good morning judge griffith a member of this panel is ill but he will be listening to the argument through his computer counsel may proceed good morning and m respect to a majority of the transport rule fips for the nine hundred ninety seven standards e p a also exceeded its authority under section seventy four ten k six its effort to correct that problem contrary contentions overlook its successful request on rehearing in north carolina to keep care in effect pending the promulgating of a valid replacement i'd like to focus on sections seventy four ten c one and k six and begin with c one which is the sole source of the e p a is fifty four with carolina hadn't done that what results if the initial decision in north carolina is all we had in a mandate issued from that vacating care then e p a would have a good argument i would think under the reverse doctrine that that would apply but what happened of course in north carolina is that each day made the request  granted it to keep care in effect and so the upshot of that was that care defined the applicable requirements of the good neighbor provision and that is significant because of section seventy four ten k three which requires e p a to approve a sip if it meets the applicable requirements of the clean air act here the good neighbor provision i mean an interesting situation given our president where you have an environmental statute or a statute affecting public health where we have said rather than go back to square zero as it were will continue in effect on this interim basis what exists so does the rivers doctrine then have no effect it does not have effect when the disposition of the court is not to vacate the rule and that's what we have here the court took the affirmative well under rivers there must be a return to ground zero i just want to be clear about this in other words this court clearly held in north carolina that and initially vacated the rule because it did not meet the requirements of the statute that's right your honor and it was on this interim theory that the court at the request of e p a in the states left care in effect and the agency argues well left it in effect only for purposes of the trading program at least that's what it says in its brief now well the court left care in effect for all purposes and it did that to preserve the environmental values of care and the effect of that again was at care controlled it to find the good neighbor obligations and that's why we had a approving care cips both before and after north carolina those care cypriots were compelled by section k three and they were not in error at the time they were made and i'd like to talk about that more in the context of case six but i also want to talk about c one and right is in c one the problem in the sense that north carolina means in essence is joe druggers says that  the state had corrected the deficiency well here's what he is arguing it's saying that the deficiency in section c ones unless clause refers to the deficiency that the court of benefit in north carolina but that doesn't comport statute the deficiency in section c ones unless clause refers to the text immediately above it it is either a c one a failure to submit any cip whatsoever or c one b submission of plainly address this situation and has left that gap for the agency to fill what's your argument we don't believe that there's any gap here because the deficiency clearly refers to a c one  c one b well you're going to make climbing argument as i understand it but the court has already helmet care was invalid the court said that in its initial opinion but it did not issue a mandate to effectuate that result and in fact its mandate effectuated the opposite result of keeping care in effect and that's why section k three applies here and requires the approval of this care says if i could move to section  six which is the corrections provision this is an important point because even if e p a is correct about what corrects the deficiency means in section c one it's still needed to rely on section k six here and that's because e p a had on the books care sip approvals on which states relied that said these states have satisfy their obligations under the good neighbor provision and we no longer have flip authority and so it had to do something to get rid of those findings and what it did here is remarkable in one sense in that it tried to have two things to contrary things at once instead of changing the carrier sip approvals to disapprovals it merely rescinded certain statements in those findings so what it did was say on the one hand that the carriers approvals are still there they were still made and it did that because it needed to keep implementing care at the direction of this court but it rescinded the statement saying that the care support prevails had ever even i'm sorry the care cips had ever even been submitted in an effort to reach back to the twenty zero five finding a failure to submit any seps so it's promising it's transport will flip authority c one a finding a failure to submit and of course those two things are inconsistent with one another but the what you refer to is remarkable says strikes me as perhaps an accurate characterization had there been no north carolina decision in that they're trying to deal with that right they are trying to deal with that but there is another provision in the cleric that gives them the mechanism to do that here and that is section seventy four ten k five wri that would have allowed e p a to say that's why it really goes back to how we interpret north carolina i think and you i think started with that and you're hedging a lot maybe everything on the fact that it wasn't vacated that's correct your honor  but we would say though that e p a did need to rely on case six and if i could make two textual points about case iks the first is the phrase was in air and this ties in with the argument that i began with were not in error at the time they were made because they were compelled by this court's decision on rehearing in mandate in north carolina and section k three even assuming however that e p a could clear that hurdle it would next confront the in the same manner language of section case six and here it's undisputed that the care sip approvals went through notice and comment rule making in the same manner in section k six means that any corrections of those approvals also have to go through notice and comment rule making and they did not and e p a s response on this point is that you can rely on the good cause exception from the administrative procedure act but that's not the case because under the text of five u s c five fifty three b the good cause exception is not available when notice or hearing is required by statute and that's what we have in section k six through the in the same manner language even assuming however that e p a could prevail on all the points i've already mentioned today it still couldn't rely on the good cause exception here because it cited only the unnecessary prong of that exception and is this court has said in mack trucks cited on page ten of our reply brief that prong of the good cause exception is limited to actions that are routine insignificant in consequential and here is certainly not the case and the reason that's not the case is because if e p a had complied with the statute and gone through notice and comment states would have pointed out the points that i just made this morning that under what the court said in north carolina and its mandate and section k three was required to approve those care sips and that is only option was a sip call and that's significant to the states because under the clean air act states have the primary sponsibility to address air pollution they do that through s that's critical to the states because they get to determine through steps how to show how to allocate the burden on their sources and if e p a comes in and imposes fips it bypasses that important protection of the clean act now in our view this error should or should result in victor of the entire rule because it takes out thirty one of the rules fifty nine  a says that's ok the rule can still function as intended and it's hard for me to see how if you take more than half the rule out that could be the case but even so that argument overlooks a couple of things the ozone season knocks trading group for instance goes from twenty states to five and it's hard to see and i'm not sure whether if you would even say that trading group can function as intended with three quarters of the states removed the other point is that this argument ignores all of the other points that the states have made in their brief and the industry petitioners have made in their brief and if we take all of those points we feel that there's not enough left of this rule to allow it to function as intended and in my remaining time if i could just address briefly one of those points this is point two in the state's brief and that is the requirement under north carolina to give independent significance to the phrase interfere with maintenance in the good neighbor provision this court held that e t a must do that in it replacement to care and e p a did try to do that but it never defined what interfere with maintenance means and in imposing cost effective controls it created a rule that could require states to go well beyond what they need to do that is up when states to ameliorate interference with maintenance in downwind areas and the only brake on that was cost and we know from the supreme court's opinion that that's not good enough  michigan's maintenance plan and noted that that was true even without the benefits of care and that any maintenance problems could be resolved through contingency contingency provisions in state measures in michigan's plan those are the points i intended to cover if there are other questions otherwise i'll  and what if my speech is a little slurred this morning your honor it's because i'm recovering from bell's palsy a condition that causes a paralysis out of the face i don't think it'll be an issue but if i need to repeat something please let me know  care was not sufficient to satisfy the up when states obligation to eliminate their contributions to interstate transport of pollutant because among other things karen posed no controls on interstate trading and the allocations of allowances both of s o two and nox were not related to the state's contribution it therefore found in multiple ways that care was invalid and that it did not address the state's significant contribution avoid what we saw as both economic and environmental problems that would result from fake a tree of care environmental problems because while care was flawed it did achieve substantial reductions in admissions and economic issues because there's already been significant banking and trading of allowances up to that point so at least as i recall some of the states were concerned that the attainment dates were fast approaching and they had already invested the training for the changing program as part of care so we certainly asked the court to maintain care in its entirety but it was not the training program for say it was because of the environmental benefits which in fact had resulted from care and because of the economic issues and we did not but we did not we simply asked the court to exercise its equitable discretion in fashioning a remedy to allow you to continue to implement care while it promulgated a replacement for the rule and that's explicitly what the court said it was doing in its rehearing order in fact it explicitly stated that care must be replaced that care must be replaced expeditiously and warned that the court would entertain  mandamus petition if they fail to do so so there is simply no way that that order on rehearing can be read as reversing the court's findings that care was invalid and that not constitute meeting the state's obligation to address interstate transport and therefore because care was invalid the care cips were invalid because there were two parts to change the allocation of allowances to sources within the state and it also made them responsible for ensuring that sources within the state complied with care that is that at the end of each year they had enough allowances to cover their emissions that was the purpose of promulgating the care seps no it was not based on any analysis independent analysis that the states had demonstrated that they had met their interstate transport obligations it was based to the extent that the care six had found that the states had met their obligation they were invalid and that also is the sole c one yes the states with a most of this most of the care hips were based on a finding of failure to submit and what after care it was clear that the states had not submitted a plan that would address their interstate transport obligations that they had been anything after north carolina after much caroline i'm sorry so i so yes so therefore because the states had not met that obligation and that was the deficiency the deficiency was that the states had not submitted a plan to address their interstate transport obligations that's what the court obligation remains as to all those states covered by care though the so there's obviously debate about k five versus k six pm wondering if we even if if we if your position on this issue were to prevail do we even have the same a thing about k five vs case sixers this all north carolina plus c one well your honor we think there are two independent grounds on which the court could g one is just exactly that that c one plus north carolina and that was you know that that's really sort of our primary view is that e p a is obligation under the fence had not been discharged by care so it can continue to have decide to go through the corrections process and to correct only that portion of the care sets it where e p a had made a finding you know implicit or explicit that the states had met their obligation because that part was clearly in error after north carolina north carolina says multiple times in the opinion that didn't care was inefficient because it did not ensure that each state eliminated its significant contribution so  when you invoke its authority under one ten k six to correct that portion of the six it did not you know there was no reason to correct the administrative portion of the steps to keep the states from administering care and allocating allowances and checking with compliance but on un pose these arguments i'm worried about the unintended with unintended unforeseen repercussions of anything we might say and of  course obviously obviously i think north carolina's very significant to this part of the argument but on the c one how often does it happen that there's a situation like the one we have in this case in other words a court  finding of deficiency sips are approved subsequently before the fifth but then a court decision comes in afterwards pulls the rug out from all that i think it's probably pretty unusual i'm not aware of any situation on those four is because this is a somewhat unusual program where e p a right develops a region wide set of requirements or you know determines how to address a problem on a region wide basis implements it initially through a fit and then gives states the opportunity to submit steps to take over administration of the program so it's it's a fairly unusual circumstance are where is the case five  six strikes me could could open up a lot of light on that ground that's that's but but correct me if i'm wrong in other words your view on case six does seem like it could be something that has again my concern about unforseen unintended repercussions of what we say here well it's certainly a situation that comes up more often your honor where e p a determines that a super approval was was in error for one reason or if if we were to get into that how are we supposed to make sense of where the boundary is between ok five in case x well they do overlap there certainly are circumstances where e p a could utilize either one  actually more limited than k five k six applies only where the sip was in error when it was promulgated so there has to have been an error at the time and it could be an error that u k should have known say it was an error at the time even though it's based on something that happened subsequently not not always you know your honor because i mean i suppose in theory but you know more often k five a situation where and five comes up in another such a number of circumstances it comes up where there have been subsequent regulations that states have to incorporate into their steps and it comes up where you know the facts of simply changed you know everybody would check the air quality to improve to a certain extent and it didn't for some circumstances and on that latter circumstances that an inappropriate circumstance for use of case x and i think it would it may depend on the facts your honor but in that situation it would generally my understanding uses k five k six is generally used where  there is either a sort of obvious technical error or where there was some error of law in in doing that and therefore uses case six and there are certainly maybe circumstances when e p a could choose to use either one it would depend on to have discretion you may hear it use case six because of a because it was obvious that it was an error and there was nothing the states the states have argued they should have had notice and comment but there's nothing they could have set the court spoke very definitively that care was in error therefore the six were in error and nothing the states could have said was going to change that and also there was a need as the court of pointed out expeditiously replaced care with the with the new rule and therefore the case six was simply a much better choice to move forward to get a program into place that met the the court's requirements from north carolina and that address the needs of the downwind states to get the reductions they need for  on the issue of maintenance e p a did here in this case define which areas needed reductions from a point states in order to avoid maintenance problems they did an analysis modeling analysis using variations in weather problems weather patterns etc to identify those areas that specifically were at a high risk of coming into non attainment that were currently had clean air quality but you know given you know predictable changes in weather patterns might well come into non attainment and then only it brought into them into the transport will those states that made a significant contribution defined as more than one percent the same threshold  used for for non attainment so it did exactly what it was required to do it identified those non attainment areas that were at risk of coming in attainment in the near future and then identify those states that is significant contribution attainment interference with maintenance prong of the statute to justify continuing controls on areas that had previously contributed to the same area when it was in non attainment and the court found that you know simply making that prong of the statute sort of an appendage to the not attainment problem was inappropriate and that he had to independently look at whether areas that are in attainment but sort of right on the border need help and that's what e p a did here it did that modeling analysis all of the statutory and case law requirements for addressing the maintenance issues so your argument is it complied with north carolina in that respect and the supreme court said you had  considerable discretion in this area and that your argument is it's a reasonable interpretation of what is required do you have any response to the argument about what i'll call double counting in other words if the down when state is assuming that the upwind state contributes ten percent of its problem as to the particular pollutant that the measurement  of what is required from an up when state should only be in excess of that amount and if you understand getting it i'm not quite sure i do your honor but i well if i understood the argument it was that given that the downwind state is already taken into account a certain percentage of out of state pollution coming into the state that therefore any obligation on the upwind state as to maintenance could only be as to the amount that exceeded what the downed when state had already assumed in its planning right the problem with that honor is that those assumptions and those maintenance problems are based on care care has to be eliminated so that we have to do is figure out what the world's going to look like without care and therefore an event determined based on no care so they can't you can't say well the maintenance plans which are based on care and these other programs show that they'll stay in attainment because kerry's going away and therefore what he had to do was look at what the going to happen in the real world in the no care situation which is you know the situation we have to face with any care and the term and whether they need continued controls and those continue controls or those that are imposed by the transport but theoretically so i understand it ignoring care is the agency's interpretation interference with maintenance consistent with not double counting yes of scenarios in these areas and determine you know it came clued in all the controls that the state had and pose all federal controls you know if you know all existing controls other the transport rule and decide that notwithstanding all these other controls reduce their emissions in order to ensure that these downwind states should remain attainment i mean it bottom your honor there's really no reason to have a different sort of analysis for areas that are just below the next as it is for those just above in both cases when state contributions are needed to make sure that you know if a given variability of weather patterns etc that the areas are able to maintain over the long term of the court has any this court of any questions that any other topics in the states we've right thank you very much as regards error correction e p a is use of the error correction provision here was fair reasonable and lawful once this court determined in the initial north carolina decision that it could not pick and choose any parts of care to preserve and then rule that the entire was unlawful as well as the care fips everyone knew or should have known that the care sips were also unlawful when the court subsequently issued its reconsideration order that was in order and remedy not on the merits and all the court was doing there was exercising its equitable powers to allow e p a to continue to implement an unlawful but beneficial rule pending the amount of time necessary for  effect to that provision that's why there are fifteen states that are designated for pollution controls for interference with maintenance but not for significant contribution for ozone once e p a corrected the si it fairly and reasonably and lawfully used fips rather than a sip call a sip call would have introduced unnecessary and unreasonable delay this court had said that it did not did not intend to set an indefinite delay on its substantive mandate and the north carolina decision and that was consistent with the court's concern with prompt and lawful emissions controls as reflected his previous order or decision that there was a necessary connection between the up when states good neighbor obligations and the down when states maintenance deadlines if however some of the up win states feel that's fair for them to be operating under the feds the rule gives them the opportunity to submit steps to replace the phipps the rule has given them that opportunity since august two thousand and eleven my understanding is that no state has taken up that opportunity yet so to turn back to  the interference issue it's the down when states and cities that suffer when an up when state interferes with maintenance the downwind states if an area reverts back to mount a tame and status they have to impose additional pollution control requirements not only say on power plants but on other industrial and commercial activities they have to impose pollution offset requirements and of course it's the people who live in those downwind areas who who suffer the adverse the increased adverse health effects from the increased pollution e p a reasonably and fairly and turpitude the interference maintenance provision to eliminate to significantly imola excuse me eliminate most of those risks determined which up when states emissions caused those risks and then it eliminated the increment of those states emissions because those risks and so for most of the downwind areas those risks were eliminated council said that e p a chose those emissions reductions based solely on cost that is not correct in fact one of the real positive changes in this rule as opposed to call is that e p a did choose the emissions reductions based not only on cost considerations but on the air quality consideration so when e p a reduced the emissions for interference with maintenance it did so only so far is necessary as to bring the above average the risky air amounts of the risky air quality in the down states beneath the next and so there is no over control here because there is a different parameter involved i time is almost up so i will i will close the stakes for clean air and the downwind states are high this rule  reasonably lawfully and fairly interpreted the good neighbor provisions and upholding the rule would allow the downwind states to finally ex enjoy the air quality benefits that this two thousand and eleven rule provide on the c one issue we agreed that the initial opinion in north carolina said the care was flawed but the problem is the court didn't give effect to that holding instead kept care in effect meets all of the applicable requirements of the clean air act here the good neighbor provision the applicable requirements were defined by care and the court's affirmative action of keeping care effect meant that the bat was what defined the applicable requirements so that's all we're saying here is that under section seventy four ten the e p a had no choice but to approve those care cips the care super approvals are on the books and everyone relied on them and they said the states have done all they need to do under the good neighbor provision it couldn't just be obvious to everybody that that was wrong e p a needed to get rid of those in order to clear the way  for phipps for the states under the good neighbor provision why wasn't it obvious well into north carolina it was an obvious because of the rehearing ok and because the court kept that's right and here's an important point on that the civil call would not create unreasonable delay or really any delay because e p a could have rolled out a sick call on essentially the same schedule it had here if shortly after north carolina came down that's and nine for the mandate e p a had issued a sick call saying once care goes away these steps are going to be substantially inadequate you need to revise your sips under k five it has eight hundred he can give it states up to eighteen months to do that or a short time if it's reasonable but remember let's not forget history here states were arguing they couldn't do that because they taking the position health care representing the states here so i'm just trying to get clear what your position was then as opposed to now in terms of criticizing e p a s alternative view of what was lawful under the statute  the states may have made that argument but the supreme court later confirmed that he a was correct on being able to write call it all i'm getting at is you're saying there wouldn't be any delay because they could have issued a sip call back at the time well the main is plans really i don't care but that's not correct and the allegan county maintenance plan the approval of that confirms that it says very clearly that view that a court decision it says the administrators determination was in error qualifies satisfies case six of those that would be limited holding th court decision provides the impetus for showing that it was in error at the time right i think if we had the initial decision in north carolina i meant it flowing from that that would make sense but again it's all it's all about the  mean the rehearing order that's right and k three it's the combination of those two a court keeping care in effect and k three saying the apple will requirements are met therefore you have to have to approve it good morning your honors and may please the court i'd like to begin if i may with our as applied over control challenges and the dispute that remains between the parties on that issue is a dispute not about the facts but about the law as stated by the supreme court section one of our opening brief identify those specific states that we contend have been over controlled and are showing are based exclusively on e p a s own data and e p a doesn't deny as a factual matter that each of the states we've listed could be regulated significantly less and every downwind location to which they are linked would still attain and maintain the next e p a instead disputes that that's the legal test for determining over control but that's exactly what the supreme court said and to quote the operative sentence from the court's decision if e p a requires an upwind state to reduce emissions by more than necessary to achieve every downwind state to which it is linked the agency will have overstepped its authority under the good neighbor provision to eliminate amounts to contribute significantly to non attainment that's exactly what was shown to be the case with respect to those states e p a hasn't denied it's the case and e p a is argument here is really simply fighting the supreme court's test in i think two different ways the first is that e p a notes that after saying it's the supreme court did that the test is whether the reduction more than necessary for attainment in every downwind state to which it is linked the court a few sentences later says that reductions unnecessary to achieve attainment anywhere are unlawful but the supreme court used those two formulations interchangeably because they mean the same thing e p a s list of all downwind locations to which given up when state is linked in the list of earl downwind locations for which the upwind state either contributes significantly to non attainment or interferes with maintenance the open states don't affect any other location within the meaning of the statute so when we've shown that those states have been required to reduce by more than necessary for each downwind state to which they are willing to attain and maintain the next we have shown that those reductions are more than necessary for attainment anywhere it's the same thing the other argument that e p a makes is that it is entitled to use uniform cost thresholds nationwide even when using those uniform cost thresholds means that some states will be overcontrolled as the supreme court stated the test that's up the highest common denominator theory in which if it least one or perhaps a few states need to be controlled the five hundred dollars a ton then all states can be controlled that way because uniformity nationwide is allowed to trump but that theory really is at war with the supreme court's instruction which it issued at e p a s behest that these over control issues be addressed and resolved through as applied challenges to individual state missions budgets e p a asked for that remedy as an alternative to this course across the board uniform invalidation of the rule and inherent in an as applied challenge to an individual state emissions budget is that if that challenge is merit remedy will be an adjustment to that individual states emissions budget which will mean there will be some departure from nationwide uniformity and it really isn't open to e p a to oppose the uniform across the board  validation of the rule that emerged from the panels last decision and urged the supreme court instead to have this issue addressed to as applied challenges and then when we bring meritorious as applied challenges that require changes in individual state emissions budgets to say that's unacceptable because then there would be no uniformity across the states and in fact it's quite clear that this is how the supreme court understood it because section two c of the supreme court's opinion which is where this is  begins by saying that e p a s use of quote uniform cost thresholds ellipsis thus left open the possibility that an individual state would be required to reduce more than necessary for attain in every down location to which it's linked it went on to say that that type of over control would be unlawful but that the way to address it is through as applied challenges to an individual states emissions budget which is exactly what we've so if i may turn unless there are questions about our over control challenge well i suppose you're right on everything you said there how does it work in terms of what we say as the particular states let me break that down and for your honor first the easiest in some respects are the fourteen ozone states we've described in section one c those are states where e p a projected at the outset of the rule making that all of the downwind locations to which any of those states are linked would attain and maintain the now in two thousand and fourteen even if there were no zero good neighbor controls on the upwind states it went on nonetheless to impose budgets on those fourteen states for those the remedy is i think a straight they could sure there is no ground for imposing budgets on fourteen up when states that are linked exclusively to locations that e p a projected in two thousand and fourteen would fully attain and maintain the next without any good neighbor controls then just so i'm clear that's the twenty fourteen budget that's correct your honor and i realize that's all your brief has addressed but just so i understand what happens for twenty fifteen twenty sixteen twenty seventeen well the twenty fourteen budgets are the ones that are you know in effect going forward so what they call the twenty four thousand budget goes on until they change it and that's what i want to understand who changes it well e p a if the rule had revised that you know there are different things that even when i know the history of the good neighbor provision has been you know a series of rules in some cases because of this court's decisions but even if there weren't this court's decision yes there would be a need through intervals of time to obligation yes because e t a has projected that they are exclusively link to download cations which will attain to maintain the next even if there are no good neighbor obligations on the up and states that are linked to them now now the other four states which are texas alabama south carolina and georgia and we address them in sections one a and b that is a different story because it is not our contention for example that texas should have no emissions budget it's our contention that it should be a higher emissions budget is still a basis for controlling texas under the good neighbor provision so to take texas in pm and explain the remedy with respect to that e p a said texas is linked to only one down one location madison illinois and said at the outset of the rulemaking that if every upwind state link to madison illinois were controlled at one hundred dollars a tonne madison would fully attain and maintain the next none the less regulated texas at five hundred dollars a tonne what we would propose for states like texas where the emissions budget should be changed is that the court remand without vacating because we're in the middle of a compliance year there's allowance trading going on we understand the disruption of vacating something completely in the middle of the year but it should be remanded so that texas emissions budget can be revised upward to take into account the supreme court's overcontrolled upward to what we eat p a s own data shows that texas could be controlled one hundred dollars a to show one hundred two hundred three hundred forty dollars a ton so we cannot point for ozone to a specific number in their rule making that establishes conclusively exactly what it should be what we do know about ozone is that texas was linked soley to two down locations alleghenies baton rouge and those locations attained at the level of emissions that texas was emitting in all the other up and states linked to them immediately prior to the transport rule nonetheless e p a says somehow those states need to reduce their emissions from that level even further in order for these states to attain the ozone that we know that's not true but we can't give you a number that would have to be a remained without fake ature in which texas contributes maintenance problem is that just something that would be worked out on remains and like like any of these things that would be worked out on remand and if we were unhappy you know we could file a petition for review and complain that the resolution was arbitrary but you know your honor is correct that on that one point they are relying on their modeling which we challenge as part of the second argument but you started out by saying he does e p a doesn't even challenge well on that one it challenged but i just want to go back as to the one hundred dollar under care where you suggesting in response to judge cabinets question that this court should say we remained with instructions open to e p a if we've missed something to come back with some other factor that they want to argue about and we could challenge it and all that but we're not saying this court orders them to do it at one hundred dollars a ton but whatever it would be it would be a lot less than the five hundred dollars a that they imposed simply because you know they were looking for uniformity and didn't agree that they had an over control limit i mean that's what is striking about going through this rule making they generated of this data at the outset which demonstrates things like madison would be controlled at one hundred dollars a tonne of the ozone states those fortune states are linked to need no good neighbor controls and they didn't look at it they didn't do anything with it they didn't consider it they generated all this data that we've cited in our brief and then because they didn't agree mean this court said in its last opinion that a p a took no steps to safeguard against over control and it's not surprising that if you don't believe the obligation exists and you take no steps to comply with it then you will find at the end of the day that there are quite a few states where you have inadvertantly overcontrolled and that's what we're asking to be corrected we say the same thing then under your theory for alabama georgia and south carolina yes yes in those states when you do the exercise with them they come up differently you know one state four hundred one state one hundred exercise my sympathies are on it but yes i mean it's it can be different for none of those states is it five hundred dollars time and then we see it as mentioned in the states brief yes i don't think we have raised a challenge with respect to louisiana least not with pm i don't think we have as one of the ozone states either but i'm not it to look at the most recent real world air quality data in order to see whether it's projections were lining up with what was going on in the real world e p a declined to do so and had it done so it would have had to confront the fact that it's projections were producing things that really made no sense and yes i mean you've already p a s brief they respond with an explanation and you take issue with the explanation there are several explanation deference lots from this circuit because you're lots from this search yes although in the appalachian power case that they cite for that proposition in fact the matter was remanded to the agency to give a better explanation because the court said stark disparities between real world data and what the model was showing required more of an explanation than the agency had given and here the agency gave explanations that's why i started where i did try and take issue with the explanations well i would say the explanation was clearly arbitrary for this reason your honor we showed that for example in nearly half of the locations that e p a looked at e p a was saying that when up when emissions would be further reduced from current levels pollution concentrations in downtown areas would go up now that should have been a whole the press is moment when the agency says that is so unusual but from the agency's perspective they had an explanation for that because the transport rule is different than care what it's it's you know it well as i do so i mean how does the court deal with that if you will in this in this and we're not we're not suggesting that you know the court would clearly probative data data which would show that their projections were making no sense what was their explanation their explanation was we can't look at that data because that data is impacted by care care has been declared unlawful and going to be replaced so we can't look at the most recent air quality data because that was impacted by care that is not a reasoned explanation because that data was factual data that established a relationship of verified real world relationship between the level of air quality reduction level of the missions reductions upwind and the says the agent but it doesn't matter what the that's what they say and that's what we say is arbitrary they say we can't look at it because it was an old rule that was declared invalid but whatever the reason why up when emissions were reduced whether it's care or an economic recession or anything else whatever the reason that's irrelevant because it's still the case that you know we all learn from care that when up upwind emissions are reduced to this down when the air quality is that and if you refuse to look at it and refused to confront the fact that my god when we use our model we are projecting that when up when emissions are reduced more down when pollution concentrations go up whether the up when cut emissions worth the level they were at because of care or anything else doesn't change the fact that there was a factual relationship between here's what upwind emissions are here's what down air quality is so all we would ask your honor to say and we're not saying the rule should be very catered on the sargon again this would be a rematch and for them to look at the data which they have refused to look at for the arbitrary reason that it was impacted by care and then they could come back and say we've looked at the data we realise we now have to change some of our projections or they could come back and say we have a better explanation that's always open to them was this an ongoing process for the agency to it's going on each year here and looking at her house it was actually not it's not i mean this is these twenty fourteen budgets or it until they initiate a new proceeding because they've decided it's now on the regulatory agenda to update the transport rule so we are stuck with this until there is a new rule making and we don't think we should be if i may go for the questions if i may reserve the remainder of my time   please the court my name is jessica o'donnell with the department of justice i'm here today on behalf of the p the supreme court indorsed e p a s cost base approach to determining up when states significant contributions to their downwind neighbors air quality problems e p a s emissions reductions required by the transport rule  are based on reasonable cost thresholds and require emission reductions that are no more than necessary to address the down when air quality problems that the agency was aiming to fix argument do not show that e p a went beyond its statutory authority in the good neighbor provision or it otherwise acted arbitrarily and establishing emissions budgets also addressed a petition  it wasn't obvious if the supreme court was going to rule with the agency in the home or as it did that it was going to include a section like that but it did include the section like that it really comes right out of oral argument it seems in the briefs as well the or even just a sort of my a question and then chief justice roberts has a specific question e b s counsel including the over control or argument or would that have been done and the answer to that was no that wasn't done paraphrasing now  s counsel representing to the supreme court and chief justice in that answer that these challenges would be available and that would mean that there would not be uniform costs rochelle's and so it seems to me that you told the chief justice one thing and coming back and then that's in the opinion you can see a direct line i think if you look at this between that colloquy in the opinion and now you're coming back and you started by emphasizing the uniformity as well as applied challenges are inconsistent with uniform and i don't think that as applied challenges are entirely inconsistent with uniformity i think that and i don't think the fact that the supreme court mentioned that there were the possibility of as applied challenges us meant that those as appl challenge as applied challenges would necessarily be meritorious as applied challenges i think that there's no doubt that i agree completely but the there is the possibility let me just ask you this there is the possibility of as applied challenges in which a successful as applied challenge would have a different cost threshold for a particular state than other states have correct i would i would not go so far i would say that the there is i don't think that anything in the supreme court's opinion requires an e p a to set an individual as cost threshold for a particular state which is what the petitioners here are asking for in fact i think that would be contrary to the primary holding priem court which is that e p a s use of the cross thresholds are so i might agree with you that there are some in justice scalia certainly pointed this out there was some tension between that section of the court's opinion and its main holding but obviously the court whether through all the court compromise or whatever came up with an opinion that said yes you can use uniform calls thresholds but also have as applied challenges and i don't well in the touchstone for the court in terms of determining what might be over control would be the  it down when linkages otherwise what other upwind there would be you know the other open states would not have other down when language linkages which is exactly the situation that you have with texas and madison texas madison is the only downwind linkage for texas however madison has numerous other upwind contributors all of whom contribute to other downwind states this supreme court specifically recognized the interwoven and connected nature of the important for us well i think opinion part of the issue to which it is going i think they're putting too much emphasis on that language i think that if you look for i think that language has in mind the examples that the  hypothetical situations the supreme court was discussing throughout the opinion which all involved the situation that i described where you have a close universe are of up in states and down one states and not the situation like you have with texas where there are other upwind lin that have downwind air quality effects and if you change the cost threshold that would apply to texas and those other open states which is not the same by the way would have ripple effects on the downwind states that are attached to those other up it your brief makes the point that it might affect the training program but the rule itself already has not uniform cost controls that's right that's right your your honor and i would say that you know even if you even assuming that petitioners reading in the supreme court opinions right i think ultimately e p a s application of the cost threshold any ph development of the cost threshold has to be judged by a reasonable in a standard the supreme court also said that p a a must have leeway to balance its obligation to avoid over control with its statutory duty to maximize down when attainment and maintenance e p a here did take into account they did exist they did essentially what petitioners are asking them to do they took into account the magnitude of the different the possible differences in the magnitude of  were where the down when problems were resolved more easily the five hundred dollars per tonne threshold represents you know the the level that e p a determined all down when problems for those states would be me p a also established a twenty three hundred dollar per ton threshold for states who are linked to higher down areas where there was a where they had more intractable air quality protesting here is uniformity of cost thresholds is a principle that is critical to a reasonable interpretation of the statutory requirement but i don't see you arguing that and let's take the texas example that were the texas budget increased as counsel was discussing that somehow that would throw out the calculation as to whether or not there will be attainment or interference with maintenance mean nothing changes other than that state's budget otherwise your scheme remains in place well i have two responses to that one is that we do disagree that texas has shown that it's all of madison's down when problems  anywhere discussion you're notion is that madison because there are hypothetically five states contributing texas is only one therefore there's this magic balance that's been developed in concluding that madison will attain and yet they only argument is looking at own data it shows that that same result will occur even if the texas budget is increased well that petitioners are relying on analyses that he did at the proposal stage e p a changed the other problem i think that is if you the problem with saying that you can just increase taxes is emissions budget is really twofold the first is what you do with the other states who are linked to madison who are paying the twenty three think that changes the analysis of whether if you lower the cost threshold for that's what this but the other states remain constant then that area would still attain except texas would not be doing the work that the area would detain based on  area exceed a tame it doesn't necessarily rank as over control no doubt if you can't if you can't if you have linkage to a and b and you  can't reduce one without pulling one below attainment pulling the other below attainment then you have to keep with the higher number and that would be the case of those other hypothetical states you're talking about who are linked to madison they have to sta well and the second part well then i'll turn to the second problem that happen will occur if you are with lowering taxes is the cost threshold if if if texas is costs are lower that means that i mean because you're not just looking at it's not just that the cost threshold apply uniformly but you're looking on an electric electricity grid and my understanding is that if you lower the car structure and this was part of e p a s rationale for stablish in uniform cost thresholds and applying them the way that they did in limiting the number of cars thresholds that you could have if you lower the cost threshold with regard to texas that will injury increase the car excuse me decrease the cost of generation in texas which means that that will have ripple effects elsewhere of you and with regard to madison i mean if you increase texas is if texas is emissions increase as a result of having lower costs that will have an adverse impact on the air quality in madison the if the one hundred were the right number madison will still attain even if i just take the hypothetical for second if if one hundred is the number that was in the data and the madison would still attain even if texas were given a hundred dollar a ton i don't know if you could say that because the i think the emissions charges were based on also the projections of electricity usage and if electricity uses the usage is increased in texas because the cost is lower that will change the ultimate output that x this the ultimate emissions levels in texas where will i find this ripple effect an well i think that that is an interesting good point that you raise your ire because i mean this issue about applying different you know applying lower cost thresholds to certain states is not something that was raised with regard to the to the ripple effect i mean i think that you know the words i can point you to the portions of our brief that discuss what will happen at your brief when i was preparing for this case what i was looking for was a theory of uniform cost controls and i thought there might be a technical documents somewhere that might explain this i didn't find that and in your brief i didn't find the argument that sort of this is a house of cards and you pull out one and the whole whole scheme collapses so at this point all we have is the data that e p a produced its conclusions and with it may be a jump to the conclusion that increasing texas's budget will not have an effect on attainment and maintenance but there isn't anything that causes at least on the record we have before us that i have found that causes me to doubt that at this point in terms of a remit i think the best six routes to that to six done that doesn't address it does i i i admit that it does not address this particular issue but what i recall i wanted to i mean just to go back to the supreme court justice sotomayor asked the question about the as applied in the chief justices including the overt control argument or would that have been done and that's the point where e p a counsel could have said that would have been done because of ripple effects etc what you just said that's not what was  said was invited there to the supreme court was the concept of as applied challenges for over control no mention of ripple effects or anything like that and then you see it in the opinion so i'm concerned about and a theory that was presented to the supreme court and now a new theory that's presented to us that would be inconsistent with the supreme court relied on i think quite clearly relied on in that section of its opinion so i questions on that topic i'd like to move on to the petitioners argument with regard to the ozone the states affected by the states that petitioners claim should now be states where petitioners are claiming that the rule should be vacated because the twenty to me the argument that petitioners were making i mean in their opening preposition ours i think said no they are you very clearly that the rule should be vacated with regard to those states in their reply brief they seem to suggest that they have no they abandoned any claim that e p a did not properly determine that those states did contribute significantly to downwind non attainment and maintenance in two thousand and twelve the rule is based on air quality projections for twenty twelve which show that all of those states have significant contributions below the threshold to non attainment and mean it's issues and so petitioners abandon any claim that  a appropriately made that determination or included the states in the rule for that purpose i it seems that petitioners are now arguing that e p a should have concluded that  should not have imposed any requirements on them on those states notwithstanding their downwind contributions because of what twenty e p a s projections showed with regard to twenty fourteen that is inconsistent with what the statute requires it's inconsistent with what this court required in north carolina and it simply wouldn't make any sense to run a regulatory program assuming that you could lift emissions reductions based on something that may or may not and maintenance will occur without any good neighbor obligation in certain upwind states doesn't that mean that he is without authority to impose good neighbor obligations on those particular open states projections and so therefore e p a had the starch atory authority to include them in the role if petitioners thought that or if the states think that and i think that accounts for petitioners even recognize this that once you're in a regulatory program you're in if any p a properly included the states and petitioners don't really contest that here when you by setting new budgets for particular year if it's established that you a circumstances the state thought that circumstances were changed in two thousand and fourteen they could submit a proposal to e p a to be removed from the fed i mean i think that would be an appropriate course people don't get out of regulatory regulated sources don't get out of regulatory programs based on future projections i mean if they were say for example as a facility that was obtaining a permit for four and s are not attainment in asar the facility the permit requirements would not be lifted on the facility just because the area was redoes again in from attainments are not a team and there would have to be some sort of a process for purposes of changing if it was appropriate those permit limits also point out that  very to require a good neighbor obligation of good neighbor obligation is not necessary for the particular year and all we have are projections for a particular year to achieve attainment in the down wind state it will e p i didn't base the budgets on projections that petitioners were lot relying on were not used for any regulatory purpose in terms of developing the rule they were simply something that a p a prepared for purposes of the regulatory impact analysis so wasn't e p a didn't rely on them in establishing emissions budgets so spin this out for me as i understand your argument is that when e p a projected the budgets were twenty fourteen in twenty twelve it was it found significant contributions the regulatory system is such that what happens in twenty fourteen where pathetically if you wish the data shows there will be no significant contribution there will be no interference with maintenance i think if the data  drop out or you're saying no the state has to submit a sip to say we are in compliance and they're for this they would have to submit a step and there is an important reason for that in order for downwind states to rely on any of the emissions reductions that are obtained by the transport roll or any rule and under the good neighbor provision those reductions have to be permanent and enduring and so downwind states cannot rely on emissions reductions if the p a were only going to leave them in place for two years so it's but if you know if the circumstances have that that's why i say the circumstances have changed and the up wednesday can show that that they are no longer significantly contributing to the downwind states air quality problems they can submit that in a  if they did that they would have to show that they wouldn't be interfering with the really any of the requirements of political requirements including the new  understanding of the regulatory system is if state was subject to the transport rule because of significant contributions in year one but by year ten state is no longer making significant contributions according to all analysis state continues to be subject to the rule until state submit something to me well i don't think that you can save and it's based on e p a s own analysis i mean i know the projections say with the projection say but e p a did not undertake those projections for purposes of establishing the requirements for the rule so ordinarily how it would work is that a stay if you know your once you're in the their contributions to down when air quality problems e p a is promulgating the rule here because the states have had a long running failure to address those problems and so e p a is it's not required by e p a under the statute to determine how long you know what on the horizon those problems will persist the states have the ability to submit if the states think that there is no longer a problem and that they're no longer contributing to the downwind states air quality problems they're permitted to they're able to submit a sip to replace the fifth in fact there are permitted they're able to do that at any time and i gather no state has  point that you know e p a i think the court understands e p a s point that care is simply there's no technical basis there's no reason you would compare results under care with the results  that e p a was projecting under the transport rule because they're simply not the same rules and they're not the same allocute they're not the same allocations of emissions the methodology is different so i'm not going to address that for the point i did want to make though is that a p a did not refuse to look at the recent air quality data e p a said that it was not going to validate or test the model using that data because that would be inappropriate but e p a did look at that data an e p a said that there were it's not simply a linear relationship between emissions levels and down when air quality there are other factors that affect e p a is that a fact that relationship being urology being  in large part by the meteorology at the time and so you can simply assume that emissions out of particular that there is a linear relationship between the emissions and that so final point that i wish to make  yes good morning may it please the court graeme mccann for the public health interveners if i may i'd like to briefly address the two thousand and fourteen basis issue as well as one quick point on the overcontrolled issue first on the base case issue if you look at the same two thousand and fourteen base case projections that war described in industry petitioners footnote thirteen they list six downwind receptors where they say those those locations would be underneath the the preamble to the final rule e p a said it is mindful of the need to provide for continuing ozone progress to meet the seventy five parts per billion level of the two thousand and eight as an x and in not releasing upwind states of  their obligations their budgets in two thousand and fourteen that was in a region regional a reasonable approach to that in front of it the other point i'd like to make is that the approach urged by industry is inconsistent with the clean air act emphasis on keeping pollution controls in place at least until an area violating the next shows that it has actually taint the standard of permanent and enforceable reductions and that it will stay clean for ten years and that is  that that structure is outlined in seventy four zero seventy three of the act one of seventy three of the act which is alluded to in industry respondents brief at footnote one i'd also like to point out on that point that the e p a page sixty eight of its final rule emissions inventory g s t it says that the two thousand and fourteen base case modeling included projected economic changes and fuel usage for each use in the mobile sector so these were not you know locked in benefits in two thousand and fourteen absent good neighbor reduction these war you know the vagaries of of the economy industrial changes natural gas  prices and that is not a basis that would be inconsistent to rely on that basis for relieving upwind states of their pollution of reduction obligations would not be consistent with that if i see my time is over i just had one point to make on the problem that the supreme court recognized and if for future rule makings or even you know looking at the time when u p a has to act it looks at all up when states having to act simultaneously to reduce their emissions so why is texas the first in line to get their reductions accounted for to madison as opposed to the other groups you states that also contribute are at the five hundred dollars but other states can reduce it without it causing a problem and other down and so if you if you sort of pull on individual threads as the industry petitioners have rather than acknowledging the interwoven and overlapping connections in this rule then and then you provide an incentive for future rule makings for the court to say well i'm going to each state to say you know i'm not going to fulfill my good when good neighbor obligations as set forth in the statute as required by the statute within my border each state must address its emissions within its borders  because i'll just see how it's going to play out with all the other states and so it doesn't there's this dynamic that it could lead to if you accept the petitioner's argument can you play that out because that's an important point but it's not in the supreme court opinion so that's the first problem but that's a legal problem more interested in just real world significance of what you're explaining and how that would play out if you give me a concrete example of what you're into s rting so i would disagree that it's this dynamic is not in the supreme court opinion i would not in the key section well which may be inconsistent with the other section of the opinion which i think your point but we have to follow  follow all the sections so i would point to to the supreme court's approving citation to the to legislative history at fifteen ninety five of the supreme court's opinion where they talk about going from the prevent standard in the one nine hundred seventy seven downwind and this is the contribution problem and so texas would say you know we have modeling to show that madison despite the fact that we contribute above the one percent threshold to madison illinois at year three afternoon x comes out they say we're going to we're going to sit on our hands we're not going to we're either going to sit on our hands or we're going to make a demonstration to e p a that says medicine illinois air quality problems will be addressed just as well by indiana or missouri or wisconsin and we'll show you that model and so we don't have to we don't have to submit or we can submit a plan laying out this this rationale for why we don't have to make any reductions but every state is required to act at that three year deadline afternoon x issues and so there's this this dynamic of you sitting saying saying oh if i can just if another state contributed that same problem also makes the reductions then i'm off the hook and i don't have  to meet my statutory burden to address the emissions from within my own borders that contributes to this problem downwind interstate pollution and others environmental problems that can be so managed i'd like to address a few of the panel's questions about the tension in the implication of uniform costs vs the shifting pollution burdens that are talked about i'd like to begin actually by directing the court to page forty eight to sixty three the federal register and appendix pages three thirty two and three thirty three and also somewhat later section  forty eight to seventy one of the federal register pages join panix three forty three forty one because these frame the tensions that the difference between using uniform costs and the difference between using  different cost for different states pose on this model i want to make sure that hardly the podium on the course questions on that issue are answered when uniformity means uniform cos mean that one would expect to find uniform allowance prices in texas in pennsylvania in alabama and when uniform allowance prices exist what it means is that power plants in all those states compete on a level playing field that's important for air pollution as well as it is for economics electricity takes no heed of state borders one power demand exists power demand is answered by the power plant that can generate that electricity most cheaply and cheaply in this case includes what we call variable cost in the industry including things like allowances you're going to have buy to admit the pollution you're going to emit when you make your energy or offsetting really and very importantly in critical to this rule the actual cost you incurred to run your scrubber or to run your selective catalytic reduction equi in order to eliminate the emissions which is of course what he wants people to do and that's why he chose a price to begin its modeling efforts that would be sufficiently high so that it would yield an allowance price which was sufficiently high so that plants would say i'm going to run my scrubber because i can do that cheaper than i can go out and buy an allowance and guess what if i buy an allowance i still emit and ton of pollution if i run my scrubber i don't so only when i run my scrub or do i have an a million and state b have different allowance prices because e p a used a different cost to determine the budget they have different allowance prices is five hundred b is one hundred the power plants and b are going to be able to run more cheaply and what does that me i mean they're going to run more and when they run more they're going to emit more pollution because the allowance prices are cheaper than running the controls and they down when aaron packs are going to go up up up so one of the flaws with the argument that we heard on behalf of texas and i think you are getting to this judge kavanaugh in your questions is well you know what it says one hundred would do it for texas well one hundred might do it for texas assuming that's true and that was in the proposed model role modeling in the are  all sorts of problems at that i won't get into but assuming that was true would also assume that everybody else was doing one hundred two and we know that one hundred isn't enough for everybody else to do right so when texas is doing one hundred the state next to it was doing one hundred so the power plants in texas weren't any cheaper than the power plants in louisiana or the power plants in arkansas or and so on and so forth all across the caspar region so uniformly plays this role of assuring that when a uniform cross is used it and those states will then be able to trade with each other are you make a compelling policy argument but the obviously in the court's decision supreme court's decision that did not carry the day for women aiding the possibility that supply challenges which are necessarily i think inconsistent with uniformity because the as applied challenge means you're going to get out from under the uniform cost threshold that otherwise you would have to comply with that's absolutely not true ok as applied challenges embrace far more than just challenges based upon the uniform cost used by e p a the budgets that states methodology and the application of the methodology to the facts and the supreme court upheld on equivocally the methodology here starting with the uniform cost using that in the statutory scheme to define what the amount is in one ten and the the translation of that to budget no actually operates through an enormous filter of facts and those facts include for every power plant where it is what kind of fuel it uses what its efficiency is what the emissions are what its emission controls are but its cost of operation is because that planning module that we're really talking about it if that's it you know if if the budget assumption the uniform cost assumption is the hot water and the budgets the t v well that big tea bag in the middle that filters through all that hot water and turns the  v is the i p m model and all of its factual assumptions now the petitioners acknowledge that that is and you have as big part of their as applied challenges right that there can be errors in that succeeded the cross state air pollution rule and change budgets because of information that has been brought to attention of places in which that teabag had erroneous information in it and there for you to different results so those as applied challenges are completely consistent with the notion that e p a can start with that uniform cost that is so important to making the plan go and work and work in a way that aligns with rather than conflicts with the way that electric power is generated and transmitted throughout the country to circle back to those references i see grievously out of time and i apologize oh  the the information you were looking for judge rogers about an explanation from b p s lips in the rule making about why having different control costs mandates isolation between trading groups which is something we've raised in our briefs to is found in forty eight to sixty three were e p a not so much talking about the cost assumptions and the importance of uniformity but talking about why it needs to segregate him presumed to have a price of about twenty three hundred dollars is in trading with a state that has a five hundred are allowance price that's going to shift the emissions to the state with a five hundred dollar allowance price because it's so much cheaper to run the power there and that state's going to emit more pollutants or the state which has a twenty three hundred dollar a tonne burden if it bought you know its own allowances could buy the allowances from the five hundred dollars state well those allowances are going to be emitted in the state which has the higher emissions to begin with and and you know those problems so that's discussed there so it boils down to i understand what you're saying is that somewhat that the as applied challenges that the supreme court has said are to be made available are matters that should be addressed to the agency not this court that's right whereas i understood counsel's argument on the legal interpretation of the supreme court's opinion but just focusing on the as applied that because of the factual matrix that you have pointed out these are matters that the agency has to take into account and a state hypothetically the texas state argument it may get a budget that's different but we don't know based on the information that we have in the record that e p a would have concluded under the transport rule that the madison receptor would attain with only a one hundred dollar budget rather than a five hundred dollars budget measure i mean that's what i hear you telling me this is complex matter where you can agree on what the supreme court said the application may not be as simplistic as indication by the supreme court that was what it meant what the supreme court said is talked about was was not its amount in these limited limiting factors the supreme court  talk about whether or not this was an amount of pollution that interferes with maintenance or contributes just actually down it payment the supreme court talked about in these carve outs lowering the budget to a point which was beneath that which was necessary for the downwind state to achieve means for payment so it's targeted to a level of air quality it's not targeted to the amount calculation that's not what the court linked it to which is where the uniform cost assumption comes in and second of all that's before we even get to the qualification that lessens it's not linked to the so the the supreme court reasoning as i understand it reconciling the sections as best as i can your honor is that the supreme court concluded that e p a was reasonable in deciding that it would determine what the amount of pollution that up when state emits that contributes substantially downwind nonpayment or interferes with maintenance it would make the determination that amount by using uniform cost in the course of that's reasonable and then later in the section that we're focused on in this decision because it has to do with as applied challenges it talks about reducing state being forced to reduce its contribution to reduce its emissions to a point that's more than is necessary to achieve a so we started with endorsing e p a s view of looking at cost as determining the amount and then we changed over to look at to check the outcome of that analysis against the actual air quality receptor state or the lone receptor state to texas you know the texas is is connected not just to madison told the states you contribute to madison and so on and so forth down the road so on and so forth i don't understand well meaning that all those states also has a certain length to madison for for the for the pm that's right and then to michigan for and louisiana for the others in the analysis on the supreme court decision when when the state is looking at its receptors in that regard the state is going to be me the court is going to have to find a air quality reason petitioners point you for them all have new budgets already subsequent roll makings so the budgets that are being challenged here and as applied basis are moot the numbers have changed to subsequent or makings actually both of which w two thousand and fourteen modeling first of all apparently two days two thousand and twelve in terms of the regulatory scheme opposed imposed by the statute the scheme that's in place today in the budgets that are in place today or intended to remedy the conditions in two thousand and twelve but more importantly as a matter of law all of those areas that were in two thousand and fourteen that petitioners point to some modeling and as e p predicted that they would be in taman in two thousand and fourteen as a matter of law all of those areas all of those receptors are in non attainment unless and until they are we designated by  in accordance with the procedures in section one hundred seven and until that time results don't matter they're in non attainment they stay in nonpayment until they are pulled out the may be a remedy for states once they are designated through the process once they're determined to be a non issue in attainment states then not only the states in which those receptors are but her up when states who can maintain that that's their only link to the program could file a new sip or otherwise receive relief through petition e p a is this is a matter of public health in this case demonstrates if it demonstrates nothing this case demonstrates how difficult it is to bring into effect regulation of these types of interstate pollution problems and this court should not mistake of prediction that he p a made in two thousand and ten when it was preparing the final rule and two thousand and eleven for attainment because that's a very different legal thing is addressed on page six of our brief and was addressed again by mr mccain his argument i thank the panel very much for its indulgence with this extra time thank you you thank  your honor if i may i'd like to address four points i'd like to talk about texas and madison and what's been said about that about the ozone states i'd like to talk about uniform cost thresholds and what's been said about that and also just haven't i'd like to address the point you raised but where there's a tension in the supreme court's decision because while we lost some aspects of that and therefore in the sense would disagree with some portions of it that are not issue here i think it actually all does hang together and that the tension your honor first to isn't there but to begin with texas and madison a council pointed out that texas isn't the only upwind state link to madison and that's right there are others and they've been controlled at higher levels because even though e p a found that madison would attain if every up and state link to it was controlled at one hundred dollars a ton these other states like kentucky are also linked to different down locations which require more reductions i why i think judge can't speak for judge kavanaugh but i think we got you ok legal argument and opening and i'd be interested in your response to what we just heard sure i mean i think everything that mr collins said is about the need to have you know a broader market for trading there is no statutory requirement trading there is a statutory requirement to avoid over control i'm sorry i wasn't clear ok you know the words where does this decision get made no usually i think the words when the supreme court talks about as applied one might think that the matter would go back to the agency let whatever state wants to come in and talk to the agency about its budget the agency would make a decision and then who knows you might be back here again but that that would be a procedural posture as distinct from trying to decide anything about these as applied challenges at this stewart said would be appropriate in response to the questions from justice sotomayor in chief justice roberts and that portion the transcript is very clear he was saying that that would be a remain to the court of appeals to consider as applied challenges but that often happens as you probably know better than i send it back to the circuit court of appeals and then often the case may go back to the agency or even to well the district court and certainly our vision of this your honor is that this does go back to the agency for more proceedings to determine the proper missions budgets but the question is whether there is an intermediate step in which this court articulated the legal principles that need to guide that remain and there are very substantial legal disputes and i understand that and i thought that was the thrust of you down locations wouldn't need any good neighbor controls miss o'donnell says they didn't base their budgets on those projections but that's our complaint there are facts in the record which show no good neighbor controls were necessary but a p a nonetheless imposed reductions the fact that they didn't they see their budgets on the projections they made is not a justification it's exactly what's wrong with what happened below with respect to uniform cost thresholds judge rogers you're absolutely right there are no uniform costs rochelle's right now there are two groups with two different cost thresholds and that's because e p a said in the room making and we quote this on page seven of our reply brief we believe it is appropriate to use multiple thresholds one troop of states can for a lower cost eliminate non attainment and maintenance for all the down areas to which they're linked which is exactly that that's not inconsistent with what we just heard that there is a theory  uniform cost controls consistent with what he has done by grouping states in a manner such that depending on the level of correction is still needed it makes sense to group in that matter and your honor if we were coming in here saying texas should instead be regulated at four hundred ninety five dollars an hour and right now we're not saying that we're talking about the difference between five hundred dollars a tonne and one hundred dollars a ton we're talking about the difference between fourteen states which are regulated florida has to cut more than twenty five percent of its nocs budget it shouldn't be regulated at all this isn't in that margin where they get leeway this is way outside that and the only thing i'd like to address judge kevin  your point about the tension in the opinion because i do think the opinion is in internally consistent in following sense if you look at section two be where the supreme court addressed proportionality what it was saying is that uniform cost thresholds can be used to allocate that increment by which states have to reduce in order to enable down winds down locations to attain but every numerical example it gave may clear that you first decide what is that increment that minimum necessary to reduce in order to enable the downwind locations to attain and maintain the next once you establish that over control ceiling then yes you use uniform cost thresholds to allocate that among the states  but then when they got to section two c they said we recognize that uniform cost thresholds does leave open the possibility that there will be over control and that's to be address and as applied challenges and i think what's going on here is that you know the court determined that there is this ceiling that has to be observed through as applied challenges and once that's observed then the remainder that needs to be reduced can be allocated using uniform cost thresholds what's happened here is that we have accepted the part of the decision that we lost on proportion and we have nor argued obviously that you cannot allocate that overage uniformly instead have to do a proportional to each state physical contribution but e p a has not accepted the proposition that there is this other limit the part of the decision that they lost which says that if e p a requires an upwind state to reduce emissions by more than is necessary to enable every down in location to which it is linked to attain the next it has overstepped its authority we can you address talk about ripple effects in texas yet there are there are no ripple effects that i understand here recall that e p a found that if all of the upwind states linked to madison were regulated one hundred dollars a ton madison would attain so when people refer to ripple effects for free riding there's no free riding texas at one hundred dollars a ton reduces the entirety of its significant contribution madison we know still it's james and maintains the next because that's what e p a has said it said if everyone is regulated one hundred dollars a ton they attain and maintain so they're no ripple effects to madison as as mr don said it's possible madison's air quality will be so it works in texas i think in other words for the lower well but if it's texas then it's not a subject of the good neighbor provision that's about affects of one state on another state there are a whole bevy of other provisions that control what texas has to do to control its own emissions and by the way no other upwind state has to do anymore because texas has reduced one hundred dollars a tonne they're doing what they're doing as your honour's noted because they're linked elsewhere so there's no free riding texas reduces its its significant contribution the dallin location attains the next and other states do what they have to do i guess my concern here council you and i just heard an explanation of the uniform cost and how in fact it works in terms of ultimately setting budgets and it's not a simple calculus we can sort of pull one state out of uniform threshold and get the same result it may work out that way but the only question is can this court make that determination or i get your point about  saying e p didn't even take into account its own figures that's one thing yet the remit but how can we go further than that well and as as i indicated in the first round in response to your honor's question we're not saying the court should direct one hundred hours of time so if there is if there's something e p a wants to say in the remain and it can and that will be tested through the process but that wouldn't be true as i understand your argument as to the fourteen states well that that's right because because on that the projection is just crisp and clear and they've given no explanation you know i mean the other thing to say your honor is that the answer to everything we've said has been this is a seamless web you pull one thread everything design everything is exactly perfect the way it is and if you just just a little little bit the whole world is going to come crashing down this is not the way it is because it's a seamless carefully crafted web it's the way it is because they did not believe they had any obligation to avoid over control and so there are lots of states where because they didn't look at it they overcontrolled based on their own data nothing we're saying with respect to at least the first four states would preclude them from saying on remand that there's some factor that they haven't identified but with respect to the fourteen states you have a record which says no good neighbor controls are needed you'd have to vacate the budgets there we think if the court has no further questions thank you and you know further we don't are we done all right we will take the case under advisement thank you counsel