Natural Resources Defense Council, Inc. v. National Highway Traffic Safety Administration

The Second Circuit Court of Appeals issued an opinion explaining the rationale for its April 2018 order vacating a National Highway Traffic Safety Administration (NHTSA) rule that indefinitely delayed a previously published rule that increased civil penalties for noncompliance with Corporate Average Fuel Economy (CAFE) standards. The court found that the Federal Civil Penalties Inflation Adjustment Act Improvement Act of 2015 did not give NHTSA authority to indefinitely delay adjustments to civil penalties and that NHTSA did not otherwise have authority to suspend the penalty increase rule. The Second Circuit also held that NHTSA violated the Administrative Procedure Act by failing to follow notice-and-comment rulemaking procedures when it adopted the delay rule. As a threshold matter, the Second Circuit also concluded that both the state petitioners and the environmental petitioners had standing. The Second Circuit also rejected the argument that the proceedings were untimely, finding that under the applicable Energy Policy and Conservation Act judicial review provision, the time for filing petitions for review was triggered by publication in the Federal Register, not by NHTSA’s delivery of the agency action to the Office of the Federal Register.

In a one-page order, the Second Circuit Court of Appeals granted petitions from environmental groups and five states challenging the Trump administration’s rule delaying the effective date for regulations that increase penalties for violations of vehicle fuel efficiency standards. The court vacated the delay rule and indicated that an opinion would follow “in due course.”

States and environmental groups asked the Second Circuit Court of Appeals for summary vacatur of the National Highway Traffic Safety Administration’s (NHTSA’s) indefinite delay of a rule increasing civil penalties for violations of fuel economy standards. The states and environmental groups contended that summary vacatur was warranted because NHTSA lacked authority to delay the rule’s effective date and failed to comply with the Administrative Procedure Act’s notice and comment requirements. Alternatively, the states and environmental groups asked the D.C. Circuit to stay the delay pending judicial review.

Two petitions for review were filed in the Second Circuit Court of Appeals seeking to set aside the National Highway Traffic Safety Administration’s decision to indefinitely delay the effective date of a final rule increasing the civil penalty rate for violations of the Corporate Average Fuel Economy (CAFE) standards. Petitioners in one proceeding were the Natural Resources Defense Council and two other environmental groups. Petitioners in the other proceeding were the State of New York and four other states. The petitions were filed pursuant to the Energy Policy and Conservation Act.