EPA mercury rule to remain in place while agency considers costs

This morning the U.S. Court of Appeals for the D.C. Circuit issued an order remanding the Environmental Protection Agency's mercury rule to the agency for consideration of costs without vacating the rule. What this means is that even though the Supreme Court held that the rule was unlawful in Michigan v. EPA due to the agency's failure to consider costs when developing the rule, the regulation will remain in place while the agency performs the required analyses. As the court noted in its order, the EPA has indicated that it is "on track" to complete this work by April 15, 2016.

The D.C. Circuit's decision is not particularly surprising. As I noted in my post on the Supreme Court's Michigan decision in June, the court has a habit of remanding without vacatur in cases, such as this, where an agency may have failed to fulfill all of its statutory obligations in promulgating a rule, but where the agency is unlikely to alter course. In this specific case, there is no question that EPA has the authority to adopt the mercury rule, and little reason to believe that a more extensive examination of costs would have altered the final rule. What is more, a substantial portion of the regulated sources have already taken steps to comply with the rule.

There is a serious argument that remand without vacatur is improper and unlawful. After all, the Administrative Procedure Act instructs court to "hold unlawful and set aside" agency actions that are found to be procedurally or otherwise improper. There is no legislative authorization for this administrative compromise of requiring an agency to conduct a do-over while leaving its regulatory edicts in place. Further, as Daniel Rodriguez argued in a 2004 paper, allowing courts to exercise such authority may distort the relationship between agencies and courts. Nonetheless, remand without vacatur has become a fairly standard practice in the D.C Circuit, and if the practice is going to exist, this is precisely the sort of case in which one would expect it to apply.