Pub. Citizen, Inc. v. Trump

Citation297 F.Supp.3d 6
Decision Date26 February 2018
Docket NumberCivil Action No. 17–253 (RDM)
Parties PUBLIC CITIZEN, INC., et al., Plaintiffs, v. Donald J. TRUMP, President of the United States, et al., Defendants.
CourtU.S. District Court — District of Columbia

Scott Lawrence Nelson, Sean M. Sherman, Allison Marcy Zieve, Public Citizen Litigation Group, Washington, DC, Patti A. Goldman, Seattle, WA, for Plaintiffs.

Brett A. Shumate, Daniel Edward Bensing, Michael Leon Drezner, U.S. Department of Justice, Washington, DC, for Defendants.


RANDOLPH D. MOSS, United States District JudgeIn this action, Plaintiffs Public Citizen, Inc., Natural Resources Defense Council, Inc. ("NRDC"), and Communication Workers of America, AFL–CIO ("CWA") challenge the lawfulness of Executive Order 13771, issued by President Trump on January 30, 2017, and two guidance documents issued by the Office of Management and Budget ("OMB") implementing the Executive Order. Pending before the Court are the government's motion to dismiss, Dkt. 15, and Plaintiffs' cross-motion for summary judgment, Dkt. 16.

The Executive Order imposes three new restrictions on the administrative process. It requires Executive Branch agencies to identify two existing regulations to be repealed for every new regulation, requires agencies to offset the private costs of compliance posed by new regulations by eliminating the costs associated with existing regulations, and imposes an annual regulatory cap (set at zero for 2017) on incremental regulatory costs that each agency may introduce. According to Plaintiffs, these requirements trammel on an array of federal statutes, all of which require federal agencies to consider statute-specific factors in deciding whether to promulgate or to repeal regulations, and none of which permits the implementing agencies—or the President—to premise those decisions on the adoption or repeal of other, unrelated regulations.

Before reaching the merits of Plaintiffs' challenge, however, the Court must first satisfy itself that it has Article III jurisdiction. See Steel Co. v. Citizens for a Better Env't , 523 U.S. 83, 94–95, 118 S.Ct. 1003, 140 L.Ed.2d 210 (1998). As explained below, the Court concludes that Plaintiffs have failed to meet their burden of plausibly alleging or proffering facts that, if accepted as true, would establish that they have standing to sue. Plaintiffs approach the standing requirement from multiple tacks. They seek to establish "associational standing" by identifying an array of regulatory actions that, they contend, the Executive Order will likely delay or preclude and by arguing that their members will suffer harm as a result. But, as to some of those regulatory actions, they fail to identify particular members who will be harmed. As to others, they fail to allege facts sufficient to show that the relevant agency would have issued the rule absent the Executive Order. And, as to yet others, they fail plausibly to allege or otherwise to show that any delay of the regulatory action attributable to the Executive Order will substantially increase the risk that any of their members will be harmed or that any of their members will face a substantial probability of harm once such an increase in risk is taken into account. See Pub. Citizen, Inc. v. Nat'l Highway Traffic Safety Admin. , 489 F.3d 1279, 1295 (D.C. Cir. 2007).

Alternatively, Plaintiffs contend that they have "organizational standing" to sue—that is, that they have standing to sue in their own right. They allege, in particular, that Executive Order 13771 has a chilling effect on their missions to encourage agencies to adopt regulations designed to protect public health and safety (Public Citizen), to protect the environment (NRDC), and to protect workers' rights (CWA). Plaintiffs assert that, as things now stand, if they contemplate proposing a new rule, they must evaluate whether the cost of the new rule—the loss of two or more unknown existing rules—is worth the benefit of the new rule. The burden of merely considering the issue, however, is insufficient to establish organizational standing. And Plaintiffs do not assert that they have actually declined—or will actually decline—to pursue a new rule out of concern that the Executive Order will require the relevant agency to rescind two existing rules.

This is not to say that a plaintiff—or, indeed, that the present Plaintiffs—will never be able to establish standing to challenge the Executive Order. On the present record, however, the Court must conclude that it lacks jurisdiction. The Court, accordingly, will grant the government's motion to dismiss, Dkt. 15, and will deny Plaintiffs' motion for summary judgment, Dkt. 16.

A. Executive Order 13771

On January 30, 2017, the President issued Executive Order 13771, entitled " Reducing Regulation and Controlling Regulatory Costs." Exec. Order No. 13771, 82 Fed. Reg. 9339. The Executive Order imposes three new restrictions on the authority of agencies to adopt or to propose new regulations: the "two for one" requirement, an "offset" requirement, and an "annual cap" on the net costs of private compliance with covered regulations. Each of these requirements is discussed only briefly in the Executive Order, leaving it to the Director of OMB to flesh out the requirements—and exceptions—in guidance and in the course of implementing the Executive Order.

Under the "two for one" requirement, "whenever an executive department or agency ... publicly proposes for notice and comment or otherwise promulgates a new regulation," the agency must "identify at least two existing regulations to be repealed." Exec. Order No. 13771 § 2(a). This requirement works in tandem with the "offset" requirement, which requires agencies to offset "any new incremental cost associated with new regulations" by eliminating "existing costs associated with at least two prior regulations." Id. § 2(c). Finally, the "annual cap" provision works in the aggregate and prohibits agencies from adopting new regulations that exceed their "total incremental cost allowance" for the year. Id. § 3(d). This cap, or total incremental cost allowance, is based on the costs of any new regulations adopted in the relevant year, less any cost savings achieved through the repeal of existing regulations. Id. The cap was set at zero for fiscal year 2017, id. § 2(b), and must be reset every year by the Director of OMB, id. § 3(d). The total cost allowance for the fiscal year may be zero, positive (i.e., permitting a net increase in total regulatory costs), or negative (i.e., requiring a net reduction in overall regulatory costs). Id. For 2018, the caps vary by agency from zero to negative $196 million in annualized costs. Office of Mgmt. & Budget, Regulatory Reform: Two–for–One Status Report and Regulatory Cost Caps 1–2 (2017) [hereinafter Two–for–One Report ].1

The Executive Order states that it "shall be implemented consistent with applicable law" and that "[n]othing in th[e] [O]rder shall be construed to impair or otherwise affect ... the authority granted by law to an executive department or agency." Exec. Order No. 13771 § 5. Similar provisos appear within particular provisions. See id. § 2(a) (two-for-one requirement applies "[u]nless prohibited by law"); id. § 2(c) (offset requirement applies "to the extent permitted by law" and any elimination of costs must comport "with the Administrative Procedure Act and other applicable law"). The Executive Order also exempts certain types of regulations and authorizes the OMB Director to exempt other "categor[ies] of regulations." Id. § 4.

B. OMB Guidance

OMB issued interim guidance on February 2, 2017, and followed up with final guidance on April 5, 2017. See Office of Mgmt. & Budget, Interim Guidance Implementing Section 2 of the Executive Order of January 30, 2017 (2017) [hereinafter Interim Guidance]; Office of Mgmt. & Budget, Guidance Implementing Executive Order 13771 (2017) [hereinafter Final Guidance]. Several important clarifications and refinements are set forth in these guidance documents.

First, the Executive Order does not apply to all regulatory actions, but only to "significant regulatory action[s]" and "significant guidance document[s]." Final Guidance, Q & A 2. A regulatory action or guidance document is "significant" if it is likely to "[h]ave an annual effect on the economy of $100 million or more" or to meet other criteria.2 Exec. Order No. 12866 § 3(f), 3 C.F.R. 638 (1994). A "deregulatory action," in contrast, is "an action" that "has been finalized" and the "total costs" of which are "less than zero." Final Guidance, Q & A 4. Deregulatory actions need not qualify as "significant" and thus take a "wide[r] range" of forms than regulatory actions. Id.

Second, unlike prior executive orders, cf. Exec. Order No. 12866, Executive Order 13771 focuses only on compliance costs borne by regulated parties, without regard to the public benefit of the existing or proposed rule. Accordingly, a regulation that imposes $100 million in costs, but that saves $1 billion in losses, is not treated as generating a net savings of $900 million; rather, its adoption would be treated as a $100 million cost, and its repeal would count as $100 million in savings. See Final Guidance, Q & A 21, 32; Interim Guidance at 4. The guidance provides additional details on accounting. In calculating costs and savings for purposes of the Executive Order, agencies are required to determine the present value of the costs or savings of the regulatory action (or deregulatory action) "over the full duration of the expected effects of the action." Final Guidance, Q & A 25. An agency's "total incremental cost" for a fiscal year "means the sum of all costs from" significant regulatory actions and guidance documents "minus the cost savings from ... deregulatory actions." Final Guidance, Q & A 8.

Third, the Executive Order recognizes that certain federal statutes prohibit agencies from considering...

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