An Intervening Change in Law Nearly Always Warrants Modification of Injunction, Holds Ninth Circuit

In State of California v. EPA, No. 19-17480 (9th Cir. Oct. 22, 2020), the Ninth Circuit holds that the district court abused its discretion by denying the Environmental Protection Agency’s motion for relief from a court-imposed deadline under Fed. R. Civ. P. 60(b)(5), owing to an intervening change in the regulations. In so holding, the panel marks a departure from ordinary federal equitable principles, holding that a party seeking modification in such circumstances need not show additional harm from compliance with the injunction or other balancing of the equities.

The case concerned a federal regulatory scheme for landfills. “EPA promulgated new landfill emissions guidelines in 2016. Doing so set off a series of mandates for states and EPA. First, each state was required to submit a plan on how it would implement the new guidelines. Second, EPA was to approve or disapprove each state plan it received. Finally, for states that failed to submit a plan at all, EPA had to promulgate a federal plan that would govern implementation in those states. The deadline for EPA to comply with its final requirement—issuing the federal plan—was set by regulation for November 30, 2017. But EPA blew this deadline.”

States sued to compel the EPA promulgate its plan, and the district court “ruled for the plaintiff states and entered an injunction requiring EPA to promulgate the plan [by November 2019]. A few months later, EPA finalized the rulemaking process, which extended its [own] regulatory deadline by two years.” The EPA at this point thus “faced two conflicting deadlines: November 2019 under the court’s order and August 2021” under the regulation. It sought relief from the November 2019 deadline under Fed. R. Civ. P. 60(b)(5), but the district court denied the motion, finding that “in spite of the new regulations, ‘all other circumstances indicate that enforcement of the judgment is still equitable.’”

The Ninth Circuit reverses. Citing the history of equity, “[a]n unbroken line of Supreme Court cases” and circuit authority, the panel holds that that it is inherently “an abuse of discretion to deny a modification of an injunction after the law underlying the order changes to permit what was previously forbidden.” Where a change in law has altered the legal foundation of the original injunction, it is unnecessary for the court to “balance the harms caused by modifying an injunction,” because “the revisions in the law [are] sufficient to require modification.” (The panel nonetheless observes in passing that some circuits have held – to the contrary – that an intervening change in law is not a sufficient basis for relief under Rule 60(b)(5).)

The States argued that the EPA did not need relief because it “ha[d]n’t shown that it would be harmed if forced to continue to abide by the court’s injunction.” They urged that Rule 60(b)(5) “requires a broad, fact-intensive inquiry into whether altering an injunction is equitable, even if the legal duty underlying the injunction has disappeared.” The panel disagrees, finding that “[c]ompelling EPA … to continue to adhere to an injunction based on a legal duty that has since disappeared is a harm in and of itself.”

The States also argued that automatically crediting a change in administrative law would upset the separation of powers, giving the executive branch a tool to upend judicial orders. “But it is only final judgments, not injunctive relief, that cannot be disturbed without offending the separation of powers …. Ultimately, we see a greater threat to the separation of powers by allowing courts to pick and choose what law governs the executive branch’s ongoing duties …. Permitting a court to make an equitable determination about which law an executive agency should follow going forward, without any other legal basis, risks undue expansions of the judicial role.”

“We therefore hold that when a district court reviews an injunction based solely on law that has since been altered to permit what was previously forbidden, it is an abuse of discretion to refuse to modify the injunction in the light of the changed law.”

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