891 F.3d 1041
D.C. Cir.2018Background
- Petitioners (NEDACAP, American Petroleum Institute, Air Permitting Forum) challenged EPA’s 2016 amendments to its Regional Consistency Regulations (40 C.F.R. §§ 56.3–56.5), promulgated under Clean Air Act § 7601, which were issued in response to this court’s earlier decision in NEDACAP I.
- The dispute traces to Summit Petroleum (6th Cir.), where the Sixth Circuit rejected EPA’s functional test for whether multiple emitting activities are a single “source,” creating a circuit split and prompting EPA’s 2012 Summit Directive of nonacquiescence outside the Sixth Circuit.
- In NEDACAP I (D.C. Cir.), this court vacated EPA’s Summit Directive as inconsistent with the then-existing EPA consistency regulations, but suggested EPA could revise those regulations to accommodate regional variances created by judicial decisions.
- EPA’s 2016 Amended Regulations clarified that only U.S. Supreme Court and D.C. Circuit decisions about nationally applicable rules/final actions must be applied uniformly, allowed regional departures when required to comply with binding federal-court decisions, and removed the need for HQ concurrence for such departures.
- Petitioners argued the Amended Regulations violate § 7601(a)(2)’s uniformity and mechanism requirements (and are arbitrary and capricious), because § 7601 allegedly requires EPA to eliminate judicially created regional inconsistency.
- The D.C. Circuit denied review, holding (1) § 7601(a)(2) governs delegation-created uniformity, not judicially created inconsistencies; (2) EPA’s interpretation and Amended Regulations are a reasonable Chevron construction and not arbitrary or capricious; and (3) to the extent NEDACAP I suggested otherwise, that discussion was incorrect.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 7601(a)(2) requires EPA to eliminate judicially created regional inconsistencies | §7601(a)(2) mandates nationwide uniform implementation and mechanisms to resolve inconsistencies, so EPA may not permit intercircuit nonacquiescence | §7601(a)(2) governs uniformity for delegated regional implementation, not obedience to binding federal-court decisions; judicially created inconsistency is inherent in §7607(b)(1) | Held for EPA: §7601(a)(2) does not apply to court-created inconsistencies; statute is not unambiguous to require Petitioners’ view |
| Whether EPA’s Amended Regulations are a permissible construction of the Act (Chevron step two) | Regulations unreasonably allow regional departures and undermine §7601’s uniformity mandate | Amended Regulations reasonably fill statutory gaps, preserve judicial-review scheme, and reflect practicable responses to circuit splits | Held for EPA: the construction is permissible and entitled to deference |
| Whether the Amended Regulations are arbitrary and capricious | EPA provided no rational basis for codifying exceptions allowing inconsistency | EPA adequately explained reasons, changed course consciously, and tied rules to practical limits of §7607(b)(1) | Held for EPA: not arbitrary or capricious under APA standard |
| Whether NEDACAP I controls and forecloses EPA’s rulemaking | NEDACAP I held nonacquiescence violated prior consistency regs mirroring §7601, so statute must be read similarly | NEDACAP I addressed earlier regulations, not the statutory scope of §7601(a)(1) limitations; NEDACAP I even contemplated revised regulations to address circuit splits | Held for EPA: to the extent NEDACAP I suggested §7601 bars reasonable nonacquiescence rules, that aspect was mistaken |
Key Cases Cited
- National Environmental Development Ass’n’s Clean Air Project v. EPA, 752 F.3d 999 (D.C. Cir. 2014) (prior D.C. Cir. decision invalidating EPA’s Summit Directive under the then-current consistency regulations)
- Summit Petroleum Corp. v. EPA, 690 F.3d 733 (6th Cir. 2012) (rejected EPA’s functional test for “adjacent” sources and prompted the Summit Directive)
- Chevron U.S.A. Inc. v. Natural Resources Defense Council, 467 U.S. 837 (1984) (framework for judicial deference to reasonable agency statutory interpretations)
- FCC v. Fox Television Stations, Inc., 556 U.S. 502 (2009) (requirements for an agency changing course to articulate reasoned basis for the change)