California District Court Vacates EPA Final Rule to Delay Compliance with Formaldehyde Emission Standards
On February 16, 2018, the U.S. District Court for the Northern District of California issued an order granting plaintiffs’, the Sierra Club and A Community Voice-Louisiana, motion for summary judgment. The court determined that the U.S. Environmental Protection Agency’s (EPA) final rule delaying the compliance date for the formaldehyde emission standards for composite wood products (Delay Rule) exceeded EPA’s authority under the Formaldehyde Standards in Composite Wood Products Act (Formaldehyde Act) codified as Title VI of the Toxic Substances Control Act (TSCA), vacated the Delay Rule, and set aside the year-long extension to December 12, 2018, of the compliance deadlines set out by EPA in the Delay Rule. Sierra Club v. Pruitt, Case No. 4:17-cv-06293. The Delay Rule, issued on September 25, 2017 (82 Fed. Reg. 44533), sought to extend further the compliance dates set out in its December 12, 2016, final rule that implemented the Formaldehyde Act (Formaldehyde Rule) (81 Fed. Reg. 89674), specifically: the December 12, 2017, manufactured-by date for emission standards, recordkeeping, and labeling provisions until December 12, 2018; the December 12, 2018, compliance date for import certification provisions until March 22, 2019; and the December 12, 2023, compliance date for provisions applicable to producers of laminated products until March 22, 2024.
As stated in the order, the Formaldehyde Act set out emission standards for domestically manufactured and imported composite wood products and directed EPA, by no later than July 1, 2013, to promulgate implementing regulations that would ensure compliance with the new emission standards; based on the Delay Rule’s further extension of deadlines, which sets both the manufacturing and emission standards compliance dates to December 12, 2018, EPA would have delayed the implementation for more than three years after the Formaldehyde Act had originally directed EPA to require compliance.
The order also denies defendant EPA’s cross-motion for summary judgment in which EPA states three arguments against plaintiffs’ motion: (1) plaintiffs’ challenge is waived, as plaintiffs did not comment on the proposed extension by raising the sole issue plaintiffs raise in their motion; (2) the statute upon which plaintiffs base their claim expressly provides for EPA to set the manufactured-by date more than 180 days from promulgation of the implementing regulations; and (3) EPA’s extension of the manufactured-by date was reasonable, supported by the record, and not arbitrary or capricious.
In its analysis, the court offered the following to support its holdings:
- The designation of a manufacturing date “no earlier than 180 days following promulgation of the regulations” found in the sell-through provision of the Formaldehyde Act must fall on the 180th day after the regulations take effect. EPA’s interpretation to set the manufacture date beyond 180 days from promulgation of the regulations effectively resets the compliance date in violation of the Formaldehyde Act’s mandatory expedient compliance deadline and the prohibition against stockpiling.
- EPA’s interpretation that it can designate the manufacture date beyond the 180 days limit for compliance with the emission standards is contrary to law and beyond the grant of authority bestowed upon it by Congress in the Formaldehyde Act.
- EPA’s interpretation creates inconsistency within the full text of the Formaldehyde Act, renders the 180-day compliance deadline superfluous, leads to the “absurd” result of permitting the perpetual delay of the effectiveness of the Formaldehyde Rule, and fails to satisfy the stated purpose of the Formaldehyde Act.
The court concluded that the issue of whether EPA should extend the deadline for compliance with the emission standards of the Formaldehyde Rule was adequately before it for consideration. The court stayed the order vacating the Delay Rule until the parties address the implementation of the compliance guidelines and the court directs them to provide, by March 9, 2018, a joint proposed submission or simultaneous briefing to address the timing for lifting the stay and expeditious implementation of the court’s order.
The ruling is one of several expected that will inform stakeholders on the scope of EPA’s authority under the Administrative Procedure Act (APA) and the underlying Act at issue, here the Formaldehyde Act, in undoing Obama-era regulations and the extent of Agency discretion in deciding whether and to what extent such rules can be unilaterally delayed or eliminated entirely. The Trump Administration has in unprecedented ways sought to roll back rules under a host of laws, environmental and otherwise, in ways that detractors claim are illegal and contrary to the APA and other laws. Here, the court emphasized the Formaldehyde Act’s “expeditious” emission compliance standards and reasoned that the repeated delays were simply inconsistent with Congress’ intent.