EME Homer City Generation, L.P. v. Environmental Protection Agency

torney General, Office the Attorney KAVANAUGH, Circuit Judges.

H power plants gener- other sources. Those for the filed Circuit Opinion Court KAVANAUGH, majority electricity ate the used in the whom Circuit Judge States, they pollu- but also emit United joins. Judge GRIFFITH quality. air Trans- tants affect Dissenting opinion filed Circuit port targets pollutants, two those Judge ROGERS. (S02) and nitrogen sulfur dioxide oxides KAVANAUGH, Judge: Circuit (NOx). pollutants emissions of air affect Some States, governments, local in- Various the pollu- where quality the States labor dustry groups, organizations emitted. emissions of air

tants are Some petitioned have for review of the travel across State boundaries pollutants facts Although compli- Rule. here are quality in downwind affect air States. cated, legal principles govern this complex regulatory chal- To deal with case are a claim straightforward: Absent authorize EPA to Congress lenge, did (and of constitutional there is EPA adopt limits on emissions as simply here), agencies may none executive exer- Rather, Congress reasonable. set deemed only authority by cise the conferred stat- system of air pollu- up a federalism-based ute, and agencies transgress stat- cooperative control. Under this fed- tion authority. utory limits on the Federal approach, both Gov- eralism Here, Transport EPA’s Rule exceeds significant play and the States ernment statutory authority the in two agency’s sets air roles. The Federal Government First, independent statutory the respects. The pollutants. standards for quality grants require up- text EPA to responsibility have the for primary States only sig- wind to reduce their own States determining how meet those standards to to a nificant contributions downwind their regulating sources within bor- and But the State’s nonattainment. under ders. Rule, Transport upwind may be addition, primary In relevance and by emissions than required to reduce more here, prevent must sources upwind States to a significant their own contributions emitting their borders from federal- within EPA downwind nonattainment. State’s pollution that “amounts” of ly determined good neighbor provision has used to the across lines and “contribute travel State impose re- massive emissions reduction to State’s “non- significantly” a downwind re- quirements upwind on States without quality of federal air stan- attainment” statutory gard imposed to limits the the requirement That sometimes dards. mat- policy its merits as a text. Whatever “good neighbor” provision. the called ter, Rule violates the Transport EPA’s Second, Air statute. the Clean Act affords August implement to the statu- opportunity implement initial to neighbor requirement, pro- EPA States the tory good the case, EPA under in this reductions mulgated rule issue here, neighbor provision. But when good known as the Transport also Cross- quantified good neighbor EPA States’ obli- Transport Air Rule. The Pollution allow gations, it did not the States responsi- reduction Rule defines emissions implement re- initial opportunity 28 upwind States based bilities respect to sources quired reductions with contributions to downwind those States’ Instead, quan- EPA within their borders. quality problems. air The Rule States’ good neighbor obligations coal- tified States’ limits emissions from States’ simultaneously set forth EPA-de- gas-fired power plants, among natural 12 Plans, today-

signed Implementation interpreted Federal should not be as a com- FIPs, implement obligations those ment on the or policy wisdom merits of so, By doing depart- the State level. job EPA’s Rule. It our is not prior approach ed from its consistent policy. set environmental Our limited but implementing good neighbor provision important independently role is ensure and violated Act. agency stays within bound- Congress aries has set. EPA did not do rea- independent For each of those two so here.1 sons, feder- violates Therefore,

al law. the Rule must vacat- be I

ed. ruling, In so we note that this has Court A affirmed numerous clean air deci Act, Under Clean Air the Fed years agency in recent when sions those eral sets quality Government stan statutory require met relevant decisions dards, but States retain the primary re complied ments and con (if it) sponsibility the States want See, e.g., straints. National Environmen choosing attain how to those standards Development tal Association’s Clean Air NRDC, their borders. See v. Train within (D.C.Cir. v. Project F.3d 803 60, 63-67, 421 U.S. 95 S.Ct. 2012); API v. F.3d (1975); L.Ed.2d Virginia (D.C.Cir.2012); ATK Launch Systems, (D.C.Cir.1997). 1406-10 (D.C.Cir.2012); Inc. v. 669 330 F.3d EPA Act thus leaves it to the individual States (D.C.Cir. NRDC v. 661 F.3d 662 EPA determine, instance, to in the first the 2011); Energy Medical Waste Institute & particular restrictions that imposed will be Recovery Council v. 645 F.3d 420 EPA particular emitters within their borders. (D.C.Cir.2011); Trucking American (If a State to participate, refuses the Fed (D.C.Cir. Ass’ns v. F.3d 624 regulates eral Government the sources di 2010). case, however, In this we conclude rectly.) transgressed that EPA has spell To in Congress boundaries. could well this more detail: decide to o.ut The Air permit charges alter the statute Clean Act require setting to or preferred Standards, EPA’s National Air approach good Quality to Ambient the neighbor issue. Congress NAAQS, Unless and until or prescribe which maximum the so, does we apply permissible must and enforce the levels common pollutants statute it’s 7409(a)- as now written. § Our decision the ambient See 42 air. U.S.C. argues petitioners’ 1. The dissent chal- the Transport EPA’s decision in Rule to set lenge approach significant to EPA's "good the neighbor” obligations States' and emis- properly contribution issue is not us before budgets simultaneously sions and issue FIPs. sufficiently because issue not was raised only challenging The States here are the latter agency before the rulemaking proceed- in the issue, they and timely have done in a so ing. fundamentally disagree We with the dis- Indeed, they fashion. could not have done so reading point. sent’s of the record on that until in the simulta- neously set the States’ individual emissions petitioners’ The dissent also claims that budgets and issued FIPs. challenge to EPA's issuance of the FIPs not is explain points We will both properly before more below. us because the affected States that, say might Suffice it here as challenge should have raised much we such earlier in so, process. again disagree. respectfully the We like to do dis- we not believe The do analysis (i) case, complex sent's on the FIPs issue we can conflates avoid the merits of this rejection (ii) of certain States' and the urges. SIPs as dissent which, by, any other (b). respect “al- nance State with levels EPA must choose national or primary are such sec- margin safety, lowing adequate an ondary quality ambient air stan- public health.” requisite protect the dard. ... 7409(b)(1). § U.S.C. 7410(a)(2)(D). § 42 U.S.C. the lengthy details process,

After a here, desig- which are not relevant good neighbor provision recog The is, ar- areas —that nates ‘upwind’ “nonattainment” nizes that emissions “from re level of each State where the may regions.” eas within gions pollute ‘downwind’ NAAQS. the pollutant exceeds Power Co. v. Appalachian 7407(d). (D.C.Cir.2001). it put To collo quially, good neighbor provision re NAAQS desig- sets a and Once EPA quires upwind responsibility States to bear areas within nates nonattainment their fair share of the mess down States, lead shifts to the States. role By placing good States. neigh wind NAAQS implement within States 110(a)(2), requirement in Section bor Con through Implementa- their State borders upwind gress established the State’s SIP (As Plans, experienced tion SIPs. implementing upwind vehicle knows, shortage there no of acro- reader is good neighbor obligation. State’s Of EPA-land.) SIPs, nyms In their course, will know sources within the choose which individual it do to good neigh what needs to meet its emissions, by how State must reduce and obligation it bor until learns the level of air example, much. For a State decide States, in downwind pollution further in- impose limits on different emissions contributing how learns much to the plants, natural coal-burning power dividual problems the downwind States. EPA other gas-burning power plants, in gathering the critical role plays informa factories, pollution, such as sources of quality tion about air in the downwind incinerators, refineries, and agricultural States, calculating upwind each State’s activities. good neighbor obligation, transmitting and to EPA must submit SIPs within upwind that information to the State. years three of new or revised each information, upwind that With the State 7410(a)(1). § NAAQS. 42 U.S.C. See how good can then determine to meet its 110(a)(2) Act re- lists the Section in a or neighbor obligation new SIP SIP of quired elements a SIP submission. 7410(k)(5). § revision. See 42 U.S.C. 110(a)(2)(D)(i)(I), “good Section the quantifies EPA good After a State’s case, neighbor” provision at issue this if neighbor obligation, a State does not of The required one of the elements a SIP. (or adequate timely submit an SIP ade- requires that good neighbor provision revision) to quate SIP take account of the SIPs: neighbor obligation by good defined (D) adequate provisions— contain EPA, responsibility to the shifts back Fed- (i) prohibiting, provi- with the consistent years Government. Within two eral or subchapter, sions of this source SIP or disapproving a State’s submission type activity other of emissions within revision, that a determining or State SIP any air emitting pollutant from State SIP, failed to submit EPA must has which amounts will— promulgate Implementation a Federal (I) implement NAAQS within that significantly to nonat- Plan contribute 7410(c)(1). in, See 42 or interfere with mainte- State. tainment B to EPA’s 2005 Clean Air Interstate 25,162 Reg. CAIR. 70 Fed. (May See neighbor good provision The —and 2005). built on CAIR the 1998 NOx implement it—are fa- attempts EPA’s good neighbor and defined 28 States’ obli- past miliar Court from cases. to this gations respect 1997 ozone Michigan NAAQS NAAQS and for annual (D.C.Cir.2000), challenge we considered matter, particulate levels of fine or annual Rule, commonly to EPA’s 1998 re- NOx id. See PM2.5. Call, which quan- ferred to as the SIP NOx neighbor obligations employed tified good CAIR two different formu- respect States with to the 1997 which ozone las—both of incorporated cost con- 57,356, 57,358 NAAQS. 63 Fed. quantify See siderations-—to each State’s obli- (Oct. 27,1998). gations pollutants covered CAIR, North The Carolina S02 NOx. The 1998 Rule did not define NOx decision held the formulas went be- will ... signifi- “amounts which contribute yond Michigan’s authorization to use cost cantly solely nonattainment” the ba- and that the formulas therefore exceeded quality impact, sis of downwind as one statutory authority. may use might expected given have “require cost to of only termination a sub- Rather, EPA text. also considered how contribution,” set of each state’s the Court much be could eliminated sources NOx explained, just “EPA pick but can’t a cost if each those sources installed for a region, ‘significant’ any and deem “highly cost-effective” emissions controls. emissions that sources can eliminate more Michigan, 213 F.3d at 675. On re- cheaply.” (citation, 531 F.3d at 918 em- view, argued some States that the statuto- phasis, quotation some internal marks ry text to order reductions omitted). The Court also held that “sec- alone, based quality impact on air not cost 110(a)(2)(D)(i)(I) tion gives no au- But Michigan reduction. Court thority to force an upwind state to share congressional found no “clear intent burden other reducing preclude consideration of cost.” Id. at 677 states’ emissions. Each state must elimi- (citation omitted). The Court thus held nate significant its own contribution to “consider differences in cut- pollution.” downwind at 921. Id. costs, that, back so after reduction of all emphasized Court “may that EPA not re- cost-effectively eliminated, could be quire some states to exceed the mark.” Id. any remaining ‘contribution’ would not be 677; ‘significant.’” considered at Id. North Carolina thus articulated an im- words, also id. at 677-79. In other EPA portant to Michigan’s approval caveat could use cost considerations to lower an cost considerations. statute permits The upwind obligations good State’s under the EPA to use cost to an upwind lower neighbor provision.2 State’s obligation good under neighbor the EPA, In North v. 531 provision. 675, Carolina F.3d 896 Michigan, 213 F.3d at (D.C.Cir.2008), we a challenge considered 677. But EPA not use cost to in- view, Ass’ns, 457, Judge 467, 2. Sentelle Trucking dissented. In his the 531 U.S. 121 S.Ct. ("We unambiguously (2001) text "set forth one 149 L.Ed.2d 1 have there- pollu- criterion: the emission of an implicit ambiguous amount of fore to find refused tant significantly sufficient contribute sections of the CAAan authorization to con- (Sen- elsewhere, often, downwind at nonattainment.” Id. 696 sider costs that has and so telle, J., dissenting); expressly granted.”). v. Whitman American been cf.

15 quantifying the began EPA obligation under upwind an State’s crease pollution that each State is, “amounts” neighbor provision good —that neighbor good under the prohibit must to “exceed upwind force is, “amounts will ... which provision Carolina, F.3d at 921. North mark.” —that significantly to nonattainment” contribute every up- requires simply, the statute Put with maintenance” of or “interfere its oim up at most to clean wind State NAAQS other States. three in a downwind pollution the air share 7410(a)(2)(D)(i).4 shares. other States’ State —not two-stage approach used obligations under the each State’s quantify C neighbor provision. good remanded Court The North Carolina stage, In the first determined vacatur, leaving CAIR without CAIR “amounts which will a State emits whether a rule consis- replaced by “until place significantly” to a downwind ... contribute North Carolina opinion.” with our tent of the three State’s nonattainment (D.C.Cir.2008) 1176, 1178 significantly NAAQS. EPA identified the (on rehearing). “link- contributing upwind States based on upwind spe- each State and ages” between attempt to is EPA’s Transport Rule The or “main- downwind “nonattainment” cific with our a rule that is consistent develop is, areas —that downwind areas tenance” proposed in North Carolina. opinion would not modeling predicted that EPA August Rule in attain, regulation or absent would Fed. See 75 August it in 2011. finalized maintain, NAAQS. Transport 2010) 45,210 (proposed); (Aug. Reg. 48,236. Reg. upwind An State was Fed. 2011) (final). 48,208 (Aug. Fed. a downwind nonattainment linked to States’ Transport Rule addresses The NAAQS if given area for a maintenance respect to obligations with good neighbor upwind modeling showed the 1997 annual NAAQS; three PM25 to that downwind area contribution State’s NAAQS, and the NAAQS, the 1997 ozone quality “air thresh- a numerical exceeded NAAQS. See id. 24-hour PM2.5 is, pol- specific amount of air old”—that 48,209.3 State into the lution sent from two basic Transport Rule contains The air. Id. EPA set the State’s downwind First, each the Rule defines components. at an pollutant threshold for each quality un- obligations emissions reduction State’s 1% of the relevant equal amount Second, neighbor provision. good resulting thresholds were NAAQS. der (ii) (i) ozone, Implementa- |xg/m3 0.15 prescribes ppb Federal 0.8 (iii) for 24- obligations |xg/m3 those 0.35 implement PM25, Plans to annual tion that an modeling If showed each com- hour Id. level. We describe at the State PM2.5. those would send more than upwind State in here some detail. ponent obligations to reduce emissions. See post-dated NAAQS States' 2006 24-hour 3. The PM25 Rule, 48,217; Reg. see Transport was not covered CAIR. 76 Fed. at and therefore Michigan, 213 F.3d at 687. EPA relied also Transport aspects of the 4. EPA bases different 110(c)(1), under Section on its statutory authori- sources of Rule on distinct 7410(c)(1), Transport § to issue the rulemaking general au- ty. on its EPA relied Rule, Reg. Transport 76 Fed. FIPs. See 301(a)(1) Clean thority under Section 48,217. at Act, 7601(a)(1), to construe 42 U.S.C. Air 110(a)(2)(D)(i)(I) quantify and to the Section air, a Virginia, into downwind State’s as Minnesota and amounts with maximum a a receptor measured at site downwind downwind contributions of 0.14 and 0.12 State, (xg/m3, upwind respectively, just State was deemed a missed being the cov- 48,240. “significant contributor” to downwind ered for annual id. at See PM2.5. problem. State’s air pollution For PM2.5, annual a total of 18 States6 quality Those numerical air thresholds exceeded threshold were and therefore upwind which States had to deemed “significant determined contributors.” For PM2.b, and emissions 24-hour a reduce their total of 22 States7 ex- S02 NOx is, upwind 48,241- which States did not—that ceeded id. the threshold. See at upwind thresholds determined which 42. Those States were thus included in significantly” States’ emissions “contribute the Rule’s programs reduction S02 pollution prob- pollutants to downwind States’ air annual NOx, that contribute to 48,210. lems. Upwind States “whose contribu- formation. See id. at For PM2B thresholds,” ozone, tions are below these a total of 26 States8 exceeded the found, 48,245. not significantly “do contribute to threshold. See id. at Those nonattainment interfere mainte- States thus were included the Rule’s NAAQS” nance of relevant program down- reduction for ozone-season NOx wind Id. States. Because their emissions which contributes to ozone formation. See 48,210; did not significantly,” 80,760 “contribute id. at Reg. those also 76 Fed. (Dec. 2011) States were not cut their emis- (finalizing six States’ inclu- purposes good sions for neighbor Transport sion in the Rule for ozone-sea- provision. NOx). son expect, “significant however,

As one would this At stage, second produced contribution” threshold quality some abandoned the air thresholds —that is, close margins. cases at the For example, stage one standard for whether an Maryland and Texas were covered upwind for an- State’s emissions sig- “contribute nual based on downwind contribu- nificantly” to downwind State’s nonat- PM2.5 tions of 0.15 and 0.18 |xg/m3,respectively— tainment air quality standards. In- just barely meeting stead, p,g/m3 two, stage 0.15 thresh- at used cost-based 48,240. old. See at id. And Texas exceed- standard: EPA how pol- determined much ed the annual just upwind threshold at power lution each plants State’s PM2.B single Madison, receptor, downwind Illi- could eliminate if plants State’s 48,241.5 By contrast, nois. at applied See id. all controls at or available below a land, Minnesota, Missouri, 5. narrowly Texas Michigan, also exceeded the 0.35 Nebras- gg/m3 ka, York, PM2B; Carolina, threshold for 24-hour Jersey, its maxi- New New North mum |xg/m3. Ohio, Tennessee, downwind contribution was 0.37 Texas, Pennsylvania, Virgi- Rule, 48,242. Transport Reg. 76 Fed. at nia, Virginia, West and Wisconsin. See Rule, 48,242. Reg. 76 Fed. Alabama, 6. Georgia, Those States were: Illi- nois, Indiana, Iowa, Kentucky, Maryland, Alabama, Arkansas, 8.Those States were: Missouri, York, Michigan, New North Car- Florida, Indiana, Illinois, Iowa, Georgia, Kan- olina, Ohio, Carolina, Pennsylvania, South sas, Louisiana, Kentucky, Maryland, Michi- Tennessee, Texas, Virginia, West and Wiscon- Missouri, gan, Mississippi, Jersey, New New sin. See 48,240. 76 Fed. York, Carolina, Ohio, Oklahoma, North Penn- Carolina, Tennessee, Texas, sylvania, South Alabama, 7. Georgia, Virginia, Virginia, Those were: States West Illi- and Wisconsin. See nois, Indiana, Iowa, Kansas, Rule, 48,245. Kentucky, Mary- Transport Reg. 76 Fed. at Support cant Technical Docu- pollution ton of reduced. Contribution per cost given 2010), 2177. (July ment 15 & n.9 J.A. without re- applied levels cost-per-ton The “significant of each State’s to the size gard modeling Armed with those two of sets In stage at one. other contribution” data, EPA which proceeded choose re- words, pollution upwind much each how threshold to gionwide cost-per-ton apply to eliminate was not was pollutants S02, for each of the three an- — upwind much the State con- to how tied EPA nual and ozone-season con- NOx NOx. pollution air tributed to downwind States’ modeling sulted both cost-of-reduction problems. quality modeling and its air and identified “significant what it termed cost thresh- far emissions would predicted EPA how is, cost-per-ton levels at which olds”—that throughout the State power plants fall if drops upwind emissions or steep jumps controls available required to install were quality air occur. downwind would The cost various cost levels. at or below Rule, 48,255; 76 Fed. at Reg. levels, thresholds, expressed were 48,255-56. EPA see also id. at then reduced, pollutant per of cost ton terms weighed quality both air and cost concerns in- plants would being the idea in a “multi-factor assessment” to choose less than the all controls that cost stall 48,256. cost-per-ton final levels. Id. at designated threshold.9 “multi-factor assessment” did not em- The from up the emissions EPA then added weigh hard formula to those fac- ploy yield total of the covered States all tors. figures pol- for each

regionwide emissions end, single In the EPA settled on a lutant, Trans- cost threshold. See at each threshold for ozone-season and $500/ton 48,250-53. Rule, Reg. Fed. at port 48,256-57. annual See id. at NOx. selected, greater higher the cost level S02, using single For instead of a cost emissions, but also the reduction of States, for all of the threshold S02 imposed on the costs and burdens greater groups into two upwind divided the States the States. sources within (that is, program year for the 2014). required in Next, modeling to emissions cuts computer EPA used modeling applying showed that quality $500/ton air effects estimate the downwind the attainment on cost threshold resolved cost-per-ton levels imposing different 48,253. areas to which problems at the downwind Id. upwind States. were linked. See id. upwind seven States quality applying effects modeled the 48,257. be- at Those seven level for and ascend- cost $500/ton NOx States, sub- Group at came the which were See id. ing cost-per-ton levels S02. id. 48,255; EPA, Quantify ject to a threshold for See Analysis Signifi- $500/ton S02. $500, $1,000, $1,000 technology EPA modeled cost levels example, a that cost 9. For NOx $2,500/ton. 2 tons of from a to install and eliminated 76 Fed. NOx power plant’s 48,249-50. $500/ton. would cost emissions high EPA went as effect, predicted far emissions how $5,000/ton See id. at for ozone-season NOx. plants all of the controls would fall if installed 48,250. S02, EPA modeled emissions For $500/ton. $l/ton from $500, $1,600, $2,300, $2,800, levels of cost computer predict the model to EPA used 48,- $10,000 $3,300, per ton. See id. at each State at that would occur in reductions process, stage in the EPA used 251. At a later thresholds. See Documen- various cost predictions decide how much each those v.4.10, (Aug. at 2-1 tation for EPA Base Case cut. State would have to 2010), example, for annual J.A. 2339. For 18 not

But did resolve attainment The require power FIPs plants $500/ton in cov- problems upwind in the downwind areas to which ered States to make the and S02 upwind 16 reductions needed comply other States were linked. NOx each upwind budget, 16 State’s emissions Group Those States became the as States, by defined EPA. The subject 1 FIPs also which were to a create an stricter See, trading interstate $2,300/ton program to allow cov- cost threshold for id. S02. ered comply sources to as 48,259. cost-effectively at possible. Rule, as Transport See 76 Fed. S02, EPA determined the amount of 48,271. Reg. at annual or ozone-season that each NOx NOx The FIPs convert each State’s emissions covered State could eliminate if power “allowances,” budget into which are allo plants installed all cost-effective emissions cated among power plants in the State. is, controls—that those controls available FIPs, Under the it is and not the applicable at or below the cost-per-ton States, that decides how to distribute the 48,260. thresholds. See id. at EPA then among allowances power plants the in each figures generate 2012, 2013, used those 48,284-88.11 State. See id. at and 2014 “budgets” emissions for each up- limited, The Rule retains secondary State, wind for pollutant each for which role for SIPs. States have option 48,259- that State was covered. See at id. submitting SIPs that modify some ele- 63. budget The is the maximum amount 48,327-28. ments of the FIPs. See id. at pollutant of each that a power State’s program year The first for which States plants may collectively given emit in a can submit such SIPs is 2014. See id. year, beginning in 2012.10 may States also replace seek to the FIPs stop did not there and leave it to wholesale, as long as the prohibits SIP implement States to required re- amounts of and emissions that NOx S02 through ductions new or revised Im- specified. 48,328. See at id. plementation Plans, or SIPs. 42 says it would “review such a SIP on a Cf. 7410(k)(5). Instead, EPA ease-by-ease simultaneous- But, basis.” Id. importantly, ly promulgated Federal Implementation the States do not post-Rule have a oppor- Plans, or FIPs. tunity by to avoid submitting FIPs a SIP may 10. augment States budgets their some- holding Court’s in North Carolina that by buying what out-of-state allowances. See deadlines must be provi- "consistent with the Rule, Transport 48,263-68. Reg. 76 Fed. at [NAAQS] mandating sions in Title compli- I ance deadlines for downwind states.” 531 power 11. plant Each "required is to hold one 912; Rule, Transport F.3d at see also 76 Fed. allowance, or one respectively, for S02 NOx 48,277-78. Reg. at every during ton emitted” S02 NOx The trading FIPs use allowance Rule, to enable year. relevant Reg. 76 Fed. plants 48,271; covered within comply 48,296-97 States to (describ- as see also id. at cost-effectively possible. program ing penalties The cre- noncompliance). for Sources trading ates four allowance by were markets: one begin complying Rule to annual with the one for annual ozone-season one requirements and NOx NOx S02 NOx States, Group January budgets 2012 for the one for the 2012-13 S02 Group January post-2014 States. See for the S02 48,277. 48,271. budgets. (This Fed. id. at plants Group Court Power stayed effect.) the Rule before it took purchase Group S02 S02 allowances, requirements 48,271- ozone-season would kick in and vice versa. See id. at NOx May years. Otherwise, 1 of those See id. EPA chose 72. trading generally interstate compliance those light deadlines in permitted. of this

19 statute, EPA is limited to fully in sion. Under “remain The FIPs revision: or SIP to ordering upwind States reduce until a state’s state covered each place ... signifi- which will contribute “amounts to approved and submitted SIP is in downwind cantly to nonattainment” Id. a FIP.” replace or revise 7410(a)(2)(D)(i). § 42 U.S.C. States. August rule in the final it issued Since subsequent 2011, taken several EPÁ has A to the actions related regulatory (Dec. 27, 80,760 Reg. 76 Fed. Rule. See Transport Rule defines States’ obli- The 2011) inclusion (finalizing six States’ 110(a)(2)(D)(i)(I) of gations under Section NOx); Reg. 77 Fed. Rule for ozone-season Act, provision Air sometimes the Clean 2012) (Feb. 10,324 21, (making technical “good neighbor” provi- described as the delaying and as- modeling adjustments 7410(a)(2)(D)(i)(I); § sion. See 2014); until provisions penalty surance EPA, 663, Michigan v. 213 F.3d (June 2012) 34,830 (revising Fed. (D.C.Cir.2000). good neighbor provi- The States). budgets for 13 Implementation that a State requires sion

Plan, or SIP: D (D) adequate provisions— contain coal com- power companies, array An (i) prohibiting, provi- consistent with unions, associations, trade panies, labor any subchapter, sions of this source States, governments petitioned local type activity of emissions within other Transport Rule. of EPA’s for review any air emitting pollutant the State from 30, 2011, in amounts which will— this Court On December on the pending a decision stayed the Rule (I) significantly contribute to nonat- 11-1302, Order, slip op. No. merits. See in, mainte- tainment or interfere with 2011). (D.C.Cir. The Court’s Dec. by, any respect nance other State with EPA to “continue admin- instructed order primary such national or sec- Air Interstate Rule istering the Clean ondary quality ambient air stan- pe- court’s resolution these pending the dard .... Id.

titions for review.” 7410(a)(2)(D). good 42 U.S.C. opinion, we address In Part II of this not all recognizes that neighbor provision authority Rule exceeds EPA’s whether the generated: pollution locally Some air to reduce “amounts to order aug- pollution “is caused or ambient significantly will ... contribute which from other states. mented emissions in downwind States. nonattainment” ‘upwind’regions pol- from Emissions III, whether the statute Part we address regions.” Appalachian lute ‘downwind’ giving EPA to issue FIPs without permits Power Co. v. imple- opportunity an initial (D.C.Cir.2001).

the States through required reductions ment grants signifi- Although the statute IV, In Part we or SIP revisions. SIPs implement good cant discretion remedy. consider the the statute’s text and neighbor provision, Michigan decisions this Court’s II red lines establish several North Carolina authority. red Those ar- that cabin Part, analyze petitioners’ In this we of this to our resolution lines are central that EPA exceeded gument case. neighbor” provi- “good under the First, obviously, quired and most the text of only to eliminate its own “amounts 110(a)(2)(D)(i)(I) which will ... significantly” tells us that the contribute to a Section downwind ... State’s “nonattainment.” “amounts which will contribute” to a As Carolina, explained in may North not downwind State’s nonattainment are at require any upwind State to “share the beyond most those amounts that travel an reducing burden of upwind other states’ upwind up State’s borders and end in a words, emissions.” Id. other the statu- downwind State’s nonattainment area.12 tory text —which refers to “amounts” The statute is not a blank check for EPA which will “contribute significantly” to a pollution region- to address interstate on a downwind State’s “nonattainment” —con- regard al basis without to an individual just tains not an component absolute upwind State’s actual contribution to (meaning that an upwind insignifi- State’s quality. downwind air covered) cant amounts are not but also a Moreover, text and relative component (meaning that each this Court’s decision North Carolina v. State’s relative contribution to the down- may EPA demonstrate that EPA not force wind State’s nonattainment must be con- a State to eliminate more than its own sidered). “significant” contribution to a downwind Moreover, goal the end of the statute is is, nonattainment State’s area —that attainment in the downwind State. EPA’s mark,” put “exceed the as we it in North authority to force upwind reductions on (D.C.Cir. Carolina. States ends at point where the affected 2008). Thus, EPA reasonably once desig downwind State achieves attainment. nates some level of “insig contribution as Therefore, if the downwind State would statute, nificant” under the it may not attain NAAQS upwind but for States’

force upwind State to reduce more is, contributions —that if the entire above- than its own contribution to that downwind NAAQS amount is upwind attributable to State minus the insignificant amount.13 States’ emissions—then upwind States’ Second, under the terms of the combined share is the entire amount by explained statute and as we in North Car which the downwind State exceeded the olina, portion of an upwind State’s NAAQS. And as we said North Car- contribution downwind State that olina, when EPA allocates that burden significantly” “contribute^] to that down among States, upwind may wind State’s necessarily “nonattainment” any upwind force State to “share the bur- depends on the relative contributions of reducing den of other upwind states’ emis- State, that upwind upwind other State sions.” Id. Each upwind State must bear contributors, and of the downwind State Therefore, its own fair “signifi- share. upwind itself. Each be re- cance” of upwind each State’s contribution argument, 12. At oral EPA's counsel refused to downwind contributions below that floor. So point. concede this upwind State whose contribution to that required downwind State is 30 units could be example, 13. For suppose that EPA deter- to reduce its contribution most units. any upwind mined that State whose contribu- course, tion to a downwind State was only less than 3 Of that is not the constraint on significantly units did not "contribute to non- to force the State to reduce attainment.” That would mean EPA had es- legal its emissions. The other constraints de- significance tablished 3 units as the floor. scribed in this Part can further lower a State’s upwind Other contributors to that downwind obligation. maximum State could not be to reduce their vacuum, NAAQS. in a divorced tainment of the cannot be measured Distributing impact upwind obligations from the of the other those proportional manner Rather, contributions, collective burden to their States. each of the three among upwind significant must be allocated States’ contribution be, most, to the size of their would proportion suppose units. Or 16% contributions to the downwind State’s non- instead that the three upwind States con- 10, 20, Otherwise, attainment. EPA would violate tribute and 30 units respectively. decision North Car- and our Distributing obligations the statute those in a manner contributions, olina.14 proportional to their those significant three States’ contributions specific example helps A illustrate that 8%, 16%, units, would be at most and 25 units, NAAQS point. Suppose the is 100 respectively, leading to the combined re- the downwind State’s nonattainment but duction of 50 units needed for the down- Suppose 150 units. further area contains wind State to reach attainment.15 that the downwind State contributes 90 units, addition, upwind and three our decisions in Michigan States contribute and North Carolina establish that EPA 20 the upwind units each. Because cost, responsible may only are for the downwind State’s consider but to further units, NAAQS by exceeding the 50 lower an individual obligations. State’s Michigan, 675; is entitled to at most 50 North downwind State 213 F.3d at Carolina, upwind units of relief from the 531 F.3d at 918. Under Michi- States so moreover, gan, can may that the downwind State achieve at- so in way do Congress adopted 14. Before the current text If the downwind State’s contribution alone 15. NAAQS, push would it above the then the in the Clean Air Act Amendments of above-NAAQSamount cannot be attrib- targeted up- entire text amounts from an only upwind uted to States. The downwind “prevent wind State that would attainment” in responsible State is above-NAAQS for its own share of the 7410(a)(2)(E) § downwind State. scenario, up- amount. In that (1988) added); (emphasis Pub. L. No. cf. wind States that contribute to the downwind 101-549, 101(b), 104 Stat. collectively State are on the hook for that (1990). "prevent Under the attainment” stan- above-NAAQS share of the amount that dard, upwind none of the three States in that upwind attributable to States’ contributions. hypothetical would itself be a but-for cause And, again, that collective burden must be By of the downwind State's nonattainment. among upwind propor- allocated States in moving "prevent from attainment” to "con- tion to the size of their contributions to the nonattainment,” significantly tribute Otherwise, upwind downwind State. one dropped requirement 1990 Amendments State would be forced "share burden of upwind that an individual State’s emissions emissions,” reducing upwind other states’ prevent on their own downwind attainment Carolina, violation of the statute. North 101-228, maintenance. See S. at 21 Rep. No. F.3d at 921. (1989), ("Since 1990 U.S.C.C.A.N. example helps point. An illustrate that may impossible say any single be that NAAQS units, Suppose the is 100 and the group source or is the one sources which downwind State’s air contains 180 units. The attainment, actually prevents changes the bill units, downwind State contributes 120 ‘prevent attainment or maintenance' to 'con- upwind three States contribute 20 units each. significantly tribute to nonattainment or inter- The downwind State is 80 units over the by,’ clarifying fere with maintenance thus NAAQS 20 units is its own re- —but Instead, occurs.”). when a violation it now sponsibility. upwind States must there- upwind suffices if EPA identifies emissions provide fore at most 60 units of relief. Dis- that, together up- other emissions tributing obligations proportionally, those from contributors, push given upwind significant wind downwind each of the three States’ NAAQS. be, most, maintenance area above the contribution would units. upwind upwind States more back the obligations that benefits some States’ to the 213 F.3d at 679. In other than others. See necessary level of reductions and sufficient words, prevent exorbitant costs order produce attainment the downwind being imposed upwind from on certain States.16 States, may obligations lower the sure, petitioners To be as even acknowl- imposed on those States. edge, truly there be some' unavoidable Third, to conform to the text of the over-control in some downwind States that statute, EPA must also ensure byproduct occurs as a necessity obligations of combined the various reducing upwind enough States’ emissions States, aggregated, produce do not NAAQS to meet the in other downwind necessary more than “over-control” in Industry Reply States. See & Labor Br. is, downwind States —that the obli- reasons, 11 n.2. For those EPA must have gations go beyond do not what is neces- some discretion about how to reasonably sary for the downwind States to achieve Moreover, avoid such over-control. be- NAAQS. multiple upwind cause may States affect a carefully

Even when EPA conforms to State, single downwind and because a sin- on authority, possi- the above limits its gle upwind may State affect multiple bility of over-control in downwind States States, may downwind it possible be to multiple upwind still arises because States accomplish ratcheting back in an en- may and, a single affect downwind State tirely proportional among manner the up- conversely, single upwind may State af- wind recognize States. Our cases multiple fect downwind States. The re- 679; Michigan, much. See 213 F.3d at quirement prevent such over-control Carolina, North 531 F.3d at But 908. directly comes from the text of the statute: point remains: -EPA using must avoid good The neighbor provision of the statute good neighbor provision in a manner that targets those upwind emissions from in unnecessary would result over-control significantly States “contribute Otherwise, the downwind States. EPA NAAQS. nonattainment” of the EPA would be exceeding statutory authority, its may require only those reductions that are expressly which is achieving tied to attain- necessary for downwind States to attain ment in the downwind States. NAAQS. good neighbor provision is not a free-standing tool for EPA to seek B quality to achieve air levels in downwind apply States that are We now those NAAQS. principles well below the Therefore, EPA modeling if Rule. “It given shows that a is axiomatic upwind slate of yield agency’s reductions an administrative power would more downwind air quality promulgate legislative regulations benefits than is limit necessary for downwind areas to attain the ed to the delegated by Con NAAQS, EPA attempt must gress.” to ratchet Georgetown Bowen v. Univ. example, suppose pro- upwind For that under the States’ combined reduction obli- 16. above, portional approach explained were, lower, A gations say, EPA would 10% would, 5,000 have to cut tons of upwind have to ratchet back the States’ re- NOx largest achieve obligation, its downwind . obligations by duction a total of That 10%. 2,000 while State B would have to cut tons to upwind only would ensure that States were largest obligation. downwind achieve If prohibit forced to those emissions that "con- modeling that all downwind showed significantly tribute to nonattainment.” nonattainment would be resolved if those two 204, 208, 109 468, 102 stage, EPA previous S.Ct. abandoned the Hosp., 488 U.S. meas- (1988); Michigan see also significance L.Ed.2d 493 ure of numerical air qual- —the (D.C.Cir.2001) thresholds, ity which were based on the (“EPA creature of agency is a federal quantity pollution upwind an State sent —a statute,” “only those au may exercise Instead, to a downwind area. by Congress.”). upon conferred thorities relying switched over to cost reduc- not exceed a statute’s au agency may An tion alone. EPA each State’s limits. If thorization or violate statute’s power to cut all plants of the emissions ambiguous, agency a statute is they given per could eliminate at a cost ton statute choose a rea administers the pollution regardless of the reduced — interpretation ambiguity— of that sonable of the “amounts” State’s emissions EPA agency’s interpretation must still but deemed to significantly” “contribute stay within the boundaries stage regardless one and relative NRDC, Inc. v. text. See Chevron U.S.A. contributions of the other 837, 842-44, 467 U.S. S.Ct. and the downwind State. (1984).17 L.Ed.2d 694 perceive We at least three indepen In the used two- legal dent but intertwined flaws in EPA’s stage approach to define “amounts which approach good neighbor provision. ... to the significantly” will contribute to down- problems. stage correspond wind attainment The first Those flaws to the three re upwind quirements identified those States that were we outlined above that come “significant contributors” to downwind at- statutory from the text. problems. tainment determined that First, fundamentally, and most the a contribution to a downwind non- State’s Transport Rule is flawed because the re- signif- attainment or maintenance area was quirement imposed that EPA upwind if a “air quality icant it exceeded numerical States was not based on the “amounts” ozone, ppb p,g/m3

threshold” of 0.8 0.15 upwind from States that signif- “contribute PM2.5, |xg/m3 for annual and 0.35 for 24- icantly to nonattainment” downwind Rule, Transport Reg. hour 76 Fed. PM2.5. States, required by the statute and our 2011). 48,236 48,208, 8, (Aug. decision in North Carolina. contributions are below “whose these thresholds,” found, signifi- “do not Petitioners claim that initial stage the of cantly contribute to nonattainment or in- analysis quality EPA’s numerical air —the terfere with maintenance of the relevant thresholds, bright-line which used a test NAAQS.” upwind Id. Those States were for whether a State’s downwind emissions altogether. off the hook significantly” “contribute “ —created is, ‘floor’below which contribution upwind But an State that exceeded the definition, insignificant.” viewed as Indus- significance threshold at one even down- try & Labor Br. 20. Petitioners receptor argue wind State’s was drawn wholesale statutory authority has no stage into the Rule’s second —cost-based compel pollu- emissions reductions. At second States to reduce amounts of judicial provision 17. We set aside EPA’s action here if "arbi- review of the Clean Air discretion, Act, trary, capricious, 7607(d)(9), an abuse of or § 42 U.S.C. as under the Ad law," not in accordance with if Act, otherwise or 706(2). § ministrative Procedure 5 U.S.C. statutory jurisdiction, authority, "in excess of EPA, Motor Vehicle Ass’n v. Manufacturers limitations, statutory right.” or short of 385, (D.C.Cir.1985). n. 768 F.2d 389 6 apply The standard we "is the same" under 24 Therefore, “insignificant.” ignore that floor at the later stage,

tion that are when it calculated each “significant State’s contri- EPA could not petitioners contend' that

bution” based on cost.18 nonattainment, point that this was duce the extent 18. The dissent contends of the controls preserved judicial simply review and that the they should not be lessened because during agency reducing was not aware of this issue have the effect of 42 agency proceedings. State’s contribution to below the initial reasons, 25,177. 7607(d)(7)(B). rejection For several we are Id. at threshold.” EPA's of "adequate argument prior rulemaking— EPA had more than no- the same convinced in a indeed, general peti- prior rulemaking substance” of tification of the that is the di EPA, argument. progenitor highly NRDC v. F.3d tioners’ rect of the current one—is 1245, (D.C.Cir.2009) (quoting argument preserved South relevant to whether the is EPA, See, Quality Mgmt. e.g., Air Dist. v. Coast here. American Petroleum Institute 882, Indeed, EPA, (D.C.Cir.2006)). (D.C.Cir. one 52 F.3d 1120 n. 1 EPA, 1995); questions long history in the central NRDC v. 824 F.2d 1987) (en (D.C.Cir. banc); implement good neighbor Appala EPA’s efforts to see also EPA, provision has been whether EPA has com- chian Power Co. v. 135 F.3d (D.C.Cir. 1998) ("The plied with the basic limits on purpose of the exhaus authority. So it here. requirement is agency tion is to that the ensure First, given opportunity bring is the first Transport proceeding its ex Rule arose Carolina, pertise to bear on the resolution decision in chal out of this Court’s North rule.”). lenge petitioners’ argument prior rejection to a on which relies. See CAIR, 48,211 ("EPA argument together 76 Fed. same Carolina, promulgating opinion re- this Court’s in North show could, sponse to the remand of the Clean Air Inter- that EPA "had notice of this issue and (CAIR) have, Ap- state Rule the U.S. Court of or should taken it into account.” NRDC, Circuit”). peals for the District of Columbia at 1151. Third, In North Carolina v. this Court ex- proposal EPA’s statements at the plained applicable statutory stage open indicated EPA limitations was not to recon- EPA sidering rejection instructed on remand to craft a new petition- CAIR’s earlier Rule, opinion.” argument. rule "consistent with Proposed Transport our ers’ See (D.C.Cir.2008) (on 45,210, 45,299 2, 2010) rehearing). Reg. (Aug. 75 Fed. ("EPA Instructing proceed EPA to in a manner ap- "con- evaluated a number of alternative with” presupposes proaches defining significant sistent North Carolina that contribution opinion. EPA is aware of the Court's And the and interference with maintenance in addi- opinion made clear that once EPA approach proposed defines tion to the this rule. in upwind "significant each suggested variety State’s contribu- Stakeholders a of ideas. tion,” may "require not some suggested approaches.... states to EPA considered all sum, exceed proposing any the mark.!’ 531 F.3d at In EPA 921. is not alternative , here.”). beginning approaches EPA knew from the By point, that it was listed Carolina, required comply already with quality-only North in- had dismissed the two air cluding part holding approaches Court's on it considered and had indicated petitioners rely which here. ap- its firm commitment to the cost-based Second, rejected— proach. Significant considered—and See Alternative precisely argument the same in Approaches CAIR. EPA Contribution Evaluated Technical acknowledged 2010) (EPA, Support first the comment: (July Signif- “Some Document 7 stated, TSD), (uniform broadly, commenters more that the icant Contribution J.A. 2312 cost-per-ton approach threshold contribution level selected successfully "has been floor, before, upwind should be a implemented considered so that with excellent environ- results”); 3-7, obliged States should be to reduce their emis mental see also id. at J.A. only light sions to the level at which their contribu 2308-12. indications that EPA tion objection to downwind nonattainment not ex does was aware of their but had no inten- CAIR, (and ceed that level.” approach threshold 70 Fed. tion to revisit its indeed had 25,162, 25,176-77 12, 2005). (May already rejected objection), specificity It argument: impor then dismissed that "Most of commenters such as and Ten- Wisconsin present purposes, long tant for as the con nessee was "reasonable” under the circum- see, yield 7607(d)(7)(B); trols e.g., downwind benefits needed to re stances. 42 U.S.C. agree petitioners. The Trans- approach poses We a fundamental le- upwind an port gal problem Rule includes excludes derives from the —one upwind on the amount of that text of statute prece- State based and from our significant a nonat- dents. Our decision in Michigan held that State’s contribution to in may area a downwind That EPA use cost tainment State. to re- considerations quire fine. But under the a State of only much is “termination a each subset of may be then to reduce emis- state’s contribution.” 213 F.3d at 675. an our decision North greater “sig- sions amount than the And in Carolina made brought nificant contribution” that it into clear that EPA not use cost to force in the That much program place. first State to “exceed the mark.” is not fine. 921.19 F.3d at

Put more EPA determined that a plainly, By using numerical threshold subject was good neighbor a State to the stage thereby initial a creating floor —and if it provision contributed at least certain below pollu- which “amounts” of downwind amount to air pollution significant threshold tion were defined the —EPA imposed “mark,” downwind State. But EPA then use the term employed North region-wide quali- restrictions based on Carolina. ig- could not then modeling projections; ty those restrictions nore that mark and redefine each State’s require upwind “significant could reduce contribution” in a way such by more than emissions the amount of that that an upwind State’s required reductions could be more than its own significant contribution. Cmt., ("EPA Wisconsin J.A. 1293 needs to eral complaint.” substance of the South Coast, primarily depend quality on air results in 472 F.3d at plainly 891. EPA was defining" significant disregard control significance stead of costs in notice that its contributions); Cmt., (“A potential legal infirmity Tennessee floor was J.A. in its approach. threshold lower cost should be considered for any State that can reduce their contribution 19. The Court North Carolina reached these significance using below 1% thresholds cost conclusions its discussion of EPA’s use of ($2,000/ton the maximum below values power plant fuel mix to distribute reduc- $500/ton NOx), applicable.... if NOx S02 obligations among tion the CAIR States. summary We like to see a would for each 904, 531 F.3d at 918-21. EPA claims that indicates, pollutant indepen State and that analysis reasoning that of is not relevant here cost, dently necessary the amounts to elimi "general signifi- because it did not relate to significant nate the contribution and interfer issues,” cant contribution but to the rather upwind ence with maintenance from calculating manner of each State’s emissions States.”); Cmt., (chal Delaware J.A. 1756 budget. Br. EPA 23. lenging depart EPA’s decision to from the air quality thresholds used for and to inclusion That is a distinction without a difference. significant quantify States’ contributions analysis The fuel mix increased some States’ considerations, quality); cost based on not air obligations argu- and reduced others’. EPA’s Power, Appalachian see also F.3d at 817 135 analysis— step ment overlooks that no in its ("the read word 'reasonable' cannot be out of step may impose however the bur- labeled— ap in hair-splitting the statute favor of a private dens on States entities unless those (an proach”); objection id. at 818 need not be statutory authority. anchored burdens are in “phrased exactly way statute, the same in each pro- Under are to forum”); Coast, (peti South 472 F.3d at 891 only hibit those "amounts which will ... con- leeway developing have tioners "some their significantly tribute to or "in- nonattainment” review). argument” on terfere with maintenance.” sum, Carolina, 7410(a)(2)(D)(i); we In are confident here that EPA had see also North “adequate gen- more than notification 919. F.3d at requires The statute significantly.”22 ute to a downwind State.20 contribution at prohibit to most those a State air that the Rule’s claims EPA now signifi- which will “amounts” “contribute were established thresholds quality If cantly” no more. amounts below —and and “other- purpose” analytical “limited numerical threshold do not contribute part what of each nothing about say wise nonat- significantly to a downwind State’s considered should be contribution State’s ” tainment, may require upwind EPA not an Br. That claim EPA 33. ‘significant.’ Transport to do more. The final itself in the EPA said rings hollow. requirement to that basic does adhere are whose contributions rule that “states and our statutory precedents.23 of the text significantly do not these thresholds below or interfere to nonattainment contribute Second, runs Transport Rule also NAAQS.” of the relevant with maintenance proportionality re- afoul statute’s 48,236. Rule, at Reg. 76 Fed. our decision quirement described that acknowledged EPA therefore authority North Carolina: EPA has “no to are not amounts below the threshold upwind to the burden force state share signifi- ... “amounts will contribute which reducing upwind other states’ emis- prob- to attainment cantly” downwind 921; Industry & at sions.” F.3d lems.21 (in budgets, Br. imposing Labor S02 EPA “did not even consider the relative short, quality

In EPA used the States”). which contributions the various a floor below thresholds to establish instinct be pollution do not “contrib- EPA’s “redistributional “amounts” of air problem particular presented in area’s attainment cannot be divorced This issue was not 20. Rule, impact Michigan. EPA bal from the relative of other States’ con- the 1998 NOx problem. using a tributions quality anced various air factors "weighl-of-evidence approach.” 63 Fed. 356, 57, 381 1998). (Oct. Unlike protests it used 22. EPA the numerical Rule did not only the 1998 thresholds to determine "which NOx threshold, employ problems nor other numerical State contributions to downwind criterion,” "bright States at line screen out are so small as to warrant exclusion.” 57,383. stage. But mean the first Id. Br. 31. that must those "amounts” "so that are small as warrant exclusion” (It “significant.” illogical to are not would be by de- avoid Carolina 21. cannot North exception out a for emis- carve de minimis clining quantify the “amount” of each statutorily “significant.”) contribution, sions are "beginning its State’s downwind cost,” analysis acknowledge any simply designating output of that cost- 23. seems reluctant analysis "significant good con- based each State’s textual on its under the limits neighbor provision. argument, "amounts At tribution.” The term oral only significantly” suggested is not which will ... contribute that "reasonableness” is ("When petitioner authority elastic. id. at 920 a on its to use so See limit cost-effectiveness complains requiring a state to elimi- Tr. of Oral EPA is to force down States' emissions. contribution, significant Arg. nate more it EPA would not rule out the than 44-45. inadequate good neighbor pro- never respond possibility is EPA to that it that under vision, significant require contri- it a State reduce more measured individual states’ could above, butions.”). go explained "amounts out As than the State’s total emissions that of logically But a claim of which will ... contribute” cannot State. See id. at 43-45. such authority statutory pollutant square a leaves exceed the amount of that does not with the obviously pollution can- State’s borders and reaches a nonattainment text—“amounts” pollu- insignificant be ex- area. And amounts must not "contribute” to a downwind State's Moreover, "significance” problem they don't even reach cluded. an tion if upwind downwind State. State's emissions for a downwind laudatory,” Carolina, North 531 F.3d at State’s own fair share of the amount by trump but it cannot of the terms which it NAAQS. exceeds the See Indus- statute, statute. Under the upwind each try & Labor Br. 24-25. How “significant- State that contributes to a non- downwind ly” upwind State contributes to a down- attainment responsible area is for no more wind State’s nonattainment depends also than its own “amounts which will ... con- part on how much of the above-NAAQS significantly” tribute to the downwind amount comes from the downwind State pollution problem. sure, State’s To be un- explained above, itself. As we EPA there- der EPA Michigan, may rely on cost- fore must factor the downwind State’s effectiveness factors in order to allow some contribution, own alongside those of the upwind States do less than their full fair upwind various States. EPA But did not 675; share. See Petition- cf. do that here. ing States’ Br. Michigan, 213 F.3d 663 Third, relatedly, EPA also failed to (No. 98-1497). But when EPA asks one ensure that the obligations collective of the upwind State to eliminate more than its upwind States, various when aggregated, share, statutory fair that State is necessar- did not produce unnecessary over-control ily being to clean up forced up- another in the downwind States. statutory EPA’s wind State’s share mess in the authority, again, once is limited to attain- downwind Under State. the statute and ing NAAQS in the downwind States. Carolina, North impermissible. require upwind States to do Here, Transport EPA’s Rule violated more necessary than for the downwind the statute attempt because made no States to NAAQS. Here, achieve the calculate upwind States’ required reduc- try did not steps to take to avoid such proportional tions on a basis that took into over-control.24 account upwind contributions other States to the downwind States’ nonattain- sum, EPA’s derives from problems. ment the statute and is limited vein,

In the same EPA’s text.25 reading of Section failed to take into account 110(a)(2)(D)(i)(I) the downwind narrow limited —a proposal stage 24. At the proceeding in the State. pollution "Amounts” of air cannot be culminated in the said to “interfere with maintenance” unless proportional approach considered a that re- they upwind leave the State and reach a many flected principles essential de- downwind State’s area. maintenance To re- EPA, Significant scribed above. Contri- quire a State to reduce "amounts” of emis- 6-7, bution TSD at J.A. 2311-12. Under pursuant sions to the “interfere mainte- approach, upwind given contributors to prong, nance” EPA must show some basis in downwind collectively would area have to believing evidence for that those "amounts” provide a quality improvement” "defined State, upwind together from an with amounts State, to the downwind in the amount contributors, upwind from other will reach a which the downwind State exceeded specific maintenance area downwind NAAQS. Id. at J.A. 2311. And the push State and that maintenance area back States’ individual shares of that collective NAAQS over the in the future. near Put duty proportion would be “in defined direct simply, the "interfere with maintenance” original to their contributionfs]” the down- prong open-ended of the statute is not an ultimately wind State. Id. chose not to impose invitation for EPA to reductions on adopt approach, that however. Rather, upwind carefully States. it is a cali- 25. requires upwind The statute also to States brated supplement and commonsense to the prohibit that emissions will "interfere with significantly” "contribute requirement. NAAQS maintenance" of the in a downwind 28 Ill the beyond far what

provision—reaches text will bear. second, entirely independent There is a pro- alone text

Although the EPA Transport the Rule. did problem with statutory context the upwind EPA’s stop simply quantifying hibits each not conclu- support for our additional In- provides neighbor obligations. good State’s Court, analyzing in Supreme The stead, application sion. unprecedented in an Act, rejected Air the 109 of Clean neighbor provision, Section EPA also si- good the “alter Congress that would premise Implementa- multaneously issued Federal regulatory details of Plans, FIPs, the fundamental implement to those tion “ancillary provisions” other in scheme” in EPA obligations on sources the States. —in words, would “hide ele- Congress an initial giving did so without the States v. phants in mouseholes.” Whitman obligations implement to opportunity Ass’ns, 457, Trucking 531 U.S. American through Implemen- their State themselves (2001). 468, 903, 149 L.Ed.2d S.Ct. Plans, or tation SIPs. neighbor provision is one good ordinarily gives Air Act The Clean requirements than 20 Section more SIP implement opportunity States the initial 110(a)(2). It inconceivable that seems quality new air standard on sources with- buried Section Congress borders; do so submit- their States 110(a)(2)(D)(i)(I) neighbor pro- good —the 7407(a), §§ ting SIPs. open-ended vision—an authorization 7410(a)(1). Here, by preemptively issuing effectively every power plant EPA to force FIPs, denied the States first EPA every emis- in the States to install the reductions opportunity implement “cost- technology sions control deems good neighbor obli- required under their trans- reading effective.” Such a would gations. justifies ap- its “FIP-first” provision good neighbor form the narrow findings earlier proach by pointing to its authority” that into a “broad and unusual had failed to meet their provisions of

would overtake other core those find- good neighbor obligations. But Oregon, 546 the Act. Gonzales v. U.S. quan- ings came before (2006). 267, 126 S.Ct. 163 L.Ed.2d 748 good neighbor tified the States’ obli- Congress could not We “are confident that punishes the gations. approach delegate intended to decision of have. to meet a standard that failing States for political significance such economic yet EPA had not announced and FDA agency cryptic in so a fashion.” yet States did not know. Corp., Tobacco Brown & Williamson 120, 160, Act, EPA has to set 529 U.S. S.Ct. Under the (2000). standards, reserves the L.Ed.2d but the statute role for the States.

first-implementer just to applies That division of labor NAAQS good neighbor prohibit only but also to obligated States are 110(a)(2)(D)(i)(I), as pollution provision, “which will Section those “amounts” of recognized has several times ... to downwind itself significantly” contribute good past. more. Be- When defines States’ problems attainment no —and give it must neighbor obligations, those cause the Rule exceeds implement limits, opportunity the first really try to States and indeed does not requirements. the new requirements, meet those it cannot stand.

29 A Michigan, 687; 213 F.3d at Virginia, 108 F.3d at 1410. Act, Air “Under the Clean both Train, Government and the States exer Federal the Supreme Court invoked responsibility maintaining and im that statutory cise division of labor in holding proving quality.” air Trucking American the Clean Air gives Act EPA “no (D.C.Cir. 624, Ass’ns v. 600 F.3d authority 625 to question the wisdom of a 2010). The Act sets forth a basic division limitations,” State’s choices of emission so of labor: The long Federal Government estab as the State’s SIP submission would standards, quality lishes am but States result in “compliance with the national primary have responsibility attaining standards for ambient air.” 421 U.S. at 79, standards those within their borders. See 95 S.Ct. 1470. The Court stated: NRDC, 60, 63-67, v. 421 Train 95 U.S. Agency plainly charged by the 1470, (1975); S.Ct. 43 L.Ed.2d 731 Ameri Act with the responsibility for setting 625-26; Trucking, 600 F.3d at Virgi can the national air ambient standards. 1397, nia v. 108 F.3d 1406-10 however, Just as plainly, it is relegated (D.C.Cir.1997); 42 also U.S.C. by the Act to a secondary role in the 7401(a) (“The § Congress finds ... process of determining and enforcing (that pollution is, air prevention the reduc specific, source-by-source emission elimination, tion or through any measures, limitations which are necessary if the pollutants amount of produced or national standards it has set are to be source) pollution created and air met. control at its primary respon source is the (emphasis added); Id. see also Union sibility of States govern and local Electric Co. v. 246, 256, 269, 427 U.S.

ments....”); 7407(a) (“Each 2518, (1976) (EPA 96 S.Ct. 49 L.Ed.2d 474 State shall have the primary responsibility may reject grounds SIP on of techni- for assuring quality air within the entire cal or economic infeasibility; that “would geographic comprising area such permit the Administrator or a federal ”).26 State.... reject court to legislative State’s choices in regulating pollution, air even though statutory

That division of authority Congress plainly States, left with the so is strict. This Court has described the long as met, the national standards were Trainr-Virginia line of cases as erecting power to determine which sources statutory “federalism bar” under Section would be burdened regulation and to 110 of Appalachian the Act. See Power Co. extent”). what 1032, (D.C.Cir.2001) v. 249 F.3d Train, (citing 1470; 421 U.S. 95 S.Ct. Similarly, in Virginia, this Court held 1397); Virginia, 108 Michigan that EPA had no under Section (D.C.Cir.2000). 110 to condition approval of northeast- prohibits That federalism bar ern States’ SIPs on the States’ adoption of using EPA from process the SIP to force California’s vehicle emission control meas- to adopt specific control measures. ures. See 108 F.3d at 1401-10. The Amendments, Amendments, 26. The 1970 "sharply which which enacted the current text authority” setting increased federal 110(a)(2)(D)(i)(I), of Section "did not alter standards, quality "explicit- at the same time responsibilities the division of between EPA ly preserved principle” primacy of State and the process.” states in section Train, implementing pollution controls. Virginia, 108 F.3d at 1410. 421 U.S. at 1470. The S.Ct. 30 Act from “responsibility under the shifts principle that the on the basic relied

Court EPA, implem- government the federal to states.” States, primary are the EPA, 1410 647 F.2d 110. See id. at Lead Industries Ass’n v. Section enters under (D.C.Cir.1980). (“section 1130, 1137 not enable EPA to force 110 does measures control particular governs Implementa- 110 State Section states”). 110(a)(1) requires tion Plans. Section a sum, the Act establishes In Title I of implement each States to submit SIPs EPA and the between “partnership NAAQS. new or revised See U.S.C. 1122, Browner, 57 F.3d NRDC v. states.” 7410(a)(1). 110(a)(2) many § lists Section (D.C.Cir.1995). The terms of contain in order elements that a SIP must EPA sets the stan- partnership are clear: comprehen- Plan to ensure will be dards, primary “bear re- but enough to enable the State to attain sive maintaining, and attaining, sponsibility 7410(a)(2).27 § NAAQS. 42 U.S.C. American enforcing these standards.” good neighbor provision, Section 388, Lung Ass’n v. 389 110(a)(2)(D)(i)(I), required is one of those (D.C.Cir.1998). elements. B 110(c)(1) Section creates a federal mind, structure in we With basic backstop if the States fail to submit ade here: question presented consider quate When EPA finds that a State SIPs. rulemaking use its au- whether “has failed to make a submission” thority quantify obligations un- States’ “disapproves implementation 110(a)(2)(D)(i)(I) der and simulta- Section plan part” submission whole or in be neously Implementation issue Federal “deficiency,” of a EPA must cause SIP Plans, giving without the States a first implementation “promulgate Federal opportunity comply. plan” years, within two “unless the State begin by briefly describing the set of We deficiency” corrects the in the meantime in statutory provisions on which EPA relies approved by a manner EPA. 42 U.S.C. here. 7410(c)(1). essence, § the issue here is implementation whether State’s of its regulating

EPA is the first mover in good neighbor obligation can be considered pollution ambient air in Title I of the Clean requires pro- part “required Air Act. EPA to of the State’s submission” Section (or NAAQS can mulgate pollu- for common air its SIP whether SIP be failing good implement tants. See Whitman v. American Truck- deficient Ass’ns, ing neighbor obligation) 531 U.S. 121 S.Ct. even before (2001) (citing quantifies good neighbor 149 L.Ed.2d 1 the State’s obli U.S.C. 7409(a)). NAAQS, gation. quantifying § But EPA sets a We think not. EPA’s once See, (SIP (A)), 7410(a)(2)(E) 7410(a)(2)(A) (SIP e.g., subparagraph 27. shall shall “include enforceable emission limita- provide that State and local au- assurances measures,” tions and other control "as well adequate personnel, thorities "will have fund- compliance”), and timetables for schedules ing, authority” and under State and local law 7410(a)(2)(B) (SIP provide shall for means to carry implementation plan”), "to out such “monitor, compile, analyze data on am- and 7410(a)(2)(F) (SIP require shall "the installa- quality” provide bient air the data to EPA tion, maintenance, replacement equip- 7410(a)(2)(C) (SIP upon request), shall "in- by “stationary ment” sources to monitor program provide clude a for the enforce- sources”). emissions from such required by ment of” the measures control 110(k)(5) good obligation a under Section neighbor State’s or to of submit new setting budget 110(a)(1). of a emissions State’s SIPs under Section Only if that “require[s]” State to make a what revised or properly new SIP is deemed to implementing obligation “submission” required lack a submission or is properly sources within the State. After EPA may deemed deficient resort to a budgets has set the relevant emissions for FIP for good neighbor the State’s obli- State, require EPA may each States to gation. 110(a)(1) new Section submit SIPs under to revise their under Section

or SIPs C 110(k)(5). approach EPA That is the has short, in the In past. used once 1 good or quantifies neigh- defines a State’s light 110(c)(1), In of Section EPA here obligation, must bor the State have rea- finding made “a to failure submit and/or require- time to implement sonable disapproved a SIP submission” for each to sources respect ment within the State with respect each NAAQS for State.28 which that State be would covered. EPA short, triggers for a FIP are § Br. (citing 7410(c)(1)); finding EPA’s that the SIP fails to contain EPA, 110(a)(2)(D)(i)(I) also Status of CAA “required submission” or EPA’s disap- SIPs Final Rule Support Technical Docu- “deficiency.” a SIP of a proving because 2011) (EPA, (July TSD), ment SIPs J.A. logically, But a SIP cannot be deemed to 3167.29 On the basis those findings, lack submission be deemed authority asserted to issue the implement failing good deficient for Transport Rule FIPs. neighbor obligation until after EPA has But neighbor many disapprovals SIP good defined State’s obli- findings it gation. obligation, Once defines the failure to submit share one may problematic then be forced revise SIPs EPA made all of feature: 110(k)(5), 48,208, 48,219 2011). provision, 28. Section SIP (Aug. call It bears not- however, authorizes EPA to "establish reasonable dead- ing, approve that EPA continued to lines” not to exceed 18 months for SIP revi- See, e.g., CAIR SIPs after Carolina. North sions, given. once notice is 42 U.S.C. 65,446 10, 2009). (Dec. Reg. Fed. 7410(k)(5); Rule, § 63 Fed. sure, cf. try NOx But to to make in the final Trans- 57,451 (12-month Reg. deadline). at port retrospectively Rule EPA "corrected” its SIPs, past approvals clarify of CAIR cognizant potential 29. was another approved view that an CAIR SIP did not past approval obstacle: its own of CAIR SIPs. Transport shield a State from the Rule FIPs. CAIR covered the ozone and annual 48,219; Reg. See 76 Fed. see also 42 U.S.C. NAAQS, NAAQS two of three PM2.5 (EPA 7410(k)(6) § any approval "revise” 25,162, 25,165 Reg. issue here. See 70 Fed. error”). the Administrator determines "was 12, 2005). (May Many covered States had EPA made using those "corrections” without approval submitted and received EPA of CAIR EPA, TSD, rulemaking, notice despite and comment SIPs. See SIPs J.A. 3167. EPA apparently statutory requirement ap- any that EPA make was concerned those cor- proved might deprive CAIR SIPs EPA of approv- au- rections "in the manner as the same 110(c)(1) thority 7410(k)(6). under to issue Section Trans- al.” 42 U.S.C. port NAAQS. Rule two FIPs for those Because must be vacat- event, EPA tried this in to address the final rule. ed in need not we address here It claimed that because North Carolina invali- whether EPA’s "corrections” of CAIR SIP CAIR, approved longer dated CAIR SIPs no approvals exceeded its under Sec- 110(a)(2)(D)(i)(I) fulfilled States' Section obli- 110(k)(6). tion gations. See 76 Fed. ... con which will hibition on “amounts told the States findings those before sign is like a road significantly” tribute their SIPs were reductions what emissions “carefully.” that tells drivers to drive neigh- good under the achieve supposed here, regulated TSD, J.A. SIPs entities — provision. bor precise guidance to more States —need 3167. to the to conform their conduct know how In with that. problem no EPA sees cannot be deemed to logically A law. SIP between view, no difference there is EPA’s or deemed to “required lack a submission” comply with the obligation a State’s good to meet the for failure be deficient neighbor obli- good NAAQS and a State’s quantifies EPA obligation before neighbor address- must submit SIPs gation: States neighbor obligation. good NAAQS, of a years three within ing both hitting for not EPA faults the States face FIPs. their target with impossible-to-know that glaring a difference—a But there is effect, EPA’s view is SIP submissions. A obligations. the two one—between hit have to only that the chance States target. For a clear numerical NAAQS is target. EPA target is defines before NAAQS annual is for example, the PM2.5 clear, target By the time EPA makes the precisely knows Every State p,g/m3. the States to com- already it’s too late for must achieve. goal its SIP what numerical ply- tar- that clear numerical misses If a State Interestingly, litigation, outside of this only itself to blame. get, it has recently repeatedly EPA has itself contrast, good neighbor obli By that it makes no sense for recognized target not a clear numerical gation is —far target. EPA to act until defines States target. it—until EPA defines from in a ago, example, a few weeks Just NAAQS, upwind after EPA sets Even that proceeding said while separate neighbor obligation for good State’s are elements of a SIP submission some and unknown. pollutant is nebulous “relatively straightforward,” “others clear- pollu is “amounts” of statutory standard through ly require interpretation significantly “contribute tion which will through rulemaking, or recommendations “interfere with mainte nonattainment” or meaning guidance, give specific in order to NAAQS in a downwind nance” of new NAAQS.” Reg. 77 Fed. particular for a 2012). way upwind for an 46,361, 46,363 3, There is no (Aug. State. “For exam- obligation 110(a)(2)(D)(i) without know to know its EPA to requires ple, section pollution of air downwind ade- ing levels that each state’s SIP contains be sure responsi apportioning significant and then con- quate provisions prevent NAAQS bility each downwind State’s nonattain tribution to nonattainment Therefore, upwind provision State’s obli This contains ment. other states. require substantial gation impossible remains for the numerous terms EPA in order to determine rulemaking by it.30 State to determine until defines sig- EPA, points as what constitutes pro such basic further definition Without Implementation Plan recognized past: Guidance for State in the 30. As EPA itself has precise Outstanding "The nature and contents of such Current Ob- Submissions to Meet stipulated 110(a)(2)(D)(i) in the stat- [sic] submission ligations for the Under Section ute. EPA believes the contents of the SIP National Ambient Ozone and 8-Hour PM25 110(a)(2)(D)(i) required by submission section 15, (EPA, 2006) (Aug. Quality Standards 3 Air may vary depending upon the and cir- facts Guidance). NAAQS.” specific cumstances related to the Thus, nifieant contribution.” Id. at n.7. Michigan Dep’t Treasury, 803, 489 U.S. good neighbor pro 809, EPA has said that the 1500, 109 S.Ct. 103 L.Ed.2d 891 “clearly require[s] (1989)). interpretation by vision through rulemaking, or recommenda Title I’s core two-step process is that the through guidance, give tions order to Federal Government goals sets end specific meaning particular NAAQS.” for a the States choose the means to attain also, Id.; 45, 320, e.g., Reg. 77 Fed. goals. those See Michigan, 213 F.3d at 2012) 45,323 (July (same); & n.7 687; Virginia, see also 108 F.3d at 1410. 43,196, 43,199 Reg. Fed. (July & n.7 theory EPA can define the —that 2012) (same); 22,533, 22,536 77 Fed. Reg. goals good end for the neighbor provision 2012) (same); (Apr. & n.7 Fed. and simultaneously issue federal plans 2011) (same). 40,248, 40,250 (July & n.5 implement upends that process and them— however, litigation, In this EPA insists places the Federal firmly Government in 110(c)(1) that the text of compels Section the driver’s seat at steps. both The FIP- approach. its FIP-first But EPA pursues first approach incompatible is with the ba- reading statutory of the text down the sic text and structure of the Clean Air Act. hole to a rabbit wonderland where EPA view, In our determining the level of target defines the the States’ chance after required reductions under Section comply target already with the has 110(a)(2)(D)(i)(I) is analogous to setting a passed. FCC v. Fox Television Sta Cf. NAAQS. And determining the level of Inc., tions, - U.S. -, 132 S.Ct. good reductions under neighbor provi- (2012) (“A

2317, 183 L.Ed.2d 234 funda triggers period sion a during which States mental principle legal system our is that may submit appropriate SIPs under Sec- regulate persons laws which or entities 110(a)(1) tion or SIP revisions under Sec- give must fair notice of conduct that is 110(k)(5). tion required.”); forbidden or (“regulated id. parties approach should know what is That comfortably fits within they may them so accordingly”); act text and structure. In both Christopher Corp., setting v. SmithKline Beecham NAAQS and defining situations — — -, 2156, 2168, U.S. good neighbor obligations S.Ct. 183 States’ —EPA (2012) (“It L.Ed.2d 153 thing is one to sets the numerical goal. end And in both cases, expect regulated parties set, to conform their once the standards are “deter- agency’s conduct to an interpretations mining particular mix of controls them; agency once the among announces individual sources to attain those quite require regulated another to parties standards” “a responsibili- remains agency’s ty.” divine the interpretations 57,356, 63 Fed. NOx ”). (Oct. 57,369 27,1998). advance.... take a We different view. Statu tory text “cannot be construed in a vacu It

um. is a fundamental canon of statuto Other contextual and structural factors ry construction that support the words of statute also our conclusion that Section 110(a)(2)(D)(i)(I) must be read in their context and with a preserves prin- the basic place States, view to their in the overall statutory ciple that not the Federal Govern- Services, ment, scheme.” Roberts Sea-Land are primary implementers after —Inc., U.S. -, 1350, 1357, 132 S.Ct. has set good States’ (2012) (quoting 182 L.Ed.2d 341 neighbor obligations. Davis v.

n held, im- that Section 126 previously in the has function particular 110’s Section legal constraints” on State give poses is to “extrinsic statutory scheme the national implement a state’s discre- autonomy “does not opportunity first affect I. Power, under Title § EPA sets Appalachian standards 110.” tion under Train, 421 7410(a)-(c); added). see also (emphasis at 1047 1470; Virginia, 108 95 S.Ct. U.S. sum, In the text and context 1410; Michigan, 213 F.3d at 686- statute, the Su- precedents and the neighbor requirement’s good The 87. Court, establish the preme Court this 110(a) provision in Section placement —-a first-implementer role under Sec- States’ regulation strongly calling for State-level — adopt reading tion 110. We decline to Congress intended States suggests that 110(a)(2)(D)(i)(I) blow a Section would obligations set forth Sec- implement principle.32 in that hole basic structural 110(a)(2)(D)(i)(I). contrast, By if tion interpretation were EPA’s FIP-first 110(a)(2)(D)(i)(I)would not prevail, Section 110(a).

fit well Section novelty approach of EPA’s under- EPA has past, scores its flaws. Moreover, separate I contains a Title good neighbor provision applied con explicitly Section provision, specific way we have outlined here. regulation EPA States-first templates direct pollution. interstate generate sources (which addressed The 1998 we NOx 7426(b)-(c); Ap § see also 42 See U.S.C. good Michigan) quantified each State’s Power, 1046. Sec palachian gave the neighbor obligation but then 126(b) permits petition a State to tion imple- 12 months to submit SIPs to neighboring that a source in a finding for a 63 Fed. ment the reductions. See pollution emits violation of Section 57,358, 57,450-51; 42 Reg. at U.S.C. 7426(b). 110(a)(2)(D)(i).31 § 42 See U.S.C. 7410(k)(5). Indeed, explicitly § as- 126(c) im gives EPA discretion to Section that the Rule did not intrude sured States sanctions, including “emission pose severe on their to choose the means schedules,” on a compliance limitations and goal. end' achieve the EPA-defined finding for which a has been made. source 57,369. Reg. at 1998 63 Fed. NOx 7426(c); § see also U.S.C. why explained, persuasively, then Congress explicitly § fact that 7509. The made sense not to deviate from Title I’s regu federal authorized EPA to use direct good of labor in the standard division sug pollution to address interstate lation neighbor context: direct Federal contemplate it did not gests determining the reduc- The task of 110(a)(2)(D)(i)(I). regulation in Section Cf. necessary tions to meet section Whitman, 467-68, 121 S.Ct. 531 U.S. 10(a)(2)(D) allocating the use of involves 903; Corp. Motors United General This States, 530, 541, the downwind basin. States’ 496 U.S. S.Ct. (1990). in the sense that the And as this area is commons 110 L.Ed.2d 480 Court 126(b)’s interpretation on "section 32. We conclude that 31. Section text refers to EPA's contrary 7426(b). to the text and 7410(a)(2)(D)(ii).” the FIPs issue 42 U.S.C. This (a step Chevron 1 viola- context of the statute Court has identified cross-reference (a tion), Chevron in the alternative is absurd (i), (ii), paragraph paragraph instead of violation), again step in the alternative Power, Appalachian scrivener's error. See (thus failing step 2 Chevron if is unreasonable 249 F.3d at 1040-44. 2). get step we contributing 328, 25,330 2006). State or States have a (Apr. That timeta- greater ble, in protecting interest their local States, assured the would allow than in protecting interests an area in a EPA approve “to timely SIPs imple- before they downwind State over which do not mentation FIP requirements occurs.” jurisdiction they have and for which 25,331 added). are Id. at (emphasis Thus, politically accountable. In both the 1998 Rule and the 2005 NOx general, it is reasonable to assume that CAIR, EPA was therefore careful not to EPA may be in a better position to infringe the States’ first-implementer role. appropriate determine the goal, or bud- past EPA’s own practice and statements get, States, contributing while illustrate anomaly of its new FIP-first leaving to the contributing [it] States’ approach. discretion to determine the mix con- trols to make the necessary reductions. D 57,370 added). Id. at (emphases separate tack, On a EPA does not con- cede that it denied the States rightful their In Michigan, this Court held that the chance to implement their good neighbor 1998 Rule did not transgress the Train- obligations. It contends States did have Virginia federalism bar. But the terms of an opportunity to submit SIPs. Michigan approval Court’s highlight view, once it issued the 2006 24-hour flagrantly how the new Transport Rule PM2.5 NAAQS, States had years three under crosses that line. We “EPA said: does 110(a)(1) Section to seek and obtain EPA not tell the states how to achieve SIP approval of SIPs addressing good their compliance. Rather, EPA looks to section neighbor obligations. 110(a)(2)(D) merely provides the levels to be achieved compli- state-determined reiterate, But to problem is that the (em- ance mechanisms.” 213 F.3d at 687 three-year period expired EPA is- before added). phasis emphasized We that States sued the Transport Rule and defined the had a “real choice” how to implement the good neighbor obligations of upwind required reductions. Id. at 688. States. EPA has an answer for thát —one we find extraordinarily unpersuasive. In Rule, Like the 1998 the 2005 Clean NOx view, its each State should have up come Air gave Interstate Rule States the first (i) its own definition of “amounts crack at implementing the reductions re- which will ... contribute significantly” and quired by EPA. 25,162, See 70 Reg. Fed. (ii) its own modeling and methodology for 2005) 25,263 (May 12, (requiring SIPs applying that definition. See EPA Br. 48 months). within 18 When EPA issued (“EPA has never stated that its methodol- CAIR FIPs in April year about a ogy only way”) omitted). is the (emphasis CAIR, after it promulgated it clarified that it intended the FIPs to serve a effect, as “Federal In EPA claims the statute re- backstop” to the ongoing SIP process, quires each State to take its own stab in did not intend to “take steps other to the dark at defining “amounts which will implement FIP requirements that could ... contribute significantly” to a downwind impact a ability State’s to regulate their State’s nonattainment. The State would sources in a different manner” until “a then have apply to that homemade defini- year after the CAIR SIP submission dead- tion using its own homemade methodolo- FIPs, line.” 25,- See CAIR Reg. 71 Fed. gy.33 points guidance

33. EPA to documents it is- sued in 2006 and 2009. Those documents stab, control, course, have little its individual States often a State takes Of once political incentive to self-im- if economic disapprove especially EPA could it — (and regulatory controls attendant pose obligation be less to defined its own State costs) solely States to within their address Experi- EPA deemed to be. than what States.”). quality other problems Petitioners that out: appears to bear ence recognized having EPA has that And itself Transport Rule State every that out point independently guess each at its own State neighbor SIP good that submitted a neighbor plausible a good obligations is not disap- NAAQS was the 2006 24-hour PM2.5 pollution: “It solution to interstate is most 29-31; Br. See & Local proved. State necessary efficient —indeed Fed- —for Local Br. 5-7. Reply & State to government eral establish overall surprise. not come as a That should for the States.” emissions levels various Rule, acknowledged EPA the 1998 NOx 57,370 Reg. 63 Fed. 1998 NOx were pre-Rule stabs the dark added). (emphasis determining an to fail. “Without bound encourages suspend EPA Yet now us to reductions,” acceptable level NOx disbelief and conclude that under the stat- warned, “the State would not have ute, only a chance avoid FIPs State’s is an sub- acceptable as to what is guidance stab in to make successful the dark —a 57,370. And 63 Fed. mission.” one feat significant devel- would incur costs States managed accomplish. clearly does those SIP submissions. oping approach not believe the stab-in-the-dark Court, repeatedly reminds this As really States FIPs— permit would to avoid pollution problem interstate is collective past its own statements show that. But requires comprehensive solution. to issue FIPs these rests (“Absent rickety statutory logic. federal accepting Br. 5 effective on our adequate supported by analy- that the further undermine EPA's contention be technical opportunity support in the was a stab dark realistic sis. Information to the state’s deter- being pulled avoid into the respect significant mination with contribu- include, might Rule FIPs. but tion nonattainment to, concerning not limited information emis- document, published 2006 after CAIR The state, meteorological in sions the conditions Carolina, apply to but before North did not ..., ..., monitored ambient concentrations EPA, States. 2006 at 4. CAIR See Guidance It the distance to the nearest area that is not anticipates, non-CAIR States that told "EPA NAAQS state, attaining and another developed upon existing based information Rule, quality modeling.”); 1998 63 CAIR, connection with the that emissions cf. NOx 57,370 (if identify Fed. EPA does not by States not from sources in covered reductions, "acceptable of level significantly not CAIR do contribute to nonat- NOx guidance not have State would to with tainment interfere maintenance submission”). NAAQS acceptable is an what 8-hour other ozone or PM2B States, The 2009 document ordered the State.” Id. at 5. equipped vague guidance, to submit with guidance The 2009 concerned document 110(a)(2)(D)(i)(I) SIPs to Section NAAQS, address the 2006 24-hour which was PM2B breath, 24-hour But in the same it seven-page covered The docu- CAIR. PM2B. warned them that EPA itself intended to vague paragraphs ment included three “complete pollu- interstate a rule address guidance "significant under contribution” 110(a)(2)(D). EPA, transport tion in the eastern half of conti- Section Guidance on Required nental United States.” 2009 Guidance SIP Elements Under Sections 110(a)(Z) (2) say happen EPA what if at 3. did not would and for the 2006 24-Hour Fine Quality approach did not Particle Air State's coincide (PM2B)National Ambient 25, (EPA, (NAAQS) 2009) (Sept. approach developing was for its own Standards 3 EPA rule, Guidance) ("The experience 2009 state's but tells the tale. conclusion must

37 Here, duty decline the invitation. Our is have no We we doubt that the “interpret symmetrical agency incorrectly. the statute as a chose The Transport fit, regulatory if Rule and coherent scheme stands on an unsound foundation— including all possible, parts into harmonious EPA’s flawed construction of the FDA v. & term “amounts whole.” Brown Williamson which ... will 120, 133, significantly 120 contribute Corp., Tobacco 529 U.S. S.Ct. to nonattainment.” (citations (2000) 1291, 146 7410(a)(2)(D)®. 42 L.Ed.2d That defi omitted). ciency quotation internal marks is too to permit fundamental tous “pick and approach portions” FIP-first fails that test. choose of the rule to preserve. North Carolina v. quantifies good States’ When (D.C.Cir.2008). F.3d And as with obligations, give it must neighbor the Clean Air Interstate the Trans opportunity reasonáble first port Rule’s “fundamental flaws foreclose That implement obligations. ap- those EPA from promulgating the same stan 110(a)(2)(D)(i)(I) reads proach Section (internal dards on Id. quotation remand.” harmony with the rest of Section 110. It omitted). marks EPA’s chosen manner Title preserves I’s Federal-State division implementing the issuing FIPs Rule— of labor—a division reinforced repeatedly without giving op the States a post-Rule Supreme and this Court Court. portunity to submit SIPs —also rests on a And it accords with the commonsense no- misreading of the statute. Congress design good tion that did not neighbor provision up to set the States to We therefore vacate the Transport Rule fail.34 rulemaking FIPs, action and and remand

to EPA. IV The remaining question is the status Carolina, The decision whether to vacate a CAIR. In North this Court ini- “depends tially flawed rule on the seriousness of held that CAIR’s “fundamental (and the order’s deficiencies thus the ex flaws” required vacatur. F.3d at 929. agency tent doubt whether the On rehearing, chose the Court reconsidered its correctly) consequences and the disruptive initial decision and modified its order interim change of an itself be remand CAIR without vacatur. North NRC, changed.” Allied-Signal, Inc. v. Carolina v. (D.C.Cir.1993) (inter (D.C.Cir.2008). 150-51 Court noted that un- omitted); nal quotation precedents, marks der our also appropriate County Mgmt. Davis Solid Waste remand without vacatur “where vacatur 1454, 1459(D.C.Cir.1997). would at least temporarily defeat the en- 34. The dissent the years contends that States' chal- FIP within two after a State to fails lenge on this issue too late. We comes dis- "required make a a submission” or submits (i) agree. prior The dissent conflates deficient SIP. But a State cannot be "re- (ii) disapproval of certain States’ SIPs and quired” implement good neighbor to its obli- quantify good neighbor EPA's decision to the gation in a SIP "submission” —nor be deemed obligation simultaneously and to issue FIPs to have a deficient submitted SIP for failure rather than to issue a SIP call for SIP revi- implement neighbor to good obligation— the (or SIPs). sions to allow new Petitioners are target by until it knows the set EPA. In this challenging only point. the And latter case, target EPA set the relevant in the Trans- proceed to announced its final decision that port challenge Rule. Petitioners' to the Trans- way Transport in the Rule itself. Put another port entirely timely. Rule's FIPs is way, says the statute that must issue a The an unset- none did. result is pause; the of environmental protection

hanced this precedent of tling EPA rule at issue.” consistent by the covered values brackets, marks, enforcing jurisdictional lim- (internal strictly court quotation Id. omitted). its, coop- “con- redesign Congress’s was a of vision of Court ellipsis and the relative and that, notwithstanding between the States erative federalism vinced to remain CAIR, allowing CAIR implementing of in government flaws the federal a rule replaced by until it is in effect the own notions the CAA based on court’s opinion would least our consistent with absurdity logic unsupport- that are and the environmental temporarily preserve record, and on trampling a factual ed by CAIR.” Id. covered values on which the Envi- precedent this court’s (“EPA”) Agency was ronmental Protection granting our Order In accordance Trans- rely developing the entitled Rule, stay the motions Rule rather than be blindsided port has to administer CAIR. continued in this arguments raised for first time (D.C.Cir. 11-1302, Order, 2at No. court. 30, 2011); http://www.epa. also Dec. Vacating CAIR now would have gov/cair. availability of Congress has limited the moved consequences that the same challenges to final rules judicial review hand— stay Court its North Carolina ways EPA in promulgated by the two now, more might indeed be severe and here. Under CAA section are relevant accumulated

light of the reliance interests 307(b)(1), 7607(b)(1), § petitions 42 U.S.C. years. intervening four We over judicial must be filed within review conclude, therefore as did the Court rule, sixty days of of a final promulgation Carolina, appropriate North 307(d)(7)(B), 42 under section and CAA is for EPA to continue to adminis- course 7607(d)(7)(B), objection “[o]nly an development its pending ter CAIR raised procedure to a rule or which was replacement.35 valid during peri- specificity with reasonable ... raised public od for comment be Transport Rule and We vacate the has, during judicial review.” The court pro- Transport Rule FIPs and remand this today, strictly require- until enforced these ad- ceeding EPA. must continue ments, two rea- important which exist for promul- ministering pending the CAIR so rule- repose to enforce that the sons: replacement. of a gation valid making process crippled by surprise is not So ordered. rightfully challenges to matters were settled, presumed guarantee ROGERS, Judge, dissenting: Circuit agency’s possible consideration and expert flaws rules correction its the court To vacate the before the matter reaches court. Instead disregards Congress placed limits jurisdictional provi- court casts both aside jurisdiction, text Air plain of the Clean sions, these fundamental (“CAA”), upending two prec- Act this court’s settled doing, thus principles. In so the court statutory pro- interpreting edent the same court’s uniformity fails to “maintain of the today. Any one of these visions issue excep- given “question[s] on these should have the court decisions” obstacles expedi- expect proceed that EPA 35. The Carolina did "not intend Iikewise will North Court grant stay to of the effective- tiously an indefinite on remand. at 1178. We ness" of its decision. R.App. 35(a)(1) 110(a) importance.” tional P. rewrites 110(c), sections and alter- Fed. ing triggering the mechanism for States’ &(2). obligations to submit “good neighbor” underlying As one basis its vacatur of obligation SIPs and EPA’s to promulgate Rule, Transport permits the the court FIPs, based on its own speculative conclu- prior attack on final collateral rules process sion the Congress adopted is EPA disapproved implementa- which state “impossible” for States to (“SIP”) follow. To plan respect tion submissions with conclusion, reach its the court today holds “good neighbor provision,” to the CAA that the requires CAA what 110(a)(2)(D)(i)(P, it previously § held 7410(a)(2)(D)(i)(I), the CAA ambiguously permits or found States failed to do. to submit such a at all. In SIP those Final Rules, EPA unambiguously SIP stated its As another ground to vacate the Trans- interpretation that an indepen- States had Rule, port that, the court concludes under 110(a) obligation dent under section to sub- EPA’s two-step approach to defining “sig- “good neighbor” mit regardless SIPs nificant contribution” under “good quantified whether first each State’s neighbor” requirement section obligations. emission reduction Under 110(a)(2)(D)(i)(I),a “may be required 307(b)(1), sixty days section States had to to reduce its emissions an amount judicial seek review of those Final SIP greater than ‘significant contribution’ challenge Rules to EPA’s interpretation of that brought it into the program in the 110(a). section EPA’s authority pro- place.” first Op. at 25. objection No was mulgate the federal implementation plans during made the Transport Rule adminis- (“FIPs”), 110(c), pursuant to section in the proceedings trative approach, EPA’s let Transport triggered by Rule was EPA hav- alone its authority, to use differ- Rules,

ing published those Final SIP and ent, unrelated significance measures of 307(b)(1) under section not col- inclusion and budget-setting. Acknowl- laterally propriety attack the Fi- those this, edging the court beyond reaches nal SIP Rules now. This is not a mere Transport record, Rule administrative de- technicality developed promul- and —EPA 307(d)(7)(B)’s spite section command, clear gated Rule with the knowl- jurisdiction. to find But the three reasons edge that all but three States did not seek up. By offers do not add suggesting judicial review of interpretation of sec- that EPA acted inconsistently with 110(a) North tion and in light of this court’s Carolina in adopting a two-step approach, opinion in North Carolina v. different, with unrelated (D.C.Cir.2008). “sig- measures of F.3d 896 The court there- nificant contribution” for inclusion jurisdiction fore lacks under section 307(b)(1) budget-setting, ignores the court that in consider States’ belated chal- North Carolina lenge expressly this court interpretation EPA’s de- section 110(a) clined to approach. disturb that same part as of its review of the Trans- Rule; F.3d at port relying 916-17. In petitions challenging on a comment expressing policy Final preference SIP Rules filed three States are made dur- ing petitions proceedings consolidated chal- administrative of the (to lenging predecessor the Transport they in- of the separate volve provisions petitioners which failed CAA and to alert the court different final rules. The court until glosses argument), rebuttal oral the court plain over the text and structure of ignores section that the comment does not chal- reality, 110 to avoid that process lenge statutory authority pursue than the amount by more that no duce emissions the fact two-step approach, its in the Trans- triggered their inclusion that in North Carolina the court petitioned one comment, place in first same Rule the port that on review based judicial for —the juris- which the court lacks argument over in North Carolina why the court which is to chal- undisturbed, petitioners’ failure see id. diction due approach that left for its statutory authority lenge rule- EPA’s prior that the ignores court also The Rule ad- during Transport the approach into incorporated was making docket merits, the proceedings. On pro- ministrative Rule administrative Transport the conclusion “proportionality” facts the court’s “ignored” these Together, ceedings. conclusion opposite the court’s reason to contradicts that EPA had no demonstrate that EPA’s measure- Trans- in North Carolina it in the any party before suspect “significant contribution” sub- ment of State’s proceedings Rule administrative port directly with its have to correlate objection in the old did not the stated scribed up- to other quality impact “relative comment, to locate and consider air nor even (citing rejection states.” 531 F.3d Finally, EPA’s wind comment. EPA, ap- Michigan v. F.3d grounds of alternative technical on (D.C.Cir.2000)). Similarly, court’s measuring “significant contri- proaches holding that EPA failed to consider solely quality, on air not cost based bution” in-state emissions is likewise during Transport Rule effect of quality, argument. says nothing on the sub-threshold proceedings premised administrative Further, the court’s “in-State emissions” EPA would have refused to whether about con- “over-control” conclusions are objection new this and its petitioners’ entertain Rule adminis- statutorily required to tradicted court that EPA was by making trative record. modify two-step approach step-one threshold of a floor the inclusion approach of under the cost

for reductions I. approaches The alternative step-two. 307(b)(1) CAA, 42 Section rejected are not even EPA considered and 7607(b)(1), petition judicial requires endorse, petitioners now approaches of EPA final actions to be filed review event, and, a failure cannot excuse in the Fed- sixty days publication within objection “reasonable to state their Register. filing period “The eral during ad- specificity” nature’; jurisdictional Air Act Clean ‘is proceedings. ministrative comply failed to petitioners if the have it, to address their powerless with we are remaining The court’s reasons for vaca- Energy & Re- claim.” Med. Waste Inst. First, the court concludes tur merit. lack 420, 427 covery v. Council “good neighbor” provi- violated (D.C.Cir.2011) (quoting Equip. Motor & “proportionality” requirement, but sion’s Nichols, Ass’n statutory au- petitioners presented no such Mfrs. (D.C.Cir.1998)). briefs, thority argument in their instead Supreme explained Court has challenging grouping of States for jurisdic- “judicial provisions are arbitrary and review purposes of reduction as S02 had, construed tional in nature and must be capricious. they Even if the court fidelity their terms. This with strict jurisdiction argument lacks because the statutory provi- true of EPA’s two- is all the more premised speculation review, for specifying timing approach measuring “significant sions step are, as we have often to re- those time limits might require contribution”

41 stated, mandatory jurisdictional, NAAQS.1 Rule, Transport 76 Fed. 48,208 2011). subject equitable tolling.” 8, and are not Reg. (Aug. In the Trans- Rule, port EPA determined that the same Slinger Drainage, Inc. v. level of emission obligations reduction (D.C.Cir.2001) 681, (quoting 682 Stone v. would apply for each of these three Serv., Immigration & Naturalization 514 NAAQS. 48,264. See id. at year Over a 405, 1537, 386, 115 S.Ct. 131 L.Ed.2d U.S. prior promulgating Rule, (1995) (internal marks, quotation alter EPA promulgated Final pub- SIP Rules omitted)). ations, According and citation lishing findings that twenty-nine States in ly, Medical Waste this court dismissed a and territories had failed to submit SIPs challenge jurisdic to a final rule for lack of with the “good neighbor” provi- petitioners judi tion where failed to seek sions for the 2006 24-hour NAAQS.2 cial review when usefdits PM2.5 “first See Failure to Submit (em Neighbor Good SIP at 427 approach, F.3d 32,673 (June Finding, 9, 75 Fed. added). Reg. objection “An phasis is consid 2010); Tennessee Failure to Submit Good only ered a collateral attack if ‘a reason Neighbor Finding, 43,- SIP Reg. Fed. [petitioner] perceived able ... would have 2011). (July In these Final SIP very substantial risk the [rule] Rules, EPA stated: [agency] says meant what now ” Servs., FERC, meant.’ S. Co. Inc. v. finding This 2-year establishes a dead- (D.C.Cir.2005) (internal quota FIP, line for promulgation by EPA of a marks, citation, tions and alterations omit 110(c)(1), accordance with section ted). any state that either does not submit or approve can not a SIP as meeting responding to the attainment and maintenance re- failures to adequate “good States’ submit quirements “good neighbor” pro- [the SIPs, neighbor” is a FIP that addresses the 2006 vision] 24-hour transport the interstate of emissions in PM25 NAAQS.... This action ... does not twenty-seven the eastern United pertain to ... a pursuant SIP Call States for three national air quali- ambient 110(k)(5). section ty (“NAAQS”): standards the 1997 8-hour NAAQS, 32,674; ozone the 1997 annual Id. at see also 76 Fed. Reg. at PM2.5 NAAQS, 43,180-81 (Tennessee). and the 2006 24-hour The Final SIP PM25 110(a)(1) provides Alaska, 1. Section of the CAA 2. The States and territories were: Colorado, Hawaii, Idaho, Illinois, Iowa, years States must submit SIPs within three Loui- siana, less, Minnesota, (or EPA) Maryland, Michigan, Mon- promulgation if set of a tana, Nebraska, Dakota, Oklahoma, NAAQS. North 110(a)(2)(D), turn, Section re- Dakota, Utah, Oregon, Pennsylvania, South quires "adequate States to submit SIPs with Virginia, Washington, Virginia, West Wiscon- provisions” sin, Columbia, Wyoming, District (i) prohibiting, provi- consistent with the Samoa, American the Commonwealth of the subchapter, any sions of this source or oth- Islands, Guam, Northern Mariana Puerto type activity er of emissions within the Rico, Virgin and the U.S. Islands. See Fail- emitting any pollutant State from Neighbor ure Findings, to Submit Good SIP amounts which will— 32,674. (On 20, 2011, Reg. July 75 Fed. (I) significantly contribute to nonattain- published finding an additional that Ten- in, ment or interfere with maintenance "good neigh- nessee had failed to submit a by, any respect NAAQS. other State with bor” SIP for the 2006 24-hour PM2-5 primary secondary such national am- Neigh- See Tennessee Failure to Submit Good 43,180 quality bient air ding, standard. (July bor SIP Fin 76 Fed. 7410(a)(2)(D)(i)(I). 2011). 42 U.S.C. petitioner Tennessee is not a here. findings proving “good neighbor” the SIP submis- state that the Rules further scope were of nationwide “peti- failure to submit sions alerted the affected States that effect, to sec- pursuant and therefore and judicial tions for review must be filed in 7607(b)(1), 307(b)(1), § tion U.S.C. Appeals the United States Court of for the had to be filed judicial for review petition appropriate by September circuit sixty days of Circuit within with the D.C. 2011,” see, 43,136 e.g., Reg. 76 Fed. at in the Fed- findings publication (Alabama), sixty day pre- deadline Failure to Submit Good Register. eral See 307(b)(1), by scribed CAA section at Finding, Reg. 75 Fed. Neighbor SIP 7607(b)(1). § Only Georgia, U.S.C. Kan- 32,675-76; Neigh- Failure to Submit Good sas, judicial petitions and Ohio filed for (Tennessee), Reg. 76 Fed. Finding bor SIP disapproval review of EPA’s action and 43,182-83. petition filed a for at No State petitions their are not consolidated with judicial'review. review, petitions they now under 2006 24-hour Other States submitted challenge different final rules.5 neighbor” provi- “good SIPs PM2.6 sions, disapproved portion but A. of ten States covered SIP submissions has, warned, Now that EPA as it pro- Alabama, Georgia, by Transport Rule: mulgated FIPs States covered Missouri, Indiana, Kansas, Kentucky, New petitioners State contend Carolina, York, Jersey, New North and that EPA lacked do so Rules, reject- Ohio.3In the Final SIP NAAQS 2006 24-hour because “a objections obligation no ed that States had PM2.5 deficiency only FIP can cure a in a re- quantified until EPA had to submit SIPs submission, quired and States were not “significant amount of contribu- States’ required provisions to include SIP elimi- permit that EPA tion” and was ‘significant yet nate contributions’ not de- prior impos- to revise their SIPs States legislative a FIP to 42 fined rule.” ing pursuant 7410(c)(1).4 Final disap- The SIP Rules Petrs’ Br. at 31. If a State wished to Promulgation Qual- Approval Jersey’s proposed disapproval, 3. See and of Air New see 76 Plan; Alabama; 43,154. ity Implementation Disap- Reg. Fed. at None of three these proval petitioner of Interstate Submission for is a here. Standards, the 2006 24-Hour 76 Fed. PM2.5 43,128 20, 2011); Reg. (July Reg. 76 Fed. EPA, (6th Cir.); 5.See Ohio v. No. 11-3988 43,159 43,175 (Georgia); Reg. 76 Fed. EPA, (D.C. Energy, Westar Inc. v. No. 11-1333 43,143 (Indiana Ohio); (Kan- Reg. Cir.); EPA, & 76 Fed. (D.C. Cir.); Kansas No. 12-1019 sas); 43,136 Reg. (Kentucky); 76 Fed. (D.C. Cir.). Georgia v. No. 11-1427 43,156 (Missouri); Reg. Reg. Fed. 76 Fed. (Nos. court consolidated the two Kansas cases 43,153 (New York); Jersey & 12-1019) New 76 Fed. January 11-1333 and 2012. 43,167 (North Carolina). Reg. (Jan. 2012). See Order Case No. 12-1019 The court also severed from Kansas’s Trans 43,131-33 (Alabama); 11-1329, Reg. port petition, 4. Fed. at Case No. its chal 43,162-64 Reg. (Georgia); lenge disapproval "good neigh 76 Fed. at 76 Fed. to EPA’s of its 43,176-79 (Indiana Ohio); Reg. January at & 76 Fed. bor” SIP submission. See id. On 43,145-47 (Kansas); 10, 2012, Reg. Reg. granted par at 76 Fed. at the Sixth Circuit 46,139-41 43,- (Kentucky); Reg. joint abeyance 76 Fed. at ties’ motion to hold the case in (North Carolina). pending 170-72 No comments were the outcome of the instant case. On 18, 2012, proposed January disapproval submitted to the the D.C. Circuit Mis- issued or submission, “good neighbor” holding Georgia souri’s SIP ders the Kansas and cases in 43,156, Reg. only abeyance pending appeal 76 Fed. one unrelat- the outcome of the present ed comment was submitted to New York in the case. 110(a) (Tennessee), object Finding that under section it had no SIP 76 Fed. added). “good neighbor” 43,183 obligation pro- to include (emphases having Not until EPA quantified visions in its SIP judicial sought review of the Final SIP “significant contribution” in emission re- they Rules determining failed to sub- required then the it budgets, duction CAA SIPs, mit required “good neighbor” States it do so at the time EPA found had not may object they not now that were not “good neighbor” obligation. met its SIP required “good neighbor” to submit SIPs response offer no petitioners State their EPA quantified until first their reduction reply position brief to EPA’s that this obligations. sixty day “The pro- window argument is a collateral attack barred closed, vided statute long has since 307(b)(1). Resp.’s Br. at section See 46- we not reopen it and entertain a 47. Waste, ... challenge belated now.” Med. Therefore, 645 F.3d at 427. the court

Ignoring plain the terms of section 307(b)(1) jurisdiction lacks the long-settled as well as this court’s over collateral at- by petitioners Louisiana, the court reaches the merits of tacks precedent, Michigan, despite jurisdiction. Nebraska, Oklahoma, lack of this issue its Virginia, and Wis- finding consin, In the Final SIP Rules States had part Transport as Rule peti- SIPs, “good neighbor” failed to submit tions, on interpretation EPA’s of section put unambiguously 110(a) covered States stated the Final SIP Rules find- interpreted notice” that “sufficient ing they failed to “good submit placing independent obligation an CAA neighbor” SIPs. adequate “good on each to include State notice, Similarly on neither Alabama nor neighbor” provisions regardless in its SIP petitioned judicial Indiana review of prospectively quanti EPA had whether disapproval of their SIP submis- “significant fied its amount of contribu sions. In the Final SIP Rule disapproving Servs., By tion.” S. Co. 416 F.3d at 44. submission, Alabama’s SIP EPA quotes Rules, very nature of Final SIP stating: one commenter as informing they EPA was that had States has stated the amount of re- obligation “good not met their to submit they satisfy duction believe is needed to SIPs, neighbor” obligation an States now transport requirements.... [T]he Furthermore, they contend never had. (because finish line isn’t even knowable findings EPA warned that its of failure to EPA refuses to inform states how two-year FIP triggered submit clock of enough much reduction satisfy is 110(c)(1), section and not the SIP Call requirements). say EPA seems to 110(k)(5).

provision of section Failure it has to be the final Transport whatever Neighbor Finding, to Submit Good SIP says, though even there no final 32,673-74; Fed. at Reg. Failure to Submit Rule. (Tennessee), Neighbor Good Finding SIP 43,131. Reg. responded 76 Fed. at 43,180-81. 76 Fed. at In Reg. alerting obligation “the state stems from the deadline, judicial to the review opportunity CAA itself.... States had an sixty days reiterated that States had to file analyses regarding to conduct their own “any petitions for ... [ ] review related to transport.” (emphasis interstate Id. add- findings of failure to submit SIPs related ed). obligat- EPA also warned that it was requirements ‘good neighbor’ to the [the years FIP provision].” promulgate Failure ed within two Submit Good SIP, disapproving Alabama’s id. at Neighbor Finding, SIP 75 Fed. 32,676; 43,132, rejected Neighbor Failure to Good comments that Submit process laterally revision section attack those Final

SIP Call SIP Rules is 110(k)(5) because, view, apply, Waste, its should barred. See Med. 645 F.3d at 427. applies only where there is provision Given EPA’s clear Fi- statements its SIP, 43,- see id. at existing, approved disapproving nal SIP Rules States’ SIP summary of Indiana’s com- 133. finding they submissions and failed to sub- proposed disapproval ments on the of its SIPs, required “good neighbor” mit there submission, EPA noted that Indiana SIP is no basis to conclude that petition- provide that EPA position took the “should might perceived ers not have a substantial opportunity to ] revise its [the State] [ that EPA risk meant what it said. See S. completed” SIP once the Rule is Servs., Co. 45. The instant “FIP contrary spirit and that a is to the [ ] case, involving petitions consolidated chal- by unnecessarily limiting of the CAA Rule, lenging the Transport is therefore 43,177. authority.” [S]tate Fed. not the appropriate forum to decide wheth- responded, relying EPA on the CAA’s er, 110(a), under section States have an text, plain required by that Indiana was independent obligation “good to submit 110(a) to submit section SIPs ade- neighbor” SIPs when EPA has not first quate “good neighbor” provisions, and that quantified “significant amounts of contri- submission, upon disapproving its promulgated bution.” EPA Final SIP legal obligation had a under the CAA to interpretation Rules which made its promulgate a FIP. See id. Alabama and clear; judicial challenge to those rules is comments, along Indiana’s with EPA’s re- proper forum to question.6 decide the sponses, demonstrate that the two States Indeed, the court itself forecasts this were on clear of interpreta- notice many conclusion: “EPA’s disapprov- SIP imposing tion of the CAA as an indepen- findings als and obligation failure to submit share dent on the States to submit SIPs, one “good problematic feature: EPA made all even the absence neighbor” EPA-quantified findings amounts of those it told “significant the States before what contribution.” Yet neither Alabama nor reductions their emission SIPs were sought judicial supposed Indiana review of EPA’s to achieve under the “good (em- Final disapproving neighbor” provision.” SIP Rules their Op. SIP at 31-32 submissions, and attempt phasis their now to col- in original). “problemat- However Ohio, here, Georgia, 6. The same important is true for This is all the more where Kansas, petitioned judicial which review yet opportunity has not been afforded the disapproval "good neighbor” of EPA's of their improper to assert an venue defense in the SIP submissions. The court's th[e] "review in pending two cases before the D.C. Circuit. case is limited [instant] to” the EPA, Agency See Tex. Mun. Power 89 F.3d jurisdiction and the court thus "lack[s] (D.C.Cir.1996); 42 U.S.C. challenges disap- over” to those States' SIP 7607(b)(1) (petitions § for review of SIP dis- provals premised they on whether have an approvals may brought only be in the court of independent obligation “good to submit circuit”) appeals appropriate (empha- "for the neighbor” Responsible Reg- SIPs. Coalition for added). Kansas, Georgia, sis If and Ohio ulation, EPA, Inc. v. 684 F.3d wish to avoid enforcement of the (D.C.Cir.2012). petitions by filed those they Rule FIPs because contend EPA’s SIP challenging disapprovals their SIP are error, disapprovals proper were in course petitions not consolidated with the before the stay disapprovals is to seek in their EPA's n.5, today, supra court petition and Ohio's cases; pending granted, stay if would elimi- pending is in the Sixth Circuit. The court upon impose nate the basis which [petitioners' must therefore "decline [State] FIPs on those States. invitation to rule on the U.S.C. merits of cases which 7410(c)(1)(B). properly panels.” are § before different Id. deficiency, this “feature” of those unless the State corrects the ic” the court views Rules, approves this and the Administrator “problem” plan Final this is SIP revision, plan three-judge panel powerless is to resolve the Administra- before jurisdiction promulgates implemen- under CAA tor such Federal it lacks because 307(b)(1) peti- plan. entertain tation section to EPA’s challenge” “back-door tioners’ 7410(c)(1) added). (emphases 110(a) of section stated interpretation obligation EPA’s FIP trig- therefore not Final Rules. Natural Res. those SIP Def. more, gered, without a State’s mere 1146, 1150 Council v. required by failure to submit a SIP section (internal (D.C.Cir.1987) quotation marks 110(a), but an explicit instead omitted). Final Rule finding the State either failed submit a SIP or an responds that The court dissent adequate A challenge SIP. to EPA’s inter- at- petitioners’ “conflates” State collateral 110(a) pretation of section must therefore announcing Final tack on the SIP Rules brought petition judicial be as a review 110(a) obligations with their Section SIP of those Final announcing SIP Rules petitioners’ supposedly argu- distinct State 110(a) to States failed meet their section promulgate ment that EPA cannot a FIP “good neighbor” obligations. SIP See simultaneously quantification with its of a Waste, Med. 645 F.3d at 427. the Under obligations. emission reduction State’s CAA, plain terms of the obligation EPA’s n.l, response at 12 37 n.34. This Op. (and authority) to promulgate a FIP is statute, misleadingly quotes the and the Rules, triggered those Final SIP proves point. the The process, dissent’s process by the which EPA promul- must that EPA says court states “the statute gate 110(c), a FIP governed by is section years must issue a FIP within two after a not, 110(a). posits, by as the court section a ‘required State fails to make submission’ therefore, dissent, The court and not the a But a or submits deficient SIP. State does conflating by turning the what should ‘required’ implement “good cannot be to challenge be a to FIP authority EPA’s neighbor” obligation in a SIP ‘submission’ 110(c) under section into a collateral attack target ... until it EPA.” knows set 110(a) interpretation EPA’s of section Id. at 37 n.34.7That is not what the statute prior set forth in the Final SIP Rules. 110(c) says. provides Section that: 110(c)(1) plain The text of section obli- (1) The Administrator promulgate shall gates EPA promulgate any to a FIP “at implementation a Federal plan any years time” within disapproving two of a years within 2 after time the Adminis- finding SIP submission or a failed State to trator— 7410(c)(1). submit a SIP. (A) that a State has failed to make finds 110(c) Moreover, nothing in section re- a ... required submission or quires to reveal to States the content (B) (i.e., a disapproves implementation State the emission budgets) reduction it plan part; submission in whole or in prior pro- intends to include its FIP circularity 307(b)(1), budgets. 7. Notice the in the court’s state- duction Under section says petitioners' ment. The court State "sim- exactly argument that is that States were ultaneity” argument "[p]ut can be another petitions judicial to make in re- n.34, way,” Op. argument at 37 as an setting view of the Final SIP Rules forth 110(a) require- States had no section SIP 110(a) interpretation. EPA’s section quantified ments until re- their emission Although FIP. the CAA allows or for the deference posing permissible owed to agency interpretations SIPs to of they “correct[] submit statutes ad- deficiency,” they Congress must do so “before” minister where left a gap has FIP, may agency of which to fill or the promulgation ambigu- statute is any years. time” within two Id. ous. occur “at cases,” court thus rewrites section “As in all construction

110(c)(l)’s unambiguous grant authority the court “begin language must with the EPA) (and obligation ultimate the statute.” Sigmon Barnhart v. Coal Co., Inc., 438, 450, 941, FIP at time promulgate within 534 U.S. 122 S.Ct. (2002). year to read: “unless the two window but L.Ed.2d 908 “[C]ourts must deficiency presume corrects the that a legislature says not until in a statute approves and the Administrator what it [SIP] means and means in a statute what revision, says before Adminis- there. When the of a [SIP] words statute then, promulgates unambiguous, trator such are [FIP].” “[A]s this first canon is emphasized has time and Supreme judicial inquiry Court also the last: complete.” again, 461-62, courts have no to rewrite Id. at 941 (quoting S.Ct. Con- FCC, Germain, plain Kay text of a statute.” v. necticut Nat. Bank 503 U.S. (D.C.Cir.2008). 249, 253-54, Be- 112 S.Ct. 117 L.Ed.2d (1992) (internal says,” cause the CAA “means what it EPA 391 quotation marks and omitted)). required, publishing disapprovals Thus, was after citation under Chevron SIPs, Council, failure to findings submit Inc. U.S.A. v. Natural Res. Def. promulgate years, 837, 842-44, FIPs within two and it 467 U.S. 104 S.Ct. required (1984), was not to wait for States first to L.Ed.2d 694 in step first statu- Express tory interpretation submit SIPs. Landstar Am. v. requires a determina- Comm’n, Fed. Maritime 498 tion of Congress directly “whether has (D.C.Cir.2009). attempt The court’s spoken precise question to the at issue. If argument clear, ferret out an about “simultanei- the intent of Congress is that is the ty” matter; as a challenge properly court, distinct end of the for the as well as brought against Rule based the agency, give must effect to the unam- 110(a) on interpretation EPA’s of section is biguously expressed intent Congress,” of If, thus a man straw for its endorsement of id. applying after traditional tools of petitioner’s construction, State collateral attack the court deter- 110(a) interpretation EPA’s of section in mines “the statute ambiguous is silent or the Final SIP rewriting respect issue,” then, Rules. Its of sec- with specific 110(c) two, tion all step is made the more remarka- under the court will defer to an recognition apply ble its that “we agency’s statutory must interpretation if it “is and enforce the statute as it’s now writ- based on a permissible construction of the ten.” Op. at 12. statute.” Id. at 104 S.Ct. 2778. questions regarding States’ obli-

B. gations to “good neighbor” submit SIPs (1) if jurisdiction Even the court had straightforward: over are Do States have an petitioners’ challenge State to their independent obligation inde- to submit SIPs pendent obligation “good neigh- to submit adequate “good neighbor” provisions; 110(a), (2) so, (3) bor” SIPs under CAA section its if triggers obligation; what statutory analysis proceeds regard obligation, with no if there is an what is the dead- (4) plain submission; for the text and structure of the CAA line for the SIP and must quantify years each States’ within three of prospectively promulgation “significant NAAQS, contribution” to SIPs, amount of of a States shall submit plain nonattainment? The text downwind and those SIPs shall include adequate equally straightfor- provides of the statute “good neighbor” provisions. This is the (1) (2) Yes; promulgation ward answers: unambiguous obligation chronology and es- (3) years NAAQS; a within three by Congress. tablished EPA has the first (unless NAAQS promulgation of a duty NAAQS, to set the and then States a prescribes EPA Administrator shorter duties, follow-up have series of listed (4) deadline); no, may so but do 110(a), section to ensure attainment of the if it chooses. NAAQS. Among clearly the duties as- signed to is the States inclusion SIPs of requires

Section 109 of the CAA adequate “good neighbor” provisions. NAAQS, a national health- promulgate based standard. See 7409. The court “interpretation”— views this turn, provides Section is, reading the actual text the stat- (a)(1) adopt Each State shall ... ute—-as a scene from Alice Wonder- Administrator, submit to the within 3 Op. land. 33. It concludes that (or years shorter period such view, determining our “[i]n the level of may prescribe) Administrator after reductions under Section a promulgation primary national 110(a)(2)(D)(i)(I) analogous setting (or quality standard revision there- NAAQS. And determining the level of of) plan provides ... a which for imple- “good neighbor” reductions under the pro- mentation, maintenance, and enforce- triggers period vision during which ment of such standard ... within [ ] submit SIPs.” Id. at 33. Even such State. analogy sound,8 if the court’s were (2) implementation Each plan submitted premise analogy of its support does not chapter under ... this shall conclusion that EPA’s determination of emission obligations reduction triggers (D) adequate provisions— contain obligations “good States’ to submit neigh- (i) prohibiting, consistent with the Rather, bor” SIPs. the court rewrites a provisions subchapter, any of this decades-old plain statute whose text and source or other type of emissions structure establish a chronology clear of activity within the from State emit- responsibilities. federal and State No- ting any pollutant in amounts place requirement where does the CAA which will— on EPA quantify to each State’s amount of (I) significantly contribute to nonat- “significant contribution” to be eliminated in, tainment or interfere with main- pursuant “good neighbor” to the provision, by, any tenance other State with any let alone provision relieving include respect any [NAAQS]. such “good of neighbor” States their SIP obli- 7410(a)(1) (a)(2)(D)(i)(I) §§ (emphas- gations Id. & in the event EPA does not first added). plain requires quantify obligations.9 es The text that emission reduction NAAQS simply State-spe- 8. The are determined based on what instead is one of the CAA's "requisite protect public is health” and cific mechanisms to ensure attainment of the NAAQS. 7410(a)(2)(D)(i)(I). welfare,” 7409(b)(1) § 42 See U.S.C. "public § 42 U.S.C. & (2), and are a uniform national standard. “good neighbor” provision, comparison The on the other 9. The court’s of section 110 to hand, standard, 126, 34, separate Op. is not a national but section conflates direct see “determining “significant “good “view” that EPA contribution” under the The court’s “good reductions under the the level of neighbor” provision, acknowledging thus provision triggers period neighbor” independent obligation their to submit ade- may submit SIPs” is during which States SIPs, quate “good neighbor” see 213 F.3d unambiguously irrelevant of the view petitioners Michigan at 686-87. State 110(a)(1) plain text section and argued authority that EPA had no to do (a)(2)(D)(i)(I), and, if the am statute were what the petitioners State now before the the court would be biguous, court contend has no interpretation to EPA’s States defer deferred, to do. In Michigan the court obligation to submit independent have two, pursuant step to Chevron to EPA’s years SIPs within three “good neighbor” interpretation it could set State emissions NAAQS promulgation of the because budgets prospectively, given section 110’s permissible interpretation under question, “silence” on the a permissible Chevron, statute, 843, see 467 U.S. at general exercise of EPA’s rulemaking au- The court’s “role is ‘not S.Ct. 2778. thority 301(a)(1), under CAA section that it ‘correct’ the text so better serves 7601(a)(1).10 Inverting Michi- nor purposes’; the statute’s under Chevron gan’s 110, analysis of section the court Congressional ‘avoid the [the court] one, holds that step Op. under Chevron see clearly text expressed simply intent n.32, at 34 unambiguous- section 110 itself by asserting preferred that [the court’s] ly requires EPA prospectively inform approach policy. would better be “good States of their neighbor” emission Congress spoken plainly....” Virgi has requirements. reduction See id. 31-35. Dep’t nia Med. Assistance Servs. v. 110, 301, Nothing in section section Servs., Dep’t Health & Human 678 F.3d other section of the requires CAA EPA to (D.C.Cir.2012) (quoting Engine today do this. Instead the court turns Ass’n v. 88 F.3d Mfrs. “must,” “may” into and holds that if EPA (D.C.Cir.1996)). does not general rulemaking exercise its Furthermore, holding -court’s is en- authority in the manner of the court’s de- tirely holding at odds with the in Michigan 110(a)(l)’s sign, then section (D.C.Cir.2000), 213 F.3d 663 110(a)(2)(D)(i)(I)’s mandatory, unambigu- Barry, LaShawn A. v. requirements ous that States submit ade- (D.C.Cir.1996) (en banc). Michigan, quate “good neighbor” SIPs within three petitioners contended EPA vio- years promulgation NAAQS of a are by prospectively informing lated the CAA by judicial erased the statute fíat— what nitrogen (NOx) their oxides from budgets relieving duty emission reduction States of the im- Congress needed to be to adequately eliminate their posed.11 amounts of The court explanation offers no regulation federal with bearing sources EPA’sstatu- sions analysis has no on the tory authority requirements to enforce here. that comply "good neighbor” States with their SIP 301(a)(1) provides 10. Section of the CAA obligations. Congress Given that included a pre- "[t]he Administrator is authorized to

specific provision obligating promul- EPA to regulations necessary scribe such as are gate if adequate FIPs States fail to submit carry chapter.” out his functions under this years promulgation SIPs within three aof 7601(a)(1). § 42 U.S.C. NAAQS, 110(c)(1); § see CAA 42 U.S.C. 7410(c)(1), and EPA relies on it in the say, extraordinarily 11. Suffice it to it is un- conclude, section 126's federal step authori- usual for a court to at Chevron one, regulate specific zation to mandatory obligations sources of emis- that it must delete at emphasized argu- counsel for oral holding squared can be with how its for ment, 59, 61, Arg. see Tr. Oral without regard. in this Michigan by any petitioners’ contradiction counsel rewriting for court’s rationale during argument, oral are rebuttal conclusion that text is its own plain CAA’s fully capable measuring interstate obligation remains im- upwind “the State’s transport by conducting of emissions mod- to determine for the State possible eling, they and have done so before and (first at 32 it.” Id. until defines “The states can continue to do so: make added). words, In its the statute emphasis effort, they and can submit SIPs to take its own stab “requires each State process how the Again, EPA. is works apply ... homemade [and] [a] in the dark in the states that aren’t included in these its own homemade meth- using definition Indeed, transport regions.” Id. at 61. court concludes odology.” Id. at 35. The recognized, this court has States are (that is, following the interpretation, charged operating quality air moni- text) plain produces absurd re- statute’s tors; specifications technical “[e]xhaustive sults, Pretermitting at 34 n.32. see id. regulate operation of a States’ network record there is a shred of evi- whether of air monitors that collect air quality data impossibility, to show such dence any given Cnty., area.” Catawba N.C. [only] if it statutory outcome is absurd EPA, 20, (D.C.Cir.2009); v. 571 F.3d ... rationality^ an outcome so cf. defies Sys. ATK Launch perceived social values that contrary (D.C.Cir.2012). quality The air moni- could not have intended it.” Congress (in- toring data collected pub- States is Express, 569 F.3d at 498-99 Landstar lically available in the National Emissions citations omit- quotation ternal marks and added). is, ted) Inventory.12 quality air That divi- To the extent the (emphases strangers complex qual- sions are no air speculation on its hinges court’s rationale ity and capability meteorological modeling of inter- that States lack technical information, reality. transport of emissions.13 this blinks at As state computer a statute in order to accord with Con- state of the art models to simulate from plain Op. meteorological gress’s intent. See at 34 n.32. It is conditions chemical suggest agen- the more that an all unusual reactions that to the contribute formation TCEQ, cy's interpretation "impermissible” at Chev- pollutants.” Introduction to Air step interpretation parrots two when the ron Quality Modeling, http://rn.tceq. available at the text of statute. texas.gov/airquality/airmod/overview/am_ (last 2012). July intro.html visited Fur- "TCEQ thermore, state-of-the-science, EPA, Technology uses U.S. Transfer Net- 12. See Clearinghouse computer for Inventories & Emis- four-dimensional models that in- work Factors, http://www.epa. corporate atmospheric physical sions available laws and (last gov/ttnchiel/eiinformation.html predict visited measured observations to weather 2012); TCEQ, July Technology space see also U.S. conditions over and time.” In- Clearinghouse Regula- Quality Modeling: Transfer Network troduction to Air Meteoro- Atmospheric Modeling, tory available at logical Modeling, http://rn.tceq.texas.gov/ http://www.epa.gov/ttn/scram/aqmindex.htm (last airquality/airmod/overview/am_met.html 23, TCEQ (last 2012) July (providing Indeed, 23, 2012). model- visited July visited uses tools). ing the same model used to model emission EPA notes in its brief contributions—CAMx. provided that Texas of the technical example: some the State of Texas. 13. To cite one that to inclusion final Quality data led its in the Environmental The Texas Council on ("TCEQ”) descrip- Transport Rule. See EPA Br. at 109. These published an extensive has methodologies. quality modeling and are far from “homemade” tion of its air activities TCEQ Op. at 35. capabilities on its website. "The uses policy that States lack the for the new better petitioner suggests reasons are No to measure their interstate than the reasons for the old one.” Id. The capability the agencies enjoy modifying to access that discretion in pollutants emissions indepen- policy approaches to their is ex- particularly from other States information pansive agency reduction bud- to exer- dently determine emission where declines discretionary not they rulemaking much less that have had cise its authori- gets, so; ty, rather reason for not as EPA did here. “It only to do their is time doing so to from insistence rarest and most circum- appears compelling stem sources) by industry that their this court to over- (supported stances that has acted be one iota agency judgment of emissions not turn an not to institute reduction WWHT, FCC, rulemaking.” than necessary is for downwind Inc. v. greater (D.C.Cir.1981). NAAQS to attain and maintain and States (and it less presumably that is easier cost- Here, EPA acknowledged previous its 58) Arg. figure to ly, Oral Tr. for EPA see Rule, approach, Transport see 76 Fed. out than it is for the individual States this 48,217; NPRM, Reg. Reg. at at 75 Fed. so, working cooperatively using and to do 45,222-223, explained and its decision guidance. This be so but it to response requesting comments Congress’s not demonstrate does time to given be submit SIPs before scheme, protecting States’ choices about imposed Transport FIPs. EPA NAAQS requirements, part to meet how stated, first, it had no to independently determining ways statutory alter the deadlines for SIP sub- “good obligation their neighbor” meet and that the require missions CAA did not argued in Michigan, the States is absurd. it a rule quantifying “good to issue States’ true, notes, Op. Rule, It is as the court see at neighbor” obligations, see Transport 34-35, “good 48,220; that in two previous neigh- Reg. second, at Fed. that the Carolina, rulemakings bor” States the remanding afforded court in North opportunity CAIR, to submit announc- vacating SIPs after rather than “emphasized ing obligation emission reduction But an budgets. remedy EPA’s flaws [CAIR’s] is not agency pre- expeditiously” forever restricted to its and thus “EPA d[id] policy statutory interpre- vious choices or it would appropriate believe be to establish tations; instead, may change it lengthy period course transition rule provided so, it is acknowledges doing replace CAIR,” which is so, presents “good 48,220; third, doing reasons” for Fed. approach “permissible under that in North Carolina also this court re- Stations, statute.” FCC v. quired align upwind Fox Television EPA to States’ emis- Inc., 502, 515, 556 U.S. NAAQS 129 S.Ct. 173 sion reduction deadlines with the (2009). Agencies earlier,” L.Ed.2d 738 “need not attainment dates of “2015 or see Carolina, demonstrate to a court’s satisfaction North 531 F.3d at 930.14 EPA’s may, 14. That EPA register under circum- The context different dates. of the federal stances, is, out, preferable prospectively points view it as EPA’s citations EPA’s review of SIP; quantify preamble States’ obli- emission reduction a submitted not state does Op. gations, engaged is irrelevant to whether EPA must in detailed interstate analysis stated departing, transport reasons for in the before meet States must Furthermore, previous approach obligations. Rule from its SIP their adequate, given register are instruction in with the court’s consistent federal citations court, expeditiously replace traditionally North Carolina to noted EPA has is- NAAQS align guidance calculating CAIR and attainment flawed sued to States on their sum, conclusion that it the court’s plain text of to the to adhere decision “stab in have been a “homemade” would its discretion- statute, to exercise and not to submit ade- the dark” for States authority, see rulemaking ary general prior pro- to “good neighbor” SIPs quate 686-87, was thus at Michigan, 213 F.3d Rule lacks a mulgation of the im- pressures the time well-explained fact, speculation and the court’s basis Television, Fox by this court. See posed inevitably disap- that EPA would have 515,129 Inasmuch S.Ct. 1800. 556 U.S. at submissions, Op. is proved such as were animated pressures those time as if hap- And that just speculation. that — public health by concern for well judicially challenge could pened, States that attain- Congress required welfare — stay appli- to avoid disapprovals, seeking expedi- NAAQS occur “as ment with the Transport Rule FIPs. Absent cation of the 42 U.S.C. tiously practicable.” as plain that the suggest record evidence to 7502(a)(2)(A) 7511; see North Car- §§ & “good neighbor” of the SIP text CAA’s olina, instant case is F.3d at 930—the leads to “an outcome obligation on States overturning for ill-suited particularly contrary perceived so to social values in not add- of its discretion EPA’s exercise it,” could not have intended Congress step to the rulemaking ing an additional (in- Express, 569 F.3d 498-99 Landstar over- the court “will process. Given and citations omit- quotation ternal marks not to initiate decision agency’s turn an ted) bound, added), the court is (emphasis cause,” and only compelling for rulemaking responsibilities of the host of view compelling reasons of those few one CAA, to enforce placed on States promulgate to declining the decision when plain it in Congress the statute as wrote health and safe- “grave a rule exacerbates terms, permis- to EPA’s give deference for the intended beneficiaries ty problems the CAA is si- interpretations sible where scheme,” Indep. statutory Midwest and to adhere to the ambiguous, lent or Inc., Operator, Sys. Transmission of EPA’s interpretation court’s (D.C.Cir.2004) FERC, 903, 911 acknowledge, Michigan, well as as (internal citation marks and quotation without con- agency has advised expert omitted), for the makes sense hardly tradiction, that have demonstrated States a rule promulgate EPA to require court to satisfy plain their competence health delay be to “good neighbor” obligations. the effect will when Indeed, most reluc- the court is benefits. agencies promulgate require

tant II. pri- at stake are the interests rules “when economic,” id., and the court’s view marily jurisdiction to The court also is without comply for “impossible” that it is statutory authority hold that lacked “good neighbor” independent their “significant measure of to use different 110(a) is animated under section obligation reduc- setting for emission contribution” imposes on obligation measure of budgets, the burdens unrelated to its tion sources, Arg. of threshold industry “significance” purposes see Oral States and in the Trans- inclusion of individual States Tr. 58. Ambient (PMg^) National obli- hour Fine Particle "good neighbor” emission reduction see, here, e.g., (NAAQS) (Sept. gations Quality and it did so Air Standards Required Under SIP Elements Guidance on 2009). (2) 110(a)(1) the 2006 24- Sections 52 at 25-27. Petitioners con-

port Op. requirement Rule. forcement of this has been hypothetical pos- that there a most strict in the statutory tended was context of au- thority objections: sibility “application that cost-effective controls could drive a State’s emissions [ ] surely there are While limits on the level that, one, point phase under below congruity party’s between a the State from would have excluded arguments before an administrative Br. regulation whatsoever.” State Petrs’ court, agency respect and the agen- for 35; Industry & Labor Petrs’ Br. at 22- proper cies’ role the Chevron frame- objection 24.15 Because no was made dur- requires work that particu- the court be ing Transport Rule administrative larly to ensure that challenges to careful proceedings statutory authority to EPA’s an agency’s interpretation of its govern- adopt two-step approach, the court ing statute are first raised in the admin- jurisdiction thus lacks to decide this issue. istrative forum. 307(d)(7)(B), § 42 See CAA U.S.C. Cement Recycling Kiln v. 255 F.3d EPA 7607(d)(7)(B). jurisdictional § ques- (D.C.Cir.2001) 855, (quoting 860 Natural close; tion is not the court’s effort Council, Res. Inc. v. 25 F.3d Def. EPA precedent avoid this court’s well-settled 1063, (D.C.Cir.1994)) 1074 (emphasis add clearly.

fails ed). now, Consistently, until the court has object held that failure to specifically to

A. EPA’s lack of authority is grounds for objections dismissal of such 307(d)(7)(B) Section provides CAA See, this court. e.g., Natural Res. “[o]nly objection to a proce- rule or Def. 561, Council v. 559 F.3d 563-64 EPA dure which was raised with reasonable (D.C.Cir.2009); Engine Ass’n v. specificity during the period public Mfrs. 1075, (D.C.Cir.1996); 88 F.3d 1097 EPA ... during judicial comment be raised 1520, Ohio v. 997 F.2d 1528 7607(d)(7)(B) (em- review.” 42 U.S.C. “ (D.C.Cir.1993); Corp. Linemaster Switch added). phasis ‘strictly’ The court has (D.C.Cir. 1299, 938 F.2d 1308 requirement,” this enforce[d] Mossville 1991); Natural Res. Council v. Thom 1232, Envtl. Action Now v. 370 Def. F.3d as, (D.C.Cir.1986). 427 (D.C.Cir.2004) (quoting Motor & Nichols, Equip. Ass’n v. Notably point, F.3d in Cement Kiln the Mfrs. (D.C.Cir.1998)); see also Natural court stating policy held that comments a Res. Council v. preference to EPA were insufficient to Def. (D.C.Cir.2009). The court also preserve judicial objections has review “[rjeasonable made clear that specificity the preferred approach was statutorily re- “[Tjhese requires something more than general quired, 255 F.3d at 860-61. com- challenge Mossville, approach.” merely ments argued per- that EPA could (internal (as 370 F.3d at 1238 quotation marks missibly approach], consider [the omitted). and alteration The court’s en- petitioners argue) that [the now CAA] re- more, responded, nothing 15. As EPA contrary suggestion, in the record to the court's see suggests hypothetical possibility this actually n.23, Op. explained selecting Rule, would occur as a result of the per- below $500/ton cost of emissions would n.20; Resp.’s Br. at 33-34 & id. at 32 controls, stop operating existing mit States to n.18, point choosing and the a "cost” that increasing, decreasing, pollu- thus rather than only "effective” for each State assumes tion. See 76 Fed. reasonable subset of emissions will be re- 48,256-57. Arg. duced. See Oral Tr. at 44-46. Further- (inter- First, preserved. was stated Id. at 860 Wisconsin approach].” quires [the omitted) “supported] that it the 1% contribution citation marks and quotation nal identifying ... states that parties And “the threshold original). (emphases they significant had are contributors downwind by the fact not saved were and main- technical, legal argu- quality state’s air nonattainment policy, made other Comments, Indeed, problems.” if such tenance Wisconsin agency. before the ments 2010). (Oct. 1, rule, a at 1 further could never waive Wisconsin party a were in fact stated: long party claim as legal argued something before

appeared (2014) budgets final emission need State Council, 25 F.3d Nat. Res. agency.” stronger linkage Def. to be set with a omitted) (internal marks quotation at 1074 quality impact residual air from the added). (emphasis (“EGU”)] [electricity generating unit compared downwind sites to the current in an rely on two comments Petitioners proposed linkage limiting emission re- challenge to EPA’s stat- attempt to show arbitrarily ductions low cost it approach adopted to the utory set which states threshold. has during Rule presented was responsibili- have contribution reduction Industry proceedings. See administrative ty quality impact, ap- based on air but Br. at n.l. Nei- Reply Petrs.’ & Labor pears modeling to default to a Tennessee commented ther is sufficient. regional pro- most efficient EGU control threshold should be lower cost “[a] gram exclusively based on cost-effective- that can reduce considered for ness. significance contribution below 1% their contribution, thresholds below the maximum

using cost defining significant ($2,000/tonfor values S02 place greater emphasis $500/ton should on air (contribution) NOx), applicable.” if Tennessee Com- quality impact remedy Proposed Transport ments on 2010 state-by-state margin- than the assessed 2010). (Aug. at 1 But Attachment proposed al control cost-effectiveness of suggest does not that EPA this comment in the of the 2014 remedy setting state following ap- statutorily barred from budgets is for EGU reductions. Issues Kiln, 255 F.3d at proach. See Cement legal are both and a concern for some 860-61; Council, Natural Res. system control installation level of EGU Def. Furthermore, Tennes- nearby F.3d at 1073-74. equity between states and be- suggest a comment does not even differing types see’s tween facilities with coal preference percent that the one policy dispatched within the same which are NAAQS threshold level be a floor. Rath- markets. electricity er, specifically comment men- Tennessee’s added). (emphases Id. at 7 Wisconsin no- contributions below reducing tions States statutorily that EPA is suggested where that re- suggesting the threshold without percent the one inclusion to use Thus, only sult violate CAA. would threshold as a floor for emission reduc- thing Tennessee commented on with “rea- tions; that EPA “should” simply urged specificity” was that EPA consider sonable quality on air put “greater emphasis” all using a uniform cost threshold for In- impacts at the individual EGU level. States. deed, that the cost commented Wisconsin low, opposite threshold was too the exact comment also does not dem-

Wisconsin’s claim. Indus- statutory authority challenge petitioners of what now onstrate the Br. at try court & Labor Petrs.’ 31-34. by petitioners now advanced this Mossville, raising closest comes to a statu- Wisconsin 370 F.3d at 1239-40. None of tory authority argument during its statement the comments legal;” the “issues are but that [] administrative proceedings approaches the in a vague indicating comment is sentence level of “reasonable specificity” required that EPA preference regulate the State’s for jurisdiction this court to have over EGU, level, than in at the rather the State petitioners’ statutory new authority argu- system in- order to achieve “EGU control ment. Comments, equity.”

stallation Wisconsin B. at 7. this, Acknowledging the court Consequently, nonethe- neither Tennessee’s nor jurisdiction less concludes that it has to argued Wisconsin’s comments “with rea- address this new issue “EPA because was specificity” sonable that EPA was statu- on notice that its disregard signifi- torily required to treat in- the threshold potential cance floor was a legal infirmity in two-step approach clusion level its in approach.” its Op. at 25 defining “significant n.18. None of contribution” as a the three reasons the court calculating floor in offers for its emission reduction re- conclusion that there need quirements.16 objec- not be they present Nor do even tions raised “with specificity reasonable policy preference for such an approach and, indeed, during period comment,” public interpreted can be sup- 7607(d)(7)(B), porting convincing. sub-threshold reductions. Even if implied the comments a challenge, First, the court states that EPA was not, they which implied do challenge required “to craft a new rule consistent is insufficient because Carolina],” Op. [North at 24 n.18 way is not the the regulatory sys- (internal quotation marks and citation

tem is structured. Such a standard omitted), and thus should have been alert- require agencies would perpet- to review ed petitioners’ objection, new raised for ually all of the ‘implied’ challenges in the first time now in this court. But in any challenge they receive. willWe not North specifically Carolina the court per- impose such a agency. burden on the mitted the exact approach same in CAIR. All [petitioner] had to do was draft Discussing this approach, the court ex- one sentence that specifically challenged plained: not,

EPA’s decision. It did and that budgets [S]tate are unrelated to the S02 specific challenge preserved. is thus not (the factor”) criterion quality “air

which EPA included in states CAIR’s only way [T]he program. contributors, [the comments] could be Significant S02 placing read as the EPA on notice is to purposes only, inclusion are those place the burden on EPA to cull through EPA projects states will contribute at all the letters it receives and answer all least 0.2 |xg/m3of to a nonattain PM25 possible implied arguments. Such ment in area another state. While we a rule would defeat re- expected would have require quirement for specificity.” “reasonable states to eliminate contributions above cite, n.18, 16. The court Op. adds a independent at 25 of cost considerations.” This is a comment from Delaware: “It is statutory authority objection Delaware’s not a to the two- opinion that an step approach, state’s rejec- emissions con- and in event EPA’s significant tribution is ... based on the “opinion" emis- tion of Delaware's was sustained in quality, sions and their Michigan, effect on air and is 213 F.3d at 679. threshold, Natural Res. EPA claims to have used to disturb. Council this Cf. Def. (D.C.Cir.2009) ... measure emissions its] [as (“EPA can eliminate cannot be to take expected a state [an] sources within controls.” in of one “highly argument, support specific cost-effective raised applying deciding approach sponte in it objection, apply EPA used a similar sua to anoth- entitled, to include SIP provision.”). which states er was NOx Call, did not disturb Michigan objection which absence of Rule either with quarrel[ed] rely “no one proceedings, pro- since administrative measures, way or the multiple use of mulgating upon stage. the inclusion the line at” drew approach. court’s decision not to disturb its here, Likewise F.3d at 675. 213 the fact that after North Carolina no And S02 EPA quarrel not with Petitioners do in the Rule adminis- comment p,g/m3 or its the line at 0.2 drawing objected that EPA proceedings trative was for de significance measure of exceeding statutory authority adopt- its in different Again, termining budgets. states’ the fact ing approach its underscores that S02 approach. disturb this we do not acting inconsistently EPA was not (em- Carolina, light Carolina in of a few at North sentences 531 F.3d 916-17 North added). plucked fuel factors out of no to con- about context. is basis phases There inconsistently with that EPA acted clude Second, afield, reaching farther by replicating ap- North Carolina points court comment submitted dur It is proach the court left undisturbed. it ing rulemaking the CAIR deems the court re- true that in North Carolina sufficient, holding when combined with the factors in allo- jected EPA’s use of fuel Carolina, EPA in North to “show that ‘had trading allowances for the CAIR cating could, notice of this issue and or should ” doing so redistributed program because have, Op. taken it into account.’ at 24 to the benefit of responsibilities reduction Natural Res. Council v. (quoting n.18 Def. electricity more coal-fired States with (D.C.Cir.1 1146, 824 F.2d at 1151 at 920-21. The court generation, see id. 987)).17 comment stated “that The CAIR stated that the threshold contribution level selected require states to exceed may not some floor, considered a so that should be fuel-adjustment mark. Because the obliged should be to reduce factors shifted the burden of emission at only their emissions to the level which equity solely pursuit of reductions nonattain their to downwind contribution rea- among upwind improper states —an ment does not exceed that threshold level.” resulting budgets state were son—the 25,162, 25,176-77 CAIR, 70 Fed. arbitrary capricious. 2005). comment, 12, (May This which was added). any petitioners’ But a not cited in brief this (emphases hold- Id. 921 by industry peti mentioned arbitrarily in de- court but first ing that had acted argument, rebuttal oral can fairly during cannot tioners signing trading program carry weight assigns the court might alert EPA that be deemed to it, light holding using particularly ah statutory exceed its does generally Carolina. The court measuring “significant contri- North approach arguments raised for the declined not entertain specifically that the court bution” promulgated prior to rule at issue was Remarkably, quotes a case in the court 17. doctrine, 307(d)(7)(B). See Natu- enactment of section common law exhaustion which the Council, 307(d)(7)(B), 824 F.2d 1150-51. applied: ral Res. than CAAsection rather Def. 56 brief, Altman v. reply guished pol- time in a see presenting

first between comments SEC, (D.C.Cir.2011); F.3d-1322, 1329 666 icy preferences presenting and those statu- Carolina, 6, 924 n. let 531 F.3d at see, tory authority objections, North e.g., Cement argument, for the first time at oral alone Kiln, 860-61, F.3d at and technical and Justice, Dep’t 642 F.3d Roth U.S. see policy arguments are to pre- insufficient (D.C.Cir.2011); Las Vegas Ark objections serve to EPA’s au- NLRB, n. 4 Corp. v. Rest. Council, thority. See Nat. Res. Def. (D.C.Cir.2003), during much less rebuttal F.3d at 1074. The CAIR comment that argument, Battery oral Coalition of EPA rejected in the rulemaking other Ass’n, 623; Recyclers 604 F.3d at Old Do not “the argument” therefore same Products, Dairy v. Sec. minion Inc. of petitioners belatedly now. attempt to raise (D.C.Cir. 961 n. Defense, Furthermore, Petroleum, in American 1980). “in simple: The reason is order to court jurisdictional concluded ‘sandbagging of and re prevent appellees question was “close” inasmuch EPA had do spondents,’ arguments we not consider explicitly incorporated the from the docket opening that were raised neither in the previous rulemaking in the rule- second by respondents.” nor S. brief Coast Air making, previous rulemaking and the had EPA, Quality Mgmt. Dist. v. 554 F.3d aborted, been such that no there was inter- * 1076, (D.C.Cir.2009) (quoting 1081 n. Sit vening opportunity judicial for review. NLRB, Seafoods, Sound Inc. ka 206 Petroleum, See Am. 52 F.3d at 1120 n. 1. .2000)). (D.C.Cir 1181 Here those Neither of factors that Ameri- made reason particular that has resonance be can a Petroleum close present case is here. relying cause EPA was on the court’s deci Transport Rule was to promulgated Carolina, in sion North F.3d at 916- replace CAIR, but the CAIR was docket two-step approach to “not disturb” its incorporated never into the contribution,” defining “significant to perhaps because of the docket— no one referenced the comment dur- CAIR instruction in court’s North that Carolina the ing Transport Rule pro- administrative analysis its ground “redo from the ceedings. up.” F.3d at 929. EPA would have Even setting starkly aside the novel for- had reason to no reexamine volumi- feiture standard the court has chosen to objections nous CAIR docket in search for apply industry petitioners, to the cited that were not raised in before the court CAIR comment is insufficient to establish Also, North Carolina. unlike the aborted statutory that the issue of authority EPA’s rule whose docket EPA in incorporated properly preserved was for court to Petroleum, American in CAIR there was jurisdiction have it. The address court intervening opportunity judicial re- on a relies footnote in American Petro- view. no one sought judicial Yet review leum Institute v. 52 F.3d CAIR on the basis of (D.C.Cir.1995), the CAIR comment n. 1 proposition for the on by precise now relied “highly court. This agency previ- relevant” if an ously “reject[ed] upon circumstance was relied court argument [ ] same prior a North Carolina in rulemaking,” Op. declining n.18. Al- to disturb though 917; the CAIR approach. comment communicates EPA’s See id. see Med. policy preference, Waste, this court has distin- 645 F.3d at 427.18 court Once the Kansas, Nebraska, claim, 18. The fact that newly ripened and Okla- have thus would CAIR, regulated Responsible homa were not Regulation, under Coalition for willing objection to disturb been to entertain an in North Carolina declined dur- objection no to ing because approach, pro- EPA’s Rule administrative authority adopt approach had EPA’s ceedings “good neighbor” provi- that the court, petitioners were been raised to sion it to use the threshold level during the Trans- required to inform for a State’s inclusion in the Transport proceedings Rule administrative port Rule as floor for emission reduction obli- statutory authority they objected to EPA’s gations. pursue approach. Nothing precedent this court’s 7607(d)(7)(B). § If American Petroleum 307(d)(7)(B), CAA section 42 U.S.C. jurisdictional question, presented a “close” 7607(d)(7)(B), supports the court’s tor jurisdictional question then the here is eas- jurisdictional tured efforts to avoid the

ily decided. jurisdiction limits the CAA and seize Third, that “EPA’s the court concludes petitioners clearly where fall far short of proposal stage at the indicated statements preserving by objecting their claim reconsidering open EPA was not statutory authority during ar- rejection petitioners’ earlier CAIR’s Transport Rule proceedings administrative that because EPA had dis- gument,” and specificity.” with “reasonable The court quality-only ap- “the two air missed acknowledge does not this court’s prece considered,” the comments of proaches it setting preserva dent a strict standard Wisconsin, Tennessee, were and Delaware “ objections, tion of circumstances,” under ‘reasonable’ inconsistency which demonstrates 24, But there was no such Op. at n.18. jurisdiction today. the court’s exercise of argument” rejection petitioners’ “earlier See, Council, e.g., Natural Res. 559 in comment did CAIR because CAIR Def. 563-64; F.3d at Am. Farm Bureau Fed’n EPA its suggest not exceeded statuto- 512, (D.C.Cir.2009); v. 559 F.3d 538 ry authority by following two-step ap- its EPA v. Natural Res. Council 571 contribu- proach defining “significant EPA Def. 1245, (D.C.Cir.2009); Mossville, F.3d 1259 Kiln, 255 F.3d at 860- tion.” See Cement 1238; Kiln, 370 F.3d at Cement 255 F.3d Furthermore, industry petitioners ac- 61. 860-61; George Corp. at E. v. Warren they in Brief that knowledge Reply their EPA, 616, (D.C.Cir.1998); 159 F.3d 629 advocating quality-only’ “are not an ‘air Ass’n, 142 Equip. Motor & F.3d at ap- a cost-based approach,” but instead Mfrs. Council, 462; Natural Res. 25 F.3d at proach with a floor for emission reduction Def. 1074; EPA, 1528-29; at Ohio v. 997 F.2d Re- obligations. Industry & Labor Petrs’ EPA, So, rejection Natural Res. Council v. ply Br. at 10. of two Def. 641, (D.C.Cir.1991); approaches has F.2d 647-48 Linemas quality-only alternative air 1308; bearing Corp., no on whether EPA would have ter Switch 938 F.2d at Thom- 129-32, secretly object port ground, Rule on this did at does not mean that those States making during during a comment made are relieved from that claim on the basis of proceed- rulemaking they parties, administrative to which were not 307(d)(7)(B) requires. judicial by ings, section and was abandoned on review as CAA it, ripeness This is all the more true here because the those who made distorts the and beyond recognition petitioners subject who were to CAIR aban- CAA exhaustion doctrines "give[s] parties proceed- and to Clean Air Act doned the CAIR comment now relied on ings weapon delaying they sought judicial powerful and the court when review. sandbagging Agency action.” Lead Indus. suggest To that EPA should have foreseen that EPA, 1130, Nebraska, Oklahoma, Kansas, despite not Inc. v. 647 F.2d and Ass’n (D.C.Cir.1980). making objection proposed Trans- to the . as, 425-27; Ass’n, Lead 805 F.2d Indus ... comments” before the id. at .

647 F.2d at 1173 1151. And although observing in South Quality Coast Air Management District v. than confront the force of Rather this (D.C.Cir.2009), 472 F.3d 891-92 precedent, phrases the court relies on from petitioners leeway,” have “some opinions suggesting a more few flexible leeway court concluded that permit did not standard, n.18, Op. at telling- 24-25 but petitioner rely upon a general proce- ly analyses omits discussion of the or preference dural stated a cover letter outcomes in those cases. This is because its comments to alert to the details even where the court has flexi- mentioned objections to a final rule. bility, the comments issue were either significantly specific more than the com- None of the proffered court’s reasons Wisconsin, ments of Tennessee and 307(d)(7)(B)’s for ignoring jurisdic- section sufficient, were thus specific or were more own, tional limitations has merit on its nor but wanting. nonetheless deemed For ex- plus combination. [plus “[Z]ero zero ample, in Natural Resources Defense equals Clipper, zero] zero.” U.S. v. Council (D.C.Cir.2002). (D.C.Cir.2009), the court suggested there “leeway” concluded, but words III. here, resonate that “EPA cannot be ex- pected to argument, take [an] raised in The court’s remaining reasons for vacat- support of specific objection, one apply ing Rule are also either sponte it sua provision.” to another Id. at beyond jurisdiction unpersuasive. irony 1259-60. The in the court’s reliance First, the court concludes that EPA vi- on this expects case is that it EPA to read olated the CAA calculating North Carolina in precisely opposite required emission pro- reductions “on a manner —it concludes should have portional basis that took into account a holding taken about “exceeding the upwind contributions of other States to mark” in the trading CAIR allowance pro- the downwind States’ nonattainment gram and sua sponte applied it to the problems.” Op. so, at 27. This is the methodology for calculating “significant court says, in Michigan because the contribution,” though even the ex- -.court court only permitted cost to be consid- plicitly declined to disturb that methodolo- way ered as a “to upwind allow some gy. supra See Pt. II.B. Appalachian States to do less than their full fair Power, 791, (D.C.Cir.1998), 135 F.3d share,” not more. Id. Petitioners have the court concluded “argument the ... argued not that EPA during violated the CAA period the comment [was] sub- —in stance, not form, calculating if emission not reductions on objection” the same basis, a court, proportional raised before as the court sug- the whereas here the gests. Jaques comments of See Anna Hosp. Tennessee and v. Wisconsin did Sebeli- us, 1, (D.C.Cir.2009). not statutory raise the authority objection The urged now statement upon industry the court in petitioners’ either form or brief substance. quotes, The court also the court Op. relies on Natu- see in- ral Resources stead maintains that EPA Council v. was arbitrary Defense (D.C.Cir.1987) (en 824 F.2d 1150-51 capricious way and grouped the banc), which involved common law (S02) exhaus- States for 2014 sulfur dioxide bud- tion, 307(d)(7)(B), because, CAA section gets claimed, and in they EPA did so that case the “explicitly issue was raised without “considering] relative contribu- States,” Industry Transport requires & Rule to reduce various tions challenge share, Br. at This their statutory Petrs’ 33. more than fair Mich- Labor to the asserted arbitrariness requires is limited the that EPA’s igan conclusion categorized States were how certain choice of cost thresholds in the budget year. for one pollutant’s one permissible. Rule was jurisdiction consider sua lacks court Next, the court that EPA concludes statutory objection to EPA’s sponte an failed to consider effect of in-State by petitioners raised within authority not own emissions of downwind States on their day period under CAA sixty and main- nonattainment interference with 7607(b)(1); 307(b)(1), 42 U.S.C. section problems, Op. see at 57. Petition- tenance Waste, 427. As 645 F.3d at see Med. conceded at oral this argument ers said, rely previously has “[t]o this court contribution” was “not “in-State contention a requested never on plaintiffs relief actually independent statutory an authori- never be to con they claim made would ty argument,” Arg. Oral Tr. at but plus equals more that zero zero clude merely repackaged objec- version of NAACP, Cnty. zero.” than Jefferson possibility tion to of reductions below Sugar Corp., Branch U.S. percent NAAQS the one inclusion (D.C.Cir.1996). 1432, 1438 threshold, argument over which the Second, if petitioners had raised even jurisdiction, lacks Part II. supra court statutory authority ob- “proportionality” jurisdiction if the court had Even to ad- objection con- jection, this and the court’s it, the court’s unsup- dress conclusion is premised speculative are on the clusion by the record. EPA ported examined might that the possibility State, various cost threshold for each to reduce emissions to require States doing in so considered NAAQS one percent below the level quality improvement how much two-step ap- threshold of inclusion defining downwind states from “signification resulted] contribu- proach tion,” more and thus than their state emission at different reductions argument levels; whether, fair share —an over which considering upwind jurisdiction. supra court also lacks reductions local emission and assumed Further, reductions, conclusion is (in-state) Part II. court’s the downwind air North where the at odds with Carolina resolved; quality problems would be concluded that EPA’s measure of court components remaining down- “directly significant contribution need not quality problem (e.g., wind air whether with each State’s individualized correlate predominantly it is a local or in-state quality impact downwind nonattain- or whether problem, it still contains upwind to other states.” 531 ment relative component). large upwind added); (emphasis La- at 908 see F.3d Rule, 48,256 at Transport Fed. A., ignores It also Shaum 87 1395. (con- added); 48,259 (emphases id. at per- the Michigan expressly that in court remaining problem cluding nonattainment the use of uniform cost thresholds mitted Liberty-Clairton result of local was the “significance,” likewise to measure and emissions). EPA thus in fact examined the result of permitted “ineluctable]” contribution of States to the downwind re- large being and contributors small problems. their own nonattainment the of reduc- to make same amount quired court that EPA jurisdic- Finally, the concludes tions. 213 F.3d 679. Without collec- argument try steps to take to avoid” tion to reach on whether “did over-control, atOp. tive 27. This conclu- approach turb the EPA adopted in the by unsupported sion too is the record. Transport Rule. projected The Rule was not To reach the vacating the Trans- result — of all achieve attainment downwind nonat- port Rule—the court does several remark- problems

tainment and maintenance at- things. jurisdiction able It seizes over the 48,- upwind tributed to States. See id. at issue of independent “good States’ neigh- 210, 48,282, 48,247-48; Resp.’s Br. at 38 bor” obligation by allowing pur- States to analysis n.24. Because EPA’s demonstrat- sue a collateral attack on Final SIP Rules “remaining ed instances of downwind air from they which either timely failed to file Rule, quality problems,” Transport 76 Fed. petitions for review or their 48,256, petitions chal- Reg. at there support is no for the lenging those court’s conclusion that the rules have not been Transport consoli- resulted collective over-control. dated with petitions challenging the Transport Rule that are before this three- IV. judge panel. jurisdiction It asserts over observes, as EPA industry’s challenge to EPA’s two-step ap- represents “the culmination of decades of proach to defining “significant contribu- Congressional, administrative, judicial and tion” excusing industry from its failure workable, comprehen- efforts fashion a to preserve the issue first presenting it regulatory sive approach to interstate air to EPA jurisdiction and then resting on a pollution issues that have huge public comment in rulemaking another that was health implications.” Resp.’s Br. at 12. first by industry cited in rebuttal oral ar- The legislative history to amendments of gument and cannot bear weight Congress’s CAA documents frustration assigns court to it because it did not chal- with the States’ historic failure to lenge statutory authority adopt take effective action on their own to curtail two-step its approach. All contrary this is problems their contributions to pollution to Congress’s limitations on the court’s States, in downwind leading to amend- jurisdiction and this precedent court’s en- strengthen ments to EPA’s hand. The forcing those limitations. The rest of the ignores court Congress’s limitations on the analysis court’s Congress’s recalibrates jurisdiction court’s and prece- decades of statutory scheme and cooperative vision of strictly dent enforcing those limitations federalism in Along the CAA. way, proceeds and to do plain violence to the court abandons consideration that an text of the CAA permissible and EPA’s agency is entitled to repose, objec- absent interpretations CAA, all while claim- tion during its administrative proceedings, ing to be “applying] enforcing] court, occasion, when a here on two ex- statute as it’s now Op. written.” at 12. pressly leaves undisturbed two-step ap- The result is the endorsement of a “maxi- proach to enforcing a statute it adminis- delay” mum strategy regulated enti- objection ters and no during is raised ties, rewarding States industry Transport Rule proceed- administrative cloaking objections their throughout years ings. Then, dictum, in the court offers of administrative rulemaking procedures suggestions as to how EPA fix might blindsiding the agency with both problems the court upon collateral attack has created interpretation on its re- 110(a) writing section objection and an the CAA and trampling raised for on this court, the first time this despite precedent court’s in North Carolina and previous court’s declining decisions Michigan. to dis- has this court heretofore EPA haustion suggest this is to None acknowledged recognizing steadfastly lim- from be excused should jurisdiction and of proce- material limits of its its both the or on its APA. enforcing Congress or the under the CAA role CAA missteps dural jurisdic- ignore the court wrote it. can But neither provisions limits or substantive

tional Accordingly, respectfully I dissent. in clear terms and wrote Congress of the CAA interpretations permissible ambiguity. statutory silence

addressing why, program- aas

Rather it underscores matter, Congress health public

matic and important are reasons there

concluded ex- limits and administrative

jurisdictional

Case Details

Case Name: EME Homer City Generation, L.P. v. Environmental Protection Agency

Court Name: Court of Appeals for the D.C. Circuit

Date Published: Aug 21, 2012

Citation: 696 F.3d 7

Docket Number: 11-1302, 11-1315, 11-1323, 11-1329, 11-1338, 11-1340, 11-1350, 11-1357, 11-1358, 11-1359, 11-1360, 11-1361, 11-1362, 11-1363, 11-1364, 11-1365, 11-1366, 11-1367, 11-1368, 11-1369, 11-1371, 11-1372, 11-1373, 11-1374, 11-1375, 11-1376, 11-1377, 11-1378, 11-1379, 11-1380, 11-1381, 11-1382, 11-1383, 11-1384, 11-1385, 11-1386, 11-1387, 11-1388, 11-1389, 11-1390, 11-1391, 11-1392, 11-1393, 11-1394, 11-1395

Court Abbreviation: D.C. Cir.