Sunday, December 21, 2008

EPA Overreaches Again on "Interpreting" the Clean Air Act

EPA lost again in the D.C. Circuit on its interpretation of the Clean Air Act in Sierra Club v. EPA, challenging EPA's exemption of facilities from MACT standards during startup, shutdown, or malfunction (SSM).  Opinion  The damage done in cases such as these where the Bush administration overreached will not be limited unfortunately just to the Bush administration.  When the D.C. Circuit gets in the habit of looking at EPA decisions closely and with suspicion, and not crediting the assertions made in DOJ briefs because the arguments that DOJ is pushed to make are simply not credible, the ability of EPA to utilize its expertise to shape coherent regulatory systems out of sometimes less than coherent legislation and the ability of DOJ to command the judiciary's respect suffers.  Both EPA and DOJ will need to rediscover that there are legal arguments that should not be made.  The bar for the government is and should be higher than that for private parties.

In Sierra Club, the court agreed that, by stripping the protections of an enforceable SSM plan out of the 1994 exemption during recent rule-making, EPA constructively reopened the 1994 SSM exemption so that Sierra Club and others could challenge the legality of the 1994 exemption. Then, on the merits, the D.C. Circuit determined that the SSM exemption is inconsistent with section 112's requirement of continuous compliance with MACT standards and that the general duty not to endanger public health and the environment through emissions of hazardous pollutants does not satisfy the CAA's requirement:

Section 112(d) provides that “[e]missions standards” promulgated thereunder must require MACT standards. 42 U.S.C. § 7412(d)(2). Section 302(k) defines “emission standard” as “a requirement established by the State or the Administrator which limits the quantity, rate, or concentration of emissions of air pollutants on a continuous basis, including any requirement relating to the operation or maintenance of a source to assure continuous emission reduction, and any design,equipment, work practice or operational standard promulgated under this chapter.” Id. § 7602(k). Petitioners contend that,contrary to the plain text of this definition, “EPA’s SSM exemption automatically excuses sources from compliance with emission standards whenever they start up, shut down, or malfunction, and thus allows sources to comply with emission standards on a basis that is not ‘continuous.’” Petrs. Br. at 23.

EPA responds that the general duty that applies during SSM events “along with the limitations that apply during normal operating conditions, together form an uninterrupted, i.e., continuous, limitation because there is no period of time duringwhich one or the other standard does not apply,” Respt.’s Br. at 31. “Although Chevron step one analysis begins with the statute’s text,” the court must examine the meaning of certain words or phrases in context and also “exhaust the traditional tools of statutory construction, including examining the statute’s legislative history to shed new light on congressional intent, notwithstanding statutory language that appears superficially clear.” Am. Bankers Ass’n v. Nat’l Credit Union Admin., 271 F.3d 262, 267 (D.C. Cir. 2001) (citations and quotation marks omitted).

EPA suggests that the general duty is “part of the operation and maintenance requirements with which all sources subject to a section 112(d) standard must comply,” Respt.’s Br. at 33, pointing to section 302(k)’s statement that an “emission standard” includes “any requirement relating to the operation or maintenance of a source to assure continuous emission reduction,” 42 U.S.C. § 7602(k). Section 302(k)’s inclusion of this broad phrase in the definition of “emission standard” suggests that emissions reduction requirements “assure continuous emission reduction” without necessarily continuously applying a single standard. Indeed, this reading is supported by the legislative history of section 302(k):

By defining the terms ‘emission limitation,’ ‘emission standard,’ and ‘standard of performance,’ the committee has made clear that constant or continuous means of reducing emissions must be used to meet these requirements. By the same token, intermittent or supplemental controls or other temporary, periodic, or limited systems of control would not be permitted as a final means of compliance.  H.R. Rep. 95-294, at 92 (1977), as reprinted in 1977 U.S.C.C.A.N. 1077, 1170.

“Congress’s primary purpose behind requiring regulation on a continuous basis” appears, as one circuit has suggested, to have been “to exclude intermittent control technologies from the definition of emission limitations,” Kamp v. Hernandez, 752 F.2d 1444, 1452 (9th Cir. 1985).

When sections 112 and 302(k) are read together, then, Congress has required that there must be continuous section 112-compliant standards. The general duty is not a section 112- compliant standard. Admitting as much, EPA states in its brief that the general duty is neither “a separate and independent standard under CAA section 112(d),” nor “a free-standing emission limitation that must independently be in compliance” with section 112(d), nor an alternate standard under section 112(h). Respt.’s Br. 32-34. Because the general duty is the only standard that applies during SSM events – and accordingly no section 112 standard governs these events – the SSM exemption violates the CAA’s requirement that some section 112 standard apply continuously. EPA has not purported to act under section 112(h), providing that a standard may be relaxed “if it is not feasible in the judgment of the Administrator to prescribe or enforce an emission standard for control of a [HAP],” id. § 7412(h)(1), based on either a (1) design or (2) source specific basis, id. § 7412(h)(2)(A), (B).

EPA’s suggestion that it has “discretion to make reasonable distinctions concerning those particular activities to which the emission limitations in a MACT standard apply,” 68 Fed. Reg. at 32,590, belies the text, history and structure of section 112.  “In 1990, concerned about the slow pace of EPA’s regulation of HAPs, Congress altered section 112 by eliminating much of EPA’s discretion in the process.” New Jersey, 517 F.3d at 578.  In requiring that sources regulated under section 112 meet the strictest standards, Congress gave no indication that it intended the application of MACT standards to vary based on different time periods. To the contrary, Congress specifically permitted the Administrator to “distinguish among classes, types, and sizes of sources within a category or subcategory in establishing such standards,” CAA § 112(d)(1), 42 U.S.C. § 7412(d)(1). Additionally, while recognizing that in some instances it might not be feasible to prescribe or enforce an emission standard under § 112, Congress provided in section 112(h) for establishment of “work practice” or “operational” standards instead, but, as petitioners point out, “strictly limited this exception by defining ‘not feasible . . .’ to include only [two types of] situations,” Petrs. Br. 9, and did not authorize the Administrator to relax emission standards on a temporal basis.  See NRDC, 489 F.3d at 1374.  In sum, petitioners’ challenge to the exemption of major sources from normal emission standards during SSM is premised on a rejection of EPA’s claim of retained discretion in the face of the plain text of section 112. “Where Congress explicitly enumerates certain exceptions to a general prohibition,additional exceptions are not to be implied, in the absence of a contrary legislative intent”. NRDC, 489 F.3d at 1374 (quoting TRW Inc. v. Andrews, 534 U.S. 19, 28 (2001)). The 1990 Amendments confined the Administrator’s discretion, see New Jersey, 517 F.3d at 578, and Congress was explicit when and under what circumstances it wished to allow for such discretion, id. at 582. “EPA may not construe [a] statute in a way that completely nullifies textually applicable provisions meant to limit its discretion.” New Jersey, 517 F.3d at 583 (quoting Whitman, 531 U.S. at 485).

Accordingly, we grant the petitions without reaching petitioners’ other contentions, and we vacate the SSM exemption. See New Jersey, 517 F.3d at 583 (citing Allied Signal, Inc. v. U.S. Nuclear Regulatory Comm’n, 988 F.2d 146, 150-51 (D.C. Cir. 1993)).

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