pillsbuiy 

Pillsbury Winthrop Shaw Pittman LLP 

2300 N Street, NW I Washington, DC 20037-1122 1 tel 202.663.8000 1 fax 202.663.8007 

Peter Wyckoff 

Phone: 202.663.8856 

peter.wyckoff@pillsburylaw.com 

March 10, 2011 

VIA EMAIL AND FIRST-CLASS MAIL 

Peter Tsirigotis, Director 

Sector Policies and Programs Division 

Mail Drop D205-01 

U.S. Environmental Protection Agency 

Research Triangle Park, NC 27771 

Re: Grandfather Exemptions for Kilns in Brick MACT Rulemaking 

Dear Mr. Tsirigotis: 

I am writing on behalf of the Brick Industry Association (BIA) to ask EPA to include a 

"grandfather" exemption in its upcoming proposal of MACT standards for the Brick and 

Structural Clay Products Manufacturing (BSCP) category. Such an exemption is one way to 

mitigate the impact of a decision by EPA, if it occurs, to base the stringency of the upcoming 

MACT proposal partly on reductions engendered by the vacated Brick MACT standard — the socalled "MACT-on-MACT" approach, which BIA regards as unfair and unlawful. I understand 

that BIA and your staff are exploring other ways of mitigating the impact of that approach. 

BACKGR4UND 

BIA very much appreciated the confirmation in Janet McCabe's letter of December 8, 

2010, to Susan Miller that: "EPA seeks to avoid creating circumstances where any future rule 

would result in replacement of technology rather than optimization of that technology or 

incremental performance improvements through additional controls." Grandfathering is a 

readily available regulatory tool for keeping the eventual MACT standards for BSCP units firom 

forcing the unwarranted replacement of one control technology with another. 

According to BIA, many, if not all, of the existing major-source tunnel kilns that were 

required by the 2003 Brick MACT standard to install control technologies, such as DLAs, 

remain subject to Title V permit conditions requiring the continued operation of those control 

technologies, even though the D.C. Circuit vacated that standard in 2007. Indeed, EPA has kept 
Mr. Peter Tsirigotis 

March 10, 2011 

Page 2 

the 2003 standard in the Code of Federal Regulations without any indication that it has been 

vacated, perhaps in an attempt to buttress those Title V permit conditions. See 40 CFR §§ 

63.8380 et seq. In any event, the upcoming Brick MACT might be stringent enough to require 

those same kilns to remove the existing technology and substitute more stringent controls, such 

as DFFs. Grandfathering is well suited to prevent such a"replacement of technology," to use 

Ms. McCabe's wording. 

LEGAL BASIS FOR A GRANDFATHER EXEMPTION 

EPA llas authority, and indeed a legal obligation, to protect tunnel kilns in those 

circumstances. The logic fiom a legal standpoint is as follows: 

Although the Clean Air Act (CAA) expressly authorizes the D.C. Circuit to review 

and overturn a MACT standard, it is silent on the parameters EPA must follow in 

responding to a mandate of the D.C. Circuit that, as is customary, simply vacates and 

remands the standard. Certainly, there is nothing in the CAA that explicitly requires 

EPA to apply a replacement MACT standard retroactively to kilns that in effect have 

remained subject to the vacated standard through the operation of the Title V 

permitting prograrn. While the vacatur of a MACT standard might be seen as 

returning EPA to the status quo ante with respect to the dictates of section 112, this 

view fails to take into account the practical reality that, as is the case with the vacated 

Brick MACT, the original promulgation did happen and did have real world impacts, 

such as engendering the installation of control equipment and continued enforcement 

through Title V permitting. Congress in fashioning section 112 simply did not 

address that contingency explicitly. 

In these circumstances, where there is a gap in the statutory fabric, EPA may fashion 

its own regulatory parameters so long as the parameters reasonably reflect and 

accommodate the language, structure and purposes of the CAA. See genej-ally 

Whitman v. Amef-ican TYuckingAssociations, Inc., 531 U.S. 457 (2001); Clzevron 

U.S.A. Inc. v. NRDC, 467 U.S. 837 (1984). As you know, grandfather exemptions are 

a common feature of EPA's PSD/NSR regulations, in pai -t because of the absence in 

the CAA of specific direction on the retroactive application of new or different 

permitting requirements. See, e.g., Citizens to Save Spencer -County v. EPA, 600 F.2d 

844 (D.C. Clr. 1979). See also EDF v. EPA, 82 F.3d 451, 455-56 (D.C. Cir. 1996) 

(upholding a grandfather exemption built into EPA's regulation tmpleinenting section 

176 SIP conformity requirements). 

• Moreover, the federal courts in construing federal statutes have established a strong 

presumption against retroactivity, which presumption can be overcome only by 

express statutory language requiring retroactive application of the rule in question. 

See Landgraf v. USI Film Pfroducts, 511 U.S. 244, 280 (1994). Here, as mentioned, 

there is no such express statutory language in the CAA. 
Mr. Peter Tsirigotis 

March 10, 2011 

Page 3 

Many years ago, the D.C. Circuit approved in part a grandfather exemption in EPA's 

stack height rule because the relevant portion of the CAA was also silent on 

retroactivity. In doing so, it pointed to the criteria that had emerged in other cases for 

justifying agency decisions on prospective versus retrospective application of rules. 

See Sierra Club v. EPA, 719 F.2d 436, 467-68 (1983). Those criteria provide a"safe 

harbor" framework for structuring a grandfathering exemption for a MACT standard 

that is a replacement for a vacated MACT standard. Also, they clearly call for 

granting grandfather status to the kilns still subject de facto to the 2003 Brick MACT 

standard through Title V permitting. 

In 1994, EPA adopted into a rule implementing section 612 of the CAA a grandfathei - 

exemption that explicitly employs those criteria. See 59 Fed. Reg. 13044, 13152 (40 

CFR §82.184(c)). The exemption remains in effect. See 40 CFR §82.184(c) (2010). 

Thus, EPA plainly regards the criteria as a sound basis for administering 

"grandfather" protections. 

• In sum, given the silence of the CAA on the vacatur situation, the strong judicial 

distaste for the retroactive application of new rules, and the criteria applied by the 

1983 Sierra Club decision, the D.C. Circuit can be expected to uphold a grandfather 

exemption for kilns that installed controls in reliance on the 2003 Brick MACT 

standard and have been required through Title V to keep them in operation despite the 

vacatur. 

BIA would be grateful to hear the reactions of you and your staff to the idea presented 

here of a grandfather exemption. The prospect of such an exemption would help to allay the 

strong fears of the brick industry that the upcoming Brick MACT might be overly stringent and 

rigid. If you have any questions, please let me know. Thank you. 

Sincerely, 

Tdm ~f 

 /,I~ 0~ & ql 

Peter H. Wyckoff 

cc: Scott Fulton (EPA-OGC) 

Janet McCabe (EPA-OAR) 

Susan Miller (BIA) 

Terry Schimmel (BIA) 

Jeff Telander (EPA-OAQPS)