6 of 13 DOCUMENTS

HONEYWELL INTERNATIONAL, INC., PETITIONER v. ENVIRONMENTAL

PROTECTION AGENCY, RESPONDENT ATOFINA CHEMICALS, INC.,

INTERVENOR

No. 02-1294

UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA

CIRCUIT

374 F.3d 1363; 362 U.S. App. D.C. 538; 2004 U.S. App. LEXIS 15273; 58 ERC (BNA)

2057; 34 ELR 20065

February 26, 2004, Argued

July 23, 2004, Decided

SUBSEQUENT HISTORY: Modified by, Rehearing

granted by, in part, Rehearing denied by, in part

Honeywell Int'l, Inc. v. EPA, 2005 U.S. App. LEXIS 298

(D.C. Cir., Jan. 7, 2005)

Rehearing granted by, in part, Rehearing denied by, in

part, Dissenting Opinion at Honeywell Int'l v. EPA, 393

F.3d 1315, 2005 U.S. App. LEXIS 247 (D.C. Cir., Jan. 7,

2005)

PRIOR HISTORY: [***1] On Petition for Review

of an Order of the Environmental Protection Agency.

DISPOSITION: Vacated and remanded.

COUNSEL: Angus Macbeth argued the cause for

petitioner. With him on the briefs were Timothy K.

Webster and Richard E. Ayres. Barry S. Neuman entered

an appearance.

Thomas A. Lorenzen, Attorney, U.S. Department of

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

brief were Steven Edward Rusak, Attorney,. Lisa M.

Jaeger, Acting General Counsel, U.S. Environmental

Protection Agency, and Jan M. Tierney, Attorney.

Sheila A. Millar argued the cause for intervenor

ATOFI-NA Chemicals, Inc. With her on the brief were

Peter L. de la Cruz and Jean-Cyril Walker.

JUDGES: Before: SENTELLE, RANDOLPH and

ROGERS, Circuit Judges. Opinion for the Court filed.

Concurring opinion filed by Circuit Judge RANDOLPH,

with whom Circuit Judge SENTELLE joins. Opinion

concurring in part and dissenting in part filed by Circuit

Judge ROGERS.

OPINION

[*1364] [**539] PER CURIAM: The opinion of

the court is presented in two parts. In the first part, Judge

Rogers writes for a unanimous court to introduce the

issues presented and to hold that Honeywell International,

Inc. has standing to challenge the rule on review

promulgated by the Environmental [***2] Protection

Agency ("EPA"). In the second part, Judge Sentelle

writes for himself and Judge Randolph on Honeywell's

challenge to EPA's reliance on economic considerations

in promulgating the rule on review, concluding that the

rule must be vacated; Judge Randolph writes on the

remedy; and Judge Rogers concurs in part and dissents in

part, and would remand the rule to EPA for further

explanation.

Page 1
PART I

ROGERS, Circuit Judge, writing in PART I the

opinion of the court: Title VI of the Clean Air Act

("CAA"), 42 U.S.C. §§ 7671-7671q (2004), implements

the policies and directives of the Montreal Protocol on

Substances that Deplete the Ozone Layer, Sept. 16, 1987,

26 I.L.M. 1550 (entered into force Jan. 1, 1989), in two

ways relevant to this appeal: first, by setting timetables

for phasing out production and importation of chemicals

that deplete the protective stratospheric ozone layer, such

as chlorofluorocarbons ("CFCs") and

hydrochlorofluorocarbons ("HCFCs"), and second, by

identifying substitutes for ozone-depleting substances

[*1365] [**540] thus phased out. Among the industrial

uses of CFCs and HCFCs is the manufacture of foam

products. In 1999 the [***3] Environmental Protection

Agency ("EPA") designated HFC-245fa, a nonozone

depleting hydrofluorocarbon ("HFC") product developed

by Honeywell International, Inc. ("Honeywell"), as an

acceptable listed substitute for HCFC-141b, an

ozonedepleting chemical scheduled to be phased out in

2003, for all foam uses. Honeywell now challenges a

final rule also authorizing as substitutes for HCFC-141b

the use of two ozonedepleting chemicals -- HCFC-22 and

HCFC-142b -- in certain foam end-uses if technical

constraints prevent use of an approved listed alternative.

Honeywell contends that EPA exceeded its statutory

authority and departed from its policy without rational

explanation by approving ozonedepleting chemicals

because EPA (1) failed to provide adequate notice of its

decision to approve HCFC-22 and HCFC-142b where its

rule had proposed the opposite; (2) had previously

approved substitutes that, in relative terms, present a

reduced risk to human health and the environment; and

(3) improperly considered potential economic impact

when rendering its final decision. EPA responds, as a

threshold matter, that Honeywell lacks standing, and on

the merits, that there was adequate notice, and that

Honeywell [***4] misconstrues the effect of the listing

of an approved substitute chemical and ignores that

continued use of ozone-depleting chemicals under the

rule turns only on technical feasibility and not costs. On

reply, Honeywell also contends that the rule

impermissibly delegates certain determinations to the

regulated end users. We hold that Honeywell has

standing.

I.

Title VI of the Clean Air Act, 42 U.S.C. §§

7671-7671q, sets restrictions on the use of chemicals

known to have ozone-depleting properties as part of the

implementation of a set of policies aimed at protecting

the ozone layer. Sections 604 and 605 of the CAA, id. §§

7671c & 7671d, set timetables phasing out, over time,

most uses of "Class I" substances (which include

chlorofluorocarbons) and "Class II substances" (which

include hydrochlorofluorocarbons). As many such

chemicals had been put to use in a wide array of

commercial applications, the CAA seeks to ensure the

availability of ozone-friendly replacements through §

612, id. § 7671k, which establishes the "safe alternatives

policy." Section 612(a) provides that, "to the maximum

extent practicable, class I and class II substances shall

[***5] be replaced by chemicals, product substitutes, or

alternative manufacturing processes that reduce overall

risks to human health and the environment." The

Administrator of EPA is directed to take several steps to

promote this transition, such as recommending research

efforts to identify and develop alternatives for Class I and

Class II substances. See CAA § 612(b).

As relevant to Honeywell's petition for review, the

Administrator must also "promulgate rules ... providing

that it shall be unlawful to replace any class I or class II

substance with any substitute substance which the

Administrator determines may present adverse effects to

human health or the environment, where the

Administrator has identified an alternative to such

replacement that -- (1) reduces the overall risk to human

health and the environment; and (2) is currently or

potentially available." CAA § 612(c). The Administrator

is required to publish lists of substitute chemicals that are

prohibited or permitted for specific uses. Id. EPA has

implemented CAA § 612 through the Significant New

Alternatives Program ("SNAP"), 40 C.F.R. §§

82.170-82.184 (2004), which establishes criteria [***6]

and procedures for listing [*1366] [**541] chemicals

as approved substitutes for chemicals phased out pursuant

to the CAA. Under the SNAP program, substitutes can be

listed as "acceptable" or "unacceptable," but the

regulations also contemplate that substitutes may be

listed as acceptable subject to "use conditions" (in which

use of the substitute is permitted if certain procedures to

minimize environmental and human risk are followed) or

"use limits" (in which use of the substitute is permitted

for a "narrowed range of use ... because of the lack of

alternatives for specialized applications"). See id. §

82.180(b).

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2004 U.S. App. LEXIS 15273, ***2; 58 ERC (BNA) 2057
In 1993, EPA, acting pursuant to CAA § 606, 42

U.S.C. § 7671e, which authorizes the acceleration of

statutory phaseout dates, promulgated bans on the

importation and production of three Class II chemicals

relevant to this petition: HCFC-141b, HCFC-22, and

HCFC-142b. 58 Fed Reg. 65,018, 65,028 (Dec. 10,

1993). The ban is effective in 2003 for HCFC-141b, and

in 2010 for HCFC-22 and HFCF-142b. Id. However, in

1994, EPA also approved these three

hydrochlorofluorocarbons, in the interim, as alternatives,

in foam uses, to more ozone-damaging

chlorofluorocarbons [***7] phased out pursuant to CAA

Title VI. See 59 Fed. Reg. 13,044, 13,083 (March 18,

1994). In anticipation of the 2003 ban on the importation

and manufacture of HCFC-141b, Honeywell developed a

non-ozone-depleting hydrofluorocarbon, HFC-245fa, to

function as a substitute for HCFC-141b in foam

applications. In 1999, EPA approved Honeywell's

petition to list HCFC-245fa as an acceptable substitute

for HCFC-141b in all foam end uses. See 64 Fed. Reg.

68,039, 68,041 (Dec. 6, 1999).

The final rule followed upon intervenor ATOFINA

Chemicals, Inc.'s petition of February 17, 1999,

requesting that HCFC-22 and HCFC-142b, along with a

third chemical, HCFC-124, also be approved as

acceptable substitutes for HCFC-141b in foam

applications. 65 Fed. Reg. 42,653, 42,656 (July 11,

2000). HCFC-22 and HCFC-142b were already in use in

several foam applications, due to EPA's 1994 approval of

those chemicals as CFC substitutes, 59 Fed. Reg. at

13,083, and ATOFINA's petition, if granted, would have

permitted their use as substitutes for HCFC-141b as well.

EPA issued a notice of proposed rulemaking, in which it

proposed to revisit the status of HCFC-141b, [***8]

HCFC-22, HCFC-124, and HCFC-142b, and to list all

four as unacceptable in all foam applications, both as

substitutes for CFCs and for each other. 65 Fed. Reg. at

42,656. The proposed rule, inter alia, had the effect of

denying ATOFINA's petition to allow new users to use

HCFC-22, HCFC-124 and HCFC-142b as substitutes for

HCFC-141b, but also swept more broadly by effectively

proposing to disallow all existing use of the four

hydrochlorofluorocarbons. EPA explained that it was

proposing to list the chemicals as unacceptable because

they had significant ozone-depleting potential and "there

are technically feasible zero-ODP

[ozone-depleting-potential] substitutes available." Id. at

42,657-58.

EPA received numerous comments on the proposed

rule, many of which focused on the economic impact,

particularly to small businesses, of comprehensively

de-listing the four chemicals at issue; the bulk of these

related to the economic hardship that existing users of

HCFC-22 and HCFC-142b would face from the proposed

ban. After the comment period closed, EPA obtained

additional information through new comments, meetings

with industry representatives, and a consultant [***9] it

hired to gather additional information on the feasibility of

alternatives to HCFC-141b in certain sectors. EPA's

consultant's report in particular expressed [*1367]

[**542] doubts about the ability of existing approved

alternatives to HCFC-141b to function as viable

substitutes across all specific foam end-uses, for

economic reasons, such as the cost of HFC-245fa and the

cost of equipment adjustments, and for technical reasons,

such as the inability of foams manufactured with

approved alternatives, at least those that had been tested,

to meet certain insulation and space requirements. EPA

then published a notice of data availability inviting

comment, noting that the new information pertained to,

inter alia, "alternatives currently used in each sector and

technically viable alternatives." 66 Fed. Reg. 28,408,

28,408 (May 23, 2001).

After receiving additional comment, EPA issued a

final rule implementing its proposed rule in some respects

but not others. 67 Fed. Reg. 47,703 (July 22, 2002). First,

EPA deferred reaching a decision on whether it would

permit continued use of HCFC-141b. Id. at 47,706.

Second, EPA abandoned its proposal to limit existing

[***10] use of HCFC-22 and HCFC-142b as substitutes

for CFCs, and allowed existing users of those chemicals

continued use of them, noting that "there would be a

significant impact on small businesses" if EPA proceeded

as proposed and that switching to alternatives "would be

difficult and prohibitively costly." Id. at 47,706-09.

Third, EPA implemented its proposal to list HCFC-124

as unacceptable in all foam uses, thus denying

ATOFINA's petition in that respect. Id. at 47,708. Fourth,

as to ATOFINA's petition to allow new use of HCFC-22

and HCFC-142b, as substitutes for HCFC-141b, EPA

established different rules for their use based on the

specific application. Observing that it "is strongly

opposed to listing HCFCs as acceptable where

non-ozone-depleting alternatives are available," EPA

listed HCFC-22 and HCFC-142b as unacceptable

substitutes for HCFC-141b in several end-uses

(polyurethane boardstock, spray foam, and appliances)

Page 3

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2004 U.S. App. LEXIS 15273, ***6; 58 ERC (BNA) 2057
because manufacturers in those sectors had "identified

and, in many cases, implemented viable

non-ozone-depleting alternatives to HCFC-141b." Id. at

47,707. For uses in commercial refrigeration, sandwich

panel [***11] applications, polyurethane slabstock, and

other foams, however, which EPA noted were

"comprised of a wide range of diverse applications with

unique technical considerations," EPA stated that for

these three uses "ozonefriendly alternatives to

HCFC-141b have not yet been fully developed and

implemented across the spectrum of applications." Id.

Because "technical information is scarce for these

applications" and it is "difficult to assess, in the absence

of detailed information, the viability of alternatives in

each narrow application," EPA expressed concern that

some endusers in specific applications might not be able

to switch to approved alternatives because of thermal

performance, dimensional, and flammability control

requirements. Id. at 47,713-14. In the final rule, EPA,

pursuant to 40 C.F.R. § 82.180(b)(3), listed HCFC-22

and HCFC-142b as acceptable substitutes for

HCFC-141b within those three end-uses, subject to

narrowed use limits conditioned on the user's ability first

to "ascertain that other acceptable alternatives are not

technically feasible." Id. at 47,705. Users would be

required to "document the results [***12] of their

evaluation, and retain the results on file for the purpose of

demonstrating compliance." Id. Notwithstanding its

decision to allow some substitution of HCFC-22 and

HCFC-142b for HCFC-141b, EPA advised that it was

"continuing to review" the end-uses in question "to

determine the progress of non-ozone-depleting

alternatives," and that "as non-ozone-depleting

alternatives become more widely available, the agency

will reevaluate the acceptability of HCFCs [*1368]

[**543] in these end-uses." Id. at 47,707. The rule also

advised end-users to begin using non-ozonedepleting

substitutes as they became available "in anticipation of

future EPA action restricting the use of HCFCs." Id.

Anticipating based on its own market analysis that it

will lose sales volume for HFC-245fa if some users are

permitted to substitute HCFC-22 and HCFC-142b for

HCFC-141b, Honeywell filed this petition for review. See

CAA § 307, 42 U.S.C. § 7607. Honeywell, which also

manufactures HCFC-22 and sells stockpiles of

HCFC-141b and HCFC-142b, does not challenge EPA's

decisions to defer a decision regarding the permissibility

of HCFC-141b use, to allow continued use of [***13]

HCFC-22 and HCFC-142b as CFC substitutes, and to bar

use of HCFC-124. Rather, Honeywell's petition is limited

to EPA's fourth decision, to permit some new use of

HCFC-22 and HCFC-142b, as substitutes for

HCFC-141b.

II.

As a threshold matter, we address EPA's contention

that Honeywell lacks standing under Article III of the

Constitution as well as prudential standing to challenge

the final rule. EPA sees this lawsuit as "nothing more

than a futile effort to bolster the demands for

[Honeywell's] product, HFC-245fa, in a market that

cannot use the product because of technical constraints."

Resp. Br. at 3. For Article III standing, Honeywell points

to its "substantial economic injury -- lost sales of HCFC

245fa." Pet. Br. at 13. For prudential standing, Honeywell

points to "its role in the market for substitutes to

ozone-depleting substance that Congress created in

Section 612 of the CAA." Id. at 14. Essentially, we agree

that Honeywell has standing to challenge the final rule

for these reasons.

A.

A party wishing to challenge agency action must

meet the familiar Article III requirements of injury in

fact, traceability, and redressability. See Lujan v.

Defenders of Wildlife, 504 U.S. 555, 560-61, 119 L. Ed.

2d 351, 112 S. Ct. 2130 (1992); [***14] Ethyl Corp. v.

EPA, 353 U.S. App. D.C. 318, 306 F.3d 1144, 1147 (D.C.

Cir. 2002). The final rule authorizes the use of HCFC-22

and HCFC-142b as substitutes for HCFC-141b only

pursuant to narrowed use limits, conditioned upon the

user's ability first to ascertain and document that

non-ozonedepleting alternatives, such as HFC-245fa, are

not technically feasible for the specific application of

HCFC-22 and HCFC-142b. EPA contends, therefore, that

Honeywell suffers no "injury in fact" from having those

chemicals listed as acceptable because the rule permits

their use only by parties who are not potential purchasers

of Honeywell's product.

While the narrowed use limits may very well cause

Honeywell's injury to be smaller than it would have been

if the EPA had approved ATOFINA's petition outright,

they defeat standing only if the court can conclude that

there are no additional foam manufacturers that would

purchase HFC-245fa if HCFC-22 and HCFC-142b were

unavailable. This assumption is not justified on the

rulemaking record. The final rule, 40 C.F.R. Pt. 82,

Page 4

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2004 U.S. App. LEXIS 15273, ***10; 58 ERC (BNA) 2057
Subpt. G, App. K (table) (2004), requires only

documentation that alternative chemicals would not

satisfy existing [***15] "performance or safety

requirements," not documentation that it would be

impossible to manufacture foam at all. Presumably some

manufacturers would be forced, in the absence of other

alternatives, to relax their performance standards and use

HCFC-245fa. Honeywell has submitted an affidavit from

the Vice President and [*1369] [**544] General

Manager of its Chemicals Operating Unit, Richard V.

Preziotti, stating that Honeywell performed a market

analysis in 1999 estimating domestic demand for

HFC-245fa of approximately 20 million pounds over the

period 2003-2010 for use in commercial refrigeration and

sandwich panel applications, rigid polyurethane

slabstock, and "other foams" categories, assuming users

of HCFC-141b would not be permitted to use other

HCFCs after December 31, 2002 when production of

HCFC-141b was phased out. According to the affidavit,

projected losses from the final rule are approximately 2-3

million pounds per year until the phase out of HCFC-22

and HCFC-142b in 2010, for a total loss of

approximately 16-24 million pounds. EPA has submitted

nothing other than its own speculation to counter this

evidence. Cf. Sierra Club v. EPA, 352 U.S. App. D.C.

191, 292 F.3d 895, 899-901 (D.C. Cir. 2002). [***16]

Some subset of manufacturers that cannot meet existing

performance requirements without HCFC-22 or

HCFC-142b would presumably, if those chemicals were

unavailable, be forced to manufacture foam products that

are less commercially desirable by using available

alternatives, such as Honeywell's product, and in the

absence of any evidence to the contrary, the affidavit

suffices to establish injury in fact. See id. at 900-01.

Similarly unpersuasive, for the same reason, is EPA's

speculation that Honeywell might suffer no injury from

the rule even if it could lead to the use of HCFC-22 or

HCFC-142b by customers who might otherwise purchase

HFC-245fa, either because customers might all choose

different approved alternatives, because customers

permitted to use HCFC-22 and HCFC-142 might

nonetheless opt to purchase HFC-245fa, or because

Honeywell might sell enough additional HCFC-22 and

HCFC-142b, both of which it also manufactures, to

compensate for any lost HFC-245fa sales. The Preziotti

affidavit speaks directly to this question, stating that

Honeywell's projected revenues from increased sales of

HCFC-122 and HCFC-142b, neither of which is

proprietary, would not offset HFC-245fa revenues

[***17] lost as a result of the rule. EPA offers no

evidence to the contrary. While EPA points to

Honeywell's comments during the rulemaking that

HFC-245fa is less expensive than HCFC-142b or

HCFC-22, those figures refer to overall system cost, not

the cost of HFC-245fa to foam manufacturers; EPA's

consultant's report indicates the cost of HFC-245fa is

meaningfully higher than the cost of competing

chemicals.

Honeywell satisfies the traceability requirement

because the rule legalizes the entry of a product into a

market in which Honeywell competes -- the market for

approved substitutes for HCFC-141b. EPA maintains that

Honeywell cannot demonstrate that it would benefit from

a decision listing HCFC-22 and HCFC-142b as

unacceptable because doing so would require speculation

about the purchasing decisions of third parties not before

the court. There is not much to this chain-of-speculation

objection; it is well established that "parties suffer

cognizable injury under Article III when an agency 'lifts

regulatory restrictions on their competitors or otherwise

allows increased competition.' " Wabash Valley Power

Ass'n, Inc. v. FERC, 348 U.S. App. D.C. 36, 268 F.3d

1105, 1113 (D.C. Cir. 2001) [***18] (quoting

Associated Gas Distribs. v. FERC, 283 U.S. App. D.C.

265, 899 F.2d 1250, 1259 (D.C. Cir. 1990)); see also

Bristol-Myers Squibb Co. v. Shalala, 320 U.S. App. D.C.

32, 91 F.3d 1493, 1499 (D.C. Cir. 1996). As a favorable

opinion of the court could remove the competing

chemicals from the market, redressability is satisfied as

well; as discussed, removal of these competing products,

even if customers using [*1370] [**545] them might

have to relax some performance standards to use

HFC-245fa, still stands to benefit Honeywell.

B.

In addition to the constitutional requirements of

Article III, a petitioner seeking review of agency action

must also demonstrate prudential standing to bring the

suit; in other words, that "the interest it seeks to protect 'is

arguably within the zone of interests to be protected or

regulated by the statute ... in question.' " Cement Kiln

Recycling Coalition v. EPA, 347 U.S. App. D.C. 127, 255

F.3d 855, 870 (D.C. Cir. 2001) (per curiam) ("Cement

Kiln") (quoting Ass'n of Data Processing Serv. Orgs. v.

Camp, 397 U.S. 150, 153, 25 L. Ed. 2d 184, 90 S. Ct. 827

(1970)). The zone of interests test "is not meant to

[***19] be especially demanding," excluding only those

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2004 U.S. App. LEXIS 15273, ***14; 58 ERC (BNA) 2057
whose interests are "so marginally related to or

inconsistent with the purposes implicit in the statute that

it cannot reasonably be assumed that Congress intended

to permit the suit." Clarke v. Sec. Indus. Ass'n., 479 U.S.

388, 399, 93 L. Ed. 2d 757, 107 S. Ct. 750 (1987). Our

cases have pointed out that a party need not share

Congress' motives in enacting a statute to be a suitable

challenger to enforce it; "parties motivated by

commercial interests routinely satisfy the zone of

interests test," as "congruence of interests, rather than

identity of interests, is the benchmark." Amgen, Inc. v.

Smith, 360 U.S. App. D.C. 88, 357 F.3d 103, 108-09

(D.C. Cir. 2004). If there is reason to believe that a

party's interest in statutory enforcement will advance,

rather than hinder, the operation of a statute, the court can

reasonably assume that Congress intended to permit the

suit.

EPA protests that Honeywell's interest in enforcing

CAA § 612 "is nothing more than a concern [about]

EPA's alleged regulatory laxity," Resp. Br. at 20, and

relies on cases holding that commercial interests lack

prudential standing to enforce regulatory burdens against

[***20] competitors, for when those interests and those

of the statute are not aligned, such suits "carr[y] a

considerable potential for judicial intervention that would

distort the regulatory process." Hazardous Waste

Treatment Council, Inc. v. EPA, 274 U.S. App. D.C. 44,

861 F.2d 277, 282-86 (D.C. Cir. 1988) (per curiam)

("HWTC II"); see also Hazardous Waste Treatment

Council v. EPA, 280 U.S. App. D.C. 296, 885 F.2d 918,

924-26 (D.C. Cir. 1989) ("HWTC IV"); Cement Kiln,

255 F.3d at 870-71. In HWTC II & IV and Cement Kiln,

the court held that manufacturers of pollution control

equipment lacked prudential standing to challenge

allegedly too-weak pollution regulations, where stronger

regulations would lead to increased demand for their

products, because of insufficient alignment between the

manufacturers' commercial interests and the

environmental purposes of the statute. EPA's reliance on

these cases is misplaced, and EPA overreads them, for

prudential standing depends on the nature of the statutory

scheme and the competitor interests. Honeywell is suing

to enforce a restriction, CAA § 612(c), that is hardly

vulnerable to the [***21] sort of manipulation that

concerned the court in the cases on which EPA relies. A

substitute product is either permitted to compete in the

market for approved substitutes or it is not. Irrespective

of whether the statutory scheme contemplates that

competitive interests will advance statutory goals, the

court has held that the Hazardous Waste Treatment

Council line of cases is inapposite when a competitor

sues to enforce a "statutory demarcation," such as an

entry restriction, because "the potentially limitless

incentives of competitors [are] channeled by the terms of

the statute into suits of a limited nature brought to enforce

the statutory demarcation." Scheduled Airlines Traffic

Offices v. Dep't of Defense, 318 U.S. App. D.C. 347, 87

F.3d 1356, 1360-61 (D.C. Cir. 1996) (quoting [*1371]

[**546] First Nat'l Bank and Trust Co. v. Nat'l Credit

Union Admin., 300 U.S. App. D.C. 314, 988 F.2d 1272,

1278 (D.C. Cir. 1993), aff'd 522 U.S. 479, 140 L. Ed. 2d

1, 118 S. Ct. 927 (1998)). A suit by a competitor to

enforce § 612(c) involves such a demarcation; "entry-like

restrictions" are less subject to manipulation than the

open-ended emissions standards in HWTC II [***22] &

IV and Cement Kiln because they "constrain[]

competitors to a limited role in guarding a

congressionally drawn boundary." First Nat'l Bank and

Trust Co., 988 F.2d at 1278. Therefore, the limits of CAA

§ 612, which restricts challenges to a determination of

whether EPA properly decided which substances should

be allowed to compete in the market for approved

substitutes, sufficiently align Honeywell's competitive

interests with those of the statute to make it a suitable

challenger to enforce CAA 612's terms.

PART II

SENTELLE, Circuit Judge, writing in Part II the

opinion of the court: Honeywell brings this petition for

review arguing that EPA exceeded its statutory authority

under Clean Air Act ("CAA") section 612(c) by

approving HCFC-22 and HCFC-142b as acceptable

substitutes for HCFC-141b in certain limited end uses,

and therefore allowing those two chemicals to compete

with Honeywell's approved substitute, HFC-245fa. The

argument is that EPA premised its approval on the

economic impact of denying ATOFINA's petition (which

would have limited the market for substitutes to

HFC-245fa). Because section 612(c), Honeywell claims,

does not permit [***23] EPA to consider economic

factors in the approval process, this approval exceeded

EPA's statutory authority under the CAA.

We agree that EPA's rule considered economic

factors and grant Honeywell's petition for review. We

also hold that the only permissible remedy under the

CAA is to vacate the rule. We therefore vacate the rule to

the extent it approves ATO-FINA's application to list

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2004 U.S. App. LEXIS 15273, ***19; 58 ERC (BNA) 2057
new uses of HCFC-22 and HCFC-142b as acceptable

substitutes for HCFC-141b in certain limited end uses.

I.

HCFC-141b is a blowing agent used to manufacture

certain types of foam, primarily foam insulation. The rule

under review listed new uses of HCFC-22 and

HCFC-142b as acceptable substitutes for HCFC-141b in

some foam end uses and unacceptable in others. EPA

found that those two chemicals were acceptable

substitutes for HCFC-141b in foam insulation used in

commercial refrigeration, sandwich panel insulation,

polyurethane slabstock, and other foams, assuming users

intending to use the substitutes ascertain and document

that other acceptable alternatives are not "technically

feasible." Protection of Stratospheric Ozone, 67 Fed.

Reg. 47,703, 47,711 (July 22, 2002).

EPA justified this [***24] conclusion by noting that

use of these two substitutes in these end uses was

widespread (because they are similar in cost to

HCFC-141b), and that there were diverse commercial

applications for such foams, each of which had unique

"technical considerations." Id. at 47,713. Those diverse

specifications, EPA reasoned, might make it difficult for

businesses to switch to other, non-ozone-depleting

blowing agents. For example, in foam used to insulate

refrigerated truck bodies and insulated rail cars, "it is

critical to maintain thermal performance, flammability

control, and an absolute outside dimension of a container

while maximizing internal dimensions," and

non-ozone-depleting chemicals might not be sufficient to

meet these requirements. Id. Also, because [*1372]

[**547] businesses use all three kinds of chemicals, and

because of the diverse commercial applications for these

foams, EPA believed it had insufficient information to

assess the "viability" of alternatives in each application.

Id. at 47,714. In some "niche applications ... foam

manufacturers may experience difficulties and delays in

transitioning to ... alternatives. Given the constraints

associated with [***25] cost and timing of transitioning

to alternatives for small businesses, and the need to

facilitate a smooth and equitable transition," id., EPA

believed that the limited use of these substitutes was

appropriate if applicants made the required showing of

technical infeasibility.

II.

The first issue we must decide is whether this

justification for approving new uses of HCFC-22 and

HCFC-142b as acceptable substitutes for HCFC-141b

relied on economic factors. 1 EPA's defense to

Honeywell's challenge is not that CAA section 612(c)

allows it to consider economic costs in deciding whether

a given substitute is acceptable or unacceptable. Rather,

EPA's defense is that the rule under review did not

actually consider costs, and instead relied on "technical

constraints."

1 As this statement of the issue makes clear, we

in fact disagree with the dissent that this merits

question "depends ... on what it means for

'technical constraints' to 'preclude' the use of other

available substitutes." Dissent at 1.

The [***26] flaw in EPA's position is the

assumption that technical constraints exclude

considerations of economics. In truth, economic

feasibility is part of technical feasibility. It is often

possible to fit a round peg in a square hole if enough

money is spent to make the round peg fit. In other words,

a given change in manufacturing technique may be

"technically infeasible" only as compared to some

baseline of what it would cost to change the technique.

The rule confirms that the technical considerations

considered by the agency intersect with economic

considerations. For example, the need for refrigerated

truck bodies and insulated rail cars to "maximize internal

dimensions," id. at 47,713, arises because trucking

companies want to transport as much food as possible per

truckload to maximize their revenues. Similarly, EPA

suggested that the "technical constraints," associated with

switching to non-ozone-depleting chemicals were

company-specific, in part because the economic need for

businesses to "remain cost competitive" caused

widespread use of HCFC-22 and HCFC-142b. Id. The

implication is that economic factors caused those

companies to be "locked in" to using these [***27]

particular chemicals in the manufacturing process,

despite the fact that within those end uses, "non-ozone

depleting alternatives have been identified and, in limited

cases, implemented successfully." Id. In other words,

even though it is technically possible to use

manufacturing techniques that do not deplete the ozone

layer, it would cost too much to require companies to

transition to such techniques given those that, for cost

reasons, they have already implemented. This, too, is

therefore an economic justification for continuing to

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2004 U.S. App. LEXIS 15273, ***23; 58 ERC (BNA) 2057
allow these companies to use HCFC-22 and HCFC-142b.

Finally, EPA noted that the wide variety of products these

types of foam are used to manufacture meant that small

businesses might economically suffer from a regulatory

requirement to use non-ozonedepleting alternatives. EPA

noted, specifically, that it was necessary to "level the

playing field for small businesses," and that those

businesses might face "constraints associated with cost

and timing of transitioning to [*1373] [**548]

alternatives," a justification that clearly considers costs.

Id. at 47,714. Even if the agency is correct to characterize

such concerns as "performance" or "technical" [***28]

factors, the fact remains that they are also economic

factors.

EPA's reliance on economic constraints requires

reversal of its rule. As stated, EPA does not justify the

rule on the ground that CAA section 612(c) allows it to

consider economic factors in approving a given substitute

as acceptable or unacceptable. Nevertheless, EPA's

counsel at oral argument said that EPA's position is that it

may consider costs, and it is at least facially plausible to

read the term "available" in section 612(c) to permit

consideration of "economic or practicality" concerns.

Such a justification cannot pass muster in this Court,

however, as the agency did not offer that construction of

the statute below. Under Chevron, U.S.A., Inc. v. Natural

Resources Defense Council, Inc., 467 U.S. 837, 81 L. Ed.

2d 694, 104 S. Ct. 2778 (1984), whether the CAA section

612(c), a statute EPA is charged to administer, permits

EPA to consider costs is a matter on which we defer to

the agency's expert judgment, unless its interpretation is

unreasonable or if the plain terms of the statute say

otherwise. Id. at 843-44. In such matters, in which the

agency's rule "is valid only as a determination of policy

[***29] or judgment which the agency alone is

authorized to make and which it has not made, a judicial

judgment cannot be made to do service for an

administrative judgment." SEC v. Chenery Corp., 318

U.S. 80, 88, 87 L. Ed. 626, 63 S. Ct. 454 (1943). Whether

the agency's construction of the statute is reasonable

under Chevron step two is one such issue, given that the

issue requires agency expertise. See Kansas City v. HUD,

287 U.S. App. D.C. 365, 923 F.2d 188, 192 (D.C. Cir.

1991). Therefore, even assuming, without deciding, that

the text of section 612(c) permits EPA to interpret the

statute to consider costs, we must still reverse EPA's

decision and remand to the agency. Without knowing the

agency's interpretation of the statute, we simply have no

way of evaluating whether its interpretation is reasonable.

True, we do not defer to the EPA on whether section

612(c) clearly requires it to consider costs, but EPA has

not advanced that argument before us. Because that

argument has not been briefed and is therefore not

properly before us, we express no opinion on its merits.

For these reasons, we grant the petition for review.

III.

The second issue we must [***30] decide is the

proper remedy to correct the agency's error. We hold that

remedy is to vacate the rule to the extent it approves

ATOFINA's application to list new uses of HCFC-22 and

HCFC-142b as acceptable substitutes for HCFC-141b in

certain limited end uses.

We read the judicial review provisions of the CAA to

authorize us only to vacate, rather than remand, for the

sort of challenge at issue here. Honeywell's challenge is a

substantive challenge to the agency's statutory authority

to promulgate the rule. Such challenges are governed by

CAA section 307(d)(9), rather than the Administrative

Procedure Act. See 42 U.S.C. § 7607(d)(1) ("the

provisions of section 553 through 557 and section 706 of

Title 5 shall not, except as expressly provided in this

subsection, apply to actions to which this subsection

applies").

Section 307(d)(9) provides that "the court may

reverse any ... action found to be ... in excess of statutory

jurisdiction, authority, or limitations, or short of statutory

right." 42 U.S.C. § 7607(d)(9)(C) [*1374] [**549]

(emphasis added). Here, the term "reverse" is being used

as a term of art to refer to the action of a reviewing

[***31] court that finds error in a decision under review.

In that context, the ordinary meaning of the term

"reverse," at the time section 307(d) was enacted as part

of the CAA Amendments of 1977, 91 Stat. 685, 775, was

"to overthrow, set aside, or make void (a legal decision)

by a contrary decision." Webster's New Collegiate

Dictionary 991 (1973); see also Webster's Third New

International Dictionary 1943 (1981) ("to overthrow [a

legal decision] by a contrary decision: make void [as for

error] the higher court may [reverse] the judgment").

"Overthrowing, setting aside, or making void" is

language suggesting vacatur. Because this Court's only

source of authority to order a remedy for EPA's unlawful

action is section 307(d)(9), our power is limited to

"reversing," and hence vacating, the offending portions of

EPA's rule below.

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We do realize that there is circuit "precedent for the

authority of the court to remand without vacating." Milk

Train, Inc. v. Veneman, 354 U.S. App. D.C. 25, 310 F.3d

747, 758 (D.C. Cir. 2002) (Sentelle, J., dissenting); see

also id. at 755-56 (majority opinion) (citing cases). To

our knowledge, however, our only case under the CAA

holding [***32] that remand, rather than vacatur, is the

proper remedy is Davis County Solid Waste Management

v. EPA, 323 U.S. App. D.C. 425, 108 F.3d 1454 (D.C.

Cir. 1997) (per curiam), which we do not think governs

our holding here. In Davis, this Court held that EPA

exceeded its statutory authority under the CAA, yet

remanded without vacating the rule. Id. at 1459.

However, in Davis we did not analyze the actual

language of section 307(d)(9), and it does not appear that

the parties brought that language to the court's attention.

That decision is therefore not binding on this Court. For

"the Supreme Court held long ago that 'questions which

merely lurk in the record, neither brought to the attention

of the court nor ruled upon, are not to be considered as

having been so decided as to constitute precedents.' "

Checkosky v. SEC, 306 U.S. App. D.C. 144, 23 F.3d 452,

492 (D.C. Cir. 1994) (per curiam) (separate opinion of

Randolph, J.) (quoting Webster v. Fall, 266 U.S. 507,

511, 69 L. Ed. 411, 45 S. Ct. 148 (1925)); see also In re

Cheney, 357 U.S. App. D.C. 274, 334 F.3d 1096, 1118

n.8 (D.C. Cir. 2003) (Randolph, J., dissenting), vacated

[***33] on other grounds by Cheney v. U.S. Dist. Court

for the Dist. of Columbia, 159 L. Ed. 2d 459, 485, 124 S.

Ct. 2576 (2004). We do not read court cases like we read

statutes; unlike statutes, cases derive their binding force

from the necessity to avoid revisiting arguments and

issues litigated before and decided by those courts, not

from the deductive implications of their holdings. The

currency of courts is principle, not commands, and we

violate no principle laid down by Davis by analyzing the

actual words of the statute setting forth the extent of this

Court's remedial power over the EPA's CAA rules. In

light of Davis's silence on the interpretation of the term

"reverse" in section 307(d)(9), Davis is not binding on

that question.

In sum, vacatur, rather than remand, is the only

remedy we are authorized to impose to correct the error

in the rule under review.

IV.

For the reasons expressed above, we vacate the rule

with respect to those end uses in which EPA permitted

limited new use of HCFC-22 and HCFC-142b as

acceptable substitutes for HCFC-141b and remand to the

EPA for proceedings not inconsistent with this opinion.

CONCUR BY: RANDOLPH, SENTELLE, concurring.

CONCUR

[***34] RANDOLPH, Circuit Judge, concurring,

with whom SENTELLE, Circuit Judge, joins: I join the

per curiam opinion and Judge Sentelle's opinion in part

II. I write separately [*1375] [**550] to explain why I

believe vacating (or reversing) and remanding unlawful

agency action, rather than simply remanding, should

always be the preferred course.

It is easy to forget that when we vacate and remand,

as we are doing here, there will be a safety valve. The

agency, and any intervenors on its side, will have the

opportunity to file post-decision motions demonstrating

why the unlawful order or rule should remain in place

during proceedings on remand. See, e.g., U.S. Tel. Ass'n

v. FCC, 338 U.S. App. D.C. 1, 188 F.3d 521, 531 (D.C.

Cir. 1999). Vacating an order or rule and then

entertaining such stay motions has several important

advantages over remanding without vacating. First, it

preserves the adversary process. When we simply order a

remand at the end of our merits opinion we are invariably

making a remedial decision without the benefit of

briefing or argument. It is quite rare for the parties even

to mention the question of remedy in their merits briefs.

In post-decision motions on [***35] stay applications,

that will be the question they address. The court thus will

have the benefit of hearing from both sides. Second, in

deciding whether to allow unlawful agency action to

remain in place during the remand (by way of a stay), the

court will act with its eyes open and will have the

information needed to assess the consequences of

granting or denying a stay. Third, the existence of a stay

with time limits, rather than an open-ended remand

without vacatur, will give the agency an incentive to act

promptly; when we simply remand, the agency has no

such incentive. Fourth, there is a longstanding body of

law in this circuit establishing the factors that determine

whether a stay should be granted. See, e.g., Virginia

Petroleum Jobbers v. FPC, 104 U.S. App. D.C. 106, 259

F.2d 921, 925 (D.C. Cir. 1958); WMATA v. Holiday

Tours, Inc., 182 U.S. App. D.C. 220, 559 F.2d 841, 843

(D.C. Cir. 1977); Wisconsin Gas Co. v. FERC, 244 U.S.

App. D.C. 349, 758 F.2d 669, 673-74 (D.C. Cir. 1985)

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2004 U.S. App. LEXIS 15273, ***31; 58 ERC (BNA) 2057
(per curiam). These include the likelihood that the

agency's position will prevail on remand; the likelihood

that there will be irreparable harm without [***36] the

stay; the prospect that others will be harmed if the court

grants the stay; and the public interest in granting the

stay. Id. Remanding without vacating is in effect granting

an indefinite stay of the effectiveness of the court's

decision. Yet we have issued many remand-only orders

without mentioning or analyzing any of the

considerations that should guide our remedial judgment.

See, e.g., Western Resources, Inc. v. FERC, 304 U.S.

App. D.C. 9, 9 F.3d 1568, 1581 (D.C. Cir. 1993); Laclede

Gas Co. v. FERC, 302 U.S. App. D.C. 246, 997 F.2d 936,

948 (D.C. Cir. 1993); City of Mesa v. FERC, 301 U.S.

App. D.C. 226, 993 F.2d 888, 898 (D.C. Cir. 1993). Even

when we have offered some reasons for remanding

without vacating, the reasons given are different from the

factors set forth in Virginia Petroleum Jobbers, which I

believe should be controlling. See, e.g., Sugar Cane

Growers Coop. of Fla. v. Veneman, 351 U.S. App. D.C.

214, 289 F.3d 89, 98 (D.C. Cir. 2002). I would therefore

vacate and remand regardless whether a judicial review

provision gave us discretion merely to remand and leave

the illegal rule in place. [***37]

DISSENT BY: ROGERS, Circuit Judge (In Part)

DISSENT

Circuit Judge, concurring in part and dissenting in

part: I concur in holding that EPA impermissibly

considered costs in the rule on review. See Op. Part II. I

write separately in Part I on the nature of the error,

because I cannot join the court's reasoning, and in Part II

on the appropriate remedy, because the court has ignored

binding precedent. Thereafter, in light of the required

remand, I address in Part III Honeywell's contention that

EPA's past approval of other substitute chemicals as safe

alternatives preclude it from making any exceptions

authorizing use of HCFC-22 [*1376] [**551] or

HCFC-142b for some foam end users.

I.

The challenged regulation permits new use of

HCFC-22 and HCFC-142b only when "necessary to meet

performance or safety requirements," and "technical

constraints [] preclude the use of other available

substitutes." 40 C.F.R. Pt. 82, Subpt. G, app. K (2004).

Whether EPA impermissibly took costs into

consideration depends on what it means for "technical

constraints" to "preclude" the use of other available

substitutes. While there is language in the rule indicating

that EPA considered costs, the more natural reading

[***38] of the regulation, in light of the language EPA

used, is, as EPA counsel maintains, that the regulation

means what it says it means: an end-user may only use

HCFC-22 or HCFC-142b if it is not actually possible to

use anything else. The fact that it might be more

expensive to use an approved alternative would not

suffice -- use of the hydrochlorofluorocarbon must be

"necessary."

This reading of the regulation is certainly natural, as

it gives the term "preclude" its most obvious meaning of

"to make impossible." AMERICAN HERITAGE

DICTIONARY OF THE ENGLISH LANGUAGE 212

(4th ed. 2000). Indeed, absent EPA's reference in the final

rule to costs, the court would likely read the regulation as

EPA's counsel suggests, giving the word "preclude" its

most natural, dictionary meaning. Cf. Citizens Against

Burlington, Inc. v. Busey, 290 U.S. App. D.C. 371, 938

F.2d 190, 202-02 (D.C. Cir. 1991). If technical

constraints must "make impossible" the use of an

approved substitute before use of a

hydrochlorofluorocarbon is permitted, then the court's

concern about EPA permitting HCFC-22 or HCFC-142b

use on the basis of mere convenience or cost, see Op. at

15-16, would be inapposite: [***39] modifications

might be required to shift to an approved substitute that

"make difficult" or "make costly" or "make inconvenient"

the use of an approved substitute, but they would not

"preclude" it. Notably, the record before the court

indicates that the transition from HCFC-141b to

HCFC-22 or HCFC-142b is more likely to involve

equipment modifications than the transition from

HCFC-141b to an approved alternative. HFC-245fa,

Honeywell's product, is a liquid agent like HCFC-141b,

and was developed specifically as a "drop-in" substitute

for use in the same equipment. HCFC-22 and

HCFC-142b, on the other hand, are both gaseous agents,

which, EPA acknowledged, would often require

modifications to equipment currently using liquid agents

such as HCFC-141b. See 67 Fed. Reg. 47,703, 47,713-14

(July 22, 2002). Some transition costs, then, would cut

against HCFC-22 and HCFC-142b rather than in their

favor. Thus, EPA counsel's suggestion, that the HCFCs'

use under the new regulation is intended for cases where

foam made with an approved substitute would not be

functional, is not without plausibility.

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Under a natural reading of the language used by

EPA, HCFC-22 and HCFC-142b use [***40] would be

reserved, not for situations where it would be "possible to

fit a round peg in a square hole" with sufficient expense,

Op. at 15, but for situations where the physical

limitations of approved foamblowing (or foam-pouring)

agents are such that equipment or design modifications

will not be sufficient to meet "performance or safety

requirements." With this view of EPA's meaning, the fact

that EPA also referred to costs in explaining the

regulation would be harmless error. Cf. PDK Labs., Inc.

v. United States DEA, 360 U.S. App. D.C. 344, 362 F.3d

786, 799 (D.C. Cir. 2004); 5 U.S.C. § 706. The bulk of

EPA's explanation of the regulation in the final rule is

consistent [*1377] with this [**552] natural reading of

the regulation. EPA relied chiefly on its concern that

foam made with existing alternatives might, in some

instances, not meet certain dimensional, flammability

control, and insulation requirements. See 67 Fed. Reg. at

47,713-14. EPA did not conclude that approved

alternatives would produce less desirable foam; rather, it

expressed concern that it did not yet have enough

information to confirm whether the foam made with

existing approved substitutes to HCFC-141b [***41]

would always work functionally as well as foam made

with HCFC-22 or HCFC-142b.

The court appears to hold that EPA impermissibly

considered costs at two stages of its decision: first, by

comparing the functionality of foam made with approved

alternatives with foam made with HCFC-22 and

HCFC-142b, and second, by considering the costs

manufacturers would incur in switching to approved

alternatives. See Op. at 15-16. While EPA relied on the

first consideration, it was not error to do so. The court

defines too broadly what it means for EPA to

impermissibly consider costs. Expressing concern over

whether a substitute product actually works (or works as

well) as the substance it is replacing is, of course, a

decision that may carry economic consequences, as

where a less functional foam product will be less

commercially desirable. If a foam is denser, picnic

coolers will have to be heavier to keep the same amount

of food cold; if a foam is less insular, it will require

thicker walls in refrigerators or houses that use it as

insulation. But that does not convert every decision EPA

makes about whether a substitute works into a decision

about costs: were that so, every approval or disapproval

[***42] decision EPA makes under the SNAP program

would be suspect, an extreme position Honeywell does

not urge.

The court's second theory, however -- that EPA

based its decision in part on the costs manufacturers

would incur in switching to approved alternatives -- is

indicated by the record. See Op. at 15-16. A statement by

EPA in the rule, about protecting small businesses, calls

into question the natural reading of the regulation urged

by EPA counsel:

In other cases, where HCFC-141b is

used in niche applications, EPA believes

foam manufacturers may experience

difficulties and delays in transitioning

from HCFC-141b to non-ozone-depleting

alternatives. Given the constraints

associated with cost and timing of

transitioning to alternatives for small

businesses, and the need to facilitate a

smooth and equitable transition from

HCC-141b, EPA believes ... it is

appropriate to approve use of HCFC-22

and/or HCFC-142b as substitutes for

HCFC-141b ... provided that the users ...

ascertain and document that other

acceptable alternatives are not technically

feasible.

67 Fed. Reg. at 47,714 (emphasis added). It is difficult to

understand this passage unless EPA [***43] believes

there is some subset of end-users for whom it would be

possible yet very costly to switch to non-ozone-depleting

alternatives, and that the rule grants this subset some

form of relief. This, in turn, suggests that EPA construes

the term "preclude" to mean something less than "make

impossible," such as to "make difficult" or "make

cumbersome." 1 [*1378] [**553] If so, EPA's approach

would appear inconsistent with its current SNAP

regulations.

1 To make the same point, the court also cites

EPA's decision to permit existing users of

HCFC-22 and HCFC-142b to continue their use

of those chemicals notwithstanding the existence

of nonozone-depleting alternatives to HCFC-22

and HCFC-142b, in large part because of the costs

they would incur were they to use alternatives.

See Op. at 15-16. EPA quite expressly relied on

transition costs in making that decision. However,

EPA's decision to allow continued use of

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HCFC-22 and HCFC-142b is not challenged by

Honeywell, which petitions for review only of

EPA's decision to allow new uses of those

chemicals, by users previously using HCFC-141b.

Given the equipment modifications required to

shift from a liquid to a gaseous

foam-manufacturing agent, the fact that EPA

considered transition costs as a basis for

grandfathering existing HCFC-22 and

HCFC-142b users does not reveal whether such

costs played a role in EPA's decision to permit

new uses.

[***44] Section 612(c) directs the Administrator of

EPA to make the use of environmentally harmful

substitutes unlawful if, inter alia, alternatives presenting

reduced harm are "currently or potentially available"; the

regulations provide that a substitute will be deemed

"unacceptable" if "other alternatives exist that reduce

overall risk." 40 C.F.R. § 82.180(b)(4) (emphasis added).

The court, in dicta, opines that a substitute may not be

"currently or potentially available" within the meaning of

CAA § 612(c) if using it would be too impractical, see

Op. at 16, and hence, presumably, does not "exist" for

purposes of § 82.180(b)(4). But the SNAP regulations

nowhere attempt to make this link. The definition of

"potentially available" turns only on whether EPA

"reasonably believes" a substitute "to be technically

feasible," id. § 82.172, and substitutes must be designated

"unacceptable" if cleaner alternatives "exist." Id. at §

82.180(b)(4). While the SNAP regulations make the "cost

and availability of the substitute" an element of

acceptability, id. § 82.180(a)(7)(vii), that concern is

limited to whether EPA "has ... reason to prohibit [***45]

its use," id. § 82.180(b)(1), not to whether cleaner

alternatives for the substance are already "currently or

potentially available." Under the SNAP regulations the

fact that it might be difficult or time-consuming for some

small businesses or others to use "other alternatives" is

irrelevant, so long as those alternatives "exist."

Consideration of transition costs is thus precluded by the

SNAP regulations as currently written, irrespective of

whether it might be permitted under CAA § 612(c), and it

is arbitrary and capricious for EPA to fail to comply with

its own regulations. See Dithiocarbamate Task Force v.

EPA, 321 U.S. App. D.C. 231, 98 F.3d 1394, 1398-1402

(D.C. Cir. 1996).

For present purposes, as the court states, see Op. at

[4-5], there is no need to decide whether EPA could,

consistent with the text and purpose of CAA § 612, adopt

SNAP regulations that incorporate, into a determination

of whether a cleaner substitute is "currently or potentially

available," consideration of the cost and practicality of

transition. While the court speculates that such

regulations might pass muster, it properly acknowledges

that this question is not before the [***46] court. See Op.

at 17. The SNAP regulations currently include no such

provision, and EPA did not attempt, either in the rule or

in its brief, to justify relying on costs in the rule on the

basis that § 612(c) permits it to do so. It remains to be

seen whether EPA will decide to make consideration of

transition costs an element of the SNAP process.

Whether CAA § 612(c) would permit substantive

consideration of transition costs is not apparent on the

face of the statute and presents a serious question of

statutory interpretation. Heretofore, when Congress has

wanted the Administrator to consider costs under the

CAA it has expressly called for consideration of costs or

practicality. See, e.g., 42 U.S.C. §§ 7411(a)(1),

7412(d)(2), 7479(2)(C), (3). Title VI's policy of phasing

out ozone-depleting [**554] [*1379] substances

involves express consideration of the practicality of

transition, but at a different point in the process: in

deciding whether an accelerated phase-out schedule is

warranted, the Administrator is to consider whether "such

more stringent schedule is practicable, taking into

account technological achievability, safety, and other

relevant factors. [***47] " CAA § 606(a)(2), 42 U.S.C. §

7671e (emphasis added). The decision that an accelerated

phaseout of HCFC-141b is practicable has already been

made. See 58 Fed Reg. 65,018, 65,028 (Dec. 10, 1993).

The court has repeatedly held in cases involving other

sections of the CAA that cost plays no role in the

promulgation of emissions standards. See, e.g., American

Lung Ass'n v. EPA, 328 U.S. App. D.C. 232, 134 F.3d

388, 389 (D.C. Cir. 1998); Natural Resources Defense

Council, Inc. v. Administrator, U.S. EPA, 284 U.S. App.

D.C. 136, 902 F.2d 962, 973 (D.C. Cir. 1990), vacated in

part on other grounds, Natural Resources Defense

Council, Inc. v. Administrator, U.S. EPA, 287 U.S. App.

D.C. 286, 921 F.2d 326 (D.C. Cir. 1991); American

Petroleum Inst. v. Costle, 214 U.S. App. D.C. 358, 665

F.2d 1176, 1185 (D.C. Cir. 1981); Lead Indus. Assn., Inc.

v. EPA, 208 U.S. App. D.C. 1, 647 F.2d 1130, 1148 (D.C.

Cir. 1980). The Supreme Court's decision in Whitman v.

Am. Trucking Ass'ns, 531 U.S. 457, 467-70, 149 L. Ed. 2d

1, 121 S. Ct. 903 (2001), which rejected a reading of the

term "public health" in the CAA that incorporated cost

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2004 U.S. App. LEXIS 15273, ***43; 58 ERC (BNA) 2057
considerations, further cautions against reading economic

considerations into the CAA where they [***48] do not

appear on the face of the statute. Thus, whether CAA §

612(c) might permit consideration of practicality in

extreme cases, such, as the court hypothesizes, where it

would be so difficult to "fit a round peg in a square hole,"

Op. at 15, that a non-ozone-depleting alternative could no

longer be said to be "available," is a question that is not

yet before the court. EPA has not attempted to locate its

approach in the statutory text, and it behooves the court,

in light of the deference that may be due, to afford EPA

the opportunity to decide whether transition costs are to

be considered in evaluating a clean alternative's

availability.

II.

While the court properly identifies error in the

regulation on review, it goes astray on the appropriate

remedy. Under the court's precedent, the proper remedy

in this case is remand, not vacatur. The court explained in

Allied-Signal v. U.S. Nuclear Regulatory Comm'n, 300

U.S. App. D.C. 198, 988 F.2d 146, 150-51 (D.C. Cir.

1993), that remand is preferable to vacatur when an

agency might be able to support a rule through further

explanation and the "consequences of vacating may be

quite disruptive." Id. at 151. [***49] See also Sinclair v.

FCC, 350 U.S. App. D.C. 313, 284 F.3d 148, 162 (D.C.

Cir. 2002); Fox Television Stations, Inc. v. FCC, 350

U.S. App. D.C. 79, 280 F.3d 1027, 1047-49 & 1052-53

(D.C. Cir. 2002). The two Allied-Signal factors are both

implicated here.

First, the identified defect in the rule that the court

has identified may be curable. As discussed, the final

regulation permits new use of HCFC-22 and HCFC-142b

in certain end-uses when "necessary to meet performance

or safety requirements," and "technical constraints []

preclude the use of other available substitutes." 40 C.F.R.

Pt. 82, Subpt. G, app. K . EPA's counsel suggested a

permissible reading of the regulation based on the natural

meaning of its terms: that the chemicals may only be used

when it is impossible, from a technical standpoint, to use

anything else. At the same time, EPA's explanation that it

allowed new uses because of "the constraints associated

with cost and timing of transitioning to alternatives for

small businesses," 67 Fed. Reg. at 47,714, suggests a

policy of protecting small businesses from the costs of a

possible, yet difficult, transition, and thereby [***50]

permitting the use of HCFC-22 and [*1380] [**555]

HCFC-142b even in some cases where available

substitutes already "exist." Cf. 40 C.F.R. § 82.180(b)(4).

But if EPA intended no more than the natural reading, it

can say so on remand, in which event any impermissible

reference to costs in the final rule was irrelevant to the

regulation actually promulgated, and thus harmless error.

Cf. PDK Labs., Inc., 362 F.3d at 799; 5 U.S.C. § 706. Of

course, it is possible that EPA may instead decide to

promulgate new SNAP regulations permitting

consideration of transition costs in determining the

availability of alternatives, or it may promulgate a new

rule in which cost is not a guiding consideration, based

on its existing SNAP regulations. Yet because EPA might

wish to retain the rule on review, and might be able to

easily cure any defect, vacating the rule risks unnecessary

disruption to the regulatory scheme. Cf. Allied-Signal,

988 F.2d at 150-51; Davis Cty. Solid Waste Mgmt. v.

EPA, 323 U.S. App. D.C. 425, 108 F.3d 1454 (D.C. Cir.

1997) (per curiam).

Second, were the court to vacate the final rule with

[***51] respect to the end-uses in which EPA has

permitted limited new HCFC-22 and HCFC-142b use,

the result would likely be that all uses of HCFC-22 and

HCFC-142b within those enduses would become

permissible, as more than 90 days have elapsed since

ATOFINA's petition and the chemicals were not listed as

unacceptable in those end-uses prior to the proposed rule.

See 40 C.F.R. § 82.174(a). This would likely lead to

more widespread interim use of these environmentally

harmful chemicals than the much more limited use EPA

authorized in the rule on review. In the past, where

vacatur of a rule risks interim harm to the environment,

the court has allowed successfully challenged EPA rules

to remain in effect pending remand. See Davis County

Solid Waste Mgmt., 180 F.3d at 1459-60. Given the

possibility of confusion and environmental harm, the

same course of action is warranted here.

Rather than engage the prudential inquiry our case

law requires to determine whether remand or vacatur is

the proper course of action, the court sua sponte holds

that there is no statutory authority for the court to remand

without vacating. See Op. at 17-19. It brushes [***52]

aside our exhaustive caselaw on this question, much of it

quite recent, see, e.g., Milk Train, Inc. v. Veneman, 354

U.S. App. D.C. 25, 310 F.3d 747, 755-56 (D.C. Cir.

2002); Fox Television Stations, 280 F.3d at 1047-49 &

1052-53; County of Los Angeles v. Shalala, 338 U.S.

App. D.C. 168, 192 F.3d 1005, 1023 (D.C. Cir. 1999);

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Radio-Television News Dirs. Ass'n v. FCC, 337 U.S. App.

D.C. 292, 184 F.3d 872, 887-89 (D.C. Cir. 1999);

Allied-Signal, 988 F.2d at 150-51, by claiming that these

cases do not actually constitute precedent and are, in any

event, distinguishable. See Op. at 18-19. Neither

argument is persuasive.

The court rewrites the law of precedent, allowing a

later court to avoid binding decisions it prefers not to

follow if the earlier decisions did not fully state their

reasoning. See Op. at 18-19. But it is long established that

irrespective of whether a later court may conclude that its

view is the better view, it is bound, absent en banc

review, by the court's prior decisions. See LaShawn A. v.

Barry, 318 U.S. App. D.C. 380, 87 F.3d 1389, 1395 (D.C.

Cir. 1996) (en [***53] banc); 28 U.S.C. § 46(c) (2004).

It is true that questions that "lurk in the record; neither

brought to the attention of the court nor ruled upon" do

not constitute precedent. Webster v. Fall, 266 U.S. 507,

511, 69 L. Ed. 411, 45 S. Ct. 148 (1925). But the question

the court revives today--the court's statutory authority to

remand agency action without vacating -- has been

"brought to the attention of the court" on at least two

occasions by separate opinions, and on both occasions,

the court remanded the agency action in question

[*1381] [**556] without vacating, over separate

opinions raising substantially the same arguments as

those that make up the holding of the court today. See

Milk Train, 310 F.3d at 757-58 (Sentelle, J., dissenting);

Checkosky v. SEC, 306 U.S. App. D.C. 144, 23 F.3d 452,

491 (D.C. Cir. 1994) (per curiam) (separate opinion of

Randolph, J.).

Nor can the court reasonably distinguish our

precedent by pointing out that most of it arose under the

Administrative Procedure Act ("APA") rather than the

CAA, and that the CAA only grants the court the power

to "reverse" administrative actions. 42 U.S.C. §

7607(d)(9)(C) (2004) [***54] . The court does not

explain how the relevant language in the CAA is any

different from § 706 of the APA, which confers the power

to "set aside" agency action, 5 U.S.C. § 706(2), where the

court's opinion itself argues that "set aside" is a synonym

for "reverse." Op. at 18 (quoting WEBSTER'S NEW

COLLEGIATE DICTIONARY 991 (1973)). And the

court's attempt to distinguish Davis, where the court,

applying the Allied-Signal test, remanded a rule under the

CAA without vacating, 108 F.3d at 1459-60, by stating

that the parties in Davis did not raise the question of the

court's authority to remand, Op. at 18, ignores that the

parties did not raise the issue in the instant case either.

Judge Randolph's approach, see Concurring Op. at 1-2,

may be of interest to the en banc court, but, absent en

banc review, our precedent requires that the rule be

remanded to EPA for further explanation.

III.

Finally, in light of the required remand, I address

Honeywell's contention that it is entitled to greater relief

than the court grants. As discussed, EPA's decision to

approve some limited use of HCFC-22 and HCFC-142b

was based in [***55] large part on its concern that it

lacked sufficient information on whether existing "safe

alternatives" for HCFC-141b could always function

adequately as substitutes. Honeywell contends that this

inquiry was foreclosed by EPA's past approval of safe

alternatives to HCFC-141b and past refusal to approve

ozone-depleting substances as safe alternatives, and that

EPA was thus precluded from approving any

ozonedepleting substances as substitutes for HCFC-141b,

in any end-uses. However, irrespective of whether CAA §

612(c) would permit EPA to approve some limited use of

HCFC-22 and HCFC-142b on remand, neither of these

other objections present separate obstacles to such

approval.

58 Fed. Reg. at 65,028Under CAA § 612(c), the

Administrator is required to "publish a list of ... safe

alternatives identified under this subsection," and to

promulgate regulations making it unlawful to use any

substitute "which the Administrator determines may

present adverse effects to human health or the

environment, where the Administrator has identified an

alternative to such replacement that -- (1) reduces the

overall risk to human health and the [**557]

environment; and (2) is currently or potentially

available." Id. Honeywell [***56] maintains that EPA

violated this provision because it found that suitable

alternatives to HCFC-141b were not "potentially

available" even though it had already designated several

such substitutes as "safe alternatives." HCFC-22 and

HCFC-142b are chemicals that EPA has determined to

"present adverse effects to ... the environment"; the

importation and manufacture of both was banned,

effective 2010, in the same rule in which EPA imposed

the 2003 ban on the importation and manufacture of

HCFC-141b. See . EPA therefore cannot permissibly

approve their use as substitutes if the Administrator has

"identified an alternative" that "(1) reduces the overall

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risk to human health and the [*1382] environment; and

(2) is currently or potentially available." CAA § 612(c).

In Honeywell's view, EPA's approval in 1999 of

HFC-245fa in "all foam end-uses," 64 Fed. Reg. 68,039,

68,041 (Dec. 6, 1999), as well EPA's approval of other

non-ozone-depleting substitutes, see 67 Fed. Reg. at

47,711, Table B, encompassed a determination that it is

"technically feasible" to use HFC-245fa in all foam

end-uses, and that it is therefore "currently or potentially

[***57] available." This contention conflates two terms

in § 612(c): an "alternative ... that is potentially available"

and a "safe alternative[] identified under this subsection

for specific uses." Being a "safe alternative" and being

"currently or potentially available," under EPA's

regulations, are not the same thing. The SNAP

regulations governing approval of substitutes call only for

applicants to identify "applications within each sector

end-use in which the substitutes are likely to be used," 40

C.F.R. § 82.178(a)(3), and provide that EPA will approve

a substitute where it has "found no reason to prohibit its

use," id. § 82.180(b)(1), with the decision based on

"atmospheric effects," "general population risks,"

"ecosystem risks," "occupational risks," "consumer

risks," "flammability," and "cost and availability." Id. §

82.180(a)(7). On the other hand, "potentially available" is

defined as "any alternative for which adequate health,

safety, and environmental data, as required for the SNAP

notification process, exist to make a determination of

acceptability, and which the Agency reasonably believes

to be technically feasible, even if not all testing [***58]

has yet been completed and the alternative is not yet

produced or sold." Id. § 82.172. In other words, being

"potentially available" adds the additional element of

EPA's reasonable belief in technical feasibility that is not

required of substances designated as safe alternatives. A

substance can be a "safe alternative" for a particular

enduse and yet be "potentially available" for only some,

not all, applications within that end-use. EPA was

therefore free to decide in this rulemaking proceeding

whether specific applications remained in which

permissible constraints still prevented the use of existing,

non-ozone depleting substitutes such as HFC-245fa, thus

rendering them not "potentially available" for those uses.

In light of the remand, it is unnecessary to decide whether

EPA had adequate record support for its conclusion that

such constraints still existed, but EPA's past approval

decisions did not prevent it from evaluating the feasibility

of existing alternatives.

Honeywell's related contention that EPA

impermissibly deviated from its stated policy of never

approving one ozonedepleting substance as a substitute

for another fails for essentially the same reason. In prior

[***59] rules where EPA had expressed this position,

such as in its 1999 refusal to list NARM-22, a blend

containing HCFC-22, EPA had always qualified it by

noting that "other alternatives ... are already acceptable

that do not contain any ozone-depleting refrigerants." 64

Fed. Reg. 22,982, 22,984 (Apr. 28, 1999). Similarly, in

1993, EPA stated that it "views HCFCs as important

interim substitutes that will allow for the earliest possible

phaseout of CFCs and other Class I substances" and

"believes that the use of HCFCs should be limited to only

those applications where other environmentally

acceptable alternatives do not exist." 58 Fed. Reg. at

65,026. The informal expressions of EPA policy at recent

trade shows, to which Honeywell refers, similarly contain

the qualification that EPA is "unlikely" to approve any

HCFCs as substitutes for HCFC-141b because, among

other things, there are "nonozone depleters available." All

these amount to are a series of situations where EPA

found non-ozone-depleting "safe alternatives" [*1383]

[**558] to be "available;" in this particular instance EPA

determined that the existing "safe alternatives" were not

"available" because some specific niche [***60]

applications remained in which constraints might

currently prevent the use of existing, non-ozone depleting

substitutes such as HFC-245fa. Whether or not the record

supports this conclusion, it was not a departure from any

past policy of not approving ozone-depleters.

Honeywell can fare no better with its other

contentions, although I do not reach the merits of either.

The relief granted by the court eliminates the need to

address Honeywell's contention that it did not have

adequate notice of EPA final decision. And Honeywell's

contention that the final rule's delegation of technical

feasibility determinations to the end-user is contrary to

CAA § 612(c)'s requirement that the "Administrator"

identify substitutes and to EPA's regulations defining

chemicals as "potential available" if "the Agency

reasonably believes them to be technically feasible," 40

C.F.R. § 82.172 (emphasis added), comes too late.

Honeywell waited to make this argument in its Reply

Brief, contending that the delegation undermines the

narrowed use limitations by creating the risk that

end-users will impermissibly consider transition costs as

a basis for determining that switching to [***61]

ozonefriendly alternatives is not technically feasible. See

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Pet. Reply Brief 2, 12. Although such delegation might

present a potentially serious issue, cf. U.S. Telecom Ass'n

v. FCC, 360 U.S. App. D.C. 202, 359 F.3d 554, 573-74

(D.C. Cir. 2004), the court has "repeatedly held that an

argument first made in a reply brief ordinarily comes too

late for our consideration" because opposing counsel is

denied an opportunity to respond. See Amgen v. Smith,

360 U.S. App. D.C. 88, 357 F.3d 103, 117-18 (D.C. Cir.

2004) (quoting Students Against Genocide v. Dep't of

State, 347 U.S. App. D.C. 235, 257 F.3d 828, 842 (D.C.

Cir. 2001)). Because EPA has had no opportunity to

address the delegation issue, and might promulgate a new

regulation on remand that does not include the narrowed

use limits, its resolution must await another day.

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