Four Administrative Law Takeaways from the DC Circuit’s Recent Perchlorate Decision

Below, we draw some key administrative law takeaways from the DC Circuit’s May 9 decision in National Resources Defense Council v. Regan, which involves the US Environmental Protection Agency’s (EPA) attempts to withdraw a regulatory determination related to perchlorate in drinking water under the Safe Drinking Water Act (SDWA). Among other takeaways, the decision illustrates that even though the US Supreme Court agreed to review the continued viability of the Chevron doctrine, various non-Chevron procedural constraints shape executive branch policy making.

Perchlorate, at issue here, is commonly associated with fireworks and rocket fuel. EPA states that perchlorate “inhibits (or blocks) iodide transport into the thyroid by chemically competing with iodide,” thus potentially interfering with thyroid functioning. In 1998, EPA added perchlorate to its SDWA Contaminant Candidate List in 1998, categorizing it as a chemical “needing additional health effects, treatment research, and occurrence information.”

In 2011, EPA issued its “final determination to regulate perchlorate in drinking water” under SDWA. Under SDWA, that determination started a clock requiring EPA to propose regulations within 24 months and promulgate regulations within 18 months of the proposal.

But EPA never proposed the perchlorate regulation that the SDWA envisions. Following litigation by the National Resources Defense Council (NRDC) in 2016 seeking to compel the regulation, EPA – in 2020 – withdrew its 2011 regulatory determination on the grounds that it had “re-evaluated” whether perchlorate satisfied SDWA criteria for regulating. EPA concluded that “perchlorate does not occur at a frequency and at levels of public health concern” and that regulation “does not present a meaningful opportunity for health risk reduction.” EPA found that this reevaluation precluded it from regulating perchlorate.

NRDC subsequently petitioned for review of EPA’s withdrawal on the grounds that SDWA did not permit EPA to withdraw its 2011 determination and that — even if it did — EPA acted in an arbitrary and capricious manner in doing so. In its opinion, the DC Circuit granted NRDC’s petition and vacated EPA’s 2020 withdrawal of its determination to regulate and remanded the case to EPA for further proceedings.

Four takeaways from NRDC v. Regan:

Agencies cannot circumvent statutory language including those involving deadlines.

The primary takeaway from NDRC v. Regan is that the language Congress uses in crafting statutes — when narrowly crafted and on-point — is outcome-determinative. Courts deferred to these deadlines twice: in 2016, when NRDC challenged EPA’s failure to complete required perchlorate regulations; and in 2020, when EPA sought to withdraw its underlying determinations. The court relied on statutory text, specifically SDWA language that EPA “shall” regulate within a defined period, to overcome EPA arguments that the 2011 determination was a preliminary step that could be overcome by new data or technical determination methods. As we have discussed elsewhere, NGOs routinely use litigation to enforce statutory deadlines and the court accepted their efforts to do so here.  Rather than the express language of the SWDA, EPA’s argument to the court was largely predicated upon the theory that because it had clear statutory authority to issue the determination, it inherently also had the right to withdraw it too.  The court disagreed, focusing on the statutory text.

Judicial review of regulatory decisions takes time.

A second takeaway is that litigation in this space takes time. EPA’s determination that perchlorate in drinking water occurred in 2011. NRDC has been litigated related to this issue since 2016. In 2023, more than two years into the Biden Administration, we now have an appellate decision confirming that a decision made by EPA during the Trump Administration was incorrect and should be vacated.

Many statutes as drafted allow significant space for technical experts to weigh in.

The Supreme Court’s decision to review the continued viability of Chevron deference has brought renewed focus onto questions of how, when, and why the three branches of government give one another space to make decisions. As noted above, EPA argued in NRDC v. Regan that it had “inherent” authority to change its mind related to a technical topic like whether perchlorate in drinking water posed a risk and supported this effort through reference to language contained in 1996 Clean Water Act amendments which broadened EPA’s discretion to forego certain regulations where EPA found that such regulations would not provide significant health benefits. Here, the court noted that even though the 1996 amendments broadened EPA’s discretion in some circumstances, the amendments did not affect the relevant regulatory deadlines: “Because the Safe Drinking Water Act requires that the agency ‘shall’ regulate after making a regulatory determination, EPA lacks authority to withdraw that determination and decide that it ‘shall not’ regulate.”

The Executive Branch already appears to have curtailed reliance on Chevron.

A final point relates to Chevron deference itself. A concurrence by Judge Florence Y. Pan, appointed by President Biden to a seat formerly held by now-Justice Ketanji Brown Jackson, notes that a further reason for denying deference to EPA is that EPA never requested Chevron deference in its brief and accordingly, the court should not consider whether deference applies. Administrative expertise and related deference play a larger role in Judge Pan’s concurrence than it does in the majority because Judge Pan plays greater heed to language

requiring EPA to use “the best available, peer-reviewed science and supporting studies conducted in accordance with sound and objective scientific practices” in every SDWA action.

In support of this point, Judge Pan cites to HollyFrontier Cheyenne Refining v. Renewable Fuels Ass’n, a 2021 Supreme Court decision authored by Justice Gorsuch that declines to evaluate whether Chevron deference applied because the government did not request it. It appears that the Biden Administration has in essence largely stopped relying on Chevron deference even though it remains as valid (if never mentioned) precedent. Supporting this, a 2022 Brookings Institution paper notes that of “the 51 major rules and other actions by federal agencies” early in the Biden Administration, only “five invoke Chevron in defending agency action.” And even in these, agencies do not request “broad discretion” – as would be expected under Chevron – but instead argue that they make the “best interpretation” of the statute as EPA requested here.

The firm’s Environmental, Government Relations, Energy & Cleantech, and Health Care teams actively monitor administrative law decisions of interest to the regulated community. Stay tuned for further updates.