Department of Energy lacks discretion to shelve efficiency standards finalized under Obama

The secretary of Energy improperly, indeterminably shelved Obama-era efficiency standards finalized just before President Trump's inauguration, a 9th U.S. Circuit Court of Appeals panel decided Thursday.

The unanimous ruling helps define the limits of an executive agency's discretion to abandon its own previous work when the presidency switches political parties.

The four rules in question set heightened efficiency standards for a handful of energy-intense consumer and industrial products and were approved by then-energy secretary Ernest Moniz in December 2016. The standards were posted for public review pursuant to the agency's "error-correction" regulation, which gives the public -- or the department itself -- a 45-day window in which to catch infirmities in finalized rules.

Though the prescribed 45 days elapsed with essentially no public complaint, Energy Secretary Rick Perry nonetheless withheld the rules from final publication and has done so to date, saying his agency is "continuing to review" them.

In Thursday's opinion, Circuit Judge Paul J. Watford conceded regulations "generally permit" agencies to withdraw even finalized rules prior to publication, but he concluded express terms of the error-correction regulation negate that default discretion. NRDC v. Perry, 2019 DJDAR 9722 (9th Cir. Oct. 10, 2019).

"The error-correction rule states that, at the end of the error-correction process, the Secretary 'will' submit the final rule for publication in the Federal Register," wrote Watford, joined by Circuit Judge Mary M. Schroeder and District Judge David A. Ezra. "The word 'will,' like the word 'shall,' is a mandatory term."

The ruling affirms a decision by District Judge Vince Chhabria, which Watford said rightly found the Department of Energy "relinquished whatever discretion it might have had to withhold publication of the rules at issue here when it adopted the error-correction rule."

Natural Resources Defense Council attorney Ian Fein, who argued the case pressed by four environmental organizations and 11 states, said Thursday's result both logically applied the specific regulation at hand and underscored a general idea about limits constraining executive agencies.

"The ruling is that agencies have to comply with their own regulations, and don't get to selectively choose," Fein said. "That principle applies more broadly than just in the context of a change of administration."

Fein's briefs suggest the energy-saving standards now ordered to take effect, barring an appeal by the government, will keep tens of millions of metric tons of carbon dioxide, sulfer dioxide, and methane from the atmosphere, and save consumers and businesses billions of dollars.

"It's a great ruling to ensure these important energy efficiency standards that the Department of Energy spent a lot of time working on will go into effect, with great benefit to both consumers and to the climate," Fein said.

Fein added that Thursday's ruling fits a pattern of necessary judicial correction to administration agencies under Trump disregarding or undermining actions they undertook during President Obama's presidency.

"This is just one in a long series of decisions where courts have struck down this administration's attempt to ignore or undo important work that the agencies themselves did under the previous administration," Fein said.

Attorneys for the government did not immediately respond to a request for comment.