938 F.3d 303
D.C. Cir.2019Background
- The Clean Air Act’s "Good Neighbor Provision" (42 U.S.C. § 7410(a)(2)(D)(i)) requires States to prohibit emissions that "contribute significantly" to nonattainment or "interfere with maintenance" of NAAQS in other States. EPA implements this via SIPs and, when necessary, FIPs.
- EPA promulgated the 2016 Cross-State Air Pollution Rule Update (CSAPR Update) to address interstate transport for the 2008 ozone NAAQS; the rule used a four-step framework: project 2017 receptor design values, apportion upwind contributions, screen at a 1%-of-NAAQS (0.75 ppb) threshold, and set state emissions budgets based on a $1,400/ton cost-control threshold for EGUs.
- The Update Rule limited its direct obligations largely to EGU sources, employed modeled 2017 projections (based on 2009–2013 monitored design values and 2011 modeling), and allowed allowance trading plus a 121% assurance level.
- Multiple consolidated petitions for review challenged the Rule from different perspectives: Environmental Petitioners argued EPA’s approach was too lenient (esp. timing/deadlines); State and Industry Petitioners argued EPA overregulated or made flawed modeling/implementation choices; Delaware argued it was mischaracterized as attaining.
- The D.C. Circuit held the Update Rule unlawful in one principal respect—EPA failed to require upwind States to eliminate significant contributions by the statutory downwind attainment deadlines—but upheld the Rule’s other major modeling, implementation, and allocation decisions; the court remanded without vacatur.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether EPA must require upwind States to eliminate "significant" contributions by the downwind statutory attainment deadlines (e.g., July 20, 2018 for moderate ozone areas). | Environmental Petitioners: Good Neighbor obligations must be met "consistent with" Title I attainment deadlines; EPA cannot allow upwind contributions to persist past those deadlines. | EPA: It adequately considered deadlines and may phase in reductions; feasibility, scientific uncertainty, litigation delays justify a partial/stepwise approach. | Held: Court agrees with petitioners. Under North Carolina precedent, EPA must align upwind elimination with downwind attainment deadlines; the Update Rule’s open-ended/indefinite timeline is unlawful. |
| Validity of EPA’s modeling and implementation choices (SCR emission rates, generation shifting scope, allowance-conversion ratio). | Environmental Petitioners: EPA’s assumptions (e.g., .10 lbs/mmBtu SCR rate, limiting generation shifting, converting banked allowances) understate potential reductions or undermine the rule’s effectiveness. | EPA: Chose reasonable, documented assumptions; explained fleet-wide and unit-specific treatments; conversion protects legitimate expectations and prevents glut-driven market distortions. | Held: Court upheld EPA’s choices as rational and entitled to deference; these challenges fail. |
| Whether EPA unlawfully regulated biogenic contributions or overcontrolled upwind States (cost/overcontrol concerns; uniform $1,400/ton threshold). | State/Industry: EPA improperly counts ozone formed with biogenic precursors as anthropogenic and applies a uniform cost threshold that can overcontrol and impose costly FIPs with disproportionate benefits. | EPA: Ozone often forms from mixed anthropogenic/biogenic precursors; its apportionment model reasonably assigns culpability; cost threshold chosen to maximize air-quality improvement per marginal cost and avoids disproportionate burdens; overcontrol claims require particularized as-applied proof. | Held: Court rejected generalized challenges. Inclusion of mixed-source ozone and the uniform $1,400/ton approach are lawful; speculative overcontrol claims must be litigated as particularized, as-applied challenges. |
| Procedural claims: timeliness of SIP denials and standing for challenges rooted in separate SIP/FIP actions. | States (e.g., Texas, Ohio, Wisconsin, Wyoming): EPA delayed past statutory SIP action deadlines; EPA misled western States about application of CSAPR modeling. | EPA: SIP-denial challenges are separate and must have been timely raised; the Rule is a FIP action and some arguments are collateral attacks on SIP denials; some petitioners lack standing as injury traces to other rulemakings. | Held: Court dismissed these procedural challenges for lack of jurisdiction (untimely collateral attack on SIP denials) or lack of standing where the Update Rule did not cause the asserted injury. |
Key Cases Cited
- EME Homer City Generation, L.P. v. EPA, 572 U.S. 489 (2014) (Supreme Court decision upholding CSAPR and outlining EPA’s Good Neighbor authority and limits)
- North Carolina v. EPA, 531 F.3d 896 (D.C. Cir. 2008) (held CAIR’s delayed compliance deadline unlawful; Court relied on this precedent to require alignment of upwind obligations with downwind attainment deadlines)
- Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29 (1983) (standard for arbitrary and capricious review of agency rulemaking)
- Massachusetts v. EPA, 549 U.S. 497 (2007) (agency cannot avoid statutory obligations merely by invoking scientific uncertainty)
- Union Elec. Co. v. EPA, 427 U.S. 246 (1976) (discusses the "as expeditiously as practicable" framework for attainment deadlines under the Clean Air Act)