STATE OF NEW JERSEY, ET AL., PETITIONERS v. ENVIRONMENTAL PROTECTION AGENCY, RESPONDENT UTILITY AIR REGULATORY GROUP, ET AL., INTERVENORS
No. 05-1097
Unitеd States Court of Appeals FOR THE DISTRICT OF COLUMBIA CIRCUIT
Decided February 8, 2008
Argued December 6, 2007; Consolidated with Nos. 05-1104, 05-1116, 05-1118, 05-1158, 05-1159, 05-1160, 05-1162, 05-1163, 05-1164, 05-1167, 05-1174, 05-1175, 05-1176, 05-1183, 05-1189, 05-1263, 05-1267, 05-1270, 05-1271, 05-1275, 05-1277, 06-1211, 06-1220, 06-1231, 06-1287, 06-1291, 06-1293, 06-1294; On Petitions for Review of the Final Action of the Environmental Protection Agency
Vanya S. Hogen, Colette Routel, Sarah I. Wheelock, Riyaz A. Kanji, Philip E. Katzen, and Ann Tweedy were on the briefs for petitioners National Congress of American Indians and Treaty Tribes. Brian B. O‘Neill entered an appearance.
Bart E. Cassidy and Meredith DuBarry Huston were on the briefs for petitioner ARIPPA. Carol F. McCabe entered an appearance.
Scott C. Oostdyk, Neal J. Cabral, Grant F. Crandall, Judith Ellen Rivlin, and Eugene M. Trisko were on the briefs for petitioners American Coal for Balanced Mercury Regulation, et al. and United Mine Workers of America, AFL-CIO.
James B. Vasile, Brian R. Gish, Susan E. Reeves, and Robert K. Reges were on the briefs for petitioner Alaska Industrial Development and Export Authority.
Anne Milgram, Attorney General, Attorney General‘s Office of the State of New Jersey, Christopher D. Ball and Ruth E. Carter, Deputy Attorneys General, Edmund G. Brown, Jr., Attorney General, Attorney General‘s Office of the State of California, Susan Durbin, Deputy Attorney General, Richard Blumenthal, Attorney General, Attorney General‘s Office of the State оf Connecticut, Matthew Levine, Assistant Attorney General, Joseph R. Biden, III, Attorney General, Attorney General‘s Office of the State of Delaware, Valerie S. Csizmadia, Deputy Attorney General, Lisa Madigan, Attorney General, Attorney General‘s Office of the State of Illinois, Ann Alexander, Assistant Attorney, G. Steven Rowe, Attorney
Henry V. Nickel, F. William Brownell, David G. Scott, and Lee B. Zeugin were on the briefs for petitioner Utility Air Regulatory Group.
Eric G. Hostetler, Attorney, U.S. Department of Justice, argued the cause for respondent. With him on the brief were John C. Cruden, Deputy Assistаnt Attorney General, Jon M. Lipshultz and Matthew R. Oakes, Attorneys, and Carol S. Holmes and Howard J. Hoffman, Counsel, U.S. Environmental Protection Agency. Wendy L. Blake, Attorney, U.S. Environmental Protection Agency, entered an appearance.
Lee B. Zeugin argued the cause for Industry State Intervenors and State Amici Curiae. With him on the briefs were Troy King, Attorney General, Attorney General‘s Office of the State of Alabama, Milt E. Belcher, Assistant Attorney General, Wayne Stenehjem, Attorney General, Attorney General‘s Office of the State of North Dakota, Paul Seby, Special Assistant, Lyle Witham, Solicitor General, Steve Carter, Attorney General, Attorney General‘s Office of the State of Indiana, Thomas M. Fisher, Assistant Attorney General, Lawrence E. Long, Attorney General, Attorney General‘s Office of the State of South Dakota, Roxanne Giedd, Deputy Attorney General, Mark J. Rudolph, Senior Counsel, State of West Virginia, Department of Environmental Protection, Peter H. Wyckoff, Henri D. Bartholomot, Jon C. Bruning, Attorney General, Attorney General‘s Office of the State of Nebraska, Jodi Fenner, Assistant Attorney General, Patrick Crank, Attorney General, Attorney General‘s Office of the State of Wyoming, Nancy Vehr, Assistant Attorney General, Henry V. Nickel, F. William Brownell, Lee B. Zeugin, William M.
Leah W. Casey was on the brief for intervenоr for petitioner Adirondack Mountain Club.
Charles H. Knauss, Sandra P. Franco, and David G. Scott, II were on the brief for intervenors Producers for Electric Reliability and West Associates. Karma B. Brown entered an appearance.
John T. Suttles, Jr. was on the brief for intervenors Physicians for Social Responsibility, et al.
Peter Glaser, Daniel J. Popeo, and Paul D. Kamenar were on the brief for amicus curiae Washington Legal Foundation in support of respondent.
Before: ROGERS, TATEL and BROWN, Circuit Judges.
Opinion for the Court by Circuit Judge ROGERS.
ROGERS, Circuit Judge: Before the court are petitions for review of two final rules promulgated by the Environmental Protection Agency regarding the emission of hazardous air pollutants (“HAPs“) from electric utility steam generating units (“EGUs“). The first rule removes coal- and oil-fired EGUs from the list of sources whose emissions are regulated under section 112 of the Clean Air Act (“CAA“),
Petitioners contend that the Delisting Rule is contrary to the plain text and structure of section 112. In response, EPA and certain intervenors rely on section 112(n), which sets special conditions before EGUs can be regulated under section 112, to justify the rule. We hold that the delisting was unlawful. Section 112 requires EPA to regulate emissions of HAPs. Section 112(n) requires EPA to regulate EGUs under section 112 when it concludes that doing so is “appropriate and necessary.” In December 2000, EPA concluded that it was “appropriate and necessary” to regulate mercury emissions from coal- and oil-fired power plants under section 112 and listed these EGUs as sources of HAPs regulated under that section. In 2005, after reconsidering its previous determination, EPA purported to remove these EGUs from the section 112 list. Thereafter it promulgated CAMR under section 111. EPA‘s removal of these EGUs from the section 112 list violates the CAA because section 112(c)(9) requires EPA to make specific findings bеfore removing a source listed under section 112; EPA concedes it never made such findings. Because coal-fired EGUs are listed sources under section 112, regulation of existing coal-fired EGUs’ mercury emissions under section 111 is prohibited, effectively invalidating CAMR‘s regulatory approach. Accordingly, the court grants the petitions and vacates both rules.
In 1970, Congress added section 112 to the CAA. Pub. L. No. 91-604, § 4(a), 84 Stat. 1676, 1685 (1970). In its original form, section 112 required EPA to list HAPs that should be regulated because they could “cause, or contribute to, an increasе in mortality or an increase in serious irreversible[] or incapacitating reversible[] illness.” Id. § 112(a)(1). Over the next eighteen years, however, EPA listed only eight HAPs, established standards for only seven of these and as to these seven addressed only a limited selection of possible pollution sources. See Nat‘l Mining Ass‘n v. EPA, 59 F.3d 1351, 1353 n.1 (D.C. Cir. 1995); S. COMM. ON ENV‘T & PUB. WORKS, CLEAN AIR ACT AMENDMENTS OF 1989, S. REP. NO. 101-228, at 131 (1989), reprinted in 1990 U.S.C.C.A.N. 3385, 3516.
In 1990, Congress, concerned about the slow pace of EPA‘s regulation of HAPs, altered section 112 by eliminating much of EPA‘s discretion in the process. See, e.g., Nat‘l Lime Ass‘n. v. EPA, 233 F.3d 625, 633-34 (D.C. Cir. 2000). Three aspects of the amendments are relevant here.
First, Congress required EPA to regulate more than one hundred specific HAPs, including mercury and nickеl compounds.
Second, Congress restricted the opportunities for EPA and others to intervene in the regulation of HAP sources. For HAPS that result in health effects other than cancer, as is true of mercury, Congress directed that the Administrator “may delete any source category” from the section 112(c)(1) list only after determining that “emissions from no source in the category or subcategory concerned . . . exceed a level which is adequate to protect public health with an ample margin of safety and no adverse environmental effect will result from emissions from any source.” Id.
Third, Congress required the Administrator to evaluate regulatory options with care and to meet certain conditions before listing EGUs as an HAP source under section 112(c)(1). Specifically:
[t]he Administrator shall perform a study of the hazards to public health reasonably anticipated to occur as a result of emissions by [EGUs] of pollutants listed under subsection (b) of this section after imposition of the requirements of this chapter. The Administrator shall report the results of this study to the Congress within 3 years after November 15, 1990. The Administrator shall develop and describe in the
Administrator‘s report to Congress alternative control strategies for emissions which may warrant regulation under this section. The Administrator shall regulate [EGUs] under this section, if the Administrator finds such regulation is appropriate and necessary after considering the results of the study required by this subparagraph.
Id.
The study of public health hazards required by section 112(n)(1)(A) was finally completed in 1998. This study found “a plausible link between anthropogenic releases of mercury from industrial and combustion sources in the United States and methylmercury in fish” and that “mercury emissions from [EGUs] may add to the existing environmental burden.” EPA, OFFICE OF AIR QUALITY PLANNING AND STANDARDS, STUDY OF HAZARDOUS AIR POLLUTANT EMISSIONS FROM ELEC. UTIL. STEAM GENERATING UNITS--FINAL REPORT TO CONG. 7-1, 45 (1998). On December 20, 2000, the Administrator announced in light of the study mandated by section 112(n)(1)(A), as well as subsequent information and consideration of alternative feasible control strategies -- that it was “appropriate and necessary” to regulate coal- and oil-fired EGUs under section 112 because, as relevant, mercury emissions from EGUs, which are the largest domestic source of mercury emissions, present significant hazards to public health and the environment. Regulatory Finding on the Emissions of Hazardous Air Pollutants From Electric Utility Steam Generating Units, 65 Fed. Reg. 79,825, 79,827 (Dec. 20, 2000) (“2000 Determination“). “As a result the source category for Coal- and Oil-Fired [EGUs] was added to the list of source categories under section 112(c)” on December 20, 2000. National Emission Standards for Hazardous Air Pollutants: Revision of Source Category List Under Section 112 of the Clean Air Act
In early 2004, EPA proposed two regulаtory alternatives to control emissions from coal- and oil-fired EGUs. The first was similar to EPA‘s proposal in 2000 -- regulation under section 112 through issuance of Maximum Achievable Control Technology standards, see, e.g.,
Having decided that it possessed the authority to delist EGUs without making the findings required by section 112(c)(9), EPA explained that the delisting of EGUs was justified because their regulation under section 112 was neither “appropriate” nor “necessary.” The potential mercury emissions reductions achievable under CAMR figured prominently in EPA‘s explanation of its delisting of coal-fired EGUs, id. at 16,005, which EPA promulgated in May 2005. CAMR established plant-specific “standards of performance” for mercury emissions from new coal-fired EGUs under section 111(b). 70 Fed. Reg. at 28,613-16. Relying on sections 111(b) and (d), it also established a national mercury emissions cap for new and existing EGUs, allocating each state and certain tribal areas a mercury emissions budget. This was supplemented by a voluntary cap-and-trade program. Id. at 28,616, 28,622,
II.
New Jersey and fourteen additional States, the Michigan Department of Environmental Quality, the Pennsylvania Department of Environmental Protection, the City of Baltimore (“Government Petitioners“), and various environmental organizations (“Environmental Petitioners“) contend that EPA violated Section 112‘s plain text and structure when it did not comply with the requirements of section 112(c)(9) in delisting EGUs. Because we agree, we do not reach their alternative contention that even if this delisting was lawful, EPA was arbitrary and capricious in reversing its determination that regulating EGUs under section 112 was “appropriate and necessary.” Government and Environmental Petitioners further contend that CAMR is incоnsistent with provisions of section 111, and that both the Delisting Rule and CAMR should be vacated. Certain intervenors -- including various industry representatives, States, and state agencies -- join EPA in urging the lawfulness of the two rules.
The court reviews the challenges to the final rules to determine whether EPA‘s promulgation of them was arbitrary or capricious, an abuse of discretion, or otherwise not in
Petitioners contend that once the Administrator determined in 2000 that EGUs should be regulated under Section 112 and listed them under section 112(c)(1), EPA had no authority to delist them without taking the steps required under section 112(c)(9). We agree.3
Section 112(c)(9) provides that:
The Administrator may delete any source category from the [section 112(c)(1) list] . . . whenever the Administrator . . . [determines] that emissions from no source in the category or subcategory concerned exceed a level which is adequate to protect public health with an ample margin of safety and no adverse environmental effect will result from emissions from any source. [emphasis added]
EPA concedes that it listed EGUs under section 112. Thus, because section 112(c)(9) governs the removal of “any source category” (emphasis added) from the section 112(c)(1) list, and nothing in the CAA exempts EGUs from section 112(c)(9), the only way EPA could remove EGUs from the section 112(c)(1) list was by satisfying section 112(c)(9)‘s requirements. Yet EPA concedes that it never made the findings section 112(c)(9) would require in order to delist EGUs. EPA‘s purported removal of EGUs from the section 112(c)(1) list therefore violated the CAA‘s plain text and must be rejected under step one of Chevron.
EPA offers several arguments in an attempt to evade section 112(c)(9)‘s plain text, but they are not persuasive. First, EPA seeks to reach step two of Chevron and obtain judicial deference to its interpretation by maintaining that section 112(n)(1) makes section 112(c)(9) ambiguous because “[l]ogically, if EPA makes a determination under section 112(n)(1)(A) that power plants should not be regulated at all under section 112 . . . [then] this determination ipso facto must result in removal of power plants from the section 112(c) list.” Resp‘t Br. at 26. But this simply does not follow. Section 112(n)(1) governs how the Administrator decides whether to list EGUs; it says nothing about delisting EGUs, and the plain text of section 112(c)(9) specifies that it applies to the delisting of “any source.” In the context of the CAA, “the word ‘any’ has an expansive
Second, EPA maintains that it possesses authority to remove EGUs from the section 112 list under the “fundamental principle of administrative law that an agency has inherent authority to reverse an earlier administrative determination or ruling where an agency has a principled basis for doing so.” Resp‘t Br. at 22 (citing Williams Gas Processing-Gulf Coast Co. v. FERC, 475 F.3d 319, 326 (D.C. Cir. 2006); Dun & Bradstreet
Finally, EPA states in its brief thаt it has previously removed sources listed under section 112(c) without satisfying the requirements of section 112(c)(9). But previous statutory violations cannot excuse the one now before the court. “[W]e do not see how merely applying an unreasonable statutory interpretation for several years can transform it into a reasonable interpretation.” F.J. Vollmer Co. v. Magaw, 102 F.3d 591, 598 (D.C. Cir. 1996). EPA suggests that it would be “anomalous” for it to be forced to await a court order to correct “its own mistake” in listing coal- and oil-fired EGUs as a source under section 112(c)(1). Resp‘t Br. at 32; see also id. at 33 (citing
Accordingly, in view of the plain text and structure of section 112, we grant the рetitions and vacate the Delisting Rule. See Allied-Signal, Inc. v. U.S. Nuclear Regulatory Comm‘n, 988 F.2d 146, 150-51 (D.C. Cir. 1993). This requires vacation of CAMR‘s regulations for both new and existing EGUs. EPA promulgated the CAMR regulations for existing EGUs under section 111(d), but under EPA‘s own interpretation of the section, it cannot be used to regulate sources listed under section 112; EPA thus concedes that if EGUs remain listed under section 112, as we hold, then the CAMR regulations for existing sources must fall. Resp‘t Br. at 99, 101-02; see also Delisting Rule, 70 Fed. Reg. at 16,031. EPA promulgated the CAMR regulations for new sources under section 111(b) on the basis that there would be no section 112 regulation of EGU emissions and that the new source performance standards would be accompanied by a national emissions cap and a voluntary cap-and-trade program. See CAMR, 70 Fed. Reg. at 28,608-10, 28,614-15, 28,619, 28,622; see also id. at 28,616. Given that these vital assumptions were incorrect, the court must vacate CAMR‘s new source performance standards and remand them to EPA for reconsideration, for “[s]everance and affirmance of a portion of an administrative regulation is improper if there is ‘substantial doubt’ that the agency would have adopted the severed portiоn on its own.” Davis County Solid Waste Mgmt. v. EPA, 108 F.3d 1454, 1459 (D.C. Cir. 1997) (citations omitted). In view of our disposition, the court does not reach other contentions of petitioners or intervenors.