September 23, 2008


Posted on September 23, 2008 by Linda Bochert

  • 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?

Tags: EPApermitting

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