Aug 13: In the U.S. Court of Appeals, Fifth Circuit, Case No. 10-60614. Petitions for Review of an Order of U.S. EPA. In this split decision, the majority Appeals Court explains that, "Sixteen years tardy, the Environmental Protection Agency (EPA) disapproved a revision to Texas's plan for implementing the requirements of the Clean Air Act. The untimely disapproval unraveled approximately 140 permits issued by Texas under the revision's terms, and now requires regulated entities to qualify for pre-revision permits or risk federal sanctions." Petitioners -- the State of Texas; the Chamber of Commerce of the United States; and representatives of nationwide manufacturing, chemical and petroleum industries -- petition for review of the EPA's action under the Administrative Procedure Act.
In its summary of the opinion, the majority rules, "We hold that the EPA's disapproval of Texas's plan fails Administrative Procedure Act review. Although the EPA acknowledges the distinct role of the states, which is congressionally called for in the design and enforcement of State Implementation Plans, the EPA based its disapproval on demands for language and program features of the EPA's choosing, without basis in the Clean Air Act or its implementing regulations. . . we grant the petition for review, vacate the EPA's disapproval of Texas's plan, and remand."
The Appeals Court analyzed the specific reasons that EPA gave for disapproving Texas's Flexible Permit Program: (1) the Program might allow major sources to evade Major NSR; (2) the provisions for monitoring, recordkeeping and reporting are inadequate; (3) and the methodology for calculating flexible permit emissions caps lacks clarity and is not replicable.
The majority said in part, "Although the EPA's concern over the potential for Major NSR evasion involves the Agency's interpretation of a law, it does not involve the interpretation of a federal law. Before approval by the EPA, a SIP revision is state law for which the EPA's interpretation is not authoritative. . . The EPA has failed not only to put forth evidence demonstrating interference, but also to put forth a cogent theory on how Texas's manner of drafting would result in interference. The standard for disapproving a SIP revision -- that the revision would interfere with the CAA -- surely requires more than the EPA's bare conclusion."
The majority also states, "Because the administrative record reflects that the EPA's rejection is based, in essence, on the Agency's preference for a different drafting style, instead of the standards Congress provided in the CAA, the EPA's decision disturbs the cooperative federalism that the CAA envisions. . . We therefore hold that the EPA's first proffered reason for rejecting the Texas Program is arbitrary and capricious, and in excess of its statutory authority."
On EPA second objection, the majority rules, "We find that the EPA's action amounts to an insistence on a particular control measure and is inconsistent with the principles of cooperative federalism that are an essential part of the CAA." And, on the third objection the majority says, "We thus find that the EPA's objections to the emissions caps of the Flexible Permit Program rely on standards not found in the CAA or its implementing regulations."
The dissenting Justice summarized saying, "This case centers on two questions. First, whether the EPA may require that Texas's Flexible Permit Program be limited to Minor NSR by language sufficiently clear to close paths around Major NSR requirements. And whether the EPA's conclusion that the Flexible Permit Program lacked that clarity was arbitrary or capricious. The majority does not dispute that the EPA could legitimately deny approval to Texas's Flexible Permit Program if the program were not clearly drafted to limit its applicability to Minor NSR but disagrees with the EPA's conclusion that the Flexible Permit Program lacks that clarity. Heeding the principle that the APA standard of 'arbitrary and capricious' does not permit a court to vacate an agency decision based on its mere disagreement, I am persuaded that the EPA's conclusion that the submitted Program is not clearly limited to Minor NSR, allowing for circumvention of Major NSR requirements, was neither arbitrary nor capricious. Rather, I see my brothers in error in assigning marks for 'federal' writing, low by their own unstated measure, and not faithfully applying the deferential arbitrary and capricious standard."
House Energy and Commerce Committee members Joe Barton (R-TX), Michael C. Burgess, M.D. (R-TX), and Pete Olson (R-TX) issued a statement in response to the ruling saying, "We are pleased with the court's decision to stand up to EPA's overreach. EPA's disapproval of Texas' permitting program has unraveled approximately 140 permits, created great regulatory uncertainty, and stalled the creation of thousands of new jobs. The court recognized the important role that states play in designing air quality programs and ruled that EPA had acted in excess of its statutory authority—a common theme we have seen throughout this administration. This attempt to extend EPA's power has done nothing to advance environmental protection, but only created more red tape, served as an impediment to growth, and wasted valuable time and resources."
Access the complete majority opinion and dissent (click here). Access the complete statement from several House GOP Texas members (click here). [#Air, #CA5]
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