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Trump’s zero-sum regulations edict may fall afoul of Constitution

Posted On: Feb. 14, 2017 4:00 AM CST

President Donald Trump’s executive order requiring agencies to repeal two existing regulations for each new regulation they put in place has led to a constitutional challenge and created additional uncertainty for employers. 

Washington-based consumer advocacy group Public Citizen Inc., New York-based environmental nongovernmental organization The Natural Resources Defense Council, the Washington-based nonprofit environmental law organization Earthjustice and the Washington-based Communications Workers of America labor union sued the administration on Wednesday in U.S. District Court for the District of Columbia, asking the court to stop the administration from implementing and enforcing the Jan. 30 executive order.

The executive order states that an agency may issue a new regulation only if it rescinds at least two existing regulations to offset the costs of the new regulation. It directs agencies to identify at least two existing regulations to repeal for every new regulation proposed or issued and to promulgate regulations during fiscal year 2017 that, together with repealed regulations, have combined incremental costs of $0 or less.

“By requiring agencies to consider factors that are not permitted under the law, the executive order usurps congressional power and violates constitutional separation of powers principles,” the organizations said in a statement. “It also violates the Take Care Clause of the Constitution, which directs the President to take care that the laws be faithfully executed. Implementation of the executive order would require federal agencies to violate numerous statutes. No federal statute authorizes an agency to consider, when deciding whether to issue a regulation intended to address identified harms to public safety, health or other statutory objectives, whether it can offset the costs of the new rules by repealing two or more existing rules.”

Looking only at costs ignores the myriad ways regulations can protect public health and welfare, said Peter Lehner, senior attorney for Earthjustice in New York. 

“You never consider costs without benefits,” he said, adding that the executive order is an attempt to amend statutes without going through the legislative process. 

The Wall Street crash, the BP P.L.C. oil disaster, the Volkswagen A.G. emissions cheating scandal, the General Motors Co. ignition switch failure, the West, Texas, fertilizer factory explosion and the Wells Fargo & Co. account-opening scandal are all examples of regulatory failures and why stronger — not fewer — regulatory protections are needed, according to the organizations.

“There will be harm from implementation of the executive order in lots of different areas,” Mr. Lehner said. “These are real public health protections and safeguards.” 

Prior to the announcement of the lawsuit, a blog post by law firm McCarter & English L.L.P. predicted that the executive order will lead to “oodles of litigation,” including a broad constitutional challenge to executive authority. 

“Congress in long-enforced statutes has directed a multitude of actions to be taken by a bevy of different federal agencies,” the firm said. “Many of those mandates are in conflict with the (executive order) by definition.”

President Trump is following through on campaign promises to cut regulations, but as onerous and excessive as regulations can be, they are also orderly and predictable, the lawyers said. 

“Trump’s intervention has created much uncertainty,” they said. 

The executive order could also have the unintended consequence of affecting regulations actively supported by regulated entities, such as a regulation establishing the amount of pesticide used on food, which can propel new products to the market, according to a blog post by Bergeson & Campbell P.C.

But the organizations challenging the executive order have not filed for a temporary restraining order or injunction to prevent the executive order from being implemented.

“We have not asked for that so far,” Mr. Lehner said. “Unlike the travel ban, which went into effect and immediately people were affected, the effect of this is more anticipatory confusion.”