NATIONAL ENVIRONMENTAL DEVELOPMENT ASSOCIATION‘S CLEAN AIR PROJECT v. ENVIRONMENTAL PROTECTION AGENCY
No. 16-1344
United States Court of Appeals, District of Columbia Circuit
June 8, 2018
Argued April 2, 2018; Consolidated with 16-1345, 16-1346
On Petitions for Review of Amendments to Regulations Promulgated by the United States Environmental Protection Agency
Allison D. Wood and Shannon S. Broome argued the cause for petitioners. With them on the briefs were Felicia H. Barnes, Leslie Sue Ritts, and Charles H. Knauss. Stacy R. Linden entered an appearance.
Andrew J. Doyle, Attorney, U.S. Department of Justice, argued the cause for respondent. With him on the brief were Jeffrey H. Wood, Acting Assistant Attorney General, and Carol S. Holmes, Attorney Advisor, U.S. Environmental Protection Agency.
Before: GARLAND, Chief Judge, and EDWARDS and SILBERMAN, Senior Circuit Judges.
Opinion for the Court filed by Senior Circuit Judge EDWARDS.
Concurring opinion filed by Senior Circuit Judge SILBERMAN.
NEDACAP I arose after the Sixth Circuit issued Summit Petroleum Corp. v. EPA, 690 F.3d 733 (6th Cir. 2012). In Summit, EPA had in force regulations adopted pursuant to the Act concerning
EPA took exception to the Summit decision because it effectively overturned a nationally applicable EPA policy. In December 2012, EPA issued a Directive to the Regional Air Directors of each of the ten EPA regions stating that,
[o]utside the [Sixth] Circuit, at this time, the EPA does not intend to change its longstanding practice of considering interrelatedness in the EPA permitting actions in other jurisdictions. In permitting actions occurring outside of the [Sixth] Circuit, the EPA will continue to make source determinations on a case-by-case basis using the [agency‘s] three factor test.
NEDACAP I, 752 F.3d at 1003. One of the Petitioners here filed suit in this court challenging EPA‘s Summit Directive. The petitioner argued that by establishing inconsistent permit criteria applicable to different parts of the country, the Summit Directive violated the Clean Air Act and EPA regulations. We granted the petition for review, holding that the Summit Directive could not be squared with EPA‘s regulations. Id. We did not decide whether the Summit Directive also contravened the requirements of the Clean Air Act.
Almost immediately after the decision in NEDACAP I was issued, EPA instituted rule making to amend the old Regional Consistency Regulations. In August 2016, EPA issued the Amended Regulations that are at issue in this case. To address the Summit issue, the Amended Regulations make it clear that only the decisions of the U.S. Supreme Court and decisions of the U.S. Court of Appeals for the D.C. Circuit Court that arise from challenges to “nationally applicable regulations . . . or final action,” as discussed in Clean Air Act section 307(b) (
The Petitioners challenge the Amended Regulations principally on the ground that, under
Under the Act, the D.C. Circuit has jurisdiction to hear petitions for review of “any . . . nationally applicable regulations promulgated, or final action taken” under the Act, as well as any other final agency action that is, inter alia, “based on a determination of nationwide scope or effect.”
I. BACKGROUND
EPA is run by an Administrator, whose office is located in Washington, D.C. The agency also has ten regional offices, each of which is responsible for administering agency programs within the states in a designated region. “The Administrator is authorized to prescribe such regulations as are necessary to carry out his functions under [the Act] . . . [and] may delegate to any officer or employee of the Environmental Protection Agency such of his powers and duties under [the Act], except the making of regulations subject to section 7607(d) of this title, as he may deem necessary or expedient.”
The Act also provides that regulations with respect to delegations under
(A) to assure fairness and uniformity in the criteria, procedures, and policies applied by the various regions in implementing and enforcing the chapter;
. . . and
(C) to provide a mechanism for identifying and standardizing inconsistent or varying criteria, procedures, and policies being employed by such officers and employees in implementing and enforcing the chapter.
As noted above, judicial review of EPA actions is bifurcated between petitions for review that must be filed in the United States Court of Appeals for the D.C. Circuit and petitions that may be filed in the regional circuit courts. The Act provides:
A petition for review of action of the Administrator in promulgating any . . . nationally applicable regulations promulgated, or final action taken, by the Administrator . . . may be filed only in the United States Court of Appeals for the District of Columbia. A petition for review of the Administrator‘s action . . . which is locally or regionally applicable may be filed only in the United States Court of Appeals for the appropriate circuit. Notwithstanding the preceding sentence a petition for review of any action referred to in such sentence may be filed only in the United States Court of Appeals for the District of Columbia if such action is based on a determination of nationwide scope or effect and if in taking such action the Administrator finds and publishes that such action is based on such a determination.
As outlined in the introduction to this opinion, the dispute in this case stems from the Sixth Circuit‘s decision in Summit. That case resolved a challenge to EPA‘s interpretation of the word “adjacent,” an interpretation the Sixth Circuit rejected. 690 F.3d at 735. EPA then issued the aforementioned Summit Directive in which the agency made it clear that it would not follow Summit in EPA regions outside of the Sixth Circuit. One of the Petitioners here challenged the Summit Directive in this court in NEDACAP I, arguing that the directive violated EPA‘s consistency obligations under both
The consistency regulations that were at issue in NEDACAP I read, in relevant part, as follows:
It is EPA‘s policy to:
(a) Assure fair and uniform application by all Regional Offices of the criteria, procedures, and policies employed in implementing and enforcing the act; [and]
(b) Provide mechanisms for identifying and correcting inconsistencies by standardizing criteria, procedures, and policies being employed by Regional Office employees in implementing and enforcing the act . . . .
NEDACAP I, 752 F.3d at 1004 (quoting
The decision in NEDACAP I made it clear that EPA had options other than following the command of Summit nationwide, including an option to “revise its uniformity regulations to account for regional variances created by a judicial decision or circuit splits.” Id. at 1010. EPA heeded these words and promptly issued a notice of proposed rule making.
In August 2015, EPA published and solicited public comment on a proposal to amend the old consistency regulations to address “how to treat Federal court decisions regarding locally or regionally applicable actions that may affect consistent application of national programs, policy, and guidance.” Amendments to Regional Consistency Regulations, 80 Fed. Reg. 50,250, 50,252 (Aug. 19, 2015) (to be codified at 40 C.F.R. pt. 56). In August 2016, EPA issued the Amended Regulations that are now before us.
The Amended Regulations read in relevant part as follows:
It is EPA‘s policy to:
(a) Assure fair and uniform application by all Regional Offices of the criteria, procedures, and policies employed in implementing and enforcing the act;
(b) Provide mechanisms for identifying and correcting inconsistencies by standardizing criteria, procedures, and policies being employed by Regional Office employees in implementing and enforcing the act; and
(d) Recognize that only the decisions of the U.S. Supreme Court and decisions of the U.S. Court of Appeals for the D.C. Circuit Court that arise from challenges to “nationally applicable regulations . . . or final action,” as discussed in Clean Air Act section 307(b) (
42 U.S.C. 7607(b) ), shall apply uniformly, and to provide for exceptions to the general policy stated in paragraphs (a) and (b) of this section with regard to decisions of the federal courts that arise from challenges to “locally or regionally applicable” actions, as provided in Clean Air Act section 307(b) (42 U.S.C. 7607(b) ).
[t]he Administrator shall not be required to issue new mechanisms or revise existing mechanisms developed under paragraphs (a) of this section to address the inconsistent application of any rule, regulation, or policy that may arise in response to the limited jurisdiction of either a federal circuit court decision arising from challenges to “locally or regionally applicable” actions, as provided in Clean Air Act section 307(b) (
42 U.S.C. 7607(b) ), or a federal district court decision.
Petitioners timely filed petitions for review of the Amended Regulations.
II. ANALYSIS
A. Standard of Review
Petitioners’ challenge to EPA‘s interpretation of the Act is governed by Chevron U.S.A. Inc. v. Natural Resources Defense Council, 467 U.S. 837 (1984). Under Chevron step one, we must first decide “whether Congress has directly spoken to the precise question at issue.” Id. at 842; see also Kingdomware Techs., Inc. v. United States, 136 S. Ct. 1969, 1976 (2016) (“[W]e begin with the language of the statute[;] . . . [i]f the . . . language is unambiguous and the statutory scheme is coherent and consistent . . . the inquiry ceases.“). If the statutory provision in question is “silent or ambiguous with respect to the specific issue,” we then assess the matter pursuant to Chevron step two to determine whether EPA‘s interpretation is “based on a permissible construction of the statute.” Id. at 843. See generally EDWARDS & ELLIOTT, FEDERAL STANDARDS OF REVIEW: REVIEW OF DISTRICT COURT DECISIONS AND AGENCY ACTIONS 211–22 (3d ed. 2018).
The court may also set aside EPA action that is “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law,” or “in excess of statutory . . . authority.”
B. Petitioners’ Challenges
Petitioners challenge the Amended Regulations on four grounds. First, they argue that
1. Section 7601(a)(2) Does Not Apply to Judicially Created Inconsistencies
Petitioners argue that because the Amended Regulations tolerate court-created inconsistencies in the application of agency policies, the regulations clearly violate
“In addressing a question of statutory interpretation, we begin with the text.” City of Clarksville v. FERC, 888 F.3d 477, 482 (D.C. Cir. 2018). In order to resolve the dispute at Chevron step one, we must determine whether “the intent of Congress is clear,” meaning that the statutory provision at issue is “unambiguous[]” with respect to the question presented. Chevron, 467 U.S. at 842–43. This requires that the governing statute, read “as a whole,” reveal a clear congressional intent regarding the relevant question, see, e.g., Dole v. United Steelworkers of Am., 494 U.S. 26, 41 (1990), or that “the text [of the statute] and reasonable inferences from it give a clear answer,” Brown v. Gardner, 513 U.S. 115, 120 (1994). We certainly can make no such findings in this case.
What is most noteworthy here is that nothing in the language of
Petitioners acknowledge, as they must, that the Administrator cannot defy a controlling federal court decision in any EPA region that falls within that court‘s jurisdiction. The Administrator has no such “power” or “duty” under the Act. In other words, the agency is required to obey such a judicial decision without regard to any delegation of powers or duties from the Administrator. Section 7601(a)(2) does not require regulations authorizing such obedience. Nor does the Act purport to allow the Administrator to delegate authority to subordinate officials to ignore binding judicial decisions. In short, because the Administrator does not have any “powers” to disobey court decisions issued within EPA regions,
Furthermore, the disputed provisions in the Amended Regulations do not purport to delegate any of the Administrator‘s powers. Rather, they provide that EPA regional offices are not required to seek headquarters approval “for actions that may result in inconsistent application if such inconsistent application is required in order to act in accordance with a federal court decision.”
“The plainness or ambiguity of statutory language” must be measured with reference to, among other things, “the specific context in which that language is used, and the broader context of the statute as a whole.” Robinson v. Shell Oil Co., 519 U.S. 337, 341 (1997). Petitioners concede that the Act, by its terms, allows for inconsistent judicial decisions. As already noted, petitions for review of purely local or regional EPA actions must be filed in the appropriate circuit court.
The potential for intercircuit inconsistency is therefore an inevitable consequence of the Act‘s judicial review provision.
Petitioners argue that
Petitioners’ arguments seem to imply that EPA‘s construction of
In any event, the main point here is that
In sum, Petitioners cannot prevail under the first step of Chevron because the plain meaning of the Act does not support their claims. Section 7601‘s uniformity obligations do not address court-created inconsistencies.
2. EPA Permissibly and Reasonably Interpreted the Act to Allow Intercircuit Nonacquiescence
Petitioners’ arguments also fail under Chevron step two. ”Chevron recognized that [t]he power of an administrative agency to administer a congressionally created . . . program necessarily requires the formulation of policy and the making of rules to fill any gap left, implicitly or explicitly, by Congress.” Mayo Found. for Med. Educ. & Research v. United States, 562 U.S. 44, 55–56 (2011). A court has no authority to “substitute its own construction of a statutory provision for a reasonable interpretation made by the administrator of an agency” when the agency is acting pursuant to congressionally delegated authority. Chevron, 467 U.S. at 844. ”Chevron‘s premise is that it is for agencies, not courts, to fill statutory gaps.” Nat‘l Cable & Telecomms. Ass‘n v. Brand X Internet Servs., 545 U.S. 967, 982 (2005).
As explained above, intercircuit conflicts in the application of EPA policies caused by inconsistent judicial decisions are inevitable because of the Act‘s judicial review provision in
However, EPA has the delegated authority to enforce these statutory provisions and to fill any perceived gaps in the statute. In our view, the Amended Regulations reasonably fill the statutory gaps, and, therefore, EPA‘s construction of the Act is entitled to deference.
In its brief to this court, EPA usefully and accurately summarized the Amended Regulations:
First, EPA promulgated an exception to the agency‘s policy of uniformity, acknowledging existing agency practice that a federal court decision adverse to EPA that arises from a challenge to a locally or regionally applicable agency action will not “automatically” apply uniformly nationwide. EPA also codified its longstanding position that, consistent with the structure and purpose of the Act‘s judicial review provision,
42 U.S.C. § 7607(b)(1) , only decisions of the Supreme Court and decisions of this Court that arise from challenges to nationally applicable regulations or final agency action would necessarily apply uniformly.Second, EPA added a provision that its headquarters need not issue mechanisms or revise existing mechanisms to address every “inconsistent application of any rule, regulation, or policy that may arise in response to the limited jurisdiction of either a federal circuit court decision arising from challenges to ‘locally or regionally applicable’ actions . . . or a federal district court decision.”
Third, EPA clarified that a regional office no longer needs to seek concurrence from headquarters to diverge from national policy if such regional action is required in certain states “to act in accordance with”
an adverse federal court decision that arises locally or regionally.
Resp‘t‘s Br. 10–11. EPA also makes the compelling point that
Congress did not purport to forecast all the unique and unpredictable variables associated with regional court decisions,
particularly when they opine on national policy. Section 7601(a)(2) is entirely silent on this more complex subject matter, and it is plausible (at the very least) for the agency to read section 7601(a)(2) as focusing on improving the consistency of actions that EPA regions take in the absence of judicial decisions.
Resp‘t‘s Br. 30. We agree. Overall, EPA‘s construction of
Petitioners struggle to articulate what regulatory provisions EPA should have included in place of the Amended Regulations. They appear to endorse the view that the Amended Regulations should require the agency to petition the Supreme Court for review of adverse judicial decisions, or require EPA‘s General Counsel to consult with the regions about how to handle court decisions that are at odds with EPA‘s national rules. None of these suggestions would make much of a dent in the inconsistencies inherently generated by
Moreover, Petitioners’ suggestions do not involve powers delegated by the Administrator to the regions, and hence would not be promulgated under
Petitioners’ ostensible parade of horribles – a potentially national thicket of inconsistent decisions – is overblown, to say the least. If no party is able to overturn an inconsistency-creating decision through a petition for rehearing, en banc review, or certiorari to the Supreme Court, EPA obviously will be in a position to consider initiating a rule making procedure to resolve the conflict, or take other final agency action that has the force of law. Alternatively, a petitioner with standing may petition for rule making should EPA fail to initiate such a proceeding.
The simple point here is that the statute clearly contemplates some splits in the regional circuits. There is nothing in the statute to indicate that EPA is bound to change its rules nationwide each time a regional circuit court issues a decision that is at odds with an EPA rule. Were this the case, then the first court of appeals to address an issue would determine EPA‘s policy nationwide. And that would make no sense because only the D.C. Circuit has jurisdiction to hear and decide cases involving “nationally applicable regulations” or cases in which the action is “based on a determination of nationwide scope or effect.” The implication of Petitioners’ position – that EPA must conform its policies nationwide to the first circuit decision disagreeing with an agency rule – is illogical, and plainly inconsistent with the Act‘s judicial review provision. In fact, it is even worse than that, because if a second (or third, etc.) circuit were to disagree with that first mover, EPA would be forced to change its rules again to avoid a lack of uniformity, if that were even possible. There is certainly no statutory requirement that EPA follow such an approach.
Petitioners’ arbitrary and capricious challenge fails for much the same reason as their Chevron step two challenge. As EPA has explained, the Amended Regulations codify obedience to the law and preserve
3. Petitioners’ Argument that NEDACAP I Controls this Case
NEDACAP I held that intercircuit nonacquiescence violated the previous consistency regulations because those regulations “implie[d] that EPA was obligated to respond to the Summit Petroleum decision in a manner that eliminated regional inconsistency.” 752 F.3d at 1011. Petitioners argue that because those regulations largely mirrored
First, to the extent the parties and decision in NEDACAP I examined the Act, they did so solely with respect to
Second, NEDACAP I specifically stated that “EPA might . . . revise its . . . regulations to account for regional variances created by a judicial decision or circuit splits.” NEDACAP I, 752 F.3d at 1010. It is implausible that NEDACAP I invited regulations its own holding would invalidate. Indeed, had NEDACAP I assessed the Summit Directive solely vis-à-vis § 7601(a)‘s strictures, and without reference to the then-effective regulations, the result would have been completely different. But NEDACAP I did not examine that issue.
Nevertheless, we recognize that the prior consistency regulations resembled
III. CONCLUSION
For these reasons, we deny the petitions for review.
So ordered.
SILBERMAN, Senior Circuit Judge, concurring: I fully agree with the court‘s opinion. I write separately to point out that the EPA can often rather easily mitigate the inter-circuit non-acquiescence problem – and it should.
In the case of Summit Petroleum Corp. v. EPA, 690 F.3d 733 (6th Cir. 2012) – which started this whole donnybrook – EPA, in accordance with its regulations, responded to a request to the Administrator for a determination whether a number of natural gas facilities were “adjacent” and thereby constituted a single “major source” (which would impose a regulatory burden). None of the various locations shared a common boundary with one another, and they were scattered across 43 square miles. Nevertheless, EPA determined that the facilities were regarded as “adjacent” under its regulations, pointing to a memorandum prepared by its then-Assistant Administrator, Gina McCarthy (subsequently appointed Administrator). See Memorandum from Gina McCarthy, Assistant Adm‘r, to Reg‘l Adm‘rs Regions I-X (Sept. 22, 2009). That was a reversal of EPA‘s previous position which interpreted “adjacent” geographically – not functionally. There is little question that, although this interpretation was applied first to a single set of facilities in the Summit case, it constituted an interpretation of “nationwide scope and effect.” Therefore, it seems to me that the EPA Administrator should have so declared, and then any challenge should have been brought to the D.C. Circuit. Instead, Summit petitioned for review in the Sixth Circuit, leading to the national uncertainty that NEDACAP decries in the case before us.
It is clear that Congress, by empowering the EPA Administrator to publish a finding that an action is “based on a determination of nationwide scope or effect,” delegated unusual authority to control the venue of judicial review. But her exercise of that authority is not unreviewable. Any circuit court, including the D.C. Circuit, could reject EPA‘s determination that an issue is of national importance as arbitrary and capricious under the APA. And conversely, a failure of EPA to so declare in an appropriate case could also be challenged by a party with standing – like NEDACAP here – who desired uniformity of national regulation, so long as it had first petitioned EPA to publish the necessary finding.
In Summit, the question as to whether the case belonged in the D.C. Circuit did not arise. But the Fifth Circuit has concluded that whether or not an issue is of nationwide scope and effect is only a venue question that it could determine de novo, without any deference to EPA. See Texas v. EPA, 829 F.3d 405, 417-22 (5th Cir. 2016). I think that opinion is quite wrong. To be sure, we have said that the question whether a case challenging EPA‘s action should be brought in a regional circuit or before us is not jurisdictional. Dalton Trucking, Inc. v. EPA, 808 F.3d 875, 879-80 (D.C. Cir. 2015). Nevertheless, it is more than the ordinary venue issue which typically involves such questions as the convenience of the parties. Here it is the legislative provision that directs regional issues to regional circuits, and national issues to our circuit for uniform resolution. As such, it is venue plus; it approaches jurisdiction. Thus, while the EPA Administrator‘s determination does not escape review under the APA‘s arbitrary and capricious standard, it certainly should be entitled to deference. Indeed, I think deference in this situation should be particularly generous because the Administrator, as the national regulator, is in a much better position than a regional circuit court to evaluate the nationwide impact of her action. Congress recognized that comparative advantage by delegating this unusual authority to an administrative agency.
Finally, as the court recognizes, it is possible that an issue of nationwide scope