Regulatory Opt-Out Provision for Lead Need Not Be Reinstated, Court Rules

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National Ass'n of Home Builders v. EPA, D.C. Cir., No. 10-1183, 6/22/12

Key Holding: A federal appeals court upholds EPA's authority to remove a provision from its lead-based paint renovation rule that allowed contractors to opt out of certain protections.

By Robert C. Cook  

A federal appeals court June 22 upheld the Environmental Protection Agency's authority to remove a provision from its lead-based paint renovation rule that had allowed contractors to opt out of certain protections against lead exposure (National Ass'n of Home Builders v. EPA, D.C. Cir., No. 10-1183, 6/22/12).

The National Association of Home Builders and other groups had argued before the U.S. Court of Appeals for the District of Columbia Circuit that EPA removed the opt-out provision from the rule without relying on new data or experience to indicate stricter lead exposure protections were required during home renovations.

The D.C. Circuit denied the petition by NAHB; the Hearth, Patio & Barbecue Association; the National Lumber & Buildings Material Dealers Association; and the Window & Door Manufacturers Association.

“We are disappointed with the court's ruling today,” a spokeswoman for NAHB told BNA June 22 in an email. “We are encouraged, however, by the House and Senate's recently introduced Lead Exposure Amendments Act of 2012 (H.R. 5911 and S. 2148), which call for the reinstatement of the opt-out provision.”

The Senate bill was introduced March 1 by Sen. James Inhofe (R-Okla), and the House bill was introduced June 7 by Reps. John Sullivan (R-Okla.) and Tim Muphy (R-Pa.) (111 DER A-23, 6/11/12).

Rule Amended in 2010.

The appellate court noted that in 2008, EPA issued the opt-out rule, stating that renovations at owner-occupied housing were exempt from lead exposure protections if the homeowner certified that no pregnant women or young children lived there.

In 2010, EPA amended the rule to eliminate the opt-out provisions. The home builders and other groups sought reversal of the May 6, 2010, amendment to the rule removing it.

The lawsuit was filed in the D.C. Circuit on July 8, 2010.

In its denial of the home builders' petition, the appellate court noted that the trade groups raised two grounds for reversal of the 2010 rule change.

First, the trade groups claimed that the decision to abandon the opt-out provision was arbitrary and capricious, in violation of the Administrative Procedure Act.

Second, the groups faulted EPA for failing to convene a panel of representatives of small businesses before issuing the new rule in violation of the Regulatory Flexibility Act.

The appellate court ruled that EPA's decision was not arbitrary or capricious, and the court said it lacked jurisdiction to review the second challenge.

On the first and primary point, the appellate court wrote, “The essence of the petitioners' argument is that it was arbitrary and capricious for EPA to change its mind about the opt-out provision.”

Court Relies on FCC v. Fox Television.

The court wrote that in light of FCC v. Fox Television Stations Inc., 556 U.S. 502 (2009), “The fact that the original opt-out provision was consistent with congressional intent is irrelevant as long as the amended rule is also 'permissible under the statute.' ”

The court explained that EPA found that the opt-out provision was not sufficiently protective for young children and pregnant women, the most vulnerable populations.

Additionally, the court said that EPA determined that lead paint dust exposure can cause adverse health effects in older children and adults.

The court determined that these reconsiderations by EPA promoted “to a greater extent” the directive of the statute “to promulgate regulations covering renovation activities in target housing.”

The D.C. Circuit held that it was not arbitrary or capricious for EPA to issue an amended rule that it reasonably believed would be “more reliable, more effective, and safer than the original rule.”

Court Notes New Administration.

“The petitioners find EPA's change of heart largely inexplicable,” the court wrote.

However, the court observed that there were two “events of note” that “go a long way toward explaining why EPA reconsidered the opt-out provision: namely, the inauguration of a new President and the confirmation of a new EPA Administrator.”

A change in administration after an election is “a perfectly reasonable basis” for an agency's reappraisal of the costs and benefits of a rule, the court said.

Lead was added as a primary ingredient to oil-based exterior and interior house paints in the 1940s.

In 1992, Congress found that as many as 3 million children younger than 6 years old were affected by low-level lead poisoning, “most commonly caused by the ingestion of household dust containing lead from lead-based paint,” EPA wrote in its appellate brief.

Also in 1992, lead paint hazards were addressed in amendments to the Toxic Substances Control Act.

EPA said in its brief and at oral argument that the revised rule provides greater protection for women and young children.

Arguing the case for EPA was Stephanie J. Talbert of the Justice Department. DOJ did not immediately respond June 22 to a request for comment.

By Robert C. Cook  


The opinion by the U.S. Court of Appeals for the District of Columbia Circuit in National Ass'n of Home Builders v. EPA is available at http://op.bna.com/env.nsf/r?Open=jstn-8vhqaz.