White Stallion Energy Center, LLC v. Environmental Protection Agency , 748 F.3d 1222 ( 2014 )

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued December 10, 2013 Decided April 15, 2014
No. 12-1100
WHITE STALLION ENERGY CENTER, LLC,
PETITIONER
v.
ENVIRONMENTAL PROTECTION AGENCY,
RESPONDENT
AMERICAN ACADEMY OF PEDIATRICS, ET AL.,
INTERVENORS
Consolidated with 12-1101, 12-1102, 12-1147, 12-1172,
12-1173, 12-1174, 12-1175, 12-1176, 12-1177, 12-1178,
12-1180, 12-1181, 12-1182, 12-1183, 12-1184, 12-1185,
12-1186, 12-1187, 12-1188, 12-1189, 12-1190, 12-1191,
12-1192, 12-1193, 12-1194, 12-1195, 12-1196
On Petitions for Review of Final Rule of the
United States Environmental Protection Agency
Lee B. Zeugin and Neil D. Gordon, Assistant Attorney
General, Office of the Attorney General for the State of
Michigan, argued the causes for State, Industry, and Labor
Petitioners. With them on the joint briefs were F. William
Brownell, Lauren E. Freeman, Elizabeth L. Horner, Bill
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Schuette, Attorney General, Office of the Attorney General for
the State of Michigan, John J. Bursch, Solicitor General, S.
Peter Manning, Assistant Attorney General, Luther Strange,
Attorney General, Office of the Attorney General for the State
of Alabama, Michael C. Geraghty, Attorney General, Office of
the Attorney General for the State of Alaska, Steven E. Mulder,
Attorney, Peter S. Glaser, George Y. Sugiyama, Michael H.
Higgins, David B. Rifkin, Jr., Lee A. Casey, Mark W. DeLaquil,
Andrew M. Grossman, David Flannery, Gale Lea Rubrecht,
Kathy G. Beckett, Edward L. Kropp, Leslie Sue Ritts, Thomas
Horne, Attorney General, Office of the Attorney General for the
State of Arizona, Joseph P. Mikitish and James T. Skardon,
Assistant Attorneys General, Dustin McDaniel, Attorney
General, Office of the Attorney General for the State of
Arkansas, Kendra Akin Jones, Assistant Attorney General,
Charles L. Moulton, Senior Assistant Attorney General, Pamela
Jo Bondi, Attorney General, Office of the Attorney General for
the State of Florida, Jonathan A. Glogau, Attorney, Lawrence G.
Wasden, Attorney General, Office of the Attorney General for
the State of Idaho, Grant Crandall, Arthur Traynor, III, Eugene
M. Trisko, Gregory F. Zoeller, Attorney General, Office of the
Attorney General for the State of Indiana, Valerie Tachtiris,
Deputy Attorney General, Dennis Lane, Derek Schmidt,
Attorney General, Office of the Attorney General for the State
of Kansas, Jeffrey A. Chanay, Deputy Attorney General, Henry
V. Nickel, George P. Sibley III, Eric A. Groten, Jeremy C.
Marwell, John A. Riley, Christopher C. Thiele, Harold E.
Pizzetta III, Assistant Attorney General, Office of the Attorney
General for the State of Mississippi, Chris Koster, Attorney
General, Office of the Attorney General for the State of
Missouri, James R. Layton and John J. McManus, Attorneys,
Paul D. Clement, Nathan A. Sales, Lisa Marie Jaeger, Jon
Bruning, Attorney General, Office of the Attorney General for
the State of Nebraska, Katherine J. Spohn, Special Counsel to
the Attorney General, Wayne Stenehjem, Attorney General,
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Office of the Attorney General for the State of North Dakota,
Margaret I. Olson, Steven C. Kohl, Eugene E. Smary, Sarah C.
Lindsey, E. Scott Pruitt, Attorney General, Office of the
Attorney General for the State of Oklahoma, P. Clayton
Eubanks, Assistant Attorney General, Michael DeWine,
Attorney General, Office of the Attorney General for the State
of Ohio, Dale T. Vitale and Gregg H. Bachmann, Assistant
Attorneys General, Robert M. Wolff, Special Counsel, Alan
Wilson, Attorney General, Office of the Attorney General for the
State of South Carolina, James Emory Smith, Jr., Assistant
Deputy Attorney General, Mark L. Shurtleff, Attorney General,
Office of the Attorney General for the State of Utah, Greg
Abbott, Attorney General, Office of the Attorney General for the
State of Texas, Jon Niermann, Chief, Mark Walters and Mary E.
Smith, Assistant Attorneys General, Kenneth T. Cuccinelli, II,
Attorney General, Office of the Attorney General for the
Commonwealth of Virginia, Patrick Morrisey, Attorney
General, Office of the Attorney General for the State of West
Virginia, Silas B. Taylor, Senior Deputy Attorney General,
Jeffrey R. Holmstead, Sandra Y. Snyder, Gregory A. Phillips,
Attorney General, Office of the Attorney General for the State
of Wyoming, Jay A. Jerde, Deputy Attorney General, Jack
Conway, Attorney General, Office of the Attorney General for
the State of Kentucky, Bart E. Cassidy, and Katherine L.
Vaccaro.
Bill Cobb argued the cause for Industry Petitioners’ Specific
Issues. With him on the briefs were Michael Nasi, Leslie Sue
Ritts, Jeffrey R. Holmstead, Sandra Y. Snyder, Paul D. Clement,
Nathan A. Sales, Steven C. Kohl, Eugene E. Smary, Sarah C.
Lindsay, Bart E. Cassidy, Katherine L. Vaccaro, John C. Hayes,
Jr., Dennis Lane, John A. Riley, Christopher C. Thiele, C. Grady
Moore, III, P. Stephen Gidiere, III, and Thomas Lee Casey, III.
Sanjay Narayan and Eric Schaeffer argued the causes for
4
Environmental Petitioners. With them on the briefs were
Whitney Farrell, James S. Pew, Neil Gormley, Ann Brewster
Weeks, and Darin Schroeder.
David Bookbinder argued the cause and filed the briefs for
petitioner Julander Energy Company.
Michael B. Wigmore, Sandra P. Franco, Robin S. Conrad,
Rachel Brand, and Sheldon Gilbert were on the brief for amicus
curiae The Chamber of Commerce of the United States of
America in support of Industry Petitioners.
Eric G. Hostetler, Matthew R. Oakes, and Amanda S.
Berman, Attorneys, U.S. Department of Justice, argued the
causes for respondent. With them on the brief was Wendy L.
Blake, Attorney, U.S. Environmental Protection Agency.
Melissa Hoffer, Assistant Attorney General, Office of the
Attorney General for the Commonwealth of Massachusetts,
argued the cause for State and Local Government Intervenors in
support of Respondent. With her on the brief were Martha
Coakley, Attorney General, Office of the Attorney General for
the State of Massachusetts, Tracy Triplett and Carol A. Iancu,
Assistant Attorneys General, Kamala D. Harris, Attorney
General, Office of the Attorney General for the State of
California, Janill L. Richards, Supervising Deputy Attorney
General, Susan L. Durbin, Deputy Attorney General, Joseph R.
Biden, III, Attorney General, Office of the Attorney General for
the State of Delaware, Valerie M. Satterfield, Deputy Attorney
General, Thomas L. Miller, Attorney General, Office of the
Attorney General for the State of Iowa, David R. Sheridan,
Assistant Attorney General, George Jepsen, Attorney General,
Office of the Attorney General for the State of Connecticut,
Kimberly P. Massicotte and Matthew I. Levine, Assistant
Attorneys General, Lisa Madigan, Attorney General, Office of
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the Attorney General for the State of Illinois, Matthew J. Dunn
and Gerald T. Karr, Assistant Attorneys General, Douglas F.
Gansler, Attorney General, Office of the Attorney General for
the State of Maryland, Roberta R. James, Assistant Attorney
General, Michael A. Delaney, Attorney General, Office of the
Attorney General for the State of New Hampshire, K. Allen
Brooks, Senior Assistant Attorney General, Janet T. Mills,
Attorney General, Office of the Attorney General for the State
of Maine, Gerald D. Reid, Assistant Attorney General, Lori
Swanson, Attorney General, Office of the Attorney General for
the State of Minnesota, Max Kieley, Assistant Attorney General,
Eric T. Schneiderman, Attorney General, Office of the Attorney
General for the State of New York, Michael J. Myers and Kevin
P. Donovan, Assistant Attorneys General, Ellen F. Rosenbaum,
Attorney General, Office of the Attorney General for the State
of Oregon, Paul A. Garrahan, Assistant Attorney-in-Charge,
Gary K. King, Attorney General, Office of the Attorney General
for the State of New Mexico, Stephen R. Farris, Assistant
Attorney General, Roy Cooper, Attorney General, Office of the
Attorney General for the State of North Carolina, James C.
Gulick, Senior Deputy Attorney General, J. Allen Jernigan,
Marc Bernstein, and Amy L. Bircher, Special Deputy Attorneys
General, William H. Sorrell, Attorney General, Office of the
Attorney General for the State of Vermont, Thea J. Schwartz,
Assistant Attorney General, George A. Nilson, William R.
Phelan, Jr., Peter F. Kilmartin, Attorney General, Office of the
Attorney General for the State of Rhode Island, George S.
Schultz, Special Assistant Attorney General, Irvin B. Nathan,
Attorney General, Office of the Attorney General for the District
of Columbia, Amy E. McDonnell, Deputy General Counsel,
Christopher King, Benna Ruth Solomon, and Jeremy Toth.
Sean H. Donahue argued the cause for Public Health,
Environmental, and Environmental Justice Group Respondent
Intervenors. With him on the brief were Pamela A. Campos,
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Tomás Carbonell, Ann Brewster Weeks, Darin T. Schroeder,
James S. Pew, Neil E. Gormley, Sanjay Narayan, John D.
Walke, and John Suttles. Vickie L. Patton entered an
appearance.
Brendan K. Collins argued the cause for Industry
Respondent Intervenors. With him on the brief were Robert B.
McKinstry Jr., Lorene L. Boudreau, and Erik S. Jaffe.
Peter S. Glaser, George Y. Sugiyama, F. William Brownell,
Lauren E. Freeman, Lee B. Zeugin, Elizabeth L. Horner, David
B. Rivkin Jr., Lee A. Casey, Mark W. DeLaquil, Andrew M.
Grossman, Jeremy C. Marwell, Eric A. Groton, Jeffrey R.
Holmstead, and Sandra Y. Snyder were on the brief for Industry
Intervenors in response to Environmental Petitioners. Henry V.
Nickel entered an appearance.
Peter S. Glaser, George Y. Sugiyama, Hahnah Williams, F.
William Brownell, Lauren E. Freeman, Lee B. Zeugin, Elizabeth
L. Horner, Jeremy C. Marwell, Eric A. Groton, Jeffrey R.
Holmstead, Sandra Y. Snyder, Bill Cobb, Michael Nasi, David
B. Rivkin Jr., Lee A. Casey, Mark W. DeLaquil, and Andrew M.
Grossman were on the brief for Intervenor Respondents in
Opposition to Brief of Petitioner Julander Energy Company.
Wendy B. Jacobs, Adam Babich, and Michael A. Livermore
were on the brief for amici curiae Institute for Policy Integrity,
et al. in support of respondent.
Before: GARLAND, Chief Judge, and ROGERS and
KAVANAUGH, Circuit Judges.
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PER CURIAM:*1 In 2012, the Environmental Protection
Agency promulgated emission standards for a number of listed
hazardous air pollutants emitted by coal- and oil-fired electric
utility steam generating units. See National Emission Standards
for Hazardous Air Pollutants From Coal- and Oil-Fired Electric
Utility Steam Generating Units and Standards of Performance
for Fossil-Fuel-Fired Electric Utility, Industrial-Commercial-
Institutional, and Small Industrial-Commercial-Institutional
Steam Generating Units, Final Rule, 77 Fed. Reg. 9304 (Feb.
16, 2012). In this complex case, we address the challenges to
the Final Rule by State, Industry, and Labor petitioners, by
Industry petitioners to specific aspects of the Final Rule, by
Environmental petitioners, and by Julander Energy Company.
For the following reasons, we deny the petitions challenging the
Final Rule.
I.
In 1970, Congress enacted § 112 of the Clean Air Act, Pub.
L. No. 91-604, § 4(a), 84 Stat. 1676, 1685 (1970), to reduce
hazardous air pollutants (“HAPs”). See Sierra Club v. EPA, 353
F.3d 976, 979 (D.C. Cir. 2004); H. R. REP. NO. 101-490, at 150
(1990). The statute defined HAPs as “air pollutant[s] . . . which
in the judgment of the Administrator [of the Environmental
Protection Agency (“EPA”)] cause, or contribute to, air
pollution which may reasonably be anticipated to result in an
increase in mortality or an increase in serious irreversible, or
incapacitating reversible, illness.” § 112(a)(1), 84 Stat. at 1685.
In its original form, § 112 required EPA to publish a list
containing “each hazardous air pollutant for which [it] intends
to establish an emission standard.” § 112(b)(1)(A), 84 Stat. at
* Parts I, II, and IV are written by Judge Rogers. Part III is
written by Judge Kavanaugh, as are his dissenting opinion in Part
II.B.2 and his concurring opinion in Part IV.
8
1685. EPA then was to promulgate, within 360 days, emission
standards “provid[ing] an ample margin of safety to protect the
public health” for each listed HAP, unless EPA found that a
particular listed substance was in fact not hazardous.
§ 112(b)(1)(B), 84 Stat. at 1685. Over the next eighteen years,
EPA listed only eight HAPs, established standards for only
seven, and as to these seven addressed only a limited selection
of possible pollution sources. See New Jersey v. EPA, 517 F.3d
574, 578 (D.C. Cir. 2008); S. REP. NO. 101-228, at 131 (1989).
To remedy the slow pace of EPA’s regulation of HAPs,
Congress amended the Clean Air Act in 1990, see Pub. L. No.
101-549, 104 Stat. 2531 (1990) (“CAA”), by eliminating much
of EPA’s discretion in the process. See New Jersey, 517 F.3d at
578. In the amended § 112, Congress itself listed 189 HAPs that
were to be regulated, see CAA § 112(b), 42 U.S.C. § 7412(b),
and directed EPA to publish a list of “categories and
subcategories” of “major sources” and certain “area sources”
that emit these pollutants, CAA § 112(c), 42 U.S.C. § 7412(c).
Once listed, a source category may only be delisted (with one
exception not relevant here) if EPA determines that “no source”
in that category emits HAPs in quantities exceeding specified
thresholds. CAA § 112(c)(9)(B), 42 U.S.C. § 7412(c)(9)(B).
For each listed “category or subcategory of major sources and
area sources” of HAPs, EPA must promulgate emission
standards. CAA § 112(d)(1), 42 U.S.C. § 7412(d)(1). Section
112(d) provides, as relevant, that emission standards
shall require the maximum degree of reduction in
emissions of the hazardous air pollutants subject to this
section (including a prohibition on such emissions,
where achievable) that the Administrator, taking into
consideration the cost of achieving such emission
reduction, and any non-air quality health and
environmental impacts and energy requirements,
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determines is achievable[.]
CAA § 112(d)(2), 42 U.S.C. § 7412(d)(2) (emphasis added).
For existing sources, these “maximum achievable control
technology” (“MACT”) standards may not be less stringent —
regardless of cost or other considerations — “than [] the average
emission limitation achieved by the best performing [] sources”
in the relevant category or subcategory. CAA
§ 112(d)(3)(A)–(B), 42 U.S.C. § 7412(d)(3)(A)–(B); see Nat’l
Lime Ass’n v. EPA, 233 F.3d 625, 629 (D.C. Cir. 2000). EPA
refers to minimum-stringency MACT standards as “floors.”
Standards more stringent than the floors, determined pursuant to
§ 112(d)(2), are called “beyond-the-floor” limits.
For electric utility steam generating units (“EGUs”),
however, Congress directed that prior to any listing EPA
conduct a study of “the hazards to public health reasonably
anticipated to occur as a result of [EGU HAP emissions] after
imposition of the requirements of this Chapter [i.e., Chapter 85
Air Pollution Prevention and Control].” CAA § 112(n)(1)(A),
42 U.S.C. § 7412(n)(1)(A) (emphasis added). The results of this
“Utility Study” were to be reported to Congress within three
years. Id. Further, Congress directed that:
The Administrator shall regulate [EGUs] under this
section, if the Administrator finds such regulation is
appropriate and necessary after considering the results
of the study required by this subparagraph.
Id. (emphasis added). Congress also directed EPA to conduct
two other studies on mercury emissions: the “Mercury Study”
on “the rate and mass of such emissions, the health and
environmental effects of such emissions, technologies which are
available to control such emissions, and the costs of such
technologies,” to be reported to Congress in four years, and the
10
National Institute of Environmental Health Sciences “study to
determine the threshold level of mercury exposure below which
adverse human health effects are not expected to occur,” to be
reported to Congress in three years. See CAA
§ 112(n)(1)(A)–(C), 42 U.S.C. § 7412(n)(1)(A)–(C).
In December 2000, on the basis of the Utility Study and
other data subsequently gathered, EPA issued a notice of
regulatory finding “that regulation of HAP emissions from coal-
and oil-fired electric utility steam generating units under section
112 of the CAA is appropriate and necessary.” Regulatory
Finding on the Emissions of Hazardous Air Pollutants From
Electric Utility Steam Generating Units, 65 Fed. Reg. 79,825,
79,826 (Dec. 20, 2000) (“2000 Finding”). EPA found that
EGUs “are the largest source of mercury emissions in the U.S.”
and that “[m]ercury is highly toxic, persistent, and
bioaccumulates in food chains.” 65 Fed. Reg. at 79,827.
Specifically, “[m]ercury emitted from [EGUs] . . . is transported
through the atmosphere and eventually deposits onto land or
water bodies” where it then changes into “a highly toxic”
substance called methylmercury. Id. Methylmercury
“biomagnifies in the aquatic food chain,” id., meaning that it
becomes concentrated in the bodies of predatory fish which
absorb the methylmercury their food sources contained. When
humans eat these contaminated fish, they also are exposed; the
methylmercury from the fish is absorbed into the bloodstream
and “distributed to all tissues including the brain.” Id. at 79,829.
The risks are greatest for women of childbearing age, EPA
explained, because methylmercury “readily passes . . . to the
fetus and fetal brain,” id., and “the developing fetus is most
sensitive to the effects of methylmercury,” id. at 79,827.
Children born to women who were exposed to methylmercury
during pregnancy have exhibited neurological abnormalities and
developmental delays. Id. at 79,829.
 11
EPA concluded that “the available information indicate[d]
that mercury emissions from [EGUs] . . . are a threat to public
health and the environment,” notwithstanding “uncertainties
regarding the extent of the risks due to electric utility mercury
emissions.” Id. (emphasis added). EPA also identified several
other metal and acid gas emissions from EGUs that were “of
potential concern,” namely arsenic, chromium, nickel, cadmium,
dioxins, hydrogen chloride, and hydrogen fluoride. Id. EPA
therefore determined that it was “appropriate” to regulate coal-
and oil-fired EGUs under § 112 because of the health and
environmental hazards posed by mercury emissions from EGUs,
and the availability of a number of control options to effectively
reduce such emissions. Id. at 79,830. EPA further determined
that it was “necessary” to regulate EGUs under § 112 because
implementation of other provisions of the CAA would “not
adequately address” the public health and environmental hazards
found. Id. Therefore, EPA added “coal- and oil-fired electric
utility steam generating units to the list of source categories
under section 112(c) of the CAA.” Id.
In 2005, EPA reversed its 2000 Finding and removed coal-
and oil-fired EGUs from the list of source categories under
§ 112(c). See Revision of December 2000 Regulatory Finding
on the Emissions of Hazardous Air Pollutants From Electric
Utility Steam Generating Units and the Removal of Coal- and
Oil-Fired Electric Utility Steam Generating Units From the
Section 112(c) List, 70 Fed. Reg. 15,994, 15,994 (Mar. 29, 2005)
(“2005 Delisting Decision”). This change was based on EPA’s
revised interpretation of § 112(n)(1)(A) and, to some extent, on
a revised assessment of the results of the Utility Study. EPA
concluded that it lacked authority under § 112(n)(1)(A) to
regulate on the basis of non-health hazards (e.g., environmental
harms), and should “focus solely” on the health effects directly
attributable to EGU emissions, rather than on EGUs’
contribution to overall pollutant levels. Id. at 15,998. Further,
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EPA decided it could consider other relevant, “situation-specific
factors, including cost” that may affect whether regulation under
§ 112 is “appropriate.” Id. at 16,000–01. Critically, EPA
determined that it must make its “appropriate and necessary”
finding by reference to health hazards that will remain “after
imposition of the requirements of” the CAA. Id. at 15,998
(emphasis added) (quoting CAA § 112(n)(1)(A), 42 U.S.C.
§ 7412(n)(1)(A)). EPA interpreted these other “requirements”
to include “not only those requirements already imposed and in
effect, but also those requirements that EPA reasonably
anticipates will be implemented” and which “could either
directly or indirectly result in reductions of utility HAP
emissions.” Id. at 15,999. Concluding that regulation under
other provisions of the CAA would adequately address EGU
emissions of mercury and other HAPs, EPA determined that
regulation under § 112 was neither “appropriate” nor
“necessary.” Id. at 16,002–08. In responding to comments,
EPA stated that if it were to regulate EGU emissions, then it
would regulate only those substances for which it had made a
specific “appropriate and necessary” determination. States and
other groups petitioned for review and this court vacated the
2005 Listing Decision, New Jersey, 517 F.3d at 583, holding
that EPA’s attempt to reverse its December 2000 listing decision
was unlawful because Congress had “unambiguously limit[ed]
EPA’s discretion to remove sources, including EGUs, from the
section 112(c)(1) list once they have been added to it.”
In 2012, after notice and comment, EPA “confirm[ed]” its
2000 Finding that regulation of EGU emissions under § 112 is
“appropriate and necessary.” Final Rule, 77 Fed. Reg. 9304,
9310–11. In the proposed rule, EPA stated that “the December
2000 Finding was valid at the time it was made based on the
information available to the Agency at that time.” Proposed
Rule, 76 Fed. Reg. 24,976, 24,986, 24,994–97 (May 3, 2011)
(“NPRM”). Although of the view that no further evidence was
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required to affirm the 2000 Finding, EPA had conducted
additional quantitative and qualitative analyses “confirm[ing]
that it remains appropriate and necessary today to regulate
EGUs under CAA section 112.” Id. at 24,986; see id. at
24,999–25,020. With respect to the term “appropriate,” EPA
explained that it was “chang[ing] the position taken in 2005 that
the appropriate finding could not be based on environmental
effects alone”; “revisiting the 2005 interpretation that required
the Agency to consider HAP emissions from EGUs without
considering the cumulative impacts of all sources of HAP
emissions”; “revising the 2005 interpretation that required the
Agency to evaluate the hazards to public health after imposition
of the requirements of the CAA”; and “rejecting the 2005
interpretation that authorizes the Agency to consider other
factors (e.g., cost), even if the agency determines that HAP
emitted by EGUs pose a hazard to public health (or the
environment).” Id. at 24,989. With respect to the term
“necessary,” EPA rejected as “unreasonable” its interpretation
in 2005 that regulation under § 112 was “necessary” only if no
other provision in the CAA — whether implemented or only
anticipated — could “directly or indirectly” reduce HAP
emissions to acceptable levels. Id. at 24,992.
EPA explained that it interpreted § 112(n)(1)(A)
to require the Agency to find it appropriate to regulate
EGUs under CAA section 112 if the Agency
determines that the emissions of one or more HAP
emitted from EGUs pose an identified or potential
hazard to public health or the environment at the time
the finding is made. If the Agency finds that it is
appropriate to regulate, it must find it necessary to
regulate EGUs under section 112 if the identified or
potential hazards to public health or the environment
will not be adequately addressed by the imposition of
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the requirements of the CAA. Moreover, it may be
necessary to regulate utilities under section 112 for a
number of other reasons, including, for example, that
section 112 standards will assure permanent reductions
in EGU HAP emissions, which cannot be assured
based on other requirements of the CAA.
Id. at 24,987–88. EPA also affirmed that coal- and oil-fired
EGUs were properly listed as a source category under § 112(c).
See id. at 24,986. EPA adhered to these interpretations in the
Final Rule, 77 Fed. Reg. at 9311. Accordingly, on February 16,
2012, EPA promulgated emission standards for a number of
listed HAPs emitted by coal- and oil-fired EGUs. See id. at
9487–93.
Several petitions for review challenge the Final Rule. We
first address, in Part II, the challenges of the State, Industry, and
Labor petitioners. In Part III, we address Industry petitioners’
specific issues. In Part IV.A, we address the challenges by the
Environmental petitioners, and in Part IV.B, Julander Energy
Company’s standing. In addressing the substantive challenges
to the Final Rule, this court must determine under the CAA
whether the Final Rule was promulgated in a manner that was
arbitrary or capricious, an abuse of discretion, or otherwise not
in accordance with law. See CAA § 307(d)(9)(A), 42 U.S.C.
§ 7607(d)(9)(A). “The ‘arbitrary and capricious’ standard
deems the agency action presumptively valid provided the action
meets a minimum rationality standard.” Sierra Club, 353 F.3d
at 978–79 (quoting Natural Res. Def. Council v. EPA, 194 F.3d
130, 136 (D.C. Cir. 1999)). That is, “[i]f EPA acted within its
delegated statutory authority, considered all of the relevant
factors, and demonstrated a reasonable connection between the
facts on the record and its decision, we will uphold its
determination.” Ethyl Corp. v. EPA, 51 F.3d 1053, 1064 (D.C.
Cir. 1995). The court will show particular deference “where the
15
agency’s decision rests on an evaluation of complex scientific
data within the agency’s technical expertise.” Troy Corp. v.
Browner, 120 F.3d 277, 283 (D.C. Cir. 1997); see also Marsh v.
Or. Natural Res. Council, 490 U.S. 360, 377 (1989).
II.
State, Industry, and Labor petitioners challenge EPA’s
interpretation and application of the “appropriate and necessary”
requirement in § 112(n)(1)(A).
A.
As a threshold matter, petitioners contend that the 2000
Finding was unlawful because EPA did not allow notice and
comment on the finding, did not quantify the relevant mercury
emissions and associated health risks, and did not describe
“alternative control strategies” as required under § 112(n)(1)(A).
Because the December 2000 notice was “fundamentally
flawed,” they contend it “could have no legal consequences” and
“could not provide the basis for a § 112(c) listing decision.”
State, Industry & Labor Pet’rs’ Br. (hereinafter “SIL Br.”)
27–28. Without a proper listing under § 112(c), they contend,
EPA has no authority to regulate EGUs under § 112(d).
The court need not decide whether EPA’s December 2000
“appropriate and necessary” finding was procedurally or
substantively valid because EPA reconsidered and
“confirm[ed]” that determination in the Final Rule. See NPRM,
76 Fed. Reg. at 24,977; Final Rule, 77 Fed. Reg. at 9310–11,
9320. For the reasons we will discuss, we hold that EPA’s
finding in the Final Rule was substantively and procedurally
valid, and consequently any purported defects in the 2000
Finding have been cured, rendering petitioners’ challenge to
December 2000 “appropriate and necessary” finding moot. Cf.
Fund for Animals, Inc. v. Hogan, 428 F.3d 1059, 1063–64 (D.C.
16
Cir. 2005).
B.
The crux of petitioners’ challenge to the Final Rule focuses
on EPA’s interpretation of the phrase “appropriate and
necessary” in § 112(n)(1)(A), 42 U.S.C. § 7412(n)(1)(A). The
context of this phrase is as follows. In a special subsection on
EGUs, Congress first directed: “The Administrator shall perform
a study of the hazards to public health reasonably anticipated to
occur as a result of emissions by electric utility steam generating
units of pollutants listed under subsection (f) after imposition of
the requirements of this Act.” CAA § 112(n)(1)(A), 42 U.S.C.
§ 7412(n)(1)(A) (emphasis added). Congress then directed:
“The Administrator shall regulate electric utility steam
generating units under this section, if the Administrator finds
such regulation is appropriate and necessary after considering
the results of the study required by this subparagraph.” Id.
(emphasis added). Apart from the instruction to “consider[] the
results of the [Utility Study]” on public health hazards from
EGU emissions, the statute offers no express guidance regarding
what factors EPA is required or permitted to consider in
deciding whether regulation under § 112 is “appropriate and
necessary.” Neither does it define the words “appropriate” or
“necessary.” See NPRM, 76 Fed. Reg. at 24,986; 2005 Listing
Decision, 70 Fed. Reg. at 15,997. Petitioners object to how EPA
chose to fill these gaps.
In matters of statutory interpretation, the court applies the
familiar two part test under Chevron U.S.A., Inc. v. Natural
Resources Defense Council, Inc., 467 U.S. 837, 842–43 (1984).
First, the court employs traditional tools of statutory
construction to determine de novo “whether Congress has
directly spoken to the precise question at issue.” Id. at 842, 843
n.9. If the court “ascertains that Congress had an intention on
the precise question at issue,” id. at 843 n.9, “that is the end of
17
the matter” and the court “must give effect to the unambiguously
expressed intent of Congress,” id. at 842–43. If, however, “the
statute is silent or ambiguous with respect to the specific issue,”
the court will uphold the agency’s interpretation so long as it
constitutes “a permissible construction of the statute.” Id. at
843. “In such case, a court may not substitute its own
construction of a statutory provision for a reasonable
interpretation made by the administrator of an agency.” Id. at
844.
To the extent petitioners’ challenge concerns EPA’s change
in interpretation from that in 2005, our approach is the same
because “[a]gency inconsistency is not a basis for declining to
analyze the agency’s interpretation under the Chevron
framework.” Nat’l Cable & Telecomms. Ass’n v. Brand X
Internet Servs., 545 U.S. 967, 981 (2005). That is, “if the
agency adequately explains the reasons for a reversal of policy,
change is not invalidating, since the whole point of Chevron is
to leave the discretion provided by the ambiguities of a statute
with the implementing agency.” Id. (internal quotation marks
omitted). And while “[u]nexplained inconsistency” may be “a
reason for holding an interpretation to be an arbitrary and
capricious change from agency practice,” id., our review of a
change in agency policy is no stricter than our review of an
initial agency action, see FCC v. Fox Television Stations, Inc.,
556 U.S. 502, 514–16 (2009). Thus, although an agency may
not “depart from a prior policy sub silentio or simply disregard
rules that are still on the books,” the agency “need not
demonstrate to a court’s satisfaction that the reasons for the new
policy are better than the reasons for the old one.” Id. at 515.
Rather, “it suffices that the new policy is permissible under the
statute, that there are good reasons for it, and that the agency
believes it to be better.” Id.
18
1. Reliance on delisting criteria. In the Final Rule, EPA
concluded that it is “appropriate and necessary” to regulate HAP
emissions on the basis, inter alia, that EGU emissions of certain
HAPs pose a cancer risk higher than the standard set forth in the
§ 112(c)(9) delisting criteria (i.e., greater than one in a million
for the most exposed individual). See Final Rule, 77 Fed. Reg.
at 9311; NPRM, 76 Fed. Reg. at 24,998. Petitioners contend
that by so doing EPA wrongly conflated the delisting criteria
with the “appropriate and necessary” determination. “By
applying the delisting provisions of § 112(c)(9) in making the
initial, pre-listing determination whether it is ‘appropriate and
necessary’ to regulate EGUs, EPA has unlawfully imposed
requirements on itself the Congress chose not to impose at the
listing stage.” SIL Br. 35. They maintain that EPA’s approach
“would treat EGUs the same as all other major source categories
— as a category that must be listed unless the delisting criteria
are met.” Id.
EPA explained that it was relying upon the delisting criteria
to interpret an ambiguous term in § 112(n)(1)(A), namely,
“hazards to public health,” see Final Rule, 77 Fed. Reg. at
9333–34; NPRM, 76 Fed. Reg. at 24,992–93, because the
phrase “hazards to public health” is nowhere defined in the
CAA. EPA looked to the delisting criteria, which specify the
risk thresholds below which a source category need not be
regulated, as evidence of congressional judgment as to what
degree of risk constitutes a health hazard. See id. EPA
explained:
Although Congress provided no definition of hazard to
public health, section 112(c)(9)(B) is instructive. In
that section, Congress set forth a test for removing
source categories from the section 112(c) source
category list. That test is relevant because it reflects
Congress’ view as to the level of health effects
19
associated with HAP emissions that Congress thought
warranted continued regulation under section 112.
NPRM, 76 Fed. Reg. at 24,993 (emphasis added); see Final
Rule, 77 Fed. Reg. at 9333–34. EPA concluded that it had
discretion also to consider various other factors in evaluating
hazards to public health, including
the nature and severity of the health effects associated
with exposure to HAP emissions; the degree of
confidence in our knowledge of those health effects;
the size and characteristics of the populations affected
by exposures to HAP emissions; [and] the magnitude
and breadth of the exposures and risks posed by HAP
emissions from a particular source category, including
how those exposures contribute to risk in populations
with additional exposures to HAP from other sources[.]
NPRM, 76 Fed. Reg. at 24,992; see Final Rule, 77 Fed. Reg. at
9334.
EPA reasonably relied on the § 112(c)(9) delisting criteria
to inform its interpretation of the undefined statutory term
“hazard to public health.” Congress did not specify what types
or levels of public health risks should be deemed a “hazard” for
purposes of § 112(n)(1)(A). By leaving this gap in the statute,
Congress delegated to EPA the authority to give reasonable
meaning to the term. Cf. Chevron, 467 U.S. at 843–44. EPA’s
approach does not, as petitioners contend, “treat EGUs the same
as all other major source categories.” SIL Br. 35. Other major
source categories must be listed unless the delisting criteria are
satisfied; EPA’s approach treats EGUs quite differently. For
EGUs, EPA reasonably determined that it may look at a broad
range of factors — only one of which concerned the § 112(c)(9)
benchmark levels — in assessing the health hazards posed by
20
EGU HAPs. Nowhere does EPA state or imply that the delisting
criteria provide the sole basis for determining whether it is
“appropriate and necessary” to regulate EGUs under § 112.
Because EPA’s approach is based on a permissible construction
of § 112(n)(1)(A), it is entitled to deference and must be upheld.
2. Costs of regulation. Noting that in 2005 EPA construed
§ 112(n)(1)(A) to allow consideration of costs in determining
whether regulation of EGU HAP emissions is “appropriate,”
petitioners contend that EPA’s new interpretation to “preclude
consideration of costs,” SIL Br. 42, “unreasonably constrains the
language of § 112(n)(1)(A),” SIL Br. 39. They point to the
dictionary definition of “appropriate” and to the differences
between regulation of EGUs under § 112(n)(1)(A) and
regulating other sources under § 112(c), and to this court’s
precedent that “only where there is ‘clear congressional intent to
preclude consideration of cost’ [do] we find agencies barred
from considering costs.” SIL Br. 40 (quoting Michigan v. EPA,
213 F.3d 663, 678 (D.C. Cir. 2000), cert. denied, 532 U.S. 904
(2001)). They contend that EPA’s new interpretation “is also
unlawful because it eliminates the discretion that Congress
intended EPA to exercise after completing the Utility Study.”
SIL Br. 41. As they see it, if the statutory term “appropriate”
imposes any limit whatsoever, it must at least limit regulation to
“risks [that] are worth the cost of elimination.” SIL Reply Br.
14 (quoting Michigan v. EPA, 213 F.3d at 667 (addressing the
term “significant”)).
In the Final Rule, EPA stated that “it is reasonable to make
the listing decision, including the appropriate determination,
without considering costs.” Final Rule, 77 Fed. Reg. at 9327.
EPA reasoned that § 112(n)(1)(A) would have included an
“express statutory requirement that the Agency consider costs in
making the appropriate determination” if Congress wanted to
require EPA to do so. Id. EPA also noted that “[t]o the extent
21
[its] interpretation differs from the one set forth in 2005,” it had
“fully explained the basis for such changes.” Id. at 9323 (citing
NPRM, 76 Fed. Reg. at 24,986–93). (Even in 2005, EPA noted
only that “[n]othing precludes EPA from considering costs in
assessing whether regulation of [EGUs] under section 112 is
appropriate in light of all the facts and circumstances presented.”
2005 Delisting Decision, 70 Fed. Reg. at 16,001 n.19.) In
responding to comments reacting to its position that “the better
reading of the term ‘appropriate’ is that it does not allow for the
consideration of costs in assessing whether hazards to public
health or the environment are reasonably anticipated to occur
based on EGU emissions,” NPRM, 76 Fed. Reg. at 24,989, EPA
observed that the dictionary definition of “appropriate” does not
require consideration of costs and that commenters had failed to
identify an express statutory requirement to that effect. EPA
also stated that it was reasonable to decline to consider costs in
the absence of an express statutory requirement to do so because
Congress, in enacting § 112, was principally concerned with
mitigating hazards to public health and the environment from
HAP emissions. See Final Rule, 77 Fed. Reg. at 9327.
Inasmuch as Congress had treated the regulation of HAP
emissions differently in the 1990 Amendments because EPA
was not acting quickly enough, EPA concluded it was
reasonable to make a listing decision without considering costs.
See id.
On its face, § 112(n)(1)(A) neither requires EPA to consider
costs nor prohibits EPA from doing so. Indeed, the word
“costs” appears nowhere in subparagraph A. In the absence of
any express statutory instruction regarding costs, petitioners rely
on the dictionary definition of “appropriate” — meaning
“especially suitable or compatible” or “suitable or proper in the
circumstances” — to argue that EPA was required “to take into
account costs to the nation’s electricity generators when
deciding whether to regulate EGUs.” SIL Br. 39 (citing
22
MERRIAM-WEBSTER’S ONLINE DICTIONARY; NEW OXFORD
AMERICAN DICTIONARY (2d ed. 2005)). Yet these definitions,
which do not mention costs, merely underscore that the term
“appropriate” is “open-ended,” “ambiguous,” and “inherently
context-dependent.” Sossamon v. Texas, 131 S. Ct. 1651, 1659
(2011); cf. Nat’l Ass’n of Clean Air Agencies v. EPA, 489 F.3d
1221, 1229 (D.C. Cir. 2007).
Even if the word “appropriate” might require cost
consideration in some contexts, such a reading of “appropriate”
is unwarranted here, where Congress directed EPA’s attention
to the conclusions of the study regarding public health hazards
from EGU emissions. Throughout § 112, Congress mentioned
costs explicitly where it intended EPA to consider them. Cf.
CAA § 112(d)(2), 112(d)(8)(A)(i), 112(f)(1)(B), 112(f)(2)(A),
112(n)(1)(B), 112(s)(2), 42 U.S.C. § 7412(d)(2),
7412(d)(8)(A)(i), 7412(f)(1)(B), 7412(f)(2)(A), 7412(n)(1)(B),
7412(s)(2). Indeed, in the immediately following subparagraph
of § 112(n), Congress expressly required costs to be considered.
CAA § 112(n)(1)(B), 42 U.S.C. § 7412(n)(1)(B). The contrast
with subparagraph A could not be more stark. “Where Congress
includes particular language in one section of a statute but omits
it in another section of the same Act, it is generally presumed
that Congress acts intentionally . . . in the disparate inclusion or
exclusion.” Russello v. United States, 464 U.S. 16, 23 (1983)
(alterations omitted); cf. Catawba Cnty., N.C. v. EPA, 571 F.3d
20, 36 (D.C. Cir. 2009). Petitioners offer no compelling reason
why Congress, by using only the broad term “appropriate,”
would have intended the same result — that costs be considered
— in § 112(n)(1)(A). The legislative history the dissent claims
“establishes” the point, Dissent at 13, consists of a Floor
statement by a single Congressman that at best is ambiguous.1
1
See 1 A LEGISLATIVE HISTORY OF THE CLEAN AIR ACT
AMENDMENTS OF 1990, at 1416–17 (1993) (statement by Rep. Oxley)
23
For these reasons, we conclude that the statute does not evince
unambiguous congressional intent on the specific issue of
whether EPA was required to consider costs in making its
“appropriate and necessary” determination under
§ 112(n)(1)(A).
Turning to EPA’s approach, its position that “nothing about
the definition of [‘appropriate’] compels a consideration of
costs,” Final Rule, 77 Fed. Reg. at 9327, is clearly permissible.
In Whitman v. American Trucking Ass’ns, 531 U.S. 457 (2001),
Justice Scalia, writing for a unanimous Court, noted that the
Supreme Court has “refused to find implicit in ambiguous
sections of the CAA an authorization to consider costs that has
elsewhere, and so often, been expressly granted.” Id. at 467; see
also Natural Res. Def. Council v. U.S. EPA, 824 F.2d 1146,
1163–65 (D.C. Cir. 1987) (en banc). EPA’s interpretation is
consistent with that instruction. Just as in Whitman, EPA
declines to find in an ambiguous section what in so many other
CAA sections Congress has mentioned expressly. And even
assuming Whitman might be distinguished on grounds it
concerned a different provision of the CAA, the question
remains only whether EPA’s interpretation is permissible.
Petitioners cannot point to a single case in which this court has
required EPA to consider costs where the CAA does not
expressly so instruct. In Michigan v. EPA, this court merely
held that “the agency was free to consider . . . costs” under CAA
§ 110(a)(2)(D), 42 U.S.C. § 7410(a)(2)(D), as EPA had urged in
that case. 213 F.3d at 679 (emphasis added).
(indicating that the provision authorizing regulation of EGUs would
“avoid[] the imposition of excessive and unnecessary costs” by
ensuring that EPA can regulate “only if the studies described in
section 112(n) clearly establish that emissions . . . from such units
cause a significant risk of serious adverse effects on public health”).
24
EPA’s interpretation is also consistent with the purpose of
the 1990 Amendments, which were aimed at remedying “the
slow pace of EPA’s regulation of HAPs” following the initial
passage of the CAA. New Jersey, 517 F.3d at 578. To ensure
that HAP emissions would be reduced to at least minimally-
acceptable levels, Congress, among other things, listed 189 HAP
substances for regulation and “restrict[ed] the opportunities for
EPA and others to intervene in the regulation of HAP sources.”
Id. The overall purpose of the 1990 Amendments was to spur
EPA to action. Although Congress gave EGUs a three-year pass
when it instructed EPA to conduct a further study before
regulating EGUs, see CAA § 112(n)(1)(A), 42 U.S.C.
§ 7412(n)(1)(A), there is no indication that Congress did not
intend EPA to regulate EGUs if and when their public health
hazards were confirmed by the study, as they were here.
Petitioners, and our dissenting colleague, suggest that
EPA’s interpretation is unreasonable because the notion that
Congress would have authorized EPA to regulate without any
consideration of regulatory costs is implausible. But this
argument rests on a false premise. Here, as in Whitman,
interpreting one isolated provision not to require cost
consideration does not indicate that Congress was unconcerned
with costs altogether, because Congress accounted for costs
elsewhere in the statute. Section 112(d)(2) expressly requires
EPA to “tak[e] into consideration the cost of achieving . . .
emission reduction[s]” when setting the level of regulation under
§ 112. CAA § 112(d)(2), 42 U.S.C. § 7412(d)(2). It is true that
this cost consideration requirement does not apply with respect
to MACT floors. Yet even for MACT floors, costs are reflected
to some extent because the floors correspond (by definition) to
standards that better-performing EGUs have already achieved,
presumably in a cost efficient manner. See CAA
§ 112(d)(3)(A), 42 U.S.C. § 7412(d)(3)(A). Moreover, Industry
respondent intervenors point out that petitioners’ proposed
25
approach would lead to an improbable “all-or-nothing” scheme
in which EPA could “choose not to regulate EGUs at all under
Section 112 based on cost, even though EPA could not consider
cost to justify a less stringent emission standard than the MACT
floor.” Indus. Resp’t Intvn’rs’ Br. 8.
Contrary to petitioners’ claims, the word “appropriate” is
not rendered meaningless unless interpreted to include cost
consideration. Petitioners contend that § 112(n)(1)(A) mandates
a two-step inquiry: EPA must “first identify ‘a health hazard’
from HAPs emitted from EGUs, and then determine whether
regulation of that health hazard is ‘appropriate and necessary.’”
SIL Br. 41 (emphasis added). If the existence of a health hazard
automatically means regulation is appropriate, they contend,
then EPA has unlawfully abdicated the exercise of discretion
Congress delegated to it. This argument, too, is unpersuasive.
First, the rulemaking record reflects that EPA did not focus
exclusively on health hazards in considering whether regulation
would be “appropriate”; EPA also considered “the availability
of controls to address HAP emissions from EGUs.” NPRM, 76
Fed. Reg. at 24,989; see id. at 24,997; see also Final Rule, 77
Fed. Reg. at 9311. The factual premise of petitioners’ argument
is therefore incorrect. Second, even if EPA had focused
exclusively on health hazards, the word “appropriate” would
still have meaning in § 112(n)(1)(A) because the provision does
not assume, as petitioners seem to suggest, that EPA would in
fact “identify ‘a health hazard’” from EGUs. SIL Br. 41.
Rather, the statute directs EPA to “perform a study of the
hazards to public health reasonably anticipated to occur” and
then to “regulate [EGUs] . . . if the Administrator finds such
regulation is appropriate and necessary after considering the
results of the study.” CAA § 112(n)(1)(A), 42 U.S.C.
§ 7412(n)(1)(A) (emphasis added). At the time Congress
enacted the 1990 Amendments, it was possible that the Utility
Study would fail to identify significant health hazards from
26
EGU HAP emissions. (Indeed, petitioners argue that it did fail
to do so. See SIL Br. 13, 48–54.) Therefore, EPA had to
“consider[] the results of the study” in order to determine
whether regulation would be “appropriate” based on its
assessment of the existence and severity of such health hazards.
The term “appropriate” plainly plays a role: it requires EPA to
apply its judgment in evaluating the results of the study.
Basically, petitioners and our dissenting colleague seek to
impose a requirement that Congress did not. What they ignore
is that Congress sought, as a threshold matter, to have EPA
confirm the nature of public health hazards from EGU
emissions. That is the clear focus of § 112(n)(1)(A). After that,
Congress left it to the expertise and judgment of EPA whether
or not to regulate. For EPA to focus its “appropriate and
necessary” determination on factors relating to public health
hazards, and not industry’s objections that emission controls are
costly, properly puts the horse before the cart, and not the other
way around as petitioners and our dissenting colleague urge.
Given Congress’s efforts in the 1990 Amendments to promote
regulation of hazardous pollutants, EPA’s interpretation of
§ 112(n)(1)(A) appears consistent with Congress’s intent.
Recall that only EGUs’ hazardous emissions were relieved of
regulation until completion of a study, and once the study
confirmed the serious public health effects of hazardous
pollutants from EGUs, Congress gave no signal that the matter
should end if remediation would be costly.
Our dissenting colleague has written a powerful-sounding
dissent. It sounds powerful, however, only because it elides the
distinction between EPA’s initial decision regarding whether to
list EGUs as sources of hazardous air pollutants, and its
subsequent decision regarding whether to issue stringent
beyond-the-floor standards for such sources. The dissent refers
to both together as the MACT “program.” Dissent at 3. But the
27
“program” in fact proceeds in two stages, as the dissent
acknowledges. It is only as to the first, listing stage that EPA
has determined it should not consider costs. That stage leads
only to the setting of the statutory MACT floor which, as the
dissent notes, is a “minimum stringency level.” Id. The second
stage leads to beyond-the-floor standards, which are more
restrictive. When setting those, EPA does consider costs.
The dissent contends that “[m]eeting that [MACT] floor
will be prohibitively expensive, particularly for many coal-fired
utilities,” forcing them “out of business.” Dissent at 10–11. But
in the Final Rule EPA rejected this contention, concluding that
“the estimated number of early retirements,” of EGUs “that may
result from this rule is . . . less than 2 percent of all U.S. coal-
fired capacity” in 2015. Final Rule, 77 Fed. Reg. at 9416; see
also id. at 9408 (rejecting the claim that the Final Rule “will
result in substantial power plant retirements”). Petitioners have
not challenged that conclusion. Industry respondent intervenors
further observe that continuing to exempt EGUs from HAP
regulation penalizes those plants that have made investments in
clean air technology, and that “[t]he Rule merely requires
owners of uncontrolled plants to install and operate control
technology already operating at their competitors’ plants, both
leveling the playing field and improving health and the
environment.” Indus. Resp’t Intv’nrs’ Br. 7. The Final Rule,
which, as the dissent notes, EPA has calculated will cost $9.6
billion a year, includes the cost of both stages. EPA also has
concluded under Executive Order 13563 that the annualized
benefits are $37 to $90 billion. See Final Rule, 77 Fed. Reg. at
9306. (The dissent questions this conclusion, notwithstanding
its promise that agency cost-benefit analyses should be reviewed
deferentially.) That’s “billion with a b,” in the dissent’s catchy
phrase. Dissent at 1. In short, “the benefits of this rule
outweigh its costs by between 3 to 1 or 9 to 1.” Final Rule, 77
Fed. Reg. at 9306.
28
As the agency noted, “[u]nder section 112(n)(1)(A), EPA is
evaluating whether to regulate HAP emissions from EGUs at
all.” NPRM, 76 Fed. Reg. at 24,989 (emphasis added). And
there was nothing unreasonable about its conclusion that costs
should not be considered in determining “whether HAP
emissions from EGUs pose a hazard to public health or the
environment.” Id. at 24,988; see id. at 24,990. That is
especially so when “Congress did not authorize the
consideration of costs in listing any [other] source categories for
regulation under section 112 . . . [and] did not permit the
consideration of costs in evaluating whether a source category
could be delisted pursuant to the provisions of section
112(c)(9).” Id. at 24,989. And while the dissent insists on “the
centrality of cost consideration to proper regulatory
decisionmaking,” Dissent at 6, Whitman makes clear the
Supreme Court believes that Congress does not necessarily
agree. Nor is Whitman the only case in which courts have found
that Congress legislated in a way the dissent would find
irrational.2
2
See Am. Textile Mfrs. Inst. v. Donovan, 452 U.S. 490,
511–12 (1981) (holding that OSHA is not required to conduct a cost-
benefit analysis in promulgating a standard under section 6(b)(5) of
the Occupational Safety and Health Act because “Congress uses
specific language when intending that an agency engage in cost-
benefit analysis”); Tenn. Valley Auth. v. Hill, 437 U.S. 153, 184
(1978) (“The plain intent of Congress in enacting [the Endangered
Species Act] was to halt and reverse the trend towards species
extinction, whatever the cost.”); Union Elec. Co. v. EPA, 427 U.S.
246, 257–58 (1976) (holding that EPA may not consider claims of
economic infeasibility in evaluating a state requirement that primary
ambient air quality standards be met by a certain deadline); Lead
Indus. Ass’n v. EPA, 647 F.2d 1130, 1150 (D.C. Cir. 1980) (“We are
unable to discern here any congressional intent to require, or even
permit, [EPA] to consider economic . . . factors in promulgating air
quality standards [under the CAA].”).
29
Academic generalities, see Dissent at 6–8, do not
demonstrate that EPA could not reasonably proceed as it did in
interpreting congressional intent — especially not generalities
by academics who are criticizing the Supreme Court for failing
to read congressional statutes as they do.3 The same is true of
utterances by single Justices — especially a separate statement
by one Justice concurring in Whitman and a question by another
during oral argument about a different statutory section. See
Dissent at 6–7. Nor do the different approaches of the Bush and
Obama Administrations on the role of costs in implementing the
CAA do more than demonstrate that administrations may differ
and can change positions without legal jeopardy, so long as an
adequate explanation is provided as was done here. See
Chevron, 467 U.S. at 865–66. The question before the court is
not “Should EPA have considered costs in making its threshold
determination under § 112(n)(1)(A)?” but rather “Was EPA
required to do so at that point in its regulatory evaluation?”
EPA has explained why it concluded costs were not part of the
“appropriate and necessary” determination, and given
Congress’s choice to leave the factors entering into that
determination to EPA, petitioners, and our dissenting colleague,
fail to demonstrate that EPA’s considered judgment about the
factors to be considered was unlawful as an impermissible and
unreasonable interpretation of § 112(n)(1)(A). Congress left to
3
See Cass R. Sunstein, Interpreting Statutes in the Regulatory
State, 103 HARV. L. REV. 405, 492–93 (1989) (criticizing American
Textile Manufacturers Institute, 452 U.S. 490, for “contributing to the
irrationality of the Occupational Safety and Health Act” by “refusing
to read the statute” as the author would); Cass R. Sunstein, Cost-
Benefit Default Principles, 99 MICH. L. REV. 1651, 1671 (2001)
(same); Richard J. Pierce, Jr., The Appropriate Role of Costs in
Environmental Regulation, 54 ADMIN L. REV. 1237, 1253 (2002)
(criticizing the Whitman Court for relying on an “anti-cost canon”).
30
EPA “the accommodation of manifestly competing interests,”
id. at 865, and EPA did all that Congress required of it. Exactly
how and when EGU emissions are to be regulated is a different
question.
For these reasons, we hold that EPA reasonably concluded
it need not consider costs in making its “appropriate and
necessary” determination under § 112(n)(1)(A).
3. Environmental harms. Petitioners also contend that EPA
was constrained to consider only public health hazards, not
environmental or other harms, in making its “appropriate and
necessary” determination. In their view, § 112(n)(1)(A)
unambiguously forecloses the consideration of non-health
effects because the statute requires EPA to make its “appropriate
and necessary” determination after considering the results of the
Utility Study, which is focused exclusively on identifying
“hazards to public health” caused by EGU HAP emissions. See
SIL Br. 44. Petitioners insist that in 2005 EPA followed the
health-only approach.
EPA reasoned that “nothing in the statute suggests that the
[EPA] should ignore adverse environmental effects in
determining whether to regulate EGUs under section 112.”
NPRM, 76 Fed. Reg. at 24,988; see Final Rule, 77 Fed. Reg. at
9325. To the contrary, EPA concluded that the purpose of the
CAA and the statute’s express instruction to assess
environmental effects in the Mercury Study suggest “it is
reasonable to consider environmental effects in evaluating the
hazards posed by HAP emitted from EGUs.” NPRM, 76 Fed.
Reg. at 24,988; see Final Rule, 77 Fed. Reg. at 9325. EPA
explained in response to comments that restricting it from
considering environmental harms would “incorrectly conflate[]
the requirements for the Utility Study with the requirement to
regulate EGUs under CAA section 112 if EPA determines it is
31
appropriate and necessary to do so.” Final Rule, 77 Fed. Reg. at
9325.
EPA did not err in considering environmental effects
alongside health effects for purposes of the “appropriate and
necessary” determination. Although petitioners’ interpretation
of § 112(n)(1)(A) is plausible, the statute could also be read to
treat consideration of the Utility Study as a mere condition
precedent to the “appropriate and necessary” determination.
EPA has consistently adopted this latter interpretation, including
in 2005. See 2005 Delisting Decision, 70 Fed. Reg. at 16,002.
In the absence of any limiting text, and considering the context
(including § 112(n)(1)(B)) and purpose of the CAA, EPA
reasonably concluded that it could consider environmental
harms in making its “appropriate and necessary” determination.
The court need not decide whether environmental effects alone
would allow EPA to regulate EGUs under § 112, because EPA
did not base its determination solely on environmental effects.
As we explain, infra Part II.B.5, EPA’s decision to list EGUs
can be sustained on the basis of its findings regarding health
hazards posed by EGU HAP emissions.
4. Cumulative impacts of HAP emissions. On the grounds
that § 112(n)(1)(A) directs EPA to study hazards reasonably
anticipated to occur “as a result of” EGU HAP emissions,
petitioners contend that EPA was required to base its
“appropriate and necessary” determination on public health
hazards that occur exclusively due to EGU HAPs. Thus, they
contend, EPA erred in considering EGU HAP emissions that
merely “contribute to” or exacerbate otherwise-occurring health
hazards. Petitioners point out that EPA’s interpretation conflicts
with its approach in 2005, when it read § 112(n)(1)(A) to
authorize regulation only upon a showing that EGU emissions
alone would cause harm.
32
EPA explained that it could reasonably consider the
cumulative impacts of HAP emissions because
focusing on HAP emissions from EGUs alone when
making the appropriate finding ignores the manner in
which public health and the environment are affected
by air pollution. An individual that suffers adverse
health effects as the result of the combined HAP
emissions from EGUs and other sources is harmed,
irrespective of whether HAP emissions from EGUs
alone would cause the harm.
NPRM, 76 Fed. Reg. at 24,988; see Final Rule, 77 Fed. Reg. at
9325. EPA acknowledged it was departing from its 2005
approach, see NPRM, 76 Fed. Reg. at 24,989, but justified the
departure on grounds that the 2005 approach had been “flawed”
and “non-scientific” to the extent that “EPA [had] incorrectly
determined that U.S. EGU emissions of [mercury] did not
constitute a hazard to public health,” id. at 25,019; cf. Final
Rule, 77 Fed. Reg. at 9322–23.
EPA’s interpretation in the Final Rule is entitled to
deference. Section 112(n)(1)(A)’s reference to hazards
occurring “as a result of” EGU HAP emissions could connote
hazards caused solely by EGU emissions, but it could also
connote hazards exacerbated by EGU emissions. EPA’s
commonsense approach to this statutory ambiguity was well
within the bounds of its discretion, and it adequately explained
its reversal from 2005. Petitioners’ contention that EPA erred
in considering the effects of HAPs emitted by non-EGU sources
is therefore unavailing. In any event, EPA concluded in the
Mercury Study that “even if there were no other sources of
[mercury] exposure, exposures associated with deposition
attributable to U.S. EGUs” would place the most susceptible
populations above the methylmercury reference dose. NPRM,
33
76 Fed. Reg. at 25,010. Thus, EPA did find, as petitioners
contend it was required to do, that EGU emissions alone would
cause health hazards.
5. Regulation under § 112(d). Petitioners contend that even
if it is “appropriate and necessary” to regulate EGU HAP
emissions, such regulation should be effected under
§ 112(n)(1)(A) to the degree appropriate and necessary — not
under § 112(d) through the imposition of MACT standards.
They maintain that regulation of EGU HAPs that do not pose
health hazards, or regulation at a level higher than needed to
eliminate such hazards, is not regulation that is “appropriate and
necessary.” Petitioners contend that § 112(n)(1)(A)’s instruction
to “regulate electric steam generating units under this section”
(emphasis added) — rather than “under § 112(d)” — evinces
congressional intent that EGU HAPs should be regulated
differently than other sources. SIL Br. 36.
EPA expressly considered and dismissed petitioners’
proposed interpretation. EPA concluded that the phrase “under
this section” presumptively refers to regulation under section
112, not to regulation under subparagraph 112(n)(1)(A). See
Final Rule, 77 Fed. Reg. at 9330; NPRM, 76 Fed. Reg. at
24,993. Thus, the plain statutory language suggests “EGUs
should be regulated in the same manner as other categories for
which the statute requires regulation.” Final Rule, 77 Fed. Reg.
at 9330. EPA explained:
CAA section 112 establishes a mechanism to list and
regulate stationary sources of HAP emissions.
Regulation under CAA section 112 generally requires
listing under CAA section 112(c)[] [and] regulation
under CAA section 112(d)[.] . . . A determination that
EGUs should be listed once the prerequisite
appropriate and necessary finding is made is wholly
34
consistent with the language of section 112(n)(1)(A),
and listed sources must be regulated under CAA
section 112(d).
Id.; see also id. at 9326.
EPA acted properly in regulating EGUs under § 112(d).
Section 112(n)(1)(A) directs the Administrator to “regulate
electric steam generating units under this section, if the
Administrator finds such regulation is appropriate and
necessary.” CAA § 112(n)(1)(A), 42 U.S.C. § 7412(n)(1)(A).
EPA reasonably interprets the phrase “under this section” to
refer to the entirety of section 112. See Desert Citizens Against
Pollution v. EPA, 66 F.3d 524, 527 (D.C. Cir. 2012). Under
section 112, the statutory framework for regulating HAP sources
appears in § 112(c), which covers listing, and § 112(d), which
covers standard-setting. See CAA § 112(c), 112(d), 42 U.S.C.
§ 7412(c), 7412(d). This court has previously noted that “where
Congress wished to exempt EGUs from specific requirements of
section 112, it said so explicitly.” New Jersey, 517 F.3d at 583.
EPA reasonably concluded that the framework set forth in
§ 112(c) and § 112(d) — rather than another, hypothetical
framework not elaborated in the statute — provided the
appropriate mechanism for regulating EGUs under § 112 after
the “appropriate and necessary” determination was made.
Therefore, EPA’s interpretation is entitled to deference and must
be upheld.
6. Regulation of all HAP emissions. In the Final Rule, EPA
claimed authority to promulgate standards for all listed HAPs
emitted by EGUs, not merely for those HAPs it has expressly
determined to cause health or environmental hazards. See, e.g.,
77 Fed. Reg. at 9325–26. Petitioners challenge this approach,
maintaining that § 112(n)(1)(A) limits regulation to those
individual HAPs that are “appropriate and necessary” to
35
regulate. Petitioners also object that EPA’s interpretation
contradicts its 2005 rulemaking when it supported a substance-
by-substance approach to regulation.
EPA explained its disagreement with petitioners’ proposed
approach. First, EPA reiterated its view that once an
“appropriate and necessary” determination is properly made,
“EGUs should be regulated under section 112 in the same
manner as other categories for which the statute requires
regulation.” Final Rule, 77 Fed. Reg. at 9326. EPA then
reasoned that this court’s decision in National Lime, 233 F.3d at
633, “requires [EPA] to regulate all HAP from major sources of
HAP emissions once a source category is added to the list of
categories under CAA section 112(c).” Id. (emphasis added).
In other words, EPA concluded that if EGUs are to be regulated
in the same manner as other source categories, then all HAPs
emitted by EGUs should be subject to regulation. See id.
EPA did not err by concluding that it may regulate all HAP
substances emitted by EGUs. In National Lime, 233 F.3d at
633, this court considered whether § 112(d)(1) permitted EPA
“to set emission levels only for those listed HAPs” that could be
controlled with existing technology. Concluding that EPA had
a “clear statutory obligation to set emission standards for each
listed HAP,” the court held that “the absence of technology-
based pollution control devices for HCl, mercury, and total
hydrocarbons did not excuse EPA from setting emission
standards for those pollutants.” Id. at 634. Although petitioners
attempt to distinguish National Lime on grounds that it
concerned “major sources” rather than EGUs, they have not
provided any compelling reason why EGUs should not be
regulated the same way as other sources once EPA has
determined that regulation under § 112 is “appropriate and
necessary.” It also bears emphasis that the plain text of
§ 112(n)(1)(A) directs the Administrator to “regulate electric
36
utility steam generating units” — not to regulate their emissions,
as petitioners suggest. This source-based approach to regulating
EGU HAPs was affirmed in New Jersey, 517 F.3d at 582, which
held that EGUs could not be delisted without demonstrating that
EGUs, as a category, satisfied the delisting criteria set forth in
§ 112(c)(9). The notion that EPA must “pick and choose”
among HAPs in order to regulate only those substances it deems
most harmful is at odds with the court’s precedent.
To the extent EPA’s interpretation differs from its 2005
approach, it adequately explained its decision. See Final Rule,
77 Fed. Reg. at 9325–26. Although petitioners suggest
otherwise, the 2005 Delisting Decision did not address whether
EPA could regulate all listed EGU HAPs following an
“appropriate and necessary” determination. Here, EPA offered
a reasoned explanation for its approach; no more is required.
See Fox Television Stations, 556 U.S. at 515; Nat’l Cable &
Telecomms. Ass’n, 545 U.S. at 981.
In view of the above, EPA’s conclusion that it may regulate
all HAP emissions from EGUs must be upheld.
III.
A.
Petitioners assert that even if EPA has correctly interpreted
§ 112(n)(1)(A), the emission standards that EPA promulgated in
the Final Rule are flawed in several respects.
1. Appropriate and necessary determination. Petitioners
first contend that the agency’s determination that it was
“appropriate and necessary” to regulate EGUs is arbitrary and
capricious. Consistent with their position on the proper
interpretation of § 112(n)(1)(A), petitioners take a HAP-by-HAP
approach to criticizing EPA’s Finding. But, as we explained
above, EPA reasonably interprets the CAA as allowing it to
37
regulate all EGU HAP emissions pursuant to the usual MACT
program once it makes the threshold “appropriate and
necessary” determination. The question then is whether EPA
reasonably found it appropriate and necessary to regulate EGUs
based on all the record evidence before it.
EPA’s “appropriate and necessary” determination in 2000,
and its reaffirmation of that determination in 2012, are amply
supported by EPA’s findings regarding the health effects of
mercury exposure. Mercury exposure has adverse effects on
human health, primarily through consumption of fish in which
mercury has bioaccumulated. See Final Rule, 77 Fed. Reg. at
9310. And EGUs are the largest domestic source of mercury
emissions. Id. Petitioners do not dispute these basic facts, but
instead take issue with whether EPA has sufficiently quantified
the contribution of EGU mercury emissions to overall mercury
exposure. Our case law makes clear, however, that EPA is not
obligated to conclusively resolve every scientific uncertainty
before it issues regulation. See Coal. for Responsible
Regulation v. EPA, 684 F.3d 102, 121 (D.C. Cir. 2012) (“If a
statute is precautionary in nature and designed to protect the
public health, and the relevant evidence is difficult to come by,
uncertain, or conflicting because it is on the frontiers of
scientific knowledge, EPA need not provide rigorous step-by-
step proof of cause and effect to support an endangerment
finding.”) (internal quotation marks omitted). Instead, “[w]hen
EPA evaluates scientific evidence in its bailiwick, we ask only
that it take the scientific record into account in a rational
manner.” Id. at 122 (internal quotation marks omitted).
EPA did so here. As explained in the technical support
document (TSD) accompanying the Final Rule, EPA determined
that mercury emissions posed a significant threat to public
health based on an analysis of women of child-bearing age who
consumed large amounts of freshwater fish. See Mercury TSD;
NPRM, 76 Fed. Reg. at 25,007; Final Rule, 77 Fed. Reg. at
38
9311–17. The design of EPA’s TSD was neither arbitrary nor
capricious; the study was reviewed by EPA’s independent
Science Advisory Board, which stated that it “support[ed] the
overall design of and approach to the risk assessment” and found
“that it should provide an objective, reasonable, and credible
determination of the potential for a public health hazard from
mercury emitted from U.S. EGUs.” SAB Letter to EPA
Administrator Jackson at 2 (Sept. 29, 2011), EPA-SAB-11-017.
In addition, EPA revised the final TSD to address SAB’s
remaining concerns regarding EPA’s data collection practices.
See Final Rule, 77 Fed. Reg. at 9313–16.4
Petitioners’ remaining objections center on the change in
EPA’s position between 2005 and 2012. Although petitioners
are correct that EPA weighed certain pieces of evidence
differently at different times, the agency reasonably and
adequately explained its basis for changing its position on
whether mercury emissions posed a sufficient risk to constitute
a public health hazard. See EPA Br. 40; NPRM, 76 Fed. Reg. at
25,019–20. EPA identified and analyzed what it viewed as
technical flaws in the scientific analysis supporting the 2005
Delisting Decision, including a failure to evaluate the
4
For the reasons explained in UARG v. EPA, Nos. 12-1166,
12-1366, 12-1420, 2014 WL 928230 (D.C. Cir. Mar. 11, 2014), we do
not address petitioners’ claims that SAB’s final report on the Mercury
TSD was submitted too late to allow public comment and that EPA
unreasonably refused SAB’s request to review the final TSD.
Petitioners did not raise those issues in comments, and reconsideration
is still pending before the agency. Even if these arguments had been
properly presented to the agency, petitioners would have forfeited
them by raising them only in a cursory footnote in their opening brief
before this court. See Hutchins v. Dist. of Columbia, 188 F.3d 531,
539 n.3 (D.C. Cir. 1999) (en banc) (“We need not consider cursory
arguments made only in a footnote”).
39
cumulative health hazard from EGU emissions when combined
with other sources of mercury, NPRM, 76 Fed. Reg. at 25,019,
and health hazards from methylmercury exposure above the
reference dose, id. at 25,020. Those explanations are sufficient
to meet the agency’s burden. See Fox Television Stations, 556
U.S. at 514–16.
2. Major source classification. Petitioners contend that in
setting emission standards for EGUs, EPA was required to
distinguish between “major sources” and “area sources.” As
relevant here, major sources are automatically subject to MACT
controls, while area sources may, in EPA’s discretion, be
regulated under alternative standards. See CAA § 112(a)(1),
112(a)(2), 112(d)(5), 42 U.S.C. § 7412(a)(1), 7412(a)(2),
7412(d)(5). Petitioners assert that EPA’s failure to segregate the
different types of sources fatally compromises the Final Rule
because the EGU emission standards should have been based
exclusively on data from major source EGUs. But § 112(d) does
not require EPA to regulate EGUs as “major sources” and “area
sources”; it merely says that, if EPA lists major and area
sources, it must then regulate them according to the separate
provisions. See CAA § 112(d)(1), 42 U.S.C. § 7412(d)(1).
EPA’s decision not to draw such a distinction here is a
reasonable one. As EPA emphasizes, distinguishing between
major source and area source EGUs runs counter to the separate
statutory provisions governing EGUs. While other sources are
classified as major or area sources depending on the quantity of
emissions they emit, § 112 specifically defines EGUs in terms
of their electrical output. Compare CAA § 112(a)(8), with CAA
§ 112(a)(1)–(2). Consistent with ordinary rules of statutory
construction, EPA reasonably relied on the more specific
definition in § 112(a)(8) rather than the general definitions
applicable to all other sources. See RadLAX Gateway Hotel,
LLC v. Amalgamated Bank, 132 S. Ct. 2065, 2070–72 (2012).
Requiring EPA to classify EGUs as major or area sources would
40
also create redundancy in the source-category listing criteria.
Section 112(c)(3) of the CAA requires EPA to list area sources
for regulation if EPA determines that they “warrant[]
regulation.” CAA § 112(c)(3), 42 U.S.C. § 7412(c)(3). That
finding is arguably unnecessary as applied to EGUs given the
requirement in § 112(n)(1)(A) that EPA make a finding that
regulation of all EGUs is “appropriate and necessary.”
EPA also did not err in declining to exercise its
discretionary authority to require less stringent “generally
available control technology,” or GACT, standards, rather than
MACT standards. Id. § 112(d)(5), 42 U.S.C. § 7412(d)(5). In
the Final Rule, EPA expressly and reasonably determined that
setting separate GACT standards for area source EGUs was
unnecessary. See Final Rule, 77 Fed. Reg. at 9404, 9438
(“[S]imilar HAP emissions and control technologies are found
on both major and area sources” such that “there is no essential
difference between area source and major source EGUs with
respect to emissions of HAP.”).
For these reasons, EPA reasonably declined to interpret
§ 112 as mandating classification of EGUs as major sources and
area sources.
3. Mercury MACT floor. Petitioners next challenge EPA’s
standards for mercury emissions from existing coal-fired EGUs.
Petitioners maintain that in calculating the MACT floor for
those units, EPA collected emissions data from only those EGUs
that were best-performing for mercury emissions.
Consequently, petitioners insist, the mercury MACT standard
reflects the results achieved by the “best of the best” EGUs, and
not the results of the best 12% of all EGUs, as required by
statute.
Petitioners’ assertions of a biased or irrational data
collection process are not supported by a review of the record.
41
“EPA typically has wide latitude in determining the extent of
data-gathering necessary to solve a problem.” Sierra Club v.
EPA, 167 F.3d 658, 662 (D.C. Cir. 1999). Here, EPA
determined that a three-pronged approach was appropriate for
developing the mercury MACT standard. First, EPA asked all
EGUs for all of their data from 2005–10; it received data from
168 units. Information Collection Request (“ICR”) Supporting
Statement Part A at 9; see generally MACT Floor Analysis
Spreadsheets. Second, EPA requested and received data from
50 randomly selected EGUs. ICR Supporting Statement Part B
at 2, 7–8. Finally, EPA requested and received data from 170 of
the best-performing units for non-mercury emissions. Id. EPA
initially thought that third group would also be the best-
performing for mercury emissions, but it discovered that was not
the case after examining the data. See Responses to Comments,
Dec. 2011, v.1, at 573–76 (“RTC”).
Based on the results of its ICR, covering a total of 388
EGUs, EPA chose “the average emission limitation achieved by
the best performing 12 percent” of all existing sources “for
which [it] ha[d] emissions information,” as authorized by CAA
§ 112(d)(3)(A). See NPRM, 76 Fed. Reg. at 25,022–23.
Although, as EPA acknowledges, it would be arbitrary and
capricious for EPA to set a MACT floor based on intentionally
skewed data, the facts indicate that EPA did not do so here. Nor
does the record suggest that EPA’s data collection efforts
resulted in unintentional bias. As previously noted, EPA
collected data from a wide range of EGUs because the agency
concluded that it could not identify units representing the best-
performing 12 percent of mercury emitters. That conclusion is
borne out by the data in the record, which showed that some of
the best-performing units for particulate matter control were
among the worst performing units for mercury control. See
generally MACT Floor Analysis Spreadsheets. Similarly, many
of the mercury best performers (32 of the best performing 126
units) were not drawn from the pool of units that EPA targeted
42
as best performers for particulate matter. See RTC v. 1 at 575.
In short, EPA’s data-collection process was reasonable, even if
it may not have resulted in a perfect dataset.
4. Acid gas HAP. EPA did not conclusively determine that
emissions of acid gases such as hydrogen chloride from EGUs
pose a health hazard. See NPRM, 76 Fed. Reg. at 25,016 (“our
case studies did not identify significant chronic non-cancer risks
from acid gas emissions”). Petitioners say that given that
conclusion, EPA should have established a less stringent, health-
based emission standard for acid gases under § 112(d)(4). That
provision states: “With respect to pollutants for which a health
threshold has been established, the Administrator may consider
such threshold level, with an ample margin of safety, when
establishing emission standards under this subsection.” CAA
§ 112(d)(4), 42 U.S.C. § 7412(d)(4). Section 112(d)(4) makes
clear, however, that EPA’s authority to set alternate standards is
discretionary. See id. (“the Administrator may consider such
threshold level”) (emphasis added). Here, EPA concluded that
it lacked enough evidence to determine whether an alternative
standard would protect health “with an ample margin of safety.”
See Final Rule, 77 Fed. Reg. at 9405–06. Petitioners dispute
EPA’s weighing of the evidence, but petitioners offer no
compelling basis for second-guessing EPA’s analysis.
Petitioners also suggest that regulation of EGU acid gas
emissions to address ecosystem acidification conflicts with
Congress’s decision in the 1990 CAA amendments to address
such acidification in Title IV of the CAA. See SIL Reply Br. 5.
But petitioners failed to raise that argument before the agency,
and did not raise it in this court until their reply brief. We
therefore deem the argument forfeited. See Bd. of Regents of
Univ. of Washington v. EPA, 86 F.3d 1214, 1221 (D.C. Cir.
1996).
43
5. UARG delisting petition. The Utility Air Regulatory
Group (UARG) filed a petition with EPA seeking to remove
coal-fired EGUs from the list of sources regulated under § 112.
EPA denied the petition. Petitioners now argue that that denial
was arbitrary and capricious for the same reasons they assert that
the agency’s determination that it is “appropriate and necessary”
to regulate EGUs was incorrect. Assuming, without deciding,
that EPA can delist only a subset of the EGU source category,
we reject petitioners’ argument on this point. As EPA explained
in the Final Rule, UARG’s delisting petition did not demonstrate
that EPA could make either of the two predicate findings
required for delisting under § 112(c)(9)(B): (1) that no source in
the category emits HAP “in quantities which may cause a
lifetime risk of cancer greater than one in one million to the
individual in the population who is most exposed” and (2) that
emissions from no source in the category “exceed a level which
is adequate to protect public health with an ample margin of
safety.” CAA § 112(c)(9)(B), 42 U.S.C. § 7412(c)(9)(B); see
also Final Rule, 77 Fed. Reg. at 9364–65 (discussing technical
flaws in UARG’s risk analysis).
6. Chromium emissions data. Finally, petitioners question
the validity of EPA’s case study regarding risks from non-
mercury EGU emissions. As relevant here, that study found that
at 6 of 16 tested facilities, emissions of HAP posed a lifetime
cancer risk of more than one in a million to the most exposed
individuals. See Final Rule, 77 Fed. Reg. at 9319. Petitioners
contend that EPA’s cancer-risk finding was the product of
contaminated emissions samples, and that EPA has refused to
correct the emissions data it used. In making this argument,
they rely on their own independent “subsequent resampling” of
the facilities that EPA examined in conducting its inhalation risk
assessment. SIL Br. 52 n.58; UARG, Petition for
Reconsideration of MATS Rule at 6–7 (Apr. 16, 2012), EPA-
HQ-OAR-2009-0234-20179 (J.A. 2493–94).
44
EPA did not act arbitrarily or capriciously in relying on the
chromium emissions data to which petitioners object. As EPA
explained in its responses to comments, the data came from
source representatives themselves. RTC v.1 at 187. EPA
reasonably believed that these representatives — given their
“concern[] about data accuracy” — would review “all data
before certifying their accuracy and submitting them to the
EPA.” Id. EPA did not err in relying on this certified data. We
cannot consider the data from petitioners’ independent
resampling, which was conducted after the Final Rule issued and
was not part of the administrative record. See CAA
§ 307(d)(7)(A), 42 U.S.C. § 7607(d)(7)(A).
B.
A group of electric utilities and industry groups have filed
a separate petition raising issues specific to industry. Many of
industry petitioners’ arguments concern circulating fluidized bed
EGUs, or CFBs. As relevant here, CFBs differ from
conventional pulverized coal units in that CFBs inject air and
additional materials, such as limestone, into the combustion
zone in order to achieve lower-temperature combustion. At that
lower temperature, fuel breaks down to a lesser degree, thus
enabling CFBs to control emissions without using add-on
controls.
Industry petitioners argue that these design differences
required EPA to create a separately regulated subcategory for
CFBs. They emphasize that EPA recognized the need for a CFB
subcategory in a different rulemaking proceeding, the “Boiler
MACT” Rule.
Industry petitioners’ CFB-related arguments are unavailing.
Contrary to industry petitioners’ assertions, nothing in the Clean
Air Act “requires” EPA to create a CFB subcategory. Rather,
the statute gives EPA substantial discretion in determining
whether subcategorization is appropriate. See CAA § 112(d)(1),
45
42 U.S.C. § 7412(d)(1) (EPA “may distinguish among classes,
types, and sizes of sources”) (emphasis added); see also Nat’l
Ass’n of Clean Water Agencies v. EPA, 734 F.3d 1115, 1159
(D.C. Cir. 2013) (“EPA’s subcategorization authority under
§ 112 involves an expert determination, placing a heavy burden
on a challenger to overcome deference to EPA’s articulated
rational connection between the facts found and the choice
made.”) (internal quotation marks omitted). EPA’s decision not
to create a CFB subcategory in the Final Rule is reasonable and
well-supported by the record. Among other things, EPA noted
that CFBs were among the best and worst performers for various
pollutants, indicating that CFBs have emissions profiles similar
to other coal-fired units despite their operational differences.
See Final Rule, 77 Fed. Reg. at 9397.
The record similarly supports EPA’s determination that the
0.002 lb/MMBtu hydrogen chloride limit for CFBs is
achievable. As noted above, some CFB units were among the
top performers for each of the regulated pollutants, including
hydrogen chloride. See id. The record thus demonstrates that at
least some CFB units are in fact able to achieve the hydrogen
chloride limit. In any event, the fact that the Final Rule may not
be cost effective for all CFBs does not necessarily mean EPA
erred in declining to create a CFB subcategory or in setting
emission standards applicable to those units.
EPA’s decision to subcategorize CFBs in the Boiler MACT
Rule is not to the contrary. There, EPA concluded that CFBs
presented relevant differences with respect to carbon monoxide
— not mercury, acid gases, or particulates (the pollutants at
issue in this rulemaking). See National Emission Standards for
Hazardous Air Pollutants for Major Sources: Industrial,
Commercial, and Institutional Boilers and Process Heaters, 76
Fed. Reg. 15,608, 15,617–18 (Mar. 21, 2011).
46
Industry petitioners further argue that at a minimum, EPA
should have set separate acid gas standards for coal-refuse-fired
CFBs. Those units burn waste coal from other coal-mining
operations and use the resulting ashes in mine reclamation
projects. Industry petitioners maintain that these fuel-ash reuse
efforts would be imperiled by the stringency of the acid gas
standards in the Final Rule.
We conclude that EPA reasonably decided that separate
standards for coal-refuse-fired CFBs were not warranted.
Industry petitioners’ assertion that the hydrogen chloride
standards are unattainable for coal-refuse-fired CFBs is
undermined by the fact that some of those units were among the
best performers for hydrogen chloride. See RTC v.1 at 587.
EPA also suggested alternative compliance methods that it says
would permit coal-refuse-fired CFBs to continue participating
in reclamation efforts. See Final Rule, 77 Fed. Reg. at 9412.
Regardless, nothing in the CAA obligates EPA to set standards
in a way that always allows the re-use of fuel ash, even if doing
so might be a more desirable outcome for some EGU operators.
C.
In contrast to its decision on CFBs, EPA did create a
subcategory for lignite-fired EGUs. (Lignite coal is also
referred to as “low rank” coal due to its low heat content.)
Industry petitioners argue that the emission standard for the
lignite subcategory is based on an improperly calculated
minimum stringency level, or MACT floor. Industry petitioners
also contend that the emission standard set by EPA is not
achievable. We consider these arguments in turn.
1. MACT floor. Industry petitioners insist that EPA
incorrectly calculated the MACT floor for lignite units,
rendering that standard arbitrary and capricious. They assert
that EPA used “cherry picked” data from the top 6% of units,
instead of the top 12% as required by § 112(d)(3)(A). Finally,
47
industry petitioners argue that EPA did not properly account for
variability in lignite coal.
Industry petitioners’ data-bias argument is similar to the
argument made by the State, Industry & Labor petitioners
regarding the mercury MACT floor, supra Part III.A.3. And, as
with that argument, petitioners’ assertions regarding the lignite
MACT floor find no support in the record. EPA has offered a
reasonable, non-biased explanation of its data-collection and
analysis process. See MACT Floor Memo at 10; RTC v.1 at
559–60.
Industry petitioners’ objections regarding the variability of
lignite coal likewise fail. EPA accounted for variability due to
differing chemical compositions of coal by applying its Upper
Prediction Limit analysis. See NPRM, 76 Fed. Reg. at 25,041.
Industry petitioners do not challenge that analysis itself. They
do suggest in passing that EPA’s results are flawed, see Industry
Pet’rs’ Br. 10, but offer no explanation as to why that is so.
Such cursory treatment is inadequate to place their challenge to
EPA’s variability analysis before the court, because “it is not
enough merely to mention a possible argument in the most
skeletal way, leaving the court to do counsel’s work, create the
ossature for the argument, and put flesh on its bones.” Davis v.
Pension Benefit Guar. Corp., 734 F.3d 1161, 1166–67 (D.C. Cir.
2013) (internal quotation marks and alterations omitted). While
EPA acknowledged that it could not account for all operational
variability, it concluded that its variability analysis “is an
appropriate method of addressing the concern that these
standards must be met at all times.” RTC v.1 at 458. EPA’s
explanation is sufficient to withstand our “extremely
deferential” review of this kind of technical judgment. New
York v. Reilly, 969 F.2d 1147, 1152 (D.C. Cir. 1992).
2. Beyond-the-floor limit. EPA is permitted to set a more
restrictive, “beyond-the-floor” emission standard if the agency
48
determines that such a standard is “achievable” considering
costs, energy requirements, and applicable control technologies.
CAA § 112(d)(2), 42 U.S.C. § 7412(d)(2). To be “achievable,”
a standard “must be capable of being met under most adverse
conditions which can reasonably be expected to recur.” Nat’l
Lime Ass’n v. EPA, 627 F.2d 416, 431 n.46 (D.C. Cir. 1980). In
this case, industry petitioners argue that EPA failed to consider
the limitations of applicable control technologies. As a result,
petitioners contend, EPA’s beyond-the-floor standard for lignite-
fired EGUs is not achievable because the standard mandates
unrealistically high levels of mercury reduction.
We reject petitioners’ challenge to the beyond-the-floor
standard. EPA concluded during the rulemaking process that the
standard for lignite units is achievable if sources increase their
use of a particular control technology, activated carbon
injection. See Beyond-the-Floor Memo at 1–4. According to
EPA, increased carbon injection can reduce emissions by up to
90%, well in excess of the reductions necessary to reach
beyond-the-floor levels. Id. at 1–2. Ultimately, the dispute on
this issue amounts to a factual disagreement between EPA and
petitioners over the effectiveness of activated carbon injection.
Because the record contains no data inconsistent with EPA’s
position on the efficacy of activated carbon injection, we defer
to the agency’s determination that the beyond-the-floor emission
standard for lignite-fired EGUs is achievable.
D.
Public utility companies are subject to certain state-law
contracting requirements that may lengthen the process of
installing upgraded controls. That added time, industry
petitioners argue, requires EPA to grant a blanket, one-year
extension of the compliance deadline to public power
companies. We disagree. Once again, petitioners’ argument
amounts to a claim that a decision the Clean Air Act leaves to
EPA’s discretion should instead be mandatory. See CAA
49
§ 112(i)(3)(B), 42 U.S.C. § 7412(i)(3)(B) (EPA “may issue” an
extension under certain circumstances). EPA explained at
length why such a blanket extension was inappropriate. See
Final Rule, 77 Fed. Reg. at 9407, 9409–11. Most importantly,
industry petitioners did not show — and likely could not show
— that an extension is necessary for the installation of controls
at every public power company. On the contrary, EPA’s data
indicated that “most units will be able to fully comply” within
the three-year period established by EPA. Final Rule, 77 Fed.
Reg. at 9410. EPA’s decision not to issue a blanket extension
therefore was not arbitrary or capricious.5
IV.
We turn to the challenges by Environmental petitioners and
Julander Energy Company.
A.
Environmental petitioners challenge the provisions of the
Final Rule that allow compliance with emission standards to be
demonstrated through (1) emissions averaging and (2) options
for non-mercury metal HAP emissions monitoring. Chesapeake
Climate Action Network, Conservation Law Foundation,
Environmental Integrity Project, and Sierra Club object to
5
To the extent that petitioners object to EPA’s alleged failure
to respond to comments on this issue made by public power
companies on the ground that this failure violates CAA
§ 307(d)(6)(B), 42 U.S.C. § 7607(d)(6)(B), we do not address that
objection because it was first raised in a pending petition for
reconsideration. See UARG, 2014 WL 928230, at *4. We also do not
address industry petitioners’ arguments concerning the standards for
petroleum-coke-fired EGUs and liquid oil-fired non-continental EGUs
because those arguments were likewise first raised in a pending
petition for reconsideration.
50
averaging as unlawful; Chesapeake Climate Action Network and
Environmental Integrity Project object to the monitoring options
as failing to provide reasonable assurance of compliance. They
presented their objections (save one) during the comment period
and EPA has responded to them. Although the challenges to
emissions averaging are also pending before EPA in a petition
for reconsideration, and usually would be incurably premature,
see, e.g., Clifton Power Corp. v. FERC, 294 F.3d 108, 112 (D.C.
Cir. 2002), the text and legislative history of the Clean Air Act
make clear this usual approach is inapplicable, see UARG v.
EPA, Nos. 12-1166, 12-1366, 12-1420, 2014 WL 928230, at *3
(D.C. Cir. Mar. 11, 2014); CAA § 307(b)(1), 42 U.S.C.
§ 7607(b)(1); S. REP. NO. 101-228, at 3755 (1989).
1. Averaging. Under the Final Rule, existing contiguous,
commonly-controlled EGUs in the same subcategory can
demonstrate compliance by averaging their emissions as an
alternative to meeting certain requirements on an individual
basis. Final Rule, 77 Fed. Reg. at 9384, 9473–76 (codified at 40
C.F.R. § 63.10009). Averaging is permissible only between the
same types of pollutants, individual EGUs that are part of the
same affected source, EGUs subject to the same emission
standard, and existing (not new) EGUs. Id. at 9385. Each
facility intending to use emissions averaging must develop an
emissions averaging plan identifying “(1) [a]ll units in the
averaging group; (2) the control technology installed; (3) the
process parameter that will be monitored; (4) the specific control
technology or pollution prevention measure to be used; (5) the
test plan for the measurement of the HAP being averaged; and
(6) the operating parameters to be monitored.” Id. at 9385–86.
Environmental petitioners contend the averaging alternative
is unlawful because it relaxes the stringency of the MACT floor
standards. With one exception, EPA set the MACT floor
standards based on a thirty-boiler operating day averaging
51
period. Id. at 9385, 9479–80. Allowing multiple EGUs to
average their emissions data effectively extends, petitioners
maintain, the standards’ averaging period to sixty days (for two
units), ninety days (for three units), or more. In their view, a
longer averaging period permits longer and larger pollution
spikes because high measurements can be averaged over more
hours of normal, lower-pollution operations.
Section 112(d)(3), 42 U.S.C. § 7412(d)(3), provides that
emission standards for existing sources “shall not be less
stringent” than “the average emission limitation achieved by the
best performing 12 percent” of such sources. The subsection
(d)(2) “beyond-the-floor” requirement provides that emission
standards for new or existing sources “shall require the
maximum degree of reduction in emissions of the hazardous air
pollutants subject to this section . . . that the Administrator . . .
determines is achievable.” CAA § 112(d)(2), 42 U.S.C.
§ 7412(d)(2).
EPA permissibly interpreted § 112(d) to allow emissions
averaging as provided for in the Final Rule. See Chevron, 467
U.S. at 843. That section neither expressly allows nor disallows
emissions averaging among multiple units. In the Final Rule,
EPA stated:
Averaging across affected units is permitted only if it
can be demonstrated that the total quantity of any
particular HAP that may be emitted by that portion of
a contiguous major source that is subject to the same
standards in the [Final Rule] will not be greater under
the averaging mechanism than it could be if each
individual affected EGU in the subcategory complied
separately with the applicable standard. Under this
test, the practical outcome of averaging is equivalent to
compliance with the MACT floor limits by each
52
discrete EGU, and the statutory requirement that the
MACT standard reflect the maximum achievable
emissions reductions is, therefore, fully effectuated.
77 Fed. Reg. at 9385. Viewing averaging as “an equivalent,
more flexible, and less costly alternative” to requiring units to
demonstrate compliance individually, EPA explained that
permitting averaging is part of its “general policy of
encouraging the use of flexible compliance approaches where
they can be properly monitored and enforced.” Id.
Environmental petitioners concede the averaging alternative
will not result in an increase in a source’s total emissions
beyond the level permitted under the applicable standard, see
Envtl. Pet’rs’ Br. 18, and while theoretically averaging could
allow an individual unit’s emissions to exceed the standard,
under the Final Rule that exceedance must be offset by other,
better-performing units to demonstrate compliance. They have
not challenged EPA’s interpretation of the ambiguous term
“source,” which EPA defined as referring to “the collection of
coal- or oil-fired EGUs . . . within a single contiguous area and
under common control,” Final Rule, 77 Fed. Reg. at 9366, rather
than a single EGU. Because § 112(d)(3), 42 U.S.C.
§ 7412(d)(3), requires EPA to prescribe emissions limitations
for “sources,” not units, EPA could permissibly establish a
standard that allows averaging within a single source. Cf.
Chevron, 467 U.S. at 866. Although this may allow individual
units to exceed the emissions limitation, the statute does not
require EPA to regulate emissions on a unit level.
As EPA has observed, Environmental petitioners’ main
objection appears to be that the Final Rule does not include a
“discount factor” whereby emission rates are reduced for
sources using an averaging alternative. Petitioners point, for
example, to the discount factor included in the Hazardous
53
Organic NESHAP rule, Envtl. Pet’rs’ Br. 9–10, in which EPA
determined that “to carry out the mandate of section 112(d)(2),
some portion of these cost savings [from averaging] should be
shared with the environment by requiring sources using
averaging to achieve more emission reductions than they would
otherwise.”6
To the extent petitioners’ objection is that EPA failed to
explain why it did not include a discount factor, EPA, in fact,
offered a reasonable and adequate explanation. In the Final
Rule, EPA explained that “[g]iven the homogeneity of fuels
within the rules subcategories, along with other emissions
averaging criteria, the Agency believes use of a discount factor
to be unwarranted for this rule.” Final Rule, 77 Fed. Reg. at
9386. Further, in responding to comments, EPA explained that
unlike the Hazardous Organic rule, “which covers a broad
number of unit types, products, and processes,” EGUs subject to
the Final Rule “differ generally only in the fuel used to produce
electricity,” a difference, EPA concluded, “accounted for . . . by
prohibiting units from differing subcategories — which are fuel
based — from participating in emissions averaging.” RTC v.2
at 361–62. EPA noted as well its agreement that “other safety
factors in the rule obviate the need for a discount factor,” id. at
363, including the requirement averaging start within three years
of promulgation of the Final Rule.
The suggestion by Environmental petitioners that EPA
improperly relied on its Upper Prediction Limit (“UPL”)
6
National Emission Standards for Hazardous Air Pollutants
for Source Categories; Organic Hazardous Air Pollutants from the
Synthetic Organic Chemical Manufacturing Industry and Other
Processes Subject to the Negotiated Regulation for Equipment Leaks,
59 Fed. Reg. 19,402, 19,430 (Apr. 22, 1994).
54
analysis to mitigate the effect of averaging on the stringency of
emission standards fares no better. The UPL analysis in the
MACT floor calculation is designed to “assess variability of the
best performers.” NPRM, 76 Fed. Reg. at 25,041. To the extent
petitioners point to EPA’s statement in responding to comments,
they ignore its context. EPA stated that it “disagrees with the
suggestion that another variability component need be
considered for those EGU owners or operators who choose to
engage in emissions averaging; the current UPL analyses was
[sic] developed to take factors such as those mentioned by the
commenter into account.” RTC v.2 at 363. According to
Environmental petitioners, “the UPL analyses contain nothing
that would eliminate (or even mitigate) the Averaging
Alternative’s additional relaxation of the standards,” and it was
therefore inappropriate for EPA to rely on this analysis in
support of the Final Rule’s emissions averaging provisions.
Envtl. Pet’rs’ Br. 20. But there is nothing to indicate this is what
EPA did. In its statement, EPA was responding to industry
comments arguing that because EPA had accounted for
individual-unit variability in the UPL analysis in setting MACT
floors, it was inappropriate to allow a multi-unit facility to
further reduce variability by averaging, without applying a
discount factor. It is far too great a stretch to read EPA’s
response as an admission that EPA relied on its UPL analysis to
support emissions averaging.
2. Monitoring. The Final Rule provides three alternatives
to continuous emissions monitoring to demonstrate compliance
with the non-mercury metal HAP standards. They are: (1) use
of a continuous parametric monitoring system (“CPMS”), (2)
quarterly performance testing, and (3) performance testing once
every three years for qualifying low emitting EGUs. See Final
Rule, 77 Fed. Reg. at 9466 (codified at 40 C.F.R.
§ 63.10000(c)(1)(iii-iv)). Environmental petitioners first
challenged CPMS in a pending petition for reconsideration, and
55
therefore that challenge is not properly before the court for
decision now. See UARG, 2014 WL 928230, at *4, *5 n.4.
Any EGU may demonstrate compliance with the non-
mercury metal standards through quarterly performance tests.
Final Rule, 77 Fed. Reg. at 9372, 9384, 9466. If a unit’s
emission results for all required tests are less than 50 percent of
the applicable emission limit for a three-year period, the EGU
may qualify as a low emitting EGU for non-mercury metal
HAPs and is then required to conduct performance testing only
once every three years, so long as it maintains compliance. Id.
at 9371, 9466, 9471.
Environmental petitioners maintain that stack testing
conducted quarterly or once every three years cannot provide
reasonable assurance of compliance with a standard set as a
thirty-day emissions rate, given EPA’s determination that stack
test results are highly variable, and that EPA has failed to
explain how compliance options involving long intervals
between performance tests and lacking any control of operating
conditions between tests can provide sufficiently timely or
reliable information to assure compliance. EPA has provided a
reasonable explanation for its determination that each of these
monitoring options complies with the statutory requirements of
CAA §§ 114 and 504.
Section 504(b), 42 U.S.C. § 7661c(b), provides that
“continuous emissions monitoring need not be required if
alternative methods are available that provide sufficiently
reliable and timely information for determining compliance.”
Although § 114(a)(3), 42 U.S.C. § 7414(a)(3), “require[s]
enhanced monitoring” for major stationary sources, there is “no
presumption in favor of any particular type of monitoring.”
Sierra Club, 353 F.3d at 991. EPA has “broad discretion in
selecting a monitoring regime that ensures compliance,” and as
56
long as it “reasonably articulate[s] the basis for its decision,” id.,
the court will “defer to the informed discretion of the Agency,”
recognizing that “analysis of this issue requires a high level of
expertise,” id. (quoting Nat’l Lime, 233 F.3d at 635).
EPA explained that, in its judgment, “[t]he quarterly stack
testing period, coupled with underlying monitoring of control
devices or the additional monitoring for liquid oil-fired units, is
expected to be frequent enough to ensure that a unit’s emissions
control devices and processes continue to operate in the same
manner as during the previous stack test.” RTC v.2 at 93. “If
there are significant changes to the operation of the unit or the
fuel, then a retest is required to reconfirm that the source
remains in compliance under the new operating circumstances.”
Id. EPA acknowledged, with respect to the low emitting EGU
option, that the available data “shows an EGU’s potential
variability,” but reasoned that “well-operated EGUs — such as
those qualifying for [low emitting EGU] status — are expected
to have much less variable emissions” and that “the requirement
to revert to the original monitoring frequency should subsequent
emissions testing show the EGUs no longer meet [low emitting
EGU] status will keep source owners or operators interested in
maintaining [that] status.” Id. at 244. EPA has provided a
reasonable explanation for its determinations that these two
monitoring options provide sufficient assurance of compliance
with the applicable emission standards.
B.
Julander Energy Company, an oil and natural gas
development, exploration, and production company, challenges
EPA’s decision not to adopt stricter emission standards by
requiring “fuel switching” by EGUs from coal to natural gas. It
contends that EPA unlawfully relied on a non-statutory factor
(prohibition of construction of new coal-fired EGUs), failed to
consider a required statutory factor (§ 112’s requirement that
57
EPA consider collateral benefits of control options), and reached
arbitrary and capricious conclusions about natural gas supply
and infrastructure and costs.
As a threshold matter, the court must address Julander’s
standing. Industry intervenor-respondents contend Julander
lacks standing under Article III of the Constitution. In fact,
Julander’s “injury in fact,” causation, and redressability under
Article III, see Lujan v. Defenders of Wildlife, 504 U.S. 555,
560–61 (1992), are self-evident, see Sierra Club v. EPA, 292
F.3d 895, 899–900 (D.C. Cir. 2002), insofar as the Final Rule
does not require EGUs to switch to natural gas, to the detriment
of Julander’s stated interests, and on remand EPA could require
fuel switching. EPA, however, contends Julander lacks
“prudential standing” because its interests do not come within
the zone-of-interests test articulated in Association of Data
Processing Service Organizations, Inc. v. Camp, 397 U.S. 150
(1970). The Supreme Court recently clarified that “‘prudential
standing is a misnomer’ as applied to the zone-of-interests
analysis,” Lexmark Int’l, Inc. v. Static Control Components,
Inc., No. 12-873, 2014 WL 1168967, at *6 (U.S. Mar. 25, 2014)
(quoting Ass’n of Battery Recyclers, Inc. v. EPA, 716 F.3d 667,
675–76 (D.C. Cir. 2013) (Silberman, J., concurring)). The
question remains whether Julander’s interest is “arguably within
the zone of interests to be protected or regulated by the statute.”
Match-E-Be-Nash-She-Wish Band of Pottawatomi Indians v.
Patchak, 132 S. Ct. 2199, 2210 (2012) (quoting Ass’n of Data
Processing, 397 U.S. at 153).
Although the zone-of-interests test “is not meant to be
especially demanding,” Clarke v. Secs. Indus. Ass’n, 479 U.S.
388, 399 (1987), we conclude that Julander falls outside the
zone of interests protected by § 112 of the CAA.
Notwithstanding our concurring colleague’s suggestion, this
conclusion is not the result of a “coin flip” to decide which of
58
our precedents to follow. Concurring Op. at 17, 29. The
Supreme Court has instructed that “the breadth of the zone of
interests varies according to the provisions of law at issue.”
Lexmark, 2014 WL 1168967, at *8 (citation omitted).
Accordingly, this court must be guided by those of our
precedents that have interpreted § 112, and not those applying
other statutory provisions, including the APA. Those cases hold
in the context of challenges to emission standards that
competitors of regulated parties fall outside the zone of interests
protected by § 112.
In Association of Battery Recyclers, 716 F.3d at 674, the
court held that a corporation could not challenge EPA’s failure
to impose more stringent emission standards on its competitors
because that interest fell outside the zone of interests protected
by § 112. In Cement Kiln Recycling Coalition v. EPA, 255 F.3d
855, 871 (D.C. Cir. 2001), the court similarly held that the
purely commercial interests of manufacturers of pollution
control equipment seeking more rigorous regulation of their
competitors under § 112 were not within the zone of interests
that Congress intended to be relied upon to challenge EPA’s
claimed disregard of the CAA. This was so even though their
pecuniary interests in increasing demand for their products were
aligned with the goals of the CAA. The court explained that
Congress’s evident purpose in enacting the CAA was not to
compel those sources with less-than-best pollution control to
invest in upgraded equipment, but only to meet the standards, as
distinct from adopting the methods of emission control, of the
best performing sources. Id. This court has not read the
Supreme Court’s decision in Match-E-Be-Nash-She-Wish Band
of Pottawatomi Indians, 132 S. Ct. 2199, to change the zone-of-
interests standard, and the court is bound to follow its own
precedent. See Grocery Mfrs. Ass’n v. EPA, 693 F.3d 169, 179
(D.C. Cir. 2012); id. at 180 (Tatel, J., concurring).
59
Julander disputes that it is seeking a competitive advantage
by increasing the regulatory burden on its competitors, pointing
out that as an oil and natural gas development company it is not
a direct competitor of the regulated coal- and oil-fired EGUs. It
maintains that it is properly characterized as a vendor to, and not
a competitor of, the regulated entities. Nonetheless, the
reasoning of our binding precedent encompasses Julander’s
situation. As the court observed in Hazardous Waste Treatment
Council v. EPA, 861 F.2d 277, 282 (D.C. Cir. 1988), where the
Treatment Council, much like Julander, claimed its interests,
although pecuniary, were “in sync” with those sought to be
served by the Resource Conservation and Recovery Act, the
Supreme Court’s standard in Clarke “leaves the status of this
sort of incidental benefit somewhat unclear.” In “find[ing]
operational meaning for a test that demands less than a showing
of congressional intent to benefit but more than a ‘marginal[]
rela[tionship]’ to the statutory purposes,” id. at 283 (quoting
Clarke, 479 U.S. at 399), this court acknowledged that even
absent an apparent congressional intent to benefit there may still
be “some indicator that the plaintiff is a peculiarly suitable
challenger of administrative neglect [to] support[] an inference
that Congress would have intended eligibility,” id. But the court
rejected the notion that the petitioner’s “in sync” interests were
more than “marginally related” to Congress’s environmental
purposes. Id.
Whenever Congress pursues some goal, it is inevitable
that firms capable of advancing that goal may benefit.
If Congress authorized bank regulators to mandate
physical security measures for banks, for example, a
shoal of security services firms might enjoy a profit
potential — detective and guard agencies,
manufacturers of safes, detection devices and small
arms, experts on entrance control, etc. But in the
absence of either some explicit evidence of an intent to
60
benefit such firms, or some reason to believe that such
firms would be unusually suitable champions of
Congress’s ultimate goals, no one would suppose them
to have standing to attack regulatory laxity. And of
course a rule that gave any such plaintiff standing
merely because it happened to be disadvantaged by a
particular agency decision would destroy the
requirement of prudential standing; any party with
constitutional standing could sue.
Id. (emphasis added). In Cement Kiln, 255 F.3d at 871, the court
embraced this analysis as no less applicable to the CAA. The
court has further observed that “judicial intervention may defeat
statutory goals if it proceeds at the behest of interests that
coincide only accidentally with those goals,” Hazardous Waste,
861 F.2d at 283, and that “open-ended emissions standards” are
particularly susceptible to such “manipulation,” Honeywell Int’l
Inc. v. EPA, 374 F.3d 1363, 1371 (D.C. Cir. 2004).
Ethyl Corp. v. EPA, 306 F.3d 1144 (D.C. Cir. 2002), is of
no aid to Julander. In that case, the court held that a
manufacturer of fuel additives seeking information (through an
open process for testing emissions control systems) in order to
comply with its own regulatory obligations fell within the zone
of interests protected or regulated by the CAA. See id. at 1148.
Ethyl had an interest that “appear[ed] congruent with those of
the [CAA], i.e., the development of products that will reduce
harmful air pollutants,” id., without the potential for distortion
of the regulatory process of concern to the court in Hazardous
Waste, 861 F.2d at 285, and Cement Kiln, 255 F.3d at 871.
Unlike petitioners seeking to increase the regulatory burden on
others in order to advance their own commercial interests, Ethyl
sought access to information to “improve its products with an
eye to conformity to emissions needs” and to “secur[e] EPA
approval for its own fuel additive products under the [Clean Air]
61
Act.” Ethyl Corp., 306 F.3d at 1147–48. The court emphasized
“the interdependence between motor vehicle certification under
the Act (the process at stake here) and fuel regulations (under
which Ethyl is a direct regulatee).” Id. at 1148. Julander, in
contrast, seeks stricter regulation of coal- and oil-fired EGUs,
not information that would enable it to comply with its own
regulatory obligations.
Julander’s suggestion that its interests are properly
characterized as those of a vendor, not a competitor, is
unavailing. It cannot rely on its existing relationship with
natural gas-fired EGUs because they are not subject to the Final
Rule, 77 Fed. Reg. at 9309. And claiming that it has standing as
a potential vendor to coal- and oil-fired EGUs, in the event they
were forced to switch to natural gas, is at odds with the
reasoning underlying the vendor-vendee line of cases. A vendor
has standing “to assert the interest of [regulated] vendees.”
Nat’l Cottonseed Products Ass’n v. Brock, 825 F.2d 482, 490
(D.C. Cir. 1987) (citing FAIC Secs., Inc. v. United States, 768
F.2d 352, 360–61 (D.C. Cir. 1985)). Julander is not standing in
for the interests of its potential vendees, which, in fact, here
challenge Julander’s petition. Consequently, the interests of
Julander and the regulated industry petitioners are not “two sides
of the same coin.” FAIC Secs., 768 F.2d at 359.
Julander had the opportunity to submit its views on fuel
switching to EPA during the rulemaking proceedings. And it
did. See Julander Comments Aug. 4, 2011. It could also have
sought permission to appear as amicus in this court, which it did
not. Absent any reason to conclude that it is an “unusually
suitable champion[]” of Congress’ goals in the CAA, we hold,
consistent with this court’s precedent, that Julander’s interest in
increasing the regulatory burden on others falls outside the zone
of interests protected by the CAA and therefore Julander may
not proceed as a petitioner in this court.
KAVANAUGH, Circuit Judge, concurring in part and
dissenting in part: Suppose you were the EPA Administrator.
You have to decide whether to go forward with a proposed air
quality regulation. Your only statutory direction is to decide
whether it is “appropriate” to go forward with the regulation.
Before making that decision, what information would you
want to know? You would certainly want to understand the
benefits from the regulations. And you would surely ask how
much the regulations would cost. You would no doubt take
both of those considerations – benefits and costs – into
account in making your decision. That’s just common sense
and sound government practice.
So it comes as a surprise in this case that EPA excluded
any consideration of costs when deciding whether it is
“appropriate” – the key statutory term – to impose significant
new air quality regulations on the Nation’s electric utilities.
In my view, it is unreasonable for EPA to exclude
consideration of costs in determining whether it is
“appropriate” to impose significant new regulations on
electric utilities. To be sure, EPA could conclude that the
benefits outweigh the costs. But the problem here is that EPA
did not even consider the costs. And the costs are huge, about
$9.6 billion a year – that’s billion with a b – by EPA’s own
calculation.
In Part I of this opinion, I explain my respectful
disagreement with the majority opinion’s decision to uphold
EPA’s exclusion of cost from its decisionmaking under this
statutory provision.
In Part II of this opinion, I write to address this Court’s
case law applying the “zone of interests” test under the
Administrative Procedure Act. I accept the majority
opinion’s conclusion that petitioner Julander Energy
Corporation – a natural gas company challenging EPA’s
allegedly unlawful under-regulation of Julander’s competitor
2
coal and oil companies – does not fall within the “zone of
interests” of the Clean Air Act, at least as the zone of interests
test has been applied by some decisions of this Court. But
those decisions are inconsistent with other decisions of this
Court and, more importantly, are incompatible with a 40-year
string of Supreme Court decisions applying the “zone of
interests” test. Put simply, our case law applying the zone of
interests test is in a state of disorder and needs to be cleaned
up in the near future.
I
These consolidated cases concern EPA’s Final Rule,
“National Emission Standards for Hazardous Air Pollutants
From Coal- and Oil-Fired Electric Utility Steam Generating
Units,” 77 Fed. Reg. 9304 (Feb. 16, 2012). The Rule
implements provisions of the Clean Air Act, 42 U.S.C. § 7401
et seq., regarding emissions of hazardous air pollutants.
As the majority opinion recounts, the Clean Air Act
originally provided EPA substantial discretion to identify and
regulate pollution from sources emitting hazardous air
pollutants. That approach proved to be time-consuming and
largely unworkable, so in 1990 Congress amended the Act to
cabin much of EPA’s discretion. The 1990 amendments
required EPA to identify stationary sources of 189
enumerated hazardous air pollutants and to adopt standards
for limiting emissions of those pollutants from those sources.
See 42 U.S.C. § 7412.1 Those technology-based standards are
1
Six other common pollutants emitted by stationary sources
are regulated under a different section of the Clean Air Act. The
National Ambient Air Quality Standards, or NAAQS, prescribe the
maximum permissible levels of those six pollutants in the ambient
air. See 42 U.S.C. § 7409(a)-(b). Under that NAAQS program,
EPA must choose levels for emissions of those pollutants which,
3
commonly referred to as the “maximum achievable control
technology,” or MACT, standards.
EPA uses a two-step process for setting MACT
standards. It begins by setting a minimum stringency level, or
“floor,” based on the performance of the best-performing
units in a particular source category. See id. § 7412(d)(3). At
that first step, EPA may not consider costs. Once the agency
sets the statutory floor, it then determines, considering cost
and the other factors listed in Section 112(d)(2), whether an
even more restrictive standard is “achievable.” Id. §
7412(d)(2). EPA refers to these stricter requirements as
“beyond-the-floor” standards.
The two-step process outlined in Section 112(d) – what I
will call the MACT program – applies automatically to most
sources of hazardous air pollutants.
But for one category of sources – electric utilities –
Congress devised an alternative system as set forth in Section
112(n)(1)(A) of the Act.2 That alternative system erects two
threshold hurdles before EPA may regulate electric utilities
under the MACT program. First, Congress required EPA to
“perform a study of the hazards to public health reasonably
anticipated to occur as a result of emissions by” electric
utilities and report the results of the study to Congress within
three years of the enactment of the amendments. Id.
§ 7412(n)(1)(A). Second, Congress provided that after the
study was completed, EPA could regulate electric utilities
under the MACT program only “if the Administrator finds
“allowing an adequate margin of safety, are requisite to protect the
public health.” Id. § 7409(b)(1).
2
The electric utilities included in this alternative system are
coal- and oil-fired electric utility steam generating units.
4
such regulation is appropriate and necessary after considering
the results of the study.” Id. (emphasis added).3
The meaning of Section 112(n)(1)(A) – particularly the
term “appropriate” – is a critical question in this litigation.
Industry petitioners and EPA dispute whether EPA, when
determining whether regulation of electric utilities under the
MACT program is “appropriate,” must consider the cost to
industry and the public from regulating electric utilities under
that program.4
EPA thinks not. EPA acknowledges that, in the past, it
has interpreted and applied the word “appropriate” in this
statute to provide for the consideration of costs. See 70 Fed.
Reg. 15,994, 16,001 & n.19 (Mar. 29, 2005). But the agency
has changed its interpretation. EPA’s position now is that
3
In full, the relevant section of the statute reads: “The
Administrator shall perform a study of the hazards to public health
reasonably anticipated to occur as a result of emissions by electric
utility steam generating units of pollutants listed under subsection
(b) of this section after imposition of the requirements of this
chapter. The Administrator shall report the results of this study to
the Congress within 3 years after November 15, 1990. The
Administrator shall develop and describe in the Administrator’s
report to Congress alternative control strategies for emissions which
may warrant regulation under this section. The Administrator shall
regulate electric utility steam generating units under this section, if
the Administrator finds such regulation is appropriate and necessary
after considering the results of the study required by this
subparagraph.” 42 U.S.C. § 7412(n)(1)(A).
4
The other key statutory term in Section 112(n)(1)(A) –
“necessary” – is not in dispute. EPA states that regulation of
electric utilities is necessary “if the identified or potential hazards to
public health or the environment will not be adequately addressed
by the imposition of the requirements of” the Clean Air Act. 76
Fed. Reg. 24,976, 24,987 (May 3, 2011).
5
EPA may reasonably exclude consideration of costs in
determining whether it is “appropriate” to regulate electric
utilities under the MACT program. The majority opinion
upholds EPA’s interpretation.
I respectfully disagree with the majority opinion. It is
certainly true, as the majority opinion states, that the word
“appropriate” is ambiguous in isolation, and that an agency’s
reasonable interpretation of an ambiguous statutory term is
permissible. See Chevron U.S.A. Inc. v. NRDC, 467 U.S. 837
(1984). But the agency’s answer must be “a permissible
construction of the statute” – or put another way, the agency’s
interpretation of the ambiguity must be reasonable. Id. at 843.
Moreover, under the APA, an agency must consider the
relevant factors when exercising its discretion under the
governing statute. See Motor Vehicle Manufacturers
Association of the United States, Inc. v. State Farm Mutual
Automobile Insurance Co., 463 U.S. 29, 42-43 (1983).
In this case, whether one calls it an impermissible
interpretation of the term “appropriate” at Chevron step one,
or an unreasonable interpretation or application of the term
“appropriate” at Chevron step two, or an unreasonable
exercise of agency discretion under State Farm, the key point
is the same: It is entirely unreasonable for EPA to exclude
consideration of costs in determining whether it is
“appropriate” to regulate electric utilities under the MACT
program.
To begin with, consideration of cost is commonly
understood to be a central component of ordinary regulatory
analysis, particularly in the context of health, safety, and
environmental regulation. And Congress legislated against
the backdrop of that common understanding when it enacted
this statute in 1990. Put simply, as a matter of common sense,
6
common parlance, and common practice, determining
whether it is “appropriate” to regulate requires consideration
of costs.
Drawing on his extensive administrative law and
regulatory experience, not to mention his experience as a
jurist, Justice Breyer has perhaps best explained the centrality
of cost consideration to proper regulatory decisionmaking. In
order “better to achieve regulatory goals – for example, to
allocate resources so that they save more lives or produce a
cleaner environment – regulators must often take account of
all of a proposed regulation’s adverse effects.” Whitman v.
American Trucking Associations, 531 U.S. 457, 490 (2001)
(Breyer, J., concurring). That is so because “every real choice
requires a decisionmaker to weigh advantages against
disadvantages, and disadvantages can be seen in terms of
(often quantifiable) costs.” Entergy Corp. v. Riverkeeper,
Inc., 556 U.S. 208, 232 (2009) (opinion of Breyer, J.). Cost is
a particularly salient consideration for administrative agencies
today, “in an age of limited resources available to deal with
grave environmental problems, where too much wasteful
expenditure devoted to one problem may well mean
considerably fewer resources available to deal effectively
with other (perhaps more serious) problems.” Id. at 233. An
“absolute prohibition” on considering costs “would bring
about irrational results. . . . [I]t would make no sense to
require plants to spend billions to save one more fish or
plankton. That is so even if the industry might somehow
afford those billions.” Id. at 232-33 (internal citation and
quotation marks omitted).
In addition to Justice Breyer, many other leading jurists
and scholars on administrative law have likewise recognized
that cost generally has to be a relevant factor in the overall
regulatory mix. Consider the following:
7
 Justice Kagan: “[W]hat does it take in a statute to
make us say, look, Congress has demanded that the
regulation here occur without any attention to costs?
In other words, essentially, Congress has demanded
that the regulation has occurred in a fundamentally
silly way.” Transcript of Oral Argument at 13, EPA v.
EME Homer City Generation, L.P., No. 12-1182 (U.S.
Dec. 10, 2013).5
 Professor Sunstein: “Without some sense of both costs
and benefits – both nonmonetized and monetized –
regulators will be making a stab in the dark.” Cass R.
Sunstein, Cost-Benefit Analysis and the Environment,
ETHICS 351, 354 (2005).
 Professor Sunstein: “A rational system of regulation
looks not at the magnitude of the risk alone, but
assesses the risk in comparison to the costs.” Cass R.
Sunstein, Interpreting Statutes in the Regulatory State,
103 HARV. L. REV. 405, 493 (1989).
 Professor Sunstein: “[A]ny reasonable judgment will
ordinarily be based on some kind of weighing of costs
and benefits, not on an inquiry into benefits alone. . . .
If the costs would be high and the benefits low, on
what rationale should . . . the EPA refuse even to
consider the former? There appears to be no good
answer. If there is not, the agency’s interpretations
should be declared unreasonable.” Cass R. Sunstein,
5
To be clear, I do not read the statutory text at issue in the
EME Homer case as encompassing costs, at least not in the way
EPA argued there. But regardless of how that particular case turns
out, the background principle succinctly articulated by Justice
Kagan at oral argument reflects the commonsense and well-settled
understanding that cost is an essential factor in determining whether
it is “appropriate” to regulate.
8
Cost-Benefit Default Principles, 99 MICH. L. REV.
1651, 1694 (2001).
 Professors Revesz and Livermore: “For certain kinds
of governmental programs, the use of cost-benefit
analysis is a requirement of basic rationality.”
RICHARD L. REVESZ & MICHAEL A. LIVERMORE,
RETAKING RATIONALITY 12 (2008).
 Professor Pierce: “All individuals and institutions
naturally and instinctively consider costs in making
any important decision. . . . [I]t is often impossible for
a regulatory agency to make a rational decision
without considering costs in some way.” Richard J.
Pierce, Jr., The Appropriate Role of Costs in
Environmental Regulation, 54 ADMIN. L. REV. 1237,
1247 (2002).
Every presidential administration for more than three
decades has likewise made analysis of costs an integral part of
the internal Executive Branch regulatory process. See
generally Helen G. Boutrous, Regulatory Review in the
Obama Administration: Cost-Benefit Analysis for Everyone,
62 ADMIN. L. REV. 243, 246-48 (2010). Most recently, in
2011, President Obama issued Executive Order 13,563, which
follows an earlier Order issued by President Clinton and
followed by President George W. Bush. The Order directs
each agency “to use the best available techniques to quantify
anticipated present and future benefits and costs as accurately
as possible.” 76 Fed. Reg. 3821, 3821 (Jan. 21, 2011). Under
President Obama’s Executive Order, agencies may proceed
with proposed regulations only if the benefits justify the costs.
Id.
To be clear, Congress may itself weigh the costs of a
particular kind of regulation, or otherwise take costs out of the
equation, when assigning authority to executive and
9
independent agencies to regulate a particular industry or in a
particular area. See Whitman v. American Trucking
Associations, 531 U.S. 457 (2001) (statutory provision does
not include consideration of costs). And even when an
agency has to take costs into account, it of course may
conclude that the benefits of a proposed regulation outweigh
the costs. Moreover, different agency heads, and different
Presidents, may assess and weigh certain benefits and costs
differently depending on their overarching philosophies.
But when considering just as a general matter whether it
is “appropriate” to regulate, it is well-accepted that
consideration of costs is a central and well-established part of
the regulatory decisionmaking process.
But EPA did not consider costs here. And EPA’s failure
to do so is no trivial matter. The estimated cost of compliance
with EPA’s Final Rule is approximately $9.6 billion per year,
by EPA’s own calculation. 77 Fed. Reg. at 9306, Table 2. To
put it in perspective, that amount would pay the annual health
insurance premiums of about two million Americans. It
would pay the annual salaries of about 200,000 members of
the U.S. Military. It would cover the annual budget of the
entire National Park Service three times over. Put simply, the
Rule is “among the most expensive rules that EPA has ever
promulgated.” JAMES E. MCCARTHY, CONGRESSIONAL
RESEARCH SERVICE, R42144, EPA’S UTILITY MACT: WILL
THE LIGHTS GO OUT? 1 (2012).
EPA calculated the $9.6 billion cost figure as part of its
Regulatory Impact Analysis accompanying the Rule. That
Regulatory Impact Analysis was required by President
Obama’s Executive Order. Yet EPA’s official position in this
Court is that the costs identified in the Regulatory Impact
Analysis should have “no bearing on” the determination of
whether regulation is appropriate. EPA Br. 55.
10
On the other side of the ledger, the benefits of this Rule
are disputed: Industry petitioners focus on the reduction in
hazardous air pollutant emissions attributable to the
regulations, which amount to only $4 to $6 million dollars
each year. See 77 Fed. Reg. at 9428; State, Industry & Labor
Br. 21. If those figures are right, the Rule costs nearly $1,500
for every $1 of health and environmental benefit produced.
For its part, EPA says it would estimate the benefits at $37 to
$90 billion dollars based on what it says are the indirect
benefits of reducing PM2.5, a type of fine particulate matter
that is not itself regulated as a hazardous air pollutant. See 77
Fed. Reg. at 9428.
To be sure, as I have said, EPA may be able to conclude
that the benefits outweigh the costs in determining whether it
is “appropriate” to regulate electric utilities under the MACT
program. But to reiterate, that’s not what EPA has done in
this Rule. Rather, according to EPA, it is irrelevant how
large the costs are or whether the benefits outweigh the costs
in determining whether it is “appropriate” to regulate
electric utilities under the MACT program.
In response to petitioners’ claim that the legal issue here
has huge real-world consequences, the majority opinion
suggests that it may not matter all that much that EPA refused
to consider costs in deciding whether it is “appropriate” to
regulate electric utilities under the MACT program, because
EPA does account for costs in the second step of the MACT
program, when EPA sets “beyond-the-floor” standards. Maj.
Op. at 24. I respectfully find that to be a red herring. After
all, once EPA determines that it is appropriate to regulate
electric utilities under the MACT program, costs are not
relevant at the first, “setting the floor” stage of the MACT
program. And meeting that floor will be prohibitively
expensive, particularly for many coal-fired electric utilities,
regardless of whether EPA decides to go further and set a
11
“beyond-the-floor” standard. So in the real world in which
electric utilities operate, the financial burden of complying
with that first “setting the floor” step of the MACT program –
where costs are not considered – will likely knock a bunch of
coal-fired electric utilities out of business and require
enormous expenditures by other coal and oil-fired electric
utilities. Telling someone that costs will be considered in a
regulatory step that occurs after they have already had to pay
an exorbitant amount and may already have been put out of
business is not especially reassuring. The majority opinion’s
attempt to downplay the effects of its decision thus rings a bit
hollow.
In downplaying the issue here, the majority opinion also
says that the result of this case is that electric utilities will just
be treated like other sources. In saying that, the majority
opinion, in my respectful view, does not sufficiently account
for the fact that treating electric utilities differently from
standard sources was the intent of Section 112(n)(1)(A), as
revealed by the statutory text. If Congress had intended EPA
to consider the costs of regulating electric utilities only when
deciding whether to adopt beyond-the-floor standards, and not
as a threshold decision in deciding whether to regulate electric
utilities under the MACT program to begin with, it would
have done one of two things: It would have either
automatically regulated electric utilities under the MACT
program, as it did with other sources, or provided that
regulation under the MACT program would be automatic if
the three-year study found that these sources indeed emitted
hazardous air pollutants. That Congress declined to choose
either of those options, and instead directed EPA to regulate
electric utilities under the MACT program only if
“appropriate,” reinforces the conclusion that Congress
intended EPA to consider costs in deciding whether to
12
regulate electric utilities at the threshold, and not simply at the
second beyond-the-floor stage of the MACT program.
Not only does EPA’s approach depart from the clear
statutory scheme, standard agency decisionmaking, and the
common understanding of the term “appropriate” in this
regulatory context, it also effectively negates the
congressional compromise that was ultimately embodied in
the statutory text of the 1990 Act. Under the initial Senate
proposal, electric utilities would been have listed as sources
under Section 112(c) and therefore automatically regulated
under Section 112(d), the MACT program. See 3 A
LEGISLATIVE HISTORY OF THE CLEAN AIR ACT AMENDMENTS
OF 1990, at 4119, 4418-28 (1993). But the House
subsequently modified the Senate bill to make regulation of
electric utilities under the MACT program dependent on the
results of a study and the Administrator’s subsequent
determination that regulation was “appropriate” and
necessary. See 2 id. at 2148-49. In the words of the House
bill’s legislative sponsor, Congressman Oxley, the goal of the
counter-proposal was to provide “protection of the public
health while avoiding the imposition of excessive and
unnecessary costs on residential, industrial, and commercial
consumers of electricity.” See 1 id. at 1417 (emphasis added).
The House’s proposal ultimately prevailed with the
Conference Committee “because of . . . the extremely high
costs that electric utilities will face under other provisions of
the new Clean Air Act amendments.” Id. at 1416. That
Conference Committee view – that EPA should avoid
imposing unwarranted financial burdens when deciding to
regulate electric utilities – is encapsulated in the textual
directive that EPA regulate electric utilities under the MACT
program only if “appropriate.”
13
The majority opinion here says that the term
“appropriate” is ambiguous. But the Supreme Court often
looks to legislative history to help inform interpretation of
otherwise ambiguous statutes, including in Chevron cases.
See Chevron 467 U.S. at 843 n.9. And here, the legislative
history should resolve any lingering ambiguity on the key
point of what “appropriate” encompasses. It establishes that
Congress in 1990 chose to impose these threshold
requirements on EPA specifically because it wanted EPA to
consider costs before regulating electric utilities under the
MACT program. EPA’s interpretation of Section
112(n)(1)(A) in this case upsets Congress’s careful balance
and stacks the deck in favor of regulation of electric utilities
under the MACT program. In effect, EPA’s reading of the
statute replaces its authority to regulate electric utilities if
“appropriate” with a command to regulate electric utilities
under the MACT program regardless of costs. That is not
what Congress intended or permitted and thus is beyond
EPA’s authority. See Chevron, 467 U.S. at 843 n.9.
In upholding EPA’s cost-blind approach, the majority
opinion points to other statutory provisions that expressly
reference cost and invokes the familiar interpretive canon that
“[w]here Congress includes particular language in one section
of a statute but omits it in another section of the same Act, it
is generally presumed that Congress acts intentionally and
purposely in the disparate inclusion or exclusion.” Russello v.
United States, 464 U.S. 16, 23 (1983). The majority opinion
assigns particular weight to the Supreme Court’s decision in
Whitman v. American Trucking Associations, 531 U.S. 457
(2001), which referenced that canon when construing a
different section of the Clean Air Act. See Whitman, 531 U.S.
at 467 (“We have therefore refused to find implicit in
ambiguous sections of the CAA an authorization to consider
costs that has elsewhere, and so often, been expressly
14
granted.”). As in Whitman, according to the majority opinion,
Congress’s decision not to explicitly mention cost in Section
112(n)(1)(A), despite doing so in other parts of the Act,
creates a negative implication that costs are an unnecessary
consideration.
But I respectfully believe the majority opinion is
misreading – or at least over-reading – Whitman. Whitman
was a textualist decision written for a unanimous Court by
Justice Scalia. It stands for the basic proposition that
consideration of costs cannot be jammed into a statutory
factor that, by its terms, otherwise would not encompass
“costs,” particularly when other provisions of the Act
expressly reference costs. See Entergy, 556 U.S. at 223
(Whitman “stands for the rather unremarkable proposition that
sometimes statutory silence, when viewed in context, is best
interpreted as limiting agency discretion.”).
In Whitman itself, the statutory factor was a provision of
the Clean Air Act, Section 109(b)(1), that directed EPA to set
ambient air quality standards at levels “requisite to protect the
public health” with “an adequate margin of safety.” 42
U.S.C. § 7409(b)(1). The dispute concerned whether those
“modest words” granted EPA “the power to determine
whether implementation costs should moderate national air
quality standards.” 531 U.S. at 468. Concluding that EPA
had not been granted such power, the Court speaking through
Justice Scalia observed that cost “is both so indirectly related
to public health and so full of potential for canceling the
conclusions drawn from direct health effects that it would
surely have been expressly mentioned in §§ 108 and 109 had
Congress meant it to be considered.” Id. at 469.
The statutory provision at issue in Whitman differs
significantly from the statute at issue here. The statutory
15
provision in Whitman tied regulation solely to “public health,”
which is typically a critical factor on the other side of the
balance from costs, not a factor that includes costs. Here, by
contrast, the key statutory term is “appropriate” – the classic
broad and all-encompassing term that naturally and
traditionally includes consideration of all the relevant factors,
health and safety benefits on the one hand and costs on the
other. To unblinkingly rely on Whitman here is to overlook
the distinct language of the relevant statutes. Cf. Michigan v.
EPA, 213 F.3d 663, 677-79 (D.C. Cir. 2000) (the term
“significant” “does not in itself convey a thought that
significance should be measured in only one dimension,” and
in “some contexts, ‘significant’ begs a consideration of
costs”).
To sum up: All significant regulations involve tradeoffs,
and I am very mindful that Congress has assigned EPA, not
the courts, to make many discretionary calls to protect both
our country’s environment and its productive capacity. In this
case, if EPA had decided, in an exercise of its judgment, that
it was “appropriate” to regulate electric utilities under the
MACT program because the benefits outweigh the costs, that
decision would be reviewed under a deferential arbitrary and
capricious standard of review. See American Radio Relay
League, Inc. v. FCC, 524 F.3d 227, 247-48 (D.C. Cir. 2008)
(separate opinion of Kavanaugh, J.). But before we assess the
merits of any cost-benefit balancing, this statutory scheme
requires that we first ensure that EPA has actually considered
the costs. See State Farm, 463 U.S. at 42-43. In my view,
whether we call it a Chevron problem or a State Farm
problem, it is unreasonable for EPA to exclude consideration
of costs when deciding whether it is “appropriate” to regulate
16
electric utilities under the MACT program. I respectfully
dissent from the majority opinion’s contrary conclusion.6
II
This case implicates another important administrative law
issue, the “zone of interests” test under the Administrative
Procedure Act.7 The Court holds that petitioner Julander
Energy Company falls outside the “zone of interests” the
Clean Air Act is designed to protect and thus cannot challenge
the Final Rule. The Court reasons that the concerns raised by
6
On the Chevron point, I add one further comment. When the
Government wins a Chevron case, it may prevail at Chevron step
one (because the agency’s interpretation of the statute is mandated
by the statutory language) or at Chevron step two (because the
agency’s interpretation of an ambiguous statute is at least
reasonable). In those cases, the step one or step two label may have
practical significance, as it may determine whether the agency
could try to adopt a contrary interpretation in the future. On the
other hand, when the agency loses a Chevron case because the
agency has adopted an interpretation outside the permissible bounds
of the statute, even after reading relevant ambiguities in the
agency’s favor, there is not much if any practical difference for
purposes of future agency action whether we label our decision as
Chevron step one or Chevron step two. See generally City of
Arlington v. FCC, 133 S. Ct. 1863, 1868, 1874 (2013). So it is
here, in my view.
7
This Court has traditionally referred to the zone of interests
test as a component of “prudential standing.” As the Supreme
Court has recently explained, however, the test does not belong
under the “prudential” rubric. Lexmark International, Inc. v. Static
Control Components, Inc., No. 12-873 (U.S. Mar. 25, 2014).
Instead, whether a plaintiff comes with the “zone of interests” is a
statutory question “that requires us to determine, using traditional
tools of statutory interpretation, whether a legislatively conferred
cause of action encompasses a particular plaintiff’s claim.” Id., slip
op. at 8.
17
Julander, a natural gas production company, are merely to
seek more stringent regulation of its coal and oil company
competitors. See Maj. Op. at 57-58.
I reluctantly join that portion of the Court’s opinion
because it is consistent with some of this Court’s previous
decisions applying the zone of interests test. I hasten to add
that the decisions on which the Court today relies are
inconsistent with other of this Court’s precedents. Given that
our case law makes this issue a de facto coin flip, I cannot
fault an opinion that lands on heads rather than tails.
I am concerned, however, about the erratic inconsistency
in our case law. I am even more concerned that our cases
holding that competitors are outside the zone of interests –
including today’s decision – are inconsistent with the
governing Supreme Court precedents. I write separately to
explain my concerns.
The Supreme Court first announced the APA “zone of
interests” test in Association of Data Processing Service
Organizations, Inc. v. Camp, 397 U.S. 150 (1970) (Data
Processing). In that case, vendors of data processing services
challenged the Comptroller of the Currency’s decision to
allow competitor national banks to sell the same services.
The data processing vendors alleged that the agency decision
violated a provision of the National Bank Act. The district
court dismissed the case for lack of standing, and the court of
appeals affirmed the dismissal. The Supreme Court reversed.
For purposes of Article III standing, the Court first said that
there was “no doubt” that the petitioners had alleged a
sufficient “injury in fact.” Id. at 152. In reaching that
conclusion, the Court rejected the then-prevailing requirement
that plaintiffs show that a defendant’s actions invaded a “legal
18
interest” belonging to the plaintiff. Id. at 153. The Court
instead adopted the now-familiar “injury in fact” test.
For purposes of the APA, the Court added that the
separate question of being able to sue under the APA
“concerns, apart from the ‘case’ or ‘controversy’ test, the
question whether the interest sought to be protected by the
complainant is arguably within the zone of interests to be
protected or regulated by the statute or constitutional
guarantee in question.” Id. And the Court said that the “zone
of interests” requirement was satisfied by the plaintiffs in
Data Processing, who were competitors of the national banks.
The Court noted with approval the “trend . . . toward
enlargement of the class of people who may protest
administrative action.” Id. at 154. In keeping with that trend,
the Court refused to take an overly restrictive view of “the
generous review provisions” of the APA, which the Court
noted should be construed “not grudgingly but as serving a
broadly remedial purpose.” Id. at 156.8
The Supreme Court reaffirmed its broad understanding of
the zone of interests test in Arnold Tours, Inc. v. Camp, 400
U.S. 45 (1970) and Investment Company Institute v. Camp,
401 U.S. 617 (1971). The plaintiffs in both cases were
competitors of national banks. Both cases concerned
decisions by the Comptroller of the Currency to authorize
8
Although Data Processing referenced the Administrative
Procedure Act, the opinion did not explicitly tie the zone of
interests test to the text of the APA. The Court subsequently
clarified that the zone of interests test is a “gloss” on Section 702 of
the APA, which grants the right to judicial review of an agency
action to any person “adversely affected or aggrieved” by that
action. See Clarke v. Securities Industry Association, 479 U.S. 388,
395, 400 n.16 (1987).
19
national banks to offer new services to customers: travel
services in Arnold Tours and investment services in
Investment Company Institute. And in both cases, the Court
held that plaintiffs who would have to compete with the banks
under the new regulations satisfied the zone of interests test
and could challenge the Comptroller’s decision. See Arnold
Tours, 400 U.S. at 46; Investment Company Institute, 401
U.S. at 620-21.
Notably, Justice Harlan dissented in Investment Company
Institute because there was no evidence of “any congressional
concern for the interests of petitioners and others like them in
freedom from competition.” Investment Company Institute,
401 U.S. at 640 (Harlan, J., dissenting). But that fact, the
Court held, was not fatal to the plaintiffs’ case; it was enough
to satisfy the zone of interests test that Congress, for its own
reasons, “did legislate against the competition that the
petitioners challenge.” Id. at 621 (majority opinion).
Thus, at the time of its inception, the zone of interests test
was understood to be part of a broader trend toward
expanding the class of persons able to bring suits under the
APA challenging agency actions. See Copper & Brass
Fabricators Council, Inc. v. Department of the Treasury, 679
F.2d 951, 953 n.2 (D.C. Cir. 1982) (R.B. Ginsburg, J.,
concurring) (in each of the Supreme Court’s first four zone of
interests decisions, the Court “utilized the ‘zone’ test to
reverse lower court decisions which had held that the
respective plaintiffs lacked standing”). Although the Supreme
Court was cognizant of the dangers of freely permitting
judicial review of agency decisions, it nonetheless “struck the
balance in a manner favoring review,” as the Court later
described it, excluding only “those would-be plaintiffs not
even arguably within the zone of interests to be protected or
regulated by the statute.” Clarke v. Securities Industry
20
Association, 479 U.S. 388, 397 (1987) (internal quotation
marks omitted).
And importantly for present purposes, the Supreme Court
in those early zone of interest cases specifically held that the
class of persons who could sue specifically included plaintiffs
who were complaining about what they alleged was
unlawfully lax agency regulation of the plaintiffs’
competitors. The theory was simple: Competitors, almost by
definition, are among the class of people “arguably” to be
“protected” when Congress limited the activities of other
competitors in the relevant industry. So absent a discernible
congressional intent to preclude suit by the plaintiffs, the suit
could proceed.
In the years following Data Processing, however, this
Court appeared to resist the Supreme Court’s direction on
competitor suits under the zone of interests test. This Court’s
cases still said, for example, that the zone of interests test
required “some indicia – however slight – that the litigant
before the court was intended to be protected” by the statute
providing a cause of action. See, e.g., Copper & Brass
Fabricators, 679 F.2d at 952 (majority opinion).
In Clarke v. Securities Industry Association, 479 U.S.
388 (1987), however, the Supreme Court reaffirmed that it
meant what it said in Data Processing. And the Court in
Clarke explicitly stated that D.C. Circuit cases had incorrectly
departed from Data Processing. See id. at 400 n.15.
Clarke was another case in which some plaintiffs argued
that the Comptroller of the Currency’s regulation of the
plaintiffs’ competitors was unduly lax. Specifically,
securities brokers challenged the Comptroller’s decision to
exempt certain bank offices that offered brokerage services
from restrictions on branch banking. The Court began its
21
analysis by clarifying that although the zone of interests test
was “basically one of interpreting congressional intent,” the
inquiry did not require a congressional intent to benefit the
plaintiff class. Clarke, 479 U.S. at 394, 399-400. Rather,
suits would be allowed unless a “congressional intent to
preclude review” in suits by the plaintiffs was “fairly
discernible.” Id. at 403 (citing Block v. Community Nutrition
Institute, 467 U.S. 340, 351 (1984)) (internal quotation marks
omitted). The zone of interests test “is a guide for deciding
whether, in view of Congress’ evident intent to make agency
action presumptively reviewable, a particular plaintiff should
be heard to complain of a particular agency decision. In cases
where the plaintiff is not itself the subject of the contested
regulatory action, the test denies a right of review if the
plaintiff’s interests are so marginally related to or inconsistent
with the purposes implicit in the statute that it cannot
reasonably be assumed that Congress intended to permit the
suit. The test is not meant to be especially demanding.” Id. at
399.
In sum, Clarke confirmed the capacious view of the zone
of interests requirement announced in Data Processing and
similar cases. It reaffirmed the presumption in favor of
allowing suit and made clear that the suit should be allowed
unless the statute evinces discernible congressional intent to
preclude review. See 3 RICHARD J. PIERCE, JR.,
ADMINISTRATIVE LAW TREATISE § 16.9, at 1521 (5th ed.
2010) (“An injured plaintiff has standing under the APA
unless Congress intended to preclude judicial review at the
behest of parties in plaintiff’s class.”).
And most importantly for our purposes, Clarke
confirmed that competitors were presumptively within the
zone of interests under the APA when challenging allegedly
lax regulation of other competitors in the relevant industry,
22
absent discernible evidence of contrary congressional intent.
See id. at 403 (“competitors who allege an injury that
implicates the policies of the National Bank Act are very
reasonable candidates to seek review of the Comptroller’s
rulings”).
As one respected commentator has summarized the
Supreme Court’s case law: “It is hardly a caricature to say
that the current law is this: Businesses desiring to complain
that the government is regulating their competitors with
insufficient stringency are invariably and automatically held
to fall within the zone of interests of any allegedly violated
statute . . . .” Jonathan R. Siegel, Zone of Interests, 92 GEO.
L.J. 317, 347 (2004) (emphasis added).
Despite the apparent clarity of Clarke – and its explicit
disapproval of this Court’s zone of interests cases – some of
this Court’s post-Clarke decisions nonetheless still have
barred competitors from suing because they are purportedly
outside the zone of interests. For example, in Hazardous
Waste Treatment Council v. EPA, 861 F.2d 277 (D.C. Cir.
1988) – a case on which the Court today relies – we
considered a claim by waste treatment companies that EPA’s
waste disposal standards were unduly lax toward some
competitors of the waste treatment companies. Id. at 283. As
I read the cases, Clarke, Data Processing, Investment
Company, and Arnold Tours had contemplated that the zone
of interests test would be satisfied in such a scenario.
Nevertheless, in Hazardous Waste, we held that the plaintiffs
did not fall within the zone of interests “in the absence of
either some explicit evidence of an intent to benefit such
firms, or some reason to believe that such firms would be
unusually suitable champions of Congress’s ultimate goals.”
Hazardous Waste, 861 F.2d at 283.
23
In my view, that language in Hazardous Waste is difficult
to square with what the Supreme Court said in Clarke and
earlier cases.9 In those cases, the Supreme Court had
specifically said that there does not need to be evidence of an
intent to benefit the plaintiff class. In fact, the Supreme Court
said that suit should be allowed unless there was a discernible
congressional intent to preclude suit by the plaintiff class. In
other words, this Court’s cases seemingly flipped the
presumption in favor of allowing suit by competitor plaintiffs
to a presumption against allowing suit by competitor
plaintiffs.
The confusion in our case law has only grown in the
years following Hazardous Waste. Sometimes we allow
competitors to sue, opining, for example, that we “take from”
cases like Clarke “the principle that a plaintiff who has a
competitive interest in confining a regulated industry within
certain congressionally imposed limitations may sue to
prevent the alleged loosening of those restrictions.” First
National Bank & Trust Co. v. National Credit Union
Administration, 988 F.2d 1272, 1277 (D.C. Cir. 1993); see,
e.g., Sherley v. Sebelius, 610 F.3d 69, 75 (D.C. Cir. 2010)
(allowing doctors to sue because of allegedly illegal agency
under-regulation of other doctors: “Because the Act can
plausibly be interpreted to limit research involving”
embryonic stem cells, “the Doctors’ interest in preventing the
NIH from funding such research is not inconsistent with the
purposes of the Amendment. . . . [T]hat is all that matters.”);
Honeywell International Inc. v. EPA, 374 F.3d 1363, 1370
(D.C. Cir. 2004) (allowing chemical manufacturer to sue
because of allegedly illegal agency under-regulation of
9
Chief Judge Wald stated as much at the time. See Hazardous
Waste Treatment Council v. Thomas, 885 F.2d 918, 931 (D.C. Cir.
1989) (Wald, C.J., dissenting).
24
competing chemicals: “If there is reason to believe that a
party’s interest in statutory enforcement will advance, rather
than hinder, the operation of a statute, the court can
reasonably assume that Congress intended to permit the
suit.”); Ethyl Corp. v. EPA, 306 F.3d 1144, 1148 (D.C. Cir.
2002) (allowing manufacturer of fuel additives to sue because
of allegedly illegal under-regulation of automobile
manufacturers: zone of interests “includes not only those
challengers expressly mentioned by Congress, but also
unmentioned potential challengers that Congress would have
thought useful for the statute’s purpose”); Wabash Valley
Power Association, Inc. v. FERC, 268 F.3d 1105, 1112 (D.C.
Cir. 2001) (allowing power association to sue because of
allegedly illegal under-regulation of merging utility
companies: “In this case, as a competitor crying foul, Wabash
satisfies prudential standing requirements.”); Mova
Pharmaceutical Corp. v. Shalala, 140 F.3d 1060, 1076 (D.C.
Cir. 1998) (allowing drug manufacturer to sue because of
allegedly illegal agency under-regulation of other drug
manufacturer: “Upjohn’s interest in limiting competition for
its product is, by its very nature, linked with the statute’s goal
of limiting competition between generic manufacturers.”)
(internal citation and quotation marks omitted); see also
Amgen, Inc. v. Smith, 357 F.3d 103, 109 (D.C. Cir. 2004)
(“Parties motivated by purely commercial interests routinely
satisfy the zone of interests test under this court’s
precedents.”).
But other times, as in Hazardous Waste, we say exactly
the opposite, that competitors are not within the zone of
interests and are barred from suing. See, e.g., Association of
Battery Recyclers, Inc. v. EPA, 716 F.3d 667, 674 (D.C. Cir.
2013) (lead smelter could not object to lax regulation of other
lead smelters: plaintiff objected “not to any regulatory burden
imposed on it but instead to the absence of regulatory burdens
25
imposed on its competitors”); Grocery Manufacturers
Association v. EPA, 693 F.3d 169, 179 (D.C. Cir. 2012) (food
producers could not object to lax regulation of ethanol
producers who compete with food producers in market to
purchase corn);10 Cement Kiln Recycling Coalition v. EPA,
255 F.3d 855, 871 (D.C. Cir. 2001) (hazardous waste
combustors could not object to lax regulation of competing
combustors: “the Council’s interest lies only in increasing the
regulatory burden on others”); ANR Pipeline Co. v. FERC,
205 F.3d 403, 408 (D.C. Cir. 2000) (natural gas pipeline
operator could not object to lax regulation of competitor’s
pipeline: plaintiff’s “only concern is with suppressing
competition from Nautilus, and that economic interest is not
within the zone of interests protected by NEPA”); Liquid
Carbonic Industries Corp. v. FERC, 29 F.3d 697, 705 (D.C.
Cir. 1994) (industrial gas corporation could not object to lax
regulation of competitor’s facilities: “There being no
indication that Congress intended to benefit a second-tier
competitor, Liquid Carbonic does not have standing as an
intended beneficiary.”).
Those competing lines of cases have developed without
any apparent distinguishing principle. Having carefully
reviewed all of them together in one sitting, I frankly cannot
find a clear line to separate the cases where we have found
competitors to be within the zone of interests from the cases
where we have not.
10
In Grocery Manufacturers Association v. EPA, 693 F.3d 169
(D.C. Cir. 2012), we addressed an additional question of whether
the zone of interests test is a jurisdictional requirement. The
Supreme Court has since made clear that the zone of interests test is
not jurisdictional. See Lexmark International, Inc. v. Static Control
Components, Inc., No. 12-873, slip op. at 9 n.4 (U.S. Mar. 25,
2014).
26
Moreover, there is nothing in the Clean Air Act that
poses a stricter limit on competitor suits than in APA cases
involving other statutes. The default rule set forth by the
Supreme Court for APA cases is that competitors may sue,
unless the substantive statute at issue excludes such suits.
Nothing in the Clean Air Act indicates an intent to exclude
competitor suits. And it is surely not incongruent with the
Clean Air Act to allow competitor suits. By definition, a
successful competitor suit would mean that the source would
have to comply with stricter Clean Air Act limits. Put simply:
Allowing competitor suits in Clean Air Act cases will mean
cleaner air. Excluding competitor suits in Clean Air Act cases
will mean dirtier air.
Apart from our case law’s internal inconsistency, the
larger problem, as I see it, is that the line of cases in this Court
that have held that competitors are outside the zone of
interests is out of step with the Supreme Court’s case law
from Data Processing to Clarke. What is more, the Supreme
Court’s cases since Clarke have only reinforced the broad
conception set forth in Data Processing and Clarke. See, e.g.,
National Credit Union Administration v. First National Bank
& Trust Co., 522 U.S. 479, 493-94 (1998) (“As competitors
of federal credit unions, respondents certainly have an interest
in limiting the markets that federal credit unions can serve,
and the NCUA’s interpretation has affected that interest by
allowing federal credit unions to increase their customer
base.”); see also Air Courier Conference of America v.
American Postal Workers Union, AFL-CIO, 498 U.S. 517,
529 (1991) (“Clarke is the most recent in a series of cases in
which we have held that competitors of regulated entities
have standing to challenge regulations.”); Lexmark
International, Inc. v. Static Control Components, Inc., No. 12-
873, slip op. at 11 (U.S. Mar. 25, 2014) (a “lenient approach”
to the zone of interests test “is an appropriate means of
27
preserving the flexibility of the APA’s omnibus judicial-
review provision, which permits suit for violations of
numerous statutes of varying character that do not themselves
include causes of action for judicial review”).
Among the Supreme Court’s post-Clarke decisions is
Match-E-Be-Nash-She-Wish Band of Pottawatomi Indians v.
Patchak, 132 S. Ct. 2199 (2012). Although not a competitor
case, the reasoning of Match-E reinforces Data Processing
and Clarke, and reaffirms the Supreme Court’s broad
conception of the zone of interests under the APA.
Writing for the Court in Match-E, Justice Kagan
reiterated that the zone of interests requirement is a low bar:
The test “is not meant to be especially demanding. We apply
the test in keeping with Congress’s evident intent when
enacting the APA to make agency action presumptively
reviewable. We do not require any indication of
congressional purpose to benefit the would-be plaintiff. And
we have always conspicuously included the word ‘arguably’
in the test to indicate that the benefit of any doubt goes to the
plaintiff. The test forecloses suit only when a plaintiff’s
interests are so marginally related to or inconsistent with the
purposes implicit in the statute that it cannot reasonably be
assumed that Congress intended to permit the suit.” Id. at
2210 (emphasis added) (footnote, citation, and some internal
quotation marks omitted).
Match-E reaffirmed – in line with Data Processing and
Clarke – that the plaintiff need not be among a class that
Congress intended to benefit in the statute at hand. And
Match-E further reaffirmed that a wide variety of interests,
including economic interests related to the agency’s allegedly
unlawful action with respect to someone else, fall within the
zone of interests. There, a residential property owner claimed
28
that the Interior Department violated federal law when it
acquired a parcel of land for use by a nearby Indian tribe as a
casino. See id. at 2202-03. All agreed that the federal statute
was not designed to benefit a property owner who objects
when the Federal Government acquires another property
owner’s land in order to help Indians. See id. at 2210 n.7.
The Supreme Court nonetheless concluded that the zone of
interests test was satisfied. The Supreme Court said that
“neighbors to the use (like Patchak) are reasonable – indeed,
predictable – challengers of the Secretary’s decisions: Their
interests, whether economic, environmental, or aesthetic,
come within § 465’s regulatory ambit.” Id. at 2212 (emphasis
added).
Given its music and its words, Match-E should have put a
final end to this Court’s crabbed approach to the zone of
interests test. But our Court has still continued since Match-E
to hold – at least in some cases – that the zone of interests test
prevents businesses from complaining about allegedly illegal
agency under-regulation of their competitor businesses. See,
e.g., Association of Battery Recyclers, 716 F.3d at 674;
Grocery Manufacturers Association, 693 F.3d at 179.
Put simply, our current zone of interests case law is
inconsistent and unpredictable. Perhaps most troubling, our
cases holding that competitors are outside the zone of
interests are inconsistent with Supreme Court precedent, as I
read it. In my respectful view, too much is at stake in the
administrative process, for health, safety, and environmental
regulation, and for the economic interests affected by these
cases for us to continue muddling along in this way. This
state of affairs should receive a careful examination at some
point in the near future. Whether a party can sue in court to
challenge illegal agency action on such important matters
29
should not come down to the equivalent of a coin flip. We
can do better.
***
I respectfully dissent from the majority opinion’s
conclusion that EPA may reasonably exclude consideration of
costs when deciding whether it is appropriate to regulate
electric utilities under the MACT program. And on the zone
of interests test, I accept the majority opinion’s conclusion
that Julander falls outside the zone of interests, at least under
some of our precedents. But in my view, those precedents are
not consistent with other decisions of this Court or with the
Supreme Court’s case law and should be corrected in due
course.