Attorneys General from 14 states—led by West Virginia and Wisconsin—filed an amicus brief on April 17 in support of the “1-in 2-out” Executive Order (EO) issued by President Trump.  This EO, which we have covered previously, requires that:

• For every new regulation promulgated, two regulations are eliminated;
• Any new incremental costs associated with new regulations shall be offset by the elimination of existing costs associated with at least two prior regulations; and
• For 2017, “the total incremental cost of all new regulations, including repealed regulations . . . shall be no greater than zero” unless otherwise required by law or consistent with advice from the Director of the Office of Management and Budget (OMB).

Plaintiffs, Public Citizen, Inc. (a nonprofit consumer advocacy organization), NRDC and the Communication Workers of America (AFL CIO), filed suit in the U.S. District Court for the District of Columbia challenging the “1-in 2-out” EO. They primarily attack the requirement that new rules can be promulgated only if the net impact does not impose greater costs. They argue that, by narrowly focusing on cost without considering benefits, the EO necessarily violates the Administrative Procedure Act and the statutes from which the agencies derive rulemaking authority.

Meanwhile, an April 5, 2017 OMB guidance document has exacerbated concerns for critics of the rule by clarifying that agencies must offset even regulations that are required by statute (effectively forcing deregulation relative to the status quo). The document also provides numerous instances when agencies are required to consult with the Office of Information and Regulatory Affairs (OIRA), likely slowing rulemaking efficiency. Finally, it states that a Clinton-era EO, which required the weighing of costs and benefits before promulgating a new regulation, still applies. Critics are likely to argue that this clarification will not undo the damage caused by the EO, but only leaves intact prior restrictions associated with promulgating new rules and likely even requires a reconstruction of the cost-benefit analysis of old rules.

Defendants filed a motion to dismiss on April 10, and the States’ brief supports this motion. The States’ brief cites numerous instances when previous Presidents have conducted a “centralized review of regulations to ensure that federal rulemaking as a whole cohered with the President’s policies and priorities.” They noted President Reagan’s development of OIRA, his requirement that regulations include a cost-benefit analysis in a regulatory impact analysis and the requirement that the “‘alternative involving the least net cost to society shall be chosen.’” They also cited two executive actions by Presidents Clinton and Obama requiring that agencies consider the impact of proposed regulations on state and local governments, and argued that “[t]he Executive Order . . . fits squarely within the tradition of orders enacted by prior administrations . . . .”

The States also argue that a broad attack is inappropriate because the EO contains exceptions when a particular approach would not be permitted by law. Their brief notes that “it is impossible to speculate when, if ever, the specific approach to rulemaking in the President’s Order would be forbidden or impracticable outside the context of a specific rulemaking.”

In response to the Defendants’ motion to dismiss, Plaintiffs amended their complaint on April 21. The Defendants’ deadline to reassert a motion to dismiss is now May 12.