Southern Illinois Power Cooper v. EPA , 863 F.3d 666 ( 2017 )

In the
United States Court of Appeals
For the Seventh Circuit
____________________
Nos. 16-3398 & 17-1442
SOUTHERN ILLINOIS POWER COOPERATIVE,
Petitioner,
v.
ENVIRONMENTAL PROTECTION AGENCY
and SCOTT PRUITT, Administrator,
Respondents.
____________________
On Motion to Dismiss or Transfer to the
U.S. Court of Appeals for the D.C. Circuit.
____________________
ARGUED MAY 30, 2017 — DECIDED JULY 12, 2017
____________________
Before BAUER, RIPPLE, and SYKES, Circuit Judges.
SYKES, Circuit Judge. Southern Illinois Power Cooperative
seeks review of a final rule of the Environmental Protection
Agency designating Williamson County, Illinois, as a nonat-
tainment area for national air quality standards for sulfur
dioxide. The rule in question is not limited to Williamson
County; it makes attainment designations for 61 geographic
areas spanning 24 states. The EPA moves to dismiss or
2 Nos. 16-3398 & 17-1442
transfer the petition to the D.C. Circuit under the terms of
the judicial-review provision of the Clean Air Act, which
designates that circuit as the exclusive venue for review of
“nationally applicable” agency actions. 42 U.S.C.
§ 7607(b)(1). We agree that the challenged rule is nationally
applicable and therefore transfer the petition to the D.C.
Circuit. Our decision conflicts with Madison Gas & Electric
Co. v. EPA, 4 F.3d 529 (7th Cir. 1993). But Madison Gas is
inconsistent with the text of § 7607(b)(1) and is therefore
overruled. 1
I. Background
The Clean Air Act “establishes a comprehensive program
for controlling and improving the nation’s air quality
through both state and federal regulation.” Sierra Club v.
EPA, 774 F.3d 383, 386 (7th Cir. 2014). The Act directs the EPA
to establish National Ambient Air Quality Standards, which
set the “maximum permissible atmospheric concentrations
for certain harmful air pollutants.” Indiana v. EPA, 796 F.3d
803, 804 (7th Cir. 2015); see 42 U.S.C. §§ 7408–7409; Sierra
Club, 774 F.3d at 386. Within two years of revising or setting
a new air quality standard, the EPA must evaluate compli-
ance with the standard and classify geographic regions
around the country as areas of “attainment” or “nonattain-
ment” (or designate them as “unclassifiable”). 42 U.S.C.
§ 7407(d)(1)(A), (d)(1)(B)(i); see ATK Launch Sys., Inc. v. EPA,
651 F.3d 1194, 1195 (10th Cir. 2011). In doing so the EPA
solicits recommendations from the state regulators on how
1 This opinion has been circulated to all judges in active service. No
judge wished to hear the case en banc. See 7TH CIR. R. 40(e).
Nos. 16-3398 & 17-1442 3
to designate areas within the state. If the EPA disagrees with
a state’s recommendation for any particular area, it notifies
the state and allows an opportunity for public comment on
its proposed modification. See § 7407(d)(1)(A), (d)(1)(B)(ii);
ATK Launch Sys., 651 F.3d at 1195. The EPA then promulgates
a final rule listing and explaining the designations,
§ 7407(d)(1)(B)(i), (d)(2), which in turn affects a state’s obliga-
tions in developing a state implementation plan to maintain
or achieve air quality standards, see 42 U.S.C. §§ 7410, 7471,
7502; ATK Launch Sys., 651 F.3d at 1195.
In 2010 the EPA revised the national air quality standards
for sulfur dioxide. See Primary National Ambient Air Quality
Standard for Sulfur Dioxide, 75 Fed. Reg. 35,520 (June 22,
2010) (as codified at 40 C.F.R. pts. 50, 53, and 58). The agency
did not have sufficient information to complete the initial
compliance designations within two years, so it took ad-
vantage of a one-year extension allowed by statute. See
§ 7407(d)(1)(B)(i). As the extended deadline approached, the
EPA remained unable to complete a full list of attainment
designations for the entire country, so it issued a rule con-
taining a partial list covering 29 areas in 16 states. See Air
Quality Designations for the 2010 Sulfur Dioxide (SO2)
Primary National Ambient Air Quality Standard (“Round 1
Designations”), 78 Fed. Reg. 47,191, 47,193 (Aug. 5, 2013) (as
codified at 40 C.F.R. pt. 81). The EPA explained in its
Round 1 Designations that the remaining designations
would be forthcoming in “separate future actions.” Id.The Sierra Club and the National Resources Defense
Council sued the agency alleging that it had failed to carry
out a nondiscretionary duty under the Clean Air Act. The
parties ultimately negotiated a consent decree in which the
4 Nos. 16-3398 & 17-1442
EPA agreed to issue the remaining designations in multiple
rounds by 2020. See Sierra Club v. McCarthy, No. 3:13-cv-
3953-SI, Consent Decree (N.D. Cal. Mar. 2, 2015).
After entering the consent decree, the EPA solicited up-
dated recommendations from the states. Illinois promptly
responded. As relevant here, state regulators recommended
that the EPA designate Williamson County in southern
Illinois as an attainment area. The EPA reviewed the pro-
posed designations from the state regulators and in due
course announced its intention to reject their recommenda-
tion for Williamson County and instead designate it as an
area of nonattainment. The EPA attached a technical-support
document explaining that the modeling method used by the
state regulators was flawed. The EPA solicited public com-
ments on the proposed designation.
Southern Illinois Power Cooperative, which operates a
large power plant in Williamson County, submitted public
comments opposing the nonattainment designation. The
Cooperative challenged the technical basis for the EPA’s
designation and submitted alternative modeling results
showing that the area surrounding the power plant met the
new air quality standard. The EPA reviewed the comments
but was unmoved.
In July 2016 the EPA promulgated a final rule listing and
explaining its Round 2 Designations. See Air Quality Desig-
nations for the 2010 Sulfur Dioxide (SO2) Primary National
Ambient Air Quality Standard—Round 2, 81 Fed. Reg.
45,039 (July 12, 2016) (as codified at 40 C.F.R. pt. 81). The
rule contained attainment designations for 61 additional
areas across 24 states, id. at 45,040, and included a nonat-
tainment designation for Williamson County, id. at 45,047.
Nos. 16-3398 & 17-1442 5
The Cooperative filed a timely petition for review with
this court under the judicial-review provision of the Clean
Air Act, § 7607(b)(1), and Rule 15(a) of the Federal Rules of
Appellate Procedure. The Cooperative simultaneously asked
the EPA to reconsider its designation of Williamson County
as an area of nonattainment. The EPA denied reconsidera-
tion, and the Cooperative petitioned for review of that
decision as well. We consolidated the two petitions. There is
no need to distinguish between the two, so we’ll refer to
them as a single petition.
The EPA moved to dismiss the petition for lack of juris-
diction or improper venue under § 7607(b)(1), which estab-
lishes venue rules for judicial review of EPA actions under
the Clean Air Act. 2 Alternatively, the agency moved to
transfer the petition to the D.C. Circuit to be consolidated
with six other petitions challenging the Round 2 Designa-
tions and a subsequent supplement to the rule. 3 See Masias v.
EPA, Nos. 16-1314, 16-1318, 16-1384, 16-1424, 17-1053 &
17-1055 (D.C. Cir.). The EPA reminded us that in 2013 we
transferred to the D.C. Circuit a similar petition challenging
the Round 1 Designations for sulfur dioxide. See Ameren-
2 The EPA takes no position on whether § 7607(b)(1) is jurisdictional or
simply dictates venue. We have already answered that question: “[T]he
venue and filing provisions of § 7607(b) are not jurisdictional.” Clean
Water Action Council of Ne. Wis., Inc. v. EPA, 765 F.3d 749, 751 (7th Cir.
2014). Nonetheless, the venue provision is a “binding rule” and the EPA
invokes its benefit, so we treat it as mandatory. See id. at 753; see also
Eberhart v. United States, 546 U.S. 12, 19 (2005) (explaining that claim-
processing rules “assure relief to a party properly raising them”).
3 The EPA explained that it also intends to move to transfer to the
D.C. Circuit two other petitions currently before the Fifth Circuit that
challenge the supplement.
6 Nos. 16-3398 & 17-1442
Energy Res. Generating Co. v. EPA, No. 13-2959 (7th Cir.
Dec. 18, 2013) (granting, over the petitioner’s objection, the
EPA’s motion to transfer); see also Treasure State Res. Indus.
Ass’n v. EPA, 805 F.3d 300, 303 (D.C. Cir. 2015) (consolidating
and denying on the merits the petitioners’ challenges to
Round 1 Designations); Dynegy Midwest Generation v. EPA,
No. 05-1536 (7th Cir. May 26, 2005) (transferring to the D.C.
Circuit, over the petitioner’s objection, the challenge to the
EPA’s fine-particulate-matter designations).
The Cooperative opposed the motion, relying heavily on
our decision in Madison Gas. After reviewing the EPA’s
motion and the Cooperative’s response, we noted a conflict
between the approach we took in Madison Gas and the text of
§ 7607(b)(1). We noted as well that Madison Gas has drawn
criticism from other circuits. See, e.g., ATK Launch Sys., Inc. v.
EPA, 651 F.3d 1194, 1198–99 (10th Cir. 2011); Texas Mun.
Power Agency v. EPA, 89 F.3d 858, 866–67 (D.C. Cir. 1996).
Accordingly, we ordered full briefing on the proper interpre-
tation of the Clean Air Act’s venue provision and asked the
parties to address whether Madison Gas was correctly decid-
ed, and if not, whether it should be overruled. The briefs are
now in, the motion has been orally argued, and the matter is
ready for decision.
II. Analysis
The Clean Air Act assigns judicial review of EPA actions
to either the D.C. Circuit or the appropriate regional circuit
based on the nature of the agency action in question. The
Act’s venue provision separates reviewable agency actions—
typically, final rules—into three distinct categories and
allocates venue accordingly (the statute is quite verbose, so
Nos. 16-3398 & 17-1442 7
we paraphrase here and quote only the key operative lan-
guage):
• a petition for review of a “nationally applicable” final
agency action “may be filed only in the United States
Court of Appeals for the District of Columbia”;
• a petition for review of a final agency action that is
“locally or regionally applicable may be filed only in
the United States Court of Appeals for the appropri-
ate circuit”; except that
• a petition for review of a “locally or regionally appli-
cable” agency action must be filed in the D.C. Circuit
if the agency action “is based on a determination of
nationwide scope or effect and if in taking such action
the Administrator finds and publishes that such ac-
tion is based on such a determination.”
§ 7607(b)(1) (emphases added); see Texas v. EPA, 829 F.3d
405, 418 (5th Cir. 2016).
Under the straightforward (if wordy) statutory text, ven-
ue depends entirely on—and is fixed by—the nature of the
agency’s action; the scope of the petitioner’s challenge has
no role to play in determining venue. The D.C. Circuit is the
exclusive venue for review of all “nationally applicable”
final EPA actions under the Act. The regional circuits are the
proper fora for review of “locally or regionally applicable”
final EPA actions, subject to an exception: If the EPA Admin-
istrator issues a published finding that a locally or regionally
applicable agency action has “nationwide scope or effect,”
venue lies in the D.C. Circuit.
This case clearly falls in the first basket. The Cooperative
seeks review of the EPA’s Round 2 Designations, a final rule
8 Nos. 16-3398 & 17-1442
of broad geographic scope containing air quality attainment
designations covering 61 geographic areas across 24 states—
from New York to Hawaii—and promulgated pursuant to a
common, nationwide analytical method. A rule with these
characteristics is “nationally applicable” within the meaning
of § 7607(b)(1), so venue lies exclusively in the D.C. Circuit.
See ATK Launch Sys., 651 F.3d at 1197 (holding that a similar
air quality designation rule with wide geographic reach,
promulgated pursuant to “a uniform process and standard
across the country,” is “nationally applicable” under
§ 7607(b)(1) and review lies in the D.C. Circuit).
The Cooperative insists that the Round 2 Designations
are just an amalgamation of many different locally or re-
gionally applicable agency actions and notes that its petition
challenges only one: the EPA’s designation of Williamson
County as a nonattainment area. That’s not an accurate
description of the petition, which is just a one-paragraph
pleading seeking review of the rule and attaching a copy.
There are no details in the petition about the scope or nature
of the Cooperative’s challenge; that information has come to
the fore in the briefing on the EPA’s motion. More im-
portantly, the Cooperative’s petition-focused approach to
the venue question cannot be squared with the plain lan-
guage of § 7607(b)(1), which assigns judicial review to the
D.C. Circuit or the regional circuits based on the nature of
the agency action in question, not the nature or scope of the
petition for review. Id. at 1199 (“The nature of the regulation,
not the challenge, controls” the venue determination under
§ 7607(b)(1).). Because the Round 2 rule is, on its face, na-
tionally applicable, venue lies in the D.C. Circuit.
Nos. 16-3398 & 17-1442 9
The Cooperative’s argument to the contrary rests largely
on our decision in Madison Gas. There we held that a petition
challenging “an element of a national program” based on an
“entirely local factor” could be brought in the regional
circuit court. 4 F.3d at 530–31. Madison Gas, a Wisconsin
electrical utility, sought review of a final EPA rule that
allocated tradable pollution allowances to electrical generat-
ing facilities across the country. Id. at 530. This national
system, designed to curb acid rain, was based on each
facility’s generating capacity, and Madison Gas contested
the EPA’s calculation of the generating capacity at three of
its Wisconsin plants. Id. The EPA moved to dismiss for
improper venue, arguing that because the rule in question
was clearly nationally applicable—it allocated pollution
allowances nationwide—the D.C. Circuit was the exclusive
venue for judicial review. Id.We rejected the EPA’s argument, reasoning that “[i]f
Madison were challenging a national feature of the acid-rain
program, such as the tradability of emission allowances, it
would be plain that its challenge could be brought only in
the D.C. Circuit, even if the impact of the program varied
greatly across the country.” Id. And “[i]t would be equally
clear that the challenge could be brought only in a regional
circuit if the challenge were to a state implementation plan
or some other regulation avowedly local or regional rather
than national in its scope.” Id. The utility’s petition, we said,
was “the intermediate case”:
Madison is challenging an element of a nation-
al program—for the program involves allocat-
ing allowances to all the electrical generating
plants in the nation, and all the allocations are
10 Nos. 16-3398 & 17-1442
listed … in a single table in the regulations—
but the challenge is based upon an entirely lo-
cal factor (Madison’s generating capacity) and
if successful will have no impact on the overall
program except insofar as the award of addi-
tional allowances might pierce the national
ceiling. It is only the latter factor that makes the
EPA’s motion to dismiss colorable, but we
think it too speculative to warrant forcing the
case to the D.C. Circuit.
Id. at 530–31.
It should be clear from our earlier discussion of the lan-
guage of § 7607(b)(1) that this “intermediate case” approach
has no foundation in the statute. Indeed, the analytical
method adopted in Madison Gas stands in direct conflict with
the actual text of the venue provision, which (to repeat)
focuses entirely on the nature of the agency action in ques-
tion (is the action nationally applicable or locally or regional-
ly applicable?) and omits any reference to the scope or
nature of the petitioner’s challenge. A petition-centric meth-
od for determining venue—like that announced in Madison
Gas—is flatly inconsistent with the actual terms of
§ 7607(b)(1).
The Tenth Circuit noted this flaw in our reasoning in
ATK Launch Systems. There the petitioners sought review of a
final rule that—much like the rule at issue in this case—
listed attainment and nonattainment designations for the
EPA’s air quality standards (in that case it was the agency’s
2009 standards for fine particulate matter). 651 F.3d at 1195.
Though the petitioners contested the nonattainment designa-
tions of just two counties in Utah, id., the rule in question
Nos. 16-3398 & 17-1442 11
“enumerate[ed] designations for areas across the country,”
id. at 1196. The EPA moved to dismiss or transfer the peti-
tion, arguing that the rule was nationally applicable and the
D.C. Circuit was the exclusive forum for judicial review. Id.
at 1195.
The Tenth Circuit agreed and transferred the petition,
explaining that “[t]he language of [the venue] provision
makes clear that this court must analyze whether the regula-
tion itself is nationally applicable, not whether the effects
complained of or the petitioner’s challenge to that regulation
is nationally applicable.” Id. at 1197. The court reasoned:
“That the regulation reaches geographic areas from coast to
coast and beyond is, at a minimum, a strong indicator that
the regulation is nationally applicable.” Id. The court noted
another key indicator of national applicability: The EPA had
applied “a uniform process and standard across the coun-
try” in promulgating the nationwide rule. Id. The Tenth
Circuit went on to consider and reject the “intermediate
case” approach announced in Madison Gas:
To the extent that Madison Gas suggests … that
the manner in which a petitioner frames his
challenge to a regulation may alter the court in
which the suit belongs, that suggestion is in-
consistent with the language of the Act’s judi-
cial review provision. … The provision assigns
to the D.C. Circuit all challenges to “nationally
applicable regulations,” not, for instance, all
national challenges or all challenges that will
have national effect. See 42 U.S.C. § 7607(b)(1).
The nature of the regulation, not the challenge,
controls.
12 Nos. 16-3398 & 17-1442
Id. at 1199.
In a similar vein, the D.C. Circuit has remarked that the
distinction drawn in Madison Gas is “rather elusive” in
practice. Texas Mun. Power, 89 F.3d at 867. Because the
procedural posture of Texas Municipal Power did not require
the D.C. Circuit to decide whether to accept or reject the
approach we took in Madison Gas, the court considered the
matter no further.
We might be able to avoid a collision with Madison Gas if
this case could be meaningfully distinguished. It cannot be.
Both Madison Gas and this case involve EPA rules of national
applicability that explain and list in table format the agen-
cy’s determinations about areas and entities across the
country: here, the sulfur-dioxide attainment designations for
61 geographic areas in 24 states; in Madison Gas, the alloca-
tion of acid-rain allowances to utilities in 47 states and the
District of Columbia. Madison Gas, 4 F.3d at 530; see Acid
Rain Allowance Allocations and Reserves, 58 Fed. Reg.
15,634, 15,651–15,704 (Mar. 23, 1993) (as codified at 40 C.F.R.
pts. 72, 73, and 75). The two cases are materially the same. If
we apply the petition-centric approach of Madison Gas, the
case may remain in this circuit; if we apply § 7607(b)(1) as
written, the case must be shipped off to the D.C. Circuit.
So a confrontation with Madison Gas cannot be avoided.
We now conclude that the approach announced in that case
cannot be reconciled with the plain text of § 7607(b)(1). By its
terms, the statute allocates venue to the D.C. Circuit or the
regional circuits based solely on the nature of the agency
action in question. If the challenged rule is “nationally
applicable,” the D.C. Circuit is the exclusive forum for
judicial review. If the challenged rule is “locally or regional-
Nos. 16-3398 & 17-1442 13
ly applicable,” venue lies in the appropriate regional circuit
unless the EPA Administrator has published a finding that
the rule is “based on a determination of nationwide scope or
effect,” in which case venue lies in the D.C. Circuit. The text
of the statute leaves no room for an intermediate case; there
is no explicit or implicit exception for challenges to national-
ly applicable rules based on local or regional “factors” or
“effects.”
It’s worth noting that the Cooperative does not defend
the reasoning in Madison Gas, relying instead on the princi-
ple that stare decisis carries special force in the domain of
statutory interpretation. John R. Sand & Gravel Co. v. United
States, 552 U.S. 130, 139 (2008). That’s an accurate statement
of the doctrine, but the principle is not without limits. As we
have shown, Madison Gas directly contradicts the venue
statute’s plain text; the petition-centered approach adopted
in that case allows review of a single, nationally applicable
EPA rule in both the D.C. Circuit and the regional circuits
(based on local factors or effects). Under that approach,
12 circuit courts could rule on issues arising from a single,
national EPA rule, utterly defeating the statute’s obvious
aim of centralizing judicial review of national rules in the
D.C. Circuit.
Madison Gas also introduces needless uncertainty into the
determination of venue, where the need for clear rules is
especially acute. A petition for review of an EPA action is
not normally accompanied by a statement of the basis for the
petitioner’s challenge. As we’ve noted, the Cooperative’s
petition did not contain such a statement; it was a bare-
bones, one-page pleading simply citing the EPA rule, attach-
ing a copy, and asking for judicial review. If, as Madison Gas
14 Nos. 16-3398 & 17-1442
implicitly holds, the nature and scope of the petitioner’s
challenge dictates the proper forum for judicial review, then
resolving venue questions will require close examination of
the specific grounds of each challenge, spawning extensive
venue litigation (as this case shows).
The ultimate outcome in Madison Gas demonstrates the
substantive risks of this approach to venue. Despite our
initial conclusion in Madison Gas that the petitioner’s chal-
lenge was based on an entirely local factor, our final decision
on the merits had much broader implications. Indeed, at the
merits phase, we rejected the EPA’s interpretation of the
statute and vacated the allocation of pollution allowances to
the petitioner’s facilities. See Madison Gas & Elec. Co. v. EPA
(“Madison Gas II”), 25 F.3d 526, 529–30 (7th Cir. 1994). In so
doing, we called into question the EPA’s interpretation of
the statute as it applied to other facilities around the country.
We acknowledged that our decision may require “taking
away some other utility’s allowances” if, as a consequence of
our decision, the national ceiling for allowances were
pierced. Id. at 528. The EPA tells us that because of our
decision in Madison Gas II, the agency did in fact revise the
allowances for other facilities across the country to avoid
exceeding the national cap.
The principle of stare decisis does not require us to refuse
to correct our own mistakes. Regrettably, Madison Gas was
mistaken. And here, the structural significance of the Clean
Air Act’s venue provision makes the case for overruling
especially strong. Overlapping, piecemeal, multicircuit
review of a single, nationally applicable EPA rule is poten-
tially destabilizing to the coherent and consistent interpreta-
Nos. 16-3398 & 17-1442 15
tion and application of the Clean Air Act. Madison Gas is
overruled.
Our decision today does not disturb deeply established
precedent; we’ve cited Madison Gas in just one published
opinion. See New York v. EPA, 133 F.3d 987, 990 (7th Cir.
1998). In that case, three northeastern states filed a petition
for review challenging an EPA action exempting several
Great Lakes states from nitrogen-oxide emission regulations.
Id. at 989. We concluded that review was proper in this court
because the exemption in question “is limited to a cluster of
states; it thus is regional in a literal sense.” Id. at 990 (citing
Madison Gas, 4 F.3d 529). The citation to Madison Gas is a bit
mysterious; our decision in New York did not follow the
petition-focused method adopted in that case. Quite the
contrary: We said that “[d]etermining whether an action by
the EPA is regional or local on the one hand or national on
the other should depend on the location of the persons or
enterprises that the action regulates rather than on where the
effects of the action are felt.” Id. This mode of analysis keeps
the focus on the nature of the agency’s action, not the scope
of the petition, and thus is fully consistent with the text of
§ 7607(b)(1).
Because the Cooperative seeks review of a nationally ap-
plicable EPA rule, this petition belongs in the D.C. Circuit.
PETITION TRANSFERRED.