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Federal regulations suit can proceed — but who can actually sue?

Cutting through red tape

A federal judge denied a motion to dismiss a lawsuit challenging President Donald Trump’s executive order requiring agencies to repeal two existing regulations for each new regulation they put in place, but raised questions about whether the public interest groups filing the lawsuit had fully established standing to sue.

In Public Citizen v. Trump, Washington-based consumer advocacy group Public Citizen Inc., New York-based environmental nongovernmental organization The Natural Resources Defense Council and the Washington-based Communications Workers of America labor union sued the administration in February 2017 in the U.S. District Court for the District of Columbia, asking the court to stop the administration from implementing and enforcing the Jan. 30, 2017, executive order.

The executive order stated 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 directed 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for every new regulation proposed or issued and to promulgate regulations during fiscal year 2017 that, together with repealed regulations, have combined incremental costs of $0 or less.

The initial lawsuit was dismissed in February 2018 after a federal judge concluded the plaintiffs had not met their threshold burden to establish that they have standing to sue, but the public interest groups filed an amended complaint and the judge concluded that they have met a burden of plausibly alleging that they have standing to sue, according to the decision issued on Friday. The groups must still survive a motion to dismiss that challenges the court’s jurisdiction and prevail on their motion for partial summary judgment by showing “there is no genuine dispute of material fact regarding their standing to sue,” which the judge said they have not done to date.

“Establishing standing in a case like this one is no easy task,” the judge stated. “To be sure, one need only read the executive order to understand that it is designed to constrain the ability of federal agencies to issue new regulations and to create incentives for those agencies to rescind existing regulations. Likewise, one need only read the Unified Agenda of Regulatory and Deregulatory Actions to understand that many proposed rules have failed to advance or have been withdrawn since the executive order was issued. What is far less clear, however, is whether the executive order — as opposed to a more general change in policy between administrations — is the cause of this decline in regulatory activity.”

The plaintiffs’ case for standing to sue is complicated by three factors highlighted by the judge in the decision.

“First, the operation of the executive order is not transparent,” the judge stated. “The government has not disclosed, and there is no process for disclosing, whether the executive order has, in fact, precluded or delayed the finalization of any proposed rule. To contrary, although the administration has reported, in general, on its efforts to reduce regulation, it has yet to identify any proposed regulation that would have been adopted but for the executive order. Second, the court must ‘avoid any undue intrusion on the discretion of the executive branch to set policy priorities.’ It is not the court’s role to decide which proposed regulations should, or should not, be adopted, nor is it the court’s role, absent a statutory directive, to set a timetable for an agency to act. Third, even assuming the executive order has precluded or delayed the finalization of proposed regulations, plaintiffs still bear the burden of demonstrating that they or their members have been or will likely be injured by the government’s failure to regulate. It is relatively easy to establish standing when you are the regulated party. It is more difficult to do so when the government fails to regulate the conduct of someone else.”

“But the existence of these hurdles does not mean that plaintiffs’ task is impossible,” the judge added, noting that the plaintiffs identified numerous examples of proposed regulatory actions that have failed to move forward since the executive order was issued.

For example, the U.S. Occupational Safety and Health Administration agreed to commence a rulemaking to address the hazards of workplace violence in the healthcare and social assistance industries in January 2017, but that proposed regulation — along with a rule to improve emergency response and preparedness — were moved off the Trump administration’s main regulatory agenda and placed on a long-term actions list, meaning the agency did not expect to have a regulatory action within the 12 months after publication of the agenda in July 2017. The two potential standards were moved back on to the regulatory agenda under the prerule stage, meaning the agency is considering taking action, in May 2018.

Although almost a year has passed since the comment period for the request for information on the workplace violence proposal closed, the court cannot conclude that plaintiffs have established beyond genuine dispute that issuance of a proposed rule, much less a final rule, has been delayed by the executive order or guidance from the Office of Management and Budget, the judge said, noting that almost seven years passed from the time OSHA issued a request for information on infectious diseases to the time it planned to issue a proposed rule.

“OSHA’s workplace violence rule, accordingly, cannot establish plaintiff’s standing beyond material dispute,” the judge stated.




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