TheCorporateCounsel.net

Earlier this month, Liz blogged about President Trump’s memo calling for agencies to repeal facially unlawful regulations without notice and comment, where that can be done consistent with the “good cause” exception in the Administrative Procedure Act. This Pillsbury memo says that if agencies follow the President’s direction, we’re likely to see quite a thicket of litigation:

If agencies implement the memo’s direction and repeal regulations without public input, litigation is virtually assured. Advocacy groups have already announced plans to challenge the approach. Critics argue that the administration may be overreaching—particularly by attempting to apply decisions like Loper Bright retroactively, citing the Supreme Court’s express statement that its holding is prospective.

Litigation may not proceed uniformly, given the lack of consensus among federal courts on how to evaluate good-cause claims:

– The D.C. and Second Circuits apply de novo review, independently determining whether the statutory criteria are satisfied.

– The Fifth, Eighth and Eleventh Circuits apply arbitrary and capricious review, deferring to agency reasoning if it appears reasonable and supported by the record.

– The First, Third, Fourth, Sixth, Seventh, Ninth and Tenth Circuits have not adopted a clear or consistent standard, often applying mixed or fact-specific approaches.

The memo says that the disparate standards of review increases the risk of inconsistent outcomes in these lawsuits, but it also observes that if challenges to the same regulatory repeal are filed in multiple circuits, the Judicial Panel on Multidistrict Litigation may consolidate them and potentially assign them to the D.C. Circuit where de novo review would apply.

– John Jenkins