On March 13, 2017, D.C. District Court Judge Tanya S. Chutkan granted summary judgment to an environmental advocacy group and ordered US EPA to update its National Emission Standards for Hazardous Air Pollutant (NESHAP) rulemakings for 20 listed major source categories in three years. The soon-to-be updated major source categories will affect several industries, including: boat manufacturing; municipal solid waste landfills; integrated iron & steel manufacturing; and surface coating of automobiles, light-duty trucks, plastic parts and products, and metal cans.

In April 2015, California Communities Against Toxics (CCAT) filed suit against US EPA for unreasonable delay in its non-discretionary duty to update NESHAPs for the 20 major source categories. It had been more than eight years since US EPA had reviewed and updated its emissions standards for these major source categories—something which US EPA did not contest in the lawsuit. However, it did contest the timeframe in which it would update the rules. While CCAT asked that the court order US EPA to update the rules in two years, EPA asked the court for five years, in order to collect information from stakeholders, thoroughly conduct the “Risk and Technology Reviews” (RTRs), and go through the public comment process. Based on the two proposals, the court “split the difference” giving US EPA three years to update its rules.

In advocating for a five year timeline, US EPA emphasized that, because “it is currently engaged in seven other rulemakings, several of which are court-ordered,” “it has fewer resources available for the 20 RTRs at issue.” Out of all the reasons US EPA gives in asking for a longer timeline, this one in particular highlights the upcoming challenges the Trump Administration will face in slashing the US EPA budget by 31% and in executing the “1-in-2-out” policy through Executive Order 13771—especially in unreasonable delay suits which were inherited from the Obama Administration.

The promulgation of these particular emission standards may not by itself pose challenges for President Trump’s US EPA, but the current court-ordered rulemakings inherited from President Obama’s US EPA (and in some cases, President George W. Bush’s US EPA), along with the potential slew of citizen suits challenging President Trump’s repeal of various Obama legacy environmental rules (such as the Clean Power Plan and New Source Performance Standards), will begin to add up in terms of the budget and the Agency’s ability to eliminate 2 rules for every 1 promulgated in the face of a court’s order.

Due to these potential challenges, US EPA will likely look for ways to comply with court orders and also meet the budget. Pursuant to Executive Order 13771, agencies may comply with requirements by issuing two “deregulatory actions” for each EO 13771 “regulatory action.” A “regulatory action” includes any significant regulatory action as defined in EO 12866 (an action that is “significant” and therefore subject to review of the Office of Management and Budget (OMB)) that has been finalized and that imposes total costs greater than zero. This will likely include an update to the NESHAPs for major sources, as most have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy, thus making them “significant.” An EO 13771 “deregulatory action” qualifies as such when the agency repeals or revises at least two existing regulations for each one regulation issued and does not increase cost. Therefore, under the structure of Trump’s EO 13771, it is possible for US EPA to simply conclude that no further action is necessary regarding most of these NESHAPs to keep the cost at zero, while only updating a select number. This would keep the 2-out-1-in policy in balance while complying with the court order.

Another consideration from this court’s order is that the CCAT’s “win” may actually benefits industry stakeholders. Under a Trump US EPA, every win in an unreasonable delay suit and court-ordered promulgation of a rule will almost certainly result in more industry-stakeholder input and a more industry-friendly rule. Therefore, unreasonable delay citizen suits should be viewed in a new light following the last eight years.

Overall, the court’s order in California Communities Against Toxics et al. v. McCarthy may benefit industry stakeholders, as it will give them the opportunity to shape these rules through the public comment process during a more industry-friendly administration and potentially incentivize US EPA to conclude that no further action is necessary on these updates in light of EO 13771. As the stakeholder outreach and public comment process begins, we will continue to provide updates with information relevant to these standards.