EPA IN THE DC CIRCUIT - WHERE HAS ALL THE DEFERENCE GONE?
- June 2007: DC Circuit Hands EPA and Industry Two Defeats: Court Rejects EPA MACT Air Rules for Commercial and Industrial Boilers and Plywood and Composite Wood Products
- February and July 2008: DC Circuit to EPA: Multi-Pollutant Strategy for Interstate Clean Air Fails to Meet Clean Air Act Requirements
Several recent cases have raised the following question in my mind: can EPA win an air case in the DC Circuit?
They teach us in law school that governmental agencies can expect a reasonable degree of deference from a reviewing court when exercising statutory authority to develop regulations to implement Congressional directives. States and entities subject to EPA’s regulations need something to rely on, and expect EPA and the Courts to provide some degree of predictability and certainty in the application of the regulations. Yet deference is nowhere to be found in the DC Circuit’s recent reviews of several EPA regulations implementing the Clean Air Act (CAA). And in each of the cases discussed below, the Court opted for the most dramatic remedy – vacatur of the offending rule.
These decisions can be sliced and diced from a variety of perspectives. At the least I think they raise vexing concerns about deference and choice of remedy. What do you think – are these the trend or the anomalies? Is this a real concern or much ado about nothing?
Here are my examples:
1. June 2007: Commercial and Industrial Boiler MACT Rules
On June 8, 2007, in Natural Resources Defense Council v. EPA, No. 04-1385 (D.C. Cir. June 8, 2007) (NRDC I) the DC Circuit struck down two EPA rules setting air toxics limitations for commercial and industrial boilers and solid waste incinerators: National Emission Standards for Hazardous Air Pollutants for Industrial, Commercial, and Institutional Boilers and Process Heaters (Boilers Rule) and Standards of Performance for New Stationary Sources and Emission Guidelines for Existing Sources: Commercial and Industrial Solid Waste Incineration Units (CISWI Definitions Rule).
At issue were the emission standards for hazardous air pollutants (HAPs) emitted from commercial and industrial solid waste incinerators and industrial boilers and the appropriate setting of the Maximum Achievable Control Technology (MACT) standard.
The challenge was brought by environmental petitioners Natural Resources Defense Council, Sierra Club, and the Environmental Integrity Project. The Court agreed with them that EPA had impermissibly narrowed the definition of “commercial or industrial waste” in the CISWI Definitions Rule in violation of the plain language of section 129 of the Clean Air Act. Because the Boilers Rule was dependent on that same definition, both rules were rejected by the Court. EPA and industry representatives, including the Coalition for Responsible Waste Incineration, Utility Air Regulatory Group, and Utility Solid Waste Activities Group, contended that EPA’s definition was within the agency’s discretion, but the Court was not persuaded.
2. June 2007: Plywood and Composite Wood Products MACT Rules
On June 19, 2007, the DC Circuit dealt a second blow in a challenge to EPA’s rules to regulate HAPs from processing plywood and composite wood products (PCWP). Also named Natural Resources Defense Council v. EPA, No. 04-1323 (D.C. Cir. June 19, 2007) (NRDC II), this case was also brought by the Natural Resources Defense Council, Sierra Club and the Environmental Integrity Project against EPA. EPA was supported by industry groups, including the American Forest and Paper Association.
The two rules involved in this case were the National Emission Standards for Hazardous Air Pollutants: Plywood and Composite Wood Products (2004 Rule) and the National Emission Standards for Hazardous Air Pollutants: Plywood and Composite Wood Products; List of Hazardous Air Pollutants, Lesser Quantity Designations, Source Category List (2006 Rule), with the primary challenge to the 2006 Rule. Example of operations regulated by these rules include sawmills with lumber kilns, hardwood and softwood plywood and veneer plants, particleboard/fibreboard and other reconstituted wood product plants, and engineered wood product plants.
Once again, the issue was the appropriate MACT standard. In this case the pivotal elements were EPA’s decisions in the 2004 Rule to create a “low-risk subcategory” and in the 2006 Rule to extend the compliance deadline from October 2007 to October 2008.
3. February 2008: Clean Air Mercury Rule (CAMR)
On February 8, 2008, the DC Circuit struck down CAMR in New Jersey v. EPA, No. 05-1097 (D.C. Cir. Feb. 8, 2008). CAMR was the result of EPA’s decision to remove oil and coal-fired electric utility steam generating units (EGUs) from the list of sources of hazardous air pollutants (HAPs) and instead regulate mercury emissions from these EGUs through a cap-and-trade program similar to the Clean Air Interstate Rule (CAIR).
In response, New Jersey, and several other states, municipal governments and environmental groups, challenged CAMR claiming that EPA had no authority to delist the EGUs without providing a “specific finding” under section 112(c)(9) of the CAA. Because EPA did not make this specific finding, the Petitioners claimed that not only was the delisting invalid, but CAMR was also flawed because it was based upon this delisting decision. The DC Circuit agreed with the Petitioners, vacating both the delisting rule and CAMR.
4. July 2008: Clean Air Interstate Rule (CAIR)
On July 11, 2008, the D.C. Circuit vacated CAIR in North Carolina v. EPA, No. 05-1244 (D.C. Cir. July 11, 2008).
The multi-party challenge to CAIR was brought by the state of North Carolina, several electric utilities (SO2 Petitioners), specific electric utilities in Texas, Florida and Minnesota, one municipality, and the Florida Association of Electric Utilities (FAEU). The electric utilities in Texas, Florida and Minnesota challenged CAIR’s applicability to them because of their location and emissions amounts. North Carolina, the SO2 Petitioners, and FAEU brought substantive challenges to the regulation, claiming that EPA did not have the discretion to act as it did, or it did so unreasonably.
The Court agreed with North Carolina and the SO2 Petitioners, holding that CAIR failed to meet the requirements of the CAA and finding “EPA’s approach – regionwide caps with no state-specific quantitative contribution determinations or emissions requirements – is fundamentally flawed.”
Is vacatur the best remedy?
In all four of these cases, the Court chose to vacate rather than remand the rules. The dissent in the CISWI/Boilers Rules case unsuccessfully argued that remand without vacating the rules was preferable“[b]ecause the rules would ensure greater protection to public health and the environment during the time EPA will need to develop and promulgate new rules.” The majority was unpersuaded and preferred no rules at all. Is that really the best option for the environment?
And the language the Court uses implies more than a lack of deference. In vacating CAIR, a decision described as “unexpected” by both proponents and opponents, the Court described the rule as “fundamentally flawed” and directed EPA to “redo its analysis from the ground up.” In vacating CAMR, the Court characterized EPA as “deploy[ing] the logic of the Queen of Hearts.” What’s going on here?
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Linda, with respect to your opening question, two of my colleagues and I coauthored an article for the Rocky Mountain Mineral Law 2007 Institute which examined judicial review of of agency NEPA decision making involving modelling or other complex scientific analyses. That review was heavily weighted toward recent Ninth Circuit caselaw in which the Ninth Circuit appeared to have abandoned traditional notions of deference, most obviously in Ecology Center Inc. v. Austin, 430 F.3d 1057 (9th Cir. 2005), cert. denied, 127 S.Ct. 931 (2007), and in a series of decisions involving challenges brought by the Lands Council against Forest Service review of timber harvest activities under the National Environmental Policy Act and the National Forest Management Act.
In an interesting en banc decision this summer, the Ninth Circuit vacated the most recent Lands Council decision (Lands Council v. McNair, 494 F.3d 771 (9th Cir. 2007), stating that the plaintiffs' arguments (and the three judge panel's decision therein) illustrated how the Ninth Circuit's environmental jurisprudence had shifted away from the appropriate standard of review and could be read to suggest that the court should "act as a panel of scientists that instructs the Forest Service" how to validate scientific hypotheses, choose among scientific studies, and explain every possibly scientific uncertainty. See Lands Council v. McNair, 537 F3d 981 (9th Cir. 2008), rhg en banc denied. In addition to vacating the 2007 Lands Council opinion, the en banc panel overruled Ecology Center, declaring that in that decision the Ninth Circuit had erred by, among other things, "def[ying] well-established law concerning the deference we owe to agencies and their methodological choices."
It's too early to tell what impact the en banc opinion in Lands Council will have, but for the moment it suggests a fairly abrupt about-face for the Ninth Circuit with respect to judicial deference to agency decision involving complex scientific issues and analyses.
As an engineer who has 20 years experience working in state government regulatory agencies, regulating both utilities and air, my experience is that the last 8 years have been extraordinary with respect to attempts by federal agencies to change the law via regulatory "interpretations" rather than through changing the legislation.
It's been the cause of much despair by me and many of my colleagues. But the courts' responses have been heartening - checks and balances are working.
It's noteworthy that states have joined in the opposition to EPA decisions, especially CAMR and CAIR. CAMR was hinged on the de-listing of EGUs (Electric Generating Units) from CAA 112(c), which was deemed illegal, and didn't get into the scientific merits of the EPA's rationale. CAIR failed to meet the specific intent of the CAA by offering a general alternative, which may or may not have solved the specific problems, but I think the CAA was clear that non-attainment areas should be able to seek remedies through Section 126 petitions from the responsible parties which CAIR precluded.
Both were decided as a matter of law, rather than science, and in an age of "policy-revelant science", I think that is a good thing. The fact that both were vacated gives us bureaucrat types a problem (we don't make policy), but the CAA provides remedies through Section 126 petitions and by Case-by-case MACT (112g or j?).
In my line of work, engineers and lawyers are often in disagreement, but I have a better understanding for the reason for that now. I certainly have a greater appreciation for the precision required by the law and those who uphold it.
You might want to add the RMRR decision to your list of lack of deference: "Only in a Humpty Dumpty world3 would Congress be required to use superfluous words while an agency could ignore an expansive word that Congress did use. We decline to adopt such a world-view. "http://cases.justia.com/us-court-of-appeals/F3/443/880/515793/