Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-04-01064/USCOURTS-caDC-04-01064-0/pdf.json

Parties Involved:
Environmental Protection Agency
Respondent
South Coast Air Quality Management District
Petitioner

Document Text:

Notice: This opinion is subject to formal revision before publication in the

Federal Reporter or U.S.App.D.C. Reports. Users are requested to notify the

Clerk of any formal errors in order that corrections may be made before the

bound volumes go to press.

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued February 8, 2006 Decided March 17, 2006

No. 03-1380

STATE OF NEW YORK, ET AL.,

PETITIONERS

v.

ENVIRONMENTAL PROTECTION AGENCY,

RESPONDENT

CLEAN AIR IMPLEMENTATION PROJECT, ET AL.,

INTERVENORS

Consolidated with Nos.

03-1381, 03-1383, 03-1390, 03-1402, 03-1453, 03-1454,

04-1029, 04-1035, 04-1064, 05-1234, 05-1287

On Petitions for Review of Final Actions of the

Environmental Protection Agency

J. Jared Snyder, Assistant Attorney General, Attorney

General’s Office of the State of New York, argued the cause for

USCA Case #04-1064 Document #956791 Filed: 03/17/2006 Page 1 of 20
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Government Petitioners. With him on the briefs were Eliot

Spitzer, Attorney General, Peter Lehner and Michael J. Myers,

Assistant Attorneys General, Bill Lockyer, Attorney General,

Attorney General’s Office of the State of California, Matthew J.

Goldman, Deputy Attorney General, Richard Blumenthal,

Attorney General, Attorney General’s Office of the State of

Connecticut, Kimberly Massicotte and Matthew Levine,

Assistant Attorneys General, M. Jane Brady, Attorney General,

Attorney General’s Office of the State of Delaware, Valerie S.

Csizmadia, Deputy Attorney General, Lisa Madigan, Attorney

General, Attorney General’s Office of the State of Illinois,

Thomas Davis, Chief, G. Steven Rowe, Attorney General,

Attorney General’s Office of the State of Maine, Gerald D.

Reid, Assistant Attorney General, J. Joseph Curran, Jr.,

Attorney General, Attorney General’s Office of the State of

Maryland, Kathy M. Kinsey, Assistant Attorney General,

Thomas F. Reilly, Attorney General, Attorney General’s Office

of the Commonwealth of Massachusetts, James R. Milkey,

Assistant Attorney General, Kelly A. Ayotte, Attorney General,

Attorney General’s Office of the State of New Hampshire,

Maureen D. Smith, Senior Assistant Attorney General, Peter C.

Harvey, Attorney General, Attorney General’s Office of the

State of New Jersey, Stephanie Brand, Kevin Auerbacher, Jean

Reilly, and Ruth Carter, Assistant Attorneys General, Patricia

A. Madrid, Attorney General, Attorney General’s Office of the

State of New Mexico, Tracy M. Hughes, General Counsel,

Robert A. Reiley, Assistant Counsel, Commonwealth of

Pennsylvania, Department of Environmental Protection, Patrick

C. Lynch, Attorney General, Attorney General’s Office of the

State of Rhode Island, Tricia K. Jedele, Special Assistant

Attorney General, William H. Sorrell, Attorney General,

Attorney General’s Office of the State of Vermont, Erick Titrud

and Kevin O. Leske, Assistant Attorneys General, Peggy A.

Lautenschlager, Attorney General, Attorney General’s Office of

the State of Wisconsin, Thomas L. Dosch, Assistant Attorney

USCA Case #04-1064 Document #956791 Filed: 03/17/2006 Page 2 of 20
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General, Robert J. Spagnoletti, Attorney General, Attorney

General’s Office of the District of Columbia, Edward E.

Schwab, Deputy Attorney General, Donna M. Murasky, Senior

Litigation Counsel, Barbara Baird, District Counsel, South

Coast Air Quality Management District, Daniel C. Esty,

Christopher P. McCormack, Christopher G. King, Assistant

Corporation Counsel, City of New York, Kristine Poplawski,

Deputy City Attorney, City and County of San Francisco. John

V. Dorsey, Assistant Attorney General, Attorney General’s

Office of the State of Maryland, William L. Pardee, Assistant

Attorney General, Attorney General’s Office of the

Commonwealth of Massachusetts, Eric Ames and J. Brent

Moore, Attorneys, Attorney General’s Office of the State of

New Mexico, and Lisa S. Gelb, Counsel, City and County of San

Francisco, entered appearances. 

Howard I. Fox argued the cause for Environmental

Petitioners and Intervenor. With him on the briefs were Keri N.

Powell, John D. Walke, Jonathan F. Lewis, Ann B. Weeks, Leah

Walker Casey, and Michael D. Fiorentino. Blair W. Todt

entered an appearance. 

Richard E. Ayers was on the brief of amicus curiae Calpine

Corporation in support of petitioners. 

Hope M. Babcock was on the brief of amici curiae

American Thoracic Society, et al. in support of environmental

petitioners.

Victor B. Flatt was on the brief of amici curiae Senator

Hillary Rodham Clinton, et al. in support of petitioners.

Geoffrey M. Klineberg was on the brief of amicus curiae

Atlantic Salmon Federation in support of petitioners.

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Angeline Purdy and Cynthia J. Morris, Attorneys, U.S.

Department of Justice, argued the cause for respondent. With

them on the brief was John C. Cruden, Deputy Assistant

Attorney General. Michael B. Heister, Attorney, and Carol S.

Holmes, Counsel, U.S. Environmental Protection Agency,

entered appearances.

F. William Brownell argued the cause for Industry

Intervenors in support of respondent. With him on the brief

were William H. Lewis, Jr., Henry V. Nickel, Makram B. Jaber,

David S. Harlow, Katherine D. Hodge, John L. Wittenborn,

Leslie Sue Ritts, Lorane Hebert, and Charles H. Knauss. Russell

S. Frye entered an appearance. 

Judith Williams Jagdmann, Attorney General, Attorney

General’s Office of the Commonwealth of Virginia, William E.

Thro, State Solicitor General, D. Mathias Roussy, Associate

State Solicitor General, Carl Josephson, Senior Assistant

Attorney General, Troy King, Attorney General, Attorney

General’s Office of the State of Alabama, Robert D. Tambling,

Assistant Attorney General, David W. Marquez, Attorney

General, Attorney General’s Office of the State of Alaska,

Steven E. Mulder, Assistant Attorney General, Mike Beebe,

Attorney General, Attorney General’s Office fo the State of

Arkansas, Teresa Marks, Deputy Attorney General, Lawrence

E. Long, Attorney General, Attorney General’s Office of the

State of South Dakota, Roxanne Giedd, Deputy Attorney

General, Mark L. Shurtleff, Attorney General, Attorney

General’s Office of the State of Utah, Fred Nelson, Assistant

Attorney General, Patrick J. Crank, Attorney General, Attorney

General’s Office of the State of Wyoming, Vicci M. Colgan,

Senior Assistant Attorney General, Phill Kline, Attorney

General, Attorney General’s Office of the State of Kansas,

David W. Davies, Assistant Attorney General, Jeremiah W.

(Jay) Nixon, Attorney General, Attorney General’s Office of the

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State of Missouri, James R. Layton, State Solicitor, Jon Bruning,

Attorney General, Attorney General’s Office of the State of

Nebraska, Wayne Stenehjem, Attorney General, Attorney

General’s Office of the State of North Dakota, and Lyle G.

Witham, Assistant Attorney General, were on the brief of

Intervening States. Michael R. O’Donnell, Assistant Attorney

General, Attorney General’s Office of the State of Wyoming, R.

Craig Kneisel, Assistant Attorney General, Attorney General’s

Office of the State of Alabama, Roger L. Chafee, Senior

Assistant Attorney General, Attorney General’s Office of the

Commonwealth of Virginia, entered appearances.

Jim Petro, Attorney General, Attorney General’s Office of

the State of Ohio, Henry McMaster, Attorney General, Attorney

General’s Office of the State of South Carolina, Steve Carter,

Attorney General, Attorney General’s Office of the State of

Indiana, Thomas M. Fisher, Solicitor General, Valerie Tachtiris,

Deputy Attorney General, and John J. Bursch were on the brief

of amici curiae States of Indiana, Ohio, and South Carolina in

support of respondent. Steven D. Griffin, Assistant Attorney

General, Attorney General’s Office of the State of Indiana,

entered an appearance.

Daniel J. Popeo, Paul D. Kamenar, and Paul M. Seby were

on the brief of amicus curiae Washington Legal Foundation in

support of respondent.

Before: ROGERS, TATEL and BROWN, Circuit Judges.

Opinion for the Court filed by Circuit Judge ROGERS.

ROGERS, Circuit Judge: In New York v. EPA, 413 F.3d 3

(D.C. Cir. 2005) (“New York I”), the court addressed the first of

two rules promulgated by the Environmental Protection Agency

providing ways for stationary sources of air pollution to avoid

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triggering New Source Review (“NSR”). The court upheld in

part and vacated in part the first rule. Id. at 10-11. We now

address the second rule, the Equipment Replacement Provision

(“ERP”), which amends the Routine Maintenance, Repair, and

Replacement Exclusion (“RMRR”) from NSR requirements.

Under section 111(a)(4) of the Clean Air Act, 42 U.S.C. §

7411(a)(4), sources that undergo “any physical change” that

increases emissions are required to undergo the NSR permitting

process. See also id. §§ 7501(4), 7479(2)(C)(cross-referencing

id. § 7411(a)(4)). The exclusion has historically provided that

routine maintenance, repair, and replacement do not constitute

changes triggering NSR. The ERP both defined and expanded

that exclusion. EPA explained:

[The] rule states categorically that the replacement of

components with identical or functionally equivalent

components that do not exceed 20% of the replacement

value of the process unit and does not change its basic

design parameters is not a change and is within the

RMRR exclusion. 

Equipment Replacement Provision of the Routine Maintenance,

Repair and Replacement Exclusion, 68 Fed. Reg. 61,248, 61,270

(Oct. 27, 2003) (“Final Rule”); see also 70 Fed. Reg. 33,838

(June 10, 2005)(“Reconsideration”). Hence, the ERP would

allow sources to avoid NSR when replacing equipment under the

twenty-percent cap notwithstanding a resulting increase in

emissions. The court stayed the effective date of the ERP on

December 24, 2003. We now vacate the ERP because it is

contrary to the plain language of section 111(a)(4) of the Act.

The Clean Air Act requires new and modified sources of

pollution to undergo NSR, a permitting process that imposes

specific pollution control requirements depending upon the

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1

 NSR consists of two programs: prevention of significant

deterioration (“PSD”) and nonattainment NSR. See New York I, 413

F.3d at 11-14. New and modified sources in attainment areas, i.e.,

where air quality standards have been met, and in unclassifiable areas

are required to follow PSD rules, which means they must obtain a

preconstruction permit, prove that the construction will not cause

violations of certain air quality standards, and show that their

operations are in compliance with the Best Available Control

Technology (“BACT”) requirements. See 42 U.S.C. § 7475. In

nonattainment areas, i.e., where air quality standards have not been

met, new and modified sources are required to obtain preconstruction

permits, to offset emissions increases with emissions reductions from

other sources in the area, and to install “lowest achievable emissions

rate” technology (“LAER”). See id. § 7503. 

geographic location of the source.1 Section 111(a)(4) of the Act

describes when a source is to be considered “modified”:

The term “modification” means any physical change

in, or change in the method of operation of, a stationary

source which increases the amount of any air pollutant

emitted by such source or which results in the emission

of any air pollutant not previously emitted.

42 U.S.C. § 7411(a)(4) (emphasis added). Since the inception

of NSR, RMRR has been excluded from the definition of

“modification.” See 39 Fed. Reg. 42,510, 42,514 (Dec. 5,

1974); 43 Fed. Reg. 26,388, 26,403-04 (June 19, 1978).

Heretofore, EPA applied the RMRR exclusion through “a caseby-case determination by weighing the nature, extent, purpose,

frequency, and cost of the work as well as other factors to arrive

at a common sense finding.” 67 Fed. Reg. 80,290, 80,292-93

(Dec. 31, 2002). Consistent with Alabama Power Co. v. Costle,

636 F.2d 323 (D.C. Cir. 1980), which recognized EPA’s

discretion to exempt from NSR “some emission increases on

grounds of de minimis or administrative necessity,” id. at 400,

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2

 The ERP provides: 

Without regard to other considerations, routine maintenance,

repair and replacement includes, but is not limited to, the

replacement of any component of a process unit with an

identical or functionally equivalent component(s), and

maintenance and repair activities that are part of the

replacement activity, provided that all of the requirements in

paragraphs (cc)(1) through (cc)(3)of this section are met.

40 C.F.R. § 52.21 (cc). Paragraph (cc)(1) establishes that the fixed

capital cost of the replacement component cannot exceed twenty

percent of the replacement value of the process unit. Paragraph

(cc)(2) states that the replacement cannot change the basic design

parameters of the process unit. Paragraph (cc)(3) requires that the

replacement activity not cause the process unit to exceed any

independent, legally enforceable emission limitation. The ERP also

amends 40 C.F.R. §§ 51.165, 51.166, and 52.24, but given the

similarity of the sections, the court will follow the practice of the

parties in citing only section 52.21. 

EPA has for over two decades defined the RMRR exclusion as

limited to “de minimis circumstances.” 68 Fed. Reg. at 61,272.

The ERP provides a bright-line rule and expands the traditional

scope of the RMRR by exempting certain equipment

replacements from NSR. See, e.g., 40 C.F.R. §

52.21(cc)(2005).2

The government and environmental petitioners contend that

the ERP is contrary to the plain text of the Act because the

statutory definition of “modification” applies unambiguously to

any physical change that increases emissions, necessarily

including the emission-increasing equipment replacements

excused from NSR by the rule. They maintain that the word

“any,” when given its natural meaning, requires that the phrase

“physical change” be read broadly, such that EPA’s attempt to

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read “physical change” narrowly would relegate the word “any”

to an insignificant role.

In evaluating the petitioners’ contention, we proceed under

the familiar two-part test of Chevron U.S.A., Inc. v. National

Resources Defense Council, Inc., 467 U.S. 837 (1984). If

“Congress has directly spoken to the precise question at issue .

. . that is the end of the matter; for the court, as well as the

agency, must give effect to the unambiguously expressed intent

of Congress.” Id. at 842-43. Only if the statute is silent or

ambiguous do we defer to the agency’s interpretation, asking

“whether [it] is based on a permissible construction of the

statute.” Id. at 843. “If a court, employing traditional tools of

statutory construction, ascertains that Congress had an intention

on the precise question at issue, that intention is the law and

must be given effect.” Id. at 843 n.9. 

The petitioners and EPA agree that the phrase “physical

change” is susceptible to multiple meanings, each citing

dictionary definitions. However, “the sort of ambiguity giving

rise to Chevron deference ‘is a creature not of definitional

possibilities, but of statutory context.’” American Bar Ass'n v.

FTC, 430 F.3d 457, 469 (D.C. Cir. 2005) (quoting Brown v.

Gardner, 513 U.S. 115, 118 (1994)); see California Indep. Sys.

Operator Corp. v. FERC, 372 F.3d 395, 400 (D.C. Cir. 2004);

Cincinnati Ins. Co. v. Flanders Elec. Motor Serv., Inc., 40 F.3d

146, 152 (7th Cir. 1994). As the parties point out, the ordinary

meaning of “physical change” includes activities that “make

different in some particular,” “make over to a radically different

form,” or “replace with another or others of the same kind or

class.” WEBSTER’S THIRD NEW INTERNATIONAL DICTIONARY

373 (1981). To say that it is “physical,” in this context,

indicates that the change must be “natural or material,” rather

than “mental, moral, spiritual, or imaginary.” Id. 1706. The

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parties agree that in “[r]eal-world, common-sense usage,” 68

Fed. Reg. at 61,271, “physical change” includes equipment

replacements. They further agree that the ERP would excuse

from NSR requirements certain emission-increasing activities

that EPA has historically considered to be “physical changes.”

See id. at 61,270. 

The parties’ essential disagreement, then, centers on the

effect of Congress’s decision in defining “modification” to insert

the word “any” before “physical change.” According to the

petitioners, the word “any” means that the phrase “physical

change” covers any activity at a source that could be considered

a physical change that increases emissions. According to EPA,

“any” does nothing to resolve ambiguity in the phrase it

modifies. EPA maintains that because “physical change” is

“susceptible to multiple meanings,” id. at 61,271, “identifying

activities that are ‘changes’ for NSR purposes . . . requires an

exercise of Agency expertise,” “the classic situation in which an

agency is accorded deference under Chevron,” id. at 61,272.

Under this approach, once EPA has identified an activity as a

“physical change,” the word “any” requires that the activity be

subject to NSR. We conclude that the differences between the

parties’ interpretations of the role of the word “any” are resolved

by recognizing that “[r]ead naturally, the word ‘any’ has an

expansive meaning, that is, ‘one or some indiscriminately of

whatever kind,’” United States v. Gonzales, 520 U.S. 1, 5

(1997), and that courts must give effect to each word of a

statute, see, e.g., TRW, Inc. v. Andrews, 534 U.S. 19, 31 (2001).

Because Congress used the word “any,” EPA must apply NSR

whenever a source conducts an emission-increasing activity that

fits within one of the ordinary meanings of “physical change.”

In a series of cases, the Supreme Court has drawn upon the

word “any” to give the word it modifies an “expansive meaning”

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when there is “no reason to contravene the clause’s obvious

meaning.” Norfolk S. Rwy. Co. v. Kirby, 543 U.S. 14, 31-32

(2004); see also Dep’t of Hous. and Urban Dev. v. Rucker, 535

U.S. 125, 130-31 (2002); Gonzalez, 520 U.S. at 5. Indeed, the

Court has read the word “any” to signal expansive reach when

construing the Clean Air Act. In Harrison v. PPG Industries,

Inc., 446 U.S. 578 (1980), the Court resolved a jurisdictional

dispute under section 307(b)(1) by interpreting the phrase “any

other final action,” which the Court “discern[ed to have] no

uncertainty.” Id. at 588. The Court never suggested that the

term “final action” was itself devoid of multiple meanings

depending on the context, but rather stated that when Congress

amended the Act in 1977, “it expanded its ambit to include not

simply ‘other final action,’ but rather ‘any other final action.’”

Id. at 589. “[I]n the absence of legislative history to the

contrary,” the Court held that the statutory phrase “must be

construed to mean exactly what it says, namely, any other final

action.” Id.

Although EPA is correct that the meaning of “any” can

differ depending upon the statutory setting, see Nixon v.

Missouri Mun. League, 541 U.S. 125, 132 (2004), the context of

the Clean Air Act warrants no departure from the word’s

customary effect. Unlike Nixon, the question of statutory

interpretation here does not arise in a setting in which the

Supreme Court has required heightened standards of clarity to

avoid upsetting fundamental policies. See id. at 132-33, 140-41

(citing Gregory v. Ashcroft, 501 U.S. 452 (1991)). EPA points

to no “strange and indeterminate results,” id. at 133, that would

emerge from adopting the natural meaning of “any” in section

111(a)(4) of the Act. Given Congress’s goal in adopting the

1977 amendments of establishing a balance between economic

and environmental interests, see Wisconsin Elec. Power Co. v.

Reilly, 893 F.2d 901, 909-10 (7th Cir. 1990)(“WEPCo”), it is

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hardly “farfetched,” Nixon, 541 U.S. at 138, for Congress to

have intended NSR to apply to any type of physical change that

increases emissions. In this context, there is no reason the usual

tools of statutory construction should not apply and hence no

reason why “any” should not mean “any.” Indeed, EPA’s

interpretation would produce a “strange,” if not an

“indeterminate,” result: a law intended to limit increases in air

pollution would allow sources operating below applicable

emission limits to increase significantly the pollution they emit

without government review. 

Even without specific reliance on the effect of “any,” this

court has construed the definition of “modification” broadly. In

Alabama Power, the court explained that “the term

‘modification’ [in section 111(a)(4)] is nowhere limited to

physical changes exceeding a certain magnitude.” 636 F.2d at

400. Although the legislative history indicated that one Senator

intended the term to apply only to “major expansion

program[s],” id. at 400 n.47, the court observed that “the

language of the statute clearly did not enact such limit into law,”

id. at 400. The court further observed that “[i]mplementation of

the statute’s definition of ‘modification’ will undoubtedly prove

inconvenient and costly to affected industries; but the clear

language of the statute unavoidably imposes these costs except

for de minimis increases.” Id. More recently, in New York I, the

court looked to the plain meaning of section 111(a)(4) and the

absence of contrary legislative history in holding that even

pollution control projects constituted “physical changes.” New

York I, 413 F.3d at 40-42. Likewise, the Seventh Circuit

concluded in WEPCo that the purposes of the 1977 amendments

to the Act required an expansive reading of the plain language

of section 111(a)(4). See WEPCo, 893 F.2d at 908-10. 

EPA’s attempt to avoid the persuasive force of these

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decisions and to find ambiguity in the phrase “any physical

change” fails for a variety of reasons. Even assuming that the

decisions construing section 111(a)(4) are not “judicial

precedent holding that the statute unambiguously forecloses the

agency’s interpretation,” Nat’l Cable & Telecomms. Ass’n v.

Brand X Internet Servs., 125 S. Ct. 2688, 2700 (2005), Brand X,

on which EPA principally relies, does not drain those decisions

of all precedential value. The fact that previous judicial

interpretations of section 111(a)(4) have all reached the

conclusion that the text must be read broadly supports the

petitioner’s argument at Chevron step one, particularly because

those decisions — both before and after Chevron — used

language indicating the text was “clear” and “plain.” See New

York I, 413 F.3d at 40; WEPCo, 893 F.2d at 907; Alabama

Power, 636 F.2d at 400.

Even in the absence of such precedent, EPA’s approach to

interpreting “physical change,” as well as a similar approach by

industry intervenors that focuses on the thirty-nine words

following “any,” contravenes several rules of statutory

interpretation. EPA’s position is that the word “any” does not

affect the expansiveness of the phrase “physical change”; it only

means that, once the agency defines “change” as broadly or as

narrowly as it deems appropriate, everything in the agencydefined category is subject to NSR. To begin, that reading,

contrary to “a cardinal principle of statutory construction,”

would make Congress’s use of the word “any” “insignificant” if

not “superfluous.” TRW, 534 U.S. at 31 (quoting Duncan v.

Walker, 533 U.S. 167, 174 (2001)). Reading the definition in

this way makes the definition function as if the word “any” had

been excised from section 111(a)(4); there is virtually no role for

“any” to play. Additionally, the approaches of EPA and

industry would require Congress to spell out all the applications

covered by a definition before a court could conclude that

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3

 See TVA v. Hill, 437 U.S. 153, 173 n.18 (1978) (quoting Through

the Looking Glass,in THE COMPLETE WORKS OF LEWIS CARROLL 196

(1939)). 

Congress had directly spoken regarding a particular application,

ignoring the fact that a definition, like a general rule, need not

list everything it covers. See NPR v. FCC, 254 F.3d 226, 229

(D.C. Cir. 2001); see also Shays v. FEC, 414 F.3d 76, 108 (D.C.

Cir. 2005). EPA’s approach would ostensibly require that the

definition of “modification” include a phrase such as “regardless

of size, cost, frequency, effect,” or other distinguishing

characteristic. Only in a Humpty Dumpty world3 would

Congress be required to use superfluous words while an agency

could ignore an expansive word that Congress did use. We

decline to adopt such a world-view. 

In contrast, the petitioners’ approach, by adopting an

expansive reading of the phrase “any physical change,” gives

natural effect to all the words used by Congress and reflects both

their common meanings and Congress’s purpose in enacting the

1970 and 1977 amendments. See New York I, 413 F.3d at 11-13;

WEPCo, 893 F.2d at 909. To improve pollution control

programs in a manner consistent with the balance struck by

Congress in 1977 between “the economic interest in permitting

capital improvements to continue and the environmental interest

in improving air quality,” Chevron, 467 U.S. at 851, Congress

defined the phrase “physical change” in terms of increases in

emissions. After using the word “any” to indicate that “physical

change” covered all such activities, and was not left to agency

interpretation, Congress limited the scope of “any physical

change” to changes that “increase[] the amount of any air

pollutant emitted by such source or which result[] in the

emission of any air pollutant not previously emitted.” 42 U.S.C.

§ 7411(a)(4). Thus, only physical changes that do not result in

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4

 The court has no occasion to decide whether part replacements or

repairs necessarily constitute a “modification” under the definition

taken as a whole. 

emission increases are excused from NSR. Because Congress

expressly included one limitation, the court must presume that

Congress acted “intentionally and purposely,” Barnhart v.

Sigmon Coal Co., 534 U.S. 438, 452 (2002) (quoting Russello

v. United States, 464 U.S. 16, 23 (1983)), when it did not

include others. Cf. New York I, 413 F.3d at 39. So construed,

each word in the phrase “any physical change” has a meaning

consonant with congressional intent and the scope of the

definitional phrase is limited only by Congress’s determination

that such changes be linked to emission increases.

The expansiveness of the petitioners’ approach does not

leave the definition of “any physical change” without limits.

The modifier “any” cannot bring an activity that is never

considered a “physical change” in ordinary usage within the

ambit of NSR. But when Congress places the word “any”

before a phrase with several common meanings, the statutory

phrase encompasses each of those meanings; the agency may

not pick and choose among them. EPA, through its historical

practice and its words, has acknowledged that the equipment

replacements covered by the ERP are “physical changes” under

one of the ordinary meanings of the phrase. See 68 Fed. Reg. at

61,271-72. EPA may not choose to exclude that “[r]eal-world,

common-sense usage of the word ‘change.’” Id. at 61,271.

Moreover, a physical change is not the sole criterion for

triggering NSR under the definition of “modification.” The

expansive meaning of “any physical change” is strictly limited

by the requirement that the change increase emissions. See 42

U.S.C. § 7411(a)(4).4

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The fact that EPA, through the RMRR exclusion, has

historically interpreted “any physical change” to exclude

changes of trivial regulatory concern on a de minimis rationale,

see Alabama Power, 636 F.2d at 360-61, does not demonstrate

that the meaning of “physical change” is ambiguous. Rather, it

reflects an agency’s inherent power to overlook “trifling

matters,” id. at 360, a “principle [that] is a cousin of the doctrine

that, notwithstanding the ‘plain meaning’ of a statute, a court

must look beyond the words to the purpose of the act where its

literal terms lead to ‘absurd or futile results,’” id. at 360 n.89

(citations omitted). As the Supreme Court has instructed, “the

venerable maxim de minimis non curat lex (‘the law cares not

for trifles’) is part of the established background of legal

principles against which all enactments are adopted, and which

all enactments (absent contrary indication) are deemed to

accept.” Wisconsin Dep’t of Revenue v. William Wrigley, Jr.,

Co., 505 U.S. 214, 231 (1992). Reliance on the de minimis

doctrine invokes congressional intent that agencies diverge from

the plain meaning of a statue only so far as is necessary to avoid

its futile application. Thus, the court in Alabama Power

acknowledged that “EPA does have discretion, in administering

the statute’s ‘modification’ provision, to exempt from PSD

review some emission increases on grounds of de minimis or

administrative necessity.” 636 F.2d at 400. As applied, the

court explained that de minimis standards served to alleviate

“severe” administrative and economic burdens by lifting

requirements on “minuscule” emission increases. See id. at 405.

While the court today expresses no opinion regarding EPA’s

application of the de minimis exception, given the limits on the

scope of the de minimis doctrine, see Shays, 414 F.3d at 113-14,

EPA appropriately has not attempted to justify the ERP as an

exercise of de minimis discretion. As EPA has disclaimed the

assertion that its prior expansive interpretations of “any physical

change” were “absurd or futile,” 70 Fed. Reg. at 33,842, it is in

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no position to claim that the ERP is necessary to avoid

absurdity.

 

EPA’s remaining arguments also fail to demonstrate that the

phrase “any physical change” is ambiguous. The fact that the

court concluded that the word “increases” in section 111(a)(4)

is ambiguous, see New York I, 413 F.3d at 23, does not suggest

that the phrase “any physical change” is also ambiguous; unlike

the latter, the former is unaccompanied by a qualifier signaling

Congress’s intent. Congress’s use of the word “increases”

necessitated further definition regarding rate and measurement

for the term to have any contextual meaning. No such further

definition of “physical change” is required because Congress’s

use of the word “any” indicates the intent to cover all of the

ordinary meanings of the phrase, as evidenced by EPA’s

decades-long understanding and practice. Also, because the

court in New York I rejected industry’s contention that Congress

ratified the New Source Performance Standards (“NSPS”)

regulations on “modification” in the 1977 amendments, see id.

at 19-20, EPA’s reliance on its NSPS regulations to demonstrate

the ambiguity of “any physical change” is unavailing. As

discussed, the early emergence of a RMRR exclusion based on

a de minimis rationale does not blur the clarity of the phrase

“any physical change.” To the extent industry intervenors rely

on the NSPS regime to reargue their position that

“modifications” require an increase in maximum emission rates,

that issue was resolved in New York I, 413 F.3d at 19-20, 40; see

also New York v. EPA, 431 F.3d 801, 802-03 (D.C. Cir. 2005)

(Williams, J., concurring in denial of rehearing), and is

irrelevant because it does not address what constitutes a

“physical change.”

“Therefore, for EPA to avoid a literal interpretation at

Chevron step one, it must show either that, as a matter of

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historical fact, Congress did not mean what it appears to have

said, or that, as a matter of logic and statutory structure, it

almost surely could not have meant it.” Engine Mfrs. Ass’n v.

EPA, 88 F.3d 1075, 1089 (D.C. Cir. 1996). The discussion in

New York I, 413 F.3d at 12-13, and WEPCo, 893 F.2d at 909

(quoting H.R. REP. NO. 95-294, at 211, (1977), as reprinted in

1977 U.S.C.C.A.N. 1077, 1290)), of Congress’s basic goals in

enacting the 1977 amendments — to intensify the war against

air pollution, to establish a permit program that struck a balance

between economic and environmental interests, and to stimulate

technology to control pollution — demonstrate the futility of

EPA’s endeavor. EPA cannot show that historical fact prevents

a broad reading of “any physical change” inasmuch as EPA for

decades has interpreted that phrase to mean “virtually all

changes, even trivial ones, . . . generally interpret[ing] the

[RMRR] exclusion as being limited to de minimis

circumstances.” 68 Fed. Reg. at 61,272.

As for logic, EPA cannot show any incoherence in Congress

requiring NSR for equipment replacements that increase

emissions while allowing replacements that do not increase

emissions to avoid NSR. EPA acknowledges the reasonableness

of its past expansive interpretation of “any physical change.”

See id.; 70 Fed Reg. at 33,842; Respondent’s Br. at 29. To the

extent that EPA relies on the argument that allowing ERP

projects has the potential to lower overall emissions through

increased efficiency even if emissions increase at a source, the

court in New York I rejected EPA’s similar argument in support

of an exemption from NSR for pollution control projects. The

court stated that “Congress could reasonably conclude, for

example, that tradeoffs between pollutants are difficult to

measure, and thus any significant increase in emissions of any

pollutant should be subject to NSR.” New York I, 413 F.3d at

41. Absent a showing that the policy demanded by the text

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borders on the irrational, EPA may not “avoid the Congressional

intent clearly expressed in the text simply by asserting that its

preferred approach would be better policy.” Engine Mfrs., 88

F.3d at 1089.

Likewise, EPA offers no reason to conclude that the

structure of the Act supports the conclusion that “any physical

change” does not mean what it says. EPA does not address the

Act’s structure except in defending the reasonableness of the

ERP as a policy choice. In that context, EPA points to the Act’s

“many other systematic air programs,” particularly “model

market-based programs,” as support for its view that economic

and environmental interests can be effectively balanced while

limiting the application of NSR to existing sources. See 70 Fed.

Reg. at 33,844. Although EPA might prefer market-based

methods of controlling pollution, Congress has chosen a

different course with NSR.

Accordingly, we hold that the ERP violates section

111(a)(4) of the Clean Air Act in two respects. First, Congress’s

use of the word “any” in defining a “modification” means that

all types of “physical changes” are covered. Although the

phrase “physical change” is susceptible to multiple meanings,

the word “any” makes clear that activities within each of the

common meanings of the phrase are subject to NSR when the

activity results in an emission increase. As Congress limited the

broad meaning of “any physical change,” directing that only

changes that increase emissions will trigger NSR, no other

limitation (other than to avoid absurd results) can be implied.

The definition of “modification,” therefore, does not include

only physical changes that are costly or major. Second,

Congress defined “modification” in terms of emission increases,

but the ERP would allow equipment replacements resulting in

non-de minimis emission increases to avoid NSR. Therefore,

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because it violates the Act, we vacate the ERP.

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