D.C. Circuit’s Opaque Approach on EPA Rules Perplexes Litigants

The US Court of Appeals for the D.C. Circuit seldom grants requests for stays of challenged Environmental Protection Agency regulations, and rarely explains its rationale for denying (or granting) such requests. The public and affected businesses would benefit from more transparency, but until this trend changes, potential litigants may need to rely on other regional circuits—or hope the US Supreme Court steps in.

When a party files a lawsuit challenging a new EPA rule—such as a regulation imposing new emissions restrictions—a dispute often arises over whether the agency can enforce it while the lawsuit proceeds, which typically takes years. Why should companies have to incur enormous costs to comply with a new regulation that’s unlikely to withstand judicial scrutiny?

To avoid those sunk costs, the party challenging the EPA’s rule may ask the reviewing court for a stay—a pause to keep the status quo—of the agency’s action until final resolution of the lawsuit. In considering that request, the reviewing court assesses the likelihood the lawsuit will ultimately succeed, the threat of irreparable harm to the challengers without a stay, and the effect of a stay on the public interest.

The D.C. Circuit, informally known as the second-highest court in the US, hears challenges to national EPA regulations. But the court is stingy in issuing stays pending review. While there is limited academic analysis of this trend, we identified 18 requests for stays of EPA rules since Jan. 1, 2016. Of those, 14 were denied, and only four were granted.

Also, the D.C. Circuit rarely explains why the request for a stay is granted or denied, leaving the public (and future litigants) guessing as to what separates successful requests from unsuccessful ones. The court provided a specific explanation in just four of the 18 stay orders we reviewed.

In this time frame, parties have requested stays of a wide variety of EPA rules, including restrictions on emissions of methane and nitrogen oxides, requirements that coal-fired power plants close or install carbon-capture technology, and criteria for exemptions from federal environmental programs.

In requesting stays, the challenging parties typically offer a similar argument: They demonstrate that they will likely succeed on their underlying challenges to the EPA rules because they violate the Constitution or an applicable statute. On multiple occasions, these arguments have succeeded even where a stay was denied at the outset of litigation.

The challengers also show that, without a stay, they would face irreparable harm, often in the form of significant compliance costs or other capital commitments that wouldn’t be recoverable even if the challenge succeeds.

They further claim that the public has an interest in the activity curtailed by the EPA’s new rule—for example, reliable and affordable power generation—and that the agency itself faces little or no harm from a stay that preserves the earlier status quo.

The challengers’ stay motions can be burdensome to prepare. They are usually supported by sworn declarations and extensive legal briefing. Yet, in denying about three out of every four stay motions, the D.C. Circuit typically issues a ruling that contains nothing more than a short boilerplate statement followed by a few citations: “ORDERED that the motions for stay be denied. Petitioners have not satisfied the stringent requirements for a stay pending court review.”

The rare orders granting stays are often similarly terse, using the same pro forma language as the denials, but stating that the motion is “granted” and that the petitioners “have satisfied” the “stringent requirements” that apply.

Recent litigation that reached the US Supreme Court suggests the D.C. Circuit’s approach may be out of step with other federal courts, including the Supreme Court itself. That litigation traces back to the EPA’s 2015 issuance of stricter air-quality standards for ozone, which triggered states’ obligation to seek the EPA’s approval of new state-created “implementation plans.” The EPA rejected the plans submitted by 23 states in favor of a single federal plan.

Seven federal appeals courts—all located outside Washington, D.C.—stayed the EPA’s denials of these state-specific plans. Four of those courts explained in detail the basis for the stay.

The D.C. Circuit, on the other hand, rejected states’ request to stay the federal plan with its usual brevity. Those states renewed their request in the Supreme Court. And on June 27, the Supreme Court in Ohio v. EPA overruled the D.C. Circuit and granted the stay in a 19-page opinion explaining its reasoning.

The D.C. Circuit’s approach to stay requests may deter meritorious challenges to EPA regulations. If companies must incur significant unrecoverable costs for years before obtaining relief, they may decide that such a pyrrhic victory isn’t worth pursuing. The court’s usual lack of detailed explanation for its stay rulings provides companies little insight into which stay requests in the environmental context are likely to succeed. Greater transparency would advance the interests of justice and judicial economy.

Other appellate courts’ approaches, as well as the Supreme Court’s reversal of the D.C. Circuit’s stay denial in Ohio v. EPA, show that the D.C. Circuit’s guarded approach isn’t the only way.

A similar request for the Supreme Court to overrule the D.C. Circuit’s refusal to stay the EPA’s carbon-capture mandate is pending in West Virginia v. EPA. There, the nation’s highest court has another opportunity to counsel what’s known as the second-highest one.

In the meantime, regulated companies will likely attempt to find refuge in other regional circuits or place their hopes in the Supreme Court’s willingness to scrutinize D.C. Circuit stay denials.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.

Author Information

Aaron Streett chairs Baker Botts’ Supreme Court and constitutional law practice.

Brent Cooper is a litigation senior associate with Baker Botts.

Jeffrey H. Wood is partner with Baker Botts, focusing on federal enforcement, compliance, litigation, permitting, and policy challenges in energy and environment.

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