Posted by Jonathan Adler:
D.C. Circuit Upholds EPA's AFO Agreements:
http://volokh.com/archives/archive_2007_07_15-2007_07_21.shtml#1184697399
Today a divided panel of the U.S. Court of Appeals for the D.C.
Circuit dismissed challenges to a series of agreements between the
U.S. Environmental Protection Agency and operators of animal feeding
operations (AFOs) in [1]Association of Irritated Residents v. EPA.
Judge David Sentelle wrote the majority opinion, joined by Judge Brett
Kavanaugh. Judge Judith Rogers dissented. Based upon my preliminary
read, this looks like a significant decision for both environmental
policy and administrative law. Pollution from AFOs, also known as
"CAFOs" for "Concentrated Animal Feeding Operations," is a major
environmental issue in much of the country, and the decision further
addresses the distinction between agency rules and enforcement
actions, the latter of which are not subject to judicial review.
The case grew out of federal efforts to begin regulating emissions
from AFOs under the Clean Air Act and other environmental statutes.
There is no question that AFOs can be a substantial source of
environmental emissions, but there significant uncertainty about how
to measure AFO emissions, and therefore it is not clear which AFOs are
subject to what environmental requirements. This prompted the EPA to
propose an innovative agreement with AFO operators. As the majority
opinion explains:
Generally, an AFO emits these pollutants in proportion to its size:
the more animals it houses, the more it pollutes. Precise
measurements have eluded the government and the AFO industry, which
are in agreement that there is no existing methodology to measure
reliably an AFO�s emissions. . . . The present uncertainty hampers
EPA�s ability to enforce the requirements of the Clean Air Act,
EPCRA, and CERCLA against AFOs. EPA�s solution to this problem was
to invite AFOs to sign a consent agreement under which each AFO
will assist in developing an emissions estimating methodology. . .
. In exchange, EPA will not pursue administrative actions and
lawsuits against the AFOs for a defined period of time. . . . In
the agency�s judgment, this is the �quickest and most effective
way� to achieve compliance.
In sum, the EPA said to AFO operators: Pay a fine and help us figure
out how much you pollute so we can enforce the law against you in the
future, and we won't prosecute you for your current and past
emissions, even if they are violating the law. Environmental groups
argue that this lets polluters off easy. EPA argues that this is the
quickest way for the EPA to obtain the information necessary to adopt
regulatory controls on polluting AFOs. In a sense, the policy debate
here is similar to that over environmental audit privilege.
Whether or not the EPA's idea makes good policy sense, AFO operators
thought it was a good deal, and the vast majority of eligible industry
participants signed up. Environmental groups that have long sought AFO
regulation were not so thrilled and filed a petition for review of the
EPA-AFO agreements alleging that the agreements were regulations
dressed up as an enforcement actions, that the EPA failed to follow
the proper rulemaking requirements, and that the EPA exceeded its
statutory authority. The D.C. Circuit found these arguments
unavailaling, however, and dismissed the petitions for review on the
grounds that "the agreements do not constitute rules, but rather
enforcement actions with the EPA's statutory authority" and "exercises
of EPA's enforcement authority are not reviewable by this court."
Here are some excerpts from the majority opinion:
The Agreement is intended to save the time and cost of litigation
while providing the agency with an opportunity to determine
whether, and to what extent, AFOs are subject to the statutory
requirements. . . . EPA could have pursued enforcement actions
against each individual AFO, but determined that a broader strategy
would lead to quicker industry-wide compliance. . . . These
judgments � arising from considerations of resource allocation,
agency priorities, and costs of alternatives � are well within the
agency�s expertise and discretion. . . . .
Petitioners argue that the Agreement is intended to �prescribe law�
because it grants an exemption from the Acts for a specified period
of time. We disagree. The Agreement merely defers enforcement of
the statutory requirements, and makes that deferral subject to
enforcement conditions that will ultimately result in compliance.
An AFO that fails to fulfill specific obligations loses the
protections of the Agreement, leaving EPA free to sue or take other
enforcement actions against the AFO. A limited deferral subject to
enforcement conditions works no change in the agency�s substantive
interpretation or implementation of the Acts. As a result, it is
not consistent with the concept of a �rule� as that term has been
defined. . . .
More generally, in the Agreement EPA issues no statement with
regard to substantive statutory standards. EPA has not bound itself
in a way that reflects "cabining" of its prosecutorial discretion
because it imposed no limit on its general enforcement discretion
if the substantive statutory standards are violated. . . .
We find no principled reason to treat EPA's decision to secure
compliance by settlement in lieu of litigation differently than its
decision to initiate and subsequently settle litigation. . . .
The covenant not to sue participating AFOs does not represent a
policy that EPA will not enforce the Acts; to the contrary, it is
part of the agency's attempt to ensure that AFOs comply with the
Acts. . . .
The authority bestowed on the agency sufficiently covers EPA�s
actions in this case. EPA�s power to make decisions about whether
and how to enforce the Acts reasonably contemplates the agency
developing a plan for achieving compliance that it deems best
suited to the industrial landscape and technological obstacles
presented. Its ability to choose among numerous enforcement options
in a particular case encompasses its decision that the best way to
proceed in this case is by the Agreement.
Judge Rogers wrote a lengthy dissent, concluding that the agreements
were, in fact, a legislative rule and that the Agency exceeded its
statutory authority.
This case involves the intersection of two doctrines. The first
involves an agency�s unreviewable enforcement discretion, and the
second relates to agency rulemaking power. The initial question for
the court is whether the scope of enforcement discretion is
expansive enough to cover the animal feeding operation (�AFO�)
protocol formally announced by the Environmental Protection Agency
(�EPA�) in the Federal Register . . . . The court concludes that
the enforcement protocol is an exercise of enforcement discretion
that falls within the scope of the exception to judicial review set
forth in Heckler v. Chaney, and that EPA has not promulgated a
legislative rule subject to the notice and comment requirements of
the Administrative Procedure Act . . . . Undoubtedly there is some
conceptual overlap between the doctrines to the extent that
policies adopted by agencies often reflect discretionary
determinations about how to enforce statutes that Congress has
entrusted them to implement. However, by imposing a civil penalty
on AFOs in the absence of individualized determinations of
statutory violations, EPA has attempted to secure the benefits of
legislative rulemaking without the burdens of its statutory duties.
Our precedent does not permit the boundless stretching of Chaney to
undercut the purposes of notice-and-comment rulemaking. . . .
By replacing the enforcement scheme in three congressional statutes
with an unauthorized system of nominal taxation of regulated
entities, EPA has promulgated a reviewable regulation. EPA cannot
avoid the regulatory responsibilities imposed by Congress by
trading nominal sanctions for amnesty to the regulated industry.
However much enforcement discretion EPA may have in determining
whether or not to file enforcement actions and whether to settle
and on what terms, Congress has not authorized EPA to allow the
regulated community to buy its way out of compliance with the
statutes. For a minimum penalty plus $2,500, an AFO can, under the
enforcement protocol, avoid liability for any potential and ongoing
violations of three statutes for at least a two-year period while
EPA gathers and studies emissions data and for an indeterminate
period thereafter while EPA develops and publishes new estimation
methodologies, . . . ; at no point are there repercussions beyond a
possible future enforcement action if an AFO opts out of the
agreement to be bound by the methodology regulations that EPA
develops. Assuming no glitches, EPA�s endeavor to develop reliable
methodologies could, according to the recommendations it has
followed, take five, twenty, or even thirty, years. This is not an
enforcement scheme at all, and is not a decision that Congress
committed to agency discretion.
Given the AdLaw-heavy nature of the decision, and the lack of a
circuit split, I do not think this is a particularly good candidate
for certiorari, nor do I expect en banc review. Nonetheless, I think
this is an interesting and important case for administrative law and
environmental policy types to chew over.
References
1. http://pacer.cadc.uscourts.gov/docs/common/opinions/200707/05-1177a.pdf
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