The D.C. Circuit Does It Again! Why Should EPA Even Bother to Propose CAA Rules?

Posted on August 10, 2015 by Richard G. Stoll

Last year I published an article in Bloomberg BNA entitled “Protection of Judicial Review Watered Down in D.C. Circuit.”  I focused on a recent D.C. Circuit ruling (UARG) I hoped would “turn out to be an unfollowed – and eventually forgotten – glitch.”  The effect of the “glitch” is to delay interminably judicial review of final Clean Air Act (“CAA”) rule provisions that EPA never hinted might be included in a final rule – even though the un-foreshadowed provisions go into full force and effect.

            The Court’s judges must have missed that BNA edition, because they have followed the same rationale at least twice more now – in their Mexichem opinion of May, 2015 and their “Transport Rule” (EME Homer) decision last week.

            This regrettable situation arises from the Court’s new interpretation of a CAA provision (§307(d)(7)(B)) which is quoted in full in my BNA article.  It begins with the hornbook proposition that you can’t attack a rule’s provision on judicial review on grounds that were not raised during the comment period.  It then provides for a process known as a “petition for reconsideration.”  If a party can show that it could not have raised an argument during the comment period, EPA must conduct a “reconsideration” process.  EPA’s actions in response to the petition are then subject to judicial review.  This provision has often been used where EPA supports a final rule with facts or rationale not included in the record when the public comment period was open.

Now consider the following hypothetical.  Assume EPA proposes a CAA rule requiring boilers to install a certain type of control device.  EPA’s final rule drops the control requirement and simply prohibits boilers from combusting coal, effective two years from the final rule’s issuance.  EPA’s proposal never mentioned coal prohibition as an option, and no one suggested it in their comments.  So most would assume that boiler owners could then file D.C. Circuit petitions for review and have slam-dunk arguments for vacatur.

As shown in my BNA article, the D.C. Circuit has on many occasions (as recently as December, 2013) done just that.  But since then, EPA and DOJ lawyers have advanced what I think is a ludicrous position: when a party believes a final CAA rule provision was issued in violation of notice-and-comment requirements, it cannot pursue judicial review on that issue unless and until it first files a petition under §307(d)(7)(B) and waits for EPA to take final action on that petition. 

Unfortunately, the D.C. Circuit has bought this position three times now.  Here is how the D.C. Circuit summarized the point in EME Homer last week:

[P]etitioners argue that EPA violated the Clean Air Act’s notice and comment requirements by significantly amending the Rule between the proposed and final versions without providing additional opportunity for notice and comment. Because that argument is an objection to the notice and comment process itself, petitioners obviously did not and could not have raised it during the period for public comment. Under Subsection 7607(d)(7)(B), however, the only appropriate path for petitioners to raise this issue is through an initial petition for reconsideration to EPA.

Note the opinion in effect concedes just how absurd this is.  The petitioners “obviously did not and could not” have raised this objection.  How can one object to EPA’s failure to propose something that EPA failed to propose?

EPA almost always delays action on §307(d)(7)(B) petitions for years so in the hypothetical above, the coal prohibition would go into effect before judicial review could even begin.  Boiler owners would either have to shut down operations or convert to non-coal burning facilities, at which point judicial review would become pointless.  The effect:  EPA stops coal burning at boilers by declining to propose such a requirement in the first place!

If you think EPA or the D.C. Circuit would out of fairness suspend application of rules in such situations, see the examples to the contrary in my BNA article and read the Mexichem opinion.  If you think I am exaggerating about how long it takes for a §307(d)(7)(B) petition to be processed, see the examples in my BNA article.  And consider that in last week’s EME Homer opinion, the Court concluded its discussion above by noting that at least one party had filed such a petition but that EPA had not yet acted upon it.  That petition was filed in 2011.



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