Mack Trucks, Inc. v. Environmental Protection Agency
Argued May 14, 2012; Decided June 12, 2012 (2012)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
An agency does not have "good cause" under the Administrative Procedure Act (APA) to bypass notice-and-comment rulemaking procedures merely to prevent economic hardship to a single regulated entity, especially when that hardship arises from the entity's own business decisions.
Facts:
- In 2001, the Environmental Protection Agency (EPA) enacted a rule requiring a 95% reduction in nitrogen oxide emissions from heavy-duty diesel engines, effective in 2010.
- Most manufacturers, including Petitioners, invested in 'selective catalytic reduction' technology and successfully met the 2010 standard.
- One manufacturer, Navistar, pursued a different technology, 'exhaust gas recirculation,' which failed to meet the 2010 emissions standard.
- Navistar was able to temporarily sell its non-compliant engines by using a finite supply of banked emission credits.
- In October 2011, Navistar informed the EPA that its credits would soon be depleted, which would force it to stop selling its non-compliant engines.
- In response, the EPA issued an Interim Final Rule (IFR) creating a nonconformance penalty (NCP) program.
- The IFR allowed manufacturers to pay a penalty of $1,919 per engine to sell engines that emitted up to two-and-a-half times the amount of nitrogen oxide permitted by the 2010 standard.
Procedural Posture:
- In January 2012, the EPA promulgated an Interim Final Rule (IFR) without prior notice or a public comment period.
- Petitioners, competing engine manufacturers, requested administrative stays of the IFR from the EPA.
- The EPA denied the requests for stays.
- Petitioners filed a petition for review of the IFR in the U.S. Court of Appeals for the D.C. Circuit and filed an emergency motion to expedite the review.
- The D.C. Circuit granted the motion to expedite review.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
Does an agency have 'good cause' under the Administrative Procedure Act to bypass notice-and-comment rulemaking to issue a rule that prevents economic harm to a single non-compliant manufacturer, when that harm results from the manufacturer's own technological choices?
Opinions:
Majority - Brown, Circuit Judge
No. An agency does not have 'good cause' under the Administrative Procedure Act to dispense with notice-and-comment procedures when its sole justification is to prevent economic harm to a single company facing the consequences of its own technological choices. The APA's good cause exception is narrowly construed and reserved for emergency situations. The court found that none of the three statutory criteria for good cause were met. First, notice and comment was not 'impracticable' because the 'emergency' was merely the economic consequence for Navistar's bottom line, not an imminent threat to public safety or the environment. Economic hardship for a single company that results from its own business strategy does not constitute an emergency justifying the exception. Second, the rule was not 'unnecessary' because it was not a routine or insignificant determination; it had a major economic impact on Navistar's competitors who had complied with the law. The rule's interim status does not, by itself, justify forgoing public comment. Third, providing notice and comment was not 'contrary to the public interest,' as the EPA's reasoning improperly inverted the statutory test; the proper question is whether providing notice would harm the public interest, not whether dispensing with it would. The court concluded that EPA's reasons were insufficient to justify circumventing the APA's core public participation requirements.
Analysis:
This decision strongly reinforces the narrow interpretation of the APA's 'good cause' exception, clarifying that it cannot be invoked to rescue a single company from its own competitive failures. It establishes that agency-created 'emergencies' resulting from a regulated party's foreseeable business difficulties are not the type of urgent situations the exception was designed for. The ruling protects the integrity of the notice-and-comment process by preventing agencies from using administrative shortcuts to enact what are effectively targeted economic bailouts. This precedent makes it more difficult for agencies to bypass public procedure to favor one market participant over others who have complied with existing regulations.
Unlock the full brief for Mack Trucks, Inc. v. Environmental Protection Agency