5 Steps To Promote Durable, Pro-Industry Environmental Regs

Originally published in Law360

The U.S. Environmental Protection Agency's March 12 announcement of 31 deregulatory initiatives may seem like a major shift.

But most of these actions require reconsideration of existing rules — a process that is governed by the Administrative Procedure Act, and that takes time to unfold through notice-and-comment procedures and judicial review.

Changes are just getting started. And the situation poses a dilemma for industry. Many businesses welcome the EPA's action in substance, but they are also concerned about the durability of deregulation.

Will today's regulatory relief still stand four years from now, after a new administration has taken office and the courts have weighed in? Recent history shows how far the pendulum can swing — and each shift wreaks havoc on even the best-laid corporate plans.

To help industry navigate the EPA's deregulatory agenda, we suggest five key actions businesses can take to promote durable regulation.

1. Participate in rulemaking — and make it count.

Businesses should look to comment on both proposed rules affecting their industry and on EPA requests for information, in order to provide feedback to the agency to ensure durable regulations.

The EPA's planned regulatory changes must be well reasoned and legally defensible. Under the U.S. Supreme Court's 1983 Motor Vehicle Manufacturers Association v. State Farm Mutual Automobile Insurance Co. decision and its progeny, agencies must provide a sound justification for their actions, especially when changing existing rules or policies.

Given this, industry must actively participate in the rulemaking process by submitting substantive comments that support regulatory changes with data, real-world evidence and legal arguments.

Depending on the proposal, this could include a detailed review of the statute, the regulatory history, the proposed rule and preamble, and supporting documents, including risk assessments, cost-benefit analyses, and analyses of available science and technology.

This is especially crucial in the wake of the high court's Loper Bright Enterprises v. Raimondo decision last year, which expands judicial scrutiny of agency actions. While industry largely applauded this ruling, it means that future regulations — including those from the current EPA — will face a tougher review in the courts.

Additionally, the administration's push to downsize federal agencies — including the EPA — could test the agency's rulemaking capacity, depending on which offices sustain staff cuts.

This only increases the significance of competent, well-reasoned support from outside interests. Industry must be prepared to take on some of the heavy lifting, ensuring that well-supported rationales are part of the rulemaking record.

2. Stay engaged in litigation.

Judicial challenges to new regulations are inevitable. Environmental organizations are likely to file petitions for review of new EPA rules and policies. Industry should be clear-eyed in understanding up front how important it is to ensure that any challenged regulation has demonstrable support in science, reason and the law.

Industry should be proactive in defending favorable policies by participating in litigation, either as direct parties or through amicus briefs. Courts need to hear robust, well-reasoned defenses of new policies — not just attacks.

Industry should not leave it to the overworked lawyers of the EPA and the U.S. Department of Justice to carry the entire burden of pulling the best supporting information from the administrative record and explaining how a new rule is lawful. And, again, under Loper Bright, this should include a demonstration that the EPA has faithfully applied statutory prerogatives.
Without industry's involvement, the legal arguments presented in court may not fully reflect the practical realities of business operations. Strategic participation in litigation ensures that regulatory changes stand a better chance of withstanding judicial review.

3. Leverage trade associations for policy advocacy.

Trade associations play a vital role in regulatory advocacy. Industry should engage with these organizations to develop durable policy agendas and provide unified voices on key issues.
A well-coordinated effort through trade associations can amplify industry concerns, and ensure that regulatory changes are not only beneficial but also built to last. Individual businesses should engage with their trade associations to develop effective public comments on rulemaking and participate in litigation.

At the same time, diverse memberships sometimes lead trade associations to take "lowest common denominator" positions. Businesses should prepare to supplement association activity with company-specific comments as needed.

Specific examples of how a proposed regulation may enhance or impede specific technologies and operations can be among the most valuable and influential comments.

4. Work with state agencies to ensure stability.

State agencies have significant influence over environmental enforcement and regulatory implementation. While federal policy shifts can be dramatic, state-level engagement can provide a buffer against regulatory volatility.

Industry should proactively build and maintain relationships with state environmental regulators, participating in rulemaking discussions, hearings and informal consultations.
This can help shape state plans and programs in ways that promote consistency and durability, even as federal policy swings back and forth over time.

5. Push for congressional reengagement.

The dysfunction of recent Congresses is well documented, but if regulatory stability is the goal, industry must push for legislative solutions. While it may seem far-fetched to pursue meaningful environmental legislation, engaging with Congress may prove to be more essential than ever for crafting more predictable and enduring regulatory frameworks.

Why is this? The combination of Loper Bright and the major questions doctrine means that sweeping regulatory initiatives — especially those related to climate change, where statutory authority remains subject to debate — will likely face ongoing legal challenges.

Without clear congressional action, industry will continue riding a regulatory roller coaster, spending billions to comply with shifting policies that change with each administration or court case.

We know changing how Congress operates is no small task, but it starts with informed, competent advocacy. Individual companies and trade associations must actively engage with lawmakers, encouraging bipartisan efforts to create durable legislative solutions.

Recognizing the efforts of members of Congress — regardless of party — who are willing to tackle these hard issues will be key to breaking the cycle of regulatory uncertainty. Legislation typically results in less-than-ideal solutions on difficult issues, but there may come a point where continuity is more valuable than perfection.

Conclusion

Regulatory change is inevitable, but instability doesn't have to be. By strategically participating in rulemaking, litigation, trade associations, state-level engagement and congressional advocacy, industry can help ensure that favorable policies stand the test of time.

The stakes are high. The question is not just whether today's regulatory relief will last, but whether industry is prepared to shape policies that remain effective and enforceable in the years ahead.