This is a guest post authored by Charles Tyler and E. Donald Elliott. Mr. Elliott is a Senior Fellow of the Administrative Conference. This post is the result of the authors' independent research and does not necessarily represent the views of the Administrative Conference or its Members, or the United States.
We are grateful to ACUS for featuring our forthcoming article, Administrative Severability Clauses.
Political analysts have dubbed the EPA’s recently released Clean Power Plan the “centerpiece” of the Obama administration’s climate strategy.[i] The proposed rule aims to reduce greenhouse gas emissions by 30% below 2005 levels before 2030,[ii] by requiring states to meet certain carbon pollution emissions goals. To set those goals, the EPA identified a set of four “building blocks” that, together, the agency believes make up the “best system of emission reduction.”[iii] While states are free to implement their own plans to reduce their greenhouse gas emissions, the plans they implement must at least match the emissions levels that could be reached by implementing the four building blocks.
Since the EPA’s emissions goals are derived from the building blocks, regulated entities are likely to challenge the factual findings underlying the building blocks in court. Given the resources poured into the proposed rule already and the resources it would take to carry the rule through notice and comment for a second time, the agency is concerned that a court will vacate the entire rule if a court finds that even just one of the building blocks is insufficiently supported by facts. To manage that risk, the agency included a conspicuous severability clause in the text of the proposed rule. The clause provides that if a court determines that one or more of the building blocks is insufficiently supported by facts, the remainder of the rule should stay in effect and the states’ emissions goals should be based on the remainder of the building blocks. [iv]
The EPA’s legal strategy is a remarkable development in administrative law. Agencies very rarely include severability clauses in their rules, and the Clean Power Plan proposed rule is, by our lights, far and away the most significant rule to include such a clause. The agency apparently has thought seriously about how the rule would function if a court invalidates one or more of the building blocks and has clarified its intent that the remainder of the rule should stay in effect.
While we take no position on the merits of the EPA’s proposed rule, we are pleased to see the agency express its view on severability in the text of the proposed rule. Indeed, six months before the proposed rule was released, we posted our unpublished paper online extolling the untapped virtues of administrative severability clauses. We argue that if agencies would more frequently include severability clauses in their rules, they would dramatically reduce the costs of courts vacating invalid provisions in rules—e.g., the costs of a regulatory “vacuum” and of repromulgating the rule.
Similarly, we argue that, for both policy and legal reasons, courts should usually defer to administrative severability clauses. Deferring to administrative severability clauses puts the severability decision in the hands of the branch that will generally be the most knowledgeable about how various regulatory regimes will likely function. Deferring to administrative severability clauses also promotes political accountability by permitting the branch that is more directly accountable to the people to make the severability decision.
Finally, deference to administrative severability clauses is arguably what several bedrock Supreme Court decisions already require. SEC v. Chenery Corp. (Chenery II) established that agencies may choose the form in which they will promulgate policy.[v] No one would deny that an agency may repromulgate the valid portions of a rule after a court invalidates a rule in toto. One way of asking whether administrative severability clauses deserve deference, then, is whether the agencies may promulgate in one step what no one denies that they may promulgate in two. The spirit of Chenery II suggests that they may. Similarly, in Auer v. Robbins, the Supreme Court held that a court should defer to an agency’s interpretation of its own rule, unless that interpretation is plainly erroneous or inconsistent with the rule.[vi] If administrative severability clauses can be thought of as interpretations of the rules in which they appear, then Auer provides another reason to think that courts should defer to those clauses.
We applaud the EPA for including a severability clause in the text of the Clean Power Plan proposed rule, and we think that the regulatory environment would be improved if more agencies followed suit.
[i] The EPA’s Emissions Plan Should Be Just the Beginning, Wash. Post, June 2, 2014, http://www.washingtonpost.com/opinions/the-epas-emissions-plan-should-be....
[ii] Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units, 79 Fed. Reg. 34830, 34832 (June 18, 2014) (to be codified at 40 C.F.R. pt. 60).
[iii] Id. at 34835. These building blocks are: (1) improving operations at Electric Generating Units, (2) dispatching lower-emitting Electric Generating Units, (3) dispatching zero-emitting energy sources, and (4) improving end-use energy efficiency.
[iv] The severability clause reads:
We consider our proposed findings of the BSER [i.e., Best System of Emission Reduction] with respect to the various building blocks to be severable, such that in the event a court were to invalidate our finding with respect to any particular building block, we would find that the BSER consists of the remaining building blocks. The state goals that would result from any combination of the building blocks can be computed from data included in the Goal Computation TSD and its appendices using the methodology described in the preamble and that TSD.
Id. at 34892.
[v] SEC v. Chenery Corp. (Chenery II), 332 U.S. 194 (1947).
[vi] Auer v. Robbins, 519 U.S. 452 (1997).