MacK Trucks, Inc. v. Environmental Protection Agency , 682 F.3d 87 ( 2012 )


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  •  United States Court of Appeals
    FOR THE DISTRICT OF COLUMBIA CIRCUIT
    Argued May 14, 2012                     Decided June 12, 2012
    No. 12-1077
    MACK TRUCKS, INC. AND VOLVO GROUP NORTH AMERICA,
    LLC,
    PETITIONERS
    v.
    ENVIRONMENTAL PROTECTION AGENCY,
    RESPONDENT
    NAVISTAR, INC.,
    INTERVENOR
    Consolidated with 12-1078, 12-1099
    On Petitions for Review of a Final Rule of the
    United States Environmental Protection Agency
    Christopher T. Handman argued the cause for petitioners.
    With him on the briefs were R. Latane Montague, Sean
    Marotta, Timothy K. Webster, Samuel I. Gutter, Karen K.
    Mongoven, Alec C. Zacaroli, and Julie R. Domike.
    Michele L. Walter, Attorney, U.S. Department of Justice,
    argued the cause and filed the brief for respondent.
    2
    Cary R. Perlman and Laurence H. Levine were on the
    brief intervenor Navistar, Inc. in support of respondents.
    Before: SENTELLE, Chief Judge, BROWN and GRIFFITH,
    Circuit Judges.
    Opinion for the Court filed by Circuit Judge BROWN.
    BROWN, Circuit Judge: In January 2012, EPA
    promulgated an interim final rule (IFR) to permit
    manufacturers of heavy-duty diesel engines to pay
    nonconformance penalties (NCPs) in exchange for the right to
    sell noncompliant engines. EPA took this action without
    providing formal notice or an opportunity for comment,
    invoking the “good cause” exception provided in the
    Administrative Procedure Act (APA). Because we find that
    none of the statutory criteria for “good cause” are satisfied,
    we vacate the IFR.
    I
    In 2001, pursuant to Section 202 of the Clean Air Act
    (“the Act”), EPA enacted a rule requiring a 95 percent
    reduction in the emissions of nitrogen oxide from heavy-duty
    diesel engines. 
    66 Fed. Reg. 5,002
     (Jan. 18, 2001). By
    delaying the effective date until 2010, EPA gave industry nine
    years to innovate the necessary new technologies. 
    Id. at 5,010
    . (EPA and manufacturers refer to the rule as the “2010
    NOx standard.” 
    77 Fed. Reg. 4,678
    , 4,681 (Jan. 31, 2012).)
    During those nine years, most manufacturers of heavy-duty
    diesel engines, including Petitioners, invested hundreds of
    millions of dollars to develop a technology called “selective
    catalytic reduction.” This technology converts nitrogen oxide
    into nitrogen and water by using a special aftertreatment
    system and a diesel-based chemical agent. With selective
    3
    catalytic reduction, manufacturers have managed to meet the
    2010 NOx standard.
    One manufacturer, Navistar, took a different approach.
    For its domestic sales, Navistar opted for a form of “exhaust
    gas recirculation,” but this technology proved less successful;
    Navistar’s engines do not meet the 2010 NOx standard. All
    else being equal, Navistar would therefore be unable to sell
    these engines in the United States—unless, of course, it
    adopted a different, compliant technology. But for the last
    few years, Navistar has been able to lawfully forestall that
    result and continue selling its noncompliant engines by using
    banked emission credits.1 Simply put, it bet on finding a way
    to make exhaust gas recirculation a feasible and compliant
    technology before its finite supply of credits ran out.
    Navistar’s day of reckoning is fast approaching: its
    supply of credits is dwindling and its engines remain
    noncompliant. In October 2011, Navistar informed EPA that
    it would run out of credits sometime in 2012. EPA,
    estimating that Navistar “might have as little as three to four
    months” of available credits before it “would be forced to stop
    introducing its engines into commerce,” leapt into action.2
    Resp’t Br. at 2–3. Without formal notice and comment, EPA
    hurriedly promulgated the IFR on January 31, 2012, pursuant
    1
    We have discussed EPA’s emissions credits system more fully in
    National Petrochemical & Refiners Association v. EPA, 
    287 F.3d 1130
    , 1148 (D.C. Cir. 2002).
    2
    At oral argument, EPA and counsel for Navistar indicated that
    now, seven months after it notified EPA of its credit shortage,
    Navistar still has and successfully uses credits to sell some
    noncompliant engines. Oral Arg. Recording at 32:35–33:15.
    Navistar also avails itself of the NCPs authorized by the IFR in
    other markets. Navistar, Inc.’s Motion for Leave to Intervene at 3
    (Feb. 28, 2012) [“Navistar Motion”].
    4
    to its authority under 
    42 U.S.C. § 7525
    (g), to make NCPs
    available to Navistar.3
    To issue NCPs under its regulations, EPA must first find
    that a new emissions standard is “more stringent” or “more
    difficult to achieve” than a prior standard, that “substantial
    work will be required to meet the standard for which the NCP
    is offered,” and that “there is likely to be a technological
    laggard.” 
    40 C.F.R. § 86.1103-87
    . EPA found these criteria
    were met. The 2010 NOx standard permits a significantly
    smaller amount of emissions than the prior standard, so the
    first criterion is easily satisfied. As for the second, EPA
    simply said that, because compliant engines (like Petitioners’)
    use new technologies to be compliant, “[i]t is therefore logical
    to conclude . . . that substantial work was required to meet the
    emission standard.” 77 Fed. Reg. at 4,681. Finally, EPA
    determined that there was likely to be a technological laggard
    because “an engine manufacturer [Navistar] . . . has not yet
    met the requirements for technological reasons” and because
    “it is a reasonable possibility that this manufacturer may not
    be able to comply for technological reasons.” Id.
    Having determined that NCPs are appropriate, EPA
    proceeded to set the amount of the penalty and establish the
    “upper limit” of emissions permitted even by a penalty-paying
    manufacturer. The IFR provides that manufacturers may sell
    heavy-duty diesel engines in model years 2012 and 2013 as
    long as they pay a penalty of $1,919 per engine and as long as
    3
    The NCP is theoretically available to any heavy-duty diesel
    engine manufacturer, but by discussing only Navistar’s predicament
    in its brief and in the IFR, EPA all but concedes that it issued the
    IFR for solely Navistar’s benefit. See Resp’t Br. at 11–13; 77 Fed.
    Reg. at 4,681. Navistar similarly averred in its motion to intervene
    that “there is no doubt that the engine manufacturer described in
    EPA’s Interim Final Rule is Navistar.” Navistar Motion, at 3.
    5
    the engines emit fewer than 0.50 grams of nitrogen oxide per
    horsepower-hour. Id. at 4,682–83. This “upper limit” thus
    permits emissions of up to two-and-a-half times the 0.20
    grams permitted under the 2010 NOx standard with which
    Navistar is meant to comply and with which Petitioners do
    comply. See id. at 4,681.
    EPA explained its decision to forego notice and comment
    procedures by invoking the “good cause” exception of the
    APA, id. at 4,680, which provides that an agency may
    dispense with formal notice and comment procedures if the
    agency “for good cause finds . . . that notice and public
    procedure thereon are impracticable, unnecessary, or contrary
    to the public interest,” 
    5 U.S.C. § 553
    (b)(B). EPA cited four
    factors to show the existence of good cause: (1) notice and
    comment would mean “the possibility of an engine
    manufacturer [Navistar] . . . being unable to certify a
    complete product line of engines for model year 2012 and/or
    2013,” (2) EPA was only “amending limited provisions in
    existing NCP regulations,” (3) the IFR’s “duration is limited,”
    and (4) “there is no risk to the public interest in allowing
    manufacturers to certify using NCPs before the point at which
    EPA could make them available through a full notice-and-
    comment rulemaking.” 77 Fed. Reg. at 4,680.
    Petitioners each requested administrative stays of the
    IFR, protesting that EPA lacked good cause within the
    meaning of the APA. Petitioners also objected to the
    substance of the NCP, arguing that EPA misapplied its own
    regulatory criteria for determining when such a penalty is
    warranted, and that EPA arbitrarily and capriciously set the
    amount of the penalty and the “upper limit” level of
    permissible emissions.       EPA denied those requests.
    Petitioners promptly filed an emergency motion with this
    Court to expedite review, which we granted.
    6
    II
    Navistar, which has intervened on behalf of EPA, claims
    Petitioners lack standing to challenge the IFR. EPA does not
    make such a claim but, of course, we have the independent
    “obligation to satisfy [ourselves]” of our own jurisdiction
    before proceeding to the merits. Dominguez v. UAL Corp.,
    
    666 F.3d 1359
    , 1362 (D.C. Cir. 2012).
    Navistar’s sole argument is that Petitioners’ lack
    procedural standing. We have no need to reach this question,
    however, since Petitioners clearly have standing as direct
    competitors of Navistar: they allege the IFR “authorizes
    allegedly illegal transactions that have the clear and
    immediate potential to compete with [their] own sales.”
    Sherley v. Sebelius, 
    610 F.3d 69
    , 72–73 (D.C. Cir. 2010).
    Navistar admits it is using NCPs to sell competitive engines,
    see Navistar Motion, at 3, so this injury is anything but
    conjectural. Petitioners’ injury is also “clear[ly]” traceable to
    the IFR which authorizes that allegedly illegal competition,
    and is redressable by a vacatur of the IFR. Sherley, 
    610 F.3d at 72
    . Finally, because “NCP provisions mandate that
    penalties . . . remove any competitive disadvantage to
    manufacturers whose engines or vehicles achieve the required
    degree of emission reduction,” Petitioners’ “interest in
    avoiding anticompetitive injury plainly falls within the zone
    of interests Congress sought to protect.” Nat’l Petrochem. &
    Refiners Ass’n, 
    287 F.3d at 1148
    . Even Navistar does not
    suggest otherwise in its brief.
    We therefore proceed to the merits.
    7
    III
    Petitioners argue first that Section 206 of the Act requires
    notice and comment; alternatively, they claim EPA lacked
    good cause in any event. The APA provides that, “[e]xcept
    when notice or hearing is required by statute,” an agency is
    relieved of its obligation to provide notice and an opportunity
    to comment “when the agency for good cause finds (and
    incorporates the finding and a brief statement of reasons
    therefor in the rules issued) that notice and public procedure
    thereon are impracticable, unnecessary, or contrary to the
    public interest.” 
    5 U.S.C. § 553
    (b)(B).4
    4
    The APA provides a second exception to the notice-and-comment
    requirement: the requirement is lifted when “persons subject thereto
    are named and either personally served or otherwise have actual
    notice thereof in accordance with law.” 
    5 U.S.C. § 553
    (b).
    Navistar, and only Navistar, argues that Petitioners had such actual
    notice of the IFR, but Petitioners knew only that EPA was
    gathering information for a possible NCP and merely orally
    supplied some information they thought might be relevant to setting
    the levels of the penalty and upper limit. EPA did not provide a
    draft of the IFR, did not advise Petitioners of the levels, did not
    explain or discuss its methodology, and did not ask Petitioners to
    discuss whether NCPs were justified in the first place. Jorgensen
    Aff. ¶ 15; Kayes Aff. ¶¶ 12–17; Greszler Aff. ¶¶ 11–13. In fact,
    according to Petitioners’ affidavits, EPA suggested the information
    was being gathered to develop a proposal which would in turn be
    subject to ordinary notice and comment—not that this was the end
    of the road. E.g., Greszler Aff. ¶ 13. EPA has not argued to the
    contrary before this Court, and Navistar offers no support for its
    position that such scant and misleading notice is sufficient. It
    certainly pales in comparison to what the APA requires of formal
    notice. See 
    5 U.S.C. § 553
    (b)(3) (notice shall include “the terms or
    substance of the proposed rule or a description of the subjects and
    issues involved”); Small Refiner Lead Phase-Down Task Force v.
    EPA, 
    705 F.2d 506
    , 549 (D.C. Cir. 1983) (“Agency notice must
    8
    A
    Is notice or hearing expressly required by statute?
    Section 206(g)(1) of the Act, 
    42 U.S.C. § 7525
    (g)(1), says
    that NCPs shall be provided “under regulations promulgated
    by the Administrator after notice and opportunity for public
    hearing.” According to Petitioners, this is an express
    requirement of notice and comment that bars EPA from even
    invoking the good cause exception in this case. Read alone,
    this language seems to support their argument. But we cannot
    read one subsection in isolation. Davis v. Mich. Dep’t of
    Treasury, 
    489 U.S. 803
    , 809 (1989). The rest of Section
    206(g) clearly reveals, as EPA points out, that this
    requirement applies only to the very first NCP rule—which
    set out the regulatory criteria governing future NCPs—not for
    each and every NCP subsequently promulgated. Because
    EPA’s position is clearly correct, we have no need to invoke
    any rule of deference. Chevron, U.S.A., Inc. v. NRDC, 
    467 U.S. 837
    , 843–44 (1984).
    Subsection (g)(2), the very next paragraph, says that “no
    [NCP] may be issued under paragraph (1) . . . if the degree by
    which the manufacturer fails to meet any standard . . . exceeds
    the percentage determined under regulations promulgated by
    the Administrator to be practicable. Such regulations . . .
    shall be promulgated not later than one year after August 7,
    1977.” 
    42 U.S.C. § 7525
    (g)(2) (emphasis added). The
    regulations to which subsection (g)(2) refers are clearly the
    regulations promulgated under subsection (g)(1). Subsection
    (g)(2) explains they are of a guiding nature and, importantly,
    describe the range of alternatives being considered with reasonable
    specificity. Otherwise, interested parties will not know what to
    comment on, and notice will not lead to better-informed agency
    decisionmaking.”). It would be wholly illogical to require any less
    from actual notice.
    9
    that they must be issued by certain a date in 1977. This
    language cannot possibly be read to describe each and every
    NCP.       Petitioners’ interpretation of subsection (g)(1),
    suggesting that it does refer to every NCP, would render
    subsection (g)(2) not just superfluous, but impossible—a
    result we must avoid. Motor & Equip. Mfrs. Ass’n, Inc. v.
    EPA, 
    627 F.2d 1095
    , 1108 (D.C. Cir. 1979). Subsection
    (g)(3) makes the flaw in Petitioners’ interpretation even
    clearer: “The regulations promulgated under paragraph (1)
    shall, not later than one year after August 7, 1977, provide for
    nonconformance penalties in amounts determined under a
    formula established by the Administrator.” 
    42 U.S.C. § 7525
    (g)(3). Once again, this provision and its deadline reveal
    that subsection (g)(1) refers to a one-time promulgation of a
    formula that governs future penalty applications. Reading
    Section 206(g) as a whole, it is clear nothing in that provision
    requires EPA to provide notice and comment every time it
    applies the original formula to the establishment of specific
    penalties.
    Contrary to Petitioners’ fears, the Act’s lack of a notice
    and comment requirement does not mean that no procedures
    are statutorily required when NCPs are issued. The APA’s
    general rule requiring notice and comment—absent identified
    exceptions—still obviously applies. Indeed, EPA has always
    argued that the IFR is justified under the good cause
    exception, not that it is justified because notice and comment
    is never required. See 77 Fed. Reg. at 4,680.
    B
    Because the Act does not contain any notice-and-
    comment requirement applicable to the IFR, EPA may invoke
    the APA’s good cause exception. We must therefore
    determine whether notice and comment were “impracticable,
    10
    unnecessary, or contrary to the public interest.” 
    5 U.S.C. § 553
    (b)(B). On that question, it would appear we owe EPA’s
    findings no particular deference. See Jifry v. FAA, 
    370 F.3d 1174
    , 1178–79 (D.C. Cir. 2004) (finding good cause without
    resorting to deference); Util. Solid Waste Activities Grp. v.
    EPA, 
    236 F.3d 749
    , 754 (D.C. Cir. 2001) (finding no good
    cause without invoking deference). But we need not decide
    the standard of review since, even if we were to review EPA’s
    assertion of “good cause” simply to determine if it is arbitrary
    or capricious, 
    5 U.S.C. § 706
    (2)(A), we would still find it
    lacking.
    We have repeatedly made clear that the good cause
    exception “is to be narrowly construed and only reluctantly
    countenanced.” Util. Solid Waste Activities Grp., 
    236 F.3d at 754
    ; Tenn. Gas Pipeline Co. v. FERC, 
    969 F.2d 1141
    , 1144
    (D.C. Cir. 1992); New Jersey v. EPA, 
    626 F.2d 1038
    , 1045
    (D.C. Cir. 1980); see also Jifry, 
    370 F.3d at 1179
     (“The
    exception excuses notice and comment in emergency
    situations, or where delay could result in serious harm.”); Am.
    Fed. of Gov’t Emps. v. Block, 
    655 F.2d 1153
    , 1156 (D.C. Cir.
    1981) (“As the legislative history of the APA makes clear,
    moreover, the exceptions at issue here are not ‘escape clauses’
    that may be arbitrarily utilized at the agency’s whim. Rather,
    use of these exceptions by administrative agencies should be
    limited to emergency situations . . . .”).
    First, an agency may invoke the impracticability of notice
    and comment. 
    5 U.S.C. § 553
    (b)(B). Our inquiry into
    impracticability “is inevitably fact- or context-dependent,”
    Mid-Tex Electric Coop. v. FERC, 
    822 F.2d 1123
    , 1132 (D.C.
    Cir. 1987). For the sake of comparison, we have suggested
    agency action could be sustained on this basis if, for example,
    air travel security agencies would be unable to address threats
    posing “a possible imminent hazard to aircraft, persons, and
    11
    property within the United States,” Jifry, 
    370 F.3d at 1179
    , or
    if “a safety investigation shows that a new safety rule must be
    put in place immediately,” Util. Solid Waste Activities Grp.,
    
    236 F.3d at 755
     (ultimately finding that not to be the case and
    rejecting the agency’s argument), or if a rule was of “life-
    saving importance” to mine workers in the event of a mine
    explosion, Council of the S. Mountains, Inc. v. Donovan, 
    653 F.2d 573
    , 581 (D.C. Cir. 1981) (describing that circumstance
    as “a special, possibly unique, case”).
    By contrast, the context of this case reveals that the only
    purpose of the IFR is, as Petitioners put it, “to rescue a lone
    manufacturer from the folly of its own choices.” Pet. Br. at
    29; see 77 Fed. Reg. at 4,680 (expressing EPA’s concern that
    providing notice and comment would mean “the possibility of
    an engine manufacturer [Navistar] . . . being unable to certify
    a complete product line of engines for model year 2012 and/or
    2013”). The IFR does not stave off any imminent threat to
    the environment or safety or national security. It does not
    remedy any real emergency at all, save the “emergency”
    facing Navistar’s bottom line. Indeed, all EPA points to is
    “the serious harm to Navistar and its employees” and “the
    ripple effect on its customers and suppliers,” Resp’t Br. at 28,
    but the same could be said for any manufacturer facing a
    standard with which its product does not comply.
    EPA claims the harm to Navistar and the resulting up-
    and down-stream impacts should still be enough under our
    precedents. The only case on which it relies, however, is one
    in which an entire industry and its customers were imperiled.
    See Am. Fed. of Gov’t Emps., 
    655 F.2d at 1157
    . Navistar’s
    plight is not even remotely close to such a weighty, systemic
    interest, especially since it is a consequence brought about by
    Navistar’s own choice to continue to pursue a technology
    which, so far, is noncompliant. At bottom, EPA’s approach
    12
    would give agencies “good cause” under the APA every time
    a manufacturer in a regulated field felt a new regulation
    imposed some degree of economic hardship, even if the
    company could have avoided that hardship had it made
    different business choices. This is both nonsensical and in
    direct tension with our longstanding position that the
    exception should be “narrowly construed and only reluctantly
    countenanced.” Util. Solid Waste Activities Grp., 
    236 F.3d at 754
    .
    Second, an agency may claim notice and comment were
    “unnecessary.” 
    5 U.S.C. § 553
    (b)(B). This prong of the good
    cause inquiry is “confined to those situations in which the
    administrative rule is a routine determination, insignificant in
    nature and impact, and inconsequential to the industry and to
    the public.” Util. Solid Waste Activities Grp., 
    236 F.3d at 755
    . This case does not present such a situation. Just as in
    Utility Solid Waste, the IFR is a rule “about which these
    members of the public [the petitioners] were greatly
    interested,” so notice and comment were not “unnecessary.”
    
    Id.
     EPA argues that since the IFR is just an interim rule, good
    cause is satisfied because “the interim status of the challenged
    rule is a significant factor” in determining whether notice and
    comment are unnecessary. Resp’t Br. at 35; 77 Fed. Reg. at
    4,680 (finding good cause because the IFR’s “duration is
    limited”). But we held, in the very case on which EPA relies,
    that “the limited nature of the rule cannot in itself justify a
    failure to follow notice and comment procedures.” Mid-Tex
    Electric Coop., 
    822 F.2d at 1132
    . And for good reason: if a
    rule’s interim nature were enough to satisfy the element of
    good cause, then “agencies could issue interim rules of
    limited effect for any plausible reason, irrespective of the
    degree of urgency” and “the good cause exception would
    soon swallow the notice and comment rule.” Tenn. Gas
    Pipeline, 
    969 F.2d at 1145
    .
    13
    EPA’s remaining argument that notice and comment
    were “unnecessary” is that the IFR was essentially ministerial:
    EPA simply input numbers into an NCP-setting formula
    without substantially amending the NCP regime. Resp’t Br.
    at 36; 77 Fed. Reg. at 4,680. But even if it were true that EPA
    arrived at the level of the penalty and the upper limit in this
    way (and Petitioners strenuously argue that EPA actually
    amended the NCP regime in order to arrive at the upper limit
    level in the IFR5), that argument does not account for how
    EPA determined NCPs were warranted in this case in the first
    place—another finding to which Petitioners object. EPA’s
    decision to implement an NCP, perhaps even more than the
    level of the penalty itself, is far from inconsequential or
    routine, and EPA does not even attempt to defend it as such.
    Finally, an agency may invoke the good cause exception
    if providing notice and comment would be contrary to the
    public interest. 
    5 U.S.C. § 553
    (b)(B). In the IFR, EPA says it
    has good cause since “there is no risk to the public interest in
    allowing manufacturers to [use] NCPs before the point at
    which EPA could make them available through a full notice-
    and-comment rulemaking,” 77 Fed. Reg. at 4,680, but this
    misstates the statutory criterion. The question is not whether
    dispensing with notice and comment would be contrary to the
    public interest, but whether providing notice and comment
    would be contrary to the public interest. By improperly
    framing the question in this way, the IFR inverts the
    presumption, apparently suggesting that notice and comment
    is usually unnecessary. We cannot permit this subtle
    malformation of the APA. The public interest prong of the
    5
    EPA admits in its brief that “Petitioners are correct that in past
    rules, EPA based the penalty rates [on certain factors]” and that
    “that was not the case for the Interim Rule.” Resp’t. Br. at 52.
    14
    good cause exception is met only in the rare circumstance
    when ordinary procedures—generally presumed to serve the
    public interest—would in fact harm that interest. It is
    appropriately invoked when the timing and disclosure
    requirements of the usual procedures would defeat the
    purpose of the proposal—if, for example, “announcement of a
    proposed rule would enable the sort of financial manipulation
    the rule sought to prevent.” Util. Solid Waste Activities Grp.,
    
    236 F.3d at 755
    . In such a circumstance, notice and comment
    could be dispensed with “in order to prevent the amended rule
    from being evaded.” 
    Id.
     In its brief, EPA belatedly frames
    the inquiry correctly, but goes on to offer nothing more than a
    recapitulation of the harm to Navistar and the associated
    “ripple effects.” Resp’t Br. at 38. To the extent this is an
    argument not preserved by EPA in the IFR, we cannot
    consider it, see SEC v. Chenery Corp., 
    332 U.S. 194
    , 196
    (1947), but regardless, it is nothing more than a reincarnation
    of the impracticability argument we have already rejected.
    IV
    Because EPA lacked good cause to dispense with
    required notice and comment procedures, we conclude the
    IFR must be vacated without reaching Petitioners’ alternative
    arguments. We are aware EPA is currently in the process of
    promulgating a final rule—with the benefit of notice and
    comment—on this precise issue. However, we strongly reject
    EPA’s claim that the challenged errors are harmless simply
    because of the pendency of a properly-noticed final rule.
    Were that true, agencies would have no use for the APA when
    promulgating any interim rules. So long as the agency
    eventually opened a final rule for comment, every error in
    every interim rule—no matter how egregious—could be
    excused as a harmless error.
    15
    We do recognize the pending final rule means our vacatur
    of the IFR on these procedural grounds will be of limited
    practical impact. Before the ink is dry on that final rule, we
    offer two observations about the parameters of this
    rulemaking. First, NCPs are meant to be a temporary bridge
    to compliance for manufacturers that have “made every effort
    to comply.” United States v. Caterpillar, Inc., 
    227 F. Supp. 2d 73
    , 88 (D.D.C. 2002). As EPA itself has explained, NCPs
    are not designed to bail out manufacturers that voluntarily
    choose, for whatever reason, not to adopt an existing,
    compliant technology. See 
    77 Fed. Reg. 4,736
    , 4,739 (Jan.
    31, 2012) (“NCPs have always been intended for
    manufacturers that cannot meet an emission standard for
    technological reasons rather than manufacturers choosing not
    to comply.”); 
    50 Fed. Reg. 35,402
    , 35,403 (Aug. 30, 1985)
    (stating that NCPs are inappropriate “if many manufacturers’
    vehicles/engines were already meeting the revised standard or
    could do so with relatively minor calibration changes or
    modifications”). Based solely on what EPA has offered in the
    IFR, it at least appears to us that NCPs are likely
    inappropriate in this case.
    Second, we emphasize that “no legislation pursues its
    purposes at all costs,” Rodriguez v. United States, 
    480 U.S. 522
    , 525–26 (1987), especially when Congress explicitly says
    as much in the legislation. Though the Clean Air Act requires
    EPA to issue NCPs when it determines the necessary criteria
    are satisfied, it also expressly demands that EPA “remove any
    competitive disadvantage to manufacturers whose engines or
    vehicles achieve the required degree of emission reduction.”
    
    42 U.S.C. § 7525
    (g)(3)(E). As it is presented in the IFR, we
    are highly skeptical that the penalty and upper limit provided
    for in this NCP satisfy this congressional demand to protect
    compliant manufacturers.
    16
    That being said, EPA is certainly free to make whatever
    findings it deems appropriate in the pending final
    rulemaking—subject, of course, to this Court’s review. For
    now, therefore, we simply hold that EPA lacked good cause
    for not providing formal notice-and-comment rulemaking,
    and accordingly vacate the IFR and remand for further
    proceedings.
    So ordered.
    

Document Info

Docket Number: 12-1077, 12-1078, 12-1099

Citation Numbers: 401 U.S. App. D.C. 194, 682 F.3d 87, 42 Envtl. L. Rep. (Envtl. Law Inst.) 20133, 2012 WL 2094414, 74 ERC (BNA) 1929, 2012 U.S. App. LEXIS 11851

Judges: Sentelle, Brown, Griffith

Filed Date: 6/12/2012

Precedential Status: Precedential

Modified Date: 10/19/2024

Authorities (16)

United States v. Caterpillar, Inc. , 227 F. Supp. 2d 73 ( 2002 )

Chevron U. S. A. Inc. v. Natural Resources Defense Council, ... , 104 S. Ct. 2778 ( 1984 )

Davis v. Michigan Department of the Treasury , 109 S. Ct. 1500 ( 1989 )

American Federation of Government Employees, Afl-Cio v. ... , 655 F.2d 1153 ( 1981 )

Jifry v. Federal Aviation Administration , 370 F.3d 1174 ( 2004 )

council-of-the-southern-mountains-inc-v-raymond-j-donovan-secretary-of , 653 F.2d 573 ( 1981 )

the-motor-and-equipment-manufacturers-association-inc-v-environmental , 627 F.2d 1095 ( 1979 )

Sherley v. Sebelius , 610 F.3d 69 ( 2010 )

Util Solid Wst Activ v. EPA , 236 F.3d 749 ( 2001 )

Securities & Exchange Commission v. Chenery Corp. , 332 U.S. 194 ( 1947 )

National Petrochemical & Refiners Association v. ... , 287 F.3d 1130 ( 2002 )

mid-tex-electric-cooperative-inc-v-federal-energy-regulatory-commission , 822 F.2d 1123 ( 1987 )

Rodriguez v. United States , 107 S. Ct. 1391 ( 1987 )

state-of-new-jersey-department-of-environmental-protection-v-united , 626 F.2d 1038 ( 1980 )

Tennessee Gas Pipeline Company v. Federal Energy Regulatory ... , 969 F.2d 1141 ( 1992 )

small-refiner-lead-phase-down-task-force-v-united-states-environmental , 705 F.2d 506 ( 1983 )

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