EPA Asks Full D.C. Circuit for Rehearing Of Decision to Vacate Cross-State Air Rule

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The Environmental Protection Agency on Oct. 5 asked the full U.S. Court of Appeals for the District of Columbia Circuit for a rehearing of a decision vacating the agency's rule addressing air pollution that crosses state lines (EME Homer City Generation LP v. EPA, D.C. Cir., No. 11-1302, petition filed 10/5/12).

A two-judge majority on Aug. 21 found that EPA erroneously issued federal implementation plans under the Cross-State Air Pollution Rule when it should have allowed states the opportunity to issue state plans. In addition, the court said the rule may have required upwind states to reduce their emissions by more than their “significant contributions” to a downwind state's nonattainment (162 DER A-14, 8/22/12).

Nine states and six cities that intervened in the case on behalf of EPA, including Illinois, Massachusetts, and New York, on Oct. 5 filed a separate petition for rehearing by the full D.C. Circuit, asking the court to reinstate the cross-state rule.

In addition, the environmental and public health intervenors in the case, including the American Lung Association and Natural Resources Defense Council, filed a petition for rehearing en banc Oct. 5.

FIP Challenge Not Appropriate, EPA Says.

In the agency's petition for rehearing en banc, EPA said it was not appropriate to consider the federal implementation plan issue in this case.

The Clean Air Act requires states to issue implementation plans addressing their contributions to downwind states' nonattainment of air quality standards. If states do not issue plans, or if EPA finds their plans to be inadequate, the law requires EPA to issue federal implementation plans.

EPA previously had either disapproved states' plans or found failures to submit, so it issued the cross-state rule through federal plans. But the court's Aug. 21 decision said it was not appropriate for EPA to require states to submit implementation plans when EPA had not yet determined what their level of significant contribution would be.

In the Oct. 5 petition, EPA said the previous final rules that either disapproved plans or found failures to submit relied on the determination that states must submit implementation plans regardless of whether EPA had quantified states' significant contribution. Therefore, the D.C. Circuit's decision actually overturned those final agency actions--not the cross-state rule.

Judge Judith Rogers, who dissented to the D.C. Circuit's Aug. 21 decision, made the same argument in her dissenting opinion.

The cross-state rule, which EPA issued in July 2011, would have required 28 states in the East, Midwest, and South to reduce power plant emissions of nitrogen oxides and sulfur dioxide that cross state lines. It was intended to help downwind states meet national ambient air quality standards for ozone and fine particulate matter.

Order Effectively Provides Exemption.

EPA's petition also said the D.C. Circuit's order had the effect of exempting states from being required to submit implementation plans until EPA determines the levels of states' significant contributions. But EPA said the Clean Air Act does not provide the agency with a deadline to make those determinations.

“Thus, under the panel's revision of the statute, states may never be obligated to promulgate transport [state implementation plans] despite the clear Congressional intent that upwind states address the attainment problems their sources cause in other States by a date certain,” EPA wrote. “Given Congress' recognition of the importance of controlling interstate pollution, it is inconceivable that it would have conditioned this requirement on action by EPA and then given EPA no deadline to take that action.”

In addition, EPA said the court underestimated states' ability to model interstate transport to determine the effect of their pollution on other states. The agency also said states that were not subject to the cross-state rule have been able to comply with the requirement to submit implementation plans addressing interstate transport.

Issue Not Raised in Comments.

Regarding the significant contribution issue, EPA said in its petition that the petitioners' arguments were not raised in public comments on the proposed rule, so the court should not have considered them. Petitioners may only litigate issues they brought to the agency's attention in comments, EPA said.

Section 110(a)(2)(D) of the Clean Air Act requires states to reduce emissions that “contribute significantly” to nonattainment of air quality standards in downwind states. EPA created a two-step approach to determine each state's significant contribution. The agency first identified states that contributed an amount of ozone or particulate matter in downwind states that was more than 1 percent of the standard. For those states, the agency then determined the reductions that would be required by taking into account the cost of emissions controls.

But the court ruled Aug. 21 that the methodology could require upwind states to reduce their emissions by more than their significant contributions to a downwind state's nonattainment.

Rogers's dissenting opinion also said EPA's two-step approach was not raised in public comments during the rulemaking process.

If the court grants the petition for rehearing, EPA also asked to submit supplemental briefs, “given the importance of these statutory and regulatory issues.”

By Jessica Coomes  

EPA's Oct. 5 petition for rehearing en banc in EME Homer City Generation LP v. EPA in the U.S. Court of Appeals for the District of Columbia Circuit is available at http://op.bna.com/fcr.nsf/r?Open=jcos-8yslxr.

The states' and cities' petition is available at http://op.bna.com/fcr.nsf/r?Open=jcos-8ysscj.

The petition from environmental and public health groups is available at http://op.bna.com/fcr.nsf/r?Open=jcos-8yssgp.

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