NATURAL RESOURCES DEFENSE COUNCIL, SIERRA CLUB, CENTER FOR BIOLOGICAL DIVERSITY, STATE OF CALIFORNIA, STATE OF MARYLAND, STATE OF NEW YORK, STATE OF PENNSYLVANIA, STATE OF VERMONT, Petitioners, v. NATIONAL HIGHWAY TRAFFIC SAFETY ADMINISTRATION, JACK DANIELSON, in his capacity as Acting Deputy Administrator of the National Highway Traffic Safety Administration, UNITED STATES DEPARTMENT OF TRANSPORTATION, ELAINE CHAO, in her capacity as Secretary of the United States Department of Transportation, Respondents, ASSOCIATION OF GLOBAL AUTOMAKERS, ALLIANCE OF AUTOMOBILE MANUFACTURERS, INC., Intervenors.
Docket Nos. 17-2780 (L), 17-2806 (con)
UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT
June 29, 2018
August Term, 2017 (Argued: April 12, 2018)
We review these consolidated petitions for review of a final rule published by the National Highway Traffic Safety Administration indefinitely delaying a previously published rule increasing civil penalties for noncompliance with Corporate Average Fuel Economy standards. Because we find that the agency lacked statutory authority to indefinitely delay the effective date of the rule, and because we find that the agency, in promulgating the rule, failed to comply with the requirements of the Administrative Procedure Act, on April 23, 2018, we GRANTED the petition for review and VACATED the rule. We indicated that an opinion would follow in due course.
Granted and Vacated.
IAN FEIN (Irene Gutierrez, Michael E. Wall, on the brief), Natural Resources Defense Council, San Francisco, CA, for Environmental Petitioners Natural Resources Defense Council, Sierra Club, and Center for Biological Diversity.
STEVEN C. WU, Deputy Solicitor General (David S. Frankel, Barbara D. Underwood, Monica Wagner, on the brief), for Barbara D. Underwood, Attorney General, State of New York, New York, N.Y., for State Petitioner State of New York.
Kyle H. Landis-Marinello, Assistant Attorney General, for Thomas J. Donovan, Jr., Attorney General, State of Vermont, Montpelier, VT, for State Petitioner State of Vermont.
Jonathan Scott Goldman, Executive Deputy Attorney General, for Josh Shapiro, Attorney General, Commonwealth of Pennsylvania, Harrisburg, PA, for State Petitioner Commonwealth of Pennsylvania.
Steven M. Sullivan, Solicitor General, for Brian E. Frosh, Attorney General, State of Maryland, Baltimore, MD, for State Petitioner State of Maryland.
H. THOMAS BYRON III (Chad A. Readler, Mark B. Stern, Steven G. Bradbury, Paul M. Geier, Jonathan Morrison, and Emily Su, on the brief), Washington, D.C. for Respondents.
Erika Z. Jones (Matthew A. Waring, on the brief), Mayer Brown LLP, Washington, D.C. for Intervenor Alliance of Automobile Manufacturers, Inc.
Ashley C. Parrish (Justin A. Torres, Jacqueline Glassman, on the brief), King & Spalding LLP, Washington, D.C. for Intervenor The Association of Global Automakers.
POOLER and PARKER, Circuit Judges.
Congress frequently passes statutes that either permit or require agencies to assess monetary penalties against parties who fail to comply with the law. After the bill is passed, however, the initial dollar amount of the penalty often remains unchanged. Due to inflation, this stasis in the law has the practical effect of decreasing the value of the penalty over time.
In 2015, Congress passed a law requiring federal agencies to adjust their civil penalties to account for inflation, so that those imposed by agencies today have approximately the same value as they did at the time the penalties were initially created by Congress. Federal Civil Penalties Inflation Adjustment Act Improvement Act of 2015 (the “Improvements Act“), Bipartisan Budget Act of 2015,
We are now asked to determine whether the National Highway Traffic Safety Administration (“NHTSA“) acted unlawfully when it published a rule indefinitely delaying the effective date of the new civil penalty promulgated by the agency several months prior. The delayed rule would have increased civil penalties for violations of corporate average fuel economy (“CAFE“) standards. Petitioners in this action (the “Petitioners“) claim NHTSA exceeded its statutory authority in indefinitely delaying a rule implemented pursuant to the clear Congressional directive in the Improvements Act. Petitioners also claim that the agency violated the requirements of the Administrative Procedures Act (“APA“).
We agree with Petitioners on both issues and conclude NHTSA‘s actions were unlawful. On April 23, 2018, we issued an Order vacating the rule and granting the petition for review, and indicated an opinion would follow in due course.
I. Energy Policy and Conservation Act
In 1975, Congress passed the Energy Policy and Conservation Act (“EPCA“). The Act was passed in the immediate wake of the 1973-74 oil crisis and its purpose was to reduce the likelihood of another severe energy crisis through the creation of programs focused on energy regulation, energy conservation, and, most relevant to this case, “improved energy efficiency of motor vehicles, major appliances, and certain other consumer products.”
When EPCA was passed in 1975, the CAFE penalty was set at $5.00 per tenth of an mpg.
II. Inflation Adjustment Acts and Rulemaking
Between 1975 and 1997, the penalty was never increased from $5. In 1997, a 10 percent adjustment raised the penalty to $5.50, and the penalty remained at that amount until 2016, when NHTSA published an interim final rule raising the penalty to $14 per tenth of an mpg. Civil Penalties, 81 Fed. Reg. 43,524 (July 5, 2016). The 2016 adjustment was driven by passage of the Improvements Act, which “require[d] agencies to make an initial catch up adjustment to the civil monetary penalties they administer through an interim final rule and then to make subsequent annual adjustments for inflation.” Id. NHTSA explained that the Improvements Act established the formula it used to set the new penalty, which was accordingly increased to $14 per tenth of an mpg. Id. at 43,525-26. Because the new penalty was issued as an interim final rule (per the statutory directive), NHTSA set an effective date of August 4, 2016, but continued to accept petitions for reconsideration until August 19, 2016. Id. at 43,524.
On December 28, 2016, NHTSA published the final rule in the Federal Register, which modified the prior interim final rule in response to concerns raised by the industry petitioners in their requests for reconsideration. Civil Penalties, 81 Fed. Reg. 95,489 (Dec. 28, 2016). Specifically, NHTSA determined that it would not apply the new penalty rates retroactively and would instead delay the implementation of the penalty rate until model year 2019. Id. at 95,491. The final rule explained:
NHTSA believes this approach appropriately harmonizes the two congressional directives of adjusting civil penalties to account for inflation and maintaining attribute-based, consumer-demand-focused standards,
applied in the context of the presumption against retroactive application of statutes. This decision increases civil penalties starting with the model year that manufacturers, in this particular instance, are reasonably able to design and produce vehicles in response to the increased penalties.
Id. at 95,491 (internal citation omitted). The final rule included an effective date of January 27, 2017. Id. at 95,489.
III. Subsequent Agency Actions
On January 20, 2017, Reince Priebus (at the time, the Assistant to the President and Chief of Staff), issued a Memorandum for the Heads of Executive Departments and Agencies, regarding a “regulatory freeze pending review.” Joint App‘x at 55. The memo directed that,
With respect to regulations that have been published in the OFR but have not taken effect, as permitted by applicable law, temporarily postpone their effective date for 60 days from the date of this memorandum, subject to the exceptions described in paragraph 1 [regarding emergencies and other “urgent circumstances“], for the purpose of reviewing questions of fact, law, and policy they raise. Where appropriate and as permitted by applicable law, you should consider proposing for notice and comment a rule to delay the effective date for regulations beyond that 60-day period.
Id. Accordingly, on January 30, 2017, NHTSA published a final rule in the Federal Register that “temporarily delay[ed] for 60 days the effective date of the rule entitled ‘Civil Penalties’ published in the Federal Register on December 28, 2016.” Civil Penalties, 82 Fed. Reg. 8,694 (Jan. 30, 2017). On March 28, 2017,
On July 12, 2017, NHTSA published a final rule in the Federal Register that is the subject of the current petitions for review. This rule, which we refer to as the “Suspension Rule,” stated that, “As of July 7, 2017, the effective date of the final rule published in the Federal Register on December 28, 2016, at 81 FR 95489, is delayed indefinitely pending reconsideration.” 82 Fed. Reg. 32,139 (July 12, 2017). NHTSA explained:
NHTSA is now reconsidering the final rule because the final rule did not give adequate consideration to all of the relevant issues, including the potential economic consequences of increasing CAFE penalties by potentially $1 billion per year, as estimated in the Industry Petition. Thus, in a separate document published in this Federal Register, NHTSA is seeking comment on whether $14 per tenth of an mpg is the appropriate penalty level for civil penalties for violations of CAFE standards given the requirements of the Inflation Adjustment Act and the Energy Policy and Conservation Act (EPCA) of 1975, which authorizes civil penalties for violations of CAFE standards. Because NHTSA is reconsidering the final rule, NHTSA is delaying the effective date pending reconsideration.
Petitioners consist of several states (the “State Petitioners“) and various environmental organizations (the “Environmental Petitioners“). On September 7, 2017, the environmental petitioners sought review of the Suspension Rule on the ground that it had been unlawfully promulgated. The next day, the state petitioners also sought review.
REVIEWABILITY
Before we consider the merits of the challenges to NHTSA‘s action, we consider whether State Petitioners and Environmental Petitioners have standing and whether their petitions were timely.
I. Standing
Whether a plaintiff possesses standing to sue under Article III “is the threshold question in every federal case, determining the power of the court to entertain the suit.” Warth v. Seldin, 422 U.S. 490, 498 (1975). To establish Article III standing, a plaintiff must demonstrate: (1) injury-in-fact, which means “an actual or imminent” and “concrete and particularized” harm to a “legally
As to the legislative authorization to petition for review, Petitioners fall within the relevant judicial review provision of EPCA, which permits “a person” to petition for review.
As to the State Petitioners, the Supreme Court has specifically recognized states’ standing to sue in cases involving environmental damage, observing that a state‘s “well-founded desire to preserve its sovereign territory” supports standing in cases implicating environmental harms. Mass. v. EPA, 549 U.S. 497, 519 (2007). That a state‘s own territory is the “territory alleged to be affected” by the challenged action “reinforces the conclusion that its stake in the outcome of this case is sufficiently concrete to warrant the exercise of federal judicial power.”
As to the Environmental Petitioners, an organization “has standing to bring suit on behalf of its members when its members would otherwise have standing to sue in their own right, the interests at stake are germane to the organization‘s purpose, and neither the claim asserted nor the relief requested requires the participation of individual members in the lawsuit.” Friends of the Earth, Inc. v. Laidlaw Envtl. Serv. (TOC), Inc., 528 U.S. 167, 181 (2000).
Members of the environmental organizations have submitted declarations indicating that they live in polluted areas and along roadways and have suffered respiratory ailments. These are petitioners who, as we have noted, have “no choice but to breathe the air where [they] live[] and work[]—air that will undoubtedly contain increased levels” of pollutants from automobile exhaust. LaFleur v. Whitman, 300 F.3d 256, 270 (2d Cir. 2002) (holding that a petitioner who lived near the source of air pollution possessed standing); see also, e.g., N.Y. Pub. Interest Research Grp. v. Whitman, 321 F.3d 316, 325-26 (2d Cir. 2003). These well-
As to causation and redressability, NHTSA argues that the connection between potential industry compliance and the agency‘s imposition of coercive penalties intended to induce compliance is too indirect to establish causation and redressability. We are not persuaded. As the caselaw recognizes, it is well-settled that “[f]or standing purposes, petitioners need not prove a cause-and-effect relationship with absolute certainty; substantial likelihood of the alleged causality meets the test. This is true even in cases where the injury hinges on the reactions of the third parties, here the auto manufacturers, to the agency‘s conduct.” Competitive Enter. Inst. v. NHTSA, 901 F.2d 107, 113 (D.C. Cir. 1990) (citations omitted). In this case, the required nexus between inappropriately low penalties and harm to Petitioners is established by the agency‘s own pronouncements and a robust body of caselaw recognizes the connection. The record establishes that Petitioners’ harms are caused by the agency‘s indefinite suspension of a meaningful and up-to-date penalty and would be redressed by the new regime of significantly increased penalties, which Congress mandated. The Suspension Rule indefinitely removed the increased fine in favor of the
II. Timeliness
NHTSA argues that the petition is untimely and therefore not subject to review in this Court. We disagree. Judicial review here is authorized by Section 32909 of EPCA, which provides that a petition for review “must be filed not later than 59 days after the regulation is prescribed.”
In reaching this conclusion, we do not plow new ground. We have already determined equivalent language in another judicial review provision of EPCA to peg the time for seeking review to the time when the rule is published in the Federal Register. In Natural Resources Defense Council v. Abraham, 355 F.3d 179 (2d Cir. 2004), we interpreted an EPCA judicial review provision that provided “[a]ny person who will be adversely affected by a rule prescribed . . . may, at any time within 60 days after the date on which such rule is prescribed, file a petition . . . for judicial review.”
This reading aligns with the requirement in Section 32909 that a person must be “adversely affected” to seek review of a regulation. Because it is only
In any event, contrary to NHTSA‘s contention, the 59-day deadline is not jurisdictional. The Supreme Court has made clear that, for a provision to define a federal court‘s jurisdiction, there must be a “clear statement” from Congress to that effect. Sebelius v. Auburn Regional Med. Ctr., 568 U.S. 145, 153 (2013). Most time bars are nonjurisdictional and, “absent such a clear statement . . . courts should treat the restriction as nonjurisdictional[.]” Id. (quotation marks omitted). The Supreme Court has further instructed that, “in applying that clear statement rule, we have made plain that most time bars are nonjurisdictional. Time and again, we have described filing deadlines as ‘quintessential claim-processing rules,’ which ‘seek to promote the orderly progress of litigation,’ but do not deprive a court of authority to hear a case.” United States v. Kwai Fun Wong, 135 S. Ct. 1625, 1632 (2015) (internal citations omitted) (quoting Henderson v. Shinseki, 562 U.S. 428, 435 (2011)).4
Section 32909 contains no indication, much less a “clear statement,” that its filing deadline and venue requirements were meant to be jurisdictional. Neither its text nor context nor legislative history indicate that Section 32909 is “a rare statute of limitations that can deprive a court of jurisdiction,” Kwai Fun Wong, 135 S. Ct. at 1632. Section 32909 is instead a typical claim-processing provision, empowering adversely affected persons to seek judicial review and setting out certain requirements such persons must follow when doing so.
Consequently, Section 32909 is subject to equitable tolling. Even if NHTSA were correct that the relevant event was the delivery of notice of its action to the
Accordingly, we conclude that Petitioners possess standing to bring this case and that the petitions are reviewable.
DISCUSSION
The APA directs courts to “hold unlawful and set aside” agency actions that are “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law,”
I. Statutory Authority
It is well settled that an agency may only act within the authority granted to it by statute. See, e.g., Abraham, 355 F.3d at 202 (discussing the “well-established principle” that the boundaries of an agency‘s authority are exclusively drawn by Congress). This principle is a recognition of the nature of an administrative agency as a “creature of statute, having no constitutional or common law existence or authority, but only those authorities conferred upon it by Congress.” Atlantic City Elec. Co. v. FERC, 295 F.3d 1, 8 (D.C. Cir. 2002) (quoting Michigan v. EPA, 268 F.3d 1075, 1081 (D.C. Cir. 2001)) (internal quotation marks omitted). In reviewing the scope of an agency‘s authority to act, “the question . . . is always whether the agency has gone beyond what Congress
Accordingly, we examine the “plain terms” and “core purposes” of the Improvements Act to determine whether the Act authorized NHTSA to publish the Suspension Rule.6 See FERC v. Elec. Power Supply Ass‘n, 136 S.Ct. 760, 773 (2016). We conclude that the Improvements Act did not grant NHTSA that authority.
A. Plain Terms of the Improvements Act
The text of the Improvements Act requires agencies across the federal government to adjust civil penalties on a set schedule using a set formula:
(a) In General.—Not later than July 1, 2016, and not later than January 15 of every year thereafter, and subject to subsections (c) and (d), the head of each agency shall—
- in accordance with subsection (b), adjust each civil monetary penalty provided by law within the jurisdiction of the Federal agency, except for any penalty (including any addition to tax and additional amount) under the Internal Revenue Code of 1986 [
26 U.S.C. 1 et seq. ] or the Tariff Act of 1930 [19 U.S.C. 1202 et seq. ], by the inflation adjustment described under section 5 of this Act; and- publish each such adjustment in the Federal Register.
(b)Procedures for Adjustments.—
- Catch up adjustment.—For the first adjustment made under subsection (a) after the date of enactment of the Federal Civil
Penalties Inflation Adjustment Act Improvements Act of 2015 [Nov. 2, 2015]—
- the head of an agency shall adjust civil monetary penalties through an interim final rulemaking; and
- the adjustment shall take effect not later than August 1, 2016.
- Subsequent adjustments.—For the second adjustment made under subsection (a) after the date of enactment of the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, and each adjustment thereafter, the head of an agency shall adjust civil monetary penalties and shall make the adjustment notwithstanding
section 553 of title 5, United States Code .
B. Core Purposes of the Improvements Act
The baseline premise of the Improvements Act is that civil penalties had lost value over time because they had not been regularly updated to keep pace with inflation.
Congress finds that
- the power of Federal agencies to impose civil monetary penalties for violations of Federal law and regulations plays an important role in deterring violations and furthering the policy goals embodied in such laws and regulations;
- the impact of many civil monetary penalties has been and is diminished due to the effect of inflation;
- by reducing the impact of civil monetary penalties, inflation has weakened the deterrent effect of such penalties; and
the Federal Government does not maintain comprehensive, detailed accounting of the efforts of Federal agencies to assess and collect civil monetary penalties.
The legislative history of the Improvements Act reinforces the purposes articulated in the statute. The Improvements Act is an amendment to a law originally passed nearly 30 years ago and represents the latest version of several congressional attempts to ensure that civil penalties keep pace with inflation. In 1990, Congress passed legislation designed to “(1) allow for regular adjustment for inflation of civil monetary penalties; (2) maintain the deterrent effect of civil monetary penalties and promote compliance with the law; and (3) improve the collection by the Federal Government of civil monetary penalties.” Federal Civil Penalties Inflation Adjustment Act of 1990 (“Inflation Adjustment Act“), Pub. L. 101-410, § 2(b), 104 Stat. 890, 890 (1990)
In 1996, Congress passed the Debt Collection Improvement Act of 1996. Appropriations Act, Pub. L. 104-134, § 31001, 110 Stat. 1321, 1321-373 (1996). The Act amended Section 4 of the Inflation Adjustment Act, so that rather than requiring reports from the President, agencies themselves were directed to “adjust each civil monetary penalty provided by law within the jurisdiction of
After the passage of the Debt Collection Improvement Act, NHTSA issued a final rule increasing the civil penalty for a violation of CAFE standards to $5.50, which was the maximum adjustment the agency could then make given the ten percent cap imposed by the Act. Civil Penalties, 62 Fed. Reg. 5,167, 5,168 (Feb. 4, 1997). NHTSA explained that the Debt Collection Improvement Act “requires Federal agencies to regularly adjust certain civil penalties for inflation,” id. at 5,167, and that the $5.50 penalty was established “[p]ursuant to the inflation adjustment methodology included in the Debt Collection Act,” id. at 5,168. The penalty remained set at $5.50 until the 2016 increase at issue in this proceeding.9
In 2015, Congress made a renewed effort to tackle the recurring issue of stagnant civil monetary penalties with passage of the Improvements Act. Bipartisan Budget Act of 2015, Pub. L. 114-74, § 701, 129 Stat. 584, 599 (2015)
In reviewing the history of the Improvements Act, from the 1990 bill to the 2015 Improvements Act, we observe increasing intervention on the part of Congress regarding civil penalties. The evolution of this regulatory regime over the years—from data collection to mandated changes implemented on a strict timeline—is a powerful indication to us that Congress did not authorize NHTSA to publish the Suspension Rule. Indeed, permitting indefinite delay of the increased civil penalties mandated by the Improvements Act would “flout the . . . core objects” of that Act. FERC, 136 S.Ct. at 781. We cannot read the Improvements Act to permit the very kind of indefinite delay that it was enacted to end.
C. NHTSA‘s Arguments
NHTSA does not argue that the Improvements Act explicitly granted it authority to indefinitely delay the increase, nor could it plausibly do so given the
When NHTSA published the Suspension Rule in the Federal Register, it offered three justifications for the rule: (1) the decision to reconsider the increased penalty required indefinite delay, (2) it was authorized by EPCA to implement CAFE standards and the delay is included in that authority, and (3) it possesses inherent authority to delay the effective date of the rule. 82 Fed. Reg. at 32,140. None of these arguments persuades us.
1. Reconsideration Requires Delay
The notice of the indefinite delay rule in the Federal Register states that “[b]ecause NHTSA is reconsidering the final rule, NHTSA is delaying the effective date pending reconsideration.” 82 Fed. Reg. at 32,140. The need for delay pending reconsideration is the primary ground advanced by NHTSA in this proceeding, but NHTSA offers no authority—statutory or otherwise—for the
We take no position on whether the actions referred to by NHTSA involving different agencies operating under different statutory schemes and bound by different rules are lawful or not. NHTSA‘s argument on this point is essentially that there is a categorical authority for an agency to delay an effective date of an earlier rule pending reconsideration. We disagree. As the D.C. Circuit recently held, a decision to reconsider a rule does not simultaneously convey authority to indefinitely delay the existing rule pending that reconsideration. See Clean Air Council, 862 F.3d at 9.
2. Authority under EPCA
NHTSA also argues that its authority to publish the Suspension Rule is that such authority inheres in its obligation to implement the CAFE standards. As NHTSA stated in enacting the indefinite delay, “[a] delay in the effective date is . . . consistent with NHTSA‘s statutory authority to administer the CAFE
The civil penalty for violation of fuel economy standards is governed by
The penalty increase is mandated by the Improvements Act, and applies to all agencies across the federal government. Nothing in EPCA contradicts or undermines that mandate. The goal of the Improvements Act was to increase compliance with all federal regulatory programs, not just the CAFE standards.11
In implementing the Improvements Act, Congress articulated purposes that transcended the confines of any given agency‘s regulatory functions: promoting “compliance with the law” writ large, as well as improving “collection by the Federal Government of civil monetary penalties.”
3. Inherent Authority
In promulgating the Suspension Rule, NHTSA also stated that it possessed “inherent authority” to indefinitely delay the rule. 82 Fed. Reg. at 32,140. In Abraham, we considered an agency‘s claim that it possessed an “inherent power to reconsider final rules it has published in the Federal Register.” 355 F.3d at 202. We rejected this contention “in light of the well-established principle that an
Given the clear Congressional directives in the Improvements Act, NHTSA was required to “point to something,” Clean Air Council, 862 F.3d at 9, in either the Improvements Act or EPCA that granted it authority to indefinitely delay the rule. Because it could not do so and because the text, purpose, and history of the Improvements Act are all unambiguous regarding the mandatory nature of the penalty deadlines, NHTSA‘s indefinite delay was issued “in excess of statutory . . . authority,”
II. Administrative Procedure Act
Under the APA, before promulgating a rule an agency must publish “[g]eneral notice of proposed rule making . . . in the Federal Register,” as well as “an opportunity to participate in the rule making through submission of written data, views, or arguments.” See
NHTSA does not appear to dispute that the Suspension Rule constitutes a final rule that would be subject to the notice and comment requirements of
When reviewing an agency‘s claim of good cause, which we do de novo, Sorenson Comm., Inc. v. FCC, 755 F.3d 702, 706 (D.C. Cir. 2014), we must “examine closely” the agency‘s explanation as outlined in the rule, Council of S. Mountains, Inc. v. Donovan, 653 F.2d 573, 580 (D.C. Cir. 1981). The burden is on the agency to
As noted, the good cause exception applies only in circumstances when notice and comment is “impracticable, unnecessary, or contrary to the public interest.”
We conclude that NHTSA‘s action does not meet these exacting standards. NHTSA offers several reasons why it believes it is entitled to invoke the exception. NHTSA first argues that notice and comment was not provided because, as it stated in the Federal Register, the effective date of the Civil Penalties Rule was “imminent.” 82 Fed. Reg. at 32140 (Suspension Rule); Joint App‘x at 78. And, NHTSA stated that no party was harmed by the delay because
Any imminence was NHTSA‘s own creation. NHTSA promulgated the Civil Penalties Rule on December 28, 2016, and NHTSA subsequently delayed its implementation of the rule through a trio of successive delays of finite durations. The effective date of the Civil Penalties Rule was imminent only insofar as NHTSA‘s third finite delay was scheduled to elapse. Good cause cannot arise as a result of the agency‘s own delay, because “[o]therwise, an agency unwilling to provide notice or an opportunity to comment could simply wait until the eve of a statutory, judicial, or administrative deadline, then raise up the ‘good cause’ banner and promulgate rules without following APA procedures.” Council of S. Mountains, 653 F.2d at 581. Quite simply, “[w]e cannot agree . . . that an emergency of [the agency‘s] own making can constitute good cause.” Abraham, 355 F.3d at 205.
Next, NHTSA notes that, simultaneously with the Suspension Rule, it published a rule soliciting comments concerning the appropriate penalty and contends that it was entitled to dispense with notice and comment in promulgating the Suspension Rule because it needed time to consider the responses it anticipated receiving. This rationale fares no better. It does not satisfy the “unnecessary” prong because that prong is limited to circumstances when the rule is “inconsequential to the industry and to the public,” Mack Trucks, 682 F.3d at 94. The responses of both sides on this petition unquestionably indicate that the Suspension Rule is anything but inconsequential.
Nor may NHTSA argue that notice and comment would not have been meaningful, or that comments would necessarily have addressed the issue it contemporaneously solicited comments on regarding whether to raise the
Finally, it was not in the public interest to suspend notice and comment. Notice and comment are not mere formalities. They are basic to our system of administrative law. They serve the public interest by providing a forum for the robust debate of competing and frequently complicated policy considerations having far-reaching implications and, in so doing, foster reasoned decisionmaking. These premises apply with full force to this case. This is not a situation of acute health or safety risk requiring immediate administrative action. And it is not a situation in which surprise to the industry is required to preempt manipulative tactics.
That a regulated entity might prefer different regulations that are easier or less costly to comply with does not justify dispensing with notice and comment. Mack Trucks, 682 F.3d at 94. The automobile industry was on notice since 2015, long before the Civil Penalties Rule was promulgated in December 2016, that Congress had established a regime requiring agencies across the federal
Accordingly, NHTSA violated the APA in promulgating the Suspension Rule without undertaking notice and comment rulemaking.
CONCLUSION
For the foregoing reasons, we GRANT the petitions for review and VACATE the Suspension Rule, 82 Fed. Reg. 32,139, 32,139-40 (July 12, 2017). The Civil Penalties Rule, 81 Fed. Reg. 95,489, 95,489-92 (December 28, 2016), no longer suspended, is now in force.