Circuit Court Upholds EPA's Removal of the Opt-out Provision

The U.S. Court of Appeals for the D.C. Circuit has ruled that EPA’s decision to remove the Opt-out provision is legal. EPA included the Opt-out provision in the original 2008 Lead, Renovation, Repair and Painting (RRP) Program Rule, which allowed homeowners without children under age six or pregnant women residing in the home to allow their contractor to forego the use of lead-safe work practices.  

Removing the opt-out more than doubled the number of homes subject to the RRP rule, and EPA has estimated this amendment will add more than $500 million per year to the cost of the regulation. To resolve a legal challenge against the 2008 RRP rule, EPA, among other actions, agreed to propose the removal of the Opt-out Provision. In 2010, EPA finalized the removal of the Opt-out as proposed.

NAHB, leading a coalition of industry trade groups, filed a petition for review in the D.C. Circuit Court of Appeals challenging the removal of the Opt-out. The other groups in the coalition include the Hearth, Patio & Barbeque Association, the National Lumber & Building Material Dealers Association, and the Window and Door Manufacturers Association.

On June 22, 2012, the court issued its decision in favor of EPA. The court found federal agencies may change existing regulations so long as the amended rule is allowed by the statute and the agency acknowledges the change in course. In the case of the Opt-out, the court found that because EPA was not obligated to include an Opt-out provision in the RRP rule, it could remove the provision without offering new information to justify its removal.

The court clearly understood the motivations behind EPA’s sudden change of heart.  In concluding the court’s opinion, Judge Garland wrote: “[T]here were … two … events of note … that go a long way toward explaining why EPA reconsidered the opt-out provision: namely, the inauguration of a new president and the confirmation of a new EPA administrator.”

While the court’s decision is disappointing, NAHB remains hopeful the bills in both the House and Senate will ultimately lead to the reinstatement of the Opt-out provision.

For more information on the court’s ruling, contact Amy Chai, (800) 368-5242, ext. 8232.