SAN FRANCISCO (CN) - Foreshadowing a potential win for the Trump administration's deregulation agenda, a Ninth Circuit judge on Wednesday rejected arguments that the Energy Department intentionally relinquished its power to hold back stricter efficiency standards.
"Why in the world would an agency want to do this?" U.S. Circuit Judge Paul Watford asked during a hearing Wednesday.
Watford was responding to arguments posed by a coalition of environmental groups, 11 states, the District of Columbia and the city of New York. The coalition is defending a federal judge's February 2018 decision to thaw frozen Obama-era efficiency standards for large appliances and industrial equipment.
U.S. District Judge Vince Chhabria found Energy Department rules require it to publish efficiency standards that were advertised as final after a 45-day error-correction period.
The U.S. Justice Department says the error-correction process was designed to limit public input to fix errors and typos, not to hinder the agency's power to hold back regulations.
"It was not intended to constrain the agency's policy authority or its underlying discretion to determine prior to publication whether to promulgate a regulation," Justice Department lawyer H. Thomas Byron III told a three-judge panel Wednesday.
The stricter standards, scheduled to take effect after a 45-day review period that started in December 2016, would apply to air conditioners, air compressors, uninterruptable power supplies, walk-in coolers and freezers and commercial boilers.
The new rules are expected to save consumers and businesses $1.6 trillion, cut 6.5 billion tons of carbon dioxide emissions, and conserve more energy than the U.S. produces in a year by 2030, according to Energy Department estimates.
But Energy Secretary Rick Perry has refused to act on the proposed regulations since taking office in March 2017.
Representing the environmental groups, attorney Ian Fein argued that the department already decided to finalize the rules before the error-correction period started.
Without a court order requiring the standards to be published, the energy-saving rules will remain in regulatory limbo, Fein told the panel.
"It would deprive the public of these enormous public benefits that the agency itself has found and not disclaimed, and it would injure the industry that in good faith relied on these final standards posted on the agency's website," Fein said.
Fein is with the Natural Resources Defense Council.
Addressing the Justice Department lawyer, U.S. Circuit Judge Mary Schroeder asked why the error-correction rule and its regulatory history are silent on the agency's authority to hold back a standard that was supposed to be published.
"Ambiguity in the rule should not be read to support plaintiffs' idea that there was intent to constrain the agency's policy-making authority," Byron said.
U.S. District Judge David Ezra, sitting on the panel by designation from the District of Hawaii, cautioned that a ruling in favor of the plaintiffs could have far-reaching implications for judicial power over executive decisions.
"I'm just wondering whether the district court has that kind of enormous power," Ezra said. "I think not."
Also supporting the stricter energy standards, California Deputy Attorney General Somerset Perry attempted to assuage any fears that a decision in favor of the plaintiffs would dramatically enhance judicial power over executive agencies.
"It will require the agency publish these standards," Perry said. "If the agency is concerned about this moving forward, it can amend the rule. It can't distort the rule it previously promulgated."
After about 45 minutes of debate, the panel took the arguments under submission.
Schroeder and Watford were appointed by Presidents Jimmy Carter and Barrack Obama, respectively. Ezra was appointed by Ronald Reagan.
Plaintiffs involved in the lawsuit include the states of California, Connecticut, Illinois, Maine, Maryland, Massachusetts, New York, Oregon, Pennsylvania, Vermont, Washington state, the District of Columbia, and the city of New York.
Other groups challenging the frozen efficiency standards include the Natural Resources Defense Council, the Sierra Club, Consumer Federation of America, and Texas Ratepayers’ Organization to Save Energy.
The Air-Conditioning, Heating & Refrigeration Institute, an industry trade group, also intervened as a defendant in the case.
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