United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued November 5, 1999 Decided June 16, 2000
No. 98-1526
Allied Local and Regional Manufacturers Caucus, et al.,
Petitioners
v.
U.S. Environmental Protection Agency,
Respondent
National Paint & Coatings Association, et al.,
Intervenors
Consolidated with
98-1527
On Petitions for Review of Orders of the
Environmental Protection Agency
C. Boyden Gray argued the cause for petitioner Dunn- Edwards Corporation. With him on the briefs were James
R. Wrathall and IJay Palansky. Daniel H. Squire entered
an appearance.
William M. Smiland argued the cause for petitioners
Allied Local and Regional Manufacturers Caucus, et al. With
him on the briefs were Christopher G. Foster and Albert M.
Cohen.
Scott J. Jordan, Attorney, U.S. Department of Justice,
argued the cause for respondent. With him on the brief were
Lois J. Schiffer, Assistant Attorney General, and Geoffrey L.
Wilcox, Attorney, U.S. Environmental Protection Agency.
Eric G. Hostetler, Attorney, U.S. Department of Justice,
entered an appearance.
Nancy S. Bryson, Richard J. Mannix, Robert L. Rhodes
and Rena I. Steinzor were on the brief for intervenors.
Thomas J. Graves entered an appearance.
Before: Ginsburg, Tatel, and Garland, Circuit Judges.
Opinion for the Court filed by Circuit Judge Garland.
Garland, Circuit Judge: Petitioners in these consolidated
cases challenge final regulations promulgated by the Environ- mental Protection Agency (EPA) to limit the content of
volatile organic compounds in architectural coatings, including
paints. The regulations were issued pursuant to section
183(e) of the Clean Air Act, which directs the agency to
regulate emissions from consumer and commercial products
to help achieve the national ambient air quality standard for
ozone. Petitioners are Dunn-Edwards Corporation, a large
paint manufacturer, and Allied Local and Regional Manufac- turers Caucus, an association of manufacturers and distribu- tors of architectural coatings. Intervening on EPA's side are
other industry groups--including the National Paint & Coat- ings Association, a trade association of some 400 paint and
coatings manufacturers and distributors--which urge us to
uphold the regulations.
Petitioners challenge the regulations on a multitude of
grounds, including their asserted inconsistency with the Clean
Air Act, the Regulatory Flexibility Act, the Unfunded Man- dates Reform Act, and the Commerce Clause. We conclude
that EPA's regulations are lawful and deny the petitions for
review.
I
The Clean Air Act, 42 U.S.C. ss 7401 et seq., directs EPA
to establish national ambient air quality standards for harm- ful air pollutants. See 42 U.S.C. s 7408(a). One of the
pollutants so identified and regulated by the agency is
ground-level ozone. See 40 C.F.R. s 50.9. Although in the
upper atmosphere ozone occurs naturally and forms a protec- tive layer that shields human beings from the harmful effects
of the sun's ultraviolet rays, at ground level, man-made ozone
can have a wide array of negative effects on human health,
crops, and forests.1 See EPA, Study of Volatile Organic
Compound Emissions From Consumer and Commercial Prod- ucts, Report to Congress 1-1 (1995) (J.A. at 518) [hereinafter
Report].
Section 183(e) of the Clean Air Act, added as part of the
1990 amendments to that Act, is aimed at mitigating the
problem of ground-level ozone. See Clean Air Act Amend- __________
1 Reporting on the Clean Air Act Amendments of 1990, the
Senate Environment and Public Works Committee explained the
impact of ground-level ozone on human health:
Ozone is fatal at high concentrations. At lower concentrations
found in many urban areas in the United States, extensive
research has shown that healthy adults and children begin to
exhibit adverse health effects. These include chest pains,
shortness of breath, coughing, nausea, throat irritation, and
increased susceptibility to respiratory infections.
Potentially more troubling and less well understood are the
effects of long-term chronic exposure to summertime ozone
concentrations found in many cities. Regular out-of-doors work
or play during the hot, sunny summer months in the more
polluted cities may cause biochemical and structural changes in
the lung, paving the way for chronic respiratory diseases.
S. Rep. No. 101-228, at 6 (1989); see also Consumer and Commer- cial Products: Schedule for Regulation, Final Listing, 63 Fed. Reg.
48,792, 48,793 (1998).
ments of 1990, Pub. L. No. 101-549, s 183(e), 104 Stat. 2399,
2444-47 (codified at 42 U.S.C. s 7511b(e)). Ozone is formed
when nitrogen oxides (NOx) react with volatile organic com- pounds (VOCs) in the presence of sunlight. See Report at
1-1 (J.A. at 518). Section 183(e) directs EPA to regulate
emissions of VOCs from consumer and commercial products
in order to help states achieve the national ambient air
quality standard (NAAQS) for ozone.2
Section 183(e) contains a number of directions to EPA.
First, it instructs the agency to "conduct a study of the
emissions of volatile organic compounds into the ambient air
from consumer and commercial products (or any combination
thereof)" in order to "(i) determine their potential to contrib- ute to ozone levels which violate the national ambient air
quality standard for ozone" and "(ii) establish criteria for
regulating consumer and commercial products." 42 U.S.C.
s 7511b(e)(2)(A). The section further directs that the study
be completed, and a report submitted to Congress, "not later
than 3 years after November 15, 1990." Id.
Upon submission of the report, section 183(e) requires the
EPA to "list those categories of consumer or commercial
products that [it] determines, based on the study, account for
at least 80 percent of the VOC emissions, on a reactivity- adjusted basis, from consumer or commercial products in
areas that violate the NAAQS for ozone." Id.
s 7511b(e)(3)(A). The statute then directs the agency "to
divide the list into 4 groups establishing priorities for regula- tion" based on the criteria developed in the study. Id.
Finally, the statute requires the EPA to regulate one group
every two years until all four have been regulated. See id.
After passage of the 1990 amendments, EPA instituted a
formal regulatory negotiation process, aimed at achieving
__________
2 The statute defines a "consumer or commercial product" as
"any substance, product (including paints, coatings, and solvents), or
article (including any container or packaging) held by any person,
the use, consumption, storage, disposal, destruction, or decomposi- tion of which may result in the release of volatile organic com- pounds." 42 U.S.C. s 7511b(e)(1)(B).
consensus on the development of VOC regulations for paint
and architectural coatings. Representatives of the affected
industry were included on the negotiation committee. Com- plete consensus could not be reached, however, and the
process was terminated in 1994. See National Volatile Or- ganic Compound Emission Standards for Architectural Coat- ings, Final Rule, 63 Fed. Reg. 48,848, 48,850 (1998) [hereinaf- ter Final Rule].
In March 1995, EPA submitted its statutorily-required
report to Congress. The report concluded that "[c]onsumer
and commercial products, while individually small sources of
VOC emissions, contribute significantly to the ozone nonat- tainment problem." Report at 2-1 (J.A. at 523). VOC
emissions from these products, the report said, constitute
approximately 28% of all man-made VOC emissions. See id.
at 2-8 (J.A. at 530). In compliance with Congress' direction,
the report also set forth "criteria for regulating consumer and
commercial products under the Act." Id. at 4-1 (J.A. at 557).
The eight criteria listed by the agency were:
(1) utility
(2) commercial demand
(3) health or safety functions
(4) emissions of 'highly reactive' compounds
(5) availability of alternatives
(6) cost-effectiveness of controls
(7) magnitude of annual VOC emissions
(8) regulatory efficiency
Id. at 4-2 (J.A. at 558).3
In March 1995, EPA also published the statutorily- mandated list of categories of consumer or commercial prod- ucts that together account for at least 80% of VOC emissions
from such products in ozone nonattainment areas on a reac- tivity-adjusted basis. See Consumer and Commercial Prod- ucts, Notice of Product Category List and Schedule for
__________
3 The first six criteria were derived from five factors specified in
the statute. See 42 U.S.C. s 7511b(e)(2)(B). The last two were
added by the agency. See infra Part IV.E.
Regulation, 60 Fed. Reg. 15,264 (1995) [hereinafter Notice of
Product Category List]. Per Congress' instruction, EPA
divided those categories into four groups, establishing priori- ties for regulation. Architectural coatings were included in
the first group, along with certain household consumer prod- ucts and automobile refinish coatings. EPA determined that
these three categories account for about 30% of the VOC
emissions from all consumer and commercial products. See
Consumer and Commercial Products: Schedule for Regula- tion, Final Listing, 60 Fed. Reg. 48,792, 48,793 (1998) [herein- after Final Listing]. According to EPA, the architectural
coatings category alone accounts for about 9% of the emis- sions from all consumer and commercial products, making it
"one of the largest emissions sources among the consumer
and commercial products categories." Final Rule, 63 Fed.
Reg. at 48,850; see National Volatile Organic Compound
Emission Standards for Architectural Coatings, Proposed
Rule, 61 Fed. Reg. 32,729, 32,731 (1996) [hereinafter Pro- posed Rule]; Report at 2-6 (J.A. at 528).
In September 1998, EPA published its final rules and
listing. As proposed, the agency listed architectural coatings,
along with consumer products and automobile refinish coat- ings, in the first group of consumer and commercial product
categories subject to regulation under section 183(e). See
Final Listing, 63 Fed. Reg. at 48,792. At the same time, it
issued a rule specifying limits on the permissible VOC content
of products in each of the categories. See National Volatile
Organic Compound Emission Standards for Automobile Coat- ings, 63 Fed. Reg. 48,806 (1998); National Volatile Organic
Compound Emission Standards for Consumer Products, 63
Fed. Reg. 48,819 (1998); National Volatile Organic Compound
Emission Standards for Architectural Coatings, 63 Fed. Reg.
48,848 (1998).
Petitioners Dunn-Edwards and Allied challenge EPA's ini- tial study and report to Congress, as well as the list and rule
that followed.4 They assert that EPA has misinterpreted the
__________
4 Dunn-Edwards challenges EPA's decisions only insofar as
they relate to architectural coatings. Although Allied's brief sug-
Clean Air Act and that its regulations are arbitrary and
capricious. By contrast, intervenor National Paint & Coat- ings Association, which, like Allied, participated in the unsuc- cessful attempt at regulatory negotiation, supports EPA's
regulations, describing them as a "comprehensive set of rea- sonable limits that are tough but fair, and which can contrib- ute significantly to ozone emissions reductions as mandated
by the [Act]." NPCA Br. at 2-3.
II
In assessing petitioners' claim that EPA has misconstrued
the statute, we are guided by the standards set forth in
Chevron U.S.A. Inc. v. Natural Resources Defense Council,
Inc., 467 U.S. 837" date_filed="1984-06-25" court="SCOTUS" case_name="Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc.">467 U.S. 837, 842-44 (1984). Under Chevron's first step,
we ask whether Congress "has directly spoken to the precise
question at issue," in which case we "must give effect to the
unambiguously expressed intent of Congress." Id. at 842-43.
If "the statute is silent or ambiguous with respect to the
specific issue," however, we move to Chevron's second step.
Id. at 843. Under step two, we must defer to the agency's
interpretation so long as it is "based on a permissible con- struction of the statute," id., and is "reasonable in light of the
Act's text, legislative history, and purpose," Southern Cal.
Edison Co. v. FERC, 116 F.3d 507" date_filed="1997-06-17" court="D.C. Cir." case_name="Southern California Edison Company v. Federal Energy Regulatory Commission">116 F.3d 507, 511 (D.C. Cir. 1997).
As petitioners note, we also have the power to set aside a
final rule promulgated under the Clean Air Act if the rule is
"arbitrary, capricious, an abuse of discretion, or otherwise not
in accordance with law." 42 U.S.C. s 7607(d)(9)(A). To
determine whether EPA's rules are "arbitrary and capri- cious," we apply the same standard of review under the Clean
Air Act as we do under the Administrative Procedure Act
(APA), 5 U.S.C. s 706(2)(A). See Ethyl Corp. v. EPA, 51
F.3d 1053, 1064 (D.C. Cir. 1995); Chemical Mfrs. Ass'n v.
EPA, 28 F.3d 1259" date_filed="1994-07-19" court="D.C. Cir." case_name="Chemical Manufacturers Association v. Environmental Protection Agency Carol M. Browner, Administrator, United States Environmental Protection Agency">28 F.3d 1259, 1263-64 (D.C. Cir. 1994). In that regard,
__________ gested a challenge to the consumer products and automobile refin- ish coatings rules as well, at oral argument counsel made clear that
Allied's attack on those rules is identical to its attack on the
architectural coatings rule. See Oral Arg. Tr. at 78-79.
we look for guidance to Motor Vehicle Manufacturers Ass'n
v. State Farm Mutual Automobile Insurance, 463 U.S. 29" date_filed="1983-06-24" court="SCOTUS" case_name="Motor Vehicle Mfrs. Assn. of United States, Inc. v. State Farm Mut. Automobile Ins. Co.">463 U.S. 29, 43
(1983). Under the standard set forth in that case, we must
affirm the EPA's rules if the agency has considered the
relevant factors and articulated a " 'rational connection be- tween the facts found and the choice made.' " Id. at 43
(quoting Burlington Truck Lines v. United States, 371 U.S.
156, 168 (1962)).
In the following parts, we apply these standards to petition- ers' challenge to the architectural coatings rule and related
EPA decisions.
III
Petitioners' principal argument is that the Clean Air Act
requires EPA to regulate VOCs according to their "reactivi- ty," and that EPA failed to do so. "Reactivity," as defined by
petitioners, is " 'the amount of ozone formed per unit amount
... of VOC added [to a given atmospheric mixture].' "
Dunn-Edwards Br. at 3 n.4 (quoting National Research
Council, Rethinking the Ozone Problem in Urban and Region- al Air Pollution 153 (1991) (J.A. at 165)) (alterations in
original). In petitioners' view, EPA ignored reactivity and
instead regulated VOCs according to their "mass"--i.e., ac- cording to the amount of VOCs contained in a product.
In this blunt form, petitioners' attack on the EPA is
factually incorrect. As the EPA notes, it did "consider[ ]
reactivity in prioritizing and selecting product categories to
be listed for regulation." Final Listing, 63 Fed. Reg. at
48,795. It did so by using available reactivity data to divide
VOCs into three groups: negligibly reactive, reactive, and
highly reactive. See id.
EPA designated as negligibly reactive those compounds the
data showed to have insignificant ozone-forming potential.
See id. To make that designation, EPA relied on data
derived from the "method now normally used for identifying
negligibly reactive VOC," the so-called "kOH method." Re- port at 3-4 (J.A. at 549). "kOH reactivity data," the agency
said, "have been obtained or estimated for nearly all VOC
species of interest." Id. at 3-5 (J.A. at 550); see also id. at 3- 4 (J.A. at 549) (describing kOH method). Compounds deter- mined to be negligibly reactive on the basis of that data were
excluded altogether from the VOC emissions inventory and
from the related regulations. See Final Listing, 63 Fed. Reg.
at 48,795.5
To differentiate between the remaining reactive VOCs,
EPA included data derived from the "Incremental Reactivity"
method, a method "more appropriate for rating reactive
VOC." Report at 3-4 (J.A. at 549). EPA used this data to
identify ten classes of VOCs that are highly reactive under
most conditions. See Final Listing, 63 Fed. Reg. at 48,795- 96. The agency then identified the product categories known
to contain these highly reactive compounds, and estimated the
quantity of highly reactive compounds emitted by those prod- uct categories. See id. at 48,796. Finally, EPA adjusted the
mass emissions figures for those product categories by apply- ing a reactivity adjustment factor to the mass emissions of
their highly reactive VOCs. See id.
Petitioners recognize that EPA did, at least in this tripar- tite categorical form, regulate according to reactivity. Their
contention is that this is not enough. Rather, petitioners
urge that the statute requires EPA to determine the reactivi- ty of each individual VOC species, and to use each VOC's
relative reactivity in promulgating the final regulations. Peti- tioners' argument is based on their analysis of three provi- sions of the Clean Air Act.
A
Section 183(e) of the Clean Air Act directs EPA "to conduct
a study of the emissions of volatile organic compounds into
the ambient air from consumer and commercial products (or
any combination thereof) in order to--(i) determine their
potential to contribute to ozone levels which violate the
national ambient air quality standard for ozone...." 42
__________
5 EPA labeled a compound negligibly reactive if its kOH value
was lower than that of ethane. See Report at 3-5 (J.A. at 550).
U.S.C. s 7511b(e)(2)(A). Petitioners contend that the phrase
"potential to contribute" as used in this provision is synony- mous with the term "reactivity."
Accepting petitioners' contention that the Clean Air Act
requires a determination of reactivity, however, does not
resolve the question of whether reactivity must be deter- mined on an individual VOC-by-VOC, rather than categorical,
basis. Allied contends that the above-quoted provision re- quires EPA to determine the reactivity of "each" volatile
compound. See Allied Br. at 14. Had Congress used the
word "each" in the statute, the first step of the Chevron test
might well dictate victory for Allied. But Congress did not
use that word. Instead, it directed EPA to study emissions
of volatile organic compounds "from consumer and commer- cial products (or any combination thereof) in order to ...
determine their potential to contribute to ozone levels." 42
U.S.C. s 7511b(e)(2)(a) (emphasis added). The express refer- ence to "any combination thereof," and the direction to deter- mine "their potential" rather than "each's potential" (or even,
"their potentials"), renders it impossible to regard the statute
as unambiguously expressing an intent that each VOC be
analyzed individually. To the contrary, and moving to the
second step of the Chevron test, these references support the
reasonableness of EPA's contention that Congress authorized
the agency to proceed on a category-by-category basis.
EPA's reading of the statute is further supported by the
provision requiring EPA to complete its study and submit its
report within three years. See id. Relatively little data is
currently available on the comparative reactivity of individual
VOC species. See Report at 2-10, 3-5 (J.A. at 532, 550)
(noting that Incremental Reactivity data is only available for
"some 328 VOC species or groups of species"). According to
EPA's figures, not seriously contested by petitioners, a de- tailed reactivity study of a single VOC species would take two
months to accomplish. See EPA, Response to Comments on
Section 183(e) Study and Report to Congress 2-75 (1998)
(J.A. at 740) [hereinafter Response to Comments]. As "there
are approximately 1,000 different VOC species associated
with the architectural coating industry alone," id., EPA esti-
mates that a truly species-specific analysis of reactivities
would require 166 years of testing. Accordingly, EPA rea- sonably concluded that in light of the three-year statutory
timetable, Congress could not have expected it to proceed on
a species-specific basis.
In reply to this argument, Dunn-Edwards suggests that
EPA could have streamlined the task by confining its analysis
to the smaller universe of those VOCs most commonly found
in architectural coatings. "EPA need not," Dunn-Edwards
says, "have determined the reactivity of every VOC." Dunn- Edwards Reply Br. at 6. Instead, a "reactivity-based regula- tion could be implemented using information on only the three
VOCs accounting for almost all emissions from waterborne
architectural coatings and the eight VOCs accounting for
almost 80% of emissions from solventborne architectural coat- ings." Id. at 6. Individual analyses of just those eleven,
Dunn-Edwards argues, could readily have been completed
within the statutory timetable.
This reply has two problems. First, Congress directed
EPA to study and regulate the VOC emissions from all
"consumer or commercial products," not only from architec- tural coatings. While the streamlined approach Dunn-
Edwards suggests might accomplish the task for the product
category of principal concern to petitioner, that does not
answer EPA's contention that the agency would still have
been unable to meet the statutory deadline across the board.
Moreover, and more important, in making this suggestion
Dunn-Edwards effectively abandons the purity of the argu- ment it predicated on Chevron step one. By contending that
EPA could have accomplished its task within the time avail- able by studying only eleven of the VOCs contained in
architectural coatings, Dunn-Edwards must accept that the
statute does not require a separate evaluation of each VOC's
individual reactivity. And if the statutory language permits
the agency to regulate by analyzing only the eleven most
significant VOCs, it is hard to see why it bars EPA from
instead taking the analytical approach it preferred: excluding
from regulation those VOCs with negligible reactivity, giving
regulatory priority to product categories containing the ten
classes of most highly reactive VOCs, and regulating the
balance of reactive compounds according to the mass of their
emissions. It may be, as petitioners contend, that theirs is
the better approach; but that is not a question for this court.
Under Chevron, we are bound to uphold agency interpreta- tions as long as they are reasonable--"regardless whether
there may be other reasonable, or even more reasonable,
views." Serono Lab., Inc. v. Shalala, 158 F.3d 1313" date_filed="1998-10-27" court="D.C. Cir." case_name="Serono Labs Inc v. Ferring Pharm. Inc.">158 F.3d 1313, 1321
(D.C. Cir. 1998).
Finally, Dunn-Edwards implicitly suggests that EPA was
unfaithful to section 183(e)(2)(A) because, rather than "deter- mine [VOCs'] potential to contribute to ozone levels" by doing
its own testing, the agency relied on a review of the existing
scientific literature. See Dunn-Edwards Br. at 12. But
nothing in section 183(e) declares that the only way to "deter- mine" potential is through the agency's own studies--some- thing Congress did demand in other sections of the Clean Air
Act. See, e.g., 42 U.S.C. s 7511f (directing EPA to study the
role of ozone precursors in tropospheric ozone formation, and
commanding that the "Administrator shall utilize all available
information and studies, as well as develop additional infor- mation, in conducting the study required by this section")
(emphasis added). Nor is there anything unreasonable about
the agency's conclusion that it could "determine" VOCs' po- tential to contribute by examining data in the existing litera- ture. To the contrary, "EPA typically has wide latitude in
determining the extent of data-gathering necessary to solve a
problem. We generally defer to an agency's decision to
proceed on the basis of imperfect scientific information, rath- er than to 'invest the resources to conduct the perfect
study.' " Sierra Club v. EPA, 167 F.3d 658" date_filed="1999-03-02" court="D.C. Cir." case_name="Sierra Club v. United States Environmental Protection Agency">167 F.3d 658, 662 (D.C. Cir.
1999) (quoting American Iron & Steel Inst. v. EPA, 115 F.3d
979, 1004 (D.C. Cir. 1997)).
B
As a second source of statutory support for their argument
that the Clean Air Act requires a VOC-specific approach,
petitioners note that in establishing "criteria for regulating
consumer and commercial products," Congress directed EPA
to take into consideration "[t]hose consumer and commercial
products which emit highly reactive volatile organic com- pounds into the ambient air." 42 U.S.C. s 7511b(e)(2)(B)(iii).
But EPA expressly complied with this congressional com- mand, adopting as one of its criteria "emissions of highly
reactive compounds." See Report at 4-6 (J.A. at 562). As
noted above, the agency implemented this criterion by identi- fying ten classes of VOCs as "highly reactive," and using that
classification to give priority to consumer and commercial
products that emitted those highly reactive compounds. See
Final Listing, 63 Fed. Reg. at 48,796. Accordingly, this
statutory citation does not add to the weight of petitioners'
challenge.
C
Finally, petitioners note that section 183(e)(3)(A) requires
EPA to "list those categories of consumer or commercial
products" that "account for at least 80 percent of the VOC
emissions, on a reactivity-adjusted basis, from consumer or
commercial products in areas that violate the NAAQS for
ozone." 42 U.S.C. s 7511b(e)(3)(A). EPA is then directed to
"divide the list into 4 groups establishing priorities for regula- tion," and to regulate one group every two years until all have
been regulated. Id.
To comply with these requirements, EPA first used the
methodology we have described above: it divided VOCs into
three sets, exempting those with negligible reactivity and
applying an (upward) reactivity adjustment factor to the mass
emissions of products with highly reactive ingredients. After
ranking product categories based on eight regulatory criteria,
see supra Part I, EPA developed the required list of regulat- ed categories by starting with the highest ranked category
and proceeding through successive categories until the list
accounted for 80% of the emissions, adjusted for reactivity.
See Final Listing, 63 Fed. Reg. at 48,796. The agency
identified architectural coatings as "one of the largest sources
of VOC emissions among categories of consumer and com- mercial products," id. at 48,797, and therefore included it
within the first group of regulated categories.
Because EPA did not evaluate each VOC's individual reac- tivity, petitioners contend that "products containing less- reactive compounds were included in an early group when,
instead, they should have been exempted or regulated, if at
all, in later stages." Allied Br. at 20. Petitioners argue that
these two possibilities--that some compounds were regulated
that should have been exempted, and that architectural coat- ings as a category were given priority regulation when they
should have been regulated in one of the later groups-- render EPA's methodology inconsistent with the statute's
command to account for VOC emissions "on a reactivity- adjusted basis." We disagree.
First, the possibility that some compounds that were regu- lated should not have been regulated at all is not likely
enough to undermine EPA's methodology. As explained
above, EPA expressly exempted from regulation those com- pounds determined to have negligible reactivity. Moreover,
pre-existing EPA regulations allow companies to apply to
have a compound excluded from the definition of VOC, and
thereby exempted from regulation, based on evidence that it
is negligibly reactive. See Final Listing, 63 Fed. Reg. at
48,798 (citing 40 C.F.R. s 51.100(s)). Working with industry,
EPA has exempted more than 100 VOC species (42 com- pounds and 2 classes of compounds) under this provision.
See Response to Comments at 2-90 (J.A. at 755); Final
Listing, 63 Fed. Reg. at 48,798. Since data necessary to
determine negligible reactivity are available for "nearly all
VOC species of interest," Report at 3-5 (J.A. at 550), and
since even petitioners concede that all VOCs have some
potential to contribute to ozone formation, see Oral Arg. Tr.
at 27; see also Final Listing, 63 Fed. Reg. at 48,797, petition- ers' challenge does not cast doubt on EPA's regulatory
process.
Nor is the second possibility, that in a perfect regulatory
world architectural coatings would not be in the first group of
regulated products, of great moment in evaluating the reason- ableness of EPA's method of regulation. There is no serious
argument that architectural coatings would not appear some- where on even a perfect regulatory list, given their status as
one of the largest sources of VOC emissions among consumer
and commercial products. Indeed, section 183(e) directs the
EPA to list those categories of consumer or commercial
products that account for "at least" 80% of VOC emissions on
a reactivity-adjusted basis--implying that it could list catego- ries accounting for 100% of such emissions. As to exactly
where on that list architectural coatings should have ranked,
we can only say what we have repeatedly said before: An
"agency is entitled to the highest deference in deciding priori- ties among issues, including the sequence and grouping in
which it tackles them." Associated Gas Distribs. v. FERC,
824 F.2d 981" date_filed="1987-06-23" court="D.C. Cir." case_name="Associated Gas Distributors v. Federal Energy Regulatory Commission">824 F.2d 981, 1039 (D.C. Cir. 1987); see Sierra Club v.
Thomas, 828 F.2d 783" date_filed="1987-09-08" court="D.C. Cir." case_name="Sierra Club v. Lee M. Thomas, Administrator, Environmental Protection Agency, American Mining Congress, National Coal Association, Intervenors">828 F.2d 783, 797 (D.C. Cir. 1987). Moreover, we
must be particularly deferential in a case like this, where
Congress--by instructing EPA to set priorities using multi- ple, nondeterminative criteria6--has necessarily indicated an
intention to delegate substantial discretion to the agency.
In sum, we conclude that nothing in the Clean Air Act
unambiguously requires the EPA to analyze the reactivity of
each VOC on an individual basis, and that EPA's more
categorical approach is a reasonable interpretation of the
reactivity-related requirements of the Act. Accordingly, the
architectural coatings rule survives review under the stan- dard set by the Supreme Court in Chevron.
D
Petitioners contend that even if the Clean Air Act does not
require EPA, as a matter of statutory construction, to regu- late VOCs based on an analysis of their relative individual
reactivities, the agency must nonetheless do so to avoid
__________
6 Congress directed EPA to establish regulatory priorities
based on criteria which "take into consideration" at least five listed
factors. 42 U.S.C. s 7511b(e)(2)(B); see also supra note 3; infra
Part IV.E.
regulating in an arbitrary and capricious fashion. As peti- tioners note, EPA's own report conceded that: "[t]o be the
most effective, ozone control strategies ideally should be
based not only on mass VOC and NOx emissions but should
consider the relative photochemical reactivity of individual
species." Report at 2-1 (J.A. at 523); see also Notice of
Product Category List, 60 Fed. Reg. at 15,266. The key
words in the quoted sentence, however, are "to be the most
effective" and "ideally." Indeed, in the sentence following the
one just quoted, EPA went on to state:
Reactivity data on VOC, especially those compounds used
to formulate consumer and commercial products, is ex-
tremely limited. Better data, which can be obtained only
at great expense, is needed if the EPA is to consider
relative photochemical reactivity in any VOC control
strategy. In the meantime, a practical approach is to act
on the basis of mass VOC emissions.
Report at 2-1 (J.A. at 523). In short, the agency concluded
that the methodology it adopted, and which we have de- scribed above, was the "most appropriate way to meet the
statutory requirements, given the limitations and uncertain- ties surrounding the reactivity issue." Report at 3-10 (J.A.
at 555).
Our role, of course, is to determine neither whether EPA's
approach was "ideal," nor whether it was the "most appropri- ate," but only whether it was reasonable. See Ethyl Corp. v.
EPA, 541 F.2d 1" date_filed="1976-06-14" court="D.C. Cir." case_name="Ethyl Corporation v. Environmental Protection Agency">541 F.2d 1, 36 (D.C. Cir. 1976) (en banc) ("We must
look at the decision not as the chemist, biologist or statistician
that we are qualified neither by training nor experience to be,
but as a reviewing court exercising our narrowly defined duty
of holding agencies to certain minimal standards of rationali- ty."); see also State Farm, 463 U.S. 29" date_filed="1983-06-24" court="SCOTUS" case_name="Motor Vehicle Mfrs. Assn. of United States, Inc. v. State Farm Mut. Automobile Ins. Co.">463 U.S. at 43. For the reasons
discussed in Part III.A-C above, we conclude that it was.
See Animal Legal Defense Fund, Inc. v. Glickman, 204 F.3d
229, 234 (D.C. Cir. 2000) (noting overlap between analysis
under Chevron and State Farm). We agree with the agency
that its general reliance on the mass of VOC emissions,
coupled with the exemption for those VOCs known to be
negligibly reactive and the upward adjustment for those
known to be highly reactive, constitutes a reasonable ap- proach given both "the uncertainties and inconsistencies of
reactivity," Report at 2-10 (J.A. at 532), and "Congress's
direction that the EPA complete the study within three
years," Final Listing, 63 Fed. Reg. at 48,796. In reaching
this conclusion, "[o]ur analysis is guided by the deference
traditionally given to agency expertise, particularly when
dealing with a statutory scheme as unwieldy and
science-driven as the Clean Air Act." Appalachian Power
Co. v. EPA, 135 F.3d 791" date_filed="1998-02-13" court="D.C. Cir." case_name="Appalachian Power Company v. Environmental Protection Agency, Public Service Electric & Gas Company, Intervenors">135 F.3d 791, 801-02 (D.C. Cir. 1998).
IV
In this Part, we consider a number of additional, miscella- neous charges leveled by petitioners against the architectural
coatings rule. Some raise questions of statutory interpreta- tion under the Clean Air Act, some charge EPA with arbi- trary and capricious decisionmaking under that Act, and some
involve a combination of the two.
A
Dunn-Edwards attacks the EPA study for "fail[ing] to
address the beneficial environmental and health effects of the
negative reactivity" of some VOCs. Dunn-Edwards Br. at
12. There is evidence, the company contends, showing that
the emissions of certain types of VOCs actually reduce ozone
levels. The agency's failure to consider the positive health
effects of a restricted pollutant, Dunn-Edwards continues,
constitutes both a violation of the Clean Air Act and unrea- sonable agency action. See Dunn-Edwards Br. at 13 (citing
American Trucking Ass'n v. EPA, 175 F.3d 1027" date_filed="1999-05-14" court="D.C. Cir." case_name="American Trucking Associations v. United States Environmental Protection Agency">175 F.3d 1027, 1051 (D.C.
Cir. 1999), cert. granted, 68 U.S.L.W. 3496 (U.S. May 22,
2000)).
The answer to this challenge is that EPA did consider the
possible effects of negative reactivity. See Response to Com- ments at 2-92 to 2-95 (J.A. at 757-760). It concluded,
however, that the phenomenon was too rare and unpredict- able to warrant changes in the regulatory structure. See id.
at 2-92 to 2-93 (J.A. at 757-58) (concluding that "reduction of
ozone by VOC occurs in very limited circumstances"). Nega- tive reactivity, the agency determined, occurs "only in very
limited cases, with only a few species of VOC (not VOC
species typically used in consumer and commercial products),
and under specific meteorological conditions." Id. at 2-154
(J.A. at 802). Studies offered by petitioners were not to the
contrary. See, e.g., J.A. at 985-86 (study describing "slightly
negative values" for two compounds in one-hour test in Los
Angeles, but noting that all compounds tested there showed
positive values in eight-hour tests). Because EPA reasonably
considered, and discounted, the phenomenon of negative reac- tivity, we reject this challenge.
B
In a related attack, Dunn-Edwards contends that EPA's
rule may also be counterproductive because it "has the poten- tial to increase ozone levels in two ways." Dunn-Edwards
Br. at 21. First, because the rule imposes limits on the mass
of VOCs in a product, rather than on the type (reactivity) of
the VOCs, it "allows for the possibility" that producers of
architectural coatings may substitute more reactive VOCs for
less reactive ones. Id. Although the reformulated products
would then emit a smaller quantity of VOCs as measured by
mass, they would generate more ozone over all. Second,
Dunn-Edwards warns, "if performance is compromised" by
reducing the VOC content of architectural coatings, the over- all volume of such products used to attain the same results
will increase--in the form of more coats, more touch-ups, and
more frequent recoating. Id.
As the quoted portions of petitioner's argument suggests, it
is framed more as a series of theoretical possibilities than of
fact-based predictions. Petitioners offer no evidence at all
that the VOC substitution they fear will occur. EPA's own
view is that even if such substitution did occur, the benefit
from reducing the total mass of VOC emissions would out- weigh any differences in relative reactivities of different
compounds. See EPA, National Volatile Organic Compound
Emission Standards for Architectural Coatings, Background
for Promulgated Standards 2-297 (1998) (J.A. at 437) [herein- after Background]. In the absence of contrary evidence, it is
to the expert agency's prediction, rather than to the petition- er's, that we must defer. See Her Majesty the Queen in
Right of Ontario v. EPA, 912 F.2d 1525" date_filed="1990-08-31" court="D.C. Cir." case_name="Her Majesty The Queen In Right of Ontario v. United States Environmental Protection Agency">912 F.2d 1525, 1534 (D.C. Cir.
1990); New York v. EPA, 852 F.2d 574" date_filed="1988-07-22" court="D.C. Cir." case_name="State of New York v. U.S. Environmental Protection Agency">852 F.2d 574, 580 (D.C. Cir. 1988).
EPA also found "no evidence or documentation to support
the[ ] claims [that] increased thinning, more priming, more
topcoating, and more frequent painting" would result if the
VOC content of architectural coatings were reduced. Back- ground at 2-293 (J.A. at 433). To the contrary, the agency
cited evidence that low VOC content coatings perform well
and do not require additional coats to achieve the same
results as those with high VOC content. See Background at
2-293 to 2-297 (J.A. at 433-37); Proposed Rule, 61 Fed. Reg.
at 32,738; see also Final Rule, 63 Fed. Reg. at 48,869 (finding
"no link between product quality and VOC content since
quality, high-performing products are available in a wide
range of VOC content levels in many product categories").
In reply, Dunn-Edwards cites a California survey indicating
that between 1980 and 1990, total VOC emissions from archi- tectural coatings increased by 16%, notwithstanding that the
VOC content of such coatings decreased by 37% during the
same period. See Dunn-Edwards Reply Br. at 10. Poorer
performance by the reduced VOC paint "may be responsible,"
Dunn-Edwards asserts. Id. And it may be that Dunn- Edwards is right. But without evidence of cause-and-effect,
we cannot know. Dunn-Edwards offers no evidence that the
increase in VOC emissions during the 1980s was due to the
poorer performance of the paints, rather than to the cause
suggested by the EPA: an increase in the volume of paints
used during that time, spurred by growth in the population,
an improved economy, and an increase in construction.
C
The architectural coatings rule regulates the manufacture
and sale of coating products nationwide. Allied contends that
this exceeds EPA's authority, which it asserts is limited to
regulating manufacture and sale within "nonattainment" ar- eas. A nonattainment area is one that either does not meet
the national primary or secondary ambient air quality stan- dard for ozone, or that contributes to ozone levels in a nearby
area that does not meet the standard. See 42 U.S.C.
s 7407(d). Allied's contention principally relies on two sub- sections of section 183(e). First, subsection (2)(A) requires
EPA to study VOC emissions in order to determine their
potential "to contribute to ozone levels which violate the
national ambient air quality standard for ozone." Id.
s 7511b(e)(2)(A)(i). Second, subsection (3)(A) requires the
EPA to list, and then to regulate, those categories of products
that "account for at least 80 percent of the VOC emissions
... from consumer or commercial products in areas that
violate the NAAQS for ozone." Id. s 7511b(e)(3)(A).
Neither of these provisions says anything about where the
regulated product itself must be manufactured or sold, or
about the geographic scope of EPA's regulatory authority.
Rather, the first directs EPA to consider the potential of
emissions to contribute to ozone levels that violate the
NAAQS; the second instructs it to regulate categories of
products that account for a specified percentage of emissions
in nonattainment areas. As EPA concludes, this language
permits the agency to regulate nationwide in order to accom- plish emissions reduction in nonattainment areas.
EPA's reading is bolstered by consideration of other provi- sions in the same section. For example, subsection (3)(A)
also states that "[i]n order to carry out this section, the
Administrator may, by regulation, control or prohibit any
activity, including the manufacture or introduction into com- merce, offering for sale, or sale of any consumer or commer- cial product." Id. s 7511b(e)(3)(A) (emphasis added); see
also id. s 7511b(e)(4) ("The regulations under this subsection
may include any system or systems of regulation as the
Administrator may deem appropriate."). Similarly, subsec- tion (1)(C) defines "regulated entities" as manufacturers and
distributors of consumer or commercial products for sale in
interstate commerce "in the United States," without geo- graphic limitation. Id. s 7511b(e)(1)(C)(i). Thus, although
Congress did direct EPA to regulate VOCs in order to
improve conditions within nonattainment areas, nothing in the
statute limits its ability to regulate the manufacture and sale
of VOCs outside such areas if such regulation is reasonably
related to that end.7
EPA readily persuades us that nationwide regulation is
reasonably related to the statutory objective. First, architec- tural coating products are widely distributed and easily trans- portable across area boundaries. See Final Listing, 63 Fed.
Reg. at 48,804. End-users (e.g., commercial painters) them- selves may well utilize these products in different locations
from day to day. See id.8 Accordingly, as EPA reasoned, a
national rule is necessary to "preempt opportunities for end- users to purchase such consumer and commercial products in
attainment areas and then use them in nonattainment areas,
thereby circumventing the regulations and undermining the
decrease in VOC emissions in nonattainment areas." Final
Listing, 63 Fed. Reg. at 48,804.
Second, just as coating products are easily transportable,
so too are the VOCs they release and the ozone the VOCs
__________
7 For that reason, section 183(e) is different from Clean Air Act
section 165(a), which we considered in Alabama Power Co. v. Costle,
636 F.2d 323" date_filed="1980-04-21" court="D.C. Cir." case_name="Alabama Power Company v. Douglas M. Costle, as Administrator, Environmental Protection Agency, Sierra Club, Intervenors.">636 F.2d 323 (D.C. Cir. 1979). The latter section expressly limits
EPA's permit authority to facilities "constructed in any area to
which [Part C] applies," 42 U.S.C. s 7475(a) (emphasis added), See Alabama
Power, 636 F.3d at 365. Section 183(e) does not contain an analo- gous limitation.
8 As the National Paint & Coatings Association wrote in its
intervening brief in support of the EPA:
A manufacturer or distributor, whether big or small, that sells
an architectural coatings product can never be sure where that
product will end up being used. For example, a small manu-
facturer in Maryland who manufacturers his paint solely in
Maryland and sells his paint to contractors only in Maryland
may have his paint used in Washington, D.C. one day, Virginia
the next day, West Virginia the next day, and finally used to
paint a weekend beach house in Delaware the next day.
NPCA Br. at 24.
create. Ambient VOCs and ozone do not obey geographic
boundaries and can flow freely between attainment and non- attainment areas. See Final Listing, 63 Fed. Reg. at 48,804;
see also Virginia v. EPA, 108 F.3d 1397" date_filed="1997-06-13" court="D.C. Cir." case_name="Commonwealth of Virginia v. Environmental Protection Agency, State of Connecticut, Intervenors">108 F.3d 1397, 1400 (D.C. Cir.
1997). Thus, EPA reasonably concluded that "emissions in
attainment areas can contribute to nonattainment in adjoining
nonattainment areas," and that a nationwide rule is therefore
consistent with its statutory mandate. Final Listing, 63 Fed.
Reg. at 48,803.
D
Dunn-Edwards contends that because section 183(e) re- quires a study of "emissions of volatile organic compounds
into the ambient air," 42 U.S.C. s 7511b(e)(2)(A), EPA violat- ed its directive by focusing its study and rule on VOC content
rather than emissions. That focus, petitioner suggests, as- sumes without foundation that all VOCs contained in a coat- ing will be emitted into the ambient air. But EPA did not
assume that all of a product's VOCs would be emitted.
Rather, it employed a test to determine the mass of solvents
that would volatize, and limited its calculation of VOC content
to the latter alone.9
Dunn-Edwards also contends that even when VOCs are
emitted from a product, they may not become "available" in
the atmosphere to form ozone--for example, because they
may be emitted indoors rather than outside. EPA considered
__________
9 In EPA's test, the paint sample is weighed, heated, and
reweighed. VOC content is calculated as the difference in the two
weights, after also subtracting the weight of water and any exempt
compounds. Hence, solvents that do not volatize under the test
conditions are not measured as VOC. See Response to Comments
at 2-56 (J.A. at 723). In a footnote, Dunn-Edwards contends that
because paints are not heated when applied, this test "does not bear
the necessary relationship to actual conditions in which coatings are
used." Dunn-Edwards Br. at 16 n.16 (citing Chemical Mfrs. Ass'n
v. EPA, 28 F.3d 1259" date_filed="1994-07-19" court="D.C. Cir." case_name="Chemical Manufacturers Association v. Environmental Protection Agency Carol M. Browner, Administrator, United States Environmental Protection Agency">28 F.3d 1259, 1264 (D.C. Cir. 1994)). EPA's rejoinder is
that heating simply accelerates the emissions of VOC, but does not
increase total emissions over time. In the absence of contrary
evidence, we defer to the agency's expert opinion.
this assertion during the rulemaking, and responded by point- ing to recent studies suggesting that "close to 100 percent of
the VOC from paint is eventually emitted into the ambient
air." Response to Comments at 2-64 (J.A. at 729). Because
this conclusion is supported by substantial evidence, the
agency's decision to control VOC emissions through the regu- lation of VOC content is reasonable.10
E
Section 183(e) directs EPA to take into consideration five
factors in establishing criteria for regulating consumer and
commercial products, as well as in establishing regulatory
priorities among those products. See 42 U.S.C.
s 7511b(e)(2)(B), (e)(3)(A). Allied contends that EPA erred
by failing to consider the last three factors listed in the
statute:
(iii) Those consumer and commercial products which
emit highly reactive volatile organic compounds into the
ambient air.
(iv) Those consumer and commercial products which are
subject to the most cost-effective controls.
(v) The availability of alternatives (if any) to such con-
sumer and commercial products which are of comparable
costs, considering health, safety, and environmental im-
pacts.
__________
10 Dunn-Edwards also contends that EPA was required to
account for reactivity variation caused by differences in the makeup
of the ambient air in different airsheds, noting that the agency
conceded that "ideally" ozone control strategies should consider the
conditions in specific airsheds. See Dunn-Edwards Br. at 17 n.17
(citing Report at 2-1 (J.A. at 523)). Nothing in the statutory
language, however, requires airshed-by-airshed analysis. Nor does
this court's authority extend to requiring EPA to utilize the "ideal"
strategy, particularly not when the agency concludes that such a
strategy is not practical in light of the limitations of the existing
data. See Report at 2-1 (J.A. at 523).
Id. s 7511b(e)(2)(B).11 We reject this challenge.
First, EPA did consider the three listed factors. Each was
expressly included among the regulatory criteria adopted by
the agency, and was applied in establishing regulatory priori- ties. See Report at 4-6 (J.A. at 562) (factor iii); id. at 4-10 to
4-11 (J.A. at 566-67) (factor iv); id. at 4-8 to 4-9 (J.A. at
564-65) (factor v); see also Final Listing, 63 Fed. Reg. at
48,794 (listing criteria); Notice of Product Category List, 60
Fed. Reg. at 15,266 (same); Report at 4-12 to 4-13 (J.A. at
568-69) (describing application of the criteria); EPA, Nation- al Air Pollution Control Techniques Advisory Committee
Meeting on Consumer and Commercial Products 53 (1995)
(J.A. at 700) (describing EPA's scoring of product categories
based on the criteria).
Second, EPA's consideration of these factors was adequate
to constitute reasoned decisionmaking. As we have discussed
above, EPA considered the third factor by assigning greater
weight to those products that emit VOCs from one of the ten
classes of VOCs that are highly reactive, an approach we
regard as consistent with the statute and neither arbitrary
nor capricious. See supra Part III. EPA reasonably consid- ered the fourth factor by assigning a higher priority to
categories of products that can reduce VOC emissions at
lowest cost. See Report at 4-10 to 4-11 (J.A. at 566-67).12
And EPA adequately considered the fifth factor, the availabil- ity of alternatives at comparable costs, by applying a criterion
that evaluated the possibility of reformulation of the product
and the availability of substitutes. See Report at 4-8 to 4-9
__________
11 The first two factors listed in the statute are: "(i) The uses,
benefits, and commercial demand of consumer and commercial
products[; and] (ii) The health or safety functions (if any) served by
such consumer and commercial products." 42 U.S.C.
s 7511b(e)(2)(B).
12 EPA used cost-effectiveness data where it was available, and
where it was not, used a matrix that considered the availability of
alternatives and the mass of emissions from the product. See
Report at 4-10 to 4-11 (J.A. at 566-67).
(J.A. at 564-65); see also Response to Comments at 2-27 (J.A.
at 714).13
In addition to alleging that EPA failed to consider these
three statutorily-enumerated factors, Allied contends that
EPA impermissibly considered two further factors not listed
in the statute: "magnitude of annual VOC emissions" and
"regulatory efficiency and program considerations." Final
Listing, 63 Fed. Reg. at 48,794; see supra note 3. Although
it is true that "an agency rule would be arbitrary and
capricious if the agency has relied on factors which Congress
has not intended it to consider," State Farm, 463 U.S. 29" date_filed="1983-06-24" court="SCOTUS" case_name="Motor Vehicle Mfrs. Assn. of United States, Inc. v. State Farm Mut. Automobile Ins. Co.">463 U.S. at 43,
that is not the case here. Nothing in section 183(e) suggests
that Congress intended to limit EPA's consideration to the
five factors specified in the statute. Indeed, the structure of
the section suggests the contrary. Subsection (2)(A) first
directs the agency to "establish criteria"; subsection (2)(B)
then directs that "[i]n establishing the criteria," the agency
"shall take into consideration" the five listed factors. The
reasonable inference taken by EPA is that while it must
consider the five listed factors, it is not barred from consider- ing additional ones. See George Warren Corp. v. EPA, 159
F.3d 616, 624 (D.C. Cir. 1998) (noting this court's "usual
reluctance to infer from congressional silence an intention to
preclude the agency from considering factors other than
those listed in a statute").
Moreover, the two additional criteria are reasonable in light
of the use to which Congress wanted all of the criteria to be
put: establishing regulatory priorities among the categories
of consumer and commercial products. See 42 U.S.C.
s 7511b(e)(3)(A). We have already considered, and judged
permissible, EPA's accordance of greater regulatory priority
to product categories that emit greater masses of VOCs--the
first of the two additional criteria. See supra Part III. The
agency's consideration of the second additional factor, denom- inated as "regulatory efficiency," seems nothing more than
__________
13 EPA reasonably relied on consumer acceptance, as measured
by market share data, as a surrogate for cost data which was of
limited availability. See Report at 4-8 to 4-9 (J.A. at 564-65); see
also Response to Comments at 2-27 (J.A. at 714).
regulatory common sense: in determining priorities, EPA
considered which categories it could regulate quickly because,
for example, the agency had ongoing or recently completed
rulemakings concerning them, or because they raised factual
issues in common with other categories. See Report at 4-12
to 4-13 (J.A. at 568-69).
V
So far, we have considered challenges to the architectural
coatings rule based on the Clean Air Act. In this part, we
consider Allied's claims that the rule is contrary to the
Regulatory Flexibility Act (RFA)14 as amended by the Small
Business Regulatory Enforcement Fairness Act of 1996
(SBREFA),15 and to the Unfunded Mandates Reform Act
(UMRA).16
A
Section 603(a) of the RFA requires that an agency, at the
time of issuance of a notice of proposed rulemaking, publish
an initial regulatory flexibility analysis which "shall describe
the impact of the proposed rule on small entities." 5 U.S.C.
s 603(a). Section 603(c) requires that such an initial analysis
also describe "any significant alternatives to the proposed
rule which accomplish the stated objectives" of the applicable
statute while minimizing significant economic impact on small
entities. Id. s 603(c). Allied contends that EPA failed to
comply with section 603(a) by failing to discuss two such
economic impacts: "stigmatic harm" allegedly arising from
the agency's suggestion that it may impose more stringent
VOC limits in future regulations;17 and asset devaluation, in
that the coatings rule allegedly will render existing product
__________
14 5 U.S.C. ss 601 et seq.
15 Pub. L. No. 104-121, ss 241-42, 101 Stat. 857, 864-68 (1996).
16 2 U.S.C. ss 1501 et seq.
17 In announcing the architectural coatings rule, EPA stated
that in the future "an additional study for this category may be
formulas valueless. Allied also contends that EPA failed to
comply with section 603(c) by failing to consider label di- rections as an alternative to VOC limits.
We are without jurisdiction to consider these challenges to
EPA's compliance with the initial regulatory flexibility analy- sis requirements of section 603. Section 611(c) of the RFA
states that "[c]ompliance or noncompliance by an agency with
the provisions of this chapter shall be subject to judicial
review only in accordance with this section." 5 U.S.C.
s 611(c). Section 611(a) specifically lists the sections of the
RFA subject to judicial review, and section 603 is not on the
list.18 See id. s 611(a)(1), (2). __________ warranted to determine the feasibility of additional reductions in
VOC limits." Final Rule, 63 Fed. Reg. at 48,872. Allied contends
not only that this announcement imposes a "stigma" on manufactur- ers, but that EPA would be without authority to issue such addi- tional reductions. EPA replies, inter alia, that this claim is unripe:
The agency has not yet decided whether it will issue any further
regulations, and Allied has not established that it will suffer any
harm in the interim. We agree. See Grand Canyon Air Tour
Coalition v. FAA, 154 F.3d 455" date_filed="1998-09-04" court="D.C. Cir." case_name="Grand Canyon Air Tour Coalition v. Federal Aviation Administration">154 F.3d 455, 471 (D.C. Cir. 1998); Florida
Power & Light Co. v. EPA, 145 F.3d 1414" date_filed="1998-06-26" court="D.C. Cir." case_name="Florida Power & Light Company v. Environmental Protection Agency">145 F.3d 1414, 1419-21 (D.C. Cir. 1998).
Allied "will have ample opportunity later to bring its legal challenge
at a time when harm is more imminent and more certain." Ohio
Forestry Ass'n v. Sierra Club, 523 U.S. 726" date_filed="1998-05-26" court="SCOTUS" case_name="Ohio Forestry Assn., Inc. v. Sierra Club">523 U.S. 726, 734 (1998).
18 In its reply brief, Allied notes that unlike challenges to an
agency's compliance with section 603 (concerning initial regulatory
flexibility analyses), challenges to compliance with RFA section 604
(concerning final regulatory flexibility analyses) are included in the
jurisdictional list of section 611. Allied suggests that the challenges
noted in the above text can be reformulated as challenges to
compliance with section 604. In relevant part, that section requires
the agency to describe the steps it has taken "to minimize the
significant economic impact on small entities consistent with the
stated objectives of applicable statutes, including a statement of ...
why each of the other significant alternatives to the rule considered
by the agency ... was rejected." 5 U.S.C. s 604(a)(5) (emphasis
added). For the reasons noted in the text, Allied has not estab-
That, however, is not the end of the story. As Allied points
out, although we may not review EPA's handling of these
issues in terms of the agency's compliance with the RFA, we
may consider them in determining whether EPA complied
with the overall requirement that an agency's decisionmaking
be neither arbitrary nor capricious. See Clean Air Act, 42
U.S.C. s 7607(d)(9)(A); see also APA, 5 U.S.C. s 706(2)(A).
That was the law prior to passage of SBREFA's amendments
to the RFA, see Thompson v. Clark, 741 F.2d 401" date_filed="1984-08-07" court="D.C. Cir." case_name="Stephen Thompson v. William P. Clark, Secretary of the Interior">741 F.2d 401, 405 (D.C.
Cir. 1984); Small Refiner Lead Phase-Down Task Force v.
EPA, 705 F.2d 506" date_filed="1983-07-06" court="D.C. Cir." case_name="Small Refiner Lead Phase-Down Task Force v. United States Environmental Protection Agency">705 F.2d 506, 539 (D.C. Cir. 1983), and it was not
altered by those amendments.19
For an agency's decisionmaking to be rational, it must
respond to significant points raised during the public com- ment period. See Home Box Office, Inc. v. FCC, 567 F.2d 9" date_filed="1977-05-20" court="D.C. Cir." case_name="Home Box Office, Inc. v. Federal Communications Commission and United States of America, Professional Baseball, Intervenors">567 F.2d 9,
35-36 (D.C. Cir. 1977). EPA did so here. The agency stated
that it was not aware of any stigmatic harm of the kind urged
by Allied, and reasonably concluded that the comments sub- mitted on the subject had "not provided enough detail to
allow the EPA to consider the issue further." Background at
2-334 (J.A. at 474). Allied's unadorned allegation in its brief,
that "[s]uch impacts are significant," Allied Br. at 23, adds no
further detail and no reason to require further agency re- sponse. EPA also reasonably rejected the contention that it
was ignoring the regulation's impact on the value of existing
__________ lished that the economic impacts and regulatory alternative it
contends EPA ignored can be classified as "significant."
19 Prior to the amendments, section 611(b) stated: "When an
action for judicial review of a rule is instituted, any regulatory
flexibility analysis for such rule shall constitute part of the whole
record of agency action in connection with the review." 5 U.S.C.
s 611(b) (1994). In Thompson, 741 F.2d at 405, we held that those
words "mean[ ] that the reviewing court will consider the contents
of the preliminary or final regulatory flexibility analysis, along with
the rest of the record, in assessing not the agency's compliance with
the Regulatory Flexibility Act, but the validity of the rule under
other provisions of law," particularly the APA. The current version
of section 611(b) contains the same words, with minor stylistic
alterations.
product formulas, noting that to the contrary it was directly
considering that impact by analyzing the effect of the regula- tion on annual profits per product. See Background at 2-334
(J.A. at 474).
To be regarded as rational, an agency must also consider
significant alternatives to the course it ultimately chooses.
See State Farm, 463 U.S. 29" date_filed="1983-06-24" court="SCOTUS" case_name="Motor Vehicle Mfrs. Assn. of United States, Inc. v. State Farm Mut. Automobile Ins. Co.">463 U.S. at 48-51; Grand Canyon Air Tour
Coalition v. FAA, 154 F.3d 455" date_filed="1998-09-04" court="D.C. Cir." case_name="Grand Canyon Air Tour Coalition v. Federal Aviation Administration">154 F.3d 455, 471 (D.C. Cir. 1998); Public
Citizen v. Steed, 733 F.2d 93" date_filed="1984-04-24" court="D.C. Cir." case_name="Public Citizen v. Diane Steed">733 F.2d 93, 99 (D.C. Cir. 1984). Allied
contends that the agency should have considered imposing a
requirement that labels contain directions for responsible use
of coating products, as an alternative to imposing VOC limits
on such products.20 But the agency did consider the possibili- ty of imposing label directions as an addition to product
reformulation, and even in that respect found "it would be
impossible to predict the VOC reductions achieved by provid- ing the consumer with directions for use." Report at 2-14
(J.A. at 536). Allied offers no response to this defect in the
labeling alternative, and no reason to believe that such an
approach would accomplish the objectives of the Clean Air
Act. Accordingly, we reject Allied's challenges under the
RFA.21 __________
20 The Clean Air Act authorizes, but does not require, "di- rections for use" as one of numerous possible means of achieving
emissions reduction. 42 U.S.C. s 7511b(e)(1)(A) (defining "best
available controls" as the degree of emissions reduction achievable
through application of "the most effective equipment, measures,
processes, methods, systems or techniques, including chemical re- formulation, product or feedstock substitution, repackaging, and
directions for use, consumption, storage, or disposal").
21 Allied briefly raises two further RFA claims. First, it
charges that the agency failed to comply with the requirement of
section 609(b) that it, inter alia, convene a review panel prior to
issuing the initial regulatory flexibility analysis. This court, howev- er, has no jurisdiction to review challenges to an agency's compli- ance with section 609(b). See 5 U.S.C. s 611(a)(1)-(2), (c). Second,
Allied contends that EPA failed to comply with the requirement of
section 601(3) that it provide an opportunity for public comment
before adopting (as it did) a definition of the term "small business"
B
Allied contends that EPA violated provisions of the Un- funded Mandates Reform Act that require preparation of a
written cost-benefit analysis, see 2 U.S.C. s 1532(a)(2), and
selection of the "least costly, most cost-effective or least
burdensome alternative that achieves the objectives of the
rule," id. s 1535(a). UMRA itself expressly denies courts
jurisdiction to review compliance with the latter provision.
See id. s 1571(b)(1); see also id. s 1571(a). And while the
Act permits limited judicial review of compliance with the
requirement to prepare a written cost-benefit analysis,22 that
requirement is not triggered unless the rule in question may
result in expenditures of $100 million or more in any one
year, see id. s 1532(a). Because EPA estimated the total
cost associated with the architectural coatings rule to be only
$32 million per year, see Final Rule, 63 Fed. Reg. at 48,855, it
concluded that UMRA was inapplicable. See id. at 48,875-76.
Allied challenges EPA's cost estimate, but advances little
basis for such a challenge beyond the complaints we consid- ered above in the context of Allied's RFA claim: Petitioner
contends that EPA ignored the "stigmatic" costs it imposed
through its suggestion that more stringent VOC limits might
__________ different from that referenced in the statute. See 5 U.S.C.
s 601(3); 15 U.S.C. s 632(a). Although we do have jurisdiction to
review a section 601 challenge, see 5 U.S.C. s 611(a)(1)-(2), Allied's
challenge fails on the merits because EPA did provide an opportuni- ty for public comment on its proposed definition. See National
Volatile Organic Compound Emission Standards for Architectural
Coatings, Extension of Public Comment Period, 61 Fed. Reg.
46,410, 46,411 (1996); Background at 2-373 to 2-375, 2-424 to 2-426
(J.A. at 480-82, 490-92).
22 UMRA, 2 U.S.C. s 1571(a)(2)(A), states that agency compli- ance with section 1532 is subject to judicial review only under 5
U.S.C. s 706(1) (court may compel agency action unlawfully with- held). If an agency fails to prepare the written statement required
by section 1532, "a court may compel the agency to prepare such
written statement," 2 U.S.C. s 1571(a)(2)(B), but the failure may
"not be used as a basis for ... invalidating or otherwise affecting
[the] rule," id. s 1571(a)(3).
be promulgated in the future, as well as the impact of the
coatings rule on the market value of existing product formu- las.23 We concluded above that EPA dealt with these issues
in a reasonable manner and, given the limited judicial review
applicable to compliance with section 1532(a), see supra note
22, we have no warrant for inquiring further under UMRA.24
VI
Finally, we consider Allied's argument that in regulating
architectural coatings, Congress exceeded its constitutional
authority "[t]o regulate Commerce ... among the several
States." U.S. Const., art. I, s 8, cl. 3. Dunn-Edwards does
not join in this attack, and the intervenor National Paint &
Coatings Association actively opposes it, preferring uniform
national regulation to the "multiple, divergent state rules"
that would otherwise hold sway. NPCA Br. at 3. The crux
__________
23 Allied's brief also asserts, without elaboration, that EPA
"excluded from its calculus losses to (1) retailers, (2) contractors, (3)
workers, and (4) consumers," and that each of these categories
"may alone reach $100,000,000 in any year." Allied Br. at 25. But
EPA did consider the effect of the rule on many of these groups, see
EPA, Draft Economic Impact Analysis and Regulatory Flexibility
Analysis of Air Pollution Regulations: Architectural and Indus- trial Maintenance Coatings 2-32 to 2-40, 2-44 to 2-45 (J.A. at 33- 41, 45-46); Background at 2-364 to 2-366 (J.A. at 1017-19), and
Allied offers neither support for nor explanation of the loss calcula- tion it asserts.
24 In a related argument, Dunn-Edwards contends that EPA
must consider costs in the course of examining "economic feasibili- ty," a factor in the evaluation of "best available controls" under the
statute, 42 U.S.C. s 7511b(e)(1)(A). Dunn-Edwards argues that
EPA's cost estimate was arbitrary and capricious, largely because
the agency reduced its initial estimate after receiving cost estimates
submitted by commenters without determining the reliability of
those estimates. In fact, EPA did evaluate the reasonableness of
the comments, utilizing data from only 11 out of 27 because the
others suffered from incompleteness or lack of clarity, or from a
failure to provide cost information on a per product basis. See
Background at 2-304 to 2-305 (J.A. at 444-45).
of Allied's argument is that EPA's regulation exceeds Con- gress' authority under the Commerce Clause because there is
an insufficient nexus between coatings manufacture, which it
describes as an intrastate event, and the interstate phenome- non of ozone formation.
Allied attempts to rely on the Supreme Court's decision in
United States v. Lopez, 514 U.S. 549" date_filed="1995-04-26" court="SCOTUS" case_name="United States v. Lopez">514 U.S. 549 (1995), striking down the
Gun-Free School Zones Act25 which made it a federal crime
knowingly to possess a firearm in a school zone. In United
States v. Morrison, 68 U.S.L.W. 4351 (U.S. May 15, 2000),
handed down last month, the Court relied on Lopez in holding
that Congress also lacked authority under the Commerce
Clause to provide a federal civil remedy for the victims of
gender-motivated violence. In both cases, the Court agreed
that " 'Congress' commerce authority includes the power to
regulate those activities having a substantial relation to inter- state commerce, ... i.e., those activities that substantially
affect interstate commerce.' " Id. at 4354 (quoting Lopez, 514
U.S. at 558-59). As Morrison explained, however, four con- siderations contributed to Lopez's conclusion that the Gun- Free School Zones Act did not fall within that category of
regulatable activity. Not one of those considerations applies
to section 183(e) of the Clean Air Act.
The Court held, first, that "in those cases where we have
sustained federal regulation of intrastate activity based upon
the activity's substantial effects on interstate commerce, the
activity in question has been some sort of economic endeav- or." Id. at 4355 (citing Lopez, 514 U.S. 549" date_filed="1995-04-26" court="SCOTUS" case_name="United States v. Lopez">514 U.S. at 559-60). Morrison
noted that the criminal statute at issue in Lopez " 'had
nothing to do with "commerce" or any sort of economic
enterprise, however broadly one might define those terms.' "
Id. at 4354 (quoting Lopez, 514 U.S. 549" date_filed="1995-04-26" court="SCOTUS" case_name="United States v. Lopez">514 U.S. at 561). It said that the
same was true of the federal civil remedy provision of the
Violence Against Women Act (VAWA).26 See id. at 4355.
But the same cannot be said of the Clean Air Act provisions
concerning VOC emissions, which permit regulation only of: __________
25 18 U.S.C. s 922(q)(1)(A).
26 42 U.S.C. s 13981.
(i) manufacturers, processors, wholesale distributors, or
importers of consumer or commercial products for sale
or distribution in interstate commerce in the United
States; or
(ii) manufacturers, processors, wholesale distributors, or
importers that supply the entities listed under clause (i)
with such products for sale or distribution in interstate
commerce in the United States.
42 U.S.C. s 7511b(e)(1)(C).
Second, Morrison noted that in Lopez, the Gun-Free
School Zones Act, like VAWA, "contained 'no express juris- dictional element which might limit its reach to a discrete set
of firearm possessions that additionally have an explicit con- nection with or effect on interstate commerce.' " Morrison,
68 U.S.L.W. at 4355 (quoting Lopez, 514 U.S. 549" date_filed="1995-04-26" court="SCOTUS" case_name="United States v. Lopez">514 U.S. at 562). As
quoted above, however, EPA's regulation of VOCs is express- ly limited to entities that act "in interstate commerce." 42
U.S.C. s 7511b(e)(1)(C).
Third, Morrison pointed out that neither the Gun-Free
School Zones Act, " 'nor its legislative history contain[s] ex- press congressional findings regarding the effects upon inter- state commerce of gun possession in a school zone.' " Id.
(quoting Lopez, 514 U.S. 549" date_filed="1995-04-26" court="SCOTUS" case_name="United States v. Lopez">514 U.S. at 562). The legislative history of
the Clean Air Act Amendments, by contrast, expressly de- scribes the problem of interstate transport of ozone, see, e.g.,
S. Rep. No. 101-228, at 3, 13, 49 (1989), as well as its effects
on the national economy, see, e.g., id. at 8-9.
Finally, according to Morrison, the "decision in Lopez
rested in part on the fact that the link between gun posses- sion and a substantial effect on interstate commerce was
attenuated," Morrison, 68 U.S.L.W. at 4355, which the Court
said was true of gender-motivated violence as well, see id. at
4356. But, there is nothing attenuated about the interstate
effects of the activity regulated here. We ourselves have
noted the interstate nature of the "ozone transport phenome- non," and the way in which it may render any given state
unable to achieve attainment because of ozone created hun- dreds of miles away. See Virginia v. EPA, 108 F.3d 1397" date_filed="1997-06-13" court="D.C. Cir." case_name="Commonwealth of Virginia v. Environmental Protection Agency, State of Connecticut, Intervenors">108 F.3d 1397,
1400 (D.C. Cir. 1997). The legislative history and EPA's
report to Congress substantiate the heavy impact ozone pollu- tion has on national health care costs and national agricultur- al production. See S. Rep. No. 101-228, at 8-9 (1989); Report
at 1-1 (J.A. at 518). And the rulemaking record sustains the
proposition that the large majority of the products regulated
by the rule are distributed nationally, and then applied by
end-users in multiple locations, see 63 Fed. Reg. 48,792,
48,804--facts that are confirmed, and stressed, by the Nation- al Paint & Coatings Association, see NPCA Br. at 24.
In short, none of the considerations that led the Court to
find Congress' authority wanting in Lopez and Morrison has
any application to section 183(e) of the Clean Air Act. In
Hodel v. Virginia Surface Mining and Reclamation Ass'n--a
case cited with approval by the Supreme Court in both Lopez
and Morrison, see Lopez, 514 U.S. 549" date_filed="1995-04-26" court="SCOTUS" case_name="United States v. Lopez">514 U.S. at 557; Morrison, 68
U.S.L.W. at 4354--the Court declared that it "agree[d] with
the lower federal courts that have uniformly found the power
conferred by the Commerce Clause broad enough to permit
congressional regulation of activities causing air or water
pollution, or other environmental hazards that may have
effects in more than one State." 452 U.S. 264" date_filed="1981-06-15" court="SCOTUS" case_name="Hodel v. Virginia Surface Mining & Reclamation Assn., Inc.">452 U.S. 264, 282 (1981).
Contrary to Allied's assertion, nothing contained in the
Court's recent Commerce Clause jurisprudence casts doubt
on the validity of that declaration here.
VII
For the foregoing reasons, we reject petitioners' challenges
to the architectural coatings rule and deny the petitions for
review.