User Name: Ann Lyons

Date and Time: 07/28/2014 1:40 PM EDT

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1. NRDC v. EPA, 749 F.3d 1055

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Ann Lyons
Neutral

As of: July 28, 2014 1:40 PM EDT

NRDC v. EPA

United States Court of Appeals for the District of Columbia Circuit

October 24, 2013, Argued; April 18, 2014, Decided

No. 10-1371 Consolidated with 10-1378, 13-1112

Reporter: 749 F.3d 1055; 2014 U.S. App. LEXIS 7281; 78 ERC (BNA) 1369; 2014 WL 1499825

NATURAL RESOURCES DEFENSE

COUNCIL, PETITIONER v.

ENVIRONMENTAL PROTECTION AGENCY

AND GINA MCCARTHY, IN HER OFFICIAL

CAPACITY AS ADMINISTRATOR, U.S.

ENVIRONMENTAL PROTECTION AGENCY,

RESPONDENTS; CEMEX, INC., ET AL.,

INTERVENORS

Prior History: [**1] On Petitions for Review

of Final Actions of the United States

Environmental Protection Agency.

Portland Cement Ass’n v. EPA, 665 F.3d 177,

398 U.S. App. D.C. 397, 2011 U.S. App. LEXIS

24577 (2011)

Core Terms

emission standards, affirmative defense,

emissions, particulate matter, Cement, Air,

petitioners’, pollutants, achievable, ton,

beyond-the-floor, requirements, penalties,

reduction, sources, cost-effectiveness, air

pollutant, civil suit, malfunctions, determines,

violations, hazardous, petitions, revised, courts,

civil penalty, hydrocarbons, unavoidable,

maximum, mercury

Case Summary

Overview

HOLDINGS: [1]-Because the U.S.

Environmental Protection Agency (EPA)

reasonably interpreted the Clean Air Act in

concluding that 42 U.S.C.S. § 7412(d)(7) did not

preclude EPA from revising an emissions rule

and § 7412(d)(2) did not preclude EPA from

considering cost-effectiveness when setting

beyond-the-floor standards, judicial deference to

the agency’s conclusions was appropriate;

[2]-EPA had authority under § 7412(i)(3)(A) to

establish a new compliance date for emission

standards for several pollutants, although the

revised rule did not alter emission levels for

some of them; [3]-EPA exceeded its authority

under 42 U.S.C.S. § 7601(a)(1) in creating an

affirmative defense to 42 U.S.C.S. § 7604(a) for

violations caused by unavoidable malfunctions

because determining whether to assess civil

penalties in citizen suits, based on the factors in

42 U.S.C.S. § 7413(e)(1), was for the courts.

Outcome

Petitions granted in part.

LexisNexis® Headnotes

Environmental Law > ... > Emission Standards >

Stationary Emission Sources > Hazardous Pollutants

HN1 Clean Air Act § 112, 42 U.S.C.S. § 7412,

requires the U.S. Environmental Protection

Agency (EPA) to establish technology-based

emission standards for major sources of certain

hazardous air pollutants. Emission standards

must reflect the maximum degree of reduction in

emissions that EPA determines is achievable,

taking into consideration the cost of achieving

such emission reduction, and any non-air quality

health and environmental impacts and energy

requirements. § 7412(d)(2). The resulting

standards are commonly known as the maximum

achievable control technology or MACT

standards. EPA uses a two-step process for

establishing MACT standards. The agency

begins by setting a minimum stringency level, or

Ann Lyons
floor, based on the results achieved by the

best-performing similar sources. § 7412(d)(3).

Once EPA sets the statutory floor, it then

determines, considering cost and the other

factors listed in § 7412(d)(2), whether a more

restrictive standard is achievable, and if so then

adopts that standard. EPA calls these stricter

requirements beyond-the-floor standards. When

EPA sets an emission standard, it also determines

a schedule for compliance with that standard.

For existing sources, EPA must provide for

compliance as expeditiously as practicable, but

in no event later than three years after the

effective date of the emission standard. §

7412(i)(3)(A).

Environmental Law > ... > Emission Standards >

Stationary Emission Sources > Hazardous Pollutants

HN2 See 42 U.S.C.S. § 7412(d)(7).

Administrative Law > Judicial Review > Standards of

Review > Deference to Agency Statutory Interpretation

Environmental Law > Air Quality > Enforcement >

Administrative Proceedings

Environmental Law > Administrative Proceedings &

Litigation > Judicial Review

HN3 The U.S. Environmental Protection

Agency administers the Clean Air Act, and a

court must defer to its reasonable interpretation

of any ambiguities in the statute.

Environmental Law > ... > Emission Standards >

Stationary Emission Sources > Hazardous Pollutants

HN4 The U.S. Environmental Protection

Agency may reset the compliance date for an

emission standard when it introduces a new

standard with a new effective date.

Environmental Law > Air Quality > Enforcement >

Citizen Suits

HN5 Clean Air Act § 304(a), 42 U.S.C.S. §

7604(a), allows individuals to file citizen suits in

federal district court against sources that violate

emission standards. Under the law as originally

enacted, a court could order only injunctive

relief as a remedy for a violation. But Congress

has expanded the citizen suit provision to give

district courts authority to impose any

appropriate civil penalties, which may include

monetary penalties.

Environmental Law > Air Quality > Enforcement >

Citizen Suits

HN6 Clean Air Act § 304(a), 42 U.S.C.S. §

7604(a), grants any person the right to

commence a civil action against any person who

is alleged to have violated (if there is evidence

that the alleged violation has been repeated) or to

be in violation of′′ an emission standard or

limitation under the Clean Air Act. The statute

further provides that the federal district courts

shall have jurisdiction, without regard to the

amount in controversy or the citizenship of the

parties, to enforce such an emission standard or

limitation and to apply any appropriate civil

penalties. When determining whether civil

penalties are appropriate, district courts look to

Clean Air Act § 113(e)(1), 42 U.S.C.S. §

7413(e)(1), which directs courts to take into

consideration (in addition to such other factors

as justice may require) the size of the business,

the economic impact of the penalty on the

business, the violator’s full compliance history

and good faith efforts to comply, the duration of

the violation as established by any credible

evidence, payment by the violator of penalties

previously assessed for the same violation, the

economic benefit of noncompliance, and the

seriousness of the violation.

Administrative Law > ... > Constitutional Controls >

Authority to Adjudicate > General Overview

Environmental Law > Air Quality > Enforcement >

Administrative Proceedings

Environmental Law > Air Quality > Enforcement >

Citizen Suits

HN7 Clean Air Act § 304(a), 42 U.S.C.S. §

7604(a), creates a private right of action. The

judiciary, not any executive agency, determines

the scope — including the available remedies —

of judicial power vested by statutes establishing

private rights of action. Section 304(a) is in

keeping with that principle. By its terms, §

304(a) clearly vests authority over private suits

Page 2 of 11

749 F.3d 1055, *1055; 2014 U.S. App. LEXIS 7281, **1

Ann Lyons
in the courts, not the U.S. Environmental

Protection Agency (EPA). The courts determine,

on a case-by-case basis, whether civil penalties

are appropriate. By contrast, EPA’s ability to

determine whether penalties should be assessed

for Clean Air Act violations extends only to

administrative penalties, not to civil penalties

imposed by a court. 42 U.S.C.S. § 7413(d)(2)(B).

To the extent that the Clean Air Act contemplates

a role for EPA in private civil suits, it is only as

an intervenor. EPA also of course could seek to

participate as an amicus curiae.

Administrative Law > ... > Constitutional Controls >

Authority to Adjudicate > General Overview

Environmental Law > Air Quality > Enforcement >

Citizen Suits

HN8 Under the Clean Air Act, deciding whether

penalties are appropriate in a given private civil

suit is a job for the courts, not for the U.S.

Environmental Protection Agency (EPA). When

a private suit is filed, the defendant can argue

that penalties should not be assessed, based on

the factors in Clean Air Act § 113(e)(1), 42

U.S.C.S. § 7413(e)(1), such as the defendant’s

full compliance history and good faith efforts to

comply. EPA can support that argument as

intervenor or amicus, to the extent such status is

deemed appropriate by the relevant court. But

under the statutory scheme, the decision whether

to accept the defendant’s argument is for the

court in the first instance, not for EPA.

Environmental Law > Air Quality > Enforcement >

General Overview

HN9 Clean Air Act § 301(a)(1), 42 U.S.C.S. §

7601(a)(1), authorizes the Administrator of the

U.S. Environmental Protection Agency (EPA) to

prescribe such regulations as are necessary to

carry out his functions under the act. But EPA’s

authority to issue ancillary regulations is not

open-ended, particularly when there is statutory

language on point. The precedents establish a

simple and sensible rule: EPA cannot rely on its

gap-filling authority to supplement the Clean Air

Act’s provisions when Congress has not left the

agency a gap to fill.

Counsel: James S. Pew and Seth L. Johnson

argued the causes for petitioners. With them on

the briefs were John Walke, Meleah Geertsma,

and Avinash Kar.

Matthew R. Oakes, Attorney, U.S. Department

of Justice, argued the cause for respondents.

With him on the brief were Robert G. Dreher,

Acting Assistant Attorney General, and Steven

E. Silverman, Attorney, U.S. Environmental

Protection Agency. Daniel R. Dertke and T.

Monique Peoples, Attorneys, U.S. Department

of Justice, entered appearances.

Carter G. Phillips argued the cause for

intervenors. With him on the briefs were Roger

R. Martella Jr., Timothy K. Webster, Ryan C.

Morris, William M. Bumpers, Debra J. Jezouit,

Michael B. Schon, Deborah E. Jennings, Chet

M. Thompson, Beth S. Ginsberg, Jason T.

Morgan, Ashley C. Parrish, Cynthia A.M.

Stroman, and Richard G. Stoll.

Russell S. Frye and Richard G. Stoll were on the

brief for amici curiae SSM Coalition, et al. in

support of respondents.

Judges: Before: KAVANAUGH and

SRINIVASAN, Circuit Judges, and EDWARDS,

Senior Circuit Judge. Opinion for the Court filed

by Circuit Judge KAVANAUGH.

Opinion by: KAVANAUGH

Opinion

[*1056] KAVANAUGH, Circuit Judge:

[**2] Portland cement is the key ingredient in

concrete. The basic process for making Portland

cement is much the same today as it was when

the material was first developed nearly 200 years

ago. Cement manufacturers pulverize limestone

and minerals, and then heat those raw materials

to several thousand degrees. The resulting

substance, called clinker, is then cooled and

ground into a fine gray powder. This powder —

called Portland cement — is later combined with

sand, rocks, and water to make concrete.

Page 3 of 11

749 F.3d 1055, *1055; 2014 U.S. App. LEXIS 7281, **1

Ann Lyons
The grinding and heating involved in cement

manufacturing has an unfortunate side effect: It

releases into the air a number of hazardous air

pollutants, most notably mercury, hydrochloric

acid, hydrocarbons, and particulate matter. This

case concerns EPA’s efforts to develop rules

under the Clean Air Act to limit emissions of

those pollutants from cement plants.

[*1057] In a previous decision, we considered

EPA’s first attempt to create emission standards

for the cement industry, and we found the

agency’s action arbitrary and capricious. See

Portland Cement Association v. EPA, 665 F.3d

177, 398 U.S. App. D.C. 397 (D.C. Cir. 2011).

Following our ruling, EPA went back to the

drawing board and developed the emission

standards [**3] at issue here, the 2013 Rule.

Several environmental organizations, including

the Natural Resources Defense Council and the

Sierra Club, have petitioned for review of the

2013 Rule, arguing primarily that certain aspects

of the Rule contravene the Clean Air Act. They

also challenge EPA’s decision to create an

affirmative defense for private civil suits in

which plaintiffs sue sources of pollution and

seek penalties for violations of emission

standards. EPA’s affirmative defense would be

available to defendants in cases where an

′′unavoidable′′ malfunction had resulted in

impermissible levels of emissions.

We conclude that the emissions-related

provisions of EPA’s 2013 Rule are permissible

but that the affirmative defense for private civil

suits exceeds EPA’s statutory authority. We

therefore grant the petitions in part and vacate

the portion of the Rule pertaining to the

affirmative defense. We deny the petitions in all

other respects.

I

HN1 Section 112 of the Clean Air Act, 42 U.S.C.

§ 7412, requires EPA to establish

technology-based emission standards for major

sources of certain hazardous air pollutants.

Emission standards must reflect ′′the maximum

degree of reduction in emissions′′ that EPA

[**4] determines is ′′achievable,′′ taking into

consideration ′′the cost of achieving such

emission reduction, and any non-air quality

health and environmental impacts and energy

requirements.′′ 42 U.S.C. § 7412(d)(2). The

resulting standards are commonly known as the

′′maximum achievable control technology,′′ or

′′MACT′′ standards. See National Lime

Association v. EPA, 233 F.3d 625, 630, 344 U.S.

App. D.C. 97 (D.C. Cir. 2000).

EPA uses a two-step process for establishing

MACT standards. The agency begins by setting

a minimum stringency level, or ′′floor,′′ based on

the results achieved by the best-performing

similar sources. See42 U.S.C. § 7412(d)(3).

Once EPA sets the statutory floor, it then

determines, considering cost and the other

factors listed in Section 112(d)(2), whether a

more restrictive standard is ′′achievable,′′ and if

so then adopts that standard. EPA calls these

stricter requirements ′′beyond-the-floor′′

standards. Sierra Club v. EPA, 479 F.3d 875,

877, 375 U.S. App. D.C. 228 (D.C. Cir. 2007).

When EPA sets an emission standard, it also

determines a schedule for compliance with that

standard. For existing sources, EPA must

′′provide for compliance as expeditiously as

practicable, but in no event later than 3 years

after the effective [**5] date′′ of the emission

standard. 42 U.S.C. § 7412(i)(3)(A).

In 2010, pursuant to its Section 112 authority,

EPA promulgated National Emission Standards

for Hazardous Air Pollutants from the Portland

Cement Manufacturing Industry and Standards

of Performance for Portland Cement Plants, 75

Fed. Reg. 54,970 (Sept. 9, 2010). That 2010 Rule

set or revised emissions limits for mercury,

hydrogen chloride, total hydrocarbons (a

surrogate for organic hazardous air pollutants

such as benzene and formaldehyde), and

particulate matter (a surrogate for certain

non-mercury metals). Cement plants would be

required to comply with the new standards

beginning in September 2013. 75 Fed. Reg. at

54,993.

Page 4 of 11

749 F.3d 1055, *1056; 2014 U.S. App. LEXIS 7281, **2

Ann Lyons
[*1058] In addition to establishing emission

standards, the 2010 Rule created an affirmative

defense in private civil suits when violations of

the standards occurred because of ′′unavoidable′′

malfunctions. See id. at 54,993, 55,053. The

affirmative defense replaced a previous EPA

policy creating an exemption from emissions

limitations during malfunction events. In a prior

decision, this Court struck down that exemption

because it was inconsistent with the requirement

that emission standards apply continuously. See

[**6] Sierra Club v. EPA, 551 F.3d 1019,

1027-28, 384 U.S. App. D.C. 96 (D.C. Cir.

2008).

Industry groups petitioned this Court for review

and we found the 2010 Rule arbitrary and

capricious and remanded to EPA. We ruled

specifically that, in calculating the floor for

MACT purposes, EPA had arbitrarily included in

its dataset information from cement kilns

properly classified as commercial incinerators,

which are regulated under a separate provision

of the Act. See Portland Cement Association v.

EPA, 665 F.3d 177, 186-89, 398 U.S. App. D.C.

397 (D.C. Cir. 2011).

In our 2011 decision, however, we did not vacate

the emission standards set forth in the 2010 Rule

or stay its implementation pending EPA’s

reconsideration process, stating that ′′it is

unlikely that significant changes will be made to

the standards upon reconsideration.′′ Id. at 189.

On remand, however, EPA made several relevant

changes to the Portland cement emission

standards. SeeNational Emission Standards for

Hazardous Air Pollutants for the Portland

Cement Manufacturing Industry and Standards

of Performance for Portland Cement Plants, 78

Fed. Reg. 10,006 (Feb. 12, 2013) (the 2013

Rule).

First, consistent with our Portland Cement

opinion, EPA revised its dataset to exclude

commercial [**7] incinerators. When

recalculated using the revised data, the

maximum emissions level for particulate matter

— the floor — was ultimately revised from 0.04

lb/ton to 0.07 lb/ton of clinker for existing kilns.

See id. at 10,017-19. And EPA declined to

re-adopt the more stringent, 0.04 lb/ton limit of

the 2010 Rule as a beyond-the-floor standard.

The agency reasoned that achieving that

additional increment of particulate reduction

would not be cost effective on a cost-per-ton

basis. See id. at 10,020-21.

Second, citing additional compliance strategies

afforded cement manufacturers by the revised

particulate standard, EPA established a new

compliance date of September 2015 for that

standard. See id. at 10,014. EPA further

concluded that although the emissions limits for

mercury, hydrochloric acid, and hydrocarbons

remained the same as in the 2010 Rule, the new

September 2015 compliance date would also

apply to those emission standards. According to

EPA, coordinating the compliance date for

particulate matter, mercury, hydrochloric acid,

and hydrocarbons was essential because the

latter standards ′′all typically involve some

element of [particulate matter] generation and

capture and so the [**8] controls must be

integrated with [particulate matter] control

strategies.′′ Id. at 10,022.

The 2013 Rule also retained the affirmative

defense for private civil suits when the defendant

violated emission standards due to an

unavoidable malfunction. EPA explained that in

its view, the affirmative defense was necessary

to resolve a ′′tension′′ between the Clean Air

Act’s requirement that emission standards apply

at all times and the fact that emission limits may

sometimes be exceeded for reasons beyond the

control of the source. See id. at 10,014.

[*1059] NRDC, the Sierra Club, and other

environmental organizations have petitioned for

review of various aspects of the 2013 Rule. In

Part II of this opinion, we address petitioners’

arguments regarding the emission standards for

particulate matter. In Part III, we address

petitioners’ challenge to the compliance

schedule implementing some of the 2013 Rule’s

Page 5 of 11

749 F.3d 1055, *1058; 2014 U.S. App. LEXIS 7281, **5

Ann Lyons
emission standards. In Part IV, we consider

whether EPA’s decision to create the affirmative

defense to civil penalties for certain

malfunction-related events exceeds the agency’s

statutory authority.

II

We first consider petitioners’ challenges to the

emission standards for particulate matter.

A

The [**9] 2013 Rule ultimately set the

emissions level for particulate matter at 0.07

lb/ton of clinker for existing kilns. The 2010

Rule had set the level at 0.04 lb/ton of clinker.

Petitioners argue that the 2013 Rule weakens the

particulate matter standard in violation of

Section 112(d)(7) of the Clean Air Act, 42 U.S.C.

§ 7412(d)(7). That provision, titled ′′Other

requirements preserved,′′ states:

HN2 No emission standard or other

requirement promulgated under this

section shall be interpreted, construed

or applied to diminish or replace the

requirements of a more stringent

emission limitation or other applicable

requirement established pursuant to

section 7411 of this title, part C or D of

this subchapter, or other authority of

this chapter or a standard issued under

State authority.

(emphases added). Petitioners maintain that

EPA violated Section 112(d)(7) because the

2013 Rule’s particulate matter standards

′′diminish or replace′′ the more stringent

standards in the 2010 Rule.

EPA responds that such a reduction does not

violate Section 112(d)(7). In EPA’s view, the

most natural reading of Section 112(d)(7) is that

′′other authority′′ refers to authority other than

Section 112 and other than the parts [**10] of

the Clean Air Act specifically enumerated in

Section 112(d)(7). Stated another way, EPA

suggests that Section 112(d)(7) is simply a

savings clause that makes clear that Section 112

does not supersede the requirements of other,

more restrictive provisions of the Act.

By contrast, petitioners say that ′′other authority′′

of the Act includes Section 112 itself, as well as

other provisions in the Act. Petitioners read the

statute as an anti-backsliding restriction on

EPA’s ability to voluntarily reduce the

stringency of any emission standard issued under

Section 112.

As EPA points out, however, when Congress has

sought to include that sort of anti-backsliding

provision in the Clean Air Act, it has done so

directly and explicitly. Cf., e.g., 42 U.S.C. §

7410(l) (′′The Administrator shall not approve a

revision of a [State Implementation Plan] if the

revision would interfere with any applicable

requirement concerning attainment and

reasonable further progress′′); id. § 7502(e)

(specifying pollution control requirements if

′′the Administrator relaxes a national primary

ambient air quality standard′′). Section 112(d)(7)

contains no such language. Furthermore, EPA

argues that petitioners’ interpretation [**11] of

Section 112(d)(7) would mean that any change

to a rule issued under Section 112 — even a

necessary change made just for technical reasons

or because there was a calculation error —

would be impermissible if the change made the

standard less stringent. EPA says that it would be

extraordinary if [*1060] the statute precluded

that kind of necessary change.

In wading through this back-and-forth, we

ultimately need not decide whether EPA’s

reading is the better or only reading of this

statutory provision, but simply whether it is a

permissible reading. HN3 EPA administers the

Clean Air Act, and we must defer to its

reasonable interpretation of any ambiguities in

the statute. See Chevron U.S.A. Inc. v. NRDC,

467 U.S. 837, 843-44, 104 S. Ct. 2778, 81 L. Ed.

2d 694 (1984). Here, even if the statute does not

compel EPA’s reading, and indeed even if EPA’s

reading is not the better reading, the statute at a

minimum is sufficiently ambiguous on this point

Page 6 of 11

749 F.3d 1055, *1059; 2014 U.S. App. LEXIS 7281, **8

Ann Lyons
to permit EPA’s reading of ′′other authority.′′

Because EPA’s reading is at least reasonable, we

reject petitioners’ argument and rule for EPA at

Chevron step two.

B

Petitioners also contend that EPA should have set

a more restrictive particulate matter standard

when considering whether to [**12] set

′′beyond-the-floor′′ standards. Petitioners argue

in particular that EPA misinterpreted the statute

to allow it to consider cost-effectiveness when

setting beyond-the-floor standards.

Under Section 112(d), EPA must require ′′the

maximum degree of reduction in emissions′′ that

EPA determines is ′′achievable.′′ 42 U.S.C. §

7412(d)(2). To determine that emission level,

EPA first establishes a minimum stringency

level, or ′′floor,′′ based on the emission results

achieved by the best-performing sources in the

category at issue. See id. § 7412(d)(3). Once

EPA sets the statutory floor, it then determines,

based on cost and the other factors listed in

Section 112(d)(2), whether a more restrictive,

beyond-the-floor standard is achievable.1

When it promulgated the 2013 Rule, EPA

rejected petitioners’ argument to set a 0.04 lb/ton

limit as a beyond-the-floor standard. 78 Fed.

Reg. at 10,020. EPA estimated that a

beyond-the-floor standard set at the 0.04 lb/ton

level would result in a reduction of 138 tons of

particulate matter per year, at a cost of $37

million. Id. Based on those estimates, EPA noted

that the cost-effectiveness of the potential

beyond-the-floor standard — $268,000 per ton

of particulate matter removed — was

substantially lower than the cost-effectiveness of

other emission standards previously rejected by

EPA. See78 Fed. Reg. at 10,021.

Petitioners take issue with EPA’s consideration

of cost-effectiveness as a component of the

Section 112(d)(2) cost analysis. Petitioners

contend that ′′cost′′ for purposes of the statute

only concerns whether ′′the standard is too

expensive for industry to achieve,′′ in essence,

whether the standards would bankrupt the

industry. Pet’rs Br. 34.

EPA says that Congress afforded it wide latitude

in [**14] deciding how to balance cost and

other considerations when determining that

maximum achievable reduction in emissions.

According to EPA, Section 112 does not

command EPA to use a particular form of cost

analysis. In taking cost into account, EPA

contends that it [*1061] may determine whether

the proposed emission levels would be

cost-effective. Indeed, EPA notes that this Court

has previously recognized EPA’s authority to

consider cost-effectiveness in setting standards

under nearly identical provisions of the Clean

Air Act. See, e.g., Husqvarna AB v. EPA, 254

F.3d 195, 200, 349 U.S. App. D.C. 118 (D.C. Cir.

2001) (′′Because section 213 does not mandate a

specific method of cost analysis, we find

reasonable the EPA’s choice to consider costs on

the per ton of emissions removed basis.′′);

National Association of Clean Water Agencies v.

EPA, 734 F.3d 1115, 1156-57 (D.C. Cir. 2013)

(citing Husqvarna; EPA could consider

cost-effectiveness in setting a beyond-the-floor

standard under Section 129(a)(2) of the Act).

Again on this issue as with the first, we need not

decide whether EPA’s reading is the only

reading of this provision. Even if the statute does

not compel EPA’s approach, and even if EPA’s

reading is not the better [**15] reading, we

conclude that it is still at least a reasonable

reading given the various potential meanings of

′′cost′′ in this context. Therefore, we reject

1

In relevant part, the statute reads: ′′Emissions standards promulgated under this subsection and applicable to new or existing

sources of hazardous air pollutants shall require the maximum degree of reduction in emissions of the hazardous air pollutants subject

to this section (including a prohibition on such emissions, where achievable) that the Administrator, taking into consideration

the cost of achieving such emission reduction, and any non-air quality health [**13] and environmental impacts and energy

requirements, determines is achievable for new or existing sources in the category or subcategory . . . .′′ 42 U.S.C. § 7412(d)(2)

(emphasis added).

Page 7 of 11

749 F.3d 1055, *1060; 2014 U.S. App. LEXIS 7281, **11

Ann Lyons
petitioners’ argument that EPA was required to

exclude consideration of cost-effectiveness and

to set a beyond-the-floor standard of 0.04 lb/ton

of clinker.

III

Next, we consider petitioners’ claim that EPA

acted unreasonably in setting a compliance date

of September 2015 for the emission standards

for particulate matter, mercury, hydrochloric

acid, and hydrocarbons.

Under Section 112(i)(3)(A) of the Clean Air Act,

EPA must require compliance with emission

standards for existing sources ′′as expeditiously

as practicable, but in no event later than 3 years

after the effective date of such standard.′′ 42

U.S.C. § 7412(i)(3)(A). Petitioners here contend

that EPA violated this timing provision by

′′extending′′ the compliance deadline for the

2010 Rule from September 2013 to September

2015.

As applied to the particulate matter standard,

there is a basic flaw in petitioners’ argument:

The 2013 Rule did not simply ′′extend′′ the

deadline for complying with the 2010 Rule.

Rather, the 2013 Rule established new

particulate matter standards with a new

[**16] effective date of February 2013, and a

new compliance date of September 2015. EPA

concluded that any earlier date of compliance

would not be practicable because of the

multi-year timeline for upgrading the technology

necessary to ensure compliance. See78 Fed. Reg.

at 10,024. As we have ruled before, HN4 EPA

may reset the compliance date for an emission

standard when it introduces a new standard with

a new effective date, as was the case for

particulate matter in the 2013 Rule. See NRDC v.

EPA, 489 F.3d 1364, 376 U.S. App. D.C. 528

(D.C. Cir. 2007).

According to petitioners, even if EPA could

change the compliance date for the particulate

matter standard, the agency could not do the

same for the mercury, hydrochloric acid, and

hydrocarbon standards. The 2010 Rule set the

emission levels for those pollutants, and the

2013 Rule did not alter the emission levels for

those pollutants. This situation does indeed

present a bit of a conundrum. On the one hand,

we know under the terms of the statute that EPA

has set a compliance date of 2015 as the date that

is as expeditious as practicable for particulate

matter. On the other hand, our prior decision did

not vacate the prior 2010 Rule, and the

compliance date for the [**17] other pollutants

as set forth in that Rule would otherwise be

2013.

This conundrum is resolved when one realizes

that it would be irrational and [*1062] even

absurd to have different compliance dates for the

different pollutants. EPA explained that the

technology is such that it would be senseless to

have different compliance dates. See78 Fed.

Reg. at 10,024. Even petitioners do not deny that

the compliance date for all the pollutants should

be the same. To be sure, they want 2013 not 2015

as the compliance date. But they recognize the

general undesirability of a compliance date of

2013 for some of the pollutants and of 2015 for

other pollutants. See Tr. of Oral Argument at

10-11. Finally and perhaps most importantly, our

prior decision in this case also recognized, at

least implicitly, that there must be a single

compliance date for all of the pollutants. See

Portland Cement Association, 665 F.3d at 189.

Our decision necessarily relied on an assumption

that if EPA did not alter the level for any of the

pollutants, the date would be 2013. But if EPA

changed the level for one of the pollutants, the

compliance date for all the pollutants would

move together. Petitioners’ argument for a 2013

[**18] compliance date would be inconsistent

with our prior decision.

In short, we reject petitioners’ argument about

the 2015 compliance date.

IV

We next consider petitioners’ challenge to the

affirmative defense that EPA created for cases of

′′unavoidable′′ malfunctions.

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Ann Lyons
HN5 Section 304(a) of the Clean Air Act, 42

U.S.C. § 7604(a), allows individuals to file

citizen suits in federal district court against

sources that violate emission standards. Under

the law as originally enacted, a court could order

only injunctive relief as a remedy for a violation.

But as part of the 1990 amendments to the Act,

Congress expanded the citizen suit provision to

give district courts authority to impose ′′any

appropriate civil penalties,′′ which may include

monetary penalties. 42 U.S.C. § 7604(a).

In the 2010 Rule, EPA created an affirmative

defense to Section 304(a) for certain emissions

violations caused by ′′unavoidable′′

malfunctions. Under the affirmative defense, the

district court may assess penalties only if

violators ′′fail to meet [their] burden of proving

all of the requirements in the affirmative

defense.′′ 78 Fed. Reg. at 10,039. EPA retained

the affirmative defense when it promulgated the

2013 Rule. See40 C.F.R. § 63.1344.

Petitioners [**19] now argue that the

affirmative defense exceeds EPA’s statutory

authority and that it is for the courts to decide

whether to create an affirmative defense in these

private civil suits, not EPA. We agree.

The threshold question is whether petitioners

have standing to challenge EPA’s adoption of the

affirmative defense. Petitioners are

environmental associations with individual

members across the country. EPA’s affirmative

defense would immunize certain emissions that

petitioners contend should be penalized. Some

of petitioners’ members will suffer from those

higher emissions, according to their affidavits. A

ruling in their favor would prevent those

emissions and help alleviate that harm. That’s

good enough. Petitioners have shown

injury-in-fact, causation, and redressability, and

they thus have standing under Article III.

We turn, then, to the substance of petitioners’

challenge to the affirmative defense.

HN6 Section 304(a) grants ′′any person′′ the

right to ′′commence a civil action′′ against any

person ′′who is alleged to have violated (if there

is evidence that the alleged violation has been

repeated) or to be in violation of′′ an emission

standard or [*1063] limitation under the Clean

Air Act. 42 U.S.C. § 7604(a). [**20] The statute

further provides that the federal district courts

′′shall have jurisdiction, without regard to the

amount in controversy or the citizenship of the

parties, to enforce such an emission standard or

limitation . . . and to apply any appropriate civil

penalties.′′ Id.

When determining whether civil penalties are

appropriate, district courts look to Section

113(e)(1) of the Act, which directs courts to

′′take into consideration (in addition to such

other factors as justice may require) the size of

the business, the economic impact of the penalty

on the business, the violator’s full compliance

history and good faith efforts to comply, the

duration of the violation as established by any

credible evidence . . . , payment by the violator

of penalties previously assessed for the same

violation, the economic benefit of

noncompliance, and the seriousness of the

violation.′′ 42 U.S.C. § 7413(e)(1).

HN7 Section 304(a) creates a private right of

action, and as the Supreme Court has explained,

′′the Judiciary, not any executive agency,

determines ’the scope’ — including the

available remedies — ’of judicial power vested

by’ statutes establishing private rights of action.′′

City of Arlington v. FCC, 133 S. Ct. 1863, 1871

n.3, 185 L. Ed. 2d 941 (2013) [**21] (emphasis

added) (quoting Adams Fruit Co. v. Barrett, 494

U.S. 638, 650, 110 S. Ct. 1384, 108 L. Ed. 2d 585

(1990)). Section 304(a) is in keeping with that

principle. By its terms, Section 304(a) clearly

vests authority over private suits in the courts,

not EPA. As the language of the statute makes

clear, the courts determine, on a case-by-case

basis, whether civil penalties are ′′appropriate.′′

By contrast, EPA’s ability to determine whether

penalties should be assessed for Clean Air Act

violations extends only to administrative

penalties, not to civil penalties imposed by a

court. See42 U.S.C. § 7413(d)(2)(B)

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Ann Lyons
(Administrator may ′′compromise, modify, or

remit, with or without conditions, any

administrative penalty′′). To the extent that the

Clean Air Act contemplates a role for EPA in

private civil suits, it is only as an intervenor. See

id. § 7604(c)(2). EPA also of course could seek

to participate as an amicus curiae.

EPA argues that its proposed affirmative defense

simply fleshes out the statutory requirement that

penalties be applied only when ′′appropriate.′′

But HN8 under this statute, deciding whether

penalties are ′′appropriate′′ in a given private

civil suit is a job for the courts, not for EPA.

When a private suit is [**22] filed, the

defendant can argue that penalties should not be

assessed, based on the factors in Section

113(e)(1) such as the defendant’s ′′full

compliance history and good faith efforts to

comply.′′ Id. § 7413(e)(1). EPA can support that

argument as intervenor or amicus, to the extent

such status is deemed appropriate by the relevant

court. But under the statutory scheme, the

decision whether to accept the defendant’s

argument is for the court in the first instance, not

for EPA.

EPA alternatively contends that it is permitted to

create the affirmative defense because of Section

301(a)(1) of the Clean Air Act. See78 Fed. Reg.

at 10,014. HN9 That provision authorizes EPA’s

Administrator to ′′prescribe such regulations as

are necessary to carry out his functions under′′

the Act. 42 U.S.C. § 7601(a)(1). But we have

consistently held that EPA’s authority to issue

ancillary regulations is not open-ended,

particularly when there is statutory language on

point. See, e.g., American Petroleum Institute v.

EPA, 52 F.3d 1113, 1119, 311 U.S. App. D.C. 268

(D.C. Cir. 1995) (′′the general grant of

rulemaking power to EPA cannot trump specific

portions of the CAA′′); NRDC v. Reilly, 976 F.2d

36, 41, 298 U.S. App. D.C. 88 (D.C. Cir.

[*1064] 1992) (EPA cannot use [**23] its

general rulemaking authority as justification for

adding to a statutorily specified list); Sierra Club

v. EPA, 719 F.2d 436, 453, 231 U.S. App. D.C.

192 (D.C. Cir. 1983) (same); see also Gonzales

v. Oregon, 546 U.S. 243, 264-65, 126 S. Ct. 904,

163 L. Ed. 2d 748 (2006) (′′It would go . . .

against the plain language of the text to treat a

delegation for the ’execution’ of [the Attorney

General’s] functions as a further delegation to

define other functions well beyond the statute’s

specific grants of authority.′′). Those precedents

establish a simple and sensible rule: EPA cannot

rely on its gap-filling authority to supplement the

Clean Air Act’s provisions when Congress has

not left the agency a gap to fill. So it is here.

On a different tack, EPA notes that Section

304(a)(1) does not expressly deny EPA the

ability to create an affirmative defense, and EPA

emphasizes that this Court has frequently

recognized the need for flexibility in the

administrative process. EPA Br. 46. That’s true.

But the suggestion implicit in EPA’s argument

— that we should ′′presume a delegation of

power absent an express withholding of such

power′′ — is ′′plainly out of keeping with

Chevron . . . .′′ Railway Labor Executives’

Association v. National Mediation Board, 29

F.3d 655, 671, 308 U.S. App. D.C. 9 (D.C. Cir.

1994) [**24] (en banc).

Finally, EPA suggests that an affirmative defense

for malfunctions is necessary to account for the

tension between requirements that emissions

limitations be ′′continuous′′ and the practical

reality that control technology can fail

unavoidably. See78 Fed. Reg. at 10,014. That is

a good argument for EPA to make to the courts

— and for the courts to then consider — in

future civil cases when this issue arises. But it

does not suffice to give EPA authority to create

an affirmative defense.2

* * *

We grant the petitions for review with regard to

EPA’s affirmative defense and vacate those

2

The Fifth Circuit recently upheld EPA’s partial approval of an affirmative defense provision in a State Implementation Plan.

See Luminant Generation Co. v. EPA, 714 F.3d 841 (5th Cir. 2013). We do not here confront the question whether an affirmative

defense may be appropriate in a State Implementation Plan.

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Ann Lyons
portions of the 2013 Rule pertaining to the

defense. We deny the petitions in all other

respects.

So ordered.

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Ann Lyons