St. Marys Cement Inc. v. United States Environmental Protection Agency , 2015 FED App. 0054P ( 2015 )

RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit I.O.P. 32.1(b)
File Name: 15a0054p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
_________________
ST. MARYS CEMENT INC., ┐
Petitioner, │
│
│ Nos. 13-3105/14-3479
v. │
>
│
UNITED STATES ENVIRONMENTAL PROTECTION │
AGENCY, │
Respondent. │
┘
On Petition for Review from the
United States Environmental Protection Agency.
No. EPA-RO5-OAR-2010-0954.
Argued: March 4, 2015
Decided and Filed: March 24, 2015
Before: CLAY, GILMAN, and SUTTON, Circuit Judges.
_________________
COUNSEL
ARGUED: Fredrick J. Dindoffer, BODMAN PLC, Detroit, Michigan, for Petitioner. Alan D.
Greenberg, UNITED STATES DEPARTMENT OF JUSTICE, Denver, Colorado, for
Respondent. ON BRIEF: Fredrick J. Dindoffer, Nathan D. Dupes, BODMAN PLC, Detroit,
Michigan, for Petitioner. Laurel A. Bedig, UNITED STATES DEPARTMENT OF JUSTICE,
Denver, Colorado, for Respondent.
_________________
OPINION
_________________
SUTTON, Circuit Judge. The Clean Air Act enlists the States and the United States to
improve visibility in the nation’s federal parks and wilderness areas, among other goals. Part of
this effort requires factories to add new pollution-limiting technology. One factory faced with
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this requirement is St. Marys Cement. (More on why St. Marys makes portland cement but not
apostrophes later.) The Michigan Department of Natural Resources and Environment deemed
the plant’s pollution controls sufficient and excused St. Marys from the retrofitting requirement.
The United States Environmental Protection Agency disagreed and required the plant to add
more stringent pollution controls. St. Marys petitions this court to vacate the decision,
disclaiming the value of the required technology and claiming that the plant at any rate is exempt
from the retrofitting requirement. We disagree on both fronts and deny St. Marys’ petition.
I.
A.
As enacted in 1963, the Clean Air Act sought to reduce the emission of air pollutants that
endangered “the public health and welfare.” 42 U.S.C. § 7401(b)(1); see Ala. Power Co. v.
Costle, 636 F.2d 323, 346–50 (D.C. Cir. 1979). In 1977, Congress amended the Act to cover
pollution-caused visibility problems in national parks and wilderness areas. See Clean Air Act
Amendments of 1977, Pub. L. No. 95-95, § 128, 91 Stat. 685, 742 (codified at 42 U.S.C.
§§ 7491(a)(1), 7492(a)). The 1977 Amendments required the EPA to reduce visibility-
impairing emissions by adopting nationwide rules that limit the release of relevant pollutants.
See 42 U.S.C. § 7491(b). As with other Clean Air Act programs, the States enforce these rules
by proposing implementation plans to the EPA for approval. See §§ 7410(a)(2)(J), 7491(b)(2).
If a plan satisfies the “applicable requirements . . . relating to . . . visibility protection,” the EPA
will approve it. § 7410(a)(2)(J). If a State’s plan falls short, the EPA must reject it and develop
a federal implementation plan in its place. See § 7410(c)(1).
The EPA promulgated its first set of visibility regulations in 1980. See Visibility
Protection for Federal Class I Areas, 45 Fed. Reg. 80,084 (Dec. 2, 1980) (codified at 40 C.F.R.
§§ 51.300–.307). “[G]enerally,” the Agency found, “two types of air pollution . . . reduce or
impair visibility”: emissions from pinpoint sources that “obscure the sky or horizon” in the local
area, and “widespread” regional haze that “impairs visibility in every direction over a large
area.” Id. at 80,085. The 1980 regulations addressed pinpoint sources only, leaving the problem
of regional haze for another day.
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That day came in 1999, when the EPA promulgated the Regional Haze Rule. Regional
Haze Regulations, 64 Fed. Reg. 35,714 (July 1, 1999) (codified at 40 C.F.R. §§ 51.308–.309).
The Rule requires the States to determine which facilities within their borders create visibility-
impairing pollutants that may “be emitted and transported downwind” to a federal park or
wilderness area. Id. at 35,739–40. States then must decide which of those sources are eligible
for “Best Available Retrofit Technology,” 40 C.F.R. § 51.308(e), a mouthful that gives some
acronyms (here BART) a good name.
What is BART? The idea is to put up-to-date pollution controls on older sources of
pollution that could not have included the emission controls when the company built the plant.
§ 51.308(e)(1)(ii)(A). All “stationary sources of air pollutants” that came “in[to] existence”
during a fifteen-year period between 1962 and 1977, the Regional Haze Rule says, are “BART-
eligible.” 40 C.F.R. § 51.301; see 42 U.S.C. § 7491(b)(2)(A). A source was “in existence”
during that period, the Rule elaborates, if the source’s owner had “obtained all necessary
preconstruction approvals” to build the source and had begun “physical on-site construction” of
the source or had “entered into binding agreements” to do so before August 1977. 40 C.F.R.
§ 51.301. Once the States conclude which sources are BART-eligible, they must determine the
best available technology for each source. See 40 C.F.R. § 51.308(e). That determination goes
into a State implementation plan that the EPA must approve. Id. The EPA uses the notice-and-
comment rulemaking process in deciding whether to accept the plan. 42 U.S.C. § 7607(d)(3)–
(6). Any new required technology must be installed at the owner’s expense. See 40 C.F.R.
§ 51.308(e)(1)(iv).
B.
St. Marys Cement Group is based in Ontario, Canada. It is named after the town of its
founding, St. Marys, which is blessed with an abundance of limestone and which sits not far
from the St. Marys River that separates Canada from Michigan. The company owns several
plants that manufacture portland cement, a limestone-based powder that, when mixed with water
and rocks, forms concrete.
(The apostrophes missing from the names of the company, town, and river warrant a brief
digression. In 1898, the Geographic Board of Canada discouraged the possessive form of place
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names wherever possible, presumably to avoid suggesting private ownership of a public place. If
a city kept the possessive, the Board directed it to drop the apostrophe. The Canadian
government amended the rule in the 1970s to allow the retention of the apostrophe where it was
well established. Some communities today thus use the possessive with their towns and cities,
and others do not. St. Marys—the city—had long kept the apostrophe and possessive
connotation because the town had dedicated the city to St. Mary. But for reasons of its own it
dropped the apostrophe in 1968 and even managed to persuade the cement company to drop the
apostrophe from its name as well. See Alan Rayburn, Naming Canada: Stories About Canada
Place Names 70–71 (2001). Nor is this a Canadian invention; it may indeed be an American
export. In 1890, President Benjamin Harrison established the Board on Geographic Names,
which adopted a similar policy and according to one estimate has removed 250,000 apostrophes
from federal maps. Barry Newman, Theres a Question Mark Hanging Over the Apostrophes
Future, Wall St. J., May 15, 2013, at 1. All of this explains why there is a St. Marys, West
Virginia, and a song to go with it. Jim Ruckman, There Ain’t No Apostrophe in St Marys, lyrics
available at http://goo.gl/uSkRmy; see also Fowler’s Dictionary of Modern English Usage 58–
59 (Jeremy Butterfield ed., 4th ed. 2015) (noting that “standard editions of local maps are the
best guide to the correct spelling of the hundreds of names of this type”). See generally George
R. Stewart, Names on the Land (1945); see more generally Wallace Stegner, Where the Bluebird
Sings to the Lemonade Springs 166–71 (Modern Library reprt. ed. 2002) (1992) (reviewing
Names on the Land).)
St. Marys—the company—purchased the cement plant at issue in this case—the one
located in Charlevoix, Michigan—in 2005. It was not the first owner of the plant. Medusa
Cement had opened the plant in 1967 and had modified it several times over the years. By 2005,
when St. Marys acquired the plant, the EPA had already promulgated the Regional Haze Rule.
Michigan submitted its initial plan to implement the Rule in 2007, but the EPA rejected the plan
in early 2009—in part because it did not include BART limitations for the Charlevoix plant.
Failure to Submit State Implementation Plans, 74 Fed. Reg. 2392, 2393 (Jan. 15, 2009).
Michigan responded with an updated plan in 2010, yet the EPA issued a notice in August 2012
that proposed rejecting it too. Michigan Regional Haze State Implementation Program, 77 Fed.
Reg. 46,912 (proposed Aug. 6, 2012) (finalized at 77 Fed. Reg. 71,533 (Dec. 3, 2012)).
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Michigan’s plan for St. Marys still came up short, the Agency explained, because the State did
not require St. Marys to install any new technology to meet BART requirements. The EPA
believed that the plant could reduce nitrous oxide emissions—a key visibility-impairing
pollutant—through updated controls. The EPA noted in its proposal that it would accept public
comments through September 5, 2012.
St. Marys submitted two sets of comments. The first challenged the EPA’s proposed
standards on technical and scientific grounds. These comments were filed on time. The second
set of comments was not. At some point after the comment period ended and after it learned that
the EPA planned to reject its first set of comments, St. Marys discovered the Charlevoix plant’s
permitting history. When it saw that a 1978 permit included new-source standards, it surmised
that the EPA must have treated the former upgrades as reconstructions. If so, that meant it was
off the hook because “any emissions unit for which a reconstruction ‘commenced’ after August
7, 1977, is not BART-eligible.” 40 C.F.R. pt. 51, app. Y, § II.A.2. Because construction for the
upgrades did not begin until 1978, St. Marys thought that the Charlevoix plant might be exempt.
St. Marys met with the EPA in October 2012 about the issue and submitted comments to
that end in mid-November. At the company’s request, Michigan also sent a letter to the EPA
saying “that the [Charlevoix] facility should not be considered BART-eligible.” App. at 158.
The efforts came too late. At the beginning of December, the EPA promulgated a final
rule that rejected Michigan’s regional haze plan and promulgated more stringent standards for
the Charlevoix plant. 77 Fed. Reg. at 71,547. The Agency acknowledged St. Marys’ late
comments and, although it promulgated the rule anyway, agreed to “carefully review” the new
comments “and take any action warranted.” Id. at 71,537 n.1. St. Marys asked the EPA to
reconsider its rulemaking, see 42 U.S.C. § 7607(d)(7)(B), and the agency rejected that motion as
well on procedural and substantive grounds.
II.
We start by addressing St. Marys’ challenge to the EPA’s rejection of its first set of
comments—the ones filed on time. To reduce the Charlevoix plant’s nitrous oxide emissions,
the EPA required St. Marys to install Selective Non-Catalytic Reduction technology. The
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technology injects ammonia or urea into a plant’s smokestacks, which causes a chemical reaction
that reduces nitrous oxide levels. The EPA estimated that the technology would reduce nitrous
oxide emissions by fifty percent. St. Marys disputes that estimate. It claims that the EPA all too
simply assumed that the technology would work at the Charlevoix facility because that
technology had worked at other cement plants. Had the EPA properly used a “case-by-case”
analysis for assessing BART, as it was supposed to, 40 C.F.R. § 51.301, St. Marys believes the
EPA would have realized that the plant’s unique characteristics make the new technology
ineffective. The EPA’s failure in that regard, St. Marys concludes, makes its final rule invalid.
We disagree.
Judges are not executive-branch administrators. We do not have authority to implement
federal programs. And we do not have authority to set aside rulemaking efforts whenever we
disagree with them. Only when a rule is “arbitrary, capricious, an abuse of discretion, or
otherwise not in accordance with law” may we invalidate it. 42 U.S.C. § 7607(d)(9)(A). This
“narrow” standard of review, identical to the one under the Administrative Procedure Act,
forbids us from “substitut[ing] [our] judgment for that of the agency” and requires the agency
only to have “examine[d] the relevant data and articulate[d] a satisfactory explanation for its
action.” FCC v. Fox Television Stations, Inc., 556 U.S. 502, 513 (2009); see Catawba Cnty. v.
EPA, 571 F.3d 20, 41 (D.C. Cir. 2009).
No such flaw appears in the EPA’s decision. The agency engaged in case-by-case
review, just as the notice-and-comment process anticipated, and proposed that St. Marys install
the new technology at the Charlevoix plant for two main reasons. One: St. Marys had
successfully used that same technology at one of its other plants. Two: Many EPA-
commissioned studies show that this technology effectively reduces nitrous oxide emissions at
portland-cement plants. See 77 Fed. Reg. at 46,923–24. As for the proposed fifty-percent
nitrous oxide reduction rate, the Agency landed on that number because the Charlevoix plant’s
emissions were typical for portland-cement plants and that level of reduction was typical at
similar plants. See id. at 46,924, 71,538.
Comments received during the public comment period did not undermine these premises.
St. Marys told the EPA that the proposed technology would not work at the Charlevoix plant due
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to the plant’s unique characteristics. But when the EPA promulgated its final rule, it addressed
each of St. Marys’ site-specific objections fairly and in detail. See id. at 71,537–47.
When all is said and done, St. Marys’ key complaint, it seems to us, targets the EPA’s
technical and scientific views. St. Marys says its own testing shows that the fifty-percent
reduction rate is wishful thinking; the EPA says that St. Marys could have met the fifty-percent
mark had it tested ammonia rather than urea. St. Marys says that the technology would release
too much ammonia into the atmosphere and thus cause a nuisance; the EPA says that other
portland-cement plants have remedied that problem. St. Marys says that the technology would
plug up the cement-manufacturing process and lead to temporary shutdowns of the plant; the
EPA points to “numerous variables that [St. Marys] can adjust and design features it can modify”
to avoid those problems. Id. at 71,541. Maybe time will prove St. Marys right on some of these
fronts; maybe not. But arbitrary and capricious review does not ask who is right. It asks whether
the EPA followed a defensible process in assessing who is right. As to that, it cannot be said that
the EPA “entirely failed to consider an important aspect of the problem, offered an explanation
for its decision that runs counter to the evidence before the agency, or is so implausible that it
could not be ascribed to a difference in view or the product of agency expertise.” Motor Vehicle
Mfrs. Ass’n of U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983). On top of
that, we are at our “most deferential” when “reviewing an agency’s scientific determinations”
about issues within its expertise, Ky. Res. Council, Inc. v. EPA, 467 F.3d 986, 991 (6th Cir.
2006), which assuredly includes an inquiry into how to reduce nitrous oxide emissions by fifty
percent at a cement plant. We uphold the EPA’s judgment that this new technology will work
effectively at the Charlevoix plant.
III.
St. Marys does not stop there. It also argues that the Charlevoix plant was never BART-
eligible in the first place and thus cannot be subject to the new technology or for that matter any
other retrofit emissions controls. St. Marys forfeited that argument, however, by failing to raise
it during the public comment period.
When a company or individual challenges EPA-promulgated implantation plans, it must
comply with the Clean Air Act’s judicial-review provisions. See 42 U.S.C. § 7607(d)(1)(B).
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One such provision says that “[o]nly an objection to a rule or procedure which was raised with
reasonable specificity during the period for public comment . . . may be raised during judicial
review.” § 7607(d)(7)(B). A party wishing to raise a new objection after the comment period
ends may ask the EPA to reconsider its implementation plan, but the EPA may refuse unless the
“objection is of central relevance to the outcome of the rule” and either the objection was
“impracticable to raise” within the comment period or the “grounds for . . . objection arose after
the period for public comment.” Id.; see Nat’l Ass’n of Clean Water Agencies v. EPA, 734 F.3d
1115, 1158 (D.C. Cir. 2013). If the EPA refuses reconsideration, a party “may seek review of
such refusal” in the courts of appeals. 42 U.S.C. § 7607(d)(7)(B).
St. Marys concedes that it did not raise its concerns about the plant’s BART-eligibility
until after the public comment period closed and after it learned that the EPA was not persuaded
by its first set of comments. In its words: “It was not until an October 10, 2012 meeting with the
EPA, after the public comment period had closed, that St. Marys realized [the] EPA was intent
on imposing much more stringent [emissions] limits. As a result, St. Marys reevaluated its entire
strategy and investigated whether the Charlevoix plant was BART-eligible in the first place.”
Pet’r Br. at 51–52. Until then, the record contained no argument with “reasonable specificity”
that the Charlevoix plant was ineligible for BART. See App. at 427, 456, 476; Nat’l Res. Def.
Council v. EPA, 559 F.3d 561, 563 (D.C. Cir. 2009). That means St. Marys forfeited a direct
challenge to the EPA’s rulemaking on the ground that the plant was not BART-eligible in the
first place.
This one conclusion does not necessarily lead to another—that St. Marys has no recourse.
Section 7607 still allows us to review whether the EPA properly refused to reconsider its rule.
The problem here is that we do not see how it was “impracticable” for St. Marys to raise its
BART objection during the comment period, as the statute requires. 42 U.S.C. § 7607(d)(7)(B).
St. Marys had ample opportunities to research the relevant permitting history before and during
the public comment period. After all, it owned the plant and could have located the information
by searching the plant’s own files or by requesting the Michigan agency to provide them to it (as
eventually happened). Nothing about that history “arose” after the comment period, which
otherwise would excuse its belated argument. § 7607(d)(7)(B). It arose decades before it, when
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Michigan first approved the permit. On this record, the Agency did not act arbitrarily or for that
matter capriciously when it refused to reconsider its decision. See § 7607(d)(9)(D)(i).
St. Marys offers several responses, all unconvincing. It first claims that the company
may not forfeit arguments with respect to BART eligibility because that issue speaks to the
EPA’s “statutory authority” and thus the Agency’s “jurisdiction.” Reply Br. at 21. Section
7607, however, is a claim-processing rule that does not speak to the agency’s or anyone else’s
jurisdiction. See EPA v. EME Homer City Generation, L.P., 134 S. Ct. 1584, 1602–03 (2014).
“By the very terms of the statute[,] [the] timeliness requirement applies to all objections.” Lead
Indus. Ass’n, Inc. v. EPA, 647 F.2d 1130, 1173 (D.C. Cir. 1980). That all questions concerning
an agency’s interpretation of a statute, if pressed by creative lawyers, may “be reframed as
questions about the scope of agencies’ regulatory jurisdiction,” City of Arlington v. FCC, 133 S.
Ct. 1863, 1870 (2013), does not permit St. Marys to sidestep this requirement. The only question
is whether St. Marys may forfeit a challenge to an agency’s reading of a statute that it
administers. It may. See Natural Res. Def. Council v. EPA, 571 F.3d 1245, 1259 (D.C. Cir.
2009); Cement Kiln Recycling Coal. v. EPA, 255 F.3d 855, 860 (D.C. Cir. 2001). Congress is
free to require affected parties to submit comments about proposed agency rules during a public
comment period and to impose consequences for failing to do so.
St. Marys adds that the EPA had an “[i]ndependent [d]uty” to consider the Charlevoix
plant’s BART-eligibility, no matter whether St. Marys argued the point or not. Pet’r Br. at 46.
The premise of the argument is that the EPA has “a duty to examine [its] key assumptions as part
of its affirmative burden of promulgating and explaining a nonarbitrary, non-capricious rule.”
Natural Res. Def. Council v. EPA, 755 F.3d 1010, 1023 (D.C. Cir. 2014). That means it “must
justify [such] assumption[s during judicial review] even if no one objects to [them] during the
comment period.” Id.The key-assumption exception to the forfeiture rule does not apply here. A first
requirement of the exception is that the EPA made an assumption: that it took something for
granted or supposed something to be true. See Webster’s Third New International Dictionary
133 (rev. ed. 2002). That explains why the EPA would apply the exception to an assumption that
state law could not apply to certain Indian-owned lands. See Okla. Dep’t of Envtl. Quality v.
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EPA, 740 F.3d 185, 192 (D.C. Cir. 2014). Or why it would apply the exception when “there
[was] not one word in the proposed or final rule that explain[ed] why the Agency chose to
distinguish” between two sets of regulated entities. See Ne. Md. Waste Disposal Auth. v. EPA,
358 F.3d 936, 949 (D.C. Cir. 2004). Or why it would apply the exception when the EPA adopted
a predictive model without addressing the soundness of that methodology. Small Refiner Lead
Phase-Down Task Force v. EPA, 705 F.2d 506, 534–35 (D.C. Cir. 1983).
Yet the EPA did not assume anything material in this instance. The forfeited point relates
to what happened to a specific plant at a specific time in the past. As to that, the EPA relied on
record evidence from the Michigan agency that the plant was BART-eligible. Evidence about a
point is not an assumption about the point or a supposition about it. It is a standard, everyday
factfinding by a decisionmaker based on the record evidence presented by the parties. As an
interested party, St. Marys had the right to build that record or to build a different record by
submitting other evidence of the plant’s permitting history.
At most, one might say that the EPA to some extent relied on the State of Michigan’s
decision that St. Marys was BART-eligible. Yet that makes sense. St. Marys did not challenge
this premise of the State’s decision, and the Clean Air Act entrusts the States with figuring out
which sources must install BART. See 42 U.S.C. § 7491(b)(2), (b)(2)(A). It would seem odd to
penalize the EPA for doing the same.
Compare this rulemaking with the setting in which the key-assumption doctrine most
often applies—the D.C. Circuit’s authority to review (often exclusively) nationwide rules
promulgated by federal agencies. To use one example in the clear-air arena: “A petition for
review of action of the Administrator in promulgating any national primary or secondary
ambient air quality standard . . . or any other nationally applicable regulations . . . may be filed
only in the United States Court of Appeals for the District of Columbia.” 42 U.S.C.
§ 7607(b)(1). The validity of a nationwide rule—and the assurance that it is non-arbitrary—
should not turn on the caprice of who happens to challenge it or not challenge it and what
arguments are made or not made during the rulemaking process.
Those concerns do not apply to a single plant in a single State under a single EPA
program, where it is entirely fair to determine the history of a plant based on the record before it,
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not the record established by the company after the EPA expresses skepticism about the
company’s first theory of non-regulation. In the latter setting, our setting, there is no reason to
ignore—in truth override—the forfeiture directive established by Congress.
St. Marys persists that the EPA excused the forfeiture by placing the late comments on
the rulemaking docket and thus into the record for judicial review. Yet the record for judicial
review, the Clean Air Act says, consists in part of material that the EPA must place on the
docket. See § 7607(d)(4)(B)(i), (d)(7)(A). That does not mean all docketed materials make it
into the administrative record. The EPA presumably can docket whatever it wants until the rule
is published, § 7607(d)(6)(C), but only “written comments . . . received . . . during the comment
period” must be docketed and thus become part of the record for our review. § 7607(d)(4)(B)(i)
(emphasis added); see § 7607(d)(7)(A).
The EPA’s proposed rule for the Charlevoix plant set forth a limited period for affected
parties to submit public comments. St. Marys’ objection to the plant’s BART-eligibility
determination did not come until after that period ended—indeed until after the EPA had rejected
the company’s other objection to the rulemaking. That was too late to preserve the objection. It
is forfeited.
For these reasons, we deny St. Marys’ petition to vacate the EPA’s final rule.