Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-05-01275/USCOURTS-caDC-05-01275-0/pdf.json

Parties Involved:
Environmental Protection Agency
Respondent
Utility Air Regulatory Group
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 December 6, 2007 Decided February 8, 2008

No. 05-1097

STATE OF NEW JERSEY, ET AL.,

PETITIONERS

v.

ENVIRONMENTAL PROTECTION AGENCY,

RESPONDENT

UTILITY AIR REGULATORY GROUP, ET AL.,

INTERVENORS

Consolidated with Nos.

05-1104, 05-1116, 05-1118, 05-1158, 05-1159, 05-1160,

05-1162, 05-1163, 05-1164, 05-1167, 05-1174, 05-1175,

05-1176, 05-1183, 05-1189, 05-1263, 05-1267, 05-1270,

05-1271, 05-1275, 05-1277, 06-1211, 06-1220, 06-1231,

06-1287, 06-1291, 06-1293, 06-1294 

On Petitions for Review of the Final Action of the

Environmental Protection Agency

USCA Case #05-1275 Document #1097932 Filed: 02/08/2008 Page 1 of 18
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James S. Pew argued the cause for Environmental

Petitioners. With him on the briefs were John D. Walke, Jon

Devine, Scott Edwards, Jon A. Mueller, Ann Brewster Weeks,

Jonathan F. Lewis, Brad Kuster.

Vanya S. Hogen, Colette Routel, Sarah I. Wheelock, Riyaz

A. Kanji, Philip E. Katzen, and Ann Tweedy were on the briefs

for petitioners National Congress of American Indians and

Treaty Tribes. Brian B. O'Neill entered an appearance.

Bart E. Cassidy and Meredith DuBarry Huston were on the

briefs for petitioner ARIPPA. Carol F. McCabe entered an

appearance.

Scott C. Oostdyk, Neal J. Cabral, Grant F. Crandall, Judith

Ellen Rivlin, and Eugene M. Trisko were on the briefs for

petitioners American Coal for Balanced Mercury Regulation, et

al. and United Mine Workers of America, AFL-CIO. 

James B. Vasile, Brian R. Gish, Susan E. Reeves, and

Robert K. Reges were on the briefs for petitioner Alaska

Industrial Development and Export Authority.

Anne Milgram, Attorney General, Attorney General’s

Office of the State of New Jersey, Christopher D. Ball and Ruth

E. Carter, Deputy Attorneys General, Edmund G. Brown, Jr.,

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

California, Susan Durbin, Deputy Attorney General, Richard

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

State of Connecticut, Matthew Levine, Assistant Attorney

General, Joseph R. Biden, III, 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, Ann

Alexander, Assistant Attorney, G. Steven Rowe, Attorney

USCA Case #05-1275 Document #1097932 Filed: 02/08/2008 Page 2 of 18
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General, Attorney General’s Office of the State of Maine,

Gerald D. Reid, Assistant Attorney General, Douglas F.

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

State of Maryland, Kathy M. Kinsey and Judah Prero, Assistant

Attorneys General, Martha Coakley, Attorney General, Attorney

General’s Office of the Commonwealth of Massachusetts,

William L. Pardee, Assistant Attorney General, Michael A. Cox,

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

Michigan, Michigan Department of Environmental Quality,

Thomas L. Casey, Solicitor General, Alan F. Hoffman and Neil

D. Gordon, Assistant Attorneys General, Lori Swanson,

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

Minnesota, Alan C. Williams, 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, Gary King, Attorney General, Attorney

General’s Office of the State of New Mexico, Karen L. Reed,

Assistant Attorney General, Andrew M. Cuomo, Attorney

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

Jacob Hollinger, Assistant Attorney General, 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,

Terence Tierney, Special Assistant Attorney General, William H.

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

State of Vermont, Kevin O. Leske, Assistant Attorney General,

J.B. Van Hollen, Attorney General, Attorney General’s Office

of the State of Wisconsin, Thomas J. Dawson, Assistant

Attorney General, and William R. Phelan, Jr., Attorney, for the

City of Baltimore, Maryland, were on the briefs for Government

Petitioners. Jean P. Reilly and Kevin P. Auerbacher, Assistant

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

New Jersey, Peter H. Lehner, Assistant Attorney General,

Attorney General’s Office of the State of Connecticut,

Christopher D. Coppin, Assistant Attorney General, Attorney

USCA Case #05-1275 Document #1097932 Filed: 02/08/2008 Page 3 of 18
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General’s Office of the State of New Mexico, Gerald T. Karr,

Assistant Attorney General, Attorney General’s Office of the

State of Illinois, entered appearances.

Henry V. Nickel, F. William Brownell, David G. Scott, and

Lee B. Zeugin were on the briefs for petitioner Utility Air

Regulatory Group.

Eric G. Hostetler, Attorney, U.S. Department of Justice,

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

John C. Cruden, Deputy Assistant Attorney General, Jon M.

Lipshultz and Matthew R. Oakes, Attorneys, and Carol S.

Holmes and Howard J. Hoffman, Counsel, U.S. Environmental

Protection Agency. Wendy L. Blake, Attorney, U.S.

Environmental Protection Agency, entered an appearance.

Lee B. Zeugin argued the cause for Industry State

Intervenors and State Amici Curiae. With him on the briefs

were Troy King, Attorney General, Attorney General’s Office of

the State of Alabama, Milt E. Belcher, Assistant Attorney

General, Wayne Stenehjem, Attorney General, Attorney

General’s Office of the State of North Dakota, Paul Seby,

Special Assistant, Lyle Witham, Solicitor General, Steve Carter,

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

Indiana, Thomas M. Fisher, Assistant Attorney General,

LawrenceE. Long, Attorney General, Attorney General’s Office

of the State of South Dakota, Roxanne Giedd, Deputy Attorney

General, Mark J. Rudolph, Senior Counsel, State of West

Virginia, Department of Environmental Protection, Peter H.

Wyckoff, Henri D. Bartholomot, Jon C. Bruning, Attorney

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

Jodi Fenner, Assistant Attorney General, Patrick Crank,

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

Wyoming, Nancy Vehr, Assistant Attorney General, Henry V.

Nickel, F. William Brownell, Lee B. Zeugin, William M.

USCA Case #05-1275 Document #1097932 Filed: 02/08/2008 Page 4 of 18
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Bumpers, Debra J. Jezouit, and Peter Glaser. Valerie M.

Tachtiris, Assistant Attorney General, Attorney General's Office

of State of Indiana, Jay A. Jerde and Vicci M. Colgan, Assistant

Attorneys General, Attorney General's Office of State of

Wyoming, Kevin C. Newsom, Harold P. Quinn, Jr., and Claudia

M. O'Brien entered appearances. 

Leah W. Casey was on the brief for intervenor for petitioner

Adirondack Mountain Club.

Charles H. Knauss, Sandra P. Franco, and David G. Scott,

II were on the brief for intervenors Producers for Electric

Reliability and West Associates. Karma B. Brown entered an

appearance.

John T. Suttles, Jr. was on the brief for intervenors

Physicians for Social Responsibility, et al. 

Peter Glaser, Daniel J. Popeo, and Paul D. Kamenar were

on the brief for amicus curiae Washington Legal Foundation in

support of respondent.

Before: ROGERS, TATEL and BROWN, Circuit Judges.

Opinion for the Court by Circuit Judge ROGERS.

ROGERS, Circuit Judge: Before the court are petitions for

review of two final rules promulgated by the Environmental

Protection Agency regarding the emission of hazardous air

pollutants (“HAPs”) from electric utility steam generating units

(“EGUs”). The first rule removes coal- and oil-fired EGUs from

the list of sources whose emissions are regulated under

section 112 of the Clean Air Act (“CAA”), 42 U.S.C. § 7412.

Revision of December 2000 Regulatory Finding (“Delisting

Rule”), 70 Fed. Reg. 15,994 (Mar. 29, 2005). The second rule

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sets performance standards pursuant to section 111, 42 U.S.C.

§ 7411, for new coal-fired EGUs and establishes total mercury

emissions limits for States and certain tribal areas, along with a

voluntary cap-and-trade program for new and existing coal-fired

EGUs. Standards of Performance for New and Existing

Stationary Sources: Electric Utility Steam Generating Units

(“CAMR”), 70 Fed. Reg. 28,606 (May 18, 2005). 

Petitioners contend that the Delisting Rule is contrary to the

plain text and structure of section 112. In response, EPA and

certain intervenors rely on section 112(n), which sets special

conditions before EGUs can be regulated under section 112, to

justify the rule. We hold that the delisting was unlawful.

Section 112 requires EPA to regulate emissions of HAPs.

Section 112(n) requires EPA to regulate EGUs under section

112 when it concludes that doing so is “appropriate and

necessary.” In December 2000, EPA concluded that it was

“appropriate and necessary” to regulate mercury emissions from

coal- and oil-fired power plants under section 112 and listed

these EGUs as sources of HAPs regulated under that section. In

2005, after reconsidering its previous determination, EPA

purported to remove these EGUs from the section 112 list.

Thereafter it promulgated CAMR under section 111. EPA’s

removal of these EGUs from the section 112 list violates the

CAA because section 112(c)(9) requires EPA to make specific

findings before removing a source listed under section 112; EPA

concedes it never made such findings. Because coal-fired EGUs

are listed sources under section 112, regulation of existing coalfired EGUs’ mercury emissions under section 111 is prohibited,

effectively invalidating CAMR’s regulatory approach.

Accordingly, the court grants the petitions and vacates both

rules.

USCA Case #05-1275 Document #1097932 Filed: 02/08/2008 Page 6 of 18
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I.

In 1970, Congress added section 112 to the CAA. Pub. L.

No. 91-604, § 4(a), 84 Stat. 1676, 1685 (1970). In its original

form, section 112 required EPA to list HAPs that should be

regulated because they could “cause, or contribute to, an

increase in mortality or an increase in serious irreversible[] or

incapacitating reversible[] illness.” Id. § 112(a)(1). Over the

next eighteen years, however, EPA listed only eight HAPs,

established standards for only seven of these and as to these

seven addressed only a limited selection of possible pollution

sources. See Nat’l Mining Ass’n v. EPA, 59 F.3d 1351, 1353 n.1

(D.C. Cir. 1995); S. COMM. ON ENV’T & PUB. WORKS, CLEAN

AIR ACT AMENDMENTS OF 1989, S. REP. NO. 101-228, at 131

(1989), reprinted in 1990 U.S.C.C.A.N. 3385, 3516.

In 1990, Congress, concerned about the slow pace of EPA’s

regulation of HAPs, altered section 112 by eliminating much of

EPA’s discretion in the process. See, e.g., Nat’l Lime Ass’n. v.

EPA, 233 F.3d 625, 633-34 (D.C. Cir. 2000). Three aspects of

the amendments are relevant here. 

First, Congress required EPA to regulate more than one

hundred specific HAPs, including mercury and nickel

compounds. CAA § 112(b)(1). Further, EPA was required to

list and to regulate, on a prioritized schedule, id. § 112(e)(1)-(3),

“all categories and subcategories of major sources and areas

sources” that emit one or more HAPs, id. § 112(c)(1). In

seeking to ensure that regulation of HAPs reflects the

“maximum reduction in emissions which can be achieved by

application of [the] best available control technology,” S. REP.

NO. 101-228, at 133, reprinted in 1990 U.S.C.C.A.N. at 3518;

see, e.g., CAA § 112(g)(2)(A), Congress imposed specific,

strict pollution control requirements on both new and existing

sources of HAPs. Congress specified that new sources must

USCA Case #05-1275 Document #1097932 Filed: 02/08/2008 Page 7 of 18
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adopt at minimum “the emission control that is achieved in

practice by the best controlled similar source, as determined by

the Administrator.” Id. § 112(d)(3). Existing sources (with

certain exceptions) must adopt emission controls equal to the

“average emission limitation achieved by the best performing 12

percent of the existing sources.” Id. § 112(d)(3)(A). 

Second, Congress restricted the opportunities for EPA and

others to intervene in the regulation of HAP sources. For HAPs

that result in health effects other than cancer, as is true of

mercury, Congress directed that the Administrator “may delete

any source category” from the section 112(c)(1) list only after

determining that “emissions from no source in the category or

subcategory concerned . . . exceed a level which is adequate to

protect public health with an ample margin of safety and no

adverse environmental effect will result from emissions from

any source.” Id. § 112(c)(9). Third parties may not challenge

the Administrator’s decision to add a pollutant to the list under

section 112(b) or a source category or subcategory to the list

under section 112(c) until “the Administrator issues emission

standards for such pollutant or category.” Id. § 112(e)(4).

Third, Congress required the Administrator to evaluate

regulatory options with care and to meet certain conditions

before listing EGUs as an HAP source under section 112(c)(1).

Specifically: 

[t]he Administrator shall perform a study of the

hazards to public health reasonably anticipated to occur

as a result of emissions by [EGUs] of pollutants listed

under subsection (b) of this section after imposition of

the requirements of this chapter. The Administrator

shall report the results of this study to the Congress

within 3 years after November 15, 1990. The

Administrator shall develop and describe in the

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Administrator’s report to Congress alternative control

strategies for emissions which may warrant regulation

under this section. The Administrator shall regulate

[EGUs] under this section, if the Administrator finds

such regulation is appropriate and necessary after

considering the results of the study required by this

subparagraph.

Id. § 112(n)(1)(A) (emphasis added).

The study of public health hazards required by section

112(n)(1)(A) was finally completed in 1998. This study found

“a plausible link between anthropogenic releases of mercury

from industrial and combustion sources in the United States and

methylmercury in fish” and that “mercury emissions from

[EGUs] may add to the existing environmental burden.” EPA,

OFFICE OF AIR QUALITY PLANNING AND STANDARDS,STUDY OF

HAZARDOUS AIR POLLUTANT EMISSIONS FROM ELEC. UTIL.

STEAM GENERATING UNITS--FINAL REPORT TO CONG. 7-1, 45

(1998). On December 20, 2000, the Administrator announced

— in light of the study mandated by section 112(n)(1)(A), as

well as subsequent information and consideration of alternative

feasible control strategies — that it was “appropriate and

necessary” to regulate coal- and oil-fired EGUs under

section 112 because, as relevant, mercury emissions from EGUs,

which are the largest domestic source of mercury emissions,

present significant hazards to public health and the environment.

Regulatory Finding on the Emissions of Hazardous Air

Pollutants From Electric Utility Steam Generating Units, 65

Fed. Reg. 79,825, 79,827 (Dec. 20, 2000) (“2000

Determination”). “As a result the source category for Coal- and

Oil-Fired [EGUs] was added to the list of source categories

under section 112(c)” on December 20, 2000. National

Emission Standards for Hazardous Air Pollutants: Revision of

Source Category List Under Section 112 of the Clean Air Act

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1

 Section 111 requires the Administrator to “establish[] . . .

standards of performance,” CAA § 111(b)(1)(B), for pollutants from

new sources that in the Administrator’s judgment “cause[], or

contribute[] significantly to, air pollution which may reasonably be

anticipated to endanger public health or welfare.” Id. § 111(b)(1)(A).

“Standards of performance” are designed to limit emissions to reflect

“the degree of emission limitation achievable through the application

of the best system of emission reduction which (taking into account

the cost of achieving such reduction and any nonair quality health and

environmental impact and energy requirements) the Administrator

determines has been adequately demonstrated.” Id. § 111(a)(1).

Existing sources of pollutants are regulated under section 111(d). 

(“2002 Notice of Listing”), 67 Fed. Reg. 6521, 6522, 6524 (Feb.

12, 2002).

In early 2004, EPA proposed two regulatory alternatives to

control emissions from coal- and oil-fired EGUs. The first was

similar to EPA’s proposal in 2000 — regulation under section

112 through issuance of Maximum Achievable Control

Technology standards, see, e.g., CAA § 112(g)(2)(A), or

implementation of a cap-and-trade system. The second

proposed removing EGUs from the list of HAP sources prepared

pursuant to section 112(c)(1) and instead regulating their

emissions under section 111.1

 Proposed National Emission

Standards for Hazardous Air Pollutants; and, in the Alternative,

Proposed Standards of Performance for New and Existing

Stationary Sources: Electric Utility Steam Generating Units, 69

Fed. Reg. 4652, 4659-61, 4683, 4689 (Jan. 30, 2004). After

receiving public comment, EPA chose the second alternative,

announcing in March 2005 that it was removing EGUs from the

section 112(c)(1) list, Delisting Rule, 70 Fed. Reg. at 16,002-08,

16,032, and regulating mercury emissions from coal-fired EGUs

under section 111, CAMR, 70 Fed. Reg. at 28,610, 28,624-32.

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EPA justified its decision to delist EGUs by explaining that

it “reasonably interprets section 112(n)(1)(A) as providing []

authority to remove coal- and oil-fired units from the section

112(c) list at any time that it makes a negative appropriate and

necessary finding under the section.” Delisting Rule, 70 Fed.

Reg. at 16,032. It based this interpretation on the “entirely

different structure and predicate for assessing whether [EGUs]

should be listed for regulation under section 112” as set forth in

section 112(n)(1)(A), id., and on the absence of a temporal

“deadline” for deciding “whether regulation of [EGUs was]

appropriate and necessary” under section 112, id. at 16,001. It

also interpreted “section 112(c)(9) [delisting] criteria . . . not [to]

apply” to EGUs because their inclusion in the list established by

section 112(c)(1) was not a “final agency action[],” and claimed,

contrary to the 2000 Determination, that “the source category at

issue did not meet the statutory criteria for listing at the time of

listing.” Id. at 16,033.

Having decided that it possessed the authority to delist

EGUs without making the findings required by

section 112(c)(9), EPA explained that the delisting of EGUs was

justified because their regulation under section 112 was neither

“appropriate” nor “necessary.” The potential mercury emissions

reductions achievable under CAMR figured prominently in

EPA’s explanation of its delisting of coal-fired EGUs, id. at

16,005, which EPA promulgated in May 2005. CAMR

established plant-specific “standards of performance” for

mercury emissions from new coal-fired EGUs under

section 111(b). 70 Fed. Reg. at 28,613-16. Relying on sections

111(b) and (d), it also established a national mercury emissions

cap for new and existing EGUs, allocating each state and certain

tribal areas a mercury emissions budget. This was supplemented

by a voluntary cap-and-trade program. Id. at 28,616, 28,622,

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2

 Upon reconsideration, EPA made no substantive change to

the Delisting Rule but revised CAMR’s State mercury allocations and

the statistical analysis used for new source performance standards;

EPA declined to stay CAMR. Revision of December 2000 Clean Air

Act Section 112(n) Finding Regarding Electric Utility Steam

Generating Units; and Standards of Performance for New and

Existing Electric Utility Steam Generating Units: Reconsideration, 71

Fed. Reg. 33,388, 33,388-89, 33,395-96 (June 9, 2006). 

28,629.2

II.

New Jersey and fourteen additional States, the Michigan

Department of Environmental Quality, the Pennsylvania

Department of Environmental Protection, the City of Baltimore

(“Government Petitioners”), and various environmental

organizations (“Environmental Petitioners”) contend that EPA

violated Section 112’s plain text and structure when it did not

comply with the requirements of section 112(c)(9) in delisting

EGUs. Because we agree, we do not reach their alternative

contention that even if this delisting was lawful, EPA was

arbitrary and capricious in reversing its determination that

regulating EGUs under section 112 was “appropriate and

necessary.” Government and Environmental Petitioners further

contend that CAMR is inconsistent with provisions of

section 111, and that both the Delisting Rule and CAMR should

be vacated. Certain intervenors — including various industry

representatives, States, and state agencies — join EPA in urging

the lawfulness of the two rules. 

The court reviews the challenges to the final rules to

determine whether EPA’s promulgation of them was arbitrary

or capricious, an abuse of discretion, or otherwise not in

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3

 Certain intervenors also contend, citing Thomas v. New

York, 802 F.2d 1443, 1446-47 (D.C. Cir. 1986), that the

Administrator’s determination in December 2000 to list EGUs as a

source under section 112(c)(1) was not binding for lack of notice and

comment and, consequently, that EPA was never required to comply

with section 112(c)(9)’s delisting process for EGUs. We need not

consider this contention, however, because EPA has steadfastly

refused to join it. See New York v. Reilly, 969 F.2d 1147, 1154 n.11

(D.C. Cir. 1992); see also Util. Air Regulatory Group v. EPA, No. 01-

1074, 2001 WL 936363, at *1 (D.C. Cir. July 26, 2001).

accordance with law. See CAA § 307(d)(9)(A), 42 U.S.C.

§ 7607(d)(9)(A). Challenges to EPA’s interpretation of the

CAA itself are governed by the familiar two-pronged test of

Chevron, U.S.A., Inc. v. Natural Resources Defense Council,

Inc., 467 U.S. 837 (1984). Under step one, the court asks

“whether Congress has directly spoken to the . . . issue.” Id. at

842. If Congress’s intent “is clear, 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.

However, if the court determines that “Congress has not directly

addressed the precise question at issue,” then, under step two,

“the question for the court is whether the agency’s answer is

based on a permissible construction of the statute.” Id. at 843.

The agency’s interpretation need not be the only permissible

reading of the statute, nor the interpretation that the court might

have originally given the statute. Id. at 843 n.11.

Petitioners contend that once the Administrator determined

in 2000 that EGUs should be regulated under Section 112 and

listed them under section 112(c)(1), EPA had no authority to

delist them without taking the steps required under

section 112(c)(9). We agree.3

 

Section 112(c)(9) provides that:

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The Administrator may delete any source category

from the [section 112(c)(1) list] . . . whenever the

Administrator . . . [determines] that emissions from no

source in the category or subcategory concerned . . .

exceed a level which is adequate to protect public

health with an ample margin of safety and no adverse

environmental effect will result from emissions from

any source. [emphasis added]

EPA concedes that it listed EGUs under section 112. Thus,

because section 112(c)(9) governs the removal of “any source

category” (emphasis added) from the section 112(c)(1) list, and

nothing in the CAA exempts EGUs from section 112(c)(9), the

only way EPA could remove EGUs from the section 112(c)(1)

list was by satisfying section 112(c)(9)’s requirements. Yet

EPA concedes that it never made the findings section 112(c)(9)

would require in order to delist EGUs. EPA’s purported

removal of EGUs from the section 112(c)(1) list therefore

violated the CAA’s plain text and must be rejected under step

one of Chevron. 

EPA offers several arguments in an attempt to evade section

112(c)(9)’s plain text, but they are not persuasive. First, EPA

seeks to reach step two of Chevron and obtain judicial deference

to its interpretation by maintaining that section 112(n)(1) makes

section 112(c)(9) ambiguous because “[l]ogically, if EPA makes

a determination under section 112(n)(1)(A) that power plants

should not be regulated at all under section 112 . . . [then] this

determination ipso facto must result in removal of power plants

from the section 112(c) list.” Resp’t Br. at 26. But this simply

does not follow. Section 112(n)(1) governs how the

Administrator decides whether to list EGUs; it says nothing

about delisting EGUs, and the plain text of section 112(c)(9)

specifies that it applies to the delisting of “any source.” In the

context of the CAA, “the word ‘any’ has an expansive

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meaning.” New York v. EPA, 443 F.3d 880, 885 (D.C. Cir.

2006) (citations omitted); see also id. at 885-86. Moreover,

where Congress wished to exempt EGUs from specific

requirements of section 112, it said so explicitly. For example,

section 112(c)(6) expressly exempts EGUs from the strict

deadlines imposed on other sources of certain pollutants.

Furthermore, EPA concedes that listing EGUs under section

112(c) triggered application of some subparts of section 112,

see, e.g., 2002 Notice of Listing, 67 Fed. Reg. at 6521, 6524,

6535 n.b; CAA § 112(c)(2), but provides no persuasive

rationale for why the comprehensive delisting process of section

112(c)(9) does not also apply. Its brief states only that previous

applications of section 112 provisions in response to EGUs’

listing were undertaken “based on the fact that [EPA] had made

a positive ‘appropriate and necessary’ finding that was still in

place. EPA has now reversed that finding.” Resp’t Br. at 28.

This explanation deploys the logic of the Queen of Hearts,

substituting EPA’s desires for the plain text of section 112(c)(9).

Thus, EPA can point to no persuasive evidence suggesting that

section 112(c)(9)’s plain text is ambiguous. It is therefore

bound by section 112(c)(9) because “for [] EPA to avoid a literal

interpretation at Chevron step one, it must show either that, as

a matter of 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), showings

EPA has failed to make. 

Second, EPA maintains that it possesses authority to

remove EGUs from the section 112 list under the “fundamental

principle of administrative law that an agency has inherent

authority to reverse an earlier administrative determination or

ruling where an agency has a principled basis for doing so.”

Resp’t Br. at 22 (citing Williams Gas Processing-Gulf Coast Co.

v. FERC, 475 F.3d 319, 326 (D.C. Cir. 2006); Dun & Bradstreet

USCA Case #05-1275 Document #1097932 Filed: 02/08/2008 Page 15 of 18
16

Corp. Found. v. USPS, 946 F.2d 189, 193 (2d Cir. 1991)). An

agency can normally change its position and reverse a decision,

and prior to EPA’s listing of EGUs under section 112(c)(1),

nothing in the CAA would have prevented it from reversing its

determination about whether it was “appropriate and necessary”

to do so. Congress, however, undoubtedly can limit an agency’s

discretion to reverse itself, and in section 112(c)(9) Congress did

just that, unambiguously limiting EPA’s discretion to remove

sources, including EGUs, from the section 112(c)(1) list once

they have been added to it. This precludes EPA’s inherent

authority claim for “EPA may not construe [a] statute in a way

that completely nullifies textually applicable provisions meant

to limit its discretion.” Whitman v. Am. Trucking Ass’ns, 531

U.S. 457, 485 (2001). As this court has observed, “when

Congress has provided a mechanism capable of rectifying

mistaken actions . . . it is not reasonable to infer authority to

reconsider agency action.” Am. Methyl Corp. v. EPA, 749 F.2d

826, 835 (D.C. Cir. 1984). Indeed, EPA’s position would

nullify section 112(c)(9) altogether, not just with regard to

EGUs, for EPA is unable to explain how, if it were allowed to

remove EGUs from the section 112 list without regard to section

112(c)(9), it would not also have the authority to remove any

other source by ignoring the statutory delisting process. 

Finally, EPA states in its brief that it has previously

removed sources listed under section 112(c) without satisfying

the requirements of section 112(c)(9). But previous statutory

violations cannot excuse the one now before the court. “[W]e

do not see how merely applying an unreasonable statutory

interpretation for several years can transform it into a reasonable

interpretation.” F.J. Vollmer Co. v. Magaw, 102 F.3d 591, 598

(D.C. Cir. 1996). EPA suggests that it would be “anomalous”

for it to be forced to await a court order to correct “its own

mistake” in listing coal- and oil-fired EGUs as a source under

section 112(c)(1). Resp’t Br. at 32; see also id. at 33 (citing

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Cleveland Nat’l Air Show, Inc. v. DOT, 430 F.3d 757, 765 (6th

Cir. 2005)). However Congress was not preoccupied with what

EPA considers “anomalous,” but rather with the fact that EPA

had failed for decades to regulate HAPs sufficiently. See, e.g.,

Nat’l Lime Ass’n, 233 F.3d at 634 (citing S. REP. NO. 101-228,

at 128, reprinted in 1990 U.S.C.C.A.N. at 3513). In the context

of this congressional concern, EPA’s disbelief that it would be

prevented from correcting its own listing “errors” except

through section 112(c)(9)’s delisting process or court-sanctioned

vacatur cannot overcome the plain text enacted by Congress.

Accordingly, in view of the plain text and structure of

section 112, we grant the petitions and vacate the Delisting Rule.

See Allied-Signal, Inc. v. U.S. Nuclear Regulatory Comm’n, 988

F.2d 146, 150-51 (D.C. Cir. 1993). This requires vacation of

CAMR’s regulations for both new and existing EGUs. EPA

promulgated the CAMR regulations for existing EGUs under

section 111(d), but under EPA’s own interpretation of the

section, it cannot be used to regulate sources listed under section

112; EPA thus concedes that if EGUs remain listed under

section 112, as we hold, then the CAMR regulations for existing

sources must fall. Resp’t Br. at 99, 101-02; see also Delisting

Rule, 70 Fed. Reg. at 16,031. EPA promulgated the CAMR

regulations for new sources under section 111(b) on the basis

that there would be no section 112 regulation of EGU emissions

and that the new source performance standards would be

accompanied by a national emissions cap and a voluntary capand-trade program. See CAMR, 70 Fed. Reg. at 28,608-10,

28,614-15, 28,619, 28,622; see also id. at 28,616. Given that

these vital assumptions were incorrect, the court must vacate

CAMR’s new source performance standards and remand them

to EPA for reconsideration, for “[s]everance and affirmance of

a portion of an administrative regulation is improper if there is

‘substantial doubt’ that the agency would have adopted the

severed portion on its own.” Davis County Solid Waste Mgmt.

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v. EPA, 108 F.3d 1454, 1459 (D.C. Cir. 1997) (citations

omitted). In view of our disposition, the court does not reach

other contentions of petitioners or intervenors.

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