Texas v. Environmental Protection Agency
726 F.3d 180
D.C. Cir.2013Background
- EPA promulgated an Endangerment Finding and Tailpipe Rule regulating greenhouse gases (GHGs); EPA said that made GHGs a "pollutant subject to regulation" under the Clean Air Act (CAA), triggering PSD and Title V permitting for major stationary sources as of Jan. 2, 2011.
- EPA issued Timing, Tailoring, and related rules to phase in permitting burdens and avoid administrative disruption; the D.C. Circuit upheld those rules in Coalition for Responsible Regulation, Inc. v. EPA.
- Several States (including Texas and Wyoming) had SIPs that did not incorporate GHGs; EPA issued a SIP Call finding many SIPs "substantially inadequate," declared some failures to submit, and promulgated FIPs (and an interim Error Correction Rule) so a permitting authority existed for GHG PSD permits.
- Petitioners (States and industry groups) challenged five EPA actions (SIP Call Rule, Failure Finding Rule, FIP Rule, Interim Error Correction Rule, Error Correction Rule), arguing EPA misinterpreted the PSD program and violated SIP revision procedures and 40 C.F.R. § 51.166(a)(6).
- The central legal question became whether CAA § 165(a) (and § 167) is "self-executing" — i.e., whether PSD permitting requirements apply immediately to newly regulated pollutants regardless of whether a State’s SIP has been revised and approved.
- The court concluded § 165(a) and § 167 are unambiguous and self-executing; because the PSD trigger operated automatically, petitioners lacked Article III standing to challenge EPA’s rules (vacatur would not redress but would worsen their asserted injuries).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether CAA § 165(a)/§ 167 are self-executing for newly regulated pollutants | §165(a) should operate only through an approved SIP; States may issue valid permits until SIPs are revised (invoking cooperative federalism and 40 C.F.R. §51.166(a)(6)) | §165(a) and §167 by plain text apply directly to sources and authorize EPA enforcement regardless of SIP status; PSD trigger operates automatically | §165(a) and §167 are unambiguous and self-executing; PSD requirements apply immediately to newly regulated pollutants (GHGs) and EPA may enforce them |
| Whether EPA’s SIP Call/FIP/Failure Finding and Error Correction actions unlawfully supplanted State authority or violated SIP procedural limits | EPA exceeded authority by accelerating SIP revision deadlines, retroactively disapproving SIPs (esp. Texas) and invoking good-cause to avoid notice-and-comment | EPA acted within §110(k)(5)/(6) and §110(c) authority to ensure a permitting authority existed; FIPs covered only GHG portion and offered delegation to States | EPA’s actions were consistent with the statutory mandate to prevent construction without PSD permits; petitioners’ procedural claims did not overcome the statutory self-executing rule |
| Whether 40 C.F.R. §51.166(a)(6) (three-year SIP revision period) limited EPA’s actions and allowed States to issue permits during interim | Regulation gives States three years to revise SIPs after PSD regulation amendments and permits remain valid during that period; EPA cannot ignore its own regulation | The three-year rule applies to SIP revisions "by reason of an amendment" to the regulation; here PSD requirements applied by operation of statute, not solely by regulatory amendment, so the three-year safe harbor is inapplicable | Court accepted EPA’s interpretation that §51.166(a)(6) does not negate the statute’s automatic PSD trigger; regulation cannot override statute |
| Standing: whether petitioners were injured by the challenged EPA rules | Vacatur of EPA rules would redress State and industry injuries from federal intrusion or retroactive disapproval; petitioners maintain harm to sovereign/practical interests | Because §165(a) operates automatically, the challenged rules mitigated — not caused — the inability to obtain lawful PSD permits; vacatur would prevent issuance of GHG PSD permits and create a moratorium | Petitioners lack Article III standing because injuries were caused by the statute’s automatic operation, not by EPA rules; petitions dismissed for lack of jurisdiction |
Key Cases Cited
- Massachusetts v. EPA, 549 U.S. 497 (Supreme Court 2007) (GHGs are "air pollutants" under the CAA)
- Coalition for Responsible Regulation, Inc. v. EPA, 684 F.3d 102 (D.C. Cir. 2012) (upholding Tailpipe, Timing, and Tailoring Rules; PSD applies automatically to GHGs)
- Citizens to Save Spencer County v. EPA, 600 F.2d 844 (D.C. Cir. 1979) (Section 165 prohibits construction without meeting statutory PSD requirements)
- Alabama Power Co. v. Costle, 636 F.2d 323 (D.C. Cir. 1979) (Section 165 applies to each pollutant subject to regulation)
- Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (Supreme Court 1984) (agency must give effect to unambiguous congressional intent)
- Alaska Dep’t of Environmental Conservation v. EPA, 540 U.S. 461 (Supreme Court 2004) (EPA has broad PSD oversight under §167; PSD provisions apply directly)
- Auer v. Robbins, 519 U.S. 452 (Supreme Court 1997) (deference to agency interpretations of its own regulations)
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (Supreme Court 1992) (Article III standing requirements)