Natural Res. Def. Council v. Nat'l Highway Traffic Safety Admin.
894 F.3d 95
| 2d Cir. | 2018Background
- EPCA (1975) established CAFE standards and a civil penalty formula; CAFE penalty originally $5 per tenth mpg and rose only modestly (to $5.50) until 2016.
- The 2015 Federal Civil Penalties Inflation Adjustment Act Improvements Act required agencies to make a catch-up inflation adjustment by August 1, 2016 and publish adjustments annually thereafter using a statutory formula and interim final rulemaking.
- NHTSA issued an interim/final Civil Penalties Rule in 2016 raising the CAFE penalty to $14 per tenth mpg, effective Jan 27, 2017 (with reconsideration petitions filed by industry groups). NHTSA postponed effective dates multiple times.
- On July 12, 2017 NHTSA issued a final "Suspension Rule" delaying the 2016 penalty increase indefinitely pending reconsideration and soliciting comment on the appropriate penalty amount.
- States and environmental organizations challenged the Suspension Rule, alleging NHTSA exceeded statutory authority under the Improvements Act and violated the APA by issuing the indefinite delay without notice-and-comment.
- The court granted review, found petitioners had standing and timely filed, and vacated the Suspension Rule, reinstating the December 28, 2016 Civil Penalties Rule.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing | Petitioners (states & env. groups) alleged concrete environmental/public-health harms tied to lower penalties that reduce deterrence | NHTSA: causal link too indirect because harms depend on manufacturers' reactions to penalties | Court: Petitioners have Article III standing; causation/redress satisfied because suspension removed a congressionally mandated deterrent and increased penalties would likely redress harms |
| Timeliness of petitions | Petitioners: 59-day clock runs from Federal Register publication (July 12, 2017), so filings timely | NHTSA: clock runs from delivery to OFR/public inspection (July 7, 2017), so petitions late | Court: Trigger is publication in Federal Register; even if not, deadline is nonjurisdictional and subject to equitable tolling; petitions timely |
| Statutory authority to indefinitely delay | Petitioners: Improvements Act imposes mandatory timing and formula for adjustments; no authority to defer implementation indefinitely | NHTSA: asserted authority to delay pending reconsideration, authority under EPCA, and inherent agency authority | Court: NHTSA exceeded statutory authority. Improvements Act unambiguously mandates timing; reconsideration, EPCA, or inherent power do not authorize indefinite suspension |
| APA notice-and-comment | Petitioners: Suspension Rule is substantive change requiring APA §553 notice-and-comment; NHTSA offered no good-cause basis | NHTSA: invoked APA good-cause exception (imminence, lack of present harm, simultaneous solicitation of comments) | Court: NHTSA violated APA. Good-cause exception unavailable (no emergency, agency-created imminence, rule not "inconsequential") and post-hoc comment solicitation does not cure lack of initial notice-and-comment |
Key Cases Cited
- Warth v. Seldin, 422 U.S. 490 (1975) (standing threshold and injury-in-fact principles)
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) (standing—elements of injury, causation, redressability)
- Massachusetts v. EPA, 549 U.S. 497 (2007) (state standing in environmental regulation cases)
- Natural Resources Defense Council v. Abraham, 355 F.3d 179 (2d Cir. 2004) (treating publication in the Federal Register as the triggering event for EPCA review periods)
- Clean Air Council v. Pruitt, 862 F.3d 1 (D.C. Cir. 2017) (reconsideration does not automatically authorize indefinite delay; agency must follow APA)
- City of Arlington v. FCC, 569 U.S. 290 (2013) (scope of agency authority constrained by statute)
- Chevron U.S.A., Inc. v. Natural Resources Defense Council, 467 U.S. 837 (1984) (deference doctrine; not applied where statute is unambiguous)