Utility Air Regulatory Group v. Environmental Protection Agency, 408 U.S. App. D.C. 386

Background

EPA revised New Source Performance Standards for fossil-fuel-fired steam generating units (boilers) in final rules issued in 2009 and 2012, addressing particulate-matter monitoring and opacity requirements.
Opacity (visual or continuous opacity monitoring systems, COMS) has been used as a surrogate for particulate emissions; continuous emissions monitoring systems (CEMS) directly measure filterable particulate matter, while visual checks can detect condensable particulate matter as well.
The 2009 rule exempted units using particulate-matter CEMS from opacity standards and monitoring only if they met a stricter filterable PM limit of 0.03 lb/MMBtu; units above that threshold remained subject to opacity limits and had to use COMS or periodic visual inspections.
EPA sought comment and issued a 2012 rule reaffirming the 0.03 lb/MMBtu-conditioned exemption, requiring condensable PM reporting/testing for some units, and declining to allow state-law affirmative defenses in lieu of the proposed federal malfunction affirmative defense.
Petitioners (UARG and Texas) filed petitions for reconsideration with EPA (still pending) and petitions for judicial review in this court challenging various aspects of the rules.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Scope: May objections first raised in pending petitions for reconsideration be heard now?	UARG/Texas: procedural challenges may be reviewable even if raised first in reconsideration petitions.	EPA: CAA bars judicial review of objections not raised during the public comment period until EPA acts on reconsideration petitions.	Court: Objections first raised in petitions for reconsideration and still pending at EPA are not properly before the court; only issues raised during the comment period may be reviewed now.
Opacity exemption threshold (0.03 lb/MMBtu): arbitrary or capricious to retain opacity requirements above threshold?	UARG: Distinguishing units based on 0.03 cutoff and continuing opacity monitoring is arbitrary; CEMS suffices for compliance verification.	EPA: Units ≤0.03 produce little/no visible emissions so opacity unnecessary; units >0.03 may have visible emissions even when controls work, so opacity/COMS or visual checks provide valuable secondary verification.	Court: EPA’s explanation is reasonable; retention of opacity limits and monitoring for units >0.03 is not arbitrary or capricious.
Monitoring method requirement (COMS or visual inspections for units >0.03)	UARG: Requiring COMS or periodic visual inspections is unreasonable where CEMS already installed.	EPA: Opacity monitoring supplies a real-time, readily verifiable check on control device performance and CEMS reliability.	Court: EPA reasonably justified requiring COMS or visual inspections as secondary checks; requirement upheld.
State-law affirmative defenses for NSPS	Texas: EPA should permit states to apply state-law malfunction affirmative defenses to §7411 NSPS as it allowed in SIP context and suggested in MATS rulemaking.	EPA: NSPS under §7411 are federal standards not incorporated into SIPs; SIP affirmative defenses do not apply; EPA declined to adopt state-specific defenses for NSPS.	Court: Texas failed to raise alleged inconsistency during comment period (raised only in petition for reconsideration), so objection is not ripe for judicial review now.

Key Cases Cited

United Transp. Union v. ICC, 871 F.2d 1114 (D.C. Cir.) (general preclusion of judicial review while petition for rehearing pending)
West Penn Power Co. v. EPA, 860 F.2d 581 (3d Cir.) (case Congress sought to overrule for CAA finality)
Appalachian Power Co. v. EPA, 249 F.3d 1032 (D.C. Cir.) (limitations on raising issues first in reconsideration petitions)
Oklahoma v. EPA, 723 F.3d 1201 (10th Cir.) (CAA bars judicial review of objections raised first in petitions for reconsideration)
NRDC v. U.S. Nuclear Regulatory Comm’n, 680 F.2d 810 (D.C. Cir.) (mootness of procedural challenge after later notice-and-comment)