Inside EPA - 10/22/2010

Ruling Could Create 'Long Road' For Next Suit Over Data Quality Challenge

Posted: October 20, 2010

Industry could face a "long road" ahead waiting several years before a court will hear a new case on whether Data Quality Act (DQA) challenges against EPA and other agencies are judicially reviewable after a federal appellate court's recent ruling sidestepped the issue, though some DQA proponents argue that courts have found the challenges to be reviewable.

Several DQA petitions are pending at EPA challenging agency data underpinning its climate and other rules, but even if EPA denies those petitions it could be several years before a lawsuit challenging that denial makes it to the U.S. Court of Appeals for the D.C. Circuit or another appeals court, sources say. Still, a legal source says, "Everyone would like to see a court, particularly the D.C. Circuit, squarely address the issue of review."

The most recent ruling on a DQA petition came in an unpublished Oct. 14 decision by the 9th Circuit in Americans for Safe Access (ASA) v. Department of Health & Human Services (HHS). The court rejected efforts by medical marijuana advocates seeking to correct a HHS finding that the drug had no medicinal value. The 9th Circuit agreed with a lower court that HHS' rejection of the DQA petition filed by ASA "did not constitute final agency action" under the Administrative Procedure Act and therefore was not eligible for judicial review (see related story).

Opponents of judicial review say the ruling likely has little bearing on the legal landscape because it leaves in place the controlling precedent that affirmatively denies judicial review of agencies' DQA decisions. And sources say that any future attempt to file a lawsuit on the issue of judicial review could take a long time.

Any future challenge would take several years, as it would need to wind its way through the process established under the DQA for agency review of the petitions. Agency responses are often delayed, for instance, if the data is informing a rule or being considered in litigation, according to a source with the Center for Regulatory Effectiveness (CRE), an industry-funded think tank that supports judicial review of DQA filings.

A future petition would need to deal with a legitimate data-quality issue, as some DQA petitions are "somewhat polemic as opposed to addressing the problems in the act," the source says. "You have to have a real problem."

Still, some proponents of judicial review argue that a new lawsuit might not be necessary because, they say, the 9th Circuit's ruling supports judicial review of DQA requests for data correction, citing the fact that the opinion did not rule out reviewability and said the decision could further encourage use of the statute.

"I think the ASA decision bolsters the prospects of the [DQA] in other circuits, and that eventually the DC Circuit will say explicitly that denials of [DQA] correction requests are reviewable," lawyer James Conrad wrote in an undated memo. "That will dramatically change how agencies treat those requests (and the [DQA])."

The CRE source also questions whether another legal challenge is needed to establish reviewability. The source says "there is enough" in the ASA ruling, when combined with a D.C. Circuit ruling, Prime Time Int'l Co. v. Vilsack. After Prime Time the court also rejected a Department of Justice call to clarify the judicial review issue -- all of which means industry can "operate under the assumption" that DQA petitions are reviewable in court, the source says.

Still industry might sue an agency in the future if it denies a DQA petition, in a bid to more fully resolve the judicial review issue. Supporters of review say the D.C. Circuit, which dealt with the issue more extensively in Prime Time than the 9th Circuit in ASA, would be the circuit of choice for another challenge because of the circuit's focus on administrative law and the "more useful language" in Prime Time, the legal source says.

Even if there is a future decision on the merits that favors industry, there could be a challenge between that and the 4th Circuit's 2006 decision in Salt Institute & U.S. Chamber of Commerce v. Michael Leavitt, which is currently the only decision dealing directly with the issue of judicial review of DQA petitions.

The 4th Circuit said that DQA challenges rejected by federal agencies are not judicially reviewable. Salt Institute found that the DQA "creates no legal rights in any third parties," rather orders the White House Office of Management & Budget "to draft guidelines concerning information quality and specifies what those guidelines should contain."

In the meantime, legal sources say that industry's reading of ASA could lead to more groups filing DQA petitions against EPA and other agencies because of the chance for a legal airing after a denial. "This case should increasingly encourage people to bring correction requests and be inclined to appeal if they get declined," the source adds.

There has already been an uptick in DQA petitions filed at EPA this year. Since May 2010, 10 petitions have been filed by industry and environmental groups on a number of topics, including EPA assessments of chemical risks, its finding on the risks of greenhouse gases, and water issues.

Regardless of future challenges, the CRE source is "adamantly" against a legislative move to make the DQA reviewable, citing the progress made in the courts. Other industry groups, such as the Chamber of Commerce, have in the past supported congressional action on the issue. -- Aaron Lovell