Dilatory Tactics: Does ‘Effective Date’ Mean Effective Date?

Dilatory Tactics: Does ‘Effective Date’ Mean Effective Date?

By Thien Chau, Staff Contributor

With the election of a new President every four to eight years comes the possibility of a change in policy and therefore a change in agency regulations. Interested parties usually do not have to worry about great instability in the regulatory regime, however, because it is a well-known principle of administrative law that a new administration, when undoing a rule, must go through the same procedure that was done when the rule was issued.[1] The process normally prescribed for agency rulemaking is the notice-and-comment procedure laid out in the Administrative Procedure Act (“APA”),[2] which requires an agency to take the time to collect public comment, consider them, and present a reasoned explanation for its decisions. However, a less well-known section of the APA allows for delaying the implementation of agency rules with much less process afforded to the public: section 705.[3] This article discusses the current use of section 705 and the implications of not taking its potential for delaying implementation of agency rules seriously.


On September 30, 2015, the U.S. Environmental Protection Agency (“EPA”) promulgated a final rule that revised the Effluent Limitation Guidelines and Standards (“ELG”) for the Steam Electric Power Generating category, regulations which had not been updated since 1982.[4] The rule went into effect on January 4, 2016, but shortly after publication, the EPA received various petitions for review that were subsequently consolidated in the U.S. Court of Appeals for the Fifth Circuit. In March of 2017, Administration Scott Pruitt received letters from industry interests expressing concern with the 2015 ELGs. Based on these letters, Pruitt announced that the EPA would postpone certain compliance dates contained within the 2015 ELGs, including those prohibiting the discharge of toxic pollutants, using authority provided in section 705 of the APA.[5]


Section 705 provides that “[w]hen an agency finds that justice so requires, it may postpone the effective date of action taken by it, pending judicial review.”[6] This language has been interpreted by the D.C. Circuit to only allow an agency to “postpone the effective date of a not yet effective rule.”[7] In the case of the 2015 ELGs, the EPA postponed certain 2018 compliance dates, not the 2016 effective date that had already passed. Though the EPA subsequently went through a full notice-and-comment rulemaking to postpone the compliance dates,[8] the initial postponement under section 705 still raises a concern about agencies using the APA to delay the implementation of a rule that had already gone into effect. The specific question is, can section 705 be used to postpone compliance dates when the effective date has already passed?


The EPA is not the only agency under the Trump Administration that has claimed authority under section 705 to postpone the compliance dates of an agency rule that was promulgated under the Obama Administration, after the effective date has passed. On February 27, 2017, the Office of Natural Resources Revenue (“ONRR”) within the U.S. Department of Interior (“DOI”) also issued a notice postponing the effective date of a rule that had already gone into effect.[9] The challenge to that section 705 action in the Northern District of California provides a good starting point for this discussion.


In Becerra v. U.S. Dep’t of Interior, the Attorneys General of California and New Mexico brought action against the DOI for using section 705 to postpone the implementation of an ONRR rule that would increase the royalty collection from federal oil and gas leases by between $71.9 million and $84.9 million, even though the effective date had passed.[10] The DOI claimed that its actions were in accordance with the APA for two main reasons: (1) that compliance dates were the “dates with teeth,” and (2) that construing the term “effective date” literally to exclude compliance dates could in some circumstances “unduly shorten the agency’s opportunity to postpone a rule’s impact” and preserve the status quo.[11] Judge Laporte of the Northern District of California found this reasoning unpersuasive. The judge determined that, first, the effective date of the ONRR rule also had teeth, as the rule “imposed compliance obligations starting on its effective date.”[12] Second, the status quo could still be preserved without reading compliance date into “effective date” because the agency “could have asked the court to stay implementation of the regulation, instead of unilaterally issuing its own ‘stay’.”[13] For those reasons, Judge Laporte refused to read compliance dates into the phrase “effective date” as used in section 705.


Though Becerra appears on its face to be a clear indictment against using section 705 to postpone compliance dates, Judge Laporte’s reasoning in the case is less absolute upon an application of different facts, particularly the facts of Pruitt’s postponement of compliance dates in the 2015 ELGs, and upon a further analysis of the APA. Regarding Judge Laporte’s first observation, the “status quo” as to a certain requirement may not always be required to change upon a rule’s effective date. For instance, the 2015 ELGs became effective on January 2016, but regulated entities are not required to even begin coming into compliance with the zero discharge standard for toxic pollutants in their coal ash transport waters until November 2018, and they are not required to complete coming into compliance until December 2023.[14] Thus, compliance dates may in some instances be the “dates with teeth” in an agency rule.


As to Judge Laporte’s second reason to rule against the DOI, it may not be such a stretch of the text to read section 705 to allow for postponement of compliance dates. Section 705’s use of the term “effective date” could fairly be read to mean only those effective dates as published in the federal register, such as the January 2016 effective date for the 2015 ELGs. However, the text refers not just to effective dates, but to the “effective date of action” taken by an agency. Reading “effective date of action” as the operative provision of section 705 provides more flexibility, especially considering the plain meaning of “effective date” and the APA’s definition of “agency action.” Black’s Law Dictionary defines “effective date” to mean the “[d]ocumented date when something is due… or when something is applicable or in effect.”[15] Webster’s Online Dictionary defines “effective date” to mean “the day when a law, rule, contract… starts to be used.”[16] Section 551 of the APA defines “agency action” to include “the whole or part of a rule,” and compliance dates are part of an agency rule.[17] Thus, “effective date of action” as used in section 705 could fairly be read to include the day when a compliance date is applicable or starts to be used. Though as Judge Laported noted, an agency may still seek a stay from a court instead of issuing its own stay, plain meaning and statutory definition also supports reading section 705 to allow an agency to postpone compliance dates without going to the courts.


It is critical to note that these observations are not meant to argue that agencies do or should have authority under section 705 to postpone compliance dates or anything other than the effective dates of promulgated rules. They are merely meant to demonstrate that the language of section 705 may be more flexible than the court in Becerra held. The important consideration is that, if the language of section 705 is flexible, then agencies may be tempted to use it as a dilatory tactic to postpone the implementation of rules promulgated under a previous administration.


To issue a stay, section 705 only requires that there be pending judicial review of the agency action and a finding that justice requires a stay.[18] Theoretically, an agency could postpone a rule indefinitely so long as the agency action continues to be tied up in court. This is a particularly perverse outcome when one considers that an agency may engage in actions such as continually filing motions to hold the pending case in abeyance to prolong the effectiveness of a stay under section 705.[19]


Furthermore, the requirement of a finding that “justice so requires” a stay does not specify that the agency can only rely on information presented during the public commenting period for the rule. This could allow an interested party to withhold information until it is politically expedient and circumvent the public commenting process. For instance, in Pruitt’s April 2017 postponement of compliance dates in the 2015 ELGs, the Administrator pointed to new information presented to him by industry interests.[20] Under normal APA notice-and-comment procedures, comments must be submitted during the commenting period.[21] If a regulated entity fails to follow such procedure, it cannot submit new information later and seek to change a rule post-hoc. However, section 705 essentially allowed the industry interests in this case to have a second chance to delay a rule under the Trump Administration – without going through normal notice-and-comment procedures – when it failed to fight the rule under the Obama Administration.


The EPA eventually promulgated a final rule to postpone the 2018 compliance dates in the 2015 ELGs, but its initial attempt to postpone the dates indefinitely shows that agencies could try to use section 705 to circumvent the requirements of section 553 and substantively amend a legislative rule without notice-and-comment.[22] The court in Becerra ruled strongly against the DOI when it tried a similar tactic, but this discussion demonstrates that an alternative set of facts could provide a stronger argument for agencies seeking to use the APA to delay the actions of a previous, politically opposite administration.


Those interests seeking to prevent agencies from potentially abusing flexible language in the APA to delay implementation of a prior administration’s rules should be aware of these arguments and properly address them. Though no court has yet ruled that section 705 cannot be used to engage in dilatory tactics, there is potential in other APA jurisprudence to argue against allowing such tactics. Court cases construing the good cause exception under section 553(b)(3)(B) of the APA for interim rules may be particularly informative. For instance, the D.C. Circuit has “recognize[d] that court tolerance of ‘temporary’ measures installed without a public airing may give the agency an apparent incentive to proceed with its permanent rulemaking at a leisurely pace,” and therefore “ the agency must convince [the court] that it is not engaging in dilatory tactics.”[23] And as discussed above, section 705 could very well be used as a dilatory tactic by a new administration to prevent the implementation of rules promulgated by a previous administration.


Hopefully, this discussion has shed some light on the potential for the APA to be used as a means to unfairly, but not necessarily illegally, delay implementation of rules. Particularly in the case of environmental rules, such as an update to decades-old guidelines meant to prevent toxic pollutants from threatening water quality, agencies should not be allowed to take advantage of unclarity in the law to delay properly promulgated rules. Those interested in preventing such abuses should not rely on the ostensibly clear text of section 705 alone, but should consider more developed arguments in order to fully build the case law for a portion of the APA that is more flexible than previously conceived.

[1] See Motor Vehicles Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 30 (1983) (holding that “an agency changing course by rescinding a rule is obligated to supply a reasoned analysis for the change beyond that which may be required when an agency does not act in the first instance”).

[2] 5 U.S.C. § 553 (2012).

[3] Id. at § 705.

[4] Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category, 80 Fed. Reg. 67837 (Nov. 3, 2015); Steam Electric Power Generating Point Source Category; Effluent Limitations Guidelines, Pretreatment Standards and New Source Performance Standards, 47 Fed. Reg. 52290 (Nov. 19, 1982).

[5] Postponement of Certain Compliance Dates for Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category, 82 Fed. Reg. 19005 (Apr. 25, 2017).

[6] 5 U.S.C. § 705 (2012).

[7] Becerra v. U.S. Dep’t of Interior, 276 F. Supp. 3d 953, 963 (N.D. Cal. 2017) (citing Safety–Kleen Corp. v. EPA, 1996 U.S. App. LEXIS, *2–3 (Jan. 19, 1996)).

[8] Postponement of Certain Compliance Dates for the Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category, 82 Fed. Reg. 43494 (Sept. 18, 2017).

[9] Postponement of Effectiveness of the Consolidated Federal Oil & Gas and Federal & Indian Coal Valuation Reform 2017 Valuation Rule, 82 Fed. Reg. 11823 (Feb. 27, 2017).

[10] Becerra, 276 F. Supp. 3d at 955-56.

[11] Id. at 963-65.

[12] Id. at 963.

[13] Id. at 965.

[14] Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category, 80 Fed. Reg. at 67895.

[15] The Law Dictionary, Effective Date, https://thelawdictionary.org/effective-date/ (last visited Feb. 26, 2018).

[16] Merriam-Webster Online, Effective Date, https://www.merriam-webster.com/dictionary/effective%20date?utm_campaign=sd&utm_medium=serp&utm_source=jsonld (last visited Feb. 26, 2018).

[17] 5 U.S.C. § 551.

[18] 5 U.S.C. § 705.

[19] See Motion to Sever and Hold in Abeyance, Sw. Elec. Power Co. v. EPA, No. 15-60821 (5th Cir. Aug. 14, 2017).

[20] Postponement of Certain Compliance Dates for Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category, 82 Fed. Reg. at 19005.

[21] 5 U.S.C. § 553.

[22] Delaying compliance deadlines in a rule are “in effect an amendment” to the rule. Council of S. Mountains v. Donovan, 653 F.2d 573, 579 n.26 (D.C. Cir. 1981).

[23] Mid-Tex Elec. Co-op., Inc. v. FERC, 822 F.2d 1123, 1132 (D.C. Cir. 1987).