Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-07-01040/USCOURTS-caDC-07-01040-0/pdf.json

Parties Involved:
American Chemistry Council
Intervenor for Respondent
Chemtura Corporation
Intervenor
Environmental Protection Agency
Respondent
Stephen L. Johnson
Respondent
Natural Resources Defense Council
Petitioner

Document Text:

United States Court of Appeals 

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued December 10, 2007 Decided January 22, 2008 

No. 07-1040 

NATURAL RESOURCES DEFENSE COUNCIL,

PETITIONER

v. 

ENVIRONMENTAL PROTECTION AGENCY AND 

STEPHEN L. JOHNSON, ADMINISTRATOR,

U.S. ENVIRONMENTAL PROTECTION AGENCY, 

RESPONDENTS

CHEMTURA CORPORATION AND 

AMERICAN CHEMISTRY COUNCIL,

INTERVENORS

On Petition for Review of an Order of the 

Environmental Protection Agency 

Benjamin H. Longstreth argued the cause for petitioner. 

With him on the briefs was David D. Doniger.

Steven E. Rusak, Attorney, United States Department of 

Justice, argued the cause for respondents. With him on the 

brief were John C. Cruden, Deputy Assistant Attorney 

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General, and Diane E. McConkey, Counsel, U.S. 

Environmental Protection Agency. 

David B. Weinberg and Eric Andreas were on the brief 

for intervenor American Chemistry Council. 

Before: SENTELLE and HENDERSON, Circuit Judges, and 

WILLIAMS, Senior Circuit Judge. 

Opinion for the Court filed by Senior Circuit Judge

WILLIAMS. 

WILLIAMS, Senior Circuit Judge: Natural Resources 

Defense Council challenges the Environmental Protection 

Agency’s 2007 “critical use” exemption for methyl bromide 

on the grounds that it applies an unreasonable interpretation of 

the Clean Air Act and that it is arbitrary and capricious in 

light of the United States’ agreements with other nations on 

reducing the use of methyl bromide and other ozone-depleting 

chemicals. The 2007 exemption applied a framework that 

EPA adopted in a 2004 rule—a rule that NRDC challenged 

previously and that we affirmed. See NRDC v. EPA, 464 F.3d 

1 (D.C. Cir. 2006). NRDC’s claim has not changed: in the 

first case it argued that the 2004 framework was invalid as 

adopted and applied to determine the 2005 exemption, and 

now it challenges the 2004 framework—which EPA left 

unchanged—as applied to determine the 2007 exemption. 

Under principles of claim preclusion, the first case bars 

NRDC’s new challenge. 

* * * 

 Methyl bromide is used in the United States and 

throughout the world as a broad-spectrum pesticide and, since 

1992, has been a controlled substance under the Montreal 

Protocol on Substances that Deplete the Ozone Layer. In 

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1997 the parties to the Montreal Protocol established a 2005 

deadline for phasing out its use and production, but at the 

same time provided that the phaseout would not apply “to the 

extent the Parties decide to permit the level of production or 

consumption that is necessary to satisfy uses agreed by them 

to be critical uses.” Montreal Protocol art. 2H(5), Sept. 16, 

1987, S. Treaty Doc. No. 100-10, 1522 U.N.T.S. 29, as 

adjusted by the parties, U.N. Env’t Programme, Report of the 

Ninth Meeting of the Parties to the Montreal Protocol on 

Substances that Deplete the Ozone Layer, U.N. Doc. 

UNEP/OzL.Pro.9/12, Annex III (Sept. 25, 1997) (“Ninth 

Report”). Congress amended the Clean Air Act (“CAA”) in 

October 1998 to adopt the Montreal Protocol’s phaseout 

schedule, CAA § 604(h), 42 U.S.C. § 7671c(h), and to include 

an exemption for critical uses, CAA § 604(d)(6), 42 U.S.C. 

§ 7671c(d)(6) (“To the extent consistent with the Montreal 

Protocol, the Administrator [of the EPA] . . . may exempt the 

production, importation, and consumption of methyl bromide 

for critical uses.”).

 In 2004 EPA promulgated a rule “describing the 

framework for the critical use exception” and approving 

critical uses for 2005. Protection of Stratospheric Ozone: 

Process for Exempting Critical Uses From the Phaseout of 

Methyl Bromide, 69 Fed. Reg. 76,982, 76,985/2 (Dec. 23, 

2004) (“Framework Rule”). In setting a framework for the 

approval of critical uses and of production and importation of 

methyl bromide for those uses, EPA interpreted Article 2H of 

the Montreal Protocol and post-ratification decisions of the 

parties that applied Article 2H. Id. at 76,984/2. One such 

decision limited production and importation to instances 

where “[m]ethyl bromide is not available in sufficient quantity 

and quality from existing stocks,” id. (quoting Ninth Report, 

Decision IX/6), and EPA read that language as recognizing 

“the possibility that available stocks could be less than 

existing stocks,” id. at 76,987/3. EPA also looked to the 

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decision of the Montreal parties allowing the United States in 

2005: (1) a total amount of permissible critical use of methyl 

bromide, and (2) a total amount of permissible production and 

importation of methyl bromide for those critical uses. See id.

at 76,986/3-76,987/1 (citing the Report of the First 

Extraordinary Meeting of the Parties to the Montreal Protocol 

on Substances that Deplete the Ozone Layer, U.N. Doc. 

UNEP/OzL.Pro.ExMP/1/3, Decision Ex.I/3 (Mar. 27, 2004)). 

EPA understood that decision to mean that when permissible 

use exceeded permissible production and importation (as it 

did in 2005 and in each later year), use of pre-existing stocks 

of methyl bromide would make up the difference. Id.

Applying this interpretation of its responsibilities under 

the Montreal Protocol, EPA adopted a framework for 

promulgating critical use exemptions each year. EPA would 

draw upon existing stocks to make up the difference between 

each year’s permissible critical use, on the one hand, and 

production and importation, on the other; but it would not 

make new production and importation contingent on any 

further drawdown from existing stocks, nor would it place any 

restriction on the amount of existing stocks that could be 

devoted to noncritical uses. In adopting that framework, EPA 

rejected the two arguments that are the subject of this petition 

for review. First, EPA noted that “[t]wo commenters stated 

that all stocks must be used before any new production is 

permitted and that all stocks other than those used for export 

to developing countries should be considered ‘available’ for 

critical uses.” Id. at 76,987/2. EPA responded that this was 

not an “accurate characterization” of its duty under the 

Montreal Protocol and that it would not adopt such a 

requirement. Id. at 76,987/2-3. Second, EPA discussed a 

“comment stating that there is no legal basis for allowing use 

of stocks by users that did not apply for or did not qualify for 

critical use status”; EPA disagreed and said that it would not 

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require that the drawdown of pre-phaseout stocks be restricted 

to critical uses. Id. at 76,988/1-2. 

 In an earlier suit in this court, NRDC challenged these 

two decisions of the Framework Rule, arguing that they were 

inconsistent with the post-ratification decisions of the parties 

to the Montreal Protocol and thus in violation of CAA 

§ 604(d)(6)’s provision that the critical use exemption 

program must be “consistent with the Montreal Protocol.” 

We denied NRDC’s petition, holding that the “postratification agreements of the parties were not ‘law’”; thus any 

inconsistency between those decisions and the Framework 

Rule would not render the Rule “not in accordance with law,” 

the relevant standard of review under CAA § 307(d)(9)(A), 42 

U.S.C. § 7607(d)(9)(A). NRDC, 464 F.3d at 7, 11. 

 Meanwhile, EPA announced its critical use exemption for 

2006, and then its critical use exemption for 2007, the rule 

under review here. Protection of Stratospheric Ozone: The 

2007 Critical Use Exemption From the Phaseout of Methyl 

Bromide, 71 Fed. Reg. 75,386 (Dec. 14, 2006) (“Final Rule”). 

(EPA has since then promulgated a critical use exemption for 

2008. Protection of Stratospheric Ozone: The 2008 Critical 

Use Exemption From the Phaseout of Methyl Bromide, 72 

Fed. Reg. 74,128 (Dec. 28, 2007).) 

In the 2007 Final Rule, EPA said that it was “not 

changing the framework of the exemption program” but 

instead was approving critical uses for 2007 and setting the 

amounts of methyl bromide that would be available from new 

production and importation, as well as from pre-phaseout 

stocks, to satisfy those critical uses. 71 Fed. Reg. at 75,389/1. 

NRDC challenges the 2007 Final Rule as inconsistent with 

law, pointing to the same two decisions it contested in the 

original Framework Rule. 

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EPA, joined in part by intervenors, claims that NRDC’s 

new challenge is an untimely assault upon the 2004 

Framework Rule rather than a timely challenge to the 2007 

Final Rule, that it is barred by issue and claim preclusion, and 

that, in any event, NRDC is wrong on the merits. Because we 

agree that NRDC’s petition is barred by claim preclusion, we 

address neither timeliness nor the merits. 

Before addressing claim preclusion, however, we note a 

possible difficulty with EPA’s timeliness argument. Section 

307(b)(1) of the Clean Air Act, 42 U.S.C. § 7607(b)(1), 

establishes a 60-day window for challenges to regulations 

promulgated and final action taken by the EPA Administrator 

under the Act. Because EPA’s Framework Rule decided the 

two matters that NRDC now presents for our review, EPA 

suggests that NRDC’s challenge is time-barred unless EPA, in 

its notice of proposed rulemaking for the 2007 exemption or 

in the 2007 Final Rule itself, reopened consideration of those 

matters. See Envtl. Def. v. EPA, 467 F.3d 1329, 1332-33 

(D.C. Cir. 2006); Nat’l Ass’n of Reversionary Prop. Owners v. 

Surface Transp. Bd., 158 F.3d 135, 141 (D.C. Cir. 1998). 

This case is unusual, however, among ones raising 

statutory time limits and the reopening doctrine: the decision 

challenged here, being an application of the principles 

developed in the prior rule, appears to depend for its legality 

on the legality of that prior rule. Accordingly, it is at least 

arguable that the timeliness issue here is governed by the 

established doctrine that parties claiming substantive 

invalidity of a rule for which direct statutory assault is timebarred are nonetheless free to raise their claims in actions 

against agency decisions applying the earlier rule. See 

Murphy Exploration & Prod’n Co. v. Dep’t of Interior, 270 

F.3d 957, 958-59 (D.C. Cir. 2001); NLRB Union v. FLRA, 834 

F.2d 191, 195-96 (D.C. Cir. 1987); Functional Music, Inc. v. 

FCC, 274 F.2d 543, 546-48 (D.C. Cir. 1958); see also Pub. 

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Citizen v. NRC, 901 F.2d 147, 151-52 (D.C. Cir. 1990). 

Because this consideration has not been briefed and other 

grounds exist for resolving the case, we need not enter this 

thicket. 

* * * 

A subsequent lawsuit is barred by claim preclusion “if 

there has been prior litigation (1) involving the same claims or 

cause of action, (2) between the same parties or their privies, 

and (3) there has been a final, valid judgment on the merits, 

(4) by a court of competent jurisdiction.” Smalls v. United 

States, 471 F.3d 186, 192 (D.C. Cir. 2006). Because NRDC

involved the same parties and proceeded to final judgment in 

this court, the current petition for review is precluded by our 

prior judgment if it involves “the same claims.” We hold that 

it does. 

In challenging the 2007 Final Rule, NRDC focuses on the 

same two decisions it contested following promulgation of the 

Framework Rule: (1) EPA’s allowance of continued new 

methyl bromide production and importation for critical uses 

despite the existence of stocks sufficient to meet all critical 

uses, and (2) its failure to prohibit all non-critical uses of 

those stocks. While NRDC challenges the 2007 exemption, 

its claim in fact remains the same: that the framework adopted 

in 2004—and used to calculate the 2007 exemption—is 

inconsistent with law. Compare the current NRDC Br. 32 

(“EPA has defied the key commitment that stockpiles be 

exhausted before new production is allowed.”), and id. at 39 

(claiming that EPA’s approach “is especially unconvincing in 

light of the Agency’s remarkable failure to protect the 

stockpile from non-critical users”), with its brief in the 2005 

case (No. 04-1438) at 26 (arguing that the Framework Rule 

“unlawfully fails to satisfy” the “obligation” that production 

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and importation of methyl bromide be permitted only if stocks 

are insufficient to satisfy critical uses), and id. at 28 (claiming 

that the Framework Rule “exacerbates the unlawful failure to 

account for stocks by allowing use of the stockpile for noncritical purposes”). Whether these two suits are based on the 

same claim “turns on whether they share the same nucleus of 

facts.” Apotex, Inc. v. FDA, 393 F.3d 210, 217 (D.C. Cir. 

2004) (quoting Drake v. FAA, 291 F.3d 59, 66 (D.C. Cir. 

2002)). Here NRDC clearly challenges the same two EPA 

decisions that it challenged in the previous case, arguing that 

they are inconsistent with the decisions of the parties to the 

Montreal Protocol that it invoked in that case. None of the 

underlying facts has changed; in defining the 2007 critical use 

exemption, EPA applied the same principles that it had 

established—unlawfully, according to NRDC—in its 

Framework Rule. 

NRDC tries to avoid the force of claim preclusion by 

arguing that in NRDC it limited its claim to a Chevron “step 

one” argument that the Framework Rule violated 

unambiguous dictates of international agreements that were 

incorporated into U.S. law, while it now claims that EPA 

violated its duty to give a reasonable construction of 

governing statutes under Chevron “step two” and that it acted 

in an arbitrary and capricious manner. NRDC Br. 7, 29-30. It 

is true that in the earlier proceeding, as we said, “NRDC 

fashion[ed] the entirety of its argument around the proposition 

that the ‘decisions’ under the Protocol are ‘law,’” NRDC, 464 

F.3d at 8, and that its arguments here are subtly different 

(though they depend overwhelmingly on the same documents 

as before). But claim preclusion precludes the relitigation of 

claims, not just arguments. Unlike issue preclusion, which is 

aimed at preventing relitigation of issues previously resolved, 

see, e.g., SBC Commc’ns Inc. v. FCC, 407 F.3d 1223, 1229 

(D.C. Cir. 2005), claim preclusion is also intended “to prevent 

‘litigation of matters that should have been raised in an earlier 

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suit,’” id. at 1230 (quoting Marrese v. Am. Academy of 

Orthopaedic Surgeons, 470 U.S. 373, 376 n.1 (1985)); accord 

Allen v. McCurry, 449 U.S. 90, 94 (1980) (“[A] final 

judgment on the merits of an action precludes the parties or 

their privies from relitigating issues that were or could have 

been raised in that action.”); NRDC v. Thomas, 838 F.2d 

1224, 1252 (D.C. Cir. 1988) (“[R]es judicata (claim 

preclusion) bars relitigation not only of matters determined in 

a previous litigation but also ones that a party could have 

raised.”). 

The two petitions simply offer different legal theories to 

support the same claim: that two judgments made by EPA in 

the Framework Rule were unlawful. Cf. CAA § 307(d)(9)(A), 

42 U.S.C. § 7607(d)(9)(A) (providing for judicial relief 

against EPA decisions found “arbitrary, capricious, an abuse 

of discretion, or otherwise not in accordance with law”). 

NRDC doesn’t get a second bite at that same apple. The 

petition for review is barred by the preclusive effect of our 

prior decision adjudicating its claims against EPA’s 

framework for adopting critical use exemptions. 

So ordered. 

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