On August 21st, the D.C. Circuit decided EME Homer City Generation v. EPA, a case examining the “good neighbor” portion of the CAA regs. The rule in question, known as the Transport Rule, regulates emissions in upwind states that contribute to air quality problems in downwind states. These rules have been the subject of litigation in the past, see e.g. Michigan v. EPA, 213 F.3d 663 (D.C. Cir. 2000); North Carolina v. EPA, 531 F.3d 896 (D.C. Cir. 2008).
The question in this case is essentially whether the EPA went beyond their statutory authority in drafting these regs. The court finds two problems with these regulations.
- “the statutory text grants EPA authority to require upwind States to reduce only their own significant contributions to a downwind State’s nonattainment. But under the Transport Rule, upwind States may be required to reduce emissions by more than their own significant contributions to a downwind State’s nonattainment.”
- “the Clean Air Act affords States the initial opportunity to implement reductions required by EPA under the good neighbor provision. But here, when EPA quantified States’ good neighbor obligations, it did not allow the States the initial opportunity to implement the required reductions with respect to sources within their borders. Instead, EPA quantified States’ good neighbor obligations and simultaneously set forth EPA-designed Federal Implementation Plans, or FIPs, to implement those obligations at the State level.”
In regards to problem 1, the court has in the past allowed some flexibility in determining these state plans. But in this opinion they are making it clear that they will not allow the EPA to increase state burdens because of cost concerns or other efficient methods. The court believes that Congress was clear in their statute that no State can be required to reduce emissions by more than “their own significant contributions.”
As for point 2, the EPA plan did in fact allow states to submit modifications to the FIPs, but the court did not find that to be sufficient.
The majority sends the EPA back to the drawing board and keeps CAIR in place until the EPA comes up with new regs that hopefully will fit the statutory framework laid out by Congress.
Justice Rogers appears to be a little upset in her dissent, describing the opinion as “an unsettling of the consistent precedent of this court strictly enforcing jurisdictional limits, a redesign of Congress’s vision of cooperative federalism between the States and the federal government in implementing the CAA based on the court’s own notions of absurdity and logic that are unsupported by a factual record, and a trampling on this court’s precedent on which the Environmental Protection Agency (“EPA”) was entitled to rely in developing the Transport Rule rather than be blindsided by arguments raised for the first time in this court.”
Justice Rogers writes that the petitioners in this case were essentially barred from challenging the regs at this point on procedural grounds, a point that the majority sort of glosses over. Justice Rogers appears to believe (quite possibly with good reason) that the majority is simply forcing the EPA to run in circles by continuously asking them to revise their regulations without giving any real guidance.
Perhaps the most important part of this decision is the court’s emphasis on federalism. The majority does not take kindly to the EPA seemingly forcing states to follow their plans when Congress clearly designed the CAA with a more cooperative approach in mind.
My feeling is that both the majority and dissent make some very good points, and perhaps the correct answer to this problem is somewhere in between the two. We may well see the Supreme Court take a look at this issue if the EPA chooses to appeal.
Whether or not you agree with this opinion, it is well worth reading as a model of excellent opinion writing. Despite the confusing subject matter, Justice Kavanaugh is able to write a very easy to understand opinion, and he even includes a useful example on p.26.
D.C. Circuit Vacates Cross-State Rule, Orders EPA to Keep Bush-Era Rule in Place (Bloomberg)
EME Homer City v. EPA Affirms Role of Federalism in Environmental Regulation (Washington Legal Foundation)
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