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Federal Register / Vol. 86, No. 54 / Tuesday, March 23, 2021 / Rules and Regulations The SUNSET final rule was scheduled to take effect on March 22, 2021. On March 9, 2021, a lawsuit was filed seeking to overturn the SUNSET final rule. HHS
finds that the interests of justice require that the SUNSET final rules effective date be postponed pending judicial review because: Based on HHSs initial review of the Complaint, HHS believes that the Court could find merit in some of Plaintiffs claims; Plaintiffs allegations of harm are credible; a postponement will permit HHS to review the SUNSET final rule in light of the claims raised in the litigation; and the balance of equities and the public interest warrant postponement of the effective date to preserve the status quo while the Court considers the challenge to the SUNSET final rule. This document also corrects certain errors in the SUNSET final rule.
In the Federal Register of November 4, 2020 85 FR 70096, HHS published a notice of proposed rulemaking entitled Securing Updated and Necessary Statutory Evaluations Timely SUNSET. Under the rule as proposed, subject to certain exceptions, Department regulations would expire at the end of 1 two calendar years after the year that the SUNSET rule first became effective, 2 ten calendar years after the year of the regulations promulgation, or 3 ten calendar years after the last year in which the Department assessed and, if required, reviewed the regulation, whichever was latest. Thus, under the proposed rule, unless HHS assessed and, if required, reviewed most of its regulations within a certain timeframe specified in the rule for most existing regulations, within two years and every ten years thereafter, the regulations would expire. The proposed rule also provided that if a review led to a finding that a regulation should be amended or rescinded, the Department must amend or rescind the regulation within a specified timeframe generally two years. In addition, the proposed rule contained certain publication requirements, including that 1 the Department publish the results of all assessments and reviews, including the full underlying analyses and data used to support the results, in the Federal Register, and 2 the Department announce the commencement of an assessment or review of a particular regulation on the agency website, with an opportunity for public comment. The proposed rule provided that comments could be submitted until December 4, 2020, except for comments on the portion of
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the rule amending 42 CFR parts 400
429 and parts 475499, which were due by January 4, 2021.
In the Federal Register of November 16, 2020 85 FR 73007, HHS announced a public hearing, scheduled for November 23, 2020, to receive information and views on the proposed rule Public Hearing.
In the Federal Register of January 19, 2021 86 FR 5694, HHS issued the SUNSET final rule. The final rule provides that all regulations, subject to certain exceptions, issued by the Secretary of the Department of Health and Human Services Secretary or their delegates or sub-delegates in titles 21, 42, and 45 of the CFR shall expire at the end of 1 five calendar years after the year that the SUNSET final rule first becomes effective, 2 ten calendar years after the year of the regulations promulgation, or 3 ten calendar years after the last year in which the Department assessed and, if required, reviewed the regulation, whichever is latest. Thus, the final rule contains the same basic expiration framework as the proposed rule, but extends the timeframe for assessment and any applicable review of most existing regulations from two calendar years to five calendar years. The final rule also provides for continuation of a regulation that is subject to expiration if the Secretary makes a written determination that the public interest requires continuation. In addition, the final rule contains exemptions for a small set of certain Food and Drug Administration FDA regulations. The final rule maintains the timeframe for amendment or rescission of regulations, as well as the publication requirements, and includes a new Federal Register publication requirement. The final rule also expands its reach to include additional provisions regarding parts of HHS not specifically included in the proposed rule. The final rule states that its effective date is March 22, 2021.
On March 9, 2021, the County of Santa Clara, California Tribal Families Coalition, National Association of Pediatric Nurse Practitioners, American Lung Association, Center for Science in the Public Interest, and Natural Resources Defense Council sued the Department seeking to overturn the SUNSET final rule under the Administrative Procedure Act APA.
Complaint, County of Santa Clara v.
HHS, Case No. 5:21cv01655BLF
N.D. Cal.. Plaintiffs allege that the SUNSET final rule is ultra vires, see id.
12330; arbitrary and capricious, see id. 13133; in violation of the APAs notice-and-comment requirements, see id. 13439; and in violation of HHSs
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Tribal Consultation Policy, see id.
14044. Plaintiffs further allege that the SUNSET final rule threatens imminent and irreparable harm to them and the general public, including by creating regulatory confusion and uncertainty that will impede their ongoing operations, budgeting, and planning activities. See, e.g., id. 100
02; see generally id. 95122.
Under 5 U.S.C. 705 of the APA, an agency may postpone the effective date of action taken by it, pending judicial review, when the agency finds that justice so requires. HHS has concluded that the interests of justice require that the SUNSET final rule be stayed pending judicial review. As discussed in greater detail below, HHS believes that the Court may find merit in some of Plaintiffs claims, that Plaintiffs allegations of harm are credible, and that the balance of equities and the public interest warrant postponement of the effective date pending judicial review. Accordingly, the interests of justice require a postponement in order to preserve the status quo, because, if the rule took effect while HHS was evaluating the rule in light of the claims raised in litigation, it could create significant obligations for HHS, cause confusion for the public, including Plaintiffs, and may lead to compliance costs as entities, including Plaintiffs, plan steps necessary to deal with the rules implementation, as explained below. HHS is unaware of any benefits from the implementation of the SUNSET final rule that would be significantly curtailed from a stay of its effective date.
The Department is taking a fresh and critical look at the SUNSET final rule in light of the allegations in the Complaint although many of these concerns were also raised during the comment period on the proposed rule. The Complaint alleges serious legal vulnerabilities of the rule, and, while HHS does not concede any of these claims at this time, HHS requires additional time to evaluate the SUNSET final rule given the pending litigation. In addition, the Complaint raises the question as to whether the SUNSET final rule, issued in the final days of the last administration, is consistent with the policies and goals of the current administration, both in terms of the appropriate role of regulatory oversight of the health care industry and necessary engagement with the public, including tribal organizations.
The Complaint makes numerous allegations that the substantive provisions of SUNSET final rule violate the law. The Complaint alleges that the SUNSET final rule is contrary to and
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