Regulatory Vacation: Next Steps After Winning An APA Challenge

• Published date: 23 May 2023
• Subject Matter: Environment, Energy and Natural Resources, Environmental Law, Oil, Gas & Electricity
• Law Firm: Eckland & Blando
• Author: Mr Robert Dube

Federal¹ agencies adopted three thousand, two hundred, and seventy-three final rules in 2021 alone.² With each rule that was adopted, the Administrative Procedure Act ("APA") required the Federal Government to follow the appropriate steps when reaching its conclusions about what rules and regulations the agencies should create. When agencies fail to take those steps, parties affected by the rules can challenge the agency action under the APA. Winning such a challenge under the APA is a hurdle in and of itself. But, what follows from the victory, whether the agency's regulation is vacated or remanded, can cause even more problems depending on the industry. Thus, it is necessary to evaluate your remedy options when challenging an administrative action and determine whether it is better for your case to seek a remand with or without vacatur.

Plaintiffs can challenge agency actions under the APA on a variety of grounds, arguing that an action is "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law."³ In other words, the procedure the agency used was deficient. The plaintiff must show that as a result of a final, deficient agency action, their interest was injured.⁴ That being said, the arbitrary or capricious standard is narrow and highly deferential to the agency, permitting courts to overturn an agency action only if the agency action is not supported by "substantial evidence in the administrative record."⁵

But, even if a plaintiff is successful in establishing their injury from the agency action and meeting the arbitrary or capricious standard, winning under the APA does not signal the end of the battle. After a court finds an agency's action is unlawful, the agency usually has another chance to promulgate a rule. If a court chooses to remand a rule back to an agency, it can remand and vacate or remand without vacatur.

When the court vacates an agency action, it annuls the rule or regulation coming out of the agency, rendering whatever effect the regulation or adjudication had void.⁶ On its face, vacatur may appear the more beneficial remedy. When a plaintiff challenges an agency action, it is reasonable to assume that voiding the agency action would be the best outcome for the aggrieved plaintiff. After all, plaintiffs who challenge an agency action for a deficient procedure under the APA need to show some harm or injury suffered by the action.⁷ However, remanding and vacating creates a vacuum of regulation in the...