EPA’s Issuance of a 90-Day Stay of the New Methane Rule Was Unlawful

On July 3, the U.S. Court of Appeals for the District of Columbia held, in a 2 to 1 decision, that the Environmental Protection Agency (EPA) lacked authority under the Clean Air Act (CAA) to issue a temporary stay of its new methane rule that had been promulgated in June 2016. This new rule, which affects many oil and gas producers, took effect on August 21, 2016. The case is Clean Air Act Council, et al. v. EPA.

Several industry groups filed petitions for reconsideration of the new rule under the provisions of Section 307(d)(7)(B) of the CAA, which provides that the Administrator of EPA must stay a rule under certain circumstances. The petitions for reconsideration argued that several provisions in the new rule were not included in the proposed rule.

Following the change in administrations, EPA first issued a partial stay of the rule in June 2017, and next published a notice of reconsideration and then a notice of proposed rulemaking indicating that the EPA planned to extend the stay for two years. The Clean Air Act Council’s lawsuit followed, with the plaintiffs seeking an emergency stay or vacatur of the EPA’s action. They argued that the controversial provisions of the new rule had in fact been thoroughly discussed in the rulemaking, and therefore EPA’s 90-day stay of the rule was arbitrary and capricious.

Since only final agency actions can be reviewed by the courts, the Court of Appeals had to determine whether the 90-day stay was a final agency action, and it concluded that it was. It found that EPA’s actions amounted to amending or revoking a final rule and these actions were susceptible to judicial review. In addition, the Court of Appeals, after reviewing the administrative record, was persuaded that the petitioners were correct, and that the issues highlighted in the petitions for reconsideration had in fact been discussed. That being the case, the 90-day stay was unlawfully granted and it was vacated.

However, the Court of Appeals also held that EPA could proceed with its plans to reconsider the existing rule, and its decision would be upheld if it comported with the policies and procedures of the Administrative Procedure Act.

Judge Brown dissented, arguing that a temporary 90-day stay was not the kind of final action that triggers judicial review. While excessive deference to agency discretion in administrative matters should be avoided, Judge Brown also warned against “an aneurysm of activism that enlarges a doctrine of engorging judicial prerogatives to the point of rupturing the separation of powers.”