## Facts

- Congress directed NHTSA, through EPCA, to set and enforce CAFE standards and to impose civil penalties for manufacturers that fail to meet them.
- The Federal Civil Penalties Inflation Adjustment Act Improvements Act required agencies to make inflation and “catch-up” adjustments to civil penalty amounts.
- NHTSA issued a final “Civil Penalties Rule” increasing per-vehicle CAFE penalties to implement the Improvements Act, but the rule had not yet taken effect.
- After a change in administration, NHTSA postponed the effective date multiple times and then issued a “Suspension Rule” that indefinitely delayed the Civil Penalties Rule’s effective date.
- NHTSA characterized the Suspension Rule as an interim measure tied to anticipated comments in a separate, related penalty rulemaking and did not use full notice-and-comment procedures.
- Environmental organizations and several states petitioned for review in the Second Circuit challenging the indefinite delay and the process used to adopt it.

## Issues

1. Whether NHTSA had statutory authority to indefinitely delay the effective date of a previously promulgated civil-penalty inflation adjustment rule.
2. Whether the Suspension Rule violated the APA by taking effect without required notice-and-comment rulemaking.

## Decision

- The Second Circuit granted the petitions for review and vacated the Suspension Rule.
- NHTSA lacked statutory authority to indefinitely delay the effective date of the Civil Penalties Rule.
- The Suspension Rule was a substantive change with legal consequences and therefore required notice-and-comment rulemaking under the APA, which NHTSA did not provide.

## Legal Principles

- Federal agencies may act only within authority granted by statute; an open-ended suspension of a duly promulgated rule requires clear statutory authorization.
- An indefinite postponement of a rule’s effective date that preserves an older regulatory regime can operate as an amendment or repeal and is subject to APA notice-and-comment requirements.
- A rule that alters regulated parties’ rights or obligations is generally substantive and cannot be implemented through abbreviated procedures absent a valid APA exception.

## Conclusion

The court invalidated NHTSA’s indefinite delay of increased CAFE civil penalties because Congress had required timely inflation adjustments and NHTSA could not suspend a finalized rule without statutory authority or bypass the APA’s notice-and-comment process for a substantive change.


Nat. Res. Def. Council v. Nat'l Highway Traffic Safety Admin., 894 F.3d 95 (2d Cir. 2018)