Tuesday, July 5, 2011

Natural Resources Defense Council (NRDC) v. U.S. EPA

Jul 1: In the U.S. Court of Appeals, D.C. Circuit, Case No. 10-1056. On Petition for Review of a Final Action of the Environmental Protection Agency. In this important case the Appeals Court addresses the highly controversial issue of regulatory "guidance" versus officially promulgated rules. The Appeals Court indicates, "Yet again we face a challenge to the Environmental Protection Agency's regulation of ozone under the Clean Air Act. At issue this time is an EPA "guidance document" addressing obligations of regions still in nonattainment of a now-revoked ozone air quality standard."
    The Appeals Court indicates, "Petitioner argues that the Guidance amounts to a legislative rule issued in violation of the Administrative Procedure Act's notice and comment requirement and that its substantive content is contrary to law. Firing nearly all the arrows in its jurisdictional quiver, EPA argues that petitioner lacks standing, that the Guidance does not qualify as final agency action, and that petitioner's claims are unripe for judicial review. As we explain in this opinion, all three arrows miss their target. On the merits, we conclude that the Guidance qualifies as a legislative rule that EPA was required to issue through notice and comment rulemaking and that one of its features -- the so-called attainment alternative -- violates the Clean Air Act's plain language. We therefore grant the petition for review and vacate the Guidance. . .
    "Now before us is EPA's latest attempt to reconcile the 8-hour standard with Subpart 2. This time its effort relates only to the application of section 185 fees to the eight regions in severe or extreme nonattainment of the 1-hour standard: Baltimore, Baton Rouge, Houston, New York City, Sacramento, the San Joaquin Valley, the South Coast Air Basin (CA), and the Southeast Desert (CA). Because attainment deadlines for the eight regions have now expired, all are in the process of developing section 185 implementation plans. Faced with the prospect of hefty fees, industry groups complained to EPA that because they already had in place the best available emission control technology, they could reduce emissions and thus avoid fees only by cutting production."
    EPA issued a "Guidance" document aimed at Regional Air Division Directors -- the agency officials directly responsible for implementation plan approval --  Memorandum from Stephen D. Page, Director, Office of Air Quality Planning & Standards to Regional Air Division Directors 3 (Jan. 5, 2010) (Fee Program Guidance). In other words, EPA believes 1-hour nonattainment areas have flexibility to choose between the statutorily mandated program and an equivalent -- i.e., the program alternative.
In addition to that alternative, the Guidance explains, regions attaining either the 1-hour or the 8-hour standard can avoid section 185 fees through an "attainment alternative."
    NRDC argues that EPA violated the Administrative Procedure Act by issuing the Guidance without notice and comment and that both the program and attainment alternatives violate the Clean Air Act. In response, EPA argues that NRDC lacks standing, that the Guidance fails to qualify as final agency action, and that NRDC's challenges are unripe for review. On the merits, EPA contends that the Guidance is either a policy statement or an interpretive rule and, in either case, is exempt from the notice and comment requirement. It also defends both alternatives as permissible exercises of statutory gapfilling. Numerous industry groups, including the American Chemistry Council and the South Coast Air Quality Management District have intervened in support of EPA.
    In a concluding statement the Appeals Court said, ". . .as we have said before, "[i]f the Environmental Protection Agency disagrees with the Clean Air Acts' requirements . . . , it should take its concerns to Congress. . . . In the meantime, it must obey the Clean Air Act as written by Congress and interpreted by this court." Sierra Club, 479 F.3d at 884."

     Access the complete opinion (click here). [*Air, #CADC]

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