CLEAN WATER ACTION; ENVIRONMENTAL INTEGRITY PROJECT; SIERRA CLUB; WATERKEEPER ALLIANCE, INCORPORATED; PENNENVIRONMENT, INCORPORATED; CHESAPEAKE CLIMATE ACTION NETWORK; PHYSICIANS FOR SOCIAL RESPONSIBILITY, CHESAPEAKE, INCORPORATED; PRAIRIE RIVERS NETWORK v. UNITED STATES ENVIRONMENTAL PROTECTION AGENCY; ANDREW WHEELER, Acting Administrator, United States Environmental Protection Agency
No. 18-60079
United States Court of Appeals, Fifth Circuit
August 28, 2019
Petition for Review of an Order of the Environmental Protection Agency
Before HIGGINBOTHAM, JONES, and COSTA, Circuit Judges.
Through notice-and-comment rulemaking, the Environmental Protection Agency (“EPA“) reviewed and decided to revise1 the earliest compliance dates for new, stringent BAT (“best available technology economically achievable“) effluent limitations and PSES (“pretreatment standards for existing source“) concerning two waste streams from steam electric power generating point sources that had previously been promulgated in a 2015 Rule.
More specifically, the agency postponed for two years only the earliest compliance dates mandated by the 2015 Rule for flue gas desulfurization (FGD) wastewater and bottom ash transport water, while (a) retaining the 2015 Rule‘s BAT limitations and pretreatment standards for other waste streams from such power plants, and (b) not altering either the last date for compliance (December 2023) or, pending reconsideration, the substantive limits required by the 2015 Rule for the two postponed stream modifications. A consortium of environmental groups has challenged the postponement, while EPA and the intervenor, Utility Water Act Group (“UWAG“),2 defend the Postponement Rule. We conclude that the EPA had statutory authority to pass this tailored rule, the agency explained its decision adequately, its decision was reasonable, and it was thus neither arbitrary nor capricious. The petition for review is DENIED.
BACKGROUND
The 2015 Rule represented the culmination of ten years’ work by EPA to update steam electric power generating plant standards for compliance with the Clean
Four lawsuits challenging the 2015 Rule were soon filed in the federal courts.3 The petitions were consolidated by the Judicial Panel on Multidistrict Litigation and transferred to this court.4 During these preliminaries, UWAG, later supplemented by the Small Business Administration‘s Office of Advocacy, submitted petitions asking EPA to reconsider the entire 2015 Rule and suspend its approaching deadlines.5 Among other things, these petitions raised substantial questions, based on newly discovered information, about the extraordinary costs of implementing the 2015 Rule and the infeasibility of EPA‘s proposed technology as applied to certain power plants. Taking these petitions seriously, EPA‘s Administrator determined that it was appropriate and in the public interest to reconsider the 2015 Rule.
After an initial stay, a formal rulemaking procedure ensued, the notice of which generated thousands of written comments, and the agency conducted a public hearing on July 31, 2017. In the end, EPA decided to adhere to most aspects of the 2015 Rule. EPA left in place the legacy wastewater limitations, which are BAT limitations that apply to each of the regulated wastestreams
beginning on the effective dates set out in the 2015 Rule; the new and more stringent limitations and quantitative standards (i.e., the permissible amount of discharges); and the latest compliance date for NPDES permitting authorities to impose those limitations.6 See generally, Postponement Rule, 82 Fed. Reg. at 43,494. But the agency also decided it must reconsider the 2015 Rule‘s regulations governing two wastestreams (FGD wastewater and bottom ash transport water) in light of “new information not contained in the record for the 2015 Rule.” Id. at 43,496. As support for reconsideration, EPA cited “the inherent discretion the Agency has to reconsider past policy decisions consistent with the CWA and other applicable law.” Id. EPA‘s expressed purpose for postponing the earliest effective compliance dates for these wastestreams during reconsideration was to “prevent the potentially needless expenditure of resources during a rulemaking that may ultimately change the 2015 Rule . . . .” Id. The agency, however, specifically declined to forecast
STANDARD OF REVIEW
The standard of review here is deferential, focusing on whether the agency action is “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.”
The reviewing court may not “substitute its judgment for that of the agency.” Citizens to Pres. Overton Park, Inc. v. Volpe, 401 U.S. 402, 416, 91 S. Ct. 814, 824 (1971).
EPA must provide a reasoned explanation for its revisions and follow the same process to revise a rule as it used to promulgate it. See Perez v. Mortg. Bankers Ass‘n, 135 S. Ct. 1199, 1206 (2015). Even “a decision based on an administrative record of less than ideal clarity will be upheld if the agency‘s path may reasonably be discerned.” United States v. Garner, 767 F.2d 104, 118 (5th Cir. 1985). This court, however, “may not supply a reasoned basis for the agency‘s action that the agency itself has not given.” Motor Vehicle Mfrs. Ass‘n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43, 103 S. Ct. 2856, 2867 (1983) (quoting SEC v. Chenery Corp., 332 U.S. 194, 196 (1947)).
DISCUSSION
In this instance, EPA went out of its way to issue a narrow reconsideration decision, leaving intact the bulk of the 2015 Rule, and to substantiate its course of action legally through notice-and-comment rulemaking.8 According to the Petitioners, that was not enough. Petitioners fault the EPA for issuing the Postponement Rule without legal authority because they argue it is an unauthorized stay or the “functional equivalent” of a stay of the 2015 Rule; for failing to consider mandatory statutory factors before promulgating a revision; and for failing to comply with what they take to be a three-year ELG compliance deadline in the CWA. We address each of
these arguments in turn.
A. Whether the Postponement Rule effects a “stay” or its “functional equivalent” concerning the 2015 Rule.
Petitioners do not challenge EPA‘s statutory authority to revise the 2015 Rule‘s ELGs because the CWA explicitly authorizes EPA to revise previously-promulgated rules. See
of the APA, EPA did not cite the APA as authorizing this Postponement Rule. EPA at all times claimed to be revising the prior rule. Consequently, cases like Clean Air Council v. Pruitt, 862 F.3d 1, 9 (D.C. Cir. 2017) and Air Alliance Houston v. EPA, 906 F.3d 1049 (D.C. Cir. 2018) (per curiam), cited by Petitioners, are inapposite because they interpreted the stay provision in the Clean Air Act and the APA, neither of which is germane to this case.10
EPA correctly surmised that, in addition to its statutory authority to revise rules under the CWA, administrative agencies possess the inherent authority to revise previously-promulgated rules, so long as they follow the proper administrative requirements and provide a reasoned basis for the agency decision. See FCC v. Fox Television Stations, Inc., 556 U.S. 502, 515, 129 S. Ct. 1800, 1811 (2009) (recognizing that the Administrative Procedure Act “makes no distinction . . . between initial agency action and subsequent agency action undoing or revising that action“); Motor Vehicle Mfrs. Ass‘n, 463 U.S. at 42, 103 S. Ct. at 2866 (“[W]e fully recognize that ‘regulatory agencies do not establish rules of conduct to last forever,’ and that an agency must be given ample latitude to ‘adapt their rules and policies to the demands of changing circumstances.‘“) (citation omitted); Perez, 135 S. Ct. at 1206 (agencies may amend rules provided that they “use the same
accord with these authorities, EPA issued the Postponement Rule following notice-and-comment rulemaking after evaluating legitimate concerns about compliance costs and achievability.
Petitioners alternatively contend that even if the Postponement Rule is not actually a stay of the 2015 Rule, then its relaxation of certain compliance dates is the “functional equivalent” of a stay, which the Clean Water Act does not authorize. But courts have rejected EPA delay actions undertaken without notice and comment rulemaking precisely because they recognize that the modification of effective dates is itself a rulemaking. See, e.g., Envtl. Def. Fund v. Gorsuch, 713 F.2d 802, 815–17 (D.C. Cir. 1983) (stating general rule that changes to effective dates constitute rulemaking and rejecting agency‘s argument that its decision not to call for hazardous waste permits from a whole class of facilities was a policy statement); Council of S. Mountains, Inc. v. Donovan, 653 F.2d 573, 580 n.28 (D.C. Cir. 1981); Envt‘l Def. Fund, Inc. v. EPA, 716 F.2d 915, 920 (D.C. Cir. 1983) (“[S]uspension or delayed implementation of a final regulation normally constitutes substantive rulemaking under APA § 553.“). As the Second Circuit explained, “altering the effective date of a duly promulgated standard could be, in substance, tantamount to an amendment or rescission of the standards.” Nat. Res. Def. Council v. Abraham, 355 F.3d 179, 194 (2d Cir. 2004).11 Courts have rebuked EPA delays as illegitimate where
the agency did not go through notice and comment procedures. See, e.g., Nat. Res. Def. Council v. Nat‘l Highway Traffic Safety Admin., 894 F.3d 98, 113–14 (2d Cir. 2018); Air Alliance Houston, 906 F.3d at 1065 (“EPA may not employ delay tactics to effectively repeal a final rule while sidestepping the statutorily mandated process for revising or repealing that rule on the merits“) (citation omitted); Clean Air Council, 862 F.3d at 9 (agency “issuing a legislative rule is itself bound by the rule until that rule is amended or revoked” and “may not alter [that rule] without notice and comment“). EPA obviated the Petitioners’ complaint because the way in
B. Whether the Postponement Rule complied with the APA.
Petitioners do not prevail by describing the Postponement Rule as a stay or something other than a notice-and-comment rulemaking. They next assert that “[d]espite citing the Clean Water Act provisions for issuing or revising effluent limitations as the authority for the [Postponement] Rule, EPA failed to consider all of the factors that the statute requires to be considered when promulgating effluent limits.” They point to the various statutory factors that must govern BAT findings that undergirded the ELGs in the 2015 Rule.12 They contend that because EPA failed to repeat, restate, re-evaluate and re-explain each of those “mandatory” factors, its Postponement Rule was invalid as “in excess of statutory authority” pursuant to the APA,
In this rulemaking proceeding, EPA revised only a subset of the 2015 Rule in response to serious issues raised about the availability and achievability of those particular regulations. The agency sought to avoid imposing potentially needless compliance costs, carefully considered which portions of the Rule to revise, and ultimately chose to modify only the earliest compliance dates for only two of the wastestreams. As EPA emphasizes, all of the relevant statutory factors were considered in the 2015 Rule. See, e.g., EPA, Technical Development Document for the Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category, Index. 12840, at 8-6 to 8-25 (discussing evidence in the record on each of the statutory factors for BAT) (Sept. 2015); 80 Fed. Reg. at 67,846–47, 67,854–56, 67,863-69 (same). All of the findings were incorporated in the administrative record for the Postponement Rule. See Administrative Record Index, Mar. 19, 2018, ECF No. 00514391502. Finally, EPA expressly identified the Postponement Rule as a follow-on rulemaking to the 2015 Rule. In large part, the Postponement Rule repeats the substance of the 2015 Rule.
Moreover, EPA has significant discretion to weigh the statutory factors and re-evaluate the policy arguments supporting the rule. See Nat‘l Ass‘n of Home Builders v. EPA, 682 F.3d 1032, 1038 (D.C. Cir. 2012) (stating that “a
reevaluation of which policy would be better in light of the facts” is the “kind of reevaluation [that] is well within an agency‘s discretion” even when the agency “offered no new evidence to support its decision“); id. at 1043 (recognizing that “[a] change in administration brought about by the people casting their votes is a perfectly reasonable basis for an executive agency‘s reappraisal of the costs and benefits of its programs and regulations” (citing Motor Vehicle Mfrs. Ass‘n, 463 U.S. at 59 (Rehnquist, J., concurring in part and dissenting in part)). The CWA allows the Administrator discretion, in addition to applying the other enumerated factors, to consider “other factors as the Administrator deems appropriate.”
Under these circumstances, EPA violated no statutory command by revising a small portion of the 2015 Rule pursuant to transparent, careful and targeted study. The agency supplied a reasoned basis for its decision to postpone two earliest compliance dates for the two specific waste streams, while retaining not only the ultimate compliance deadline specified in the 2015 Rule for those waste streams but practically the entirety of the 2015 Rule itself. The agency supplied a reasoned basis for its action, and accomplished the revision using “the same procedures when they amend[ed] . . . a rule as they used to issue the rule in the first instance.” Perez, 135 S. Ct. at 1206. This court may not substitute our judgment for that of the agency. Volpe, 401 U.S. at 416, 91 S. Ct. at 824.
C. Whether the Postponement Rule complies with 33 U.S.C. § 1311(b)(2) .
Petitioners’ last contention is that the Postponement Rule violates what they assert is a mandatory maximum three-year compliance deadline for any BAT effluent limitations promulgated under the CWA. The CWA requires that “there shall be achieved . . . compliance with [BAT] effluent limitations . . . as expeditiously as practicable but in no case later than three years after the date such limitations are promulgated . . . , and in no case later than March 31, 1989.”
EPA argues that this statutory language dealt only with the initial promulgation of BAT effluent limitations, and the agency retains discretion to set compliance dates for any BAT subsequent effluent limitations. We agree with the agency. The plain text of the statute indicates that the three-year compliance deadline refers only to promulgation of the initial BAT effluent limitations.14 The “in no case later than three years” language is modified by
the deadline “and in no case later than March 31, 1989.” Petitioners’ reading of the statute is absurd, as it is impossible to require compliance with BAT effluent limitations both within three years of the 2015 Rule and by March 31, 1989. EPA‘s reading of the text accords the language its natural meaning: the initial BAT effluent
Petitioners’ additional contentions are unavailing. First, Petitioners argue that the statutory purposes and legislative history suggest that reading a three-year compliance requirement even after 1989 would be most consistent with the CWA‘s “overall goal to eliminate all discharges of pollution into navigable waters.” Pretermitting the propriety of this reading, courts cannot resort to statutory purposes and legislative history and set aside the plain meaning of the statute. Second, Petitioners cite Chem. Mfrs. Ass‘n v. EPA, 870 F.2d 177, 242 (5th Cir.), clarified on reh‘g, 885 F.2d 253 (5th Cir. 1989), for the proposition that the three-year statutory deadline is mandatory, and EPA‘s discretion extends only to deciding how to enforce the deadline. But that case concerned only a challenge to the original 1989 deadline, and did not address whether the statute also required maximum three-year compliance deadlines for any BAT effluent limitations promulgated thereafter. Petitioners identify no case law in support of their atextual interpretation. Finally, Petitioners suggest that the CWA‘s system of periodic review and revision would be meaningless without mandatory deadlines for compliance. But it was not meaningless for Congress to require three-year compliance deadlines for the initial promulgation of BAT effluent limitations, given the pressing need for regulation at that time. Even without specific Congressional direction, EPA has not been powerless in setting appropriate compliance deadlines for later revised BAT effluent limitations.
CONCLUSION
In response to new information provided to it about the availability and achievability of a subset of regulations contained in a previously-promulgated rule, EPA revised its prior rule by changing only the earliest compliance dates applicable only to that subset of the regulations which had the potential to impose needless compliance costs. EPA engaged in incremental and targeted rulemaking following a period of notice and comment. In the end, most elements of the prior rule remained intact. EPA had statutory authority to pass this tailored Postponement Rule, the agency provided a reasoned basis for its decision, and its decision was reasonable, not arbitrary or capricious. The petition for review is DENIED.
Notes
Nat‘l Fam. Planning and Reprod. Health Ass‘n., Inc. v. Sullivan, 979 F.2d 227, 235 (D.C. Cir. 1992).It is a maxim of administrative law that: “If a second rule repudiates or is irreconcilable with [a prior legislative rule], the second rule must be an amendment of the first; and, of course, an amendment to a legislative rule must itself be legislative.” Michael Asimow, Nonlegislative Rulemaking and Regulatory Reform, 1985 Duke L.J. 381, 396. Judge Easterbrook has lucidly explained why in such circumstances notice and comment rulemaking must be followed: A volte face . . . may be an attempt to avoid the notice and opportunity for comment that the Administrative Procedure Act requires for the alteration of a rule. When an agency gets out the Dictionary of Newspeak and pronounces that for purposes of its regulation war is peace, it has made a substantive change for which the APA may require procedures. If in the air bags case, Motor Vehicle Manufacturers Ass‘n v. State Farm Mutual Automobile Insurance Co., 463 U.S. 29, 103 S. Ct. 2856, 77 L.Ed.2d 443 (1983), instead of repealing the rule the agency had proclaimed that an ordinary seat belt is a “passive restraint“, the Court would have treated this the same as it treated revocation of the rule. Both require notice, an opportunity for comment, and an adequate record. Homemakers North Shore, Inc. v. Bowen, 832 F.2d 408, 412 (7th Cir.1987).