09/29/2005
Thanks to a recent NFIB Legal Foundation victory, small business is one step closer to regulatory fairness. The Regulatory Flexibility Act of 1980 requires agencies to consider the impact of their regulatory proposals on small businesses, analyze effective alternatives that minimize small-business impacts and make analysis available for public comment.
In the case NFIB v. U.S. Army Corps of Engineers, the NFIB Legal Foundation argued that the U.S. Army Corps of Engineers failed to follow the RFA when it revised the permit application process for homebuilders and construction firms under the Clean Water Act. The Corps, on the other hand, argued that permitting regulations did not fall under the RFA because the changes were not regulatory and permits did not constitute a final agency action against businesses.
On July 29, the U.S. Court of Appeals for the D.C. Circuit ruled in favor of small business, requiring the District Court for the District of Columbia to hear NFIB’s RFA challenge against the Corps.
Elizabeth Gaudio, NFIB Legal Foundation senior attorney, said the lawsuit was filed to preserve the integrity of the Small Business Regulatory Enforcement Fairness Act, enacted in 1996 by Congress to ensure regulatory agencies undertake greater review of the impact of regulations on small businesses.
“Congress passed SBREFA to protect small-business owners at the beginning of the regulatory process,” said Gaudio. “Congress said to government agencies, ‘Do your homework, find out if what you propose will hurt small business and, if it does, look for alternatives that are less burdensome.’ Congress wanted agencies to make that decision before imposing new regulatory requirements—not after the damage is done.”
Not only does the victory demonstrate that the Court of Appeals understands the adverse effect government rules can have on small businesses, it also sets an important precedent by confirming that the scope of the RFA includes permitting regimes.
In addition to the case against the Corps, the NFIB Legal Foundation currently has two RFA lawsuits pending: NFIB v. U.S. Environmental Protection Agency, in which NFIB argues that the EPA failed to adequately address the small-business impact of a new lead-reporting rule, and NFIB v. Architectural and Transportation Barriers Compliance Board, in which NFIB claims the board did not consider the impact of newly issued ADA guidelines.
Enforcing the RFA has been a cornerstone of the NFIB Legal Foundation since it was founded in 2000.
