958 F.3d 1185
D.C. Cir.2020Background
- The Clean Air Act’s Good Neighbor Provision (42 U.S.C. § 7410(a)(2)(D)(i)) requires states to prohibit in-state emissions that "contribute significantly" to nonattainment or interfere with maintenance of NAAQS in other states; §126(b) lets any state petition EPA for a finding that an upwind source "emits or would emit" in violation of that provision.
- EPA implements Good Neighbor obligations via a four-step CSAPR framework: (1) identify downwind nonattainment/maintenance receptors, (2) identify linked upwind states, (3) quantify cost‑effective controls and state emission budgets, (4) implement via FIPs/allowance trading.
- In 2016 Maryland and Delaware filed §126(b) petitions seeking source‑specific NOx limits (largely to require optimization of selective catalytic reduction (SCR) units, operation of selective non‑catalytic reduction (SNCR) at a few units, and a fuel‑use limit at Brunner Island).
- EPA denied the petitions (Oct. 5, 2018): Delaware denied at Step One (no in‑state current/future nonattainment shown and EPA excluded out‑of‑state monitor data); both denied at Step Three (EPA concluded SCR optimization reductions already achieved under its Update Rule and SNCR controls were not cost‑effective; Brunner Island already was operating mostly on natural gas and unlikely to revert).
- D.C. Circuit reviewed petitions for arbitrary-and-capricious/Chevron issues, rejected some Step One EPA reasoning (notably EPA’s exclusion of out‑of‑state monitors and use of an inappropriate future year), upheld most Step Three conclusions, but remanded EPA’s non‑catalytic‑controls (SNCR) cost‑effectiveness explanation for further analysis.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Burden of proof under §126(b) | Petitioners: EPA must undertake investigation / shouldn’t shift burden to petitioning state | EPA: sixty‑day statutory timeline and APA default place initial evidentiary burden on petitioner | EPA’s allocation was reasonable; petitioning state bears initial burden of proof |
| Consideration of out‑of‑state monitors in multistate nonattainment areas | Delaware: EPA must consider monitors in a shared nonattainment area (e.g., Philadelphia‑Wilmington‑Atlantic City) when petitioning state is affected | EPA: §126(b) limited to receptors within petitioning state; out‑of‑state data may be addressed under other mechanisms | EPA’s refusal to consider monitors in a shared multistate nonattainment area including the petitioning state was unreasonable; EPA must consider such data |
| Year to measure downwind nonattainment (current vs future; which future year) | Petitioners: EPA must consider current nonattainment or at least nonattainment at the petitioning state’s next applicable attainment deadline (e.g., 2021) | EPA: Good Neighbor focuses on future nonattainment and EPA may analyze a later year (it used 2023) | EPA may exclude present‑only nonattainment, but must assess nonattainment at the petitioning state's next attainment deadline; EPA erred by using 2023 instead of 2021 for Delaware’s 2015‑NAAQS analysis |
| Step Three cost‑effectiveness & specific controls (SCR, SNCR, Brunner Island) | Petitioners: named units are failing to optimize SCRs; SNCR operation may be cost‑effective for some units; Brunner Island should be required to burn gas | EPA: SCR optimization reductions already achieved/ accounted for by Update Rule; SNCR not cost‑effective per Update Rule; Brunner Island voluntarily (and economically) operating on gas | Court upheld EPA regarding SCR optimization and Brunner Island predictions, but remanded EPA’s SNCR (non‑catalytic) cost‑effectiveness analysis as inadequately justified |
Key Cases Cited
- EME Homer City Generation, L.P. v. EPA, 572 U.S. 489 (2014) (explains interstate transport of ozone precursors and rationale for Good Neighbor rules)
- Chevron U.S.A. Inc. v. NRDC, 467 U.S. 837 (1984) (framework for judicial deference to reasonable agency statutory interpretations)
- Wisconsin v. EPA, 938 F.3d 303 (D.C. Cir. 2019) (invalidated EPA’s partial‑remedy Update Rule; clarified timing/deadline obligations under Good Neighbor Provision)
- North Carolina v. EPA, 531 F.3d 896 (D.C. Cir. 2008) (upheld EPA’s interpretation limiting Good Neighbor inquiry to current and continuing future nonattainment)
- New York v. EPA, 852 F.2d 574 (D.C. Cir. 1988) (interpreting §126(b) timeline and evidentiary expectations for petitions)
- Appalachian Power Co. v. EPA, 249 F.3d 1032 (D.C. Cir. 2001) (explains §126’s incorporation of Good Neighbor substantive inquiry)
- SEC v. Chenery Corp., 318 U.S. 80 (1943) (agency decisions must be reviewed on the reasons the agency actually gave)
- Allied‑Signal, Inc. v. U.S. Nuclear Regulatory Comm’n, 988 F.2d 146 (D.C. Cir. 1993) (acceptance of alternative rationales where supported by the record)