Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-09-01297/USCOURTS-caDC-09-01297-0/pdf.json

Parties Involved:
Cement Kiln Recycling Coalition
Amicus Curiae for Petitioner
Coalition for Responsible Waste Incineration
Intervenor for Petitioner
Energy Recovery Council
Petitioner
Environmental Protection Agency
Respondent
HMIWI Coalition
Amicus Curiae for Petitioner
Medical Waste Institute
Petitioner
Natural Resources Defense Council
Intervenor for Respondent
Sierra Club
Intervenor for Respondent

Document Text:

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued November 16, 2010 Decided June 24, 2011

No. 09-1297

MEDICAL WASTE INSTITUTE AND ENERGY RECOVERY

COUNCIL,

PETITIONERS

v.

ENVIRONMENTAL PROTECTION AGENCY,

RESPONDENT

COALITION FOR RESPONSIBLE WASTE INCINERATION, ET AL.,

INTERVENORS

On Petition for Review of a Final Action

of the Environmental Protection Agency

Michael B. Wigmore argued the cause for petitioners. With

him on the briefs was Sandra P. Franco.

Ronald A. Shipley, William L. Wehrum, James W. Rubin,

and Richard G. Stoll were on the briefs for intervenor Coalition

for Responsible Waste Incineration and amici curiae

Manufacturers’ HMIWI Coalition and Cement Kiln Recycling

Coalition in support of petitioners.

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Perry M. Rosen, Attorney, U.S. Department of Justice,

argued the cause for respondent. With him on the brief was

Michael W. Thrift, Counsel, U.S. Environmental Protection

Agency. Daniel R. Dertke, Attorney, U.S. Department of

Justice, entered an appearance.

James S. Pew argued the cause for intervenors Natural

Resources Defense Council and Sierra Club in support of

respondent. With him on the brief were Colin C. O'Brien and

John D. Walke. 

Before: SENTELLE, Chief Judge, and GINSBURG and

KAVANAUGH, Circuit Judges.

Opinion for the Court filed by Chief Judge SENTELLE.

SENTELLE, Chief Judge: Petitioners Medical Waste

Institute and Energy Recovery Council, trade associations

representing the medical waste and waste-to-energy industries,

respectively, petition for review of a regulation promulgated by

the Environmental Protection Agency (“EPA”) setting

performance standards for new and existing

hospital/medical/infectious waste incinerators (“HMIWI”). 

Petitioners argue that the data set EPA used to establish these

standards was flawed, that the agency’s pollutant-by-pollutant

approach to setting target emissions levels was impermissible,

and that the agency acted arbitrarily when it removed a

provision exempting HMIWI from complying with the standards

during periods of startup, shutdown, and malfunction. The EPA

counters that this court lacks jurisdiction to review the two latter

claims, and that the use of the data set was justifiable. We agree

with the EPA and deny the petition for review.

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I.

The challenged regulation, titled “Standards of Performance

for New Stationary Sources and Emissions Guidelines for

Existing Sources: Hospital/Medical/Infectious Waste

Incinerators,” was issued pursuant to Section 129 of the Clean

Air Act (“CAA”), 42 U.S.C. § 7429. The statute directs the

EPA to set required levels of emissions reduction for nine listed

air pollutants, as well as for opacity where appropriate. 

§ 7429(a)(4). The statute sets forth the factors EPA is to

consider in establishing the standards.

Standards applicable to solid waste incineration units . . .

shall reflect the maximum degree of reduction in emissions

of air pollutants listed under section (a)(4) that the

Administrator, taking into consideration the cost of

achieving such emission reduction, and any non-air quality

health and environmental impacts and energy requirements,

determines is achievable for new or existing units in each

category. The Administrator may distinguish among

classes, types . . . and sizes of units within a category in

establishing such standards. The degree of reduction in

emissions that is deemed achievable for new units in a

category shall not be less stringent than the emissions

control that is achieved in practice by the best controlled

similar unit, as determined by the Administrator. Emissions

standards for existing units in a category may be less

stringent than standards for new units in the same category

but shall not be less stringent than the average emissions

limitation achieved by the best performing 12 percent of

units in the category . . . .

§ 7429(a)(2). The level of emissions control identified by the

Administrator pursuant to this provision is commonly known as

a “maximum achievable control technology,” or “MACT,”

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standard. 74 Fed. Reg. 51,368, 51,370 (Oct. 6, 2009). The

minimum levels of stringency that the EPA may require are

referred to as the MACT “floors.” Id.; see Sierra Club v. EPA

(“Sierra Club-HMIWI”), 167 F.3d 658, 660 (D.C. Cir. 1999). 

Once the EPA establishes these floors, it is permitted to set more

stringent MACT standards – that is, go “beyond the floor” – if,

taking into account the factors identified in the statute, it

determines that more stringent emissions limitations are

achievable. 74 Fed. Reg. at 51,370. The statute also directs

EPA to review and, if appropriate, revise the standards issued

pursuant to this section every five years. § 7429(a)(5).

EPA first promulgated MACT standards pursuant to the

CAA in September of 1997. 62 Fed. Reg. 48,348 (Sept. 15,

1997). EPA divided the HMIWI population into three

subcategories (small-, medium-, and large-capacity units) and

set standards for the nine listed pollutants in each category,

which resulted in 27 separate floor determinations. See 167 F.3d

at 660. Because it did not have enough data to calculate MACT

floors for existing units based on emissions limitations actually

achieved by best performing units, it used surrogate data –

specifically, emissions limitations set by state regulations and

permit requirements – to make its calculations. See 167 F.3d at

660-61; 62 Fed. Reg. at 48,352; 72 Fed. Reg. 5510, 5513 (Feb.

6, 2007). But for 17 of the 27 floor determinations, the share of

the HMIWI population covered by the applicable regulations

was less than 12 percent. 167 F.3d at 661. In order to meet the

statutory requirement that the MACT floor in each category be

set at the level of the average emissions limitation achieved by

the top-performing 12 percent of units, the EPA supplemented

its data set yet again, this time using “uncontrolled” data – that

is, data from incinerators with no pollution controls in place. Id.

 The Sierra Club petitioned for review of the 1997 MACT

standards. This court concluded that “EPA’s method looks

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hopelessly irrational.” Sierra Club-HMIWI, 167 F.3d at 664. 

We did not vacate the standards altogether, however, because

“[i]t is possible that EPA may be able to explain [the standards],

and the Sierra Club has expressly requested that we leave the

current regulations in place during any remand, rather than

eliminate any federal control at all.” Id. We remanded the case

to the EPA for further explanation. 

The 1997 regulations that remained in place after the Sierra

Club-HMIWI decision were fully implemented by September

2002. 72 Fed. Reg. at 5510. In the wake of the implementation

of these standards, approximately 94% of HMIWI shut down

and an additional 3% obtained exemptions from the regulations. 

Id. at 5518. 

In February 2007, EPA finally issued a proposed rule in

response to the 1999 remand. 72 Fed. Reg. at 5510. In this

proposal, EPA offered a detailed rationale for its approach to

determining the MACT floors. It identified and corrected errors

in its previous methodology, which resulted in revised MACT

floor determinations. The new floor determinations were based

on much of the same data upon which EPA had relied in 1997,

but the adjusted methodology “result[ed] in proposed emission

limits that in many cases are more stringent than the limits

promulgated in 1997.” In addition to undertaking revisions in

response to this court’s remand, the EPA made further revisions

in fulfillment of its obligation under the CAA to conduct a

review of emissions standards every five years and revise the

standards as necessary to keep them aligned with the statutory

requirements. 72 Fed. Reg. at 5518; see §§ 7411(a)(1),

7429(a)(5). Specifically, in performing its five-year review it

revised some of the emissions limitations “to reflect the actual

performance of the MACT technologies” under the 1997

standards. 72 Fed. Reg. at 5533.

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On December 1, 2008, the EPA issued a new proposed rule,

declaring that “following recent court decisions and receipt of

public comments regarding [the February 2007] proposal, we

chose to re-assess our response to the Court’s remand.” 73 Fed.

Reg. 72,962, 72,962 (Dec. 1, 2008). The EPA explained it no

longer was confident that state regulatory limits were reasonable

substitutes for actual emissions data. Because of this uncertainty

combined with the unavailability of emissions data from the

many units that had shut down in the wake of the 1997

requirements, EPA concluded that “the best course of action is

to re-propose a response to the remand based on data from the

57 currently operating HMIWI.” Id. at 72,970. Although the

EPA stated that this new proposed rule discharged its duty to

perform a five-year review, it maintained that its recalculation

of MACT floors was done pursuant to its duty to set emissions

limitations in the first instance, not solely in fulfillment of its

review duty under § 7429(a)(5). 

The EPA issued its final rule on October 6, 2009. 74 Fed.

Reg. at 51,368. The final rule used the same basic

methodological approach as the 2008 proposal, with a few

statistical adjustments that resulted in generally more stringent

limits than had been previously proposed. In the final rule, the

EPA for the first time removed the “startup, shutdown, and

malfunction exemption” (“SSM exemption”), which had

provided that no waste was counted against a unit during an

SSM period. 

This challenge followed the publication of the final rule. 

The Clean Air Act empowers us to reverse the Administrator’s

action in rulemaking if it is “arbitrary, capricious, an abuse of

discretion, or otherwise not in accordance with law.” 

§ 7607(d)(9)(A); see Bluewater Network v. EPA, 370 F.3d 1, 11

(D.C. Cir. 2004) (noting that review under the CAA’s “arbitrary

and capricious” standard is the same as review under the

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Administrative Procedure Act, 5 U.S.C. § 706(2)(A)). 

II.

A.

The petitioners contend that the EPA exceeded its authority

under the Clean Air Act when it revised the HMIWI MACT

floors based on data collected after implementation of the 1997

standards. It is undisputed that once the EPA has set the floors,

it may thereafter establish standards more stringent than those

floors. However, petitioners raise an objection to the standards

established by the EPA after remand of the earlier decision. The

objection is double faceted, but in both its aspects is based on

the proposition that the CAA only authorizes a one-time

establishment of floors based on the level of emission control

“achieved in practice by the best controlled similar unit” for new

units, and at “the average emissions limitation achieved by the

best performing 12 percent of units in the category” for existing

units. Petitioners’ first objection to the setting of the standards

before us is that the EPA based its calculations not on the best

performing 12 percent at the time of the original rulemaking, but

rather on the best performing 12 percent of the remaining

entities in the field after the shutdown of 97 percent of the units

existing during the earlier proceeding. As the remaining units

are the most efficient of the original group, the emissions levels

upon which the EPA based its floor were ratcheted downward. 

Petitioners refer to this approach as “MACT-on-MACT.” That

gives rise to the second facet of this argument. Petitioners

contend that the new “floors” are in fact revised standards

subject to the provisions of §§ 7411(a)(1) and 7429(a)(5), which

require the EPA to consider the cost of compliance. Briefly put,

petitioners contend that to set standards more stringent than

floors based on the 1997 data, the EPA must consider cost and

other factors listed in the statute—either as part of an initial

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standard-setting process or as part of the five-year review.

Petitioners further argue that the remand in Sierra ClubHMIWI did not authorize the recalculation of the MACT floors. 

They argue that by remanding the standards without vacating,

the court “affirmed the validity of the EPA’s 1997 data set.” 

The EPA, they contend, should have continued to use that data

set in responding to the remand, as it did in its 2007 proposal. 

When the EPA chose instead to abandon that data set and rely

on compliance data collected after the 1997 standards were

implemented, it was acting outside the scope of the remand.

The EPA responds that nothing in the Clean Air Act or in

the Sierra Club-HMIWI decision suggests that it is prohibited

from resetting the MACT floors in order to correct its own

errors. It suggests that the approach petitioners label “MACTon-MACT” would be more accurately described as “MACT-onUnsupportable-Standards-Erroneously-Labeled-as-MACT.” It

insists that its action was a reasonable response to this court’s

remand.

We agree with the EPA. Granted, its action was fraught

with cunctation. The ten-year gap between our remand and the

promulgation of the revised floors no doubt contributed to the

unavailability of emissions data from a larger segment of the

HMIWI units operating in 1997. The delay imposed protracted

regulatory uncertainty on the industry, which continued to be

subject to the 1997 standards while the agency dithered. But

neither the length of the delay nor the problems caused by that

delay affect the ultimate validity of the EPA’s product. 

When this court remanded the 1997 standards without

vacating them, we did not thereby affirm the data set the EPA

had used to set those standards. We did not hold that the use of

regulatory data to set MACT floors was “inherently

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impermissible” under the statute, but instead left open the

possibility that the use of such data might be acceptable “as long

as it allows a reasonable inference as to the performance of the

top 12 percent of units.” Sierra Club-HMIWI, 167 F.3d at 662-

63. We most certainly did not mandate that EPA must proceed

from the data set it had employed in the initial setting of the

floors. Indeed, we withheld vacatur for the purpose of allowing

the EPA an opportunity to establish the reasonableness of its

then-current regulations. Had we been satisfied of the adequacy

of the regulations and the data set on which the regulations were

based, the remand would hardly have been necessary. As we

stated at the time, “[i]t is possible that EPA may be able to

explain [its methodology].” Id. at 664. We remanded so that

the agency could attempt to do so. We declined to vacate the

standards at the express request of the petitioner Sierra Club,

which did not want the court to eliminate all federal control

while the EPA determined its next step. Id. 

In the course of revisiting its 1997 standards and attempting

to arrive at a reasonable explanation for its action, the EPA came

to believe that the approach it had taken in setting those

standards was unsupportable. Far from being an inappropriate

response to the remand, this is precisely the type of analytic

assessment we expect an agency to conduct when its regulation

has been remanded by a court. Once the EPA concluded that the

regulatory data it had used in 1997 did not reliably approximate

the emissions levels achieved in practice by best performing

units, it rightly recognized that it could not continue to use that

data set. By the time the EPA had identified the infirmities in its

data set, it was no longer able to gather emissions data from the

vast majority of HMIWI units operational at the time the

original floors were promulgated. See 73 Fed. Reg. at 72,970. 

Therefore, it chose to use “the most reliable” data available:

actual emissions levels from the 57 units remaining in operation. 

Id. This decision constituted a reasonable attempt at following

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the statute’s direction to set the MACT floors at a level achieved

by the best performing units. It was also well within the scope

of the remand.

At oral argument, counsel for the petitioners affirmed that

they would not be challenging EPA’s decision to reset the floors

as so-called MACT-on-MACT if the court had vacated the

standards at the time of remand, because in that case the agency

would be regulating on a blank slate. We are not persuaded that

remand without vacatur as opposed to vacatur has the outcomechanging significance the petitioners ascribe to it. Although in

Sierra Club-HMIWI we did not vacate the standards, we made

clear that we had serious concerns about their validity. The

standards remained in place, but they had not been accepted by

the court as fulfillment of the agency’s duty under the Clean Air

Act to set emissions levels. 

Sierra Club-HMIWI left open the question whether the EPA

could offer a reasonable explanation for its use of the regulatory

data in its initial determination. On remand, the EPA

determined that it could not. When the EPA determined that its

regulation rested on unreliable data and that it had to reset the

floors, the agency was functionally regulating on a blank slate

even though the regulation continued to remain on the books. 

Therefore, the emissions levels contained in the new rule are

properly characterized not as “beyond-the-floor,” or as a

revision conducted as part of the five-year review, but as the

floor-setting that is the initial step in establishing emissions

standards. See 42 U.S.C. § 7429(a)(2), (5). The former require

consideration of the costs of compliance, but the latter does not. 

Id. We hold that, given this court’s previous remand without

vacatur and the agency’s subsequent determination that it was

unable to provide a rational explanation for continued use of the

data upon which it had relied, the EPA acted lawfully in

resetting the MACT floors based on post-compliance emissions

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data.

B.

The petitioners’ second challenge is to the EPA’s

“pollutant-by-pollutant” approach to setting MACT floors. In

other words, the petitioners are challenging EPA’s interpretation

of the statutory requirement that it determine the level of

emissions control achieved by “the best controlled similar unit”

to permit it to identify a top-performing unit (or units, when

setting standards for existing HMIWI) for each individual

pollutant, rather than one unit that is the best controlled overall. 

See § 7429(a)(2). The result, petitioners argue, is that the floors

are set with reference to “a hypothetical ‘super unit’” that attains

maximum emissions control for every pollutant. The petitioners

insist that EPA’s approach, and the resulting floors, violate the

CAA because these floors have never been “achieved in

practice” by any single unit.

We will not reach the merits of this challenge. 

Petitioners’ claim is barred by 42 U.S.C. § 7607(b)(1). That

provision directs that any petition for review must be filed

within sixty days from the date that notice of the challenged

action appears in the Federal Register. The filing period in the

Clean Air Act “is jurisdictional in nature,” Motor & Equip.

Mfrs. Ass’n v. Nichols, 142 F.3d 449, 460 (D.C. Cir. 1998)

(internal quotation marks omitted); if the petitioners have failed

to comply with it, we are powerless to address their claim. 

Petitioners did in fact fail to comply.

EPA used the same pollutant-by-pollutant approach to

set the standards in its 1997 rule. See 62 Fed. Reg. at 48,363-64. 

Although this approach was questioned by commenters (and

EPA responded to those comments in its final rule), see id., no

one challenged the pollutant-by-pollutant approach in court at

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that time. The sixty-day window provided by statute has long

since closed, and we may not reopen it and entertain a belated

challenge to the EPA’s pollutant-by-pollutant approach now. 

The petitioners point out that they lodged objections to the

approach during the rulemaking that culminated in the 2009

final rule, see 74 Fed. Reg. at 51,380-82, in compliance with the

statutory requirement that objections must be “raised with

reasonable specificity during the period for public comment” in

order to be preserved for judicial review. See § 7607(d)(7)(B). 

While this is true, a renewed objection before the agency does

not compensate for the petitioners’ failure to raise their

complaint before the court within sixty days of the EPA’s first

use of the pollutant-by-pollutant approach, as required by the

statute. Nor does the EPA’s defense of the methodology in its

comments demonstrate it actually or constructively reopened the

issue. See Am. Road & Transp. Builders Ass’n v. EPA, 588 F.3d

1109, 1115 (D.C. Cir. 2009). The petitioners’ challenge to the

EPA’s longstanding practice of setting floors based on the

emissions levels achieved by the best performing units with

respect to each individual pollutant is barred.

C.

The petitioners’ final challenge is to the EPA’s removal of

a provision exempting HMIWI from meeting emissions

standards during periods of startup, shutdown, or malfunction

(“SSM”). The SSM exemption had appeared in the 1997 rule,

and was retained in the 2007 proposal and 2008 re-proposal. 

See 74 Fed. Reg. at 51,375. But in the 2009 final rule, the EPA

announced its decision to remove the exemption and make the

emissions limits applicable at all times. Id. The EPA grounded

its action in this court’s Sierra Club v. EPA (“Sierra ClubSSM”) opinion, published after the 2008 proposal issued, which

vacated provisions (promulgated under a different section of the

CAA) exempting “major sources of air pollution” from

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following normal emissions standards during SSM periods. 551

F.3d 1019, 1021 (D.C. Cir. 2008). Although the EPA

recognized that the Sierra Club-SSM decision did not directly

impact the HMIWI standards at issue in the rulemaking then

underway, it concluded that “the legality of source categoryspecific SSM provisions such as those adopted in the 1997

HMIWI rule [was] questionable” in the wake of the court’s

opinion. See 74 Fed. Reg. at 51,394. In addition, it determined

that “the exemption and definitions as promulgated in 1997

provided virtually no utility” to HMIWI units. Id. Petitioners

argue that the EPA’s decision to remove the SSM exemption

was arbitrary and capricious.

Again the petitioners have failed to comply with a

procedural prerequisite for judicial review. The Clean Air Act

instructs that:

Only an objection to a rule or procedure which was raised

with reasonable specificity during the period for public

comment (including any public hearing) may be raised

during judicial review. If the person raising an objection

can demonstrate to the Administrator that it was

impracticable to raise such objection within such time or if

the grounds for such objection arose after the period for

public comment (but within the time specified for judicial

review) and if such objection is of central relevance to the

outcome of the rule, the Administrator shall convene a

proceeding for reconsideration of the rule and provide the

same procedural rights as would have been afforded had the

information been available at the time the rule was

proposed.

§ 7607(d)(7)(B). Petitioners did not raise their objection to the

removal of the SSM exemption before the agency with

reasonable specificity. Petitioners correctly point out that

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because the first indication from the agency that it would

remove the exemption was in the final rule, they did not have a

provocation or an opportunity to object to the removal during

the comment period. But the statute provides for just such a

situation by offering an alternative way to present an objection

to the agency in order to tee it up for judicial review. It requires

an interested party unable to raise its objection during the

comment period to file a motion for reconsideration. Petitioners

did not do so, and “[p]etitioners who fail to comply with this

exhaustion requirement are barred from seeking judicial

review.” Nat’l Ass’n of Clean Air Agencies v. EPA, 489 F.3d

1221, 1231 (D.C. Cir. 2007). We will not review the

petitioners’ challenge to the EPA’s decision to remove the SSM

exemption from the final rule.

III.

We hold that the EPA’s decision to use emissions data from

the HMIWI units remaining in operation after the

implementation of the 1997 standards, once it determined that

the data set upon which it had relied in 1997 was flawed, was

reasonable. We do not have jurisdiction to review the

challenges to the EPA’s long-standing practice of setting

emissions floors based on emissions levels achieved by the best

performing unit or units for each individual pollutant, and to the

agency’s removal of an exemption from compliance with

emissions limitations during periods of startup, shutdown, and

malfunction. 

The petition is dismissed in part and denied in part.

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