United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued February 25, 2015 Decided July 28, 2015

No. 11-1302

EME HOMER CITY GENERATION, L.P.,

PETITIONER

v.

ENVIRONMENTAL PROTECTION AGENCY,

RESPONDENT

SAN MIGUEL ELECTRIC COOPERATIVE, ET AL.,

INTERVENORS

Consolidated with 11-1315, 11-1323, 11-1329, 11-1338, 

11-1340, 11-1350, 11-1357, 11-1358, 11-1359, 11-1360, 

11-1361, 11-1362, 11-1364, 11-1365, 11-1366, 11-1367, 

11-1368, 11-1369, 11-1371, 11-1372, 11-1373, 11-1374, 

11-1375, 11-1376, 11-1377, 11-1378, 11-1379, 11-1380, 

11-1381, 11-1382, 11-1383, 11-1384, 11-1385, 11-1386, 

11-1388, 11-1389, 11-1390, 11-1391, 11-1392, 11-1393, 

11-1394, 11-1395

On Petitions for Review of a Final Rule Promulgated by

the United States Environmental Protection Agency

Bill Davis, Assistant Solicitor General, Office of the 

Attorney General for the State of Texas, argued the cause for 

USCA Case #11-1302 Document #1564814 Filed: 07/28/2015 Page 1 of 36
2

State and Local Petitioners. With him on the briefs on 

remand were Ken Paxton, Attorney General, Jon Niermann, 

Chief, Environmental Protection Division, Mark Walters, 

Assistant Attorney General, Derek Schmidt, Attorney 

General, Office of the Attorney General for the State of 

Kansas, Jeffrey A. Chanay, Chief Deputy Attorney General, 

Pamela Jo Bondi, Attorney General, Office of the Attorney 

General for the State of Florida, Jonathan A. Glogau, Chief, 

Complex Litigation, Henry V. Nickel, George P. Sibley III, 

Luther Strange, Attorney General, Office of the Attorney 

General for the State of Alabama, Robert D. Tambling, 

Assistant Attorney General, Greg Zoeller, Attorney General, 

Office of the Attorney General for the State of Indiana, 

Thomas M. Fisher, Solicitor General, David R. Taggart, 

Samuel S. Olens, Attorney General, Office of the Attorney of 

the State of Georgia, John E. Hennelly and James D. Coots, 

Senior Assistant Attorneys General, James D. ABuddy@

Caldwell, Attorney General, Office of the Attorney General 

for the State of Louisiana, Megan K. Terrell, Assistant 

Attorney General, Herman Robinson, Jackie M. Marve, 

Elliott Vega, Donald Trahan, Deidra Johnson, Kathy M. 

Wright, Aaron D. Lindstrom, Solicitor General, Office of the 

Attorney General for the State of Michigan, Neil David 

Gordon, Assistant Attorney General, Sean Peter Manning, 

Chief, Environmental, Natural Resources, and Agriculture 

Division, Blake Johnson, Assistant Attorney General, Doug 

Peterson, Attorney General, Office of the Attorney General 

for the State of Nebraska, Harold E. Pizzetta III, Assistant 

Attorney General, Office of the Attorney General for the State 

of Mississippi, E. Scott Pruitt, Attorney General, Office of the 

Attorney General for the State of Oklahoma, Patrick Wyrick, 

Solicitor General, P. Clayton Eubanks, Deputy Solicitor 

General, J.B. Van Hollen, Attorney General at the time the 

brief was filed, Office of the Attorney General for the State of 

Wisconsin, Thomas J. Dawson, Assistant Attorney General, 

USCA Case #11-1302 Document #1564814 Filed: 07/28/2015 Page 2 of 36
3

Michael DeWine, Attorney General, Office of the Attorney 

General for the State of Ohio, Dale T. Vitale, Gregg H. 

Bachmann and Elizabeth Ewing, Assistant Attorneys General, 

Alan Wilson, Attorney General, Office of the Attorney 

General for the State of South Carolina, James Emory Smith, 

Jr., Deputy Solicitor General, and Leslie Sue Ritts. William J. 

Cobb for the State of South Carolina entered an appearance.

Peter D. Keisler argued the cause for Industry and Labor 

Petitioners. With him on the briefs on remand were C. 

Frederick Beckner III, Roger R. Martella, Jr., Eric D. 

McArthur, Benjamin Beaton, F. William Brownell, P. Stephen 

Gidiere III, Grant Crandall, Arthur Traynor III, Eugene M. 

Trisko, Ann M. Seha, Daniel J. Kelly, William M. Bumpers, 

Joshua B. Frank, Megan H. Berge, Kelly M. McQueen, Janet 

J. Henry, Robert A. Manning, Joseph A. Brown, Mohammad

O. Jazil, Bart E. Cassidy, Katherine L. Vaccaro, Todd E. 

Palmer, Jordan J. Hemaidan, Valerie L. Green, Jeffrey L. 

Landsman, Vincent M. Mele, Richard G. Stoll, Brian H. Potts, 

Steven G. McKinney, C. Grady Moore III, Ben H. Stone, 

Terese T. Wyly, Karl R. Moor, William L. Wehrum, Jr., 

Margaret Claiborne Campbell, Bryon W. Kirkpatrick, 

Hahnah Williams Gaines, James S. Alves, Gary V. Perko, 

David M. Flannery, Kathy G. Beckett, Laura M. Goldfarb, 

Peter S. Glaser, Andrea Bear Field, Norman W. Fichthorn, E. 

Carter Chandler Clements, David R. Tripp, Dennis Lane, 

William F. Lane, and Maureen Harbourt. 

Shannon L. Goessling and Michael J. Nasi were on the 

brief for intervenor San Miguel Electric Cooperative, Inc. and 

Amicus Southeastern Legal Foundation, Inc. in support of 

petitioners on remand. Robert M. Cohan entered an 

appearance.

USCA Case #11-1302 Document #1564814 Filed: 07/28/2015 Page 3 of 36
4

Norman L. Rave, Jr. and Jessica O=Donnell, Attorneys, 

U.S. Department of Justice, argued the causes for 

respondents. With them on the brief were John C. Cruden, 

Assistant Attorney General, and Stephanie Hogan, Attorney, 

U.S. Environmental Protection Agency.

Andrew G. Frank, Assistant Attorney General, Office of 

the Attorney General for the State of New York, argued the 

cause for State and Local Intervenors in support of 

respondent. With him on the brief on remand were Eric T. 

Schneiderman, Attorney General, Barbara D. Underwood, 

Solicitor General, Steven C. Wu, Deputy Solicitor General, 

Michael J. Myers, Assistant Attorney General, Brian E. 

Frosh, Attorney General, Office of the Attorney General for 

the State of Maryland, Mary E. Raivel, Assistant Attorney 

General, Roy Cooper, Attorney General, Office of the 

Attorney General for the State of North Carolina, Marc 

Bernstein, Special Deputy Attorney General, Peter F. 

Kilmartin, Attorney General, Office of the Attorney General 

for the State of Rhode Island, Gregory S. Schultz, Assistant 

Attorney General, George Jepsen, Attorney General, Office 

of the Attorney General for the State of Connecticut, 

Kimberly P. Massicotte and Scott N. Koschwitz, Assistant 

Attorneys General, Matthew Denn, Attorney General, Office 

of the Attorney General for the State of Delaware, Valerie M. 

Edge, Deputy Attorney General, Lisa Madigan, Attorney 

General, Office of the Attorney General for the State of 

Illinois, Matthew J. Dunn and Gerald T. Karr, Assistant 

Attorneys General, William J. Moore III, Benna Ruth 

Solomon, Carrie Noteboom, William H. Sorrell, Attorney 

General, Office of the Attorney General for the State of 

Vermont, Thea Schwartz, Assistant Attorney General, Maura 

Healey, Attorney General, Office of the Attorney General for 

the Commonwealth of Massachusetts, Frederick D. 

Augenstern, Assistant Attorney General, Karl Racine, 

USCA Case #11-1302 Document #1564814 Filed: 07/28/2015 Page 4 of 36
5

Attorney General, Office of the Attorney General for the 

District of Columbia, Todd Kim, Solicitor General, Scott J. 

Schwarz, and William R. Phelan, Jr.

Graham G. McCahan argued the cause for Public Health 

Respondent Intervenors. With him on the brief on remand 

were Howard I. Fox, David S. Baron, Josh Stebbins, Vickie L. 

Patton, Sean H. Donahue, David Marshall, John Walke, and 

Emily Davis. Ann B. Weeks entered an appearance.

Brendan K. Collins argued the cause for Industry 

Respondent Intervenors. With him on the brief on remand 

were Robert B. McKinstry, Jr., Lorene L. Boudreau, and 

James W. Rubin.

Before: ROGERS, GRIFFITH, and KAVANAUGH, Circuit 

Judges.

Opinion for the Court filed by Circuit Judge

KAVANAUGH.

KAVANAUGH, Circuit Judge: The Clean Air Act requires 

EPA to set national ambient air quality standards, or NAAQS. 

Those standards limit the levels of common pollutants in the 

ambient air. See 42 U.S.C. § 7409(a). Under the Act, 

individual States are responsible for ensuring attainment 

within their States of federal air quality standards. But air 

pollution is “heedless of state boundaries.” EPA v. EME 

Homer City Generation, L.P., 134 S. Ct. 1584, 1593, slip op. 

at 2 (2014). Emissions in upwind States therefore may affect 

air quality in downwind States. The Clean Air Act’s “good 

neighbor” provision speaks to that problem by proscribing 

upwind States from “emitting any air pollutant in amounts”

that will “contribute significantly to nonattainment” of a

NAAQS in a downwind State. 42 U.S.C. § 7410(a)(2)(D)(i). 

USCA Case #11-1302 Document #1564814 Filed: 07/28/2015 Page 5 of 36
6

This case concerns EPA’s effort to regulate interstate air 

pollution pursuant to the good neighbor provision.

In 2011, EPA promulgated its latest good neighbor 

regulation, the Transport Rule, also known as the Cross-State 

Air Pollution Rule. A number of States, localities, and 

industry groups promptly challenged the Rule. They argued, 

among other things, that the Rule’s methodology for 

computing the upwind States’ emissions reduction obligations 

under the good neighbor provision exceeded EPA’s statutory 

authority. As relevant here, they contended that the Rule 

imposed uniform pollution reductions on upwind States 

regardless of the actual amounts of pollution that individual 

upwind States contributed to downwind States. According to 

petitioners, this methodology led to over-control of upwind 

States’ emissions. Applying our precedents in North 

Carolina v. EPA, 531 F.3d 896 (D.C. Cir. 2008), and 

Michigan v. EPA, 213 F.3d 663 (D.C. Cir. 2000), this Court

issued a 2-1 decision, with Judge Rogers dissenting, that 

agreed with petitioners and vacated the Rule. See EME 

Homer City Generation, L.P. v. EPA, 696 F.3d 7, 38 (D.C. 

Cir. 2012).

On review, the Supreme Court reversed in a 6-2 decision.

The Court ruled that the over-control problem did not require 

invalidation of the Rule “on its face.” EME Homer, 134 S. 

Ct. at 1609, slip op. at 31. In doing so, however, the Court 

stated that it “agree[d] with the Court of Appeals to this 

extent”: The Transport Rule requires “unnecessary”

emissions reductions when EPA “requires an upwind State to

reduce emissions by more than the amount necessary to

achieve attainment in every downwind State to which it is 

linked.” Id. at 1608-09, slip op. at 29-31. The Court stated 

that over-control of individual upwind States could be 

USCA Case #11-1302 Document #1564814 Filed: 07/28/2015 Page 6 of 36
7

contested through “particularized, as-applied challenge[s].” 

Id. at 1609, slip op. at 31.

Now on remand, we consider several as-applied overcontrol challenges to EPA’s 2014 emissions budgets. 

Petitioners challenge the 2014 SO2 emissions budgets for

Texas, Alabama, Georgia, and South Carolina. Petitioners 

also challenge the 2014 ozone-season NOX emissions budgets 

for Florida, Maryland, New Jersey, New York, North 

Carolina, Ohio, Pennsylvania, South Carolina, Texas, 

Virginia, and West Virginia. On this record, petitioners’ asapplied challenges are meritorious, and those 2014 emissions 

budgets are invalid. We therefore grant the petitions to that 

limited extent, and we remand without vacatur to EPA for it 

to reconsider those 2014 emissions budgets. 

In this opinion, we also must address a number of 

petitioners’ broader challenges to the Transport Rule that we 

did not have occasion to address in the prior case. We reject 

all of those claims and deny the petitions with respect to those 

issues.

I

The Transport Rule has been described in exhaustive 

detail in earlier phases of this litigation. See EPA v. EME 

Homer City Generation, L.P., 134 S. Ct. 1584, 1593-95, slip 

op. at 2-6 (2014). We summarize the main points here. 

The Clean Air Act regulates air quality through a federalstate collaboration. First, EPA establishes air quality 

standards known as NAAQS. See 42 U.S.C. § 7409(a). 

Then, EPA identifies areas within the States that have not 

attained those NAAQS. See id. § 7407(d). Those are called

“nonattainment” areas. Id. Next, the baton is passed to the

States, which have the first opportunity to enact plans that 

USCA Case #11-1302 Document #1564814 Filed: 07/28/2015 Page 7 of 36
8

provide for the “implementation, maintenance, and 

enforcement” of the NAAQS. Id. § 7410(a)(1). States 

typically must enact and submit their plans – called State 

Implementation Plans or SIPs – within three years of any new 

or revised NAAQS. Id. If a State declines to submit a SIP, or 

if EPA finds that the State’s SIP fails to satisfy the minimum 

criteria of the Clean Air Act, EPA must promulgate a Federal 

Implementation Plan, or FIP, in its stead. See id. 

§ 7410(c)(1).

Pollution emitted in upwind States can travel to 

downwind States. As a result, some “downwind States to 

which the pollution travels are unable to achieve clean air 

because of the influx of out-of-state pollution.” EME Homer, 

134 S. Ct. at 1593, slip op. at 1.

The Clean Air Act’s good neighbor provision addresses

the issue of interstate air pollution. That provision, as 

currently phrased, requires State SIPs to:

contain adequate provisions –

(i) prohibiting, consistent with the provisions of this 

subchapter, any source or other type of emissions 

activity within the State from emitting any air 

pollutant in amounts which will –

(I) contribute significantly to nonattainment in, or 

interfere with maintenance by, any other State 

with respect to any such national primary or 

secondary ambient air quality standard . . . .

42 U.S.C. § 7410(a)(2)(D).

1

 1 The Rule imposes good neighbor obligations based on 

emissions that “contribute significantly to nonattainment” of 

USCA Case #11-1302 Document #1564814 Filed: 07/28/2015 Page 8 of 36
9

The Transport Rule at issue here represents EPA’s latest 

effort to implement the requirements of the good neighbor 

provision. The Rule focuses on three NAAQS. (NAAQS 

regulate individual pollutants measured over a specified time 

period.) The NAAQS covered by the Transport Rule are the 

8-hour ozone NAAQS, the annual particulate matter (or 

PM2.5) NAAQS, and the 24-hour PM2.5 NAAQS. See

Transport Rule, 76 Fed. Reg. 48,208, 48,209 (Aug. 8, 2011). 

The Transport Rule does not directly regulate ozone and 

PM2.5. As gases are “carried downwind, they are 

transformed, through various chemical processes, into 

altogether different pollutants.” EME Homer, 134 S. Ct. at 

1594, slip op. at 3. The pollutants that become ozone in 

downwind States start out in upwind States as emissions of 

nitrogen oxide (NOX). See Transport Rule, 76 Fed. Reg. at 

48,209-10. The pollutants that become PM2.5 in downwind 

States start out in upwind States as emissions of NOX and 

sulfur dioxide (SO2). Id. Therefore, the Transport Rule 

promotes downwind attainment of ozone and PM2.5 NAAQS 

by limiting NOX and SO2 emissions in upwind States.

The Transport Rule employed a “two-step approach” to 

determine whether and to what extent a State must reduce its 

NOX and SO2 emissions pursuant to the good neighbor 

provision. EME Homer, 134 S. Ct. at 1596, slip op. at 7. 

In the first step, EPA identified the upwind States that 

“contribute significantly” to nonattainment of NAAQS in one 

 

NAAQS in downwind States and emissions that “interfere with 

maintenance” of NAAQS in downwind States. For ease of 

discussion, we focus on the “contribute significantly to 

nonattainment” prong. But our analysis of over-control applies to 

both prongs. 

USCA Case #11-1302 Document #1564814 Filed: 07/28/2015 Page 9 of 36
10

or more downwind States. See id. If a downwind State’s

receptor site is not in attainment and if an upwind State 

caused more than 1% of the pollution at that site, then that 

upwind State was deemed to have “contributed significantly.” 

See id. (Receptor sites are locations in downwind States

where EPA measures ambient air quality for pollutants 

regulated by the Clean Air Act. See id.) 

When an upwind State was found to contribute 1% or 

more of the relevant pollution at a downwind receptor, that 

upwind State was deemed to have a “linkage” to that 

downwind location. See Transport Rule, 76 Fed. Reg. at 

48,236. Any State with no such linkages was “screened out 

and exempted from regulation under the rule.” EME Homer, 

134 S. Ct. at 1596, slip op. at 7. Any State that had at least 

one linkage was subject to the Transport Rule. See id. EPA 

found 27 upwind States to have one or more linkages in

downwind States. See id. Those 27 States were then subject 

to the second step of the Transport Rule.

In the second step, EPA calculated the pollution 

reductions necessary for those 27 upwind States to comply 

with their good neighbor obligations. Recall that the good 

neighbor provision of the Act prohibits upwind States from 

emitting “amounts” of pollution that “contribute 

significantly” to nonattainment in downwind States. 42 

U.S.C. § 7410(a)(2)(D). EPA’s task at this second step was 

to decide what “amounts” of pollution each upwind State

needed to reduce.

But given what it described as the complexity of trying to 

assess the relative amount that each upwind State contributes 

to nonattainment in each downwind State, EPA decided to 

impose uniform emissions reductions on the upwind States

covered by the Rule. See EME Homer, 134 S. Ct. at 1607, 

slip op. at 26-27. In other words, once a State was deemed 

USCA Case #11-1302 Document #1564814 Filed: 07/28/2015 Page 10 of 36
11

subject to the Transport Rule, its obligation to reduce 

emissions would no longer depend on the actual amounts it 

emitted into individual downwind States. 

Using its uniform approach, EPA calculated how much 

pollution each upwind State could eliminate if all of its 

sources applied pollution control technologies available at

particular cost thresholds. See id. at 1596, slip op. at 7-8. 

Those cost thresholds were expressed in terms of cost per ton 

of emissions reduced.

In the end, EPA adopted four cost thresholds for the 27 

upwind States subject to the Transport Rule. For all States 

subject to the Rule for annual NOX, EPA set a $500/ton cost 

threshold. See Transport Rule, 76 Fed. Reg. at 48,250. For 

States subject to the Rule for ozone-season NOX, EPA also set 

a $500/ton cost threshold. See id. For States subject to the 

Rule for SO2, EPA divided the States into two groups. For 

Group 1 States, EPA set a $2,300/ton cost threshold. See id. 

at 48,259.

2

 For Group 2 States, EPA set a $500/ton cost 

threshold. See id.3

In the prior round of litigation, petitioners disputed 

EPA’s method of calculating emissions budgets for upwind 

States, and this Court found three main problems with EPA’s 

approach. First, the Rule could lead to over-control of 

upwind States – that is, emissions reductions beyond those 

 2 Group 1 States are Illinois, Indiana, Iowa, Kentucky, 

Maryland, Michigan, Missouri, New Jersey, New York, North 

Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia, 

and Wisconsin. See Transport Rule, 76 Fed. Reg. at 48,257.

3 Group 2 States are Alabama, Georgia, Kansas, Minnesota, 

Nebraska, South Carolina, and Texas. See Transport Rule, 76 Fed. 

Reg. at 48,257. 

USCA Case #11-1302 Document #1564814 Filed: 07/28/2015 Page 11 of 36
12

necessary to achieve attainment in downwind States. Second, 

the Rule could require States to reduce even insignificant 

contributions to pollution in downwind States. Third, the 

Rule did not purport to try to assess each upwind State’s

relative contribution to nonattainment in downwind States. 

We therefore concluded that EPA’s methodology violated the 

Clean Air Act, and vacated the Transport Rule.

The Supreme Court largely agreed with this Court on the

first two issues but not on the third. The Court concluded, 

moreover, that those first two issues did not support 

“wholesale invalidation” of the Transport Rule. EME Homer, 

134 S. Ct. at 1608, slip op. at 29. 

Most important for present purposes is the first issue, 

over-control. The Supreme Court “agree[d] with the Court of 

Appeals to this extent”: The Transport Rule violates the 

statute when it “requires an upwind State to reduce emissions 

by more than the amount necessary to achieve attainment in 

every downwind State to which it is linked.” Id.

But the Supreme Court concluded that the potential 

“over-control” did not “justif[y] wholesale invalidation of the 

Transport Rule.” Id. at 1608, slip op. at 28-29. Rather, as 

relevant here, if “any upwind State concludes it has been 

forced to regulate emissions . . . beyond the point necessary to 

bring all downwind States into attainment, that State may 

bring a particularized, as-applied challenge to the Transport 

Rule.” Id. at 1609, slip op. at 31.

That’s where we are now. 

II

We start by addressing petitioners’ as-applied challenges 

to the Transport Rule. 

USCA Case #11-1302 Document #1564814 Filed: 07/28/2015 Page 12 of 36
13

A

As the Supreme Court stated in EME Homer, the Clean 

Air Act authorizes EPA to “prohibit[] only upwind emissions 

that contribute significantly to downwind nonattainment.”

EPA v. EME Homer City Generation, L.P., 134 S. Ct. 1584, 

1604, slip op. at 21 (2014); see also id. at 1607, slip op. at 27 

(EPA may “require the elimination of only those ‘amounts’ of 

pollutants that contribute to the nonattainment of NAAQS in 

downwind States.”); id. at 1603-04, slip op. at 21 (“EPA’s 

task is to reduce upwind pollution, but only in ‘amounts’ that 

push a downwind State’s pollution concentrations above the 

relevant NAAQS.”).

4

In EME Homer, the Supreme Court rejected a facial 

challenge to EPA’s uniform approach and recognized that 

EPA must have some leeway to balance the possibilities of 

over-control and under-control of interstate emissions. The 

Court stated, however, that an upwind State may bring an asapplied challenge to EPA’s Transport Rule emissions budgets 

when EPA’s uniform approach has gone too far in proscribing 

emissions by upwind States. Id. at 1608-09, slip op. at 29-31. 

In such an as-applied challenge, how do we determine 

whether EPA has gone too far? 

 4 The Supreme Court held that the same was true for upwind 

States that “interfere with maintenance” at downwind locations. 

See EME Homer, 134 S. Ct. at 1604 n.18, slip op. at 22 n.18 (“Just 

as EPA is constrained, under the first part of the Good Neighbor 

Provision, to eliminate only those amounts that ‘contribute . . . to 

nonattainment,’ EPA is limited, by the second part of the provision, 

to reduce only by ‘amounts’ that ‘interfere with maintenance,’ i.e.,

by just enough to permit an already-attaining State to maintain 

satisfactory air quality.”). 

USCA Case #11-1302 Document #1564814 Filed: 07/28/2015 Page 13 of 36
14

The Supreme Court answered that question in EME 

Homer. As relevant here, it stated that EPA may not require

“an upwind State to reduce emissions by more than the 

amount necessary to achieve attainment in every downwind 

State to which it is linked.” Id. at 1608, slip op. at 29. If EPA 

does so, “the Agency will have overstepped its authority, 

under the Good Neighbor Provision, to eliminate those 

amounts that contribute to nonattainment.” Id. (alterations 

and internal quotation marks omitted).

When can we say that an upwind State has been required, 

in the Supreme Court’s words, “to reduce emissions by more 

than the amount necessary to achieve attainment in every

downwind State to which it is linked”? The answer again is 

clear from the Supreme Court’s EME Homer opinion: when 

those downwind locations would achieve attainment even if 

less stringent emissions limits were imposed on the upwind 

States linked to those locations. Id. at 1609, slip op. at 30-31.

For example, assume that a downwind location would 

meet its NAAQS if the upwind States to which it is linked 

implemented emissions reduction technologies available at a 

cost of $100/ton. Once those technologies are in place, the 

downwind location will be in attainment. If the upwind 

States also implemented emissions reduction technologies 

available at a cost of $200/ton, the emissions reductions that 

flow from those technologies would not help the downwind 

location reach attainment because it already reached 

attainment when technologies available at a cost of $100/ton 

were implemented. 

In evaluating petitioners’ as-applied challenges, we thus 

must determine whether a downwind location would still 

attain its NAAQS if linked upwind States were subject to less 

stringent emissions limits. If we answer in the affirmative, 

EPA has overstepped its authority. Importantly, that does not 

USCA Case #11-1302 Document #1564814 Filed: 07/28/2015 Page 14 of 36
15

mean that every such upwind State would then be entitled to

less stringent emissions limits. Some of those upwind States 

may still be subject to the more stringent emissions limits so 

as not to cause other downwind locations to which those 

States are linked to fall into nonattainment. Otherwise, 

however, upwind States in those circumstances should prevail

in their as-applied challenges.

5

B

1

Invoking EME Homer’s explicit authorization of asapplied challenges, petitioners challenge the 2014 SO2

emissions budgets for Texas, Alabama, Georgia, and South 

Carolina. Recall that SO2 emissions transform (along with 

annual NOX) into PM2.5 in downwind States.

We begin with Texas. At step one of its process for 

computing emissions budgets under the Transport Rule, EPA 

found Texas to be linked to PM2.5 nonattainment at only one 

downwind location, Madison, Illinois (171191007). Air 

Quality Modeling Final Rule Technical Support Document 

(June 2011), J.A. 2716. At step two, EPA grouped Texas 

with six other States and found that collectively those States

must reduce emissions at the $500/ton level in 2014. 

Transport Rule, 76 Fed. Reg. 48,208, 48,257 (Aug. 8, 2011).

 5 What if the downwind location would still reach attainment if 

one upwind State’s emissions limits were relaxed, but only so long 

as the other upwind States’ emissions limits were kept the same? 

We are not certain how the Supreme Court in EME Homer meant to 

resolve that question, but that issue is not presented in this case. 

Here, as we will explain, we know from EPA’s own data that the 

relevant downwind locations could reach attainment even if all of 

the relevant upwind States’ emissions limits were relaxed in a 

uniform manner. 

USCA Case #11-1302 Document #1564814 Filed: 07/28/2015 Page 15 of 36
16

However, EPA’s Technical Support Document for the 

Transport Rule – a document that EPA prepared when it 

proposed the Transport Rule – reveals that Madison, Illinois,

would attain its annual PM2.5 NAAQS even if all of the

upwind States linked to it implemented emissions reductions 

available at the $100/ton cost threshold. See Technical 

Support Document, Analysis to Quantify Significant 

Contribution (July 2010), J.A. 2231.6

Without any good neighbor reductions, Madison’s 

maximum pollution level for PM2.5 would be 16.85 μg/m3 in 

2012. J.A. 2231. The NAAQS for annual PM2.5 is 15 μg/m3

. 

See Transport Rule, 76 Fed. Reg. at 48,218. Madison 

therefore needed to reduce its pollution by 1.85 μg/m3.

According to EPA’s projections, if every State connected to 

Madison implemented pollution controls at a cost of 

$100/ton, Madison would reduce its PM2.5 by at least that 

amount in 2014. See J.A. 2231. 

Yet EPA required every State connected to Madison to 

implement pollution controls available at a cost of $500/ton

or greater.

7

 But EPA’s projections showed that if every State 

 6 At oral argument, EPA stated that it “changed the inputs into 

the models between proposal and final [Rule], so we don’t know if” 

the analysis in the Technical Support Document “still is true.” Tr. 

of Oral Arg. 58-59. But in the final Rule, EPA did not provide any 

updated analysis regarding cost thresholds below $500/ton. 

Therefore, for the purposes of these proceedings, we may and must 

rely on EPA’s initial analysis of those lower thresholds. On 

remand, EPA may of course update its analysis, but it must 

consider cost thresholds below $500/ton and it must justify its final 

calculation consistent with the directions set forth by the Supreme 

Court and this Court. 

7 Some States connected to Madison are in Group 1 for SO2, 

which must implement pollution controls at $2,300/ton. See 

USCA Case #11-1302 Document #1564814 Filed: 07/28/2015 Page 16 of 36
17

connected to Madison implemented pollution controls 

available at $500/ton, Madison’s PM2.5 would go down by 

2.61 μg/m3. J.A. 2231. That is 0.76 μg/m3 more than 

Madison needed to reduce in order to comply with its 

NAAQS. 

Put another way, by requiring reductions of $500/ton or 

greater for the upwind States linked to Madison, EPA 

required those States to help Madison overachieve its 

NAAQS by at least 0.76 μg/m3

. 

Texas is linked only to Madison, Illinois. Therefore, by 

requiring Texas to implement pollution controls available at 

$500/ton when controls in all contributing upwind States at 

$100/ton would bring Madison into attainment, EPA has 

required Texas “to reduce emissions by more than the amount 

necessary to achieve attainment in every downwind State to 

which it is linked,” in clear violation of the Supreme Court’s 

directive. EME Homer, 134 S. Ct. at 1608, slip op. at 29.

EPA similarly required Alabama, Georgia, and South 

Carolina to implement unnecessary emissions controls in their 

2014 SO2 emissions budgets.

Alabama is linked to four downwind locations: Fulton, 

Georgia (131210039), Hamilton, Ohio (390610014), 

Hamilton, Ohio (390610042), and Hamilton, Ohio 

(390618001). See J.A. 2715. Note that some counties

contain multiple receptor locations where EPA measures air 

quality; each location is demarcated with a unique 

identification number. EPA’s projections show that Fulton, 

Georgia, will come into attainment even if all States linked to 

 

Transport Rule, 76 Fed. Reg. at 48,259. Texas is in Group 2 for 

SO2, which requires pollution controls at $500/ton. Id. 

USCA Case #11-1302 Document #1564814 Filed: 07/28/2015 Page 17 of 36
18

it implement no good neighbor reductions in 2014. 

Moreover, all three locations in Hamilton, Ohio, will come 

into attainment even if all upwind States linked to them 

implement cost controls at $100/ton. See J.A. 2231. EPA is 

requiring Alabama to implement cost controls at $500/ton, 

when cost controls at $100/ton would bring every downwind 

location to which it is linked into attainment.

Georgia is connected to two downwind locations: 

Jefferson, Alabama (10730023) and Jefferson, Alabama 

(10732003). See J.A. 2715. EPA’s projections show that 

Jefferson, Alabama (10730023) will come into attainment if 

all States linked to it implement cost controls at $400/ton and 

Jefferson, Alabama (10732003) will come into attainment if 

all upwind States linked to it implement cost controls at 

$200/ton. See J.A. 2231. EPA is requiring Georgia to 

implement cost controls at $500/ton, when cost controls at 

$400/ton would bring every downwind location to which it is 

linked into attainment. 

South Carolina is linked to one location, Fulton, Georgia 

(131210039). See J.A. 2716. EPA’s projections showed that 

that location would come into attainment if all upwind States 

linked to it implemented no cost controls. J.A. 2231. Yet 

EPA is requiring South Carolina to implement pollution 

controls at $500/ton. 

In short, EPA’s 2014 SO2 emissions budgets for Texas, 

Alabama, Georgia, and South Carolina require each of those 

States “to reduce emissions by more than the amount 

necessary to achieve attainment in every downwind State to 

which it is linked.” EME Homer, 134 S. Ct. at 1608, slip op. 

at 29. The reductions on those four States are “unnecessary to 

downwind attainment anywhere.” Id. at 1609, slip op. at 30. 

Those emissions budgets are therefore invalid. 

USCA Case #11-1302 Document #1564814 Filed: 07/28/2015 Page 18 of 36
19

2

Next, we consider as-applied challenges to the Transport 

Rule’s 2014 ozone-season NOX emissions budgets related to 

the 1997 8-hour ozone NAAQS. Petitioners bring as-applied 

challenges to those 2014 budgets for Florida, Maryland, New 

Jersey, New York, North Carolina, Ohio, Pennsylvania, South 

Carolina, Texas, Virginia, and West Virginia.

For ozone-season NOX, the only record data showed that 

the downwind locations to which 10 of those 11 upwind 

States (all but Texas) were linked would comply with their 

NAAQS in 2014 even with no good neighbor obligation on 

the upwind States. See Transport Rule, 76 Fed. Reg. at

48,246 (linkages); J.A. 2550-76 (2014 Base Case Maximum 

Values). The conclusion is therefore simple. The 2014 

ozone-season NOX emissions budgets for those upwind States 

are invalid.

For Texas, petitioners acknowledge that some good 

neighbor obligation for ozone-season NOX may be 

appropriate, but they say that it must be far lower than 

$500/ton. The record supports their argument. The evidence 

indicates that the two downwind locations to which Texas is 

linked for ozone – East Baton Rouge, Louisiana and Allegan, 

Michigan – could comply with their NAAQS even if the 

upwind States to which those two locations were linked were 

subject to cost thresholds far lower than $500/ton. The 2014 

ozone-season NOX emissions budget for Texas is therefore 

invalid.

C

Despite those rather clear transgressions of the statutory 

boundaries as set forth by the Supreme Court in EME Homer, 

EPA argues that petitioners’ over-control challenges should 

USCA Case #11-1302 Document #1564814 Filed: 07/28/2015 Page 19 of 36
20

fail. EPA advances two main arguments, neither of which is

persuasive in light of the Supreme Court’s opinion.

First, EPA contends that over-attainment in downwind 

locations does not mean that there is impermissible overcontrol of upwind States. Regarding Texas, for instance, EPA 

says that Madison’s over-attainment “reflects incidental 

benefits flowing from emission reductions by other upwind 

States that are necessary to” achieve attainment at other 

downwind locations. EPA Br. at 53-54. 

EPA’s argument directly contravenes the Supreme 

Court’s analysis in EME Homer. According to the Supreme 

Court, over-attainment in downwind locations is permissible 

when it is “incidental to reductions necessary to ensure 

attainment elsewhere.” EME Homer, 134 S. Ct. at 1608, slip 

op. at 29. That happens, for instance, when “the emissions 

reduction required to bring one linked downwind State into 

attainment” is “large enough to push other linked downwind 

States over the attainment line.” Id.

The Supreme Court made crystal clear in EME Homer 

that over-attainment in downwind locations is impermissible 

when that excess attainment is “unnecessary.” Id. at 1609, 

slip op. at 29-30. “If EPA requires an upwind State to reduce 

emissions by more than the amount necessary to achieve 

attainment in every downwind State to which it is linked, the 

Agency will have overstepped its authority.” Id. at 1608, slip 

op. at 29. That is precisely what we have here.

Two examples of upwind States’ linkages to Madison, 

Illinois, illustrate the difference between permissible and 

impermissible over-attainment at downwind locations. 

The upwind State of Indiana is linked to Madison, Illinois,

as well as to 11 other downwind locations for annual PM2.5. 

USCA Case #11-1302 Document #1564814 Filed: 07/28/2015 Page 20 of 36
21

See J.A. 2715. To reach attainment, one of those downwind 

locations in Allegheny, Pennsylvania, needs all upwind States 

to which it is linked to implement cost controls at $2,300/ton

or higher. See J.A. 2715-16; Transport Rule, 76 Fed. Reg. at 

48,257. Therefore, regardless of the cost threshold that is 

necessary to bring Madison into attainment, Indiana must 

implement controls available at $2,300/ton in order to satisfy 

its good neighbor obligation to Allegheny. As a result, the 

benefits that Madison, Illinois, receives from those higher 

controls on Indiana are merely incidental to the reductions on 

Indiana that are necessary to bring other locations into 

attainment.

The upwind State of Texas, by contrast, is linked only to 

Madison, Illinois for annual PM2.5. Madison will come into 

attainment for annual PM2.5 if all States linked to it implement 

cost controls at $100/ton. If EPA requires Texas to 

implement cost controls at $500/ton, the over-attainment that 

Madison would achieve because of Texas’s incremental cost 

controls would not be an “incidental” benefit of other 

necessary good neighbor reductions imposed on Texas. 

Texas does not contribute significantly to nonattainment for 

PM2.5 at any other downwind location. Therefore, those 

$500/ton reductions from Texas cannot be necessary to – or 

even aid in – the achievement of attainment at any other 

downwind location. Requiring Texas to implement higher 

cost controls does not produce benefits that are “incidental” to 

attainment elsewhere; it produces benefits that are 

“unnecessary to downwind attainment anywhere.” EME 

Homer, 134 S. Ct. at 1609, slip op. at 29-30. 

Second, EPA argues that “imposing less stringent 

emission budgets” on those upwind States “would be 

inequitable and contrary to the rationale underlying uniform 

cost thresholds.” EPA Br. at 55. Specifically, EPA says that 

USCA Case #11-1302 Document #1564814 Filed: 07/28/2015 Page 21 of 36
22

uniform cost thresholds are important because they subject 

“to stricter regulation those States that have done relatively 

less in the past to control their pollution” and prevent those 

States from “free riding on their neighbors’ efforts to reduce 

pollution.” Id. (quoting EME Homer, 134 S. Ct. at 1607, slip 

op. at 27).

But EPA’s argument again flatly contradicts the 

crystalline holding of the Supreme Court in EME Homer. 

The Supreme Court could not have said it more clearly: “If 

EPA requires an upwind State to reduce emissions by more 

than the amount necessary to achieve attainment in every

downwind State to which it is linked, the Agency will have 

overstepped its authority.” EME Homer, 134 S. Ct. at 1608, 

slip op. at 29. The Court therefore explicitly authorized asapplied challenges that, when successful under the principles 

outlined by the Court, will necessarily mean a lack of 

uniformity in certain circumstances. 

It bears mention, moreover, that the Supreme Court’s 

conclusion on this point tracked the affirmative representation 

made by the Deputy Solicitor General to the Supreme Court 

that as-applied over-control challenges by upwind States 

would be permissible – even though such challenges, when 

successful, would necessarily mean the cost thresholds would 

not be uniform.8

 EPA is now saying something to this Court 

 8 The Supreme Court’s language allowing such as-applied 

over-control challenges was no accident, as examination of the oral 

argument transcript in that case reveals:

Justice Sotomayor: . . . [B]elow, the government conceded that 

there was a theoretical possibility that some States could be 

overcontrolled, that they would be implementing measures that 

would reduce their contributions to pollution below the 1 

USCA Case #11-1302 Document #1564814 Filed: 07/28/2015 Page 22 of 36
23

that is tension with, if not in contravention of, what the 

Deputy Solicitor General told the Supreme Court.

In sum, EPA’s uniform cost thresholds have required

States to reduce pollutants beyond the point necessary to 

 

percent. Assume that – I think there’s a theoretical possibility 

of that – but that your approach was basically fine. 

What would we do about that? First of all, are there measures 

States can take to get out of the FIP if it’s inappropriate to 

them because of overcontrol? And if not – and how do they do 

it? I mean, what’s the process? If we think there’s a flaw, do 

we vacate the rule? . . . .

Mr. Stewart [Deputy Solicitor General]: . . . [E]ven if we win 

everything that’s at issue in this Court, the case is not over. 

There are a variety of more specific challenges to the details of 

the rule that the D.C. Circuit found it unnecessary to address. 

And so if we won on the issues that are before the Court, the 

case would be remanded and there would be an opportunity for 

the court below to consider those. And to the extent –

Chief Justice Roberts: Including – including the overcontrol 

argument, or would that have been done?

Mr. Stewart: Well, to – to the extent that any State had – and I 

don’t know the – the pending as-applied challenges at this 

level of detail. But to the extent that any State has a properly 

preserved challenge to the effect that it is actually likely to be 

subject to overcontrol, then that could be heard by the court of 

appeals. The court of appeals could determine both whether 

that is, in fact, likely to happen and whether, if it does happen, 

that would render the rule arbitrary and capricious as to that 

State. 

Transcript of Oral Argument at 26:24-28:18, EPA v. EME Homer 

City Generation, L.P., 134 S. Ct. 1584 (2014) (Nos. 12–1182, 12–

1183) (italics added). 

USCA Case #11-1302 Document #1564814 Filed: 07/28/2015 Page 23 of 36
24

achieve downwind attainment. That violates the Supreme 

Court’s clear mandate in EME Homer.

D

The next question is the remedy for the invalid 2014 

emissions budgets. We will remand without vacatur the 2014 

emissions budgets that we have found invalid. Although 

there have been some critiques of the practice of remanding 

without vacatur, this Court’s precedents authorize remand 

without vacatur in certain limited circumstances. See, e.g.,

North Carolina v. EPA, 550 F.3d 1176, 1178 (D.C. Cir. 

2008); Advocates for Highway and Auto Safety v. Federal 

Motor Carrier Safety Administration, 429 F.3d 1136, 1151 

(D.C. Cir. 2005). Here, as petitioners themselves note,

vacatur could cause substantial disruption to the trading 

markets that have developed around the 2014 emissions 

budgets. Cf. NACS v. Board of Governors of Federal Reserve 

System, 746 F.3d 474, 493 (D.C. Cir. 2014) (remanding 

without vacating where “disruptive effect of vacatur [wa]s

high”) (internal quotation marks omitted). Moreover, as

petitioners have acknowledged, some good neighbor 

obligations may be appropriate for some of the relevant 

upwind States. In these circumstances, remand without 

vacatur is appropriate.

On remand, EPA, petitioners, or other parties as 

appropriate may provide new evidence, data, or calculations. 

To be sure, remand without vacatur creates a risk that an 

agency may drag its feet and keep in place an unlawful 

agency rule. With that in mind, we expect and urge EPA to 

move promptly on remand. If not, petitioners may promptly

bring suit against the Administrator for “failure . . . to 

perform,” in addition to other appropriate remedies petitioners

may choose to pursue. 42 U.S.C. § 7604(a)(2). 

USCA Case #11-1302 Document #1564814 Filed: 07/28/2015 Page 24 of 36
25

III

We now address petitioners’ other challenges to the 

Transport Rule that we did not have occasion to reach during 

petitioners’ last trip to this Court. 

A

To begin with, the State and local petitioners contend that 

EPA lacked authority to promulgate the Transport Rule FIPs 

for 22 of the 27 covered States. Starting in 2007, EPA 

approved SIPs for those 22 States. See Transport Rule, 76 

Fed. Reg. 48,208, 48,220-21 (Aug. 8, 2011).

9

 Those SIPs 

sought to fulfill the States’ good neighbor obligations by 

complying with the regulatory framework laid out in the 2005

Clean Air Interstate Rule or CAIR.

But in North Carolina v. EPA in 2008, this Court found 

CAIR to be “fundamentally flawed,” and instructed EPA to 

build a replacement for CAIR “from the ground up.” North 

Carolina v. EPA, 531 F.3d 896, 929 (D.C. Cir. 2008). The 

Court did not vacate CAIR. See North Carolina v. EPA, 550 

F.3d 1176, 1178 (D.C. Cir. 2008). Our decision in North 

Carolina prompted EPA to develop the Transport Rule.

EPA may promulgate a FIP only if a State declines to 

submit a SIP or if EPA finds that the State’s SIP does not 

meet all of the applicable requirements of the Clean Air Act. 

See 42 U.S.C. § 7410(c)(1).10 EPA, in other words, may not 

 9 Those States are: Alabama, Arkansas, Connecticut, Florida, 

Georgia, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maryland, 

Massachusetts, Minnesota, Mississippi, Missouri, New York, North 

Carolina, Ohio, Pennsylvania, South Carolina, Virginia, and West 

Virginia. See Transport Rule, 76 Fed. Reg. at 48,220-21.

10 The full provision provides that:

USCA Case #11-1302 Document #1564814 Filed: 07/28/2015 Page 25 of 36
26

promulgate a FIP for a State if it has previously approved a 

SIP for that State. Here, EPA had approved SIPs for 22 of the 

27 States covered by the Transport Rule. Therefore, in order 

to promulgate the Transport Rule FIPs, EPA first needed to 

revise its approval for the CAIR SIPs.

The Clean Air Act allows EPA to “revise” a prior SIP 

approval if that approval “was in error.” Id. § 7410(k)(6). In 

particular, the Clean Air Act provides that whenever “the 

Administrator determines that the Administrator’s action 

approving, disapproving, or promulgating any plan or plan 

revision (or part thereof) . . . was in error, the Administrator 

may . . . revise such action as appropriate without requiring 

any further submission from the State.” Id. Here, EPA 

invoked its correction powers under Subsection 7410(k)(6) to 

“rescind any statements that the [CAIR] SIP submissions 

either satisfy or relieve the state of the obligation to submit a 

SIP to satisfy the requirements of” the good neighbor 

provision. See Transport Rule, 76 Fed. Reg. at 48,220. 

 

The Administrator shall promulgate a Federal implementation 

plan at any time within 2 years after the Administrator – (A) 

finds that a State has failed to make a required submission or 

finds that the plan or plan revision submitted by the State does 

not satisfy the minimum criteria established under subsection 

(k)(1)(A) of this section, or (B) disapproves a State 

implementation plan submission in whole or in part, unless 

the State corrects the deficiency, and the Administrator 

approves the plan or plan revision, before the Administrator 

promulgates such Federal implementation plan.

42 U.S.C. § 7410(c)(1).

USCA Case #11-1302 Document #1564814 Filed: 07/28/2015 Page 26 of 36
27

Petitioners argue that EPA’s use of its Subsection 

7410(k)(6) correction power was invalid. They advance three 

distinct contentions. 

First, petitioners argue that EPA’s initial approval of the 

CAIR SIPs was not “in error,” and therefore could not be 

corrected pursuant to Subsection 7410(k)(6). But when our 

decision in North Carolina deemed CAIR to be an invalid 

effort to implement the requirements of the good neighbor 

provision, that ruling meant that the initial approval of the 

CAIR SIPs was in error at the time it was done. As the 

Supreme Court stated: “A judicial construction of a statute is 

an authoritative statement of what the statute meant before as 

well as after the decision of the case giving rise to that 

construction.” Rivers v. Roadway Express, Inc., 511 U.S. 

298, 312-13 (1994). 

Second, petitioners argue that because we remanded 

CAIR without vacatur in North Carolina, we cannot now 

conclude that EPA’s SIP approvals under CAIR were “in 

error.” But petitioners misunderstand why we declined to 

vacate CAIR in North Carolina. We left CAIR in effect 

temporarily because doing so was necessary to “at least 

temporarily preserve the environmental values covered by 

CAIR” until it could be “replaced by a rule consistent with 

our opinion.” North Carolina, 550 F.3d at 1178.

But critically, the decision to remand without vacatur did 

not alter the core holding of North Carolina: CAIR contained 

“fatal flaws” and needed to be replaced. North Carolina, 531 

F.3d at 901. Our decision to remand without vacating, 

therefore, does not change the conclusion that EPA’s original 

approvals of the CAIR SIPs were “in error” given our 

decision in North Carolina. 

USCA Case #11-1302 Document #1564814 Filed: 07/28/2015 Page 27 of 36
28

Third, petitioners say that EPA ran afoul of the Clean Air 

Act’s requirement that EPA correct SIP approval errors “in 

the same manner as the approval.” 42 U.S.C. § 7410(k)(6). 

We reject that argument because EPA did correct the SIP 

approvals “in the same manner” as it originally issued them. 

Both the original SIP approvals and the corrections were 

effectuated through rulemaking pursuant to the requirements 

of the Clean Air Act. 

It is true that, as petitioners note, EPA approved the 

original CAIR SIPs through rulemaking with notice and 

comment, but revised them through rulemaking without 

notice and comment. See Transport Rule, 76 Fed. Reg. at 

48,221. But both actions complied with the Clean Air Act’s 

framework for rulemaking. 

Under the Clean Air Act, rulemaking can be 

accomplished without notice and comment when EPA has 

“good cause” to forgo that extra procedure. See 42 U.S.C. 

§ 7607(d)(1). Specifically, the Clean Air Act permits EPA to 

conduct rulemaking without notice and comment when doing 

so would be appropriate under Subsection 553(b) of the 

Administrative Procedure Act, which sets forth a “good 

cause” exception.11

 11 The Clean Air Act exempts from its notice and comment 

requirements “any rule or circumstance referred to in 

subparagraphs (A) or (B) of subsection 553(b) of title 5.” 42 

U.S.C. § 7607(d)(1); cf. General Motors Corp. v. Ruckelshaus, 742 

F.2d 1561, 1565 n.6 (D.C. Cir. 1984). Those subparagraphs, in 

turn, provide two exceptions to the notice and comment 

requirement: (A) when the agency enacts interpretative rules, and 

(B) when the agency has good cause to forgo notice and comment. 

See 5 U.S.C. § 553(b)(A)-(B).

USCA Case #11-1302 Document #1564814 Filed: 07/28/2015 Page 28 of 36
29

Subsection 553(b)(B) provides that an agency has “good 

cause” to conduct rulemaking without notice and comment 

when proceeding through notice and comment would be 

“impracticable, unnecessary, or contrary to the public 

interest.” 5 U.S.C. § 553(b)(B). This Court has previously 

affirmed the use of the “good cause” exception when 

rulemaking without notice and comment is “a reasonable and 

perhaps inevitable response to” a “court order.” American 

Federation of Government Employees, AFL-CIO v. Block, 

655 F.2d 1153, 1157 (D.C. Cir. 1981). 

EPA explained here that it invoked the “good cause” 

exception because this Court’s decision in North Carolina 

invalidated the CAIR SIPs and commentators could not have 

said anything during a notice and comment period that would 

have changed that fact. See Transport Rule, 76 Fed. Reg. at 

48,222 (“EPA must accept the Court’s conclusion that 

compliance with CAIR does not satisfy the requirements of 

[the good neighbor provision] and lacks discretion to reach a 

different conclusion.”). EPA is correct that it would have 

been utterly “unnecessary” and wasteful to go through notice 

and comment given our decision in North Carolina. See 5 

U.S.C. § 553(b)(B).

In sum, EPA’s initial approval of the CAIR SIPs was “in 

error.” And EPA corrected that approval “in the same 

manner” as it approved the SIPs – that is, through a valid 

rulemaking.12

 12 Our conclusion on Subsection 7410(k)(6) is limited to the 

unusual circumstances here, in which a federal court says that EPA 

lacked statutory authority at the time to approve a SIP. We do not 

take a position on use of Subsection 7410(k)(6) in any other 

circumstances.

USCA Case #11-1302 Document #1564814 Filed: 07/28/2015 Page 29 of 36
30

B

Next, petitioners challenge two models used by EPA to 

create the Transport Rule. This Court’s review of EPA’s 

modeling choices is deferential. It is “only when the model 

bears no rational relationship to the characteristics of the data 

to which it is applied that we will hold that the use of the 

model was arbitrary and capricious.” Appalachian Power Co. 

v. EPA, 135 F.3d 791, 802 (D.C. Cir. 1998).

First, petitioners argue that EPA’s model for creating air 

quality projections was arbitrary and capricious because it 

used insufficient real-world data. In order to project 

downwind air quality, EPA used real-world data from 2003 to 

2007. See Transport Rule, 76 Fed. Reg. at 48,233-36. 

Petitioners argue that EPA should have verified its findings 

against air quality measured after 2007 as well.

EPA’s decision not to use post-2007 air quality data in 

the model was reasonable. As already discussed, in 2008, this 

Court invalidated CAIR, but we left that Rule in place until 

the Agency came up with a replacement. See North Carolina, 

550 F.3d at 1178. As a result, air quality data after 2007 

reflected “large emission reductions from CAIR” that would 

ultimately be displaced by the Transport Rule. See Transport 

Rule, 76 Fed. Reg. at 48,230. 

 

Moreover, given our narrow holding here, EPA’s use of its 

correction power under Subsection 7410(k)(6) should not be read to 

diminish the scope or force of Subsection 7410(k)(5), which 

provides that whenever “the Administrator finds that the applicable 

implementation plan for any area is substantially inadequate . . . the 

Administrator shall require the State to revise the plan as necessary 

to correct such inadequacies.” 42 U.S.C. § 7410(k)(5). 

USCA Case #11-1302 Document #1564814 Filed: 07/28/2015 Page 30 of 36
31

As EPA reasonably explained, because “the Transport 

Rule will replace CAIR, we must model a future year base 

case which does not assume that CAIR is in place (a ‘noCAIR’ case).” Id. 

Second, petitioners object to the model EPA used to set 

State emissions budgets. That model predicted the generation

and emissions produced at electric generating units within the 

States covered by the Transport Rule. Petitioners say that 

those predictions were arbitrary because EPA knew that there 

were “discrepancies” between the predictions and the actual 

generation and emissions at those units. EPA contends that 

the model’s “discrepancies are small and random and thus do 

not result in biases.” Transport Rule Primary Response to 

Comments (June 2011), J.A. 2089.

We will not invalidate EPA’s predictions solely because 

there might be discrepancies between those predictions and 

the real world. That possibility is inherent in the enterprise of 

prediction. The best model might predict that the Nationals 

will win the World Series in 2015. If that does not happen, 

you can’t necessarily fault the model. As we have said 

previously, the fact that a “model does not fit every 

application perfectly is no criticism; a model is meant to 

simplify reality in order to make it tractable.” Chemical 

Manufacturers Association v. EPA, 28 F.3d 1259, 1264 (D.C. 

Cir. 1994). 

C

Next, petitioners argue that EPA failed to properly 

regulate pursuant to the “interfere with maintenance” prong of 

the good neighbor provision. The Transport Rule regulates 

two different kinds of interstate air pollution. As we have 

discussed, the Rule regulates upwind emissions that 

“contribute significantly to nonattainment” of NAAQS in 

USCA Case #11-1302 Document #1564814 Filed: 07/28/2015 Page 31 of 36
32

downwind States. 42 U.S.C. § 7410(a)(2)(D)(i). The Rule

also regulates upwind emissions that “interfere with 

maintenance” of NAAQS in downwind States that have 

achieved attainment. Id. 

In North Carolina, we held that EPA must give 

“independent significance” to those prongs. North Carolina, 

531 F.3d at 910. We found that CAIR failed to do that. 

CAIR applied the interference with maintenance provision “in 

conjunction with the significant contribution to nonattainment 

provision and so did not use the maintenance prong to 

separately identify upwind States subject to CAIR.” Id.

(quoting 71 Fed. Reg. 25,328, 25,337 (Apr. 28, 2006)). Put 

another way, areas that found “themselves barely meeting 

attainment . . . due in part to upwind sources interfering with 

that attainment ha[d] no recourse under EPA’s interpretation 

of the interference prong” in CAIR. Id. 

Petitioners argue that the Transport Rule repeats the same 

error. We disagree. 

The Transport Rule’s methodology affords independent 

effect to the “interfere with maintenance” prong of the good 

neighbor provision. In formulating the Transport Rule, EPA 

“evaluat[ed] contributions to identified maintenance receptors 

as well as contributions to identified nonattainment 

receptors.” Transport Rule, 76 Fed. Reg. at 48,227; see also 

id. at 48,212 (“EPA thus identified specific emission 

reduction responsibilities for each upwind state found to 

significantly contribute to nonattainment or interfere with 

maintenance in other states.”) (emphasis added). 

With the Transport Rule, EPA created a distinct category 

of maintenance receptors that could independently trigger an 

upwind State’s good neighbor obligations. See id. at 48,228. 

Therefore, the Transport Rule complied with North 

USCA Case #11-1302 Document #1564814 Filed: 07/28/2015 Page 32 of 36
33

Carolina’s requirement that EPA give the nonattainment and 

maintenance prongs “independent significance.”

D

Petitioners also raise several objections to EPA’s 

methodology for identifying upwind States that “interfere 

with maintenance” at downwind locations. 

First, petitioners argue that EPA’s methodology for 

identifying upwind emissions that “interfere with 

maintenance” failed to “identify and analyze only those 

upwind emissions that might actually threaten continued 

attainment.” State and Local Br. at 20. Second, they argue 

that the methodology improperly required emissions 

reductions in upwind States without accounting for

maintenance secured by the downwind States’ own 

maintenance plans.13 As a result, it risked requiring 

emissions reductions that would be duplicative or 

unnecessary. Third, they say that EPA erred by focusing 

“exclusively on the utility sector for emissions reductions,” 

when that sector may not produce the emissions that interfere 

with maintenance at downwind locations. Id. at 21.

At bottom, each of those claims is an argument that 

EPA’s methodology could lead to over-control of upwind 

States that are found to interfere with maintenance at a 

downwind location. That could prove to be correct in certain 

 13 When a State believes that an area within its borders has 

reached a national air quality standard, that State may seek a 

“redesignation” of that area from “nonattainment” to attainment. 

See 42 U.S.C. § 7505a(a). That request must be accompanied by a 

revision to the State’s SIP, which “provide[s] for the maintenance 

of the” NAAQS “for at least 10 years after the redesignation.” Id. 

That revision is called a “maintenance plan.”

USCA Case #11-1302 Document #1564814 Filed: 07/28/2015 Page 33 of 36
34

locations. But the Supreme Court made clear in EME Homer 

that the way to contest instances of over-control is not 

through generalized claims that EPA’s methodology would 

lead to over-control, but rather through a “particularized, asapplied challenge.” EME Homer, 134 S. Ct. at 1609, slip op. 

at 31. And petitioners do not point to any actual such

instances of over-control at downwind locations.

As the Supreme Court stated, under the “interfere with 

maintenance” prong, EPA may only limit emissions “by just 

enough to permit an already-attaining State to maintain 

satisfactory air quality.” Id. at 1604 n.18, slip op. at 22 n.18. 

If States have been forced to reduce emissions beyond that 

point, affected parties will have meritorious as-applied 

challenges.

E

Finally, petitioners advance three new arguments on 

remand that we may not entertain at this time. 

We may hear objections to EPA rules or procedures only 

if the objections were “raised with reasonable specificity 

during the period for public comment.” 42 U.S.C. 

§ 7607(d)(7)(B). If it was “impracticable to raise a particular 

objection” or if “the grounds for the objection arose after that 

period,” parties still must petition EPA for administrative 

reconsideration before raising the issue before this Court. See 

Utility Air Regulatory Group v. EPA, 744 F.3d 741, 746 (D.C. 

Cir. 2014). This may sometimes seem a roundabout 

procedure, but that is what the statute requires and what we 

therefore must insist upon. If EPA fails to conduct a 

reconsideration hearing, the party may seek review of that 

decision in this Court. See 42 U.S.C. § 7607(d)(7)(B) (“If the 

Administrator refuses to convene such a proceeding, such 

USCA Case #11-1302 Document #1564814 Filed: 07/28/2015 Page 34 of 36
35

person may seek review of such refusal in the United States 

court of appeals for the appropriate circuit.”). 

First, petitioners argue that EPA violated the Clean Air 

Act’s notice and comment requirements by significantly 

amending the Rule between the proposed and final versions 

without providing additional opportunity for notice and 

comment. Because that argument is an objection to the notice 

and comment process itself, petitioners obviously did not and 

could not have raised it during the period for public comment. 

Under Subsection 7607(d)(7)(B), however, the only

appropriate path for petitioners to raise this issue is through 

an initial petition for reconsideration to EPA. At least one 

party to the present suit has done just that. See Br. of

Intervenor San Miguel Electric Cooperative, Inc. and Amicus 

Southeastern Legal Foundation, Inc. at 27. EPA has not ruled 

on that request, and the parties have not asked for judicial

review of EPA’s delay in acting. Id. We are without 

authority at this time to reach this question. 

Second, petitioners argue that EPA did not have authority 

to promulgate certain Transport Rule FIPs because those FIPs 

were signed by the EPA Administrator before EPA published 

its disapproval of the CAIR SIPs in the Federal Register. 

Petitioners did not raise this issue before the Agency during 

notice and comment, and EPA has not denied any petition for 

reconsideration raising this objection. We therefore may not

entertain it now. 

Third, petitioners argue that EPA exceeded its authority 

by finding linkages based on upwind contributions to 

downwind locations that were designated in “attainment” or 

“unclassifiable.” See 42 U.S.C. § 7407(d). Petitioners again 

did not raise this argument during the notice and comment 

period or otherwise comply with 42 U.S.C. § 7607(d)(7)(B). 

USCA Case #11-1302 Document #1564814 Filed: 07/28/2015 Page 35 of 36
36

This question is therefore not properly before this Court, and 

we may not reach it now.

* * *

To sum up: We hold invalid the 2014 SO2 emissions 

budgets for Alabama, Georgia, South Carolina, and Texas, as 

well as the 2014 ozone-season NOX budgets for Florida, 

Maryland, New Jersey, New York, North Carolina, Ohio, 

Pennsylvania, South Carolina, Texas, Virginia, and West 

Virginia. We remand without vacatur to EPA for it to 

reconsider those emissions budgets. We reject all of 

petitioners’ other challenges to the Transport Rule, including 

all of their facial challenges to the Rule. The petitions for 

review are therefore granted in part and denied in part.

So ordered.

USCA Case #11-1302 Document #1564814 Filed: 07/28/2015 Page 36 of 36