Close

Are you in compliance?

Don't miss out! Sign up today for our weekly newsletters and stay abreast of important GRC-related information and news.

Lawsuit challenges President’s ‘one-in, two-out’ Executive Order

Joe Mont | February 10, 2017

A coalition of consumer, environmental and worker advocacy groups have sued the Trump Administration to block an Executive Order that directs federal agencies to repeal two federal regulations for every new rule they issue.

The plaintiffs—Public Citizen, Natural Resources Defense Council, and the Communications Workers of America —are asking the court to issue a declaration that the order cannot be lawfully implemented and bar federal agencies from implementing the order.

“For fiscal year 2017, which is in progress, the heads of all agencies are directed that the total incremental cost of all new regulations, including repealed regulations, to be finalized this year shall be no greater than zero, unless otherwise required by law or consistent with advice provided in writing by the Director of the Office of Management and Budget,” the Executive Order, signed by President Donald J. Trump on Jan. 30, says.

The Executive Order covers all new “significant” rules or guidance documents issued by executive agencies. “Significant” is generally defined as an impact on the economy of $100 million or a matter otherwise of major national importance. The Executive Order does not cover rules from independent agencies which do not answer to the President) including the Federal Communications Commission, the Federal Trade Commission, the Securities and Exchange Commission, and the Consumer Financial Protection Bureau.

The Executive Order also requires covered agency heads, beginning in Fiscal Year 2018, to provide their “best approximation of the total costs or savings associated with each new regulation or repealed regulation.” During the Presidential budget process, the OMB director is instructed to provide regulators with a total amount of incremental costs that will be allowed for each agency in issuing new regulations and repealing regulations for the next fiscal year.

“No regulations exceeding the agency's total incremental cost allowance will be permitted in that fiscal year, unless required by law or approved in writing by the Director,” the order says.  

The lawsuit, filed in the U.S. District Court for the District of Columbia, names as defendants the President, the acting OMB director, and the current or acting secretaries and directors of more than a dozen executive departments and agencies. The complaint alleges that the agencies cannot lawfully comply with the order because doing so would violate the statutes under which the agencies operate and the Administrative Procedure Act.

"No one thinking sensibly about how to set rules for health, safety, the environment, and the economy would ever adopt the Trump Executive Order approach, unless their only goal was to confer enormous benefits on big business,” Public Citizen President Robert Weissman said in a statement. “If implemented, the order would result in lasting damage to our government’s ability to save lives, protect our environment, police Wall Street, keep consumers safe and fight discrimination. By irrationally directing agencies to consider costs but not benefits of new rules, it would fundamentally change our government’s role from one of protecting the public to protecting corporate profits.”

The plaintiffs are represented by lawyers at Public Citizen Litigation Group, NRDC, CWA, and Earthjustice.

“When presidents overreach, it is up to the courts to remind them no one is above the law and hold them to the U.S. Constitution,” said Earthjustice attorney Patti Goldman. “This is one of those times.”

Citing estimates that regulations cost $2 trillion a year, the Trump Administration is aiming to reduce the cost of regulations by 75-80 percent.

A draft 2016 report to Congress from the White House OMB, however, estimates that the annual benefits from all major regulations over the past 10 years for which agencies monetized both benefits and costs were between $269 billion and $872 billion, while the costs were between $74 billion and $110 billion, in 2014 dollars,” the plaintiff’s claim. The Executive Order, they say, does not take into account the benefits of new rules, “which in almost every case vastly exceed the purported costs.”

By requiring agencies to consider factors that are not permitted under the law, the Executive Order “usurps congressional power and violates constitutional separation of powers principles” plaintiffs say of the legal rationale for the lawsuit. It also violates the Take Care Clause in Article II of The Constitution, which directs the President to take care that the laws be faithfully executed, they argue.

“Implementation of the Executive Order would require federal agencies to violate numerous statutes,” they add. “No federal statute authorizes an agency to consider, when deciding whether to issue a regulation intended to address identified harms to public safety, health, or other statutory objectives, whether it can offset the costs of the new rules by repealing two or more existing rules.”

 Agencies cannot implement the Executive Order “without violating the statutes from which they derive their rulemaking authority and the Administrative Procedure Act, which prohibits regulation that is arbitrary or in violation of the law,” they add.