New Lawsuit Claims Trump’s Pro-Deregulation Executive Order Violates Constitution

Image courtesy of Chris Wilson

Last month, President Trump signed an executive order intended to spur massive deregulation — or at least curb new regulations — by requiring that for each new rule issued by a federal agency, at least two rules would have to be undone. Now that order is the target of a legal action claiming that it violates the Constitution and will ultimately harm American consumers.

The lawsuit [PDF] — filed today in a federal court in Washington, D.C., by advocacy groups Public Citizen and the Natural Resources Defense Council, along with the Communications Workers of America — seeks an injunction preventing the order from being enforced and asks the court to declare that the Trump White House has overstepped its authority.

Zero-Sum Game

The order isn’t merely about cutting down on the number of existing regulations; it requires that the cost of any new regulation be zeroed out by the savings from the regulations that will be eliminated. So, for example, a new rule that would costs $15 billion annually must be offset by getting rid of rules with costs that total at least that amount. (NOTE: The order is unclear whether costs refers solely to the cost of the government to administer a regulation; the cost of companies to comply; or both).

What the order, as written, does not mention is any benefit that might be enjoyed as a result of that regulation, notes the lawsuit.

“Indeed, the Executive Order directs agencies to disregard the benefits of new and existing rules —including benefits to consumers, to workers, to people exposed to pollution, and to the economy — even when the benefits far exceed costs,” states the complaint.

By telling federal regulators to eliminate, or not create, rules without any consideration to the net benefits will, according to the lawsuit, “force agencies to take regulatory actions that harm the people of this nation.”

The plaintiffs contend that there are no laws allowing federal agencies to not issue a regulation based on an “arbitrary upper limit on total costs,” nor do any laws authorize federal agencies to make that decision based on the notion that costs must zero out over multiple regulations.

No Good Choice

The lawsuit also raises concerns about using this newly mandated cost-shuffling as the sole reason to repeal regulations that have gone through the legally prescribed rulemaking process, which included a public comment period, and a window for Congress to express its disapproval.

Plaintiffs point to a number of examples of situations where federal agencies could be tasked with having to sacrifice meaningful regulations involving public health and safety.

One example involves the National Highway Traffic Safety Administration’s recently proposed new rule that would eventually require advanced vehicle-to-vehicle communications in most new cars and trucks, allowing them to better avoid collisions, thereby saving lives thousands of lives, along with reducing insurance payouts and medical expenses by billions of dollars.

“Despite the huge net benefits to society… NHTSA will not be able to promulgate this safety standard without repealing two other regulations that impose equivalent or greater costs,” notes the lawsuit.

Constitutional Concerns

The plaintiffs argue that the order violates the separation of powers as detailed in the Constitution, by usurping authority that is reserved for Congress.

“By requiring agencies engaged in rulemaking to take final action or to unlawfully withhold final action based on factors that are impermissible and arbitrary under the governing statutes, the Executive Order purports to amend the statutes through which Congress has delegated rulemaking authority to federal agencies.”

Article II of the Constitution, which details the authority of the President, includes what’s known as the “Take Care” or “Faithfully Executed” Clause, because it states that the President shall “take care that the laws be faithfully executed.”

By directing agencies to possibly repeal regulations required by laws like the Motor Vehicle Safety Act, the Federal Water Pollution Control Act, the Occupational Safety and Health Act, the Toxic Substances Control Act, and many others, the plaintiffs contend that the President is not fulfilling his obligation under the Take Care Clause.

“No one thinking sensibly about how to set rules for health, safety, the environment and the economy would ever adopt the Trump Executive Order approach – unless their only goal was to confer enormous benefits on big business,” says Public Citizen President Robert Weissman. “If implemented, the order would result in lasting damage to our government’s ability to save lives, protect our environment, police Wall Street, keep consumers safe and fight discrimination.”

Want more consumer news? Visit our parent organization, Consumer Reports, for the latest on scams, recalls, and other consumer issues.