Administrative Law Report - January 2025, Vol. 3

Welcome to your monthly rundown of all things administrative law, where we highlight all the happenings you may have missed.

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Environmental/Energy:  

• Ninth Circuit Applies Deferential Standard to EPA Risk Management Program Rules: In United States v Multistar Industries Inc, the Ninth Circuit Court of Appeals addressed judicial deference to agency interpretations in the context of the EPA’s definition of “Stationary Source” under the Clean Air Act (CAA) and related regulations. The case examined whether railcars fell under the transportation exemption in the CAA and the Emergency Planning and Community Right to Know Act. While the court acknowledged ambiguity in the relevant statutes and regulations, it did not apply Chevron deference, citing Loper Bright and Skidmore. The court was persuaded that EPA’s interpretation was a reasonable approach based on its substantive expertise and reflected EPA’s “fair and considered judgment” representing its official position noting its inclusion in the regulatory preamble, referencing Kisor v. Wilke. Ultimately, the court upheld the EPA’s interpretation of its own regulations but also cited Skidmore suggesting its use to guide courts when statutes are ambiguous.
• Update on PFAS CERCLA Litigation: Following up on our article from our October Report, Petitioners filed their brief that has shed light on their position that EPA lacks the authority to regulate PFAS under the Comprehensive Environmental Response Compensation and Liability Act (CERCLA). Petitioners’ primary argument centers on EPA’s alleged faulty interpretation of the phrase “may present substantial danger” under CERCLA Section 102. Citing Loper Bright, Petitioners argue that EPA interpretation has no fixed boundaries, is inconsistent with CERCLA’s structure and is inconsistent with prior EPA interpretations. EPA has yet to file its brief. Stay tuned.

Financial Services/Securities:  

• Digital Debt Collection: Court Upholds Email Communications Under FDCPA and FCCPA: In Quinn-Davis v. TrueAccord, the U.S. District Court for the Southern District of Florida ruled in favor of TrueAccord, determining that sending debt collection emails does not violate the inconvenient time provisions of the Fair Debt Collection Practices Act (FDCPA) or the Florida Consumer Collection Practices Act (FCCPA). The court emphasized that emails, unlike phone calls, do not intrude upon consumers’ peace and can be accessed at the recipient’s convenience. This decision challenges the Consumer Financial Protection Bureau’s (CFPB) interpretation in Regulation F, which considers the time an email is sent to determine convenience. The court’s ruling underscores the evolving legal perspective on digital communications in debt collection.
• Texas Court Upholds Injunction and Jurisdiction in CFPB Late Fee Rule Challenge: In Chamber of Commerce of the United States of America et al. v. Consumer Financial Protection Bureau et al., the U.S. District Court for the Northern District of Texas denied the CFPB’s motions to dissolve a preliminary injunction on its Credit Card Late Fee Final Rule and to transfer the case to the District of Columbia. The court also upheld the standing of the Fort Worth Chamber of Commerce, allowing the case to proceed in Texas.

Labor:  

• 2024 FLSA Salary Rule Vacated: In April 2024, the U.S. Department of Labor (DOL) issued a Final Rule raising the minimum salary required for employers to classify employees as exempt from the minimum wage and overtime provisions of the Fair Labor Standards Act (FLSA). The rule sought to increase the salary threshold for the “white-collar” exemptions from $684 per week to $844 per week ($43,888 annually) starting July 1, 2024, and then to $1,128 per week ($58,656 annually) on Jan. 1, with automatic increases every three years thereafter. This significant change faced legal challenges from the State of Texas and various employer groups, leading to the case Texas v. DOL. The court ruled that the DOL exceeded its authority by prioritizing salary thresholds over the duties tests outlined in existing law. Citing the precedent of Loper Bright and other authorities, the court vacated the rule nationwide, stating that illegal agency actions should be nullified. Although the DOL has appealed the decision, the agency faces significant challenges in overturning the ruling.

Telecommunications:

• Supreme Court to Consider Non-Delegation Doctrine: The Fifth Circuit Court of Appeals in Consumers Research v Federal Communications Commission, 109 4th 743 (5th Cir.2024) held that the Universal Service Fund (USF) established under the Telecommunications Act that entrusted the Federal Communications Commission (FCC) with the administration of the USF and the FCC relied upon the Universal Service Administrative Co (USAC) for support in setting the USF was an unlawful delegation of congressional authority in violation of the Legislative Vesting Clause. For many years, the Supreme Court has upheld congressional delegations so long as Congress provides an intelligible principle to guide the agency’s discretion. However, there are limits to congressional delegations, and the Supreme Court’s decision to review this case suggests a renewed interest in congressional delegations.
• Sixth Circuit Puts Net Neutrality Rules on Ice: The Sixth Circuit Court of Appeals in MCP No. 185: FCC In the Matter of Safeguarding and Securing Open Internet (6th Cir. January 2, 2025) prevented the Federal Communications Commissions from restoring the net neutrality rules, citing Loper Bright. In setting aside these rules the Court noted that previously courts have upheld these rules under the Chevron Doctrine. The Sixth Circuit, in considering the FCC’s latest Order, noted that with Chevron no longer effect, the court did not have to defer to the FCC. Rather, the court noted that its task is to determine the “best reading of the statute” using traditional tools of statutory construction. The Court went on to hold that Broadband Internet Service Providers offer only an “information service” under the Telecommunications Act (Act) and therefore the FCC lacks the statutory authority to impose desired net-neutrality policies through the Act.

Transportation:  

• Scope of NEPA Review: Arguments Before the Supreme Court: On December 10, 2024, the U.S. Supreme Court heard arguments in Eagle County, Colorado v. Surface Transportation Board et al., 144 S. Ct. 2680 (June 24, 2024)(granting a petition for writ of certiorari). The case originates from of the U.S. Surface Transportation Board (STB), whereby the STB granted authority for an entity to construct a common carrier line of railroad to primarily ship crude oil out of the Uinta Basin in Utah. The D.C. Circuit had remanded the case back to the STB for failing to take a sufficient hard look under the National Environmental Policy Act (NEPA) because, according to the D.C. Circuit, the STB should have further studied the impacts of refining the fuel. During oral arguments, the justices appeared to be skeptical that a railroad regulatory agency has the power to study environmental impacts outside of its jurisdiction and appeared to be leaning towards imposing some new restrictions on the scope of an agency’s NEPA review. Prior to hearing oral argument, Justice Neil Gorsuch recused himself from the case without explanation. The Court’s decision is expected sometime in the first half of 2025.

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