STATE OF CALIFORNIA, BY AND THROUGH ITS GOVERNOR EDMUND G. BROWN JR., ATTORNEY GENERAL XAVIER BECERRA AND CALIFORNIA AIR RESOURCES BOARD, ET AL., PETITIONERS v. ENVIRONMENTAL PROTECTION AGENCY AND ANDREW WHEELER, AS ADMINISTRATOR OF THE UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, RESPONDENTS ALLIANCE OF AUTOMOBILE MANUFACTURERS AND ASSOCIATION OF GLOBAL AUTOMAKERS, INC., INTERVENORS
No. 18-1114
United States Court of Appeals FOR THE DISTRICT OF COLUMBIA CIRCUIT
Decided October 25, 2019
Argued September 6, 2019. Consolidated with 18-1118, 18-1139, 18-1162. On Petitions for Review of an Action of the United States Environmental Protection Agency
David Zaft, Deputy Attorney General, Office of the Attorney General for the State of California, argued the cause for State Petitioners. With him on the briefs were Xavier Becerra, Attorney General, Robert W. Byrne, Senior Assistant Attorney General, Gary E. Tavetian and David A. Zonana, Supervising Deputy Attorneys General, Julia K. Forgie, Deputy Attorney General, William Tong, Attorney General, Office of the Attorney General for the State of Connecticut, Matthew I. Levine and Scott N. Koschwitz, Assistant Attorneys General, Karl A. Racine, Attorney General, Office of the Attorney General for the District of Columbia, Loren L. AliKhan, Solicitor General, Thomas J. Miller, Attorney General, Office of the Attorney General for the State of Iowa, Jacob Larson, Assistant Attorney General, Kathleen Jennings, Attorney General, Office of the Attorney General for the State of Delaware, Valerie Edge, Deputy Attorney General, Kwame Raoul, Attorney General, Office of the Attorney General for the State of Illinois, Daniel I. Rottenberg, Assistant Attorney General, Brian E. Frosh, Attorney General, Office of the Attorney General for the State of Maryland, Steven M. Sullivan, Solicitor General, Aaron M. Frey, Attorney General, Office of the Attorney General for the State of Maine, Mary M. Sauer and Laura E. Jensen, Assistant Attorneys General, Keith Ellison, Attorney General, Office of the Attorney General for the State of Minnesota, Max Kieley, Assistant Attorney General, Maura Healey, Attorney General, Office of the Attorney General for the Commonwealth of Massachusetts, Christophe Courchesne, Carol Iancu and Matthew Ireland, Assistant Attorneys General, Megan M. Herzog, Special Assistant Attorney General, Letitia James, Attorney General, Office of the Attorney General for the State of New York, Yueh-Ru Chu, Chief, Affirmative Litigation Section, Environmental Protection Bureau, Gavin G. McCabe, Special Assistant Attorney General, Gurbir S. Grewal, Attorney General, Office of the Attorney General for the State of New Jersey, David C. Apy, Assistant Attorney General, Robert J. Kinney, Deputy Attorney General, Josh Shapiro, Attorney General, Office of the Attorney General for the Commonwealth of Pennsylvania, Michael J. Fischer, Chief Deputy Attorney General, Kristen M. Furlan, Assistant Director, Ellen F. Rosenblum, Attorney General, Office of the Attorney General for the State of Oregon, Paul Garrahan, Attorney-in-Charge, Thomas J. Donovan, Jr., Attorney General, Office of the Attorney General for the
Sean H. Donahue argued the cause for petitioners Public Interest Organizations. With him on the briefs were Matthew Littleton, Benjamin Longstreth, Irene Gutierrez, Joanne Spalding, Alejandra Núñez, Vera Pardee, Vickie Patton, Peter Zalzal, Martha Roberts, Alice Henderson, Erin Murphy, Howard I. Fox, Javier Guzman, Travis Annatoyn, Maya Golden-Krasner, Scott L. Nelson, and Emily K. Green. Howard M. Crystal, David D. Doniger, Seth L. Johnson, and Susannah Weaver entered appearances.
Robert A. Wyman, Jr., Joel C. Beauvais, Devin O‘Connor, and Kevin Poloncarz were on the briefs for petitioners National Coalition for Advanced Transportation, et al. Steven Croley entered an appearance.
Michael Burger was on the brief for amici curiae The National League of Cities, et al. in support of petitioners. Susan E. Amron, Edward N. Siskel, and Jennifer M. Stacy entered appearances.
Philip J. Weiser, Attorney General, Office of the Attorney General for the State of Colorado, and Eric R. Olson, Solicitor General, were on the brief for amicus curiae the State of Colorado in support of petitioners.
Gary S. Guzy, Beth S. Brinkmann, Thomas Brugato, and Jeffery S. Dennis were on the brief for amicus curiae Advanced Energy Economy in support of petitioners.
Bayron T. Gilchrist, Barbara Baird, William B. Wong, and Brian Tomasovic were on the brief for amicus curiae South Coast Air Quality Management District in support of petitioners.
Jared P. Marx and Samuel Walsh were on the brief for amicus curiae Lyft, Inc. in support of petitioners.
Joseph R Palmore was on the brief for amicus curiae Consumers Federation of America in support of petitioners.
Eric G. Hostetler, Attorney, U.S. Department of Justice, argued the cause for respondents. With him on the brief were Eric Grant, Deputy Assistant Attorney General, and David Orlin and Mark Kataoka, Counsel, U.S. Environmental Protection Agency.
Erin E. Murphy argued the cause for intervenors. With her on the brief were Paul D. Clement, Stuart Drake, C. Harker Rhodes IV, Raymond B. Ludwiszewski, John T. Whatley, Susan T. Conti, and Charles H. Haake.
Before: ROGERS, SRINIVASAN and PILLARD, Circuit Judges.
Opinion for the Court by Circuit Judge
ROGERS, Circuit Judge: After the Environmental Protection Agency (“EPA“) announced that it would reconsider the appropriateness of, and conduct a rulemaking to potentially alter, greenhouse gas emission standards adopted in 2012 for model year 2022 to 2025 motor vehicles, a coalition of states, environmental groups, and industry representatives brought this challenge. Because we conclude EPA has not engaged in “final action” under the Clean Air Act, the petitions for review are dismissed for lack of jurisdiction.
I.
Section 202(a) of the Clean Air Act (“CAA“) directs EPA to “prescribe (and from time to time revise)” standards for “the emission of any air pollutant from . . . new motor vehicles or new motor vehicle engines,” which “cause, or contribute to, air pollution which may reasonably be anticipated to endanger public health or welfare.”
The Energy Policy and Conservation Act (as amended by the Energy Independence and Security Act) requires the Secretary of Transportation to prescribe by regulation corporate average fuel economy (“CAFE“) standards for new vehicles.
In view of “[t]he close relationship between emissions of CO2 — the most prevalent greenhouse gas emitted by motor vehicles — and fuel consumption, [which] means that the technologies to control CO2 emissions and to improve fuel economy overlap to a great degree,” EPA and NHTSA announced in 2009 that they would collaborate to propose harmonized standards under their respective statutory authorities. See Notice of Upcoming Joint Rulemaking to Establish Vehicle GHG Emissions and CAFE Standards, 74 Fed. Reg. 24,007, 24,008, 24,009 n.7 (May 22, 2009). The following year, the two agencies published a joint final rule establishing “strong and coordinated” GHG emission and CAFE standards, increasing in stringency annually from model year 2012 to 2016. See Light-Duty Vehicle Greenhouse Gas Emission Standards and Corporate Average Fuel Economy Standards; Final
As a continuation of the National Program, in 2012 EPA and NHTSA published GHG emission and fuel economy standards for 2017 to 2025 model year (“MY“) vehicles. See 2017 and Later Model Year Light-Duty Vehicle Greenhouse Gas Emissions and Corporate Average Fuel Economy Standards, 77 Fed. Reg. 62,624, 62,638 (Oct. 15, 2012). Because NHTSA was statutorily limited to promulgating standards for a maximum of five model years, it issued CAFE standards for model years 2017 to 2021 and announced “augural” standards for model years 2022 to 2025 based on its “current best judgment of what [it] would have set at this time had [it] the authority to do so.” 77 Fed. Reg. at 62,629 n.8. The agencies estimated that this nine-year phase of the National Program would save four billion barrels of oil, reduce GHG emissions by two billion metric tons, and generate net lifetime fuel savings of $3,400 to $5,000 per vehicle sold. Id. at 62,627. California “reconfirmed its commitment” to deem compliance with the federal standards as compliance with its standards, so long as the proposed reductions “are maintained.” Id. at 62,637–38.
In light of the National Program‘s “long time frame” and NHTSA‘s need to conduct a further rulemaking to finalize the augural standards, the agencies also committed in 2012 to conduct a “comprehensive mid-term evaluation,” which would include public notice and comment. See id. at 62,784. The agencies stated that they “fully expect to conduct the mid-term evaluation in close coordination with” CARB and that “any adjustments to the standards” will “ensure[] continued harmonization of state and Federal vehicle standards.” Id. EPA issued regulations requiring it to make a final decision by April 1, 2018, on whether the model year 2022 to 2025 standards remained “appropriate” under Section 202(a) of the CAA based on “the record then before the Administrator.”
(i) The availability and effectiveness of technology, and the appropriate lead time for introduction of technology;
(ii) The cost on the producers or purchasers of new motor vehicles or new motor vehicle engines;
(iii) The feasibility and practicability of the standards;
(iv) The impact of the standards on reduction of emissions, oil conservation, energy security, and fuel savings by consumers; (v) The impact of the standards on the automobile industry;
(vi) The impacts of the standards on automobile safety;
(vii) The impact of the greenhouse gas emission standards on the Corporate Average Fuel Economy standards and a national harmonized program; and
(viii) The impact of the standards on other relevant factors.
Id. § 86.1818–12(h)(1). EPA‘s evaluation was to be “holistic . . . without placing decisive weight on any particular factor or projection.” 77 Fed. Reg. at 62,784.
If, at the end of the mid-term evaluation, EPA concluded that the 2012 standards remained appropriate under Section 202(a), that determination would be “final agency action . . . subject to judicial review on its merits.” Id. On the other hand, “[i]f the Administrator determines [the model year 2022 to 2025 standards] are not appropriate, the Administrator shall initiate a rulemaking to revise the standards, to be either more or less stringent as appropriate.”
A.
Original Determination. EPA, NHTSA, and CARB began research and outreach to stakeholders shortly after the 2012 final rule was issued, and in July 2016, published for public comment a 1,217-page Draft Technical Assessment Report. See Notice of Availability of Midterm Evaluation Draft Technical Assessment Report for Model Year 2022–2025 Light Duty Vehicle GHG Emissions and CAFE Standards, 81 Fed. Reg. 49,217, 49,218 (July 27, 2016). The agencies found that “[a] wider range of technologies exist[s] for manufacturers to use to meet the MY 2022–2025 standards, and at costs that are similar or lower, than those projected” when the standards were established in 2012. After receiving over 200,000 public comments on the Draft Technical Assessment Report, EPA published a 268-page Proposed Determination and accompanying 719-page Technical Support Document for further public comment. See Proposed Determination on the Appropriateness of the Model Year 2022-2025 Light-Duty Vehicle Greenhouse Gas Emissions Standards Under the Midterm Evaluation, 81 Fed. Reg. 87,927, 87,927–28 (Dec. 6, 2016). EPA concluded that the model year 2022 to 2025 GHG emission standards “remain appropriate under the Clean Air Act and therefore should not be amended to be either more or less stringent.” Id. at 87,927.
After a period of public comments on the Proposed Determination, EPA completed the mid-term evaluation with its January 2017 Original Determination. See Final Determination on the Appropriateness of the Model Year 2022–2025 Light-Duty Vehicle Greenhouse Gas Emissions Standards under the Midterm Evaluation, EPA-420-R-17-001 (2017) (“Original Determination“). The Administrator concluded that the “standards adopted in 2012 by the EPA remain feasible, practical and appropriate under Section 202(a) and do not need to be revised, after considering the factors laid out in the 2012 rule.” See Cover Letter to Stakeholders from Gina McCarthy, Administrator, EPA (Jan. 12,
B.
Revised Determination. Following the transition in presidential administrations, EPA changed lanes. President Trump announced in Detroit in March 2017 that he was “going to cancel” the Original Determination and “going to restore the originally scheduled mid-term review.” See Remarks by President Trump at American Center for Mobility, Detroit, MI, The White House (Mar. 15, 2017), https://www.whitehouse.gov/briefings-statements/remarks-president-trump-american-center-mobility-detroit-mi/. The following week, EPA formally announced that it would reconsider the Original Determination. See Notice of Intention To Reconsider the Final Determination, 82 Fed. Reg. 14,671, 14,671 (Mar. 22, 2017). EPA solicited public comment on the reconsideration in August, declaring that although it would conduct the reconsideration in accordance with Section 12(h), it was not reopening the Technical Assessment Report for comment. See Request for Comment on Reconsideration of the Final Determination, 82 Fed. Reg. 39,551, 39,551–53 (Aug. 21, 2017).
On April 13, 2018, EPA published its Revised Determination “withdrawing” the Original Determination and concluding that the standards were “not appropriate.” See Mid-Term Evaluation of Greenhouse Gas Emissions Standards for Model Year 2022–2025 Light-Duty Vehicles, 83 Fed. Reg. 16,077, 16,077 (Apr. 13, 2018) (“Revised Determination“). Because the Administrator now thought that the “current standards may be too stringent,” EPA would embark on a rulemaking to revise the standards “as appropriate.” Id. EPA explained that it had developed a “significant record” since the Original Determination and that this record suggested that “[m]any of the key assumptions EPA relied upon . . . were optimistic or have significantly changed.” Id. at 16,078. Consequently, EPA would, “in partnership with NHTSA, [] initiate a notice and comment rulemaking . . . to further consider appropriate standards for MY 2022–2025 light-duty vehicles.” Id. at 16,087. EPA reiterated that the “current standards remain in effect” and stated that the Revised Determination was “not a final agency action.” Id.
Although EPA concluded that the 2012 standards were “not appropriate,” its analysis of the individual Section 12(h) factors was less definitive. For example, with respect to the availability and effectiveness of technology factor, EPA had found in the 2017 Original Determination that there would “be multiple technologies available at reasonable cost to allow the industry to meet the MY2022–2025 standards.” See Original Determination at 18. EPA‘s analysis had shown that automakers would be able to meet the standards largely through use of advanced gasoline technologies, with only low numbers of strong hybrids and electric vehicles needed. Id. By contrast, in the 2018 Revised Determination, EPA
Since publishing the Revised Determination, EPA and NHTSA have issued a proposed rule setting GHG emission and fuel economy standards for the 2021 to 2026 model years at the same levels as were applicable for the 2020 model year. See The Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule for Model Years 2021–2026 Passenger Cars and Light Trucks, 83 Fed. Reg. 42,986, 42,988 (Aug. 24, 2018). Comments on the proposed rule were due by October 2018. See id. at 42,986. On September 27, 2019, EPA and NHTSA also formally announced the withdrawal of state authority to adopt and enforce state standards but otherwise left in place for now the 2012 standards. The Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule Part One: One National Program, 84 Fed. Reg. 51,310, 51,350–52 (Sept. 27, 2019).
II.
After EPA issued the Revised Determination, State Petitioners, Environmental Group Petitioners, and Electric Industry Petitioners timely filed for review pursuant to
Automobile Manufacturers moved to dismiss the petitions for
Only “final action” under the Clean Air Act is judicially reviewable.
Agency action is final only if “two independent conditions are met.” Soundboard Ass‘n v. Fed. Trade Comm‘n, 888 F.3d 1261, 1267 (D.C. Cir. 2018). “First, the action must mark the consummation of the agency‘s decisionmaking process“; in other words, “it must not be of a merely tentative or interlocutory nature.” Bennett v. Spear, 520 U.S. 154, 177–78 (1997) (internal quotation omitted). Second, “the action must be one by which rights or obligations have been determined, or from which legal consequences will flow.” Id. at 178 (internal quotations omitted). Because Petitioners’ contention that the Revised Determination is judicially reviewable final action by EPA fails at the Bennett test‘s second prong, there is no need to address the test‘s first prong.
The second prong of the Bennett test, as noted, requires the court to decide whether the Revised Determination is an action “by which rights or obligations have been determined, or from which legal consequences will flow.” Id. (internal quotations omitted). This inquiry is a “pragmatic” one. See U.S. Army Corps of Eng‘rs v. Hawkes Co., Inc., 136 S. Ct. 1807, 1815 (2016) (internal quotation omitted).
The Revised Determination does not determine rights or obligations or establish legal consequences within the meaning of the Bennett test‘s second prong. The Revised Determination did not itself effect any change in the emissions standards that were established by the 2012 final rule for model year 2022–2025 vehicles. EPA has made clear that those “standards will remain in effect unless and until EPA changes them by rulemaking.” 77 Fed. Reg. at 62,785. Rather, the Revised Determination created only the possibility that there may be a change in the future to the model year 2022–2025 standards as the result of the rulemaking process it initiated. EPA concluded in the Revised Determination that the model year 2022–2025 GHG emission standards are “not appropriate” because they ”may be too stringent.” See 83 Fed. Reg. at 16,077 (emphasis added). That reassessment set in motion a rulemaking “to further consider appropriate standards for MY 2022–2025 light-duty vehicles.” Id. But, again, EPA‘s Revised Determination itself did not alter the standards in place for those model years. See id. at 16,087.
Nor did EPA explain exactly how the 2012 standards would be modified to make them appropriate under Section 12(h). Although the Revised Determination stated that the standards currently in place “may be too stringent,” counsel for State Petitioners acknowledged during oral argument that EPA‘s finding did not bind EPA to relax the standards so long as EPA complies with ordinary notice-and-comment requirements. Oral Arg. 9:53–11:10. Likewise, EPA has taken the position that the Revised Determination “does not dictate the outcome of further rulemaking,” Respondents’ Br. at 32, and that “all of the options are on the table” in the rulemaking, Oral Arg. at 43:09–25.
By withdrawing the Original Determination and initiating a rulemaking, EPA has not erased the Draft Technical Assessment Report, Technical Support Document, or any of the other prior evidence it collected. Rather, EPA has simply announced its intention to revisit the information collected in those earlier proceedings, along with new information gathered since then, to devise the standards that it finds appropriate. See 83 Fed. Reg. at 16,078–79. As counsel for EPA acknowledged during oral argument, EPA had not “withdrawn its prior technical analyses or the record” or the Original Determination “in a final way” and thus the withdrawal would neither eliminate any part of the existing administrative record nor affect the standard for judicial review of any future final action. See Oral Arg. at 46:06–12, 47:30–48:52. Of course, if EPA ultimately changes the 2012 standards, it will need to provide a “reasoned explanation” for why it is “disregarding facts and circumstances that underlay or were engendered by the” 2022–2025 model year standards when they were set in 2012 and the additional record developed during the original mid-term evaluation process. See FCC v. Fox Television Stations, Inc., 556 U.S. 502, 515–16 (2009); see also Nat‘l Lifeline Ass‘n v. FCC, 921 F.3d 1102, 1110–11 (D.C. Cir. 2019). As Environmental Group Petitioners point out, the baseline from which EPA must justify any departure from the existing standards remains unchanged by the Revised Determination. See Envtl. Grp. Reply Br. at 4–5.
Petitioners advance three additional arguments why the Revised Determination satisfied Bennett‘s second prong. First, Petitioners argue that the Revised Determination “created direct legal consequences for the agency” because it required EPA to conduct a rulemaking to revise the emission standards. Second, Petitioners argue that the Revised Determination created legal consequences for the states, particularly those that must initiate their own rulemaking processes to ensure continued compliance with California‘s GHG emission standards. And third, Petitioners argue that the Revised Determination is final action because it withdrew the 2017 Original Determination, which itself was final action. These arguments are unavailing.
The Revised Determination did not create the type of legal consequences for EPA that entail final action. As Respondents point out, when the court spoke of “binding effects” or “legal consequences” in two cases on which Petitioners rely, it meant something different from what Petitioners suggest. In Center for Auto Safety v. NHTSA, NHTSA had sent letters to automakers noting its “concerns” about the practice of regional recalls of defective vehicles and establishing guidelines for recalls of limited geographic scope. See 452 F.3d 798, 802–04 (D.C. Cir. 2006). The court held that these letters were mere
Nor was the Revised Determination an action “from which legal consequences will flow,” Bennett, 520 U.S. at 178, for the Petitioner States. The court here primarily looks to “the actual legal effect (or lack thereof) of the agency action in question on regulated entities.” Nat‘l Mining Ass‘n v. McCarthy, 758 F.3d 243, 252 (D.C. Cir. 2014). The court has also taken stock of the “practical burden[s]” of agency action, CSI Aviation Services, Inc. v. U.S. Department of Transportation, 637 F.3d 408, 412 (D.C. Cir. 2011), particularly when the “writing is on the wall” about how the agency will act in the future, Safari Club International v. Jewell, 842 F.3d 1280, 1289 (D.C. Cir. 2016). But “if the practical effect of the agency action is not a certain change in the legal obligations of a party, the action is non-final for the purpose of judicial review.” Nat‘l Ass‘n of Home Builders v. Norton, 415 F.3d 8, 15 (D.C. Cir. 2005).
State Petitioners contend that the “Revised Determination wiped away EPA‘s previous assurance that the existing standards would remain legally binding.” See States’ Br. at 31. They point out that Section 177 states and the District of Columbia needed to act quickly—before a final rule was published—in order to put in place California‘s standards (which would no longer mirror the federal standards) within the required two-year lead time. For example, the State of Washington explained that its legislature enacted California‘s emission standards and required its Department of Ecology to issue rules to implement those standards, see Wash. Rev. Code § 70.120A.010 (2010), but because of the Revised Determination, its Department of Ecology was “required to revise [its] rules to ensure that the California standards for MY 2022–2025 will be applicable in Washington State.” See States’ Add. 151.
Still, the Revised Determination did not have any actual legal effect on the Section 177 states. Although the Revised Determination declared the current GHG emission standards “not appropriate,” it did not change the 2012 standards. To that extent, the Revised Determination did not compel the Petitioner States to act in order to meet their commitments. The Petitioner States and the District of Columbia may have been “prudent” to act quickly based on their prediction that the standards will be made less stringent in the forthcoming
Finally, Petitioners provide no support for their view that the Revised Determination is final action simply because the Determination it withdrew was itself final action. Such symmetry is not required. After all, the two contrary determinations put EPA along different paths: the Original Determination ended the rulemaking process while the Revised Determination restarted it. Much like on a petition for reconsideration, whether EPA decides to stay the course or consider changing the 2012 standards leads the court to a different conclusion on whether the action is final. See Clean Air Council, 862 F.3d at 6. The Original Determination has been withdrawn, but the evidence supporting it stands. If EPA‘s rulemaking results in changes to the existing 2012 standards, it will be required to provide a reasoned explanation and cannot ignore prior factual findings and the supporting record evidence contradicting the new policy. See Nat‘l Lifeline Ass‘n, 921 F.3d at 1110–11.
Because the Revised Determination neither determines rights or obligations or imposes any legal consequences, nor alters the baseline upon which any departure from the currently effective 2012 emission standards must be explained, the Revised Determination is not judicially reviewable final action, and the petitions for review must be dismissed.