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D.C. Circuit Upholds EPA Greenhouse Gas Rules

06.26.12

The United States Court of Appeals for the D.C. Circuit this morning issued a decision affirming EPA’s first round of greenhouse gas (GHG) regulations in all respects. These regulations included EPA’s 2009 “endangerment finding,” its motor vehicle GHG emission rule, its “Timing Rule” in which it commenced GHG regulation of stationary sources under the Prevention of Significant Deterioration (PSD) and Title V permitting programs, and its “Tailoring Rule” in which it limited PSD and Title V regulation to large industrial sources. The rules were challenged by a large number of businesses, business associations and several states, and supported by environmental organizations and other states.

The panel, consisting of Judges Tatel, Rogers and Sentelle, issued its decision per curiam without any dissents. The main rulings of the court are as follows:

1. Endangerment. The court rejected petitioners’ argument that Massachusetts v. EPA left open the possibility that EPA could look at more than just science in making the endangerment finding and that EPA could therefore defer making the endangerment finding if it concluded that doing so would lead to a chain of regulations causing absurd results in the PSD program. It ruled that EPA could only consider science, and not the regulatory implications of making the endangerment finding.

On the science, the Court found that the record contained “substantial evidence” that GHG emissions endanger public health and welfare. In response to petitioners’ arguments on uncertainty, the Court reiterated past precedent that an endangerment judgment is a very permissive standard and that EPA is justified in finding endangerment even if there is significant uncertainty. Granting deference to EPA on scientific questions, the Court found that EPA’s exercise of judgment was not irrational. The Court did not accept petitioners’ arguments that EPA had overly deferred to the Intergovernmental Panel on Climate Change (IPCC) and instead said that EPA had exercised its own judgment. It also quickly dismissed “Climategate,” i.e., the release of emails regarding the conduct of certain scientists who played prominent roles in the IPCC, saying EPA had adequately responded to those concerns in its response to 10 reconsideration petitions and was not required to conduct new notice and comment in doing so. Further, it said that EPA’s failure to consult its Science Advisory Board was harmless error.

The Court also found that EPA, for purposes of the endangerment finding, had not improperly combined six separate GHGs into one pollutant. Although two of the pollutants (SF6 and PFCs) are not even emitted by motor vehicles, it held that no party in the case had standing to raise that issue since no such party to the appeal could show that it is harmed by the regulation of those substances. The Court ignored the argument raised by the mining and agricultural industries that two of the pollutants (methane and nitrous oxides) are only emitted by motor vehicles in minimal amounts and hence EPA had not made a proper “cause or contribute” finding for those pollutants.

2. Motor vehicle rule. The Court dismissed petitioners’ argument that EPA should have considered the impacts of issuing the motor vehicle rule on stationary sources given EPA’s interpretation that issuing the motor vehicle rule would automatically trigger stationary source regulation. Section 202(a) of the CAA provides that once EPA makes an endangerment finding, it “shall” issue motor vehicle rules. In the Court’s view, that provision ends the analysis. The Court also rejected petitioners’ argument that EPA should have considered whether the motor vehicle rules would meaningfully address the endangerment that purportedly justified issuing those regulations. Despite EPA’s own conclusion that those rules would only reduce temperatures by tenths to thousandths of a degree by 2100, the Court found that the rule would reduce GHGs in a sector of the economy that is a significant emitter of those substances.

3. Argument that issuance of motor vehicle rule does not automatically trigger PSD regulation of stationary sources. EPA has always applied its PSD program to any pollutants regulated under any CAA program. Industry presented three arguments as to why this long-standing approach is wrong when applied to GHGs. In the only part of the decision that industry “won,” the Court ruled that, procedurally, these arguments are not time-barred even though they were not raised years ago when EPA first applied PSD to any regulated pollutant. But the Court ruled on the merits that all of petitioners’ arguments were wrong as a matter of law.

  • The Court rejected petitioners’ argument that PSD applies only to local or regional pollutants and not to global pollutants, relying on Massachusetts v. EPA. The Court found that PSD applies to “any” air pollutant, including GHGs.
  • The Court rejected petitioners’ argument that that PSD applies only to National Ambient Air Quality Standard (NAAQS) pollutants, again relying on the broad term “any.”
  • The Court rejected petitioners’ argument that EPA failed to follow proper procedures for designating a pollutant for regulation under PSD, saying those procedures only apply to NAAQS pollutants.

4. Tailoring. On what appeared to be petitioners’ strongest argument – that EPA did not have the authority to “tailor” specific statutory thresholds – the Court never reached the merits. It ruled that since the rule excluded sources from the PSD program and only reduced state agencies’ permitting workload, the rule doesn’t harm anyone, and so no petitioner in the case had standing to challenge the rule.

5. Implementation. The Court declined to rule on issues regarding EPA’s implementation of PSD permitting of GHG-emitting sources. Those issues are being considered in a separate appeal.

The case name is Coalition for Responsible Regulation, Inc. v. EPA, No. 09-1322. Petitioners can ask the full court to rehear the case or they can petition the Supreme Court for certiorari.

© TROUTMAN SANDERS LLP. ADVERTISING MATERIAL. These materials are to inform you of developments that may affect your business and are not to be considered legal advice, nor do they create a lawyer-client relationship. Information on previous case results does not guarantee a similar future result. Follow Troutman Sanders on Twitter.

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