## Facts

- EPA promulgated a 2001 Clean Air Act rule requiring a major reduction in nitrogen-oxide emissions from heavy-duty diesel engines, with compliance delayed until 2010.
- Mack Trucks, Inc. and Volvo Group North America, LLC developed and deployed selective catalytic reduction technology to meet the 2010 nitrogen-oxide standard.
- Navistar, Inc. pursued exhaust gas recirculation technology that did not meet the 2010 standard and continued sales by using a limited bank of emission credits.
- By late 2011, Navistar notified EPA it would soon exhaust its credits and would be unable to continue introducing noncompliant engines into commerce.
- On January 31, 2012, EPA issued an interim final rule establishing nonconformance penalties that allowed sales of engines not meeting the 2010 standard in exchange for payment of penalties.
- EPA issued the interim final rule without prior notice and comment, invoking the Administrative Procedure Act’s “good cause” exception.
- Mack and Volvo petitioned for review, arguing the rule was unlawfully promulgated and distorted competition by permitting continued sales of noncompliant engines.

## Issues

1. Whether EPA had “good cause” under 5 U.S.C. § 553(b)(B) to issue the interim final rule without notice-and-comment procedures.
2. Whether foreseeable economic and competitive effects associated with a single manufacturer’s impending loss of emission credits can constitute impracticability, an emergency, or a sufficient public-interest basis for bypassing notice and comment.
3. Whether labeling a rule “interim” or “ministerial” can excuse noncompliance with APA procedural requirements when the rule has immediate legal effect.

## Decision

- The D.C. Circuit vacated EPA’s interim final rule.
- The court held that none of the statutory criteria for APA “good cause” were satisfied.
- The court concluded that EPA’s failure to provide notice and an opportunity for comment violated the APA.
- The court declined to remand without vacatur and set the rule aside.

## Legal Principles

- The APA’s good-cause exception to notice-and-comment rulemaking is narrowly construed and permitted only in limited circumstances meeting the statute’s criteria.
- Foreseeable circumstances, including effects arising from regulated parties’ long-term business or technology choices and an agency’s established regulatory timeline, generally do not establish “impracticability” or an emergency sufficient for good cause.
- Avoiding economic disruption to a particular regulated entity, without a supported showing of imminent harm of the type contemplated by the APA, is insufficient to show that notice and comment would be contrary to the public interest.
- A rule’s characterization as “interim” does not exempt it from APA procedures when it has immediate legal effect; agencies may not use interim labeling to bypass statutory process.
- A rule is not “ministerial” when it reflects policy choices that materially affect regulated parties and market conditions.

## Conclusion

The D.C. Circuit invalidated EPA’s interim nonconformance-penalty rule because EPA did not justify bypassing notice-and-comment procedures under the APA’s good-cause exception, and the court vacated the rule due to the procedural defect.


Mack Trucks, Inc. v. EPA, 682 F.3d 87 (D.C. Cir. 2012)