United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued November 7, 2012 Decided January 22, 2013

No. 10-1347

HONEYWELL INTERNATIONAL, INC. AND E. I. DU PONT DE 

NEMOURS AND COMPANY,

PETITIONERS

v.

ENVIRONMENTAL PROTECTION AGENCY,

RESPONDENT

ARKEMA INC., ET AL.,

INTERVENORS

Consolidated with 10-1348, 10-1349, 10-1350

On Petitions for Review of Rules of 

the Environmental Protection Agency

Timothy K. Webster argued the cause for petitioners. 

With him on the briefs were James R. Wedeking, Richard 

Ayres, Jessica Olson, Chet M. Thompson, Robert J. Meyers, 

and David Y. Chung.

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

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

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Diane E. McConkey, Attorney. Matthew R. Oakes, Trial 

Attorney, entered an appearance.

Dan Himmelfarb argued the cause for intervenors. With 

him on the brief were John S. Hahn, Roger W. Patrick, Brian 

J. Wong, William J. Hamel, Roscoe C. Howard Jr., and Gia 

V. Cribbs.

Before: ROGERS, BROWN, and KAVANAUGH, Circuit 

Judges.

Opinion for the Court filed by Circuit Judge 

KAVANAUGH, with whom Circuit Judge ROGERS joins.

Dissenting opinion filed by Circuit Judge BROWN.

KAVANAUGH, Circuit Judge: Under the Clean Air Act, 

the Environmental Protection Agency administers a cap-andtrade program regulating the production and consumption of 

hydrochlorofluorocarbons, a class of ozone-depleting 

pollutants. (We frown on excessive use of acronyms, but in a 

case involving a 24-letter word, we think it appropriate to use 

HCFCs for hydrochlorofluorocarbons.) This cap-and-trade 

program entails overall caps on production and consumption 

of various HCFCs for each year, as well as EPA-administered

baseline allowances of HCFCs for each participating 

company. Companies are then permitted to transfer their 

allowances, subject to certain statutory and regulatory 

restrictions.

Honeywell and DuPont, whom we refer to collectively as 

Honeywell, complain that certain 2008 transfers made by 

their competitors Arkema and Solvay were deemed to 

permanently increase those competitors’ future baseline 

allowances of HCFC-22. Because there is an overall cap on 

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HCFC-22 production, this is a zero-sum system: The 

increased allowances to Arkema and Solvay in turn reduced

Honeywell’s market share and allowances of HCFC-22. The 

problem for Honeywell here is that this Court concluded in 

Arkema Inc. v. EPA that those permanent transfers were valid 

under the Clean Air Act. 618 F.3d 1, 6-9 (D.C. Cir. 2010). 

Honeywell believes that Arkema was incorrectly decided. 

Absent en banc review, we must adhere to circuit precedent. 

And because Honeywell’s other challenges to the 2008 

transfers are meritless, we deny the petitions for review. 

I

The Clean Air Act gradually phases out all HCFCs over 

five regulatory periods spanning to 2030. See 42 U.S.C. 

§§ 7671d(c), 7671e(b). In the meantime, the Act regulates

HCFCs through a cap-and-trade program administered by the 

Environmental Protection Agency. There are overall caps on 

production and consumption of each HCFC for each year. 

And for each regulatory period, EPA allots a baseline 

allowance for each regulated HCFC to each company

participating in the cap-and-trade program. EPA has always 

set baseline allowances by considering historical usage of 

HCFCs by participating companies. 

The Clean Air Act permits companies to transfer their 

allowances. Two kinds of transfers are permitted –

interpollutant transfers and intercompany transfers. In an 

interpollutant transfer, a company swaps its allowance of a 

particular HCFC for a particular year for its allowance of a 

different HCFC for the same year. See 42 U.S.C. 

§ 7671f(b)(1). In an intercompany transfer, two companies 

swap allowances of the same HCFC. See 42 U.S.C. 

§ 7671f(c). Intercompany transfers may permanently affect 

the trading companies’ baseline allowances of that HCFC, 

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with one company having a higher allowance and one having 

a lower allowance. 76 Fed. Reg. 47,451, 47,459-60 (Aug. 5, 

2011). 

In 2008, EPA approved the interpollutant transfers at 

issue in this case. Arkema made transfers swapping its

allowance of HCFC-142b for an increase in its allowance of 

HCFC-22. Solvay did the same.

In 2009, EPA set baseline allowances for the 2010-2014

regulatory period. EPA did not recognize the 2008 

interpollutant transfers by Arkema and Solvay in setting their 

baseline allowances for HCFC-22. 74 Fed. Reg. 66,412, 

66,419 (Dec. 15, 2009). Arkema and Solvay then challenged 

EPA’s rule. In Arkema Inc. v. EPA, this Court held that EPA 

had to honor the transactions EPA previously approved and 

had to recognize the 2008 transfers in setting Arkema and 

Solvay’s baseline allowances for HCFC-22 for 2010-2014, at 

least so long as EPA continued to set baselines by considering 

the historical usage of HCFCs by participating companies. 

618 F.3d 1, 6-9 (D.C. Cir. 2010). 

Following Arkema, EPA incorporated the 2008 transfers 

into the baseline allowances of HCFC-22 for 2010-2014, 

thereby reducing Honeywell’s HCFC-22 market share and 

allowances. 76 Fed. Reg. at 47,459. Honeywell filed a 

petition for review in this Court, challenging the 2008 

transfers that formed the basis for the new baseline HCFC-22 

allowances for 2010-2014. EPA, along with intervenors 

Arkema and Solvay, respond that Honeywell lacks standing; 

that Honeywell’s petitions are untimely; and that our decision 

in Arkema forecloses Honeywell’s claims. We conclude that 

we have jurisdiction and that the petitions are timely. But 

based on Arkema, we deny the petitions on the merits.

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II

The initial question is whether Honeywell has standing to 

challenge EPA’s approval of the 2008 interpollutant transfers

by Arkema and Solvay and the transfers’ corresponding effect 

on the baseline allowances for the 2010-2014 period. To 

establish standing, Honeywell must show a cognizable injury 

in fact that is concrete and particularized and actual or 

imminent; that its injuries are fairly traceable to EPA’s

allegedly unlawful conduct; and that a favorable ruling will 

likely remedy its injuries. Lujan v. Defenders of Wildlife, 504 

U.S. 555, 560-61 (1992).

Honeywell has suffered an injury in fact. The decrease in

Honeywell’s market share and in allowances of HCFC-22 is a 

concrete and particularized injury. Honeywell’s injury is 

fairly traceable to the now-permanent 2008 interpollutant 

transfers by Arkema and Solvay because the injury would not 

have occurred but for the 2008 transfers. See Duke Power 

Co. v. Carolina Environmental Study Group, Inc., 438 U.S. 

59, 74-75 (1978); LaRoque v. Holder, 650 F.3d 777, 789 

(D.C. Cir. 2011); Community Nutrition Institute v. Block, 698 

F.2d 1239, 1247 (D.C. Cir. 1983) (“A plaintiff need only 

make a reasonable showing that ‘but for’ defendant’s action 

the alleged injury would not have occurred.”). And because

Honeywell’s market share and allowances of HCFC-22 would 

not have decreased but for the now-permanent 2008 transfers, 

invalidating the 2008 transfers would remedy Honeywell’s 

injuries. Honeywell has therefore satisfied all of the

requirements of standing. 

EPA relatedly suggests that Honeywell’s challenge is 

untimely. We disagree. Although many challenges to EPA 

action under the Clean Air Act must be filed within 60 days 

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from the date that the notice appears in the Federal Register, 

challenges “based solely on grounds arising after” the 

expiration of the 60-day period are permitted so long as they 

are filed within 60 days of the new grounds. 42 U.S.C. 

§ 7607(b)(1). 

Here, this Court’s decision in Arkema constitutes afterarising grounds, and Honeywell filed within 60 days of that 

decision. Honeywell could not have raised its merits 

arguments until our decision in Arkema. In particular, several 

of Honeywell’s arguments depend on the premise that the 

2008 interpollutant transfers by Arkema and Solvay were 

permanent. Prior to Arkema, however, EPA viewed the 

transfers as lasting only for a limited time – that is, not 

permanently. Arkema changed the legal landscape on that 

issue, which suffices to constitute after-arising grounds under 

the circumstances of this case. 

Having resolved the various threshold arguments in 

Honeywell’s favor, we turn to the merits of Honeywell’s 

arguments. 

III

On the merits, Honeywell’s main contention ultimately 

boils down to a claim that permanent interpollutant transfers 

are prohibited by Section 607 of the Clean Air Act. 

Honeywell notes that Section 607 permits interpollutant

transfers of an allowance of one HCFC for an allowance of a 

different HCFC only “for the same year.” 42 U.S.C. 

§ 7671f(b)(1). Honeywell explains, moreover, that there is no 

similar “for the same year” limitation on intercompany 

transfers. See id. at § 7671f(c). Intercompany transfers may 

permanently affect baseline allowances. Honeywell thus 

argues that interpollutant transfers are good only for the same 

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year in which the transfers are made and should not be 

permanent or affect a company’s baseline allowance for a 

new regulatory period. 

Put simply, Honeywell’s claim is foreclosed by this 

Court’s decision in Arkema. Arkema held that EPA, having 

approved the 2008 interpollutant transfers, had to honor them

in the future, at least so long as EPA continued to set 

baselines by considering the historical usage of HCFCs by 

participating companies. Arkema, 618 F.3d at 6-9. To reach 

that conclusion, as EPA correctly explains in its brief here, the

Arkema Court necessarily concluded that permanent 

interpollutant transfers were permissible under the statute. 

That conclusion controls in this case. 

Honeywell disagrees strongly with this Court’s decision 

in Arkema. For that matter, EPA says that it too disagrees 

with Arkema. (Intervenors Arkema and Solvay are of course 

happy with Arkema.) Absent en banc review, we are bound 

by the Arkema decision. 

In a roundabout attempt to undermine the now-permanent 

2008 transfers, Honeywell also raises longshot procedural 

challenges to the 2008 transfers themselves. The basic 

answer to those various arguments is that Honeywell had 

notice and an opportunity to present its views during EPA’s 

pre-Arkema regulatory proceedings, during the Arkema

litigation, and during EPA’s subsequent post-Arkema 

proceedings. Because Honeywell had notice and an 

opportunity to comment, and EPA’s reasonable interpretation 

of its regulation controls, see Auer v. Robbins, 519 U.S. 452, 

461 (1997), its procedural objections to the 2008 transfers are 

unavailing. As is apparent from the briefing, Honeywell’s 

real problem here is the permanence of the 2008 

interpollutant transfers by Arkema and Solvay and the altered 

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HCFC-22 allowances for the 2010-2014 period. In other 

words, Honeywell’s real problem is Arkema. But a panel 

cannot remedy that problem.

* * *

We deny the petitions for review.

So ordered.

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BROWN, Circuit Judge, dissenting: In Arkema, this Court 

held that EPA changed the legal landscape by not giving 

effect to the 2008 transfers in the new regulatory period—in 

other words, that the 2008 transfers had always been 

permanent. See 618 F.3d at 8–9. Thus, Arkema cannot 

constitute after-arising grounds and the petitions for review 

are untimely. 

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