ARGUMNT HELD FEBRUARY 23, 2007

IN THE UNTED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMIA CIRCUIT

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NATUR RESOURCES DEFENSE COUNCIL,) et aI., )

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Petitioners,

v.

C.A. No. 04-1385 (and

consolidated cases)

U.S. ENVIRONMNTAL PROTECTION

AGENCY,

Respondent.

REPLY IN SUPPORT OF

MOTION FOR VOLUNTARY PARTIAL

V ACA TUR AND REMAND

AND OPPOSITION TO PETITIONERS' CROSS-MOTION

TO ESTABLISH DEADLINE TO GOVERN REMAND

Respondent United States Environmental Protection Agency ("EP A") offers

the following reply in support of its motion for voluntary partial vacatur and

remand and opposition to Petitioners' Cross-Motion for a Deadline to Govern

Remand. Petitioners 'do not oppose a voluntary remand of the MACT standards,

nor do they oppose EPA's request that the Court resolve the other issues in the

case. However, Petitioners oppose EPA's request that the standards be vacated,
instead demanding a remand without vacatur, and also requesting that the Court

require EP A to complete the remand process within 2 years.

As stated in EPA's motion, vacatur is consistent with this Court's

precedents. The equitable considerations raised in Petitioners' Opposition can

more appropriately be addressed in the context of a motion to stay the mandate

after the Court has decided all of the pending issues in the case. Petitioners'

cross-motion to impose a deadline on EP A to respond to the remand is essentially

a petition for a writ of mandamus, and Petitioners have not justified the imposition

of that extraordinary remedy. Moreover, the time needed to respond to the

mandate cannot be determined until the Court resolves the remaining issues

pending in the case. Thus, if the Court believes that some deadline may be

appropriate, Petitioners' motion should be dismissed without prejudice to refiling

after the Court resolves the remaining issues.

I. Vacatur Of The Standards And Compliance Date Is Consistent

With This Court's Precedents

In determining whether vacatur or remand without vacatur is appropriate,

this Court considers two factors: "the seriousness of the order's deficiencies (and

thus the extent of doubt whether the agency chose correctly) and the disruptive

consequences of an interim change that may itself be changed." See

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Allied-SignaL. Inc. v. United States Nuclear Regulatory Comm'n, 988 F.2d 146,

150-51 (D.C. Cir. 1993). Petitioners do not address the first factor, except to note

that, in some cases, the Court will remand without vacatur even if it determines

that an Agency action is unlawfuL. Opp. at 5.

EP A recognizes that the Court has discretion to remand an agency action

without vacatur, even where the Court finds serious deficiencies in the rule, if it

finds that equitable factors weigh in favor of doing so. In this case, however,

vacatur is consistent with this Court's precedents because of the seriousness of the

deficiencies in the MACT emissions standards in light of the Court's recent

decision in Sierra Club v. EPA, No. 03-1202 (D.C. Cir. March 13,2007). As

explained in our motion for partial vacatur and remand, the MACT standards in

the Boilers rule are based on substantially the same methodology that this court

found unacceptable in Sierra Club. Thus, this is not a case where it is likely that

the Agency will be able to keep all of the same standards w,ith further explanation

or support. Where a rule is unlawful, the Court typically vacates the rule, as it did

in Sierra Club. See also Allied-Signal, 988 F .2d at 150-51.

The equitable factors regarding the potential disruptive consequences of an

interim change identified by Petitioners can be more effectively addressed in the

context of a motion to SÚiy the mandate after the Court has decided all of the

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issues in the case. The Court has suggested such an approach on previous

occasions,~, Honeywell Intl. Inc. v. EPA, 374 F.3d 1363, 1375 (D.C. Cir.

2004) (Randolph, J., concurring); Cement Kiln Recycling Coalition v. EPA, 255

F.3d 855, 872 (D.C. Cir. 2001). At that stage in the proceeding, the parties will

know how the Court has ruled on all of the pending issues in the case. Those

rulings wil allow the parties more effectively to evaluate the impact of immediate

vacatur versus allowing the standards to remain in place pending remand.

Furthermore, the Court will be able then to "act with its eyes open and will have

the information needed to assess the consequences of granting or denying a stay."

Honeywell, 374 F.3d at 1375.

This is particularly so in this case, where the Intervenors representing the

regulated industry parties filed a response to EPA's motion that took no specific

position with respect to the disruptiveness of the interim relief while reserving the

prerogative to address these matters in a motion to stay the mandate. Based on

information available at the time of its motion for partial vacatur, EP A was

concerned that greater disruption would result from maintaining the requirement

that existing sources comply with the emissions limitations by September 2007

and that newly-constructed sources comply upon startup. While Petitioners assert

that vacatur would be more disruptive due to the number of new sources already in

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compliance with the standards and the fact that existing sources have already made

the capital investments necessary to comply, they cite no evidence to support their

assertion. This issue can be more effectively addressed by both the parties and the

Court after the Court resolves the remaining issues in the case and the parties are

able to evaluate the potential impact of vacatur.

Furthermore, the environmental impacts assòciated with vacatur are less

severe than supposed by Petitioners because of the requirement that the MACT

standards be incorporated into the operating permits required under Title V of the

Clean Air Act, 42 U.S.C. § 7661a. Facilities that are subject to the Boiler

standards because they have commenced operations since the rule was

promulgated should already have the emission standards incorporated into their

operating permits. These requirements will remain in their permits, even if the

standards are vacated, unless they are removed by State permitting authorities.

Thus, these facilities will be subject to the standards in the Rule even if it is

vacated. While it is true that these permits could be modified, these facilities

would be subject to the requirements of Clean Air Act section 1120).

EP A recognizes that vacatur of the standards will trigger the requirements

of Clean Air Act sections 1 12(g) for new sources and 1120) for existing sources.

The entities that would have to meet these requirements, i.e., the regulated entities

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represented by Industry Int~rvenors, have not opposed EP A's motion for vacatur,

but have reserved the right to ask for further relief after the Court resolves all

issues in the case. Because of the seriousness of the legal deficiencies of the

MACT emission standards and the fact that the equitable issues raised in

Petitioners' Opposition can be more appropriately addressed in the context of a

motion to stay the mandate, EP A's motion for partial vacatur should be granted.

II. There Is No Basis For The Court To Establish A Deadline For

EP A To Complete The Remand

Petitioners' cross-motion to establish a deadline for EP A to complete its

remand is, in essence, a petition for mandamus to compel EP A to act. Petitioners

have not made the showing necessary to justify such an Order. This Court has

repeatedly recognized that a writ of mandamus is "an extraordinary remedy" that

should be issued only in "extràordinary circumstances." Bluewater Network, 234

F.3d at 1316; In re International Chemical Workers Union, 958 F.2d 1144, 1149

(D.C. Cir. 1992) ("in extraordinary circumstances, this court will review claims of

unreasonable agency delay"). In this case Petitioners seek mandamus to compel

EPA to comply with the Court's yet-to-be-issued mandate. However, in such

circumstances the Court has found mandamus justified only where the agency has

acted inconsistently with the Court's opinion, see Atlantic City Electric Co. v.

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FERC, 329 F.3d 856 (D.C. Cir. 2003); Northern States Power Co. v. Dept. of

Energy, 128 F.3d 754 (D.C. Cir. 1997), and Office of Consumers' Counsel v.

FERC, 826 F.2d 1136 (D.C. Cir. 1987), or where the agency has unreasonably

delayed responding to the remand, see Potomac Electric Power Co. v. ICC, 702

F.2d 1026 (D.C. Cir. 1983) (delay of five years warrants issuance of mandamus).

Nothing in this case justifies such a remedy. The Court has not yet even

remanded the rule to EP A, and thus EP A clearly has not acted inconsistently with

the Court's opinion. Nor is there any basis for the Court simply to assume that

EP A will unreasonably delay its response to the remand. Although EP A missed

the original statutory deadline for the Boilers rule, EP A met the schedule

established by Consent Decree. Sierra Club v. Whitman, 1:01 CVO 1537 (Dist. Ct.

D.C., May 22,2003); 69 Fed. Reg. 55218, 55252 (Sept. 13,2004) (signed by

Administrator on Feb. 26, 2004).

In none of the cases cited by Petitioners did the Court impose a deadline

based simply on unsubstantiated speculation that EP A would unreasonably delay

after remand. Moreover, in each case the amount of delay was far more egregious

than anything present in this case. In one case, EP A missed the original statutory

deadline and also failed to comply with a court-ordered schedule. Environmental

Defense Fund v. EPA, 852, F.2d 1316,1331 (D.C. Cir. 1988). In the other case,

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the time taken by the Agency exceeded the amount provided by the statute by

more than 12-fold. Sierra Club v. EPA,719 F.2d 436,469-70 (D.C. Cir. 1983).

In addition, the two-year time frame Congress established for EP A to

promulgate section 112 standards for the first 40 categories of major sources is not

dispositive as to the amount of time necessary for EP A to complete action on

remand for this rule. First, when Congress established the two year deadline for

those categories it knew that the rulemaking to address them was already well

underway. Conference Report, No. 101-952, at 338 (1990), reprinted in 1 A

Legislative History of the Clean Air Act Amendments of 1990, at 1788. For other

source categories, Congress allowed longer deadlines. The Act establishes a

four-year deadline for 25 percent of the listed categories, a seven-year deadline for

an additional 25-percent of listed categories, and a ten-year deadline to complete

standards for all the remaining categories. 42 U.S.C. 7412(e)(1). Thus, while the

statute directs EP A to complete standards for the first 40 categories in two years,

Congress plainly contemplated that some categories might take longer and

provided EP A the discretion to determine which categories could be completed in

two years and which categories would require more time to address. Thus, in

contrast to the EDF and Sierra Club cases, Petitioners can point to no specific

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congressional finding that EP A could promulgate rules for industrial, commercial,

and institutional boilers and process heaters within 2 years.

Furthermore, EP A currently has a considerable number of competing

obligations under Clean Air Act section 1 12 that did not exist at the time the

provision was enacted in 1990. The Act requires that already promulgated

emission standards be reviewed no less often than every eight years to determine if

"developments in practices, processes, and control technologies" require a change

in the standard. 42 U.S.C. § 7412(d)(6). In addition, the statute requires EPA to

conduct a review eight years after promulgation of the MACT standards to

determine if additional requirements are necessary to protect public health with an

ample margin of safety and to prevent adverse environmental effects. Id.

§ 7412(f)(2). The Agency is currently performing many of these reviews, and the

appropriate time for EP A to respond to the remand in this case must take into

account these additional responsibilities that the Agency did not have when

Congress set the two-year deadline for the initial 40 categories.

Moreover, EPA cannot effectively respond to Petitioners' argument that two

years is an appropriate schedule until the Court resolves the remaining issues in

the case, including Petitioners' consolidated challenge to EPA's definition ofa

commercial and industrial solid waste incinerator under section 129 of the Act.

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Until the Court rules on those issues, which will have significant impacts on

EPA's determination of the MACT standards, the uncertainty about the proper

scope of the boiler category on remand prevents EP A from providing a reasoned

estimate of how much time it will take to determine which facilities are included

within the boiler category, to identify whether EP A needs additional data for those

sources remaining the category, and then to gather the necessary data and

determine the appropriate standard for such sources. In addition, dueto the

Municipal Petitioners', challenge, EPA is currently reconsidering whether it is

necessary to convene a panel under the Regulatory Flexibility Act, 5 U.S.C.

§§ 601-12, and this determination may also be affected by the scope of the

category on remand. . If a panel is required, that would likely add several months to

the time required to promulgate a rule. Accordingly, if the Court believes that

imposition of a deadline on EP A might be appropriate, Petitioners' motion should

be denied with leave to renew it after the Court resolves the remaining issues in

the case.

CONCLUSION

EP A's motion for partial remand and vacatur should be granted and

Petitioners' cross-motion to impose a deadline for EPA to respond to the Court's

remand should be denied.

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Respectfully submitted,

MATTHEW J. McKEOWN ~szeYGenerai

NORMN L. RAVE, JR.

PAMLA TONGLAO

CA THERI WANNAMR

Environmental Defense Section

Environment & Natural Resources Division

United States Department of Justice

P.O. Box 23986

Washington, D.C. 20026-3986

(202) 616-7568

Counsel for Respondent

Of Counsel:

BRIAN L. DOSTER

Office of General Counsel (2344-A)

U.S. Environmental Protection Agency

1200 Pennsylvania Ave., NW

Washington, DC 20460

May 4, 2007

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CERTIFICATE OF SERVICE

I hereby certify that on this 4th day of May, 2007, I caused a true and correct copy of the

foregoing Reply in Support of Motion for Voluntar Parial Vacatur and Remand and Opposition

to Petitioners' Cross-Motion to Establish Deadline to Govern Remand to be served by first-class

mail on the counsel listed below:

James S. Pew

Earhjustice

1625 Massachusetts Ave., NW

Suite 702

Washington, DC 20036-2212

(202) 667-4500

Counsel for Petitioners NRDC, Sierra Club, and Environmental Integrity Project in 04-

1386,05-1302, and 06-1065, and Counsel for Petitioners Louisiana Environmental Action

Network and Sierra Club in 05-1434

Amanda Leiter

John D. Walke

Natual Resources Defense Council

1200 New York Ave., NW

Suite 400

Washington, DC 20005

(202) 289-2426

Counsel for Petitioner NRDC in 04-1386, 05-1302 and 06-1065

Allen Kacenjar

Douglas McWiliams

Squire, Sanders and Dempsey LLP

4900 Key Tower

127 Public Square

Cleveland, Ohio 44114-1304

(216) 479-8500

Counsel for Petitioners in 04-1386 and Intervenor-Respondents in 04-1385: American

Municipal Power-Ohio, Inc.; City of Dover, Ohio; City of Orrvile, Ohio; City of

Painesvile, Ohio; City of Shelby, Ohio; and City of St. Mary's, Ohio

Wiliam F. Lane

Kilpatrick Stockton

3737 Glenwood Ave., Suite 400

Raleigh, N.C. 27612~2519

(919) 420-1794

Counscl for Intervenor-Respondent in 04-1385 American Home Furnishings Allance, Inc.
Claudia O'Brien

Cassandra Sturkie

Latham & Watkins LLP

555 Eleventh Street, NW

Suite 1000

Washington, DC 20004-1304

(202) 637-1067

Counsel for Intervenors-Respondents in 04-1385: Council of Industrial Boiler Owners,

American Forest and Paper Association, Inc., American Chemistry Council, National

Petrochemical & Refiners Association, American Petroleum Institute, National Oilseed

Processors Association, and Coke Oven Environmental Task Force, Allance of Automobile

Manufacturers

Ronald A. Shipley

Law Office of Ronald A. Shipley

10229 Crosscut Way

Damascus, MD 20872-2912

(301) 540-0315

Counsel for Intervenor-Respondent in 04-1385 Coalition for Responsible Waste

Incineration

Craig S. Harison

Lee B. Zeugin

Hunton & Wiliams LLP

1900 K Street N.W.

Washington, D.C. 20006

(202) 955-1500

Counsel for Intervenor-Respondent in 04-1385 Utilty Air Regulatory Group

Maurice Griffin

Attorney General's Offce of State of New Jersey

Division of Law

25 Market Street

P.O. Box 093, Richard!. Hughes Justice Complex

Trenton, NJ 08625-0093

(609) 984-4863

Counsel for Amicus Curiae State of New Jersey

Gerald D. Reid

Attorney General's Office of State of Maine

6 State House Station

111 Sewall Street

Augusta, ME 04333-0006

(207) 626-8545

Counsel for Amicus Curiae State of Maine
1. Jared Snyder

Attorney General's Offce of State of New York

The Capitol

New York State Department of Law

Albany, NY 12224-0341

(518) 474-8010

Counsel for Amicus Curiae State of New York

Donna M. Murasky

Office of Attorney General for the District of Columbia

441 4th Street N.W.

Sixth floor

Washington, D.C. 20001-2714

(202) 727-6252

Counsel for Amicus Curiae District of Columbia

Mar An McGrail

Kellogg, Huber, Hansen, Todd, Evans & Figel, P.L.L.C.

1615 M Street, N.W.

Suite 400

Washington, D.C. 20036-3209

(202) 326-7900

Counsel for Amici Curiae State and Territorial Air Pollution Program Administrators, and

the Association of Local Air Pollution Control Officials

Douglas H. Green

Aaron J. Wallisch

DLAPiper Rudnick Gray Car US LLP

1200 19th St., N.W.

Washington, D.C.' 20036

(202) 861-3900

Counsel for Intervenors-Respondents in 05-1434 American Forest & Paper Association and

Utilty Solid Waste Activities Group, Edison Electric Institute, National Rural Electric

Cooperativè Association, American Public Power Association

Marc D. Machlin

Wiliam J . Walsh

Charles H. Carenter

Pepper Hamilton LLP

600 14th St., N.W., Suite 500

Washington, D.C. 20005

Counsel for Amicus Curiae in 05-1434 Rubber Manufacturers Association ~L

No an L. Rave, Jr.