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MAKING SENSE OF DODD-FRANK

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Dodd-Frank

Trump’s 2 for 1 Regulatory Reduction Challenged in Court

by   |   February 8, 2017

President Donald Trump’s Executive Order requiring two regulations be repealed for every new one adopted and related OMB guidance have been challenged in a law suit commenced in the U.S. District Court for the District of Columbia. The law suit was commenced by Public Citizen, the Natural Resources Defense Council and the Communications Workers of America. The defendants are the President, the Acting Director of the OMB and the current or acting secretaries and directors of more than a dozen executive departments and agencies.

The plaintiffs are asking the court to issue a declaration that the order cannot be lawfully implemented and bar the agencies from implementing the order. The complaint alleges that the agencies cannot lawfully comply with the president’s order because doing so would violate the statutes under which the agencies operate and the Administrative Procedure Act.

According to the complaint, to repeal two regulations for the purpose of adopting one new one, based solely on a directive to impose zero net costs and without any consideration of benefits, is arbitrary, capricious, an abuse of discretion, and not in accordance with law, for at least three reasons:

  • No governing statute authorizes any agency to withhold a regulation intended to address identified harms to public safety, health, or other statutory objectives on the basis of an arbitrary upper limit on total costs (for fiscal year 2017, a limit of $0) that regulations may impose on regulated entities or the economy.
  • The Executive Order forces agencies to repeal regulations that they have already determined, through notice-and-comment rulemaking, advance the purposes of the underlying statutes, and forces the agencies to do so for the sole purpose of eliminating costs that the underlying statutes do not direct be eliminated.
  • No governing statute authorizes an agency to base its actions on a decision making criterion of zero net cost across multiple regulations.