This week, brought a major new development in Louisiana v. EPA.   The Western District of Louisiana amended its August 2024 judgment to vacate the EPA and DOJ regulations the Biden Administration maintained imposed disparate-impact liability, “in so far as they authorize disparate-impact liability.” You can read the Court’s opinion, below.

Background

The case saw Louisiana challenge the Biden-Era EPA’s misapplication of Title VI and its regulations to impose disparate-impact analysis.* The EPA argued that its early-1970s Title VI regulations had always been a catch-all, all-purpose, disparate-impact regulation.  On that basis, EPA launched a systematic national effort to force states to embed disparate-impact analyses in their own decision-making.  When Louisiana sued, EPA dismissed its investigations into the disparate impacts of some otherwise proper permitting decisions. According to EPA, that mooted Louisiana’s challenge.  EPA insisted that any argument to the contrary came fifty years too late and conflicted with Supreme Court precedent.

The amicus brief we filed in the case with Hamilton Lincoln Law Institute argued that all of this was wrong. We argued the regulation could not constitutionally be the catch-all, all-purpose disparate-impact regulation EPA contended. We proposed that the Court either apply the canon of constitutional avoidance to refuse to read the regulation as the EPA preferred or hold that the regulation unconstitutionally exceeded the EPA’s power.

In January 2024, the District Court chose the latter, initially granting Louisiana a related preliminary injunction.  In August 2024, the Court followed with a final judgment.  However, at that time, Judge Cain declined to set aside the challenged regulations.  Instead, the Court granted a statewide permanent injunction against the agencies, enjoining them from both: (a) enforcing the “disparate-impact requirements contained in” the regulations “against any entity in the State of Louisiana, or requiring compliance with those requirements;” and (b) otherwise enforcing any Title VI disparate-impact requirement or cumulative-impact analyses against the same.

One day later, the Fifth Circuit issued an opinion in Restaurant Law Center v. U.S. Dep’t of Labor, 120 F.4th 163 (5th Cir. 2024).  Restaurant Law Center held that the Administrative Procedure Act denied district courts the discretion to decline to set aside illegal regulations.  Based on that decision, Louisiana moved in August 2024 that the Court amend its final judgment to vacate the regulations.

During the intervening two years, the Trump Administration, echoing the Court’s analysis, concluded that all Title VI disparate-impact regulations were illegal and unconstitutional.  Starting with DOJ, the agencies began to replace their regulations to clarify the same. Before this week, the EPA had not yet followed suit.

Amending the Judgment

So things then sat for the last two years.  Until this week.

Cycling back to the matter, Judge Cain “agrees that a universal vacatur is warranted based on Fifth Circuit precedent.”  His new ruling formally sets aside the EPA’s regulation.  When the amended judgment becomes final, it should serve as the capstone precedent ending the debate on whether agencies can Constitutionally impose disparate-impact liability under Title VI.

* – Louisiana similarly objected to DOJ’s parallel Title VI regulation, as interpreted by the Biden Administration. The opinion continues to deal with both agencies and regulations, but in the interim, DOJ rewrote its own regulation to specifically disavow any disparate-impact component. As a result, the Court’s action should only impact EPA.