Daimler Trucks North America LLC v. Environmental Protection Agency ( 2013 )

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued October 22, 2013 Decided December 11, 2013
No. 12-1433
DAIMLER TRUCKS NORTH AMERICA LLC, ET AL.,
PETITIONERS
v.
ENVIRONMENTAL PROTECTION AGENCY,
RESPONDENT
NAVISTAR, INC.,
INTERVENOR
On Petition for Review of a Final Rule Promulgated
by the United States Environmental Protection Agency
Christopher T. Handman argued the cause for petitioners.
With him on the briefs were Julie R. Domike, R. Latane
Montague, Sean Marotta, Kathryn L. Lannon, William F. Lane,
and Alec C. Zacaroli.
Michele L. Walter, Attorney, U.S. Department of Justice,
argued the cause for respondent. With her on the brief were
Robert G. Dreher, Acting Assistant Attorney General, and
Michael J. Horowitz, Attorney Advisor, U.S. Environmental
Protection Agency.
2
Cary R. Perlman and Laurence H. Levine were on the brief
for intervenor Navistar, Inc. in support of respondent.
Before: HENDERSON, ROGERS and TATEL, Circuit Judges.
Opinion for the Court by Circuit Judge ROGERS.
ROGERS, Circuit Judge: To carry out the 1977 amendments
to the Clean Air Act, the Environmental Protection Agency
(“EPA”) promulgated a rule in 2001 requiring a 95% reduction
in nitrogen oxide (“NOx”) emissions by heavy-duty motor
vehicles by 2010. At the time, no technology existed to achieve
these reductions. EPA regulations provide, as Congress has
authorized, for nonconformance penalties (“NCPs”) to protect
technological laggards by allowing them to pay a penalty for
engines temporarily unable to meet a new or revised emission
standard. In a 2012 rulemaking, EPA established NCPs, having
determined that its three regulatory criteria for issuing these
penalties were met for heavy heavy-duty diesel engines,
including that one manufacturer, Navistar, Inc., was a
technological laggard. Petitioners, who are competitors of
Navistar, Inc., challenge the 2012 Rule on procedural and
substantive grounds. Because of the lack of adequate notice and
opportunity to comment on the amendments to the “substantial
work” regulation, we grant the petition. In light of EPA’s
counsel’s statement during oral argument that due to the
changed circumstances of Navistar, Inc. vacatur would cause no
harm, we vacate the 2012 Rule.
I.
In the 1977 amendments to the Clean Air Act, Congress
required the Administrator of EPA to “prescribe . . . standards
applicable to the emission of any air pollutant from any class or
classes of new motor vehicles or new motor vehicle engines,
3
which in [the Administrator’s] judgment cause, or contribute to,
air pollution which may reasonably be anticipated to endanger
public health or welfare.” 42 U.S.C. § 7521(a)(1). The
standards for NOx emissions from heavy-duty vehicles and
engines manufactured after model year 1983 must “reflect the
greatest degree of emission reduction achievable through the
application of technology which the Administrator determines
will be available for the model year to which such standards
apply, giving appropriate consideration to cost, energy, and
safety factors.” Id. § 7521(a)(3)(A)(i).
Before introducing vehicles and engines into commerce,
manufacturers are required to obtain certificates of conformity
from EPA demonstrating compliance with relevant emission
standards. Id. § 7525(a). Certificates shall be issued, however,
“notwithstanding the failure of such vehicles or engines to meet
[the applicable] standard if [the] manufacturer pays a
nonconformance penalty as provided under regulations
promulgated by the Administrator after notice and opportunity
for public hearing.” Id. § 7525(g)(1). EPA may not offer NCPs
where a manufacturer’s level of compliance exceeds the level
determined to be “practicable” under EPA’s regulations. Id.
§ 7525(g)(2). Also, the penalty amount established under the
Administrator’s formula must, as relevant here, take into
account the extent to which emissions exceed the standard,
increase periodically to create incentives to achieve compliance,
and “remove any competitive disadvantage” to compliant
manufacturers. Id. § 7525(g)(3).
In 1985, EPA promulgated the Phase I Rule establishing the
regulatory framework for NCPs. Control of Air Pollution from
New Motor Vehicles and New Motor Vehicle Engines;
Nonconformance Penalties for Heavy-Duty Engines and Heavy-
Duty Vehicles, Including Light-Duty Trucks, 50 Fed. Reg.
35,374 (Aug. 30 1985) (to be codified at 40 C.F.R. pt. 86). This
4
rule identified three criteria that must be met in order for a
subclass of heavy-duty engines or vehicles to be eligible for
NCPs. Id. at 35,388 (to be codified at 40 C.F.R. § 86.1103–87).
EPA must find that (1) an emission standard is more difficult to
achieve, either because the standard itself becomes more
stringent, or because of its interaction with another new or
revised standard; (2) “substantial work will be required to meet
the standard”; and (3) “there is likely to be a technological
laggard.” Id. (emphasis added). The rule defined “substantial
work” to “mean[] the application of technology not previously
used in an engine or vehicle class or subclass, or the significant
modification of existing technology or design parameters . . . .”
Id. The rule also established the formula for calculating the
amount of the penalty when the three criteria are met. Id. at
35,394–96 (codified at 40 C.F.R. § 86.1113–87(a)). One factor
is the cost of compliance with the standard relative to the “upper
limit,” i.e., the highest emission level at which an engine or
vehicle can be certified using an NCP, id. at 35,376, which the
Phase I Rule made equal to the previous emission standard, id.
at 35,388 (codified at 40 C.F.R. § 86.1104–87). See also 42
U.S.C. § 7525(g)(2), (g)(3)(E). An alternate path to certification
for certain engines that do not meet relevant emission standards
is averaging, banking, and trading emission credits. 40 C.F.R.
§ 86.007–15. See Nat’l Petrochemical & Refiners Ass’n v. EPA,
287 F.3d 1130, 1148 (D.C. Cir. 2002) (citing Certification
Programs for Banking and Trading of Oxides of Nitrogen and
Particulate Emission Credits for Heavy-Duty Engines, 54 Fed.
Reg. 22,652, 22,666 (May 25, 1989) (to be codified at 40 C.F.R.
pt. 86)).
In 2001, EPA promulgated the rule requiring a 95%
reduction in NOx emissions from heavy-duty engines by 2010.
Control of Air Pollution from New Motor Vehicles: Heavy-Duty
Engine and Vehicle Standards and Highway Diesel Fuel Sulfur
Control Requirements, 66 Fed. Reg. 5002, 5002 (Jan. 18, 2001)
5
(to be codified at 40 C.F.R. pts. 69, 80, and 86) (“2001 Rule”).
Because compliance would require “a new technology solution,”
id. at 5046, manufacturers were afforded several years to
comply with the new 0.20 grams per brake-horsepower-hour
(g/bhp-hr) standard, which was phased in for heavy-duty diesel
engines between 2007 and 2010. Id. at 5005. By 2010,
petitioners and other manufacturers had developed selective
catalytic reduction aftertreatment technology (“SCR”) and had
succeeded in meeting the 0.20 g/bhp-hr standard. Navistar, Inc.
pursued an alternative path to compliance, relying on developing
advanced exhaust gas recirculation technology (“EGR”). When
the new NOx standard became fully effective in 2010, Navistar,
Inc. had not reached the 0.20 g/bhp-hr level using EGR, but
continued to obtain certificates of conformity for its vehicles by
using banked emission credits. In late 2011, Navistar, Inc.
advised EPA that its supply of emission credits would be
inadequate for its model year 2012 heavy heavy-duty engines.
On January 31, 2012, EPA promulgated an interim rule
establishing NCPs for manufacturers of heavy heavy-duty diesel
engines in model years 2012 and 2013 for the 0.20 g/bhp-hr NOx
standard. Nonconformance Penalties for On-Highway Heavy
Heavy-Duty Diesel Engines, 77 Fed. Reg. 4678 (to be codified
at 40 C.F.R. pt. 86) (“Interim Final Rule”). This rule was
vacated in Mack Trucks, Inc. v. EPA, 682 F.3d 87 (D.C. Cir.
2012) (“Mack Trucks”), because EPA lacked good cause to
bypass notice-and-comment requirements.
The same day as it issued the Interim Final Rule, EPA
published a notice of proposed rulemaking for a final rule.
Nonconformance Penalties for On-Highway Heavy-Duty Diesel
Engines, 77 Fed. Reg. 4736 (Jan. 31, 2012) (to be codified at 40
C.F.R. pt. 86) (“NPRM”). In the NPRM, EPA stated it believed
that the three NCP criteria had been met: (1) the “technology
forcing” 0.20 g/bhp-hr NOx standard was more difficult to meet
6
than the previous NOx emission standard; (2) “substantial work
was required” to meet the 0.20 g/bhp-hr standard because all
heavy heavy-duty diesel engines certified without relying on
emission credits were using new aftertreatment systems to meet
the standard; and (3) there was “a significant likelihood” that
NCPs would “be needed by an engine manufacturer that ha[d]
not yet met the requirements for technological reasons” and was
expected not “to have sufficient credits to cover its entire model
year 2012 production.” NPRM, 77 Fed. Reg. at 4738 (emphasis
added). EPA proposed NCPs on the basis of its existing
formula, as modified to permit setting “the upper limit at a level
below the previous standard if [EPA] determine[s] that the lower
level is achievable by all engines,” and “in unusual
circumstances” above the previous standard, inasmuch as even
noncompliant manufacturers had achieved the proposed 0.50
g/bhp-hr emission level. Id. at 4740, 4748–49 (amending 40
C.F.R. § 86.1104–91, “Determination of upper limits,” and 40
C.F.R. § 86.1105–87, “Emission standards for which
nonconformance penalties are available”).
EPA promulgated the final rule that petitioners now
challenge on September 5, 2012. Nonconformance Penalties for
On-Highway Heavy-Duty Diesel Engines, 77 Fed. Reg. 54,384(to be codified at 40 C.F.R. pt. 86) (“2012 Rule”). EPA found
the three criteria for NCPs had been met for NOx emissions from
heavy heavy-duty diesel engines, id. at 54,388, and set NCPs
accordingly, id. at 54,402. It also amended its regulations on
upper limits, NCP payment procedures, and the “substantial
work” criterion. Id. at 54,401–02. In response to comments,
EPA stated that consistent with allowing technological laggards
to be able to certify engines, the “substantial work” criterion “is
to be evaluated based on the total amount of work needed to go
from meeting the previous standard to meeting the current
standard, regardless of the timing of such changes.” Id. at
54,389. Commenters had objected that although “substantial
7
work” had been required to meet the NOx standard when it was
introduced in 2001, this was no longer true because some
manufacturers now had technology capable of meeting the
standard. Id. EPA emphasized that “the important question is
whether manufacturers who were using technology that met the
previous standard would need to conduct significant work” to
meet the new standard and that “[q]uestions about work that still
needs to be done at the point EPA begins an NCP rulemaking”
are irrelevant to the “substantial work” criterion. Id. at 54,390(emphasis in original).
“To avoid this confusion for future NCPs,” EPA in the 2012
Rule “clarifi[ed] . . . the regulatory text,” id., by amending 40
C.F.R. § 86.1103–87 to: (1) change the verb tense from
“substantial work will be required to meet the standard”
(emphasis added) to “substantial work is required” (emphasis
added); (2) redefine “substantial work” from including the
application of “technology not previously used in an engine or
vehicle class or subclass” to including “technology that was not
generally used in an engine or vehicle class or subclass to meet
standards prior to the implementation of the new or revised
standard”; and (3) add a new last sentence stating: “Substantial
work is determined by the total amount of work required to meet
the standard for which the NCP is offered, compared to the
previous standard, irrespective of when EPA establishes the
NCP.” Compare Phase I Rule, 50 Fed. Reg. at 35,388 with 2012
Rule, 77 Fed. Reg. at 54,401.
II.
Petitioners challenge the 2012 Rule on procedural and
substantive grounds. They contend EPA failed to provide
adequate notice and opportunity for comment before amending
the regulatory definition of the “substantial work” criterion.
They contend EPA did likewise before finding that after 2012
8
Navistar, Inc. would need to engage in “substantial work” to
meet the NOx standard. They also contend that EPA erred in
finding that Navistar, Inc. was a technological laggard, and that
EPA’s NCP calculation departed from past agency practice
without rational explanation. For the following reasons we need
only address the first contention.
Petitioners and EPA agree that the 2012 Rule revised the
“substantial work” criterion and appear to disagree only on
whether the final rule was a logical outgrowth of the proposed
rule. See Pet’rs Br. 28; Resp’t Br. 22; Reply Br. 4. EPA notes
that petitioners do not ask the court to rule on “whether EPA’s
longstanding interpretation of the ‘substantial work’ criterion, as
reflected in that revision, is a permissible construction of EPA’s
prior regulation to which EPA would be entitled deference under
Auer [v. Robbins,] 519 U.S. [452,] 461 [(1997)].” Resp’t Br. 22.
Petitioners explain that because EPA promulgated a new
regulation, they made no challenge to EPA’s interpretation of
the superceded prior regulation in this court. Reply Br. 10 n.2.
They correctly describe the question now before the court as
whether EPA improperly amended its regulation without
warning “so that it would now jibe with EPA’s preferred
interpretation.” Id.
“A final rule is a logical outgrowth of the proposed rule
‘only if interested parties should have anticipated that the
change was possible, and thus reasonably should have filed their
comments on the subject during the notice-and-comment
period.’” Int’l Union, United Mine Workers of Am. v. Mine
Safety & Health Admin., 626 F.3d 84, 94–95 (D.C. Cir. 2010)
(quoting Int’l Union, United Mine Workers of Am. v. Mine
Safety & Health Admin., 407 F.3d 1250, 1259 (D.C. Cir. 2005)).
Notice of agency action is “crucial to ‘ensure that agency
regulations are tested via exposure to diverse public comment,
. . . to ensure fairness to affected parties, and . . . to give affected
9
parties an opportunity to develop evidence in the record to
support their objections to the rule and thereby enhance the
quality of judicial review’.” Id. at 95 (quoting Int’l Union, 407
F.3d at 1259). The court, however, will deem a final rule to be
a logical outgrowth of a proposed rule “if a new round of notice
and comment would not provide commentators with their first
occasion to offer new and different criticisms which the agency
might find convincing.” Id. (quoting Fertilizer Inst. v. EPA,
935 F.2d 1303, 1311 (D.C. Cir. 1991)). This avoids the
“absurdity . . . that the agency can learn from the comments on
its proposals only at the peril of starting a new procedural round
of commentary.” Small Refiner Lead Phase-Down Task Force
v. EPA, 705 F.2d 506, 546–47 (D.C. Cir. 1983).
In the NPRM, EPA proposed amendments to its regulations
on the determination of upper limits, 40 C.F.R. § 86.1104–91,
and the emission standards for which NCPs are available, 40
C.F.R. § 86.1105–87. NPRM, 77 Fed. Reg. at 4748–49. It did
not propose, and offered no indication that it was contemplating,
amendments to the “substantial work” criterion in 40 C.F.R.
§ 86.1103–87. The NPRM mentioned “substantial work” only
in describing the “substantial work” criterion and concluding
that it was satisfied for the 0.20 g/bhp-hr standard. Id. at 4738.
In the 2012 Rule, EPA characterized its amendments to the
“substantial work” criterion as “clarifying” the regulatory text
rather than as a substantive amendment. 2012 Rule, 77 Fed.
Reg. at 54,390. Petitioners, in contrast, maintain that the
amendments made a significant change because, as comments
on the proposed rule pointed out, the test set forth in EPA’s
regulations had always asked whether “substantial work” “will
be required” to comply with a new or revised emission standard
not, after the standard became effective, whether “substantial
work” “was required” in the past. See Pet’rs Br. 20.
10
The revisions to the “substantial work” criterion in 40
C.F.R. § 86.1103–87 went beyond mere clarification. Since the
Phase I Rule, EPA had been required to find that “substantial
work will be required to meet the standard for which the NCP is
offered,” 50 Fed. Reg. at 35,388, and in previous NCP
rulemakings EPA had evaluated the work required to meet the
new emission standard by looking forward from the time the
NCP was proposed. See, e.g., Control of Air Pollution from
New Motor Vehicles and New Motor Vehicle Engines;
Nonconformance Penalties for Heavy-Duty Engines and Heavy-
Duty Vehicles, Including Heavy Light-Duty Trucks, 58 Fed. Reg.
68,532, 68,534 (Dec. 28, 1993) (to be codified at 40 C.F.R. pt.
86); Control of Air Pollution from New Motor Vehicles and New
Motor Vehicle Engines; Nonconformance Penalties for 1996
and 1998 Model Year Emission Standards for Heavy-Duty
Vehicles and Engines— Part II, 61 Fed. Reg. 6949, 6951 (Feb.
23, 1996) (to be codified at 40 C.F.R. pt. 86). Under the second
criterion in the 2012 Rule, EPA is to evaluate the work required
to go from the old to the new emission standard, regardless of
when the NCP is offered. 2012 Rule, 77 Fed. Reg. at 54,401.
These two approaches yield a similar result when an NCP is
offered at the same time or shortly after the announcement of a
new emission standard but different inquiries arise when the
NCP is offered after the new standard has taken effect. The
technology-forcing NOx standard, see Natural Res. Def. Council
v. Thomas, 805 F.2d 410, 428 n.30 (D.C. Cir. 1986), was
announced in 2001 and became fully effective in 2010. The
NCP was not proposed until 2012. In these circumstances,
whether “substantial work” was required to meet the NOx
standard when it was announced in 2001 and whether
“substantial work” was required in 2012, two years after it
became fully effective, are different questions.
EPA maintains that the amendments to its “substantial
work” criterion are consistent with its longstanding
11
interpretation that it should “look[] forward from the point in
time at which the new or revised standard is issued.” Resp’t Br.
27. EPA fails, however, to acknowledge that the 2012 Rule is
the first rulemaking in which an NCP has been proposed after
the new emission standard took effect. The timing of the
offering of these penalties differed from previous NCPs, which
as demonstrated in the Phase II through VI Rules had been
proposed before the relevant new emission standards became
effective.1 By contrast here, although the NOx standard became
1
See Control of Air Pollution from New Motor Vehicles and
New Motor Vehicle Engines; Nonconformance Penalties for Heavy-
Duty Engines and Heavy-Duty Vehicles, Including Light-Duty Trucks,
50 Fed. Reg. 53,454 (Dec. 31, 1985) (to be codified at 40 C.F.R. pt.
86) (“Phase II Rule”); Control of Air Pollution from New Motor
Vehicles and New Motor Vehicle Engines; Nonconformance Penalties
for Heavy-Duty Engines and Heavy-Duty Vehicles, Including Heavy
Light-Duty Trucks, 55 Fed. Reg. 46,622 (Nov. 5, 1990) (to be codified
at 40 C.F.R. pt. 86) (“Phase III Rule”); Control of Air Pollution from
New Motor Vehicles and New Motor Vehicle Engines;
Nonconformance Penalties for Heavy-Duty Engines and Heavy-Duty
Vehicles, Including Heavy Light-Duty Trucks, 58 Fed. Reg. 68,532(Dec. 28, 1993) (to be codified at 40 C.F.R. pt. 86) (“Phase IV Rule”);
Control of Air Pollution from New Motor Vehicles and New Motor
Vehicle Engines; Nonconformance Penalties for 1996 Model Year
Emission Standards for Heavy-Duty Vehicles, 61 Fed. Reg. 6944 (Feb.
23, 1996) (to be codified at 40 C.F.R. pt. 86) (“Phase V Rule Part I”);
Control of Air Pollution from New Motor Vehicles and New Motor
Vehicle Engines; Nonconformance Penalties for 1996 and 1998 Model
Year Emission Standards for Heavy-Duty Vehicles and Engines—Part
II, 61 Fed. Reg. 6949 (Feb. 23, 1996) (to be codified at 40 C.F.R. pt.
86) (“Phase V Rule Part II”); Control of Air Pollution from New
Motor Vehicles and New Motor Vehicle Engines; Non-Conformance
Penalties for 2004 and Later Model Year Emission Standards for
Heavy-Duty Diesel Engines and Heavy-Duty Diesel Vehicles, 67 Fed.
Reg. 51,464 (Aug. 8, 2002) (to be codified at 40 C.F.R. pt. 86)
(“Phase VI Rule”). Although the Phase V Rule, which offered NCPs
12
fully effective in 2010, Navistar, Inc.’s reliance on banked
emission credits meant that no affected manufacturer required
NCPs until 2012. In offering NCPs in this new situation,
measuring “substantial work” as the amount of work needed to
go from the old standard to the new standard was incompatible
with the regulatory text in the Phase I Rule requiring EPA to
find, before offering NCPs, that “substantial work will be
required” to meet the new emission standard.
EPA’s position that the amendments to the “substantial
work” criterion in the 2012 Rule were a logical outgrowth of the
proposed rule relies heavily on its claim that petitioners had
actual notice of the change. See Resp’t Br. 30–31 (citing Small
Refiner Lead Phase-Down Task Force, 705 F.2d 506, 549 (D.C.
Cir. 1983)). For support, EPA points to three documents: a
letter from EPA to heavy-duty diesel engine manufacturers
dated February 22, 2010; EPA’s denial of a request by
petitioners Daimler Trucks North America, LLC and Detroit
Diesel Corporation for a stay of the Interim Final Rule published
in January 2012; and the statement in the NPRM that
“substantial work was required to meet the emission standard,”
77 Fed. Reg. at 4738. Each of these documents includes a
statement by EPA finding that “substantial work” was required,
or was likely required, to meet the NOx standard. Although EPA
is correct that the documents placed petitioners on notice that
EPA’s measurement of “substantial work” included work
completed in the past, they neither stated nor suggested that
EPA was contemplating amending the text of the second
criterion adopted in the Phase I Rule.
No more availing is EPA’s suggestion that the briefing in
Mack Trucks and comments submitted in response to the NPRM
for 1996 standards, was finalized in February 1996, we note that the
NCPs were proposed in 1994, well before the standards took effect.
13
demonstrate that petitioners had actual notice of EPA’s change
to the “substantial work” regulation. Petitioners’ arguments in
comments that EPA’s interpretation conflicted with the
regulatory text of 40 C.F.R. § 86.1103–87 demonstrate only that
they had notice of EPA’s interpretation of the regulation, not
that they had notice that EPA contemplated changing the
regulatory text to encompass a backwards-looking inquiry.
Further, petitioners’ notice of EPA’s interpretation does not
imply that the public had notice of, or an opportunity to
comment on, EPA’s changes to the regulation.
So too, EPA’s position that the amended text of the
“substantial work” criterion is consistent with twenty-seven
years of agency practice ignores that the 2012 Rule is the first
rulemaking in which EPA has proposed NCPs after the new
emission standard went into effect. EPA’s prior conclusion that
“substantial work” includes work required to reach the new
emission standard when that standard is to take effect in the
future is distinguishable from its revised approach that this is
also true when NCPs are proposed after the standard has taken
effect. Contrary to EPA’s suggestion that the 2002 Phase VI
Rule, 67 Fed. Reg. at 51,464, supra note 1, which also proposed
NCPs years after a new emission standard was announced, gave
petitioners notice of its approach, the Phase VI Rule was
promulgated before the standard announced in 1997 took effect
in 2004. Control of Emissions of Air Pollution from Highway
Heavy-Duty Engines, 62 Fed. Reg. 54,694 (Oct. 21, 1997) (to be
codified at 40 C.F.R. pts. 9 and 86). Although the preamble to
the Phase VI Rule discussed the amount of work that was
anticipated when the emission standard was promulgated in
1997, it also addressed the “substantial work” left to be done to
meet the standard in the future. Phase VI Rule, 67 Fed. Reg. at
51,466. Regarding the use of technologies that “have not
previously been used in the on-highway heavy-duty diesel
market,” EPA stated that it “continue[d] to believe such new
14
technologies will be used by a number of engine manufacturers,”
and that “several manufacturers have indicated in recent
statements that they will use new emission control technologies
in order to achieve the 2004 standards.” Id. (emphasis added).
This forward-looking analysis is consistent with the text of the
second criterion identified in the Phase I Rule instructing EPA
to determine whether “substantial work will be required” to
meet the new standard; it provided no indication that when an
NCP was proposed years after the new emission standard had
become effective, EPA would abandon the forward-looking
analysis and look to “substantial work” completed in the past to
meet the standard. EPA’s attempt to fit the 2012 Rule’s NCP
into a consistent twenty-seven-year pattern of rulemaking fails.
Consequently, we cannot conclude that petitioners, “ex ante,
should have anticipated the changes to be made in the course of
the [2012] rulemaking,” City of Waukesha v. EPA, 320 F.3d 228,
246 (D.C. Cir. 2003) (internal quotation omitted), to the
“substantial work” criterion, 40 C.F.R. § 86.1103–87. If EPA
wanted to revise its “substantial work” regulation, then it had to
provide adequate notice and opportunity for comment, as it did
with respect to the upper limit revision, see NPRM, 77 Fed. Reg.
at 4740 (proposing to amend 40 C.F.R. § 86.1104–91), rather
than making an unannounced change. See 42 U.S.C.
§ 7525(g)(1); cf. Mack Trucks, 682 F.3d at 92. EPA “entirely
failed” to provide notice of its intention to amend its regulation
in the NPRM, and “offered no persuasive evidence that possible
objections to its final rule[] have been given sufficient
consideration,” City of Waukesha, 320 F.3d at 246 (internal
citations omitted), instead treating its revision as a clarification
rather than a substantive change. EPA’s counsel’s post hoc
reasoning cannot fill the void. See Motor Vehicle Mfrs. Ass’n of
U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 50
(1983).
15
Accordingly, we grant the petition. Because the court
typically vacates rules when an agency “entirely fail[s]” to
provide notice and comment, Shell Oil Co. v. EPA, 950 F.2d
741, 752 (D.C. Cir. 1991), and especially in light of EPA’s
counsel’s statement during oral argument that vacatur would not
cause any harm because it has become clear that Navistar Inc.’s
engines will be in compliance with the NOx standard by the
beginning of 2014, see Oral Argument at 25:55 (Oct. 22, 2013),
we vacate the 2012 final rule. See Chamber of Commerce v.
Sec. & Exch. Comm’n, 443 F.3d 890, 908 (D.C. Cir. 2006)
(quoting Allied-Signal, Inc. v. Nuclear Regulatory Comm’n, 988
F.2d 146, 150–51 (D.C. Cir. 1993)).