In New York v. EPA,
[The] rule states categorically that the replacement of components with identical or functionally equivalent components that do not exceed 20% of the replacement value of the process unit and does not change its basic design parameters is not a change and is within the RMRR exclusion.
Equipment Replacement Provision of the Routine Maintenance, Repair and Replacement Exclusion, 68 Fed.Reg. 61,248, 61,270 (Oct. 27, 2003) (“Final Rule”); see also 70 Fed.Reg. 33,838 (June 10, 2005)(“Recon-sideration”). Hence, the ERP would allow sources to avoid NSR when replacing equipment under the twenty-percent cap notwithstanding a resulting increase in emissions. The court stayed the effective date of the ERP on December 24, 2003. We now vacate the ERP because it is contrary to the plain language of section 111(a)(4) of the Act.
The Clean Air Act requires new and modified sources of pollution to undergo NSR, a permitting process that imposes specific pollution control requirements depending upon the geographic location of the source.
The term “modification” means any physical change in, or change in the method of operation of, a stationary source which increases the amount of any air pollutant emitted by such source or which results in the emission of any air pollutant not previously emitted.
42 U.S.C. § 7411(a)(4) (emphasis added). Since the inception of NSR, RMRR has been excluded from the definition of “modification.” See 39 Fed.Reg. 42,510, 42,514 (Dec. 5, 1974); 43 Fed.Reg. 26,388, 26,403-04 (June 19, 1978). Heretofore, EPA applied the RMRR exclusion through “a case-by-case determination by weighing the nature, extent, purpose, frequency, and cost of the work as well as other factors to
The government and environmental petitioners contend that the ERP is contrary to the plain text of the Act because the statutory definition of “modification” applies unambiguously to any physical change that increases emissions, necessarily including the emission-increasing equipment replacements excused from NSR by the rule. They maintain that the word “any,” when given its natural meaning, requires that the phrase “physical change” be read broadly, such that EPA’s attempt to read “physical change” narrowly would relegate the word “any” to an insignificant role.
In evaluating the petitioners’ contention, we proceed under the familiar two-part test of Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc.,
The petitioners and EPA agree that the phrase “physical change” is susceptible to multiple meanings, each citing dictionary definitions. However, “the sort of ambiguity giving rise to Chevron deference ‘is a creature not of definitional possibilities, but of statutory context.’ ” American Bar Ass’n v. FTC,
The parties’ essential disagreement, then, centers on the effect of Congress’s decision in defining “modification” to insert the word “any” before “physical change.” According to the petitioners, the word “any” means that the phrase “physical change” covers any activity at a source that could be considered a physical change that increases emissions. According to EPA, “any” does nothing to resolve ambiguity in the phrase it modifies. EPA maintains that because “physical change” is “susceptible to multiple meanings,” id. at 61,271, “identifying activities that are ‘changes’ for NSR purposes ... requires an exercise of Agency expertise,” “the classic situation in which an agency is accorded deference under Chevron,” id. at 61,272. Under this approach, once EPA has identified an activity as a “physical change,” the word “any” requires that the activity be subject to NSR. We conclude that the differences between the parties’ interpretations of the role of the word “any” are resolved by recognizing that “[r]ead naturally, the word ‘any’ has an expansive meaning, that is, ‘one or some indiscriminately of whatever kind,’ ” United States v. Gonzales,
In a series of cases, the Supreme Court has drawn upon the word “any” to give the word it modifies an “expansive meaning” when there is “no reason to contravene the clause’s obvious meaning.” Norfolk S. Rwy. Co. v. Kirby,
Although EPA is correct that the meaning of “any” can differ depending upon the statutory setting, see Nixon v. Missouri Mun. League,
Even without specific reliance on the effect of “any,” this court has construed the definition of “modification” broadly. In Alabama Power, the court explained that “the term ‘modification’ [in section 111(a)(4) ] is nowhere limited to physical changes exceeding a certain magnitude.”
EPA’s attempt to avoid the persuasive force of these decisions and to find ambiguity in the phrase “any physical change” fails for a variety of reasons. Even assuming that the decisions construing section 111(a)(4) are not “judicial precedent holding that the statute unambiguously forecloses the agency’s interpretation,” Nat’l Cable & Telecomms. Ass’n v. Brand X Internet Servs., - U.S. -, -,
Even in the absence of such precedent, EPA’s approach to interpreting “physical change,” as well as a similar approach by
In contrast, the petitioners’ approach, by adopting an expansive reading of the phrase “any physical change,” gives natural effect to all the words used by Congress and reflects both their common meanings and Congress’s purpose in enacting the 1970 and 1977 amendments. See New York I,
The expansiveness of the petitioners’ approach does not leave the definition of “any physical change” without limits. The
The fact that EPA, through the RMRR exclusion, has historically interpreted “any physical change” to exclude changes of trivial regulatory concern on a de minimis rationale, see Alabama Power,
EPA’s remaining arguments also fail to demonstrate that the phrase “any physical change” is ambiguous. The fact that the court concluded that the word “increases” in section 111(a)(4) is ambiguous, see New York I,
“Therefore, for EPA to avoid a literal interpretation at Chevron step one, it must show either that, as a matter of historical fact, Congress did not mean what it appears to have said, or that, as a matter of logic and statutory structure, it almost surely could not have meant it.” Engine Mfrs. Ass’n v. EPA,
As for logic, EPA cannot show any incoherence in Congress requiring NSR for equipment replacements that increase emissions while allowing replacements that do not increase emissions to avoid NSR. EPA acknowledges the reasonableness of its past expansive interpretation of “any physical change.” See id.; 70 Fed Reg. at 33,842; Respondent’s Br. at 29. To the extent that EPA relies on the argument that allowing ERP projects has the potential to lower overall emissions through increased efficiency even if emissions increase at a source, the court in New York 1 rejected EPA’s similar argument in support of an exemption from NSR for pollution control projects. The court stated that “Congress could reasonably conclude, for example, that tradeoffs between pollutants are difficult to measure, and thus any significant increase in emissions of any pollutant should be subject to NSR.” New York I,
Likewise, EPA offers no reason to conclude that the structure of the Act supports the conclusion that “any physical change” does not mean what it says. EPA does not address the Act’s structure except in defending the reasonableness of the ERP as a policy choice. In that context, EPA points to the Act’s “many other
Accordingly, we hold that the ERP violates section 111(a)(4) 'of the Clean Air Act in two respects. First, Congress’s use of the word “any” in defining a “modification” means that all types of “physical changes” are covered. Although the phrase “physical change” is susceptible to multiple meanings, the word “any” makes clear that activities within each of the common meanings of the phrase are subject to NSR when the activity results in an emission increase. As Congress limited the broad meaning of “any physical change,” directing that only changes that increase emissions will trigger NSR, no other limitation (other than to avoid absurd results) can be implied. The definition of “modification,” therefore, does not include only physical changes that are costly or major. Second, Congress defined “modification” in terms of emission increases, but the ERP would allow equipment replacements resulting in non-de minimis emission increases to avoid NSR. Therefore, because it violates the Act, we vacate the ERP.
Notes
. NSR consists of two programs: prevention of significant deterioration ("PSD”) and non-attainment NSR. See New York I,
. The ERP provides:
Without regard to other considerations, routine maintenance, repair and replacement includes, but is not limited to, the replacement of any component of a process unit with an identical or functionally equivalent components), and maintenance and repair activities that are part of the replacement activity, provided that all of the requirements in paragraphs (cc)(l) through (cc)(3)of this section are met.
40 C.F.R. § 52.2 l(cc). Paragraph (cc)(l) establishes that the fixed capital cost of the replacement component cannot exceed twenty percent of the replacement value of the process unit. Paragraph (cc)(2) states that • the replacement cannot change the basic design parameters of the process unit. Paragraph (cc)(3) requires that the replacement activity not cause the process unit to exceed any independent, legally enforceable emission limitation. The ERP also amends 40 C.F.R. §§ 51.165, 51.166, and 52.24, but given the similarity of the sections, the court will follow the practice of the parties in citing only section 52.21.
. See TVA v. Hill,
. The court has no occasion to decide whether part replacements or repairs necessarily constitute a "modification” under the definition taken as a whole.
