A Response to "Rediscovering the Limits" of OMB Regulatory Review

Robert E. Steinberg

Mr. Steinberg is an attorney with the law firm of Porter, Wright, Morris & Arthur in Washington, D.C. He was Special Litigation Counsel at the United States Department of Justice from 1984 to 1986 and Special Assistant to Attorney General William French Smith from 1983 to 1984. The author was lead counsel for the government in Environmental Defense Fund v. Thomas. The views expressed in this Dialogue, however, are solely those of the author.

[17 ELR 10142]

Since President Reagan issued Executive Order 12291¹ establishing his system to review rulemaking actions by executive agencies, environmental and other public interest groups have sought to preclude the President and his delegatee, the Office of Management and Budget (OMB), from reviewing or influencing agency decision-making. These groups believe that agencies will provide stronger protection for health, safety, and environmental values if freed from the disciplines of the regulatory review process which require that the agencies, to the extent permitted by their enabling legislation, promulgate regulations whose potential benefits outweigh their costs.

Robert V. Percival, in a recent Article in this journal,² has argued that litigation can be a useful tool for limiting the regulatory review process. Citing Judge Flannery's decision in Environmental Defense Fund (EDF) v. Thomas,³ Mr. Percival argues that in those cases in which the Environmental Protection Agency (EPA) or another agency has missed or is about to miss a statutory deadline, "no additional time can be allowed for OMB review."⁴ Apparently, Mr. Percival would urge public interest groups to bring lawsuits precluding OMB review in the many circumstances in which an agency has not met, or is not likely to meet, the statutory deadline set by Congress.

While Mr. Percival, as usual, has eloquently stated his position, I must take issue with his conclusions. First, I do not believe Judge Flannery's decision is properly read to prohibit OMB review merely because a statutory deadline has been missed. Nor do I believe that Judge Flannery would have jurisdiction to issue such an order. First, in those environmental statutes in which Congress has set deadlines for promulgation of regulations, the citizen suit provision gives a court authority to issue orders directed to the agency head. The courts are not given any jurisdiction over OMB. Moreover, the Administrative Procedure Act does not provide a basis for jurisdiction over OMB's review of an agency's regulation because such review would not constitute final agency action. Federal courts are courts of limited jurisdiction and ordinarily may exercise only the authority granted to them by Congress.⁵

Recognizing his limited authority, Judge Flannery refused to grant plaintiffs the extraordinary relief they sought in the EDF litigation. Plaintiffs in that case requested that the court prohibit OMB from reviewing the underground hazardous waste tank regulation because the statutory deadline for promulgation of the regulation had passed. Plaintiff further sought to prohibit OMB review for all other regulations subject to statutory deadlines under the Resource Conservation and Recovery Act (RCRA)⁶ based on speculation that OMB would delay promulgation of these regulations. Not surprisingly, Judge Flannery refused to enjoin EPA from consulting with OMB merely because a deadline might be missed some time in the future.⁷ As to the underground tank regulation that had not been issued by the statutory deadline, Judge Flannery did not issue any order that precluded OMB from engaging in regulatory review merely because the statutory deadline had passed. Rather, Judge Flannery directed his order to the only defendant over whom he had jurisdiction, EPA, and informed EPA that it could not delay promulgation of a regulation based solely on withheld approval by OMB.

This distinction is highly significant. Had Judge Flannery enjoined OMB from consulting with an agency after a statutory deadline had passed or was about to expire, he would have exceeded the bounds of his jurisdiction. Judge Flannery had authority under RCRA only to issue an order directed to the Administrator of EPA to promulgate the regulation consistent with the timetable set by Congress. Because the statutory deadline has passed, the Administrator was required to promulgate the regulation within a reasonable time.⁸ Judge Flannery thus informed [17 ELR 10143] EPA that it would be per se "unreasonable" for the Administrator not to promulgate a regulation based merely on a unilateral decision of OMB to review the regulation further. Judge Flannery did not address whether EPA could continue regulatory review with OMB after a statutory deadline when such review was reasonable. In other words, Judge Flannery did not prohibit regulatory review after a statutory deadline had passed; he merely informed EPA that it cannot withhold issuance of a regulation based solely on withheld approval by OMB.

Obviously, the Executive Branch cannot ignore limitations set by Congress. Under Article II of the U.S. Constitution, the Executive Branch is vested with authority to execute the law, not to make the law, and the Executive cannot transgress legitimate boundaries set by Congress.⁹ However, Congress cannot preclude the President from carrying out his Article II responsibilities. Had Judge Flannery prohibited implementation of the President's system of regulatory review merely by virtue of the fact that a statutory deadline had passed, he would have created a mechanism whereby Congress could preclude the President from ensuring faithful execution of the laws. Congress could merely set an extremely brief deadline for issuance of a regulation and thereby prohibit the President from reviewing regulations promulgated by his subordinates.

Courts have long recognized that a statutory deadline may be infeasible or impossible for an agency acting in good faith to meet and, as appropriate, have extended the time for compliance with the congressionally mandated time limits.¹⁰ In such instances, an agency is not precluded from submitting material for OMB review under the Executive Order to the extent that compliance is practicable and reasonable given the circumstances of the missed statutory deadline. For example, in Sierra Club v. Costle,¹¹ the court held that EPA's consultation with the President and his advisors and delegatees after a statutory deadline had passed, and after EPA failed to meet a deadline in a consent decree, was reasonable, appropriate, and lawful.

The basic limitation placed on OMB review under the Flannery decision is that it is per se unreasonable for an agency not to issue a regulation based solely on a unilateral decision by OMB that further review should take place. Judge Flannery did not preclude regulatory review because a statutory deadline has been missed or is about to be missed. Such a ruling would be inappropriate because it would allow all agencies and all persons and organizations to take any reasonable step to promulgate or comment on proposed regulations after a statutory deadline had passed, except the President and the office he has designated to supervise promulgation of regulations. Such a ruling would also be inconsistent with Sierra Club v. Costle. Where consultation with OMB is reasonable, EDF v. Thomas does not prohibit such consultation even after a statutory deadline has passed.

1. 3 C.F.R. 127 (1982), ELR REG. 45035, reprinted in 5 U.S.C. § 601 note (1982).

2. Percival, Rediscovering the Limits of the Regulatory Review Authority of the Office of Management and Budget, 17 ELR 10017 (Jan. 1987).

3. 627 F. Supp. 566, 16 ELR 20250 (D.D.C. 1986).

4. 17 ELR at 10021.

5. See Chase Manhattan Bank v. South Acres Development Co., 434 U.S. 236, 239-40 (1978); Moor v. County of Alameda, 411 U.S. 693, 715 (1973); Sheldon v. Sill, 49 U.S. (8 How.) 441 (1850).

6. 42 U.S.C. §§ 6901-6987, ELR STAT. 42001.

7. EDF v. Thomas, 627 F. Supp at 571, 16 ELR at 20253.

8. See Natural Resources Defense Council, Inc. v. Train, 510 F.2d 692, 712-13, 5 ELR 20046, 20696, 20056-57 (D.C. Cir. 1975); Illinois v. Gorsuch, 9 ELR 20243 (D.D.C. Jan. 3, 1979).

9. See Youngstown Steel and Tube Co. v. Sawyer, 343 U.S. 579 (1952).

10. Alabama Power Co. v. Costle, 636 F.2d 323, 359, 10 ELR 20001, 20011 (D.C. Cir. 1979); Natural Resources Defense Council, Inc. v. Train, 510 F.2d 692, 712-13, 5 ELR 20046, 20696, 20056-57 (D.C. Cir. 1975).

11. 657 F.2d 298, 11 ELR 20455 (D.C. Cir. 1981).