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The Environmental Protection Agency has been having a tough time in court recently. More than three dozen times in the past seven years the EPA has seen its regulatory judgment struck down by the U.S. Court of Appeals for the D.C. Circuit. In suits filed by environmentalists and regulated industries, in opinions written by conservatives and liberals, the EPA has been rebuked time and again for failing to comply with statutory requirements or to adequately justify its policy decisions. Given the extreme deference courts show federal agencies, this record of defeat is remarkable and suggests an agency in need of greater oversight, if not fundamental reform. Perhaps the EPA’s most notorious loss came last May in American Trucking Associations v. EPA, in which the D.C. Circuit struck down the agency’s proposed national ambient air quality standards for ozone and particulates. As one of the costliest rules in the EPA’s history, the new stricter NAAQS were extremely controversial. After congressional efforts to set the standards aside failed, several business groups sued. The D.C. Circuit held unanimously that the EPA ignored reliable scientific evidence suggesting that tightening the ozone standard could have negative impacts on public health, and that the agency’s approach to implementing the standard violated the Clean Air Act. Two of the judges went even further, holding that the EPA’s interpretation of the statute was so broad that there was no “intelligible principle” to guide its selection of one air quality standard over another and, thus, the EPA could justify mandating any level of air quality from virtually unbreathable to pristine. The lack of such a principle would render Congress’ delegation of authority to the EPA unconstitutional, so the court told the agency to try again. Reaction from the EPA was swift and fierce. Administrator Carol Browner lambasted the court’s “illogical” ruling, calling it “one of the most bizarre and extreme decisions ever rendered in the annals of environmental jurisprudence.” “It’s an extreme interpretation of the Constitution that’s aimed at preventing the federal government from doing its job,” added Natural Resources Defense Council attorney David Hawkins, himself a former EPA official. University of Chicago law Professor Cass Sunstein cited the case as evidence of a “perilous” upsurge in “conservative judicial activism” by “Reagan and Bush appointees” on the federal courts. The EPA has filed a certiorari petition with the Supreme Court. LOSING RECORD While the American Trucking panel’s reliance upon the nondelegation doctrine might be unusual, there is nothing exceptional about a federal court’s rejecting EPA regulations. Over the past seven years, the D.C. Circuit, which reviews most challenges to EPA rules, struck down regulations governing reformulated gasoline, fuel additives, hazardous air pollutant listings, transportation conformity regulations, and even decisions not to tighten federal pollution standards. All federal agencies have some share of their policy decisions challenged, but they are not expected to lose very often. This is because federal courts show tremendous deference when reviewing agency rule makings. Federal courts generally defer to administrative agencies’ policy decisions, particularly when they are administering a congressionally enacted program. Agencies, the reasoning goes, have greater expertise in resolving complex matters and are presumed to have the requisite knowledge to handle matters within their area of specialization. Moreover, agency officials, unlike judges, are responsible to elected officials, and are therefore more accountable to the public for their decisions. As a general rule, courts will only strike down a federal regulation for one of three reasons. First, courts will invalidate regulations that violate constitutional protections or are not authorized by federal statutes. Second, courts will invalidate rules that are arbitrary and capricious or otherwise represent an abuse of the agency’s discretion. This is a fairly minimal requirement that agencies document and explain the rationale and evidentiary basis for their decisions. It does not, however, require that agencies make the most sensible policy choices or factual findings. Third, courts will invalidate agency rules when agencies fail to follow the relevant procedures for issuing rules. None of these three standards is particularly difficult for agencies to meet. Given to this high level of deference, most federal agencies win most of the time. Studies of judicial review have found that federal regulatory agencies win the vast majority of cases. For instance, one study of more than 1,800 decisions in the mid-1980s found that federal appellate courts upheld challenged agency actions between 70 and 80 percent of the time. While federal agencies had a tougher time in the D.C. Circuit, they still won a majority of the time. This has not been the EPA’s experience during the past seven years. In a forthcoming study for the Reason Public Policy Institute, I examined challenges to EPA rules argued before the D.C. Circuit after the Clinton administration took office in 1993 and decided prior to Jan. 20, 2000. Of the 69 cases analyzed, the EPA won only 23, or one-third of those in which the court considered the merits of the challenge. In 54 percent of the cases, the D.C. Circuit struck down all or a substantial portion of the challenged rule. In the remaining 13 percent, the court dismissed the challenges on ripeness or standing grounds, or otherwise held the challenged EPA action to be unreviewable in federal court. ‘LET THEM EAT CAKE’ Several of the EPA’s losses raise questions about the rigorousness of the agency’s policy evaluation, as well as the propriety of the current administration’s priorities. In a 1995 challenge to the EPA’s decision to use reformulated gasoline regulations to promote ethanol use, the D.C. Circuit found that while the “sole purpose” of the underlying program was to reduce air pollution, the agency was pursuing a rule that “might possibly make air quality worse.” American Petroleum Institute v. EPA. In voiding the EPA’s decision to list methylene diphenyl diisocynate as a hazardous air pollutant in 1994, the court declared that the agency’s willingness to disregard scientific evidence “bespeaks a ‘let them eat cake’ attitude that ill-becomes an administrative agency whose obligation to the public it serves is discharged if only it avoids being arbitrary and capricious.” Chemical Manufacturers Association v. EPA. During this period, the EPA lost many types of cases, involving allegations of both excessive and insufficient regulation. For example, one year before the invalidation of the ozone and particulate national ambient air quality standards, the D.C. Circuit held that the EPA failed to explain adequately its decision not to revise the NAAQS for sulfur oxide emissions. American Lung Association v. EPA (1998). While the EPA was reprimanded by the court for obstructing the use and registration of MMT, a fuel additive, it also lost challenges to transportation conformity regulations brought by environmental groups that claimed the EPA was too lax in grandfathering state highway projects for federal funding. See Ethyl Corp. v. Browner (MMT case); Environmental Defense Fund v. EPA (1999) and Sierra Club v. EPA (1997) (highway cases). Thus, it would be wrong to characterize the agency’s string of high-profile losses as evidence of “anti-regulatory” or “anti-environmental” sentiment among the judiciary. It is possible that the EPA’s string of losses is an artifact of the time period studied. Subsequent decisions of the D.C. Circuit, however, generally support my study. Since the Jan. 20 end of the study period, the D.C. Circuit has ruled on six challenges to EPA rules. In three of these cases, the EPA escaped with its rules largely, if not completely, intact. Not so in the other three. Two cases — Chlorine Chemistry Council v. EPA and Appalachian Power Co. v. EPA — were complete repudiations of the agency’s decisions. The third, Association of Battery Recyclers v. EPA, was a draw, upholding one of EPA’s regulatory determinations while striking down another. OTHER AGENCIES FARE BETTER That the EPA has a particularly poor record in federal appellate courts does not necessarily mean, in and of itself, that there is anything wrong with the EPA’s decision making. For instance, one could argue that the complex nature of the agency’s policy-making responsibilities and the controversial nature of the EPA’s regulatory efforts combine to make its job particularly difficult. Yet the EPA is hardly the only federal agency forced to defend complex and costly regulations of highly technical matters in federal court. For instance, the Occupational Safety and Health Administration regulates workplace exposures to chemicals and other substances that pose a potential health threat to workers. Much like the EPA, OSHA is required by statute to consider highly complex matters about which there is substantial scientific uncertainty. Indeed, some of the substances OSHA regulates, such as lead, benzene, and asbestos, are subject to EPA regulation as well. OSHA regulation can also be tremendously expensive — and controversial. And OSHA, like the EPA, is not without its fair share of anti-regulatory critics. Despite OSHA’s similar mandate and experience with controversy, it has not had the same difficulties as the EPA in defending its regulatory determinations in court. While OSHA promulgates far fewer regulations than the EPA — and has a correspondingly smaller staff and budget — a smaller percentage of its substantive rules are successfully challenged in court. Indeed, over the last 20 years OSHA has lost only a handful of cases in which a substantive rule making was challenged. OSHA’s experience suggests that the regulatory behavior of an agency is a greater determinant of whether it will succeed in court than the substance or scope of its regulatory efforts. Whatever the nature and extent of its statutory mandate, it is important that the EPA administer its responsibility in a faithful and accountable manner. This means adhering to the priorities and limits established by Congress and making clear to the public the reasoning for agency decisions. The EPA’s consistent failure to do these things during the past several years, if not longer, has led to its disappointing record in the D.C. Circuit. Ultimately, if the EPA is unhappy with how its regulations are perceived by the courts, it has no one to blame but itself. Jonathan H. Adler is a senior fellow in environmental policy at the Competitive Enterprise Institute in Washington, D.C., and is the author of the forthcoming Reason Public Policy Institute report “Environmental Performance at the Bench: The EPA’s Record in Federal Court,” from which portions of this article are adapted.

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