Transition Guide to the New Edition Environmental Defense v. Duke - New Source Review Litigation Bush EPA Contends CO2 Not a "Pollutant" In Response to Lawsuit for NAAQS DC Circuit Holds that EPA Is Not Required to Regulate Emissions of Greenhouse Gases MA V. EPA Holds that EPA Does Have the Authority to Regulate Carbon Dioxide New York v. EPA II
Transition Guide to the New Edition Part A - "The Air Pollution Problem" has been updated. Part C - The Problem Exercise: "A NAAQS for CO2?" has been moved up and is supplemented with discussion of the D.C. Circuit's decision in Massachusetts v. EPA. There is also additional material on the D.C. Circuit's new interpretation of the non-delegation doctrine and the revision of the NAAQS for ozone and particulates. Part D - Formerly "Implementation," has been renamed "Attainting and Maintaining the NAAQS." It contains a new excerpt from Alaska Dept. of Environmental Conservation v. EPA. The discussion of Non-attainment, the PSD program, and New Source Review has been rewritten and contains new excerpts from the Fourth Circuit's decision in United States v. Duke Energy (which was granted cert to be heard in the Supreme Court this fall) and the district court's decision in New York v. EPA. Both cases are followed by a new set of Notes and Questions. The section on "Transboundary Air Pollution" has been renamed "Multi-State Air Quality Problems." It contains new excerpts from the D.C. Circuit's decisions in Michigan v. EPA and Appalachian Power Co. v. EPA. Both cases are followed by new Notes and Questions, including discussion of EPA's adoption of the Clean Air Interstate Rule, CAIR. The material on Title IV acid deposition program has been updated. Part E - "Mobile Source Controls" has been updated and contains a new excerpt from the Supreme Court's decision in Engine Manufacturers Assn. v. South Coast Air Quality Management District. This is followed by new Notes and Questions discussing California's new regulations to control emissions of greenhouse gases from mobile sources and litigation arguing that these regulations are preempted by federal fuel economy standards.
New Source Review Litigation (p. 516) As noted in the casebook (p. 516), in November 1999 EPA filed suit against seven electric utilities for upgrading components of their power plants without complying with the new source review provisions of the Clean Air Act. The utility defendants contend that their upgrades are routine maintenance for purposes of the routine maintenance exemption to NSR. Prior to these recent filings, the scope of the routine maintenance exemption had played a central role in only one federal court decision, Wis. Elec. Power co. v. Reilly, 893 F.2d 901, 905 (7th Cir. 1990). Subsequent to the WEPCO decision, the EPA had issued revised rules governing the application of NSR to utility power plants, 57 Fed. Reg. 32314 (July 21, 1992) (The WEPCO Rule). Recently, it has finalized revisions to the NSR regulations, including the RMRR exemption. See Controversy Over Changes in New Source Review Regulations above. The utilities strenuously contested EPA's interpretation of plant alterations that trigger NSR. As the litigation unfolded, the cases focused on three claims by the utilities. First, they claimed their renovations fit within the routine maintenance, repair and replacement (RMRR) exception under prior guidance issued by EPA, and that the interpretation of RMRR that EPA was putting forth in the lawsuits was in effect a new interpretation for which they lacked fair notice and therefore should not have applied to them. Second, EPA based part of its determination of RMRR on whether the capital improvements were routine for the specific unit being evaluated. Industry claimed this was the wrong standard, and that their improvements were routine because they were routine for the industry. Separate from their specific criticisms of RMRR, the utilities also objected to how EPA was determining whether or not their actions had increased emissions. EPA took the position that the question of an increase was to be answered by whether or not the facility’s projected emissions over an annual time period after the improvements exceeded its actual emissions over an annual time period prior to the improvements. The utilities claimed that the proper calculation was whether or not the unit’s hourly emissions rate was made greater by the capital improvements. One consequence of this difference is that if an improvement made operating the unit more efficient or economical, it might be run for more hours during the year after the improvements. In that case, its annual emissions would go up even though its hourly emissions rate did not, simply because it was be run longer. Because most of the changes the utilities had made did not increase the unit’s hourly emissions rate, winning on this point alone would secure them a meaningful victory regardless of the outcome of the other two arguments. Four decisions have been issued in a four different district court actions. Only one of these produced an appealable ruling, however. In United States v. Duke Energy Corp., 278 F.2d Supp. 619 (M.D.N.C. 2003), the court ruled on cross summary judgment motions, finding for the utility on both the routine in the industry vs. routine at the unit issue and the total emissions vs. emissions rate question. The Fourth Circuit affirmed in U.S. v. Duke Energy. (Casebook p. 518). As indicated in note 5 on p. 524, the Department of Justice declined to appeal the denial of a rehearing en banc. For only the third time ever, the Supreme Court agreed to review a case soley at the behest of an environmental organization over the opposition of the government and the regulated commnity. In November, the Court heard Environmental Defense v. Duke Energy Corp., Docket No., 05-0848. Click Here for the Court's Unanimous Opinion (Thomas declining to join only one part of the Court's statutory interpretation analysis) which held that the Fourth Circuit erred in requiring the same interpretation of "modifcation" under the PSD and NSPS programs. Transcripts of the oralargument can be found HERE. For briefs of the parties look HERE. Bush EPA Contends CO2 Not a "Pollutant" in Response to Lawsuit for NAAQS (p. 480) On August 28, 2003, EPA denied a petition by three environmental groups who had asked the agency to declare that carbon dioxide emitted by automobiles is a pollutant that should be regulated. EPA’s decision reverses the position that the agency had taken during the Clinton Administration, when EPA General Counsel Jonathan Z. Cannon had concluded that CO2 met the definition of “air pollutant” in the Clean Air Act. The Bush Administration EPA now states that Congress did not give it the power to declare carbon dioxide or other gases that contribute to global warming and climate change to be pollutants under the Clean Air Act. EPA Assistant Administrator Jeff Holmstead stated that "Congress must provide us with clear legal authority before we can take regulatory action to address a fundamental issue such as climate change," Environmental groups denounced the EPA decision as another attempt by the White House to duck “its legal and moral responsibility to address global warming.” The opinion by EPA General Counsel Robert E. Fabricant declaring that CO2 is not a pollutant can be found here and the 1998 opinion to the contrary by former EPA General Counsel Jonathan Z. Cannon can be found here. DC Circuit Holds that EPA Is Not Required to Regulate CO2 Several environmental groups, joined by twelve states and three cities, challenged EPA’s August 2003 denial of a petition to regulate emissions by automobiles of carbon dioxide and other greenhouse gases (see above). In July 2005 a panel of the D.C. Circuit, by a 2-1 vote, rejected this challenge to EPA’s denial of the petition, though the two judges in the majority – Judges Raymond Randolph and David Sentelle -- were unable to agree on the rationale for doing so. Massachusetts v. EPA, 415 F.3d 50 (D.C. Cir. 2005). Judge Randolph declined to address EPA’s claim that it had no authority to regulate emissions of greenhouse gases under the Clean Air Act. He concluded instead that the agency had properly exercised its “policy judgment” in denying the petition by citing scientific uncertainty concerning the effects of greenhouse gas emissions and the agency’s concerns that Clean Air Act regulations may not be the best vehicle for addressing climate change. Judge Sentelle argued that the petitioners lacked standing because global warming affects “humanity at large,” making it a generalized grievance that is not justiciable in court due to the inability of the plaintiffs to establish particularized injury. However, because he was the only judge on the panel who believed that the petitioners lacked standing, Judge Sentelle stated that he would “join Judge Randolph in the issuance of a judgment closest to that which I myself would issue,” upholding EPA’s denial of the petition without addressing its merits. In a sharp dissent, Judge David Tatel stated that EPA not only has the authority to regulate emissions of greenhouse gases, but that it also has a duty to do so. He concluded that Section 202(a)(1) of the Clean Air Act “clearly gives EPA authority to regulate ‘any air pollutant’ that may endanger welfare” and that greenhouse gases fit within the statutory definition of “air pollutant.” Judge Tatel rejected Judge Randolph’s conclusion that EPA had sound policy reasons for declining to regulate greenhouse gas emissions because “none of these policy reasons relates to the statutory [endangerment] standard . . and the Clean Air Act gives the Administrator no discretion to withhold regulation for such reasons.” Tatel concluded that: “In effect, EPA has transformed the limited discretion given to the Administrator under section 202 – the discretion to determine whether or not an air pollutant causes or contributes to pollution which may reasonably be anticipated to endanger public health or welfare – into the discretion to withhold regulation because it thinks such regulation bad policy. But Congress did not give EPA this broader authority, and the agency may not usurp it.”
A copy of the court’s decision can be found at http://pacer.cadc.uscourts.gov/docs/common/opinions/200507/03-1361a.pdf. This case was heard on appeal by the U.S. Supreme Court in the November 2007, Massachusetts v. EPA - Docket No. 05-1120. Click Here for the Court's 5-4 opinion holding that EPA does have the authority to regulate Carbon Dioxide and, futher, that EPA has not sufficiently explained its reasons for not doing so. Transcript of the oral argument can be found HERE. For briefs of the parties look HERE.
NY v. EPA, 443 F.3d 880 (D.C. Cir. 2006) (NY II) - Update to Note 4 on page 532. On March 17 the D.C. Circuit decided NY II vacating the ERP because it was contrary to the plain language of §111(a)(4) of the Clean Air Act. In thus holding, the Court found that the words “any physical change,” used to describe the NSR trigger “modified,” demanded that repairs and upgrades allowed under the ERP be subject to NSR. The Court found that the ERP would allow sources to avoid NSR when replacing equipment under the twenty-percent cap notwithstanding a resulting increase in emissions and that this violated the plain language of the statute. The ERP was an effort to create a bright line rule to replace a case-by-case method which applied a de minimis analysis to determine whether emissions increases under RMRR fell under NSR requirements. The Supreme Court subsequently agreed in May to review the conflicting Duke Energy decision, as indicated in Note 5 on page 524. It will be interesting to see if the 4th Circuit decision is upheld over the D.C. Circuit which should be the exclusive home of such questions. Below is the final paragraph of the NY II decision. 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. NY v. EPA, 443 F.3d 880, 890 (D.C. Cir. 2006). | 
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