Congress will soon be deciding whether to use the Congressional Review Act (CRA) to overturn several EPA waivers that allow California to regulate vehicle emissions. There have been two important developments since I initially posted an explainer on Legal Planet about this issue. First, two lawyers, Michael Buschbacher and Jimmy Conde, posted a lengthy piece on this site responding in part to my previous arguments and advocating that Congress should move forward on overturning the waiver. And second, the Government Accountability Office has issued a new legal opinion arguing that the CRA does not apply. It’s time to take a closer look at the issue.

For those who are tuning in late, my earlier explainer should help get you up to speed.  Here’s a quick and dirty orientation:

• Although the Clean Air Act generally preempts state emissions standards for new vehicles, EPA is required to waive preemption for California provided certain requirements are met. 
• The CRA provides a framework for Congress to overturn agency rules. The main practical significance of the CRA is that, when it applies, a Senate filibuster is precluded.  
• The big point of contention is whether the waiver is a “rule” under the CRA, which in turn depends on whether it is classified as a rule under the Administrative Procedure Act (APA).

Below I discuss why the California waiver is clearly not a rule.  In what may reflect doubts about their core legal argument, Buschbacher and Conde also argue that Congress can do anything it wants anyway. That is true in terms of raw power.  But it would require the Senate to ignore its own rules or use the nuclear option to change them.  Views may differ about whether the Senate should expand the hole that the CRA has already carved in the filibuster.  Rather than speculate about the Senate’s fidelity to the CRA and existing Senate rules, I will limit myself to a discussion of whether the CRA applies.

The Argument Against Considering the Waiver To Be a Rule

In my previous explainer, I gave the basic reasons why the California waiver is not a rule:

1. The waiver does not apply to an open-ended class of entities who would be subject to later EPA enforcement.  Only California can enforce its regulations, not EPA.
2. The California waiver applies existing legal standards to a particular set of facts: whether specific California regulations meet the requirements for the waiver.
3. The waiver has a particularized application: specific regulations for California based on the facts as of the specific time when the waiver was granted. 
4. Even if the California waiver were otherwise considered a rule under the APA, the CRA itself has a specific exemption for rules of “particular applicability.”  Since a waiver applies only to one set of regulations in a single state, it’s seemingly covered by this exemption.

GAO has raised some additional arguments that also deserve mention. First, two of the three EPA documents being reviewed by Congress merely inform the public that EPA has granted a waiver of a particular rule.  Thus, they are like press releases. Whatever the word “rule” means, it clearly doesn’t include press releases about earlier agency actions. If you wanted to challenge the agency in court, you’d have to ask the court to review the decision itself, not the later press release. 

Second, the California waiver is clearly a “license” within the meaning of the APA and is therefore better classified as a case-specific order rather than a rule. As GAO explains:

APA defines an order as “the whole or a part of a final disposition, whether affirmative, negative, injunctive, or declaratory in form, of an agency in a matter other than rule making but including licensing.” 5 U.S.C. § 551(6). APA further defines “licensing” to include an agency granting or revoking a license, and “license” to include an agency approval, statutory exemption, or other form of permission. 5 U.S.C. § 551(8), (9).

Subjecting waivers to CRA review would be a dramatic expansion of a statute that was carefully crafted to provide a check on quasi-legislative actions by agencies.  Waivers are ubiquitous across the administrative state. Several states, for instance, have obtained waivers for their Medicaid programs. Businesses also often obtain waivers of one kind or another. Classifying waivers as rules would expose them to the risk of being overturned when control of the government switches.   

The Collateral-Effect Argument

Buschbacher and Conde’s best argument in favor of classifying the California waiver as a rule is based on another provision of the Clean Air Act, section 177, which was adopted seven years after the California waiver provision.  Once a California regulation receives a waiver, section 177 allows other states to piggyback on the waiver and adopt the same regulation themselves. Congress’s thinking was clearly that, once carmakers were committed to producing cars meeting the California standard anyway, it would not be hard for them to expand production to meet demand in other states as well.  Thus, a collateral effect of granting the California waiver is to allow copycat standards to be adopted in other states.  

Buschbacher and Conde argue that this side effect makes the waiver a rule of general applicability and future effect. This argument implies that, prior to the later passage of section 177, a California waiver would not have been considered a rule, but that in 1977 Congress unintentionally converted the waiver into a different legal beast subject to different procedural rules.

This is an argument I didn’t address in my earlier Legal Planet post due to space limits, but I’m glad to have the opportunity to address it now.  Part of the premise is right—the waiver does have some side effects in other states due to section 177.  The core flaw in the argument is that it confuses the nature of a government action with its effects. Many government actions that are obviously adjudications, not rulemakings, have similar collateral effects. 

To begin with, judicial judgments—the quintessential non-rulemaking actions—can also have collateral effects on non-parties. Injunctions bind not only the defendant but all those acting in concert with them.  Judicial rulings result in issue preclusion which other parties can use in their own litigation to prevent the other side from relitigating an issue.  But regardless of its collateral effects, a court’s judgment about the legality of a specific party’s conduct is not a rule.

Moreover, it is not unusual for a federal action relating to a single concrete situation to impact preemption of state laws.  For instance, although the details are complicated, the Supreme Court has ruled federal approval of certain medical devices and drugs preempts state damage suits against the manufacturer of that particular device. But a determination that a specific drug or device is safe and effective is not a rulemaking.

Furthermore, while the APA defines a rule as “an agency statement of general or particular applicability and future effect,” the CRA excludes “any rule of particular applicability.” Note that this language refers to the “application” of a rule rather than its “effects.” A California waiver decision applies only to the specific California rules in front of the agency. EPA does not consider or issue an order about preemption in other states. The California waiver announcement does not even mention any state other than California or any effect that the waiver might have outside California. The decision’s collateral effect on other states comes from an entirely different provision of law that EPA has no control over.

In short, a possible collateral effect should not transform an agency statement about one person or entity into a general regulation.  For example, while government approval of a person’s citizenship application has a collateral effect on others through the family reunification policy, no one would say that approving a single person’s citizenship application is a rulemaking.

Thus, despite the best efforts of advocates to convert a decision about a single vehicle standard in a single state into a general rule, the fact remains that it is a case-specific decision.  Trying to force the square peg of the California waiver into the round hole of the CRA would be a mistake.

Daniel Farber is the Sho Sato Professor of Law at the University of California, Berkeley.