No. -XXXX 

In the Supreme Court of the United States

UNITED STATES ENVIRONMENTAL 

PROTECTION AGENCY, ET AL., PETITIONERS

v.

EME HOMER CITY GENERATION, L.P., ET AL.

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS 

FOR THE DISTRICT OF COLUMBIA CIRCUIT 

PETITION FOR A WRIT OF CERTIORARI 

BRENDA MALLORY

Acting General Counsel 

SONJA RODMAN

Attorney 

Environmental Protection 

 Agency 

Washington, D.C. 20460 

DONALD B. VERRILLI, JR. Solicitor General 

Counsel of Record 

IGNACIA S. MORENO

Assistant Attorney General 

MALCOLM L. STEWART

Deputy Solicitor General 

JOSEPH R. PALMORE

Assistant to the Solicitor 

General 

JON M. LIPSHULTZ

NORMAN L. RAVE, JR. Attorneys 

Department of Justice 

Washington, D.C. 20530-0001 

SupremeCtBriefs@usdoj.gov 

(202) 514-2217 

 
(I) 

QUESTIONS PRESENTED 

The Clean Air Act, 42 U.S.C. 7401 et seq. (Act or 

CAA), requires the Environmental Protection Agency 

(EPA) to establish National Ambient Air Quality Standards (NAAQS) for particular pollutants at levels that 

will protect the public health and welfare. 42 U.S.C. 

7408, 7409. “[W]ithin 3 years” of “promulgation of a 

[NAAQS],” each State must adopt a state implementation plan (SIP) with “adequate provisions” that will, 

inter alia, “prohibit[]” pollution that will “contribute 

significantly” to other States’ inability to meet, or maintain compliance with, the NAAQS. 42 U.S.C. 7410(a)(1), 

(2)(D)(i)(I). If a State fails to submit a SIP or submits 

an inadequate one, the EPA must enter an order so 

finding. 42 U.S.C 7410(k). After the EPA does so, it 

“shall promulgate a [f]ederal implementation plan” for 

that State within two years. 42 U.S.C. 7410(c)(1). 

The questions presented are as follows: 

1. Whether the court of appeals lacked jurisdiction to 

consider the challenges on which it granted relief. 

2. Whether States are excused from adopting SIPs 

prohibiting emissions that “contribute significantly” to 

air pollution problems in other States until after the 

EPA has adopted a rule quantifying each State’s interstate pollution obligations. 

3. Whether the EPA permissibly interpreted the 

statutory term “contribute significantly” so as to define 

each upwind State’s “significant” interstate air pollution 

contributions in light of the cost-effective emission reductions it can make to improve air quality in polluted 

downwind areas, or whether the Act instead unambiguously requires the EPA to consider only each upwind 

State’s physically proportionate responsibility for each 

downwind air quality problem. 
(II) 

PARTIES TO THE PROCEEDINGS 

Petitioners are the United States Environmental 

Protection Agency and Acting EPA Administrator Robert Perciasepe. 

Respondents who were petitioners in the court of appeals are: City of Ames, Iowa; City of Springfield, Illinois, Office of Public Utilities, doing business as City 

Water, Light & Power; Louisiana Department of Environmental Quality; Louisiana Public Service Commission; Mississippi Public Service Commission; Public 

Utility Commission of Texas; Railroad Commission of 

Texas; State of Alabama; State of Florida; State of 

Georgia; State of Indiana; State of Kansas; State of 

Louisiana; State of Michigan; State of Nebraska; State 

of Ohio; State of Oklahoma; State of South Carolina; 

State of Texas; State of Virginia; State of Wisconsin; 

Texas Commission on Environmental Quality; Texas 

General Land Office; AEP Texas North Co; Alabama 

Power Co.; American Coal Co.; American Energy Corp.; 

Appalachian Power Co.; ARIPPA; Big Brown Lignite 

Company LLC; Big Brown Power Company LLC; Columbus Southern Power Co.; Consolidated Edison Company of New York, Inc.; CPI USA North Carolina LLC; 

Dairyland Power Cooperative; DTE Stoneman, LLC; 

East Kentucky Power Cooperative, Inc.; EME Homer 

City Generation, LP.; Entergy Corp.; Environmental 

Committee of the Florida Electric Power Coordinating 

Group, Inc.; Environmental Energy Alliance of New 

York, LLC; GenOn Energy, Inc.; Georgia Power Co.; 

Gulf Power Co.; Indiana Michigan Power Co.; International Brotherhood of Electrical Workers, AFL-CIO; 

Kansas City Board of Public Utilities, Unified Government of Wyandotte County, Kansas City, Kansas; Kansas Gas and Electric Co.; Kenamerican Resources, Inc.; 

Kentucky Power Co.; Lafayette Utilities System; Loui-
III 

siana Chemical Association; Luminant Big Brown Mining Company LLC; Luminant Energy Company LLC; 

Luminant Generation Company LLC; Luminant Holding Company LLC; Luminant Mining Company LLC; 

Midwest Food Processors Association; Midwest Ozone 

Group; Mississippi Power Co.; Municipal Electric Authority of Georgia; Murray Energy Corp.; National 

Mining Association; National Rural Electric Cooperative 

Association; Northern States Power Co. (a Minnesota 

corporation); Oak Grove Management Company LLC; 

Ohio Power Co.; Ohio Valley Coal Co.; Ohio American 

Energy, Inc.; Peabody Energy Corp.; Public Service 

Company of Oklahoma; Sandow Power Company LLC; 

South Mississippi Electric Power Ass’n; Southern Company Services, Inc.; Southern Power Co.; Southwestern 

Electric Power Co.; Southwestern Public Service Co.; 

Sunbury Generation LP; Sunflower Electric Power 

Corp.; Utility Air Regulatory Group; United Mine 

Workers of America; Utah American Energy, Inc.; 

Westar Energy, Inc.; Western Farmers Electric Cooperative; Wisconsin Cast Metals Association; Wisconsin 

Electric Power Co.; Wisconsin Paper Council, Inc.; Wisconsin Manufacturers and Commerce; Wisconsin Public 

Service Corp. 

Respondents who were intervenors in support of the 

court of appeals petitioners are: San Miguel Electric 

Cooperative; City of New York (Nos. 11-1388 and 11-

1395 only); State of New York (Nos. 11-1388 and 11-1395 

only). 

Respondents who were intervenors in support of the 

court of appeals respondents are: American Lung Association; Calpine Corporation; Clean Air Council; Environmental Defense Fund; Exelon Corporation; Natural 

Resources Defense Council; Public Service Enterprise 

Group, Inc.; Sierra Club; City of Bridgeport, Connecti-
IV 

cut; City of Chicago; City of New York (all but Nos. 11-

1388 and 11-1395); City of Philadelphia; Mayor and City 

Council of Baltimore; State of Connecticut; State of 

Delaware; District of Columbia; State of Illinois; State 

of Maryland; Commonwealth of Massachusetts; State of 

New York (all but Nos. 11-1388 and 11-1395); State of 

North Carolina; State of Rhode Island; State of Vermont. 
(V) 

TABLE OF CONTENTS

Page

Opinions below ................................................................................ 1 

Jurisdiction ...................................................................................... 1 

Statutory provisions involved ....................................................... 2 

Statement ......................................................................................... 2 

Reasons for granting the petition ............................................... 11 

A. The court of appeals both exceeded its 

jurisdiction and erred on the merits by 

effectively invalidating prior SIP orders ......................... 12

B. The court of appeals erred in adjudicating 

unpreserved challenges to the EPA’s “significant 

contribution” analysis, and in failing to defer 

to the agency’s reasonable interpretation of 

ambiguous statutory terms ............................................... 18 

C. The court of appeals’ decision will seriously 

disrupt the EPA’s implementation of the CAA, 

and it threatens serious harm to the public health ........ 28 

Conclusion ...................................................................................... 32 

TABLE OF AUTHORITIES 

Cases: 

Barnhart v. Sigmon Coal Co., 534 U.S. 438 (2002) ............. 16 

Chevron U.S.A. Inc. v. NRDC, Inc., 467 U.S. 837 

(1984) ................................................................................ 21, 24

DOT v. Public Citizen, 541 U.S. 752 (2004) ......................... 19 

Entergy Corp. v. Riverkeeper, Inc., 556 U.S. 208 

(2009) ...................................................................................... 25 

McCarthy v. Madigan, 503 U.S. 140 (1992) ......................... 19 

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

cert. denied, 532 U.S. 903, and 532 U.S. 904 

(2001) ........................................................................ 4, 9, 21, 24 

National Cable & Telecomms. Ass’n v. Gulf Power 

Co., 534 U.S. 327 (2002) ........................................................ 24
VI 

Cases—Continued: Page

North Carolina v. EPA (D.C. Cir.): 

531 F.3d 896 (2008) ................................................. 5, 10, 21 

550 F.3d 1176 (2008) ........................................................... 5 

Vermont Yankee Nuclear Power Corp. v. NRDC, 

Inc., 435 U.S. 519 (1978) ...................................................... 19 

Whitman v. American Trucking Ass’ns, 531 U.S. 457 

(2001) ...................................................................................... 25 

Statutes:

Clean Air Act, 42 U.S.C. 7401 et seq. ........................... passim

42 U.S.C. 7408 ...................................................................... 2 

42 U.S.C. 7409 ...................................................................... 2 

42 U.S.C. 7410(a) ............................................................... 31 

42 U.S.C. 7410(a)(1) .................................................... 15, 16 

42 U.S.C. 7410(a)(2) .................................................... 15, 16 

42 U.S.C. 7410(a)(2)(D)....................................................... 4 

42 U.S.C. 7410(a)(2)(D)(i)(I) ................................... passim 

42 U.S.C. 7410(a)(2)(E) (Supp. II 1977) ........................... 3 

42 U.S.C. 7410(a)(2)(K)(i) ................................................. 18 

42 U.S.C. 7410(c) ............................................................... 15 

42 U.S.C. 7410(c)(1) ......................................................... 2, 6 

42 U.S.C. 7410(k) ............................................................... 15 

42 U.S.C. 7426 .................................................................... 27 

42 U.S.C. 7426(b) ............................................................... 27 

42 U.S.C. 7511(a)(1) .......................................................... 17 

42 U.S.C. 7607(b) ............................................................... 14 

42 U.S.C. 7607(d)(7)(B) ......................................... 18, 19, 20 

42 U.S.C. 7607(d)(10) ........................................................ 27 

42 U.S.C. 1857c-5(a)(2)(E) (1970) ............................................ 2 
VII 

Miscellaneous: 

136 Cong. Rec. 6420 (1990), reprinted in 

1 S. Comm. on Environment & Public Works, A 

Legislative History of the Clean Air Act Amendments of 1990 (1998) ............................................................... 3 

EPA: 

Air Quality Modeling Final Rule Technical 

Support Document, Appendices D, E, and F 

(2011), http://www.epa.gov/airtransport/pdfs/ 

AQModeling.pdf ............................................................ 9 

Clean Air Markets (2010), http://www.epa.gov/ 

airmarkets/progsregs/index.html ............................... 5 

63 Fed. Reg. 57,356 (Oct. 27, 1998) ......................................... 5

69 Fed. Reg. (Jan. 30, 2004): 

p. 4566 ................................................................................... 8

p. 4575 ................................................................................... 8

70 Fed. Reg. 25,162 (May 12, 2005) ......................................... 5

76 Fed. Reg. (July 20, 2011): 

p. 43,175 .............................................................................. 14

p. 43,177 .............................................................................. 14

77 Fed. Reg. 1027 (Jan. 9, 2012) ............................................ 18

78 Fed. Reg. 3086 (Jan. 15, 2013) ............................................ 6

H.R. Rep. No. 294, 95th Cong., 1st Sess. (1977), reprinted in 4 S. Comm. on Environment & Public 

Works, A Legislative History of the Clean Air 

Amendments of 1977 (1978) .................................................. 3 

S. Rep. No. 127, 95th Cong., 1st Sess. (1977), reprinted in 3 S. Comm. on Environment & Public Works, 

A Legislative History of the Clean Air Amendments of 1977 (1978) ............................................................... 3 
VIII 

Miscellaneous—Continued: Page

S. Rep. No. 228, 101st Cong., 1st Sess. (1989), 

reprinted in 5 S. Comm. on Environment & 

Public Works, A Legislative History of the 

Clean Air Act Amendments of 1990 (1998) ........................ 3 

 
(1) 

In the Supreme Court of the United States

No.X- XX 

UNITED STATES ENVIRONMENTAL 

PROTECTION AGENCY, ET AL., PETITIONERS

v.

EME HOMER CITY GENERATION, L.P., ET AL.

ON PETITION FOR A WRIT OF CERTIORARI 

TO THE UNITED STATES COURT OF APPEALS 

FOR THE DISTRICT OF COLUMBIA CIRCUIT 

PETITION FOR A WRIT OF CERTIORARI 

The Solicitor General, on behalf of the United States 

Environmental Protection Agency (EPA) and the Acting 

Administrator of the EPA, respectfully petitions for a 

writ of certiorari to review the judgment of the United 

States Court of Appeals for the District of Columbia 

Circuit in this case. 

OPINIONS BELOW 

The opinion of the court of appeals (App., infra, 1a116a) is reported at 696 F.3d 7. The final rule of the 

EPA (App. 117a-1458a) is reported at 76 Fed. Reg. 

48,208. 

JURISDICTION 

The judgment of the court of appeals was entered on 

August 21, 2012. Petitions for rehearing were denied on 

January 24, 2013 (App. 1459a-1462a). The jurisdiction of 

this Court is invoked under 28 U.S.C. 1254(1). 
2 

STATUTORY PROVISIONS INVOLVED 

Pertinent statutory provisions are set forth in the 

appendix to this petition. App. 1463a-1498a. 

STATEMENT 

1. a. The Clean Air Act (CAA, or the Act), 42 U.S.C. 

7401 et seq., creates a federal-state partnership to 

control air pollution in the United States. The Act requires the EPA to establish National Ambient Air 

Quality Standards (NAAQS) for particular pollutants at 

levels that will protect the public health and welfare. 

42 U.S.C. 7408, 7409. The Act then obligates States to 

adopt state implementation plans (SIPs) that, inter alia, 

assure both that States will meet the NAAQS within 

their own borders and that they will not emit pollutants 

in amounts that “contribute significantly” to other 

States’ NAAQS nonattainment or inability to maintain 

compliance with NAAQS. 42 U.S.C. 7410(a)(2)(D)(i)(I). 

If the EPA finds that a State has failed to adopt a SIP 

meeting these or other CAA requirements, the EPA 

“shall” issue a federal implementation plan (FIP) for 

that State within two years of that finding. 42 U.S.C. 

7410(c)(1).

This case involves the interstate component of these 

SIP requirements, commonly referred to as the “good 

neighbor” provision. 42 U.S.C. 7410(a)(2)(D)(i)(I). The 

original version of that provision required only that 

SIPs include provisions for “intergovernmental cooperation” to assure that emissions would not interfere with 

attainment or maintenance of the NAAQS in other 

States. 42 U.S.C. 1857c-5(a)(2)(E) (1970). Because this 

“cooperation” approach proved ineffectual, Congress 

amended the CAA in 1977 to require, more directly, that 

all SIPs contain provisions prohibiting emissions from 

particular stationary sources that “will * * * prevent” 
3 

attainment or maintenance of the NAAQS in downwind 

States. 42 U.S.C. 7410(a)(2)(E) (Supp. II 1977). In 

adding these (and related) new provisions in 1977, Congress recognized that upwind States had little incentive 

to control pollution whose effects would be felt principally in other States, and Congress made clear its intent 

that the burdens of air pollution control be shared more 

equitably among upwind and downwind States.1

In 1990, Congress decided that even the strengthened interstate-pollution provision in the CAA had been 

inadequate.2 In particular, the EPA had found in sever-

 

1

 For example, a House report concluded that existing law was “an 

inadequate answer to the problem of interstate air pollution.” H.R. 

Rep. No. 294, 95th Cong., 1st Sess. 330 (1977), reprinted in 4 A 

Legislative History of the Clean Air Amendments of 1977 (1977 

Legis. Hist.), at 2797 (1978). The report stressed that one of the 

problems under the existing law was that its effectiveness depended 

largely on “prevention or abatement” by upwind States that in reality 

had little “incentive and need to act.” Ibid. Similarly, a Senate 

report criticized the lack of effective “interstate abatement procedures” and “interstate enforcement actions” under existing law, 

which it viewed as “resulting in serious inequities among several 

States, where one State may have more stringent implementation 

plan requirements than another State.” S. Rep. No. 127, 95th Cong., 

1st Sess. 41-42 (1977), reprinted in 3 1977 Legis. Hist., at 1415. 

Accordingly, the new provisions were “intended to equalize the 

positions of the States with respect to interstate pollution by making 

a source at least as responsible for polluting another State as it would 

be for polluting its own State.” Id. at 1416. 2

 See S. Rep. No. 228, 101st Cong., 1st Sess. 48 (1989), reprinted in

5 A Legislative History of the Clean Air Act Amendments of 1990

(1990 Legis. Hist.), at 8388 (1998); see also 136 Cong. Rec. 6420 

(1990), reprinted in 1 1990 Legis. Hist., at 1106 (statement of Sen. 

Lautenberg) (“In New Jersey, the Department of Environmental 

Protection says that on some days even if we shut down the entire 

State, we would be in violation of some health standards because of 

pollution coming over from other States.”); S. Rep. No. 228, 101st 
4 

al decisions that pollution contributions by particular 

upwind sources could not be shown to have “prevent[ed]” NAAQS attainment downwind. See Michigan 

v. EPA, 213 F.3d 663, 674 (D.C. Cir. 2000) (per curiam) 

(discussing this history), cert. denied, 532 U.S. 903, 904 

(2001). 

For these reasons, Congress in 1990 revised a number of provisions relating to interstate pollution 

transport, including (as relevant here) 42 U.S.C. 

7410(a)(2)(D). That amendment made the good neighbor 

provision stronger and more flexible by extending its 

reach beyond a single stationary source to cover multiple sources, and by requiring States to prohibit emissions that “contribute significantly” to downwind nonattainment or maintenance problems, whether or not 

those emissions could be shown, on their own, to “prevent” attainment. See App., infra, 25a n.14; 42 U.S.C. 

7410(a)(2)(D)(i)(I). The good neighbor provision now 

requires SIPs to contain measures “(i) prohibiting 

* * * any source or other type of emissions activity 

within the State from emitting any air pollutant in 

amounts which will—(I) contribute significantly to nonattainment in, or interfere with maintenance by, any 

other State with respect to any such national primary or 

secondary [NAAQS].” 42 U.S.C. 7410(a)(2)(D)(i)(I); see 

App., infra, 8a (“To put it colloquially, the good neighbor provision requires upwind States to bear responsibility for their fair share of the mess in downwind 

States.”). 

b. Following enactment of the 1990 amendments, the 

EPA began a series of rulemakings to address the revised interstate pollution transport requirements. The 

 

Cong., 1st Sess. 49 (1989), reprinted in 5 1990 Legis. Hist., at 8389 

(similar statement regarding New York City). 
5 

first was the “NOx SIP Call,” which in 1998 established a 

cap-and-trade program3 for nitrogen oxide (NOx) emissions to address ozone nonattainment. 63 Fed. Reg. 

57,356 (Oct. 27, 1998). The NOx SIP Call was upheld by 

the D.C. Circuit in most significant respects in Michigan. 

In 2005, the EPA issued the Clean Air Interstate 

Rule (CAIR), which extended the basic approach of the 

NOx SIP Call to “reduce or eliminate the impact of upwind sources on out-of-state downwind nonattainment of 

NAAQS for fine particulate matter (‘PM2.5’)” and ozone. 

North Carolina v. EPA, 531 F.3d 896, 903 (D.C. Cir. 

2008) (North Carolina) (per curiam); see 70 Fed. Reg. 

25,162 (May 12, 2005). CAIR was initially vacated by 

the D.C. Circuit in North Carolina. In a later decision 

on rehearing, however, the court modified the remedy to 

remand without vacatur, thus allowing the EPA to continue to administer CAIR pending further rulemaking. 

North Carolina v. EPA, 550 F.3d 1176 (D.C. Cir. 2008) 

(per curiam). 

c. The EPA rule at issue in this case is the CrossState Air Pollution Rule, commonly referred to as the 

Transport Rule. App. 117a-1458a. The Transport Rule

 

3

 In simple terms, a cap-and-trade program establishes an aggregate emission “cap” for each set of covered sources and provides 

regulated entities significant flexibility to determine how the cap is 

met. Sources comply by holding allowances equal to their emissions, 

and they can purchase allowances from other sources that are able to 

reduce their emissions less expensively. Allowances are traded much 

like other commodities. This gives sources the flexibility to secure 

required emission reductions in the most feasible and least expensive 

manner, while still assuring that the overall pollution-control targets 

are met. General information about the EPA’s clean air markets 

programs can be found at EPA, Clean Air Markets (2010), http:// 

www.epa.gov/airmarkets/progsregs/index.html. 
6 

responded to the remand in North Carolina and addressed the emission of pollutants in 28 upwind States 

that significantly contribute to downwind States’ problems attaining or maintaining the NAAQS for ozone and 

fine particulate matter (PM2.5).4 For each State subject 

to the Transport Rule, the EPA had previously made a 

finding (in separate administrative proceedings) that the 

State either had failed to submit a SIP addressing the 

good neighbor requirement, or had submitted an inadequate one, thus triggering the statutory requirement 

for the EPA to promulgate a FIP within two years. 

42 U.S.C. 7410(c)(1); see App. 171a-172a. In the 

Transport Rule, the EPA therefore promulgated FIPs 

for those States. 

d. While the NOx SIP Call, CAIR, and the Transport 

Rule varied somewhat in their details, all three rules 

were premised on the same basic framework, using a 

two-part analysis that considered both air quality and 

cost factors. The first step was the Screening Analysis, 

in which the EPA identified those States potentially 

subject to the rule (pending further analysis). The 

Screening Analysis used air quality modeling to determine whether each State’s emissions increased ambient 

 

4

 The Transport Rule actually addressed three distinct NAAQS: 

(1) the 1997 PM2.5 annual NAAQS; (2) the 2006 PM2.5 daily NAAQS; 

and (3) the 1997 8-hour ozone NAAQS. App. 168a. Because the 

differences in the EPA’s analysis for the two PM2.5 NAAQS are 

largely irrelevant to the issues addressed in this petition, the petition 

refers simply to the PM2.5 NAAQS except as specifically noted. In 

2008, the 8-hour ozone NAAQS was revised to be somewhat more 

stringent, id. at 169a, and in January 2013, the EPA revised its suite 

of PM NAAQS, making the annual PM2.5 more stringent but retaining the same standard for daily PM2.5. 78 Fed. Reg. 3086 (Jan. 15, 

2013). The Transport Rule does not address either of these recently 

revised NAAQS. 
7 

concentrations of pollutants by greater than a defined 

threshold level in at least one downwind area with a 

NAAQS nonattainment or maintenance problem. App. 

255a. 

In the second part of the analysis (the Control Analysis), the EPA established the emission-control obligations for each upwind State that had been made subject 

to the rule by the Screening Analysis. The obligations of 

each such State were defined by reference to the amount 

of emission reductions that can be achieved in that State 

at a specific cost threshold. The cost thresholds were 

selected by evaluating how much emission control is 

necessary to address the upwind component of downwind nonattainment and maintenance problems. In this 

way, the agency considered both the air quality impacts 

and the cost to the regulated community of increasingly 

stringent levels of emission control. App. 316a-323a. 

EPA’s rationale for using this two-part approach is 

largely based on the nature and technical complexity of 

the interstate pollution problem. For decades, air quality modeling has shown that ozone and PM2.5 nonattainment and maintenance problems are caused by the collective contribution of NOx and sulfur dioxide (SO2) from 

numerous upwind States to particular downwind areas, 

combined with local emissions from the affected downwind areas themselves.5

 Further complicating matters 

 

5

 The underlying chemical mechanisms are complex but can be 

summarized in general terms as follows. In the case of ozone pollution, emissions of NOx and volatile organic compounds (VOCs) mix in 

the atmosphere in the presence of sunlight to form ozone. Accordingly, ozone nonattainment is primarily a seasonal, warm-weather problem. Because VOC emissions generally are local in nature, the interstate component of ozone pollution is due primarily to NOx emissions 

that can be transported in the atmosphere over very long distances 

(hundreds of miles or more). App. 185a-187a. Fine particulate mat-
8 

is the fact that many States that are upwind contributors to pollution problems in other States also have 

NAAQS nonattainment and maintenance problems of 

their own (i.e., they are both “upwind” and “downwind”), 

and most upwind States contribute, in varying degrees, 

to nonattainment and maintenance problems in many 

downwind areas. In short, at least in the eastern half of 

the United States (which for demographic and meteorological reasons is the portion of the country most affected), the interstate pollution problem is best understood 

as a dense, spaghetti-like matrix of overlapping upwind/downwind “linkages” among many States, rather 

than a neater and more limited set of linkages among 

just a few. 

To illustrate these points more concretely, the EPA’s 

air quality modeling for the Transport Rule evaluated 

2479 potential contribution linkages among 37 upwind 

States and 67 ozone and PM2.5 downwind nonattainment 

and maintenance areas. Of these linkages, 565 were 

above the one-percent threshold for the rule’s Screening 

Analysis (88 for ozone and 477 for PM2.5). For each 

downwind nonattainment and maintenance area, between 25 and 32 upwind States contribute some amount 

of pollution, with between five and 12 (and a mean of 

eight) being substantial enough to exceed the screening 

threshold. For ozone, four out of 25 contributing States 

are both upwind contributors and downwind receptors, 

 

ter (i.e., PM2.5) can be emitted directly or formed secondarily in the 

atmosphere. The interstate air pollution component of PM2.5 pollution is primarily attributable to the formation of sulfates from SO2

emissions from power plants and industrial facilities and nitrates 

from NOx emissions from power plants, automobiles, and other combustion sources. These precursors, as well as the fine particles 

themselves, also can be transported long distances in the atmosphere. 

69 Fed. Reg. 4566, 4575 (Jan. 30, 2004). 
9 

while for PM2.5, this figure is nine out of 23. Many upwind States, especially those located in the industrial 

Midwest, make downwind contributions exceeding the 

screening threshold to a large number of downwind 

areas. For example, Kentucky contributes above the 

threshold to 40 out of 41 downwind receptor areas for 

the daily PM2.5 NAAQS, and to all 16 downwind receptors for the annual PM2.5 NAAQS.6

2. a. In Michigan, the D.C. Circuit reviewed the 

NOx SIP Call and upheld the EPA’s two-step analytical 

approach. 213 F.3d at 677-680. The court held that the 

term “significant” (as used in the good neighbor provision) is ambiguous, and that the EPA can permissibly 

determine the amount of a State’s “significant” contribution by reference to the amount of emissions reductions 

achievable through application of “highly cost-effective” 

controls. Id. at 677-679. The court observed that “[t]he 

term ‘significant’ does not in itself convey a thought that 

significance should be measured in only one dimension—

here, in the petitioners’ view, health alone.” Id. at 677. 

The EPA used the same basic analytical approach for 

CAIR, which was the subject of the D.C. Circuit’s decision in North Carolina. Although the court of appeals 

ultimately remanded CAIR on other grounds, the court 

reaffirmed Michigan’s general acceptance of a costeffectiveness analysis to help determine the amount of 

each State’s “significant” contribution, and it expressly 

 

6

 The figures discussed in this paragraph are derived from data in 

the EPA’s air quality modeling technical support document (Air 

Quality TSD) for the Transport Rule, which was part of the administrative record for the Rule. See EPA, Air Quality Modeling Final 

Rule Technical Support Document, Appendices D, E, and F (2011), 

http://www.epa.gov/airtransport/pdfs/AQModeling.pdf. 
10 

declined to disturb the agency’s basic two-step analytical approach. North Carolina, 531 F.3d at 916-917. 

b. In the order at issue here, the EPA again used the 

same basic analytical approach, but a divided panel of 

the court of appeals rejected it. App., infra, 1a-116a.7

The court of appeals concluded for three reasons that 

the Transport Rule was unambiguously foreclosed by 

the good neighbor provision. First, the court found that 

the rule could theoretically result in a State being compelled to reduce emissions below the threshold level for 

determining whether that State was subject to the 

Transport Rule. Second, the court believed that, where 

multiple upwind States contribute to a common downwind nonattainment problem, the rule did not sufficiently assure that upwind States’ emission reduction obligations were proportional to their share of modeled downwind contribution. Third, the court concluded that the 

rule did not sufficiently assure that cumulative upwindState obligations would be no more than the minimum 

amount necessary to enable affected downwind areas to 

meet the NAAQS. App., infra, 31a-41a. 

The court of appeals also held that the EPA lacked 

statutory authority to promulgate FIPs under the circumstances presented here. The EPA is required to 

 

7

 To the extent that the EPA’s two-step regulatory approach for 

the Transport Rule differed in any significant way from that used in 

the NOx SIP Call and CAIR, it was to place greater emphasis on air 

quality factors. Most notable in this respect was the agency’s decision to create two different cost thresholds for SO2 controls to apply 

to different groups of States depending on the severity of the associated downwind PM2.5 nonattainment problems. See App. 314a, 316a323a. Where the downwind problems were less severe, upwind States 

were required only to make reductions available at $500 per ton, a 

relatively low cost threshold compared to the $2000 per ton threshold 

used in the NOx SIP Call and CAIR. 
11 

promulgate a FIP only when it has made a finding that a 

State has breached its obligation to submit an adequate 

SIP in a timely fashion. In the court’s view, no such 

state non-compliance had been demonstrated because no 

State was obligated to submit a SIP addressing interstate transport until the EPA had defined that State’s 

significant contribution to nonattainment or interference 

with maintenance in other States. App., infra, 42a-61a. 

Judge Rogers dissented. She concluded that the 

court did not have jurisdiction to decide either the 

significant-contribution or FIP question. On the merits, 

she would have held that the Transport Rule was a permissible exercise of the EPA’s authority under the CAA. 

App., infra, 65a-116a; see id. at 114a (“The court ignores 

Congress’s limitations on the court’s jurisdiction and 

decades of precedent strictly enforcing those limitations 

and proceeds to do violence to the plain text of the CAA 

and EPA’s permissible interpretations of the CAA.”). 

“The result,” Judge Rogers concluded, “is the endorsement of a ‘maximum delay’ strategy for regulated entities.” Ibid.

REASONS FOR GRANTING THE PETITION 

The court of appeals committed a series of fundamental errors that, if left undisturbed, will gravely undermine the EPA’s enforcement of the Clean Air Act. As 

Judge Rogers explained in dissent, the court should not 

even have decided either question presented. The court 

of appeals’ determination that the EPA could not pass 

judgment on SIPs until it had quantified States’ good 

neighbor obligations was, in substance, a collateral invalidation of separate orders not before the court. Those 

challenging the Transport Rule likewise had waived any 

statutory objection to the agency’s approach to “signifi-
12 

cant contribution” by failing to raise it in the administrative proceedings. 

The court of appeals’ merits holdings were likewise 

erroneous. The court disregarded mandatory statutory 

deadlines for States to adopt SIPs with good neighbor 

provisions and for the EPA to issue FIPs when it finds 

that a State has failed to do so (or has done so inadequately). The court then read several statutory commands of its own invention into the ambiguous term 

“significant contribution” and faulted the EPA for not 

complying with those directives. 

If not corrected, the decision below will have serious 

adverse consequences. Its imposition of non-textual 

barriers to implementation of the good neighbor provision could delay by years the ability of downwind States 

to comply with NAAQS, and could in some cases make it 

impossible for those States to meet statutory deadlines 

for doing so. Because the EPA had planned to use the 

Transport Rule as a model for enforcement of additional 

NAAQS, the court’s decision also creates serious uncertainty about implementation of other CAA requirements. Most fundamentally, the court of appeals’ errors 

will seriously impede the EPA’s ability to deal with a 

grave public health problem. The petition for a writ of 

certiorari should be granted. 

A. The Court Of Appeals Both Exceeded Its Jurisdiction 

And Erred On The Merits By Effectively Invalidating 

Prior SIP Orders 

1. In June 2010 and July 2011 (before the Transport 

Rule had calculated any State’s good neighbor obligations), EPA issued final orders finding that 29 States 

and territories had failed to satisfy their statutory obligation to submit SIPs with good neighbor provisions for 

the 2006 24-hour PM2.5 NAAQS. App., infra, 71a-73a & 
13 

n.2 (Rogers, J., dissenting). No party sought judicial 

review of those orders. Id. at 73a (Rogers, J., dissenting). Also in July 2011, EPA issued separate final orders disapproving as inadequate the good neighbor 

provisions of SIPs submitted by ten other States. See 

id. at 73a & n.3 (Rogers, J., dissenting). Only three of 

those States sought judicial review (two in the D.C. 

Circuit and one in the Sixth Circuit), and those petitions 

were not consolidated with the case below. See id. at 

73a-74a & n.3 (Rogers, J., dissenting). 

The court of appeals in this case held that “EPA’s 

many SIP disapprovals and findings of failure to submit 

share one problematic feature: EPA made all of those 

findings before it told the States what emissions reductions their SIPs were supposed to achieve under the 

good neighbor provision.” App., infra, 49a. That statement starkly demonstrates that the Court’s invalidation 

of the Transport Rule rested on its conclusion that the 

EPA’s antecedent June 2010 and July 2011 final orders 

were premature and therefore erroneous. But the proper avenue for challenging the prior orders was via direct 

petitions for review of those orders, not through a later 

challenge to the Transport Rule. As Judge Rogers explained, “[i]f a State wished to object that under section 

[7410(a)] it had no obligation to include ‘good neighbor’ 

provisions in its SIP until EPA quantified its ‘significant 

contribution’ in emission reduction budgets, then the 

CAA required it to do so at the time EPA found it had 

not met its SIP ‘good neighbor’ obligation.” Id. at 75a.8

 

8

 Indeed, in the 2011 order disapproving the good neighbor provision of Indiana’s SIP, EPA rejected the very argument on which the 

court below later relied in invalidating the Transport Rule, i.e., that 

“EPA ‘should provide [the State] the opportunity to revise its [] SIP 

once the Transport Rule is completed.’” App., infra, 77a (Rogers, J., 
14 

To obtain judicial review of EPA action under the 

CAA, a challenger must file a petition for review within 

60 days after that action is published in the Federal 

Register. 42 U.S.C. 7607(b). The court of appeals therefore exceeded its jurisdiction by permitting those challenging the Transport Rule to collaterally attack separate final orders for which the time to seek review had 

passed. See App., infra, 65a-66a, 70a-82a (Rogers, J., 

dissenting). In determining the propriety of the 

Transport Rule, the court below therefore was required 

to accept as valid the antecedent SIP disapprovals and 

findings of failure to submit. 

2. Even if the court of appeals had been authorized 

to review the June 2010 and July 2011 orders, the 

court’s determination that the orders were invalid conflicts with the text of the Act. See App., infra, 83a-95a 

(Rogers, J., dissenting). The CAA’s “plain text and 

structure establish a clear chronology of federal and 

State responsibilities” that do not include the extra 

steps mandated by the court of appeals. Id. at 86a 

(Rogers, J., dissenting). 

The CAA provides: 

 Each State shall, after reasonable notice and public hearings, adopt and submit to the Administrator, 

within 3 years (or such shorter period as the Administrator may prescribe) after the promulgation of a 

national primary ambient air quality standard (or 

any revision thereof) under section 7409 of this title 

for any air pollutant, a plan which provides for implementation, maintenance, and enforcement of such 

 

dissenting) (quoting 76 Fed. Reg. 43,175, 43,177 (July 20, 2011)). 

Indiana did not file a petition for review to challenge that conclusion. 

Id. at 78a (Rogers, J., dissenting). 
15 

primary standard in each air quality control region 

(or portion thereof) within such State. 

42 U.S.C. 7410(a)(1) (emphases added). 

The Act further provides: 

Each such [state implementation] plan shall * * * 

(D) contain adequate provisions— 

(i) prohibiting, consistent with the provisions of this 

subchapter, any source or other type of emissions activity within the State from emitting any air pollutant 

in amounts which will— 

(I) contribute significantly to nonattainment in, or 

interfere with maintenance by, any other State with 

respect to any such national primary or secondary 

ambient air quality standard. 

42 U.S.C 7410(a)(2). 

If a State fails to submit a SIP, or submits an inadequate one, the EPA must make a finding of failure to 

submit or disapprove the submission. 42 U.S.C 7410(k). 

The EPA is then required to promulgate a FIP within 

two years of making such a finding or disapproval unless 

the State has addressed the problem and the EPA has 

approved the SIP. 42 U.S.C. 7410(c). As noted above, 

for every State for which the EPA promulgated a 

Transport Rule FIP, the agency either had found that 

the State’s submission was overdue or had disapproved 

a submitted SIP. Under the plain terms of the statute, 

the EPA therefore had a mandatory duty to promulgate 

FIPs for those States. Ibid. 

Notwithstanding the clear statutory mandate, the 

court of appeals held that the EPA lacked authority to 

promulgate the FIPs because, in that court’s view, 

States have no obligation under the good neighbor pro-
16 

vision to submit SIPs addressing interstate transport 

until after the EPA has defined their significant contribution. App., infra, 42a-61a. The court did not find that 

the language of Section 7410(a)(1)—i.e., that States 

“shall” submit a SIP within three years after the EPA 

has promulgated a NAAQS—makes a State’s obligation 

to act contingent on its receipt of guidance from the 

EPA. Rather, the court thought that “contextual and 

structural factors” supported its approach. Id. at 54a.

The court of appeals’ analysis violated the core principle of statutory interpretation that “courts must presume that a legislature says in a statute what it means 

and means in a statute what it says there.” Barnhart v.

Sigmon Coal Co., 534 U.S. 438, 461-462 (2002) (citation 

omitted). The statutory language here could not be 

clearer. Under the Act, each State “shall” submit a SIP 

to the EPA within three years after the promulgation of 

a new or revised NAAQS, and “[e]ach such plan shall” 

contain adequate provisions to control emissions from 

the State that significantly contribute to nonattainment or interfere with maintenance in another State. 

42 U.S.C. 7410(a)(2) (emphases added). Nothing in the 

CAA makes that obligation contingent on prior action by 

the EPA to define a particular State’s contribution to 

downwind nonattainment. “The Act does not require 

EPA to promulgate a rule or issue guidance regarding 

the specific requirements of section [7410(a)(2)(D)(i)(I)] 

in advance of the SIP submittal deadline, much less 

require EPA to promulgate such a rule a specific 

amount of time before the SIP submittal deadline.” 

App. 175a. 

The court of appeals’ interpretation is also inconsistent with the statute’s emphasis on timely attainment 

of the NAAQS. The statute establishes specific dead-
17 

lines by which the NAAQS must be achieved, which can 

be as short as three years after an area is designated as 

nonattainment. 42 U.S.C. 7511(a)(1). As Congress recognized in enacting and then strengthening the interstate transport provision of the Act, some States need 

emission reductions from upwind States (in conjunction 

with emission reductions within their own borders) in 

order to achieve attainment. Thus, the timely submission of interstate transport SIPs and the consequent 

implementation of control measures are integral to the 

ability of all States to achieve the statutory deadlines for 

attainment. By effectively eliminating the statutory 

deadline for the submission of transport SIPs, the court 

of appeals’ decision disrupts this integrated statutory 

scheme for achieving attainment. By contrast, the 

EPA’s Transport Rule, which included statutorilymandated FIPs but stressed that States were free to 

replace them by later submitting SIPs to the EPA for 

approval, see App. 669a-682a, was true to the statutory 

design. 

Finally, the court of appeals erred in asserting that 

States are incapable of submitting transport SIPs until 

the EPA has established their significant contribution. 

The court cited nothing to support this assumption except statements by the EPA to the effect that determining interstate contribution is complex. App., infra, 51a52a. In implementing the CAA, however, States routinely undertake technically complex air quality determinations. SIPs addressing in-state emissions are based 

on complex modeling to predict how emissions of numerous pollutants will interact with atmospheric conditions to create, often in areas far from the sources, 

concentrations of ozone and PM2.5. States are capable 

of producing the air quality modeling and inform- 
18 

ation needed to submit transport SIPs. See id. at 89a95a (Rogers, J. dissenting); see also 42 U.S.C. 

7410(a)(2)(K)(i) (States must “perform[] * * * such air 

quality modeling as [EPA] may prescribe for the purpose of predicting the effect on ambient air quality of 

any emissions of any air pollutant for which [EPA] has 

established a [NAAQS].”). In addition, the necessary 

emissions information from all States is publicly available, see App., infra, 90a & n.12 (Rogers, J., dissenting), 

and States not covered by CAIR or the Transport Rule 

have complied with the requirement to submit transport 

SIPs. E.g., 77 Fed. Reg. 1027 (Jan. 9, 2012) (EPA approval of Colorado’s interstate transport SIP). 

B. The Court Of Appeals Erred In Adjudicating Unpreserved Challenges To The EPA’s “Significant Contribution” Analysis, And In Failing To Defer To The Agency’s 

Reasonable Interpretation Of Ambiguous Statutory 

Terms 

The court of appeals also erred in invalidating the 

Transport Rule based on its conclusion that the EPA’s 

“significant contribution” analysis was foreclosed by the 

CAA. No statutory objection to that effect was made in 

the administrative proceedings. In any event, the EPA’s 

analysis of that issue reflected a reasonable construction 

of the CAA’s broad and ambiguous terms. 

1. The CAA specifies that “[o]nly an objection to a 

rule or procedure which was raised with reasonable 

specificity during the period for public comment * * * 

may be raised during judicial review.” 42 U.S.C. 

7607(d)(7)(B). That statutory requirement codifies longrecognized exhaustion rules. Enforcement of such rules 

helps to ensure that an agency will have the opportunity 

to modify its proposed course of action if it concludes 

that particular objections have merit; enables the agen-
19 

cy to explain why it views particular objections as unmeritorious if it reaches that conclusion; and promotes 

better-informed judicial review by allowing the court to 

focus on the agency’s actual responses to actual objections. See, e.g., DOT v. Public Citizen, 541 U.S. 752, 

764-765 (2004); Vermont Yankee Nuclear Power Corp. v.

NRDC, Inc., 435 U.S. 519, 553-554 (1978). “Exhaustion 

concerns apply with particular force when,” as here, 

“the agency proceedings * * * allow the agency to 

apply its special expertise.” McCarthy v. Madigan, 

503 U.S. 140, 145 (1992). 

The court below failed to honor Section 

7607(d)(7)(B)’s requirement that objections to EPA 

action must be “raised with reasonable specificity” during the administrative proceedings in order to be preserved for judicial review. See App., infra, 95a-110a 

(Rogers, J., dissenting); see also id. at 96a (noting that 

the waiver “question is not close”). In concluding that 

the EPA’s methodology was inconsistent with the CAA, 

the court of appeals expressed concern that the EPA’s 

Control Analysis could theoretically require a State to 

reduce its emissions below the air quality threshold used 

for the Screening Analysis (i.e., one percent of the applicable NAAQS for at least one upwind-to-downwind linkage). Id. at 31a-38a. Such a result, the court believed, 

would exceed the EPA’s statutory authority to regulate 

only “significant” contributions. See ibid.

As Judge Rogers’s dissent thoroughly demonstrated, 

however, this statutory objection was not asserted in 

any rulemaking comments. App., infra, 98a-101a. Because of that failure, there was no evidence before the 

court of appeals that the factual scenario the court hypothesized would ever actually occur. Id. at 95a & n.15 

(Rogers, J., dissenting). Likewise, the court of appeals’ 
20 

conclusion that the CAA required a strictly proportional 

approach to upwind States’ emission-reduction obligations was not even advanced in the court of appeals by 

those challenging the Transport Rule. Id. at 111a (Rogers, J., dissenting). The court nevertheless viewed those 

questions as properly before it because concerns of this 

sort had been raised in the years-old and separate CAIR

rulemaking, and because EPA had discussed (but proposed not to pursue) alternative regulatory approaches 

in the Transport Rule proposal. Id. at 32a n.18. The 

court therefore believed that the agency was sufficiently 

“on notice that its disregard of the significance floor was 

a potential legal infirmity in its approach.” Ibid.

Under the plain language of the CAA’s judicial review provision, however, the relevant question is not 

whether the EPA was aware of a potential issue or objection, but whether the objection asserted in court was 

“raised with reasonable specificity during the period for 

public comment” on the particular agency action that is 

the subject of the petitioner’s challenge. 42 U.S.C. 

7607(d)(7)(B). The court of appeals’ casual approach to 

waiver and exhaustion issues would require agencies to 

intuit unstated objections to proposed rules based on 

any issue of which a court might later find the agency 

was “on notice.” In particular, the court’s approach 

would require agencies to guess whether objections 

raised in one agency proceeding, but never asserted as a 

ground for judicial review of the resulting agency action, 

must be addressed again in a subsequent rulemaking 

even though no commenter has pressed them. The 

court’s approach also permits courts to adjudicate very 

complex regulatory issues without the benefit of agency 

responses to focused rulemaking comments. Indeed, the 

manner in which the court of appeals proceeded to ana-
21 

lyze the significant contribution claims in this case is a 

striking illustration of this problem. See pp. 21-28, 

infra. 

2. On the merits, the court of appeals erred in invalidating the EPA’s approach to the “significant contribution” question. 

Agencies are entitled to deference in construing statutes they administer. Chevron U.S.A. Inc. v. NRDC, 

Inc., 467 U.S. 837, 842-845 (1984). If Congress has “directly spoken to the precise question at issue,” that 

intent must be given effect. Id. at 842-843. However, “if 

the statute is silent or ambiguous with respect to the 

specific issue, the question for the court is whether the 

agency’s answer is based on a permissible construction 

of the statute.” Id. at 843. “The court need not conclude 

that the agency construction was the only one it permissibly could have adopted to uphold the construction, or 

even the reading the court would have reached if the 

question initially had arisen in a judicial proceeding.” 

Id. at 843 n.11. 

In 2000, the D.C. Circuit held that the term “significant” is ambiguous as used in the statutory phrase “contribute significantly to nonattainment,” 42 U.S.C. 

7410(a)(2)(D)(i)(I). Michigan v. EPA, 213 F.3d 663, 677-

680 (D.C. Cir. 2000), cert. denied, 532 U.S. 903, 904 

(2001). The court further held that it was reasonable for 

the EPA to determine the “significan[ce]” of particular 

state contributions by reference to the amount of highly 

cost-effective pollution controls available in each upwind 

State, and without regard to the amount of each State’s 

downwind contribution. Ibid.; see North Carolina v. 

EPA, 531 F.3d 896, 916-917 (D.C. Cir. 2008) (declining to 

disturb CAIR’s similar approach to significant contribution). In this case, however, the court below changed 
22 

course and held that the EPA’s approach violated the 

CAA’s plain terms. 

a. In particular, the court of appeals perceived a 

strict statutory requirement that the emission-reduction 

obligations for each upwind State be “proportional” to 

its modeled amount of downwind air quality contributions. App., infra, 31a-41a. The court did not make 

clear whether it found these to be unambiguous statutory requirements (Chevron step one) or merely a necessary component of any “permissible” construction of the 

statute (Chevron step two). The court of appeals erred 

in either event because Congress did not address these 

specific issues, and the EPA’s approach is reasonable. 

The court of appeals’ proportionality requirement is 

an unrealistically simplistic response to a highly complex problem. To illustrate, first consider a downwind 

nonattainment area (Area A) that receives relatively 

equal amounts of pollution contributions from three 

upwind States, X, Y, and Z. A strict proportionality 

requirement would compel the EPA to identify the portion of the problem attributable to each upwind State 

and then divide the upwind share among States X, Y, 

and Z “in proportion to the size of their contributions to 

the downwind State’s nonattainment.” App., infra, 25a. 

In reality, however, interstate pollution transport 

problems are far more complex. In the scenario described above, for example, assume that States Y and Z 

also contribute relatively higher amounts to nonattainment in other areas (Areas B and C, respectively), while 

State X contributes a relatively small (but still “significant”) amount to nonattainment in a fourth area (Area 

D). These facts may require States Y and Z to make 

relatively larger emission reductions to address their 

contributions to Areas B and C. With respect to Area A, 
23 

however, where States Y and Z constitute two-thirds of 

the upwind contribution, the likely result of such larger 

reductions would be some degree of incidental 

“overcontrol,” as well as a lack of “proportionality” 

among States X, Y, and Z. Similarly, because State X is 

a relatively small contributor to nonattainment in Area 

D, the relatively larger reductions it would have to make 

to satisfy its share of the upwind contribution to Area A 

would likely cause some lack of proportionality and some 

over-control with respect to Area D. 

As discussed above, further technical complications 

and cost implications arise out of other typical realworld circumstances, such as the fact that many downwind nonattainment areas are also upwind contributors, 

and that there is often a wide disparity among the 

States with regard to the pollution-control investments 

they have already made (and the consequent disparities 

in expenditures needed to make additional emission 

reductions). Moreover, in a typical real-world case, a 

downwind area will have far more than the three upwind 

contributors used in the above examples; these upwind 

contributions will vary widely in degree; and each upwind State will typically contribute in varying amounts 

to downwind nonattainment and maintenance problems 

in numerous areas, not just one or two. 

Especially when viewed against this background, 

Congress is unlikely to have intended—and it surely did 

not unambiguously determine—to impose the court of 

appeals’ simplistic and inflexible quantitative proportionality restrictions on the EPA (and the States) in 

addressing this sprawling and complex problem. Rather 

than prescribing a specific regulatory solution, Congress 

instead simply required each State’s SIP to prohibit 

emissions in amounts that “contribute significantly” to 
24 

downwind nonattainment or maintenance problems, 

42 U.S.C. 7410(a)(2)(D)(i)(I), without specifying any 

technical or policy factors that the EPA should take into 

account in enforcing this requirement. This is a classic 

delegation of gap-filling authority warranting Chevron

deference in a highly technical area that demands specialized expertise. Chevron, 467 U.S. at 843; National 

Cable & Telecomms. Ass’n v. Gulf Power Co., 534 U.S. 

327, 339 (2002). 

b. The EPA’s construction of the CAA to allow its 

mixed air-quality and cost-effectiveness approach to the 

“contribute significantly” criterion, unencumbered by 

the restrictions enunciated by the court of appeals, is a 

reasonable one. As the D.C. Circuit had previously 

recognized, see Michigan, 213 F.3d at 677, the term 

“significant,” in and of itself, does not dictate an exclusive or even primary focus on air quality impacts to the 

exclusion of costs. Nor is such a focus required by the 

CAA’s references to the “amounts” of emissions that 

“contribute significantly,” as the court below appeared 

to believe. See App., infra, 22a-23a; 42 U.S.C. 

7410(a)(2)(D)(i)(I). 

To be sure, the statutory reference to “amounts” can 

be read as an indication that Congress expected SIPs to 

address the interstate transport requirement through 

quantitative emission limits; but the Transport Rule did 

that. It is the term “contribute significantly” that 

guides the substance of those limits, however, and that 

key term was not defined by Congress. While the EPA’s 

approach may not be the only permissible way to define 

the “significant” amount of upwind emissions, it is (for 

all the reasons discussed above) one permissible approach, as it achieves the air quality results desired by 
25 

Congress in a simpler, more feasible, and less costly 

manner than other alternatives. 

The EPA’s approach to significant contribution is also consistent with applicable guidance from this Court. 

The Court has recently stressed that, except where 

consideration of costs is expressly precluded by statute, 

the EPA and other agencies should be allowed to consider costs in construing broad qualitative standards 

similar to that at issue here, in order to allow the agency 

to identify the most efficient and least burdensome 

mechanisms to achieve a statutory goal. See Entergy 

Corp. v. Riverkeeper, Inc., 556 U.S. 208, 218 (2009) (considering a Clean Water Act “best technology available” 

standard and observing that, while the technology that 

achieves the maximum environmental benefit could be 

viewed as the “best,” the term also could be used to 

describe the technology that is “most efficient[]” from a 

cost-benefit perspective). And, citing Michigan, this 

Court has specifically noted the D.C. Circuit’s conclusion that Section 7410(a)(2)(D)(i)(I), unlike the Act’s 

NAAQS provisions, does not preclude the consideration 

of costs. Whitman v. American Trucking Ass’ns, 

531 U.S. 457, 469 n.1 (2001). 

c. The court of appeals also erred in opining that its 

proportionality requirement was necessary to assure 

that upwind contributors were required to do no more 

than their “fair share” to address downwind nonattainment problems. App., infra, 25a. To begin with, the 

CAA itself does not specify any single most equitable 

and appropriate manner to divide emission-control responsibility among multiple upwind and downwind contributors. In the absence of any such statutory specification, the responsibility of balancing the relevant equi-
26 

ties is a quintessential policy judgment on which the 

EPA should be afforded deference. 

In the D.C. Circuit’s view, each upwind contributor’s 

“fair share” must be measured exclusively by its modeled air quality contribution to a single downwind nonattainment area, relative to other upwind contributors to 

the same area. App., infra, 25a. The court of appeals 

even specified a proportionality formula (illustrated 

with a hypothetical example involving three upwind 

contributors to a single downwind area) that it believed 

the statute required. Id. at 25a-26a & n.15. The hypothetical foundation of this formula bears so little resemblance to reality that it would be difficult if not impossible to apply even in the single-area context on which it is 

premised.9

 More importantly, however, most States 

subject to the rule are contributors to multiple downwind nonattainment and maintenance problems, with 

their relative degree of air quality culpability for each 

 

9

 For example, the court’s hypothetical was premised on an invented and otherwise-unknown unit of measure—so-called NAAQS 

“units”—which the court used to describe both the quantity of upwind 

and downwind emissions and the air quality of the affected downwind 

area. The court depended on this unrealistic device to create an 

artificial world in which its mathematical construct could easily be 

applied. App., infra, 26a (assuming that the NAAQS is “100 units,” 

the downwind area has air quality of “150 units,” the downwind State 

contributes “90 units” and three upwind States contribute “20 units” 

each). In reality, of course, emissions are measured in actual quantities (e.g., tons per year), and the effect of any given quantity of emissions on air quality and NAAQS attainment in downwind areas is 

highly variable and can be accurately estimated only through sophisticated computer modeling that takes into account geographic, meteorological, and a host of other technical factors—not through simple 

addition and subtraction as the court of appeals suggests. See note 5, 

supra (discussing formation of ozone and PM2.5 from precursor NOx

and SO2 emissions). 
27 

upwind-to-downwind linkage varying considerably. The 

court of appeals therefore was hopelessly unrealistic in 

assuming that each State could be assigned a precise air 

quality-based “fair share” with respect to all of its “significant” linkages.10

d. The court of appeals’ fair-share policy rationale also does not take into account a separate but highly relevant consideration, namely that different States (both 

upwind and downwind) had made widely varying pollution-control investments at the time the Transport Rule 

was promulgated. To illustrate, again consider the simple hypothetical discussed above, where States X, Y, and 

Z contribute equal amounts to downwind nonattainment 

in Area A. Under the court of appeals’ proportional 

approach, each of the three States must be required to 

make one-third of the total needed “upwind” emission 

reductions with respect to Area A. However, if States X 

and Y already have made substantial pollution-control 

 

10 The decision below also creates a possible conflict with another 

CAA interstate transport provision, 42 U.S.C. 7426. Inter alia, 

that provision allows a downwind State to petition the EPA to make 

a finding that a specific source (or multiple sources) in upwind States 

violate the prohibition on significant contribution in Section 

7410(a)(2)(D)(i)(I) with respect to the downwind State. 42 U.S.C. 

7426(b). The statute requires the EPA to respond to any such petition within 60 days, while authorizing the EPA to extend that deadline for up to six months. Ibid.; 42 U.S.C. 7607(d)(10). Under the 

court of appeals’ view of Section 7410(a)(2)(D)(i)(I), however, the 

EPA would typically be unable to quantify the emissions of upwind 

sources that contribute significantly to NAAQS nonattainment or 

maintenance problems unless it first undertook a full-blown, multistate air quality modeling analysis that addressed the court’s proportionality requirements with respect to all other potential contributors. Such an onerous requirement is incompatible with Congress’s 

express expectation that the EPA could act, and act relatively quickly, on Section 7426 petitions. 
28 

investments, but State Z’s investments have to date 

been negligible, the EPA could reasonably take that fact 

into account in defining each State’s obligations, even if 

the effect of that approach was to reduce State Z’s emissions by somewhat more than one-third of the total 

upwind contributions to Area A. This is especially true 

since, in the real world, State Z would likely contribute 

to NAAQS nonattainment and maintenance problems in 

other downwind areas as well, and might even have 

NAAQS nonattainment and maintenance problems of its 

own. In this respect, the EPA’s cost-effectiveness approach provides a rough but objective means of equitably distributing pollution-control burdens among a crisscrossing patchwork of upwind and downwind States. 

e. Finally, the court of appeals expressed concern 

that the Transport Rule “could require upwind States to 

reduce emissions by more than the amount” of pollution 

that subjected them to the rule in the first place. App., 

infra, 34a-35a. That concern, however, was entirely 

hypothetical. The court cited no basis in the record for 

believing that such a scenario was a realistic possibility, 

see id. at 95a n.15 (Rogers, J., dissenting), and because 

no party advanced that argument in the administrative 

proceedings, the EPA did not address it in the rulemaking. If such a scenario ever occurs, it will provide at 

most a basis for a targeted challenge by the affected 

State; but it affords no sound justification for facial 

invalidation of the Transport Rule.

C. The Court Of Appeals’ Decision Will Seriously Disrupt 

The EPA’s Implementation Of The CAA, And It Threatens Serious Harm To The Public Health 

Review of the court of appeals’ decision is warranted 

because it creates a substantial impediment to the 

EPA’s ability to implement the CAA. In particular, it 
29 

hobbles the agency with respect to the aspect of the 

Act’s administration (regulation of interstate pollution 

that upwind States often have little incentive to police on 

their own) where the need for a strong federal role is the 

most critical. 

1. The court of appeals’ decision will substantially 

delay emission reductions by upwind States that are 

necessary for downwind States to attain and maintain 

the NAAQS. Indeed, the compliance dates in the 

Transport Rule were “aligned with the attainment deadlines for the relevant NAAQS.” App. 449a. That rule 

and its compliance dates are now vacated, but the attainment deadlines remain. 

If the decision below is not corrected, the EPA will be 

required to determine each State’s significant contribution in accordance with the new restrictions announced 

by the court of appeals. That task would presumably be 

undertaken through notice and comment rulemaking 

that would likely take at least two years, and that might 

itself be subject to judicial review. The EPA would then 

be required to give each affected State an opportunity, 

probably again for a period of years, to develop a strategy for implementing the requirements in the State 

through its SIP process. The resulting SIPs would then 

be submitted to the EPA for review. If a State fails to 

submit a SIP, or if the EPA disapproves a SIP submission, the EPA would promulgate a FIP, again through 

notice-and-comment rulemaking. Only then would the 

EPA be back at the point it had previously reached by 

promulgating the Transport Rule. Cumulatively, these 

processes would likely take many years to complete, and 

would no doubt generate time-consuming legal challenges of their own. Under the court of appeals’ decision, 

the time required for controls to be implemented in 
30 

upwind States would extend far beyond that contemplated by the CAA, to the detriment of the public health 

in downwind States. 

2. In addition to establishing extra-textual procedural obstacles for the EPA to surmount, the court of appeals placed onerous and unwarranted restrictions on 

the manner in which the agency may permissibly identify “significant” contributions to downwind nonattainment. As discussed above, given the multiple, overlapping linkages involved in the interstate pollution problem, it may well be nearly impossible to meet the court’s 

proportionality requirement with respect to all upwindto-downwind linkages. 

To be sure, the court of appeals’ opinion acknowledges that the EPA has “some discretion” in applying these 

requirements when it faces “truly unavoidable” technical complications, App., infra, 28a, and that the agency 

has some additional degree of discretion to consider 

costs (but, in the court of appeals’ view, only to reduce

regulatory burdens), id. at 27a. This may leave the EPA 

enough latitude to at least attempt to craft a new regulatory approach that meets the court’s requirements. 

Because the EPA’s ability to consider cost-effectiveness 

and the impact of collective contributions in crafting 

such a rule would be vastly diminished, however, any 

resulting rule would likely be much more costly and 

burdensome in its application to certain States. There is 

no basis in the statute to require such an inflexible and 

unwise result. 

3. The court of appeals’ decision also severely impedes the EPA’s efforts to combat the serious health 

risks posed by fine particles and ozone. Fine particles 

“are associated with a number of serious health effects 

including premature mortality, aggravation of respirato-
31 

ry and cardiovascular disease, * * * lung disease, 

* * * asthma attacks, and certain cardiovascular problems.” App. 165a; see id. at 165a-166a (discussing negative impact on environment and agriculture). Shortterm exposure to ozone at sufficient concentrations “can 

irritate the respiratory system” and aggravate asthma, 

while long-term exposure “can inflame and damage the 

lining of the lungs, which may lead to permanent changes in lung tissue and irreversible reductions in lung 

function.” Id. at 166a-167a; see id. at 167a (discussing 

negative impact on environment and agriculture). 

An EPA analysis on which the agency relied in issuing the Transport Rule estimated that “1 in 20 deaths in 

the U.S. is attributable to PM2.5 and ozone exposure.” 

App. 602a; see ibid. (“This same analysis attributed 

almost 200,000 non-fatal heart attacks, 90,000 hospital 

admissions due to respiratory or cardiovascular illness, 

2.5 million cases of aggravated asthma among children, 

and many other human health impacts to exposure to 

these two air pollutants.”). The EPA estimated that the 

Transport Rule would “annually reduce between 13,000 

and 34,000 PM2.5-related premature deaths, 15,000 nonfatal heart attacks, 8,700 incidences of chronic bronchitis, 8,500 hospital admissions, and 400,000 cases of aggravated asthma,” while the rule’s “annual ozone related 

health benefits” would include “160,000 fewer days with 

restricted activity levels, and 51,000 fewer days where 

children are absent from school due to illnesses.” Id. at 

602a-603a. By vacating the Transport Rule, while impeding any EPA effort to replace it, the court of appeals’ 

decision will directly and negatively affect the public 

health. 

4. Because the opinion below broadly interprets the 

requirements of Section 7410(a), it will affect the EPA’s 
32 

ability to address transported pollution with respect to 

all NAAQS, not just those directly at issue here. Indeed, when it issued the Transport Rule, the agency 

described the Rule as “a precedent for quantifying upwind state emission reduction responsibilities with respect to potential future NAAQS.” App. 138a; see id. at 

310a, 314a. Because the analysis that produced the 

Transport Rule was intended to serve as a model for 

future efforts to limit interstate pollution, its importance 

transcends the rulemaking at issue here. Review is 

warranted for that reason as well. 

CONCLUSION 

The petition for a writ of certiorari should be granted. 

Respectfully submitted. 

BRENDA MALLORY

Acting General Counsel 

SONJA RODMAN

Attorney 

Environmental Protection 

 Agency 

DONALD B. VERRILLI, JR. Solicitor General 

IGNACIA S. MORENO

Assistant Attorney General 

MALCOLM L. STEWART

Deputy Solicitor General 

JOSEPH R. PALMORE

Assistant to the Solicitor 

General 

JON M. LIPSHULTZ

NORMAN L. RAVE, JR. 

Attorneys 

MARCH 2013 
(1a) 

APPENDIX A 

UNITED STATES COURT OF APPEALS 

FOR THE DISTRICT OF COLUMBIA CIRCUIT 

No. 11-1302

EME HOMER CITY GENERATION, L.P., PETITIONER

v.

ENVIRONMENTAL PROTECTION AGENCY, ET AL.,

RESPONDENTS

SAN MIGUEL ELECTRIC COOPERATIVE, ET AL., INTERVENORS

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

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

11-1361, 11-1362, 11-1363, 11-1364, 11-1365, 11-1366, 

11-1367, 11-1368, 11-1369, 11-1371, 11-1372, 11-1373, 

11-1374, 11-1375, 11-1376, 11-1377, 11-1378, 11-1379, 

11-1380, 11-1381, 11-1382, 11-1383, 11-1384, 11-1385, 

11-1386, 11-1387, 11-1388, 11-1389, 11-1390, 11-1391, 

11-1392, 11-1393, 11-1394, 11-1395 

Argued: Apr. 13, 2012

Decided: Aug. 21, 2012 
2a 

On Petitions for Review of a Final Rule of the 

Environmental Protection Agency 

Before: ROGERS, GRIFFITH, and KAVANAUGH, Circuit Judges.

Opinion for the Court filed by Circuit Judge KAVANAUGH, with whom Circuit Judge GRIFFITH joins. 

Dissenting opinion filed by Circuit Judge ROGERS. 

KAVANAUGH, Circuit Judge: Some emissions of 

air pollutants affect air quality in the States where the 

pollutants are emitted. Some emissions of air pollutants travel across State boundaries and affect 

air quality in downwind States. To deal with that 

complex regulatory challenge, Congress did not authorize EPA to simply adopt limits on emissions as 

EPA deemed reasonable. Rather, Congress set up a 

federalism-based system of air pollution control. 

Under this cooperative federalism approach, both the 

Federal Government and the States play significant 

roles. The Federal Government sets air quality 

standards for pollutants. The States have the primary responsibility for determining how to meet those 

standards and regulating sources within their borders. 

In addition, and of primary relevance here, upwind 

States must prevent sources within their borders from 

emitting federally determined “amounts” of pollution 

that travel across State lines and “contribute significantly” to a downwind State’s “nonattainment” of fed-
3a 

eral air quality standards. That requirement is sometimes called the “good neighbor” provision. 

In August 2011, to implement the statutory good 

neighbor requirement, EPA promulgated the rule at 

issue in this case, the Transport Rule, also known as 

the Cross-State Air Pollution Rule. The Transport 

Rule defines emissions reduction responsibilities for 28 

upwind States based on those States’ contributions to 

downwind States’ air quality problems. The Rule 

limits emissions from upwind States’ coal-and natural 

gas-fired power plants, among other sources. Those 

power plants generate the majority of electricity used 

in the United States, but they also emit pollutants that 

affect air quality. The Transport Rule targets two of 

those pollutants, sulfur dioxide (SO2) and nitrogen 

oxides (NOx). 

Various States, local governments, industry groups, 

and labor organizations have petitioned for review of 

the Transport Rule. Although the facts here are 

complicated, the legal principles that govern this case 

are straightforward: Absent a claim of constitutional 

authority (and there is none here), executive agencies 

may exercise only the authority conferred by statute, 

and agencies may not transgress statutory limits on 

that authority. 

Here, EPA’s Transport Rule exceeds the agency’s 

statutory authority in two independent respects. 

First, the statutory text grants EPA authority to require upwind States to reduce only their own significant contributions to a downwind State’s nonattainment. But under the Transport Rule, upwind States 
4a 

may be required to reduce emissions by more than 

their own significant contributions to a downwind 

State’s nonattainment. EPA has used the good 

neighbor provision to impose massive emissions reduction requirements on upwind States without regard to 

the limits imposed by the statutory text. Whatever 

its merits as a policy matter, EPA’s Transport Rule 

violates the statute. Second, the Clean Air Act affords States the initial opportunity to implement reductions required by EPA under the good neighbor 

provision. But here, when EPA quantified States’ 

good neighbor obligations, it did not allow the States 

the initial opportunity to implement the required reductions with respect to sources within their borders. 

Instead, EPA quantified States’ good neighbor obligations and simultaneously set forth EPA-designed 

Federal Implementation Plans, or FIPs, to implement 

those obligations at the State level. By doing so, 

EPA departed from its consistent prior approach to 

implementing the good neighbor provision and violated 

the Act. 

For each of those two independent reasons, EPA’s 

Transport Rule violates federal law. Therefore, the 

Rule must be vacated. 

In so ruling, we note that this Court has affirmed 

numerous EPA clean air decisions in recent years 

when those agency decisions met relevant statutory 

requirements and complied with statutory constraints. 

See, e.g., National Environmental Development Association’s Clean Air Project v. EPA, No. 10-1252 (D.C. 

Cir. July 20, 2012); API v. EPA, No. 10-1079 (D.C. Cir. 
5a 

July 17, 2012); ATK Launch Systems, Inc. v. EPA, 669 

F.3d 330 (D.C. Cir. 2012); NRDC v. EPA, 661 F.3d 662 

(D.C. Cir. 2011); Medical Waste Institute & Energy 

Recovery Council v. EPA, 645 F.3d 420 (D.C. Cir. 

2011); American Trucking Ass’ns v. EPA, 600 F.3d 

624 (D.C. Cir. 2010). In this case, however, we conclude that EPA has transgressed statutory boundaries. Congress could well decide to alter the statute 

to permit or require EPA’s preferred approach to the 

good neighbor issue. Unless and until Congress does 

so, we must apply and enforce the statute as it’s now 

written. Our decision today should not be interpreted 

as a comment on the wisdom or policy merits of EPA’s 

Transport Rule. It is not our job to set environmental policy. Our limited but important role is to independently ensure that the agency stays within the 

boundaries Congress has set. EPA did not do so 

here.1

 

1

 The dissent argues that petitioners’ challenge to EPA’s approach to the significant contribution issue is not properly before 

us because that issue was not sufficiently raised before the agency 

in the rulemaking proceeding. We fundamentally disagree with 

the dissent’s reading of the record on that point. 

The dissent also claims that petitioners’ challenge to EPA’s issuance of the FIPs is not properly before us because the affected 

States should have raised such a challenge earlier in the process. 

We again disagree. The dissent’s analysis on the FIPs issue conflates (i) EPA’s rejection of certain States’ SIPs and (ii) EPA’s 

decision in the Transport Rule to set States’ “good neighbor” obligations and emissions budgets and simultaneously issue FIPs. 

The States here are challenging only the latter issue, and they 

have done so in a timely fashion. Indeed, they could not have done 
6a 

I 

A 

Under the Clean Air Act, the Federal Government 

sets air quality standards, but States retain the primary responsibility (if the States want it) for choosing 

how to attain those standards within their borders. 

See Train v. NRDC, 421 U.S. 60, 63-67 (1975); Virginia v. EPA, 108 F.3d 1397, 1406-10 (D.C. Cir. 1997). 

The Act thus leaves it to the individual States to determine, in the first instance, the particular restrictions that will be imposed on particular emitters within 

their borders. (If a State refuses to participate, the 

Federal Government regulates the sources directly.) 

To spell this out in more detail: The Clean Air Act 

charges EPA with setting National Ambient Air Quality Standards, or NAAQS, which prescribe the maximum permissible levels of common pollutants in the 

ambient air. See 42 U.S.C. § 7409(a)-(b). EPA must 

choose levels which, “allowing an adequate margin 

of safety, are requisite to protect the public health.” 

42 U.S.C. § 7409(b)(1). 

After a lengthy process, the details of which are not 

relevant here, EPA designates “nonattainment” areas—that is, areas within each State where the level 

 

so until EPA, in the Transport Rule, simultaneously set the States’ 

individual emissions budgets and issued FIPs. 

We will explain both points more below. Suffice it here to say 

that, much as we might like to do so, we respectfully do not believe 

we can avoid the merits of this complex case, as the dissent urges. 
7a 

of the pollutant exceeds the NAAQS. See 42 U.S.C. 

§ 7407(d). 

Once EPA sets a NAAQS and designates nonattainment areas within the States, the lead role shifts to 

the States. The States implement the NAAQS within 

their borders through State Implementation Plans, or 

SIPs. (As the experienced reader knows, there is no 

shortage of acronyms in EPA-land.) In their SIPs, 

States choose which individual sources within the State 

must reduce emissions, and by how much. For example, a State may decide to impose different emissions 

limits on individual coal-burning power plants, natural 

gas burning power plants, and other sources of air pollution, such as factories, refineries, incinerators, and 

agricultural activities. 

States must submit SIPs to EPA within three years 

of each new or revised NAAQS. See 42 U.S.C. 

§ 7410(a)(1). Section 110(a)(2) of the Act lists the required elements of a SIP submission. 

Section 110(a)(2)(D)(i)(I), the “good neighbor” provision at issue in this case, is one of the required elements of a SIP. The good neighbor provision requires that SIPs: 

(D) contain adequate provisions— 

(i) prohibiting, consistent with the provisions of 

this subchapter, any source or other type of emissions activity within the State from emitting any air 

pollutant in amounts which will— 

(I) contribute significantly to nonattainment 

in, or interfere with maintenance by, any other 
8a 

State with respect to any such national primary 

or secondary ambient air quality standard. 

. . . 

42 U.S.C. § 7410(a)(2)(D). 

The good neighbor provision recognizes that emissions “from ‘upwind’ regions may pollute ‘downwind’ 

regions.” Appalachian Power Co. v. EPA, 249 F.3d 

1032, 1037 (D.C. Cir. 2001). To put it colloquially, the 

good neighbor provision requires upwind States to 

bear responsibility for their fair share of the mess in 

downwind States. By placing the good neighbor requirement in Section 110(a)(2), Congress established 

the upwind State’s SIP as the vehicle for implementing 

the upwind State’s good neighbor obligation. Of 

course, an upwind State will not know what it needs to 

do to meet its good neighbor obligation until it learns 

the level of air pollution in downwind States, and further learns how much it is contributing to the problems 

in the downwind States. EPA plays the critical role 

in gathering information about air quality in the downwind States, calculating each upwind State’s good 

neighbor obligation, and transmitting that information 

to the upwind State. With that information, the upwind State can then determine how to meet its good 

neighbor obligation in a new SIP or SIP revision. See 

42 U.S.C. § 7410(k)(5). 

After EPA quantifies a State’s good neighbor obligation, if a State does not timely submit an adequate 

SIP (or an adequate SIP revision) to take account of 

the good neighbor obligation as defined by EPA, responsibility shifts back to the Federal Government. 
9a 

Within two years of disapproving a State’s SIP submission or SIP revision, or determining that a State 

has failed to submit a SIP, EPA must promulgate a 

Federal Implementation Plan to implement the 

NAAQS within that State. See 42 U.S.C. § 7410(c)(1). 

B 

The good neighbor provision—and EPA’s attempts 

to implement it—are familiar to this Court from past 

cases. 

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

we considered a challenge to EPA’s 1998 NOx Rule, 

commonly referred to as the NOx SIP Call, which 

quantified the good neighbor obligations of 22 States 

with respect to the 1997 ozone NAAQS. See 63 Fed. 

Reg. 57,356, 57,358 (Oct. 27, 1998). 

The 1998 NOx Rule did not define “amounts which 

will . . . contribute significantly to nonattainment” solely on the basis of downwind air quality impact, as one might have expected given the statutory 

text. Rather, EPA also considered how much NOx

could be eliminated by sources in each State if those 

sources installed “highly cost-effective” emissions 

controls. See Michigan, 213 F.3d at 675. On review, 

some States argued that the statutory text required 

EPA to order reductions based on air quality impact 

alone, not cost of reduction. But the Michigan Court 

found no “clear congressional intent to preclude consideration of cost.” Id. at 677 (citation omitted). 

The Court thus held that EPA may “consider differences in cutback costs, so that, after reduction of all 

that could be cost-effectively eliminated, any remain-
10a 

ing ‘contribution’ would not be considered ‘significant.’” Id. at 677; see also id. at 677-79. In other 

words, EPA could use cost considerations to lower an 

upwind State’s obligations under the good neighbor 

provision.2

In North Carolina v. EPA, 531 F.3d 896 (D.C. Cir. 

2008), we considered a challenge to EPA’s 2005 Clean 

Air Interstate Rule, or CAIR. See 70 Fed. Reg. 

25,162 (May 12, 2005). CAIR built on the 1998 NOx

Rule and defined 28 States’ good neighbor obligations 

with respect to the 1997 ozone NAAQS and the 1997 

NAAQS for annual levels of fine particulate matter, or 

annual PM2.5. See id. 

CAIR employed two different formulas—both of 

which incorporated cost considerations—to quantify 

each State’s obligations for the pollutants covered by 

CAIR, SO2 and NOx. The North Carolina decision 

held that the formulas went beyond Michigan’s authorization to use cost and that the formulas therefore 

exceeded EPA’s statutory authority. EPA may use 

cost to “require termination of only a subset of each 

state’s contribution,” the Court explained, but “EPA 

can’t just pick a cost for a region, and deem ‘signifi-

 

2

 Judge Sentelle dissented. In his view, the statutory text unambiguously “set forth one criterion: the emission of an amount 

of pollutant sufficient to contribute significantly to downwind 

nonattainment.” Id. at 696 (Sentelle, J., dissenting); cf. Whitman 

v. American Trucking Ass’ns, 531 U.S. 457, 467 (2001) (“We have 

therefore refused to find implicit in ambiguous sections of the CAA 

an authorization to consider costs that has elsewhere, and so often, 

been expressly granted.”). 
11a 

cant’ any emissions that sources can eliminate more 

cheaply.” 531 F.3d at 918 (citation, emphasis, and 

some internal quotation marks omitted). The Court 

also held that “section 110(a)(2)(D)(i)(I) gives EPA no 

authority to force an upwind state to share the burden 

of reducing other upwind states’ emissions. Each 

state must eliminate its own significant contribution to 

downwind pollution.” Id. at 921. The Court emphasized that EPA “may not require some states to exceed 

the mark.” Id. 

North Carolina thus articulated an important caveat to Michigan’s approval of cost considerations. The 

statute permits EPA to use cost to lower an upwind 

State’s obligation under the good neighbor provision. 

See Michigan, 213 F.3d at 675, 677. But EPA may 

not use cost to increase an upwind State’s obligation 

under the good neighbor provision—that is, to force an 

upwind State to “exceed the mark.” North Carolina, 

531 F.3d at 921. Put simply, the statute requires 

every upwind State to clean up at most its own share 

of the air pollution in a downwind State—not other 

States’ shares. 

C 

The North Carolina Court remanded CAIR without 

vacatur, leaving CAIR in place “until it is replaced by a 

rule consistent with our opinion.” North Carolina v. 

EPA, 550 F.3d 1176, 1178 (D.C. Cir. 2008) (on rehearing). 

The Transport Rule is EPA’s attempt to develop a 

rule that is consistent with our opinion in North Carolina. EPA proposed the Transport Rule in August 
12a 

2010 and finalized it in August 2011. See 75 Fed. Reg. 

45,210 (Aug. 2, 2010) (proposed); 76 Fed. Reg. 48,208 

(Aug. 8, 2011) (final). The Transport Rule addresses 

States’ good neighbor obligations with respect to three 

NAAQS: the 1997 annual PM2.5 NAAQS, the 1997 

ozone NAAQS, and the 2006 24-hour PM2.5 NAAQS. 

See id. at 48,209.3

The Transport Rule contains two basic components. 

First, the Rule defines each State’s emissions reduction obligations under the good neighbor provision. 

Second, the Rule prescribes Federal Implementation 

Plans to implement those obligations at the State level. 

We describe each component here in some detail. 

EPA began by quantifying the “amounts” of pollution that each State must prohibit under the good 

neighbor provision—that is, “amounts which will 

. . . contribute significantly to nonattainment” or 

“interfere with maintenance” of the three NAAQS in 

other States. 42 U.S.C. § 7410(a)(2)(D)(i).4

 

3

 The 2006 24-hour PM2.5 NAAQS post-dated and therefore was 

not covered by CAIR. 

4

 EPA bases different aspects of the Transport Rule on distinct 

sources of statutory authority. EPA relied on its general rulemaking authority under Section 301(a)(1) of the Clean Air Act, 42 

U.S.C. § 7601(a)(1), to construe Section 110(a)(2)(D)(i)(I) and to 

quantify the States’ obligations to reduce emissions. See Transport Rule, 76 Fed. Reg. at 48,217; see also Michigan, 213 F.3d 

at 687. EPA relied on its authority under Section 110(c)(1), 

42 U.S.C. § 7410(c)(1), to issue the Transport Rule FIPs. See

Transport Rule, 76 Fed. Reg. at 48,217. 
13a 

EPA used a two-stage approach to quantify each 

State’s obligations under the good neighbor provision. 

In the first stage, EPA determined whether a State 

emits “amounts which will . . . contribute significantly” to a downwind State’s nonattainment of any 

of the three NAAQS. EPA identified the significantly 

contributing upwind States based on “linkages” between each upwind State and specific downwind “nonattainment” or “maintenance” areas—that is, downwind areas that EPA modeling predicted would not 

attain, or absent regulation would not maintain, the 

NAAQS. Transport Rule, 76 Fed. Reg. at 48,236. 

An upwind State was linked to a downwind nonattainment or maintenance area for a given NAAQS if EPA 

modeling showed that the upwind State’s contribution 

to that downwind area exceeded a numerical “air quality threshold”—that is, a specific amount of air pollution sent from the upwind State into the downwind 

State’s air. Id. EPA set the air quality threshold for 

each pollutant at an amount equal to 1% of the relevant 

NAAQS. The resulting thresholds were (i) 0.8 ppb 

for ozone, (ii) 0.15 μg/m3

 for annual PM2.5, and (iii) 0.35 

μg/m3 for 24-hour PM2.5. Id. If modeling showed 

that an upwind State would send more than those 

amounts into a downwind State’s air, as measured at a 

receptor site in a downwind State, the upwind State 

was deemed a “significant contributor” to the downwind State’s air pollution problem. 

Those numerical air quality thresholds determined 

which upwind States had to reduce their SO2 and NOx

emissions and which upwind States did not—that is, 
14a 

the thresholds determined which upwind States’ emissions “contribute significantly” to downwind States’ air 

pollution problems. Upwind States “whose contributions are below these thresholds,” EPA found, “do not 

significantly contribute to nonattainment or interfere 

with maintenance of the relevant NAAQS” in downwind States. Id. Because their emissions did not 

“contribute significantly,” those States were not required to cut their emissions for purposes of the good 

neighbor provision. 

As one would expect, this “significant contribution” 

threshold produced some close cases at the margins. 

For example, Maryland and Texas were covered for 

annual PM2.5 based on downwind contributions of 0.15 

and 0.18 μg/m3, respectively—just barely meeting the 

0.15 μg/m3

 threshold. See id. at 48,240. And Texas 

exceeded the annual PM2.5 threshold at just a single 

downwind receptor, in Madison, Illinois. See id. at 

48,241. 5 By contrast, Minnesota and Virginia, with 

maximum downwind contributions of 0.14 and 0.12 

μg/m3

, respectively, just missed being covered for 

annual PM2.5. See id. at 48,240. 

For annual PM2.5, a total of 18 States6 exceeded the 

threshold and were therefore deemed “significant 

 

5

 Texas also narrowly exceeded the 0.35 μg/m3 threshold for 

24-hour PM2.5; its maximum downwind contribution was 0.37 μg/m3

. 

See Transport Rule, 76 Fed. Reg. at 48,242. 6

 Those States were: Alabama, Georgia, Illinois, Indiana, Iowa, 

Kentucky, Maryland, Michigan, Missouri, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, Texas, West 
15a 

contributors.” For 24-hour PM2.5, a total of 22 States7

exceeded the threshold. See id. at 48,241-42. Those 

States were thus included in the Rule’s reduction programs for SO2 and annual NOx, pollutants that contribute to PM2.5 formation. See id. at 48,210. For 

ozone, a total of 26 States8 exceeded the threshold. 

See id. at 48,245. Those States were thus included in 

the Rule’s reduction program for ozone-season NOx, 

which contributes to ozone formation. See id. at 

48,210; see also 76 Fed. Reg. 80,760 (Dec. 27, 2011) 

(finalizing six States’ inclusion in the Transport Rule 

for ozone-season NOx). 

At the second stage, however, EPA abandoned the 

air quality thresholds—that is, the stage one standard 

for whether an upwind State’s emissions “contribute 

significantly” to a downwind State’s nonattainment of 

air quality standards. Instead, at stage two, EPA 

used a cost-based standard: EPA determined how 

much pollution each upwind State’s power plants could 

 

Virginia, and Wisconsin. See Transport Rule, 76 Fed. Reg. at 

48,240. 

7

 Those States were: Alabama, Georgia, Illinois, Indiana, Iowa, 

Kansas, Kentucky, Maryland, Michigan, Minnesota, Missouri, 

Nebraska, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Tennessee, Texas, Virginia, West Virginia, and Wisconsin. 

See Transport Rule, 76 Fed. Reg. at 48,242. 8

 Those States were: Alabama, Arkansas, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, 

Michigan, Mississippi, Missouri, New Jersey, New York, North 

Carolina, Ohio, Oklahoma, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, West Virginia, and Wisconsin. See Transport 

Rule, 76 Fed. Reg. at 48,245. 
16a 

eliminate if the upwind State’s plants applied all controls available at or below a given cost per ton of pollution reduced. The cost-per-ton levels applied without 

regard to the size of each State’s “significant contribution” at stage one. In other words, how much pollution each upwind State was required to eliminate was 

not tied to how much the upwind State contributed to 

downwind States’ air pollution problems. 

EPA predicted how far emissions would fall if power plants throughout the State were required to install 

controls available at or below various cost levels. The 

cost levels, or thresholds, were expressed in terms of 

cost per ton of pollutant reduced, with the idea being 

that plants would install all controls that cost less than 

the designated threshold.9

EPA then added up the emissions from all of the 

covered States to yield total regionwide emissions figures for each pollutant, at each cost threshold. See 

 

9 For example, a technology that cost $1,000 to install and eliminated 2 tons of NOx from a power plant’s emissions would cost 

$500/ton. In effect, EPA predicted how far emissions would fall if 

plants installed all of the controls from $1/ton to $500/ton. 

EPA used a computer model to predict the reductions that would 

occur in each State at various cost thresholds. See EPA, Documentation for EPA Base Case v.4.10, at 2-1 (Aug. 2010), J.A. 

2339. For example, for annual NOx, EPA modeled cost levels of 

$500, $1,000, and $2,500/ton. See Transport Rule, 76 Fed. Reg. at 

48,249-50. EPA went as high as $5,000/ton for ozone-season NOx. 

See id. at 48,250. For SO2, EPA modeled emissions at cost levels 

of $500, $1,600, $2,300, $2,800, $3,300, and $10,000 per ton. See id. 

at 48,251. At a later stage in the process, EPA used those predictions to decide how much each State would have to cut. 
17a 

Transport Rule, 76 Fed. Reg. at 48,250-53. The higher the cost level selected, the greater the reduction of 

emissions, but also the greater the costs and burdens 

imposed on sources within the States. 

Next, EPA used computer modeling to estimate the 

downwind air quality effects of imposing different 

cost-per-ton levels on the upwind States. Id. at 

48,253. EPA modeled the air quality effects of applying a $500/ton cost level for NOx and ascending 

cost-per-ton levels for SO2. See id. At 48,255; EPA, 

Analysis to Quantify Significant Contribution Technical Support Document 15 & n.9 (July 2010), J.A. 

2177. 

Armed with those two sets of modeling data, EPA 

proceeded to choose which regionwide cost-per-ton 

threshold to apply for each of the three pollutants—

SO2, annual NOx, and ozone-season NOx. EPA consulted both its cost-of reduction modeling and its air 

quality modeling and identified what it termed “significant cost thresholds”—that is, cost-per-ton levels at 

which steep drops in upwind emissions or jumps in 

downwind air quality would occur. Transport Rule, 

76 Fed. Reg. at 48,255; see also id. at 48,255-56. EPA 

then weighed both air quality and cost concerns in a 

“multi-factor assessment” to choose the final cost-perton levels. Id. at 48,256. The “multi-factor assessment” did not employ any hard formula to weigh those 

factors. 

In the end, EPA settled on a single $500/ton threshold for ozone-season and annual NOx. See id. at 

48,256-57. 
18a 

For SO2, instead of using a single cost threshold for 

all of the SO2 States, EPA divided the upwind States 

into two groups for the 2014 program year (that is, the 

emissions cuts required in 2014). EPA modeling 

showed that applying a $500/ton cost threshold resolved the attainment problems in the downwind areas 

to which seven upwind States were linked. See id. at 

48,257. Those seven upwind States became the Group 

2 States, which were subject to a $500/ton threshold 

for SO2. See id. But $500/ton did not resolve attainment problems in the downwind areas to which 16 

other upwind States were linked. Those 16 upwind 

States became the Group 1 States, which were subject 

to a stricter $2,300/ton cost threshold for SO2. See id. 

at 48,259. 

EPA determined the amount of SO2, annual NOx, or 

ozone-season NOx that each covered State could eliminate if its power plants installed all cost-effective 

emissions controls—that is, those controls available at 

or below the applicable cost-per-ton thresholds. See 

id. at 48,260. EPA then used those figures to generate 2012, 2013, and 2014 emissions “budgets” for each 

upwind State, for each pollutant for which that State 

was covered. See id. at 48,259-63. The budget is the 

maximum amount of each pollutant that a State’s 

power plants may collectively emit in a given year, 

beginning in 2012.10

 

10 States may augment their budgets somewhat by buying out-ofstate allowances. See Transport Rule, 76 Fed. Reg. at 48,263-68. 
19a 

EPA did not stop there and leave it to the States to 

implement the required reductions through new or 

revised State Implementation Plans, or SIPs. Cf. 42 

U.S.C. § 7410(k)(5). Instead, EPA simultaneously 

promulgated Federal Implementation Plans, or FIPs. 

The FIPs require power plants in covered upwind 

States to make the SO2 and NOx reductions needed to 

comply with each upwind State’s emissions budget, as 

defined by EPA. The FIPs also create an interstate 

trading program to allow covered sources to comply as 

cost-effectively as possible. See Transport Rule, 76 

Fed. Reg. at 48,271. 

The FIPs convert each State’s emissions budget 

into “allowances,” which are allocated among power 

plants in the State. Under the FIPs, it is EPA, and 

not the States, that decides how to distribute the allowances among the power plants in each State. See 

id. at 48,284-88.11

 

11 Each power plant is “required to hold one SO2 or one NOx

allowance, respectively, for every ton of SO2 or NOx emitted” 

during the relevant year. Transport Rule, 76 Fed. Reg. at 48,271; 

see also id. at 48,296-97 (describing penalties for noncompliance). 

Sources were required by the Rule to begin complying with the 

annual SO2 and NOx requirements by January 1, 2012 for the 

2012-13 budgets and by January 1, 2014 for the post-2014 budgets. 

See id. at 48.277. (This Court stayed the Rule before it took 

effect.) The ozone-season NOx requirements would kick in on 

May 1 of those years. See id. EPA chosethose compliance 

deadlines in light of this Court’s holding in North Carolina that the 

deadlines must be “consistent with the provisions in Title I mandating [NAAQS] compliance deadlines for downwind states.” 531 

F.3d at 912; see also Transport Rule, 76 Fed. Reg. at 48,277-78. 
20a 

The Rule retains a limited, secondary role for SIPs. 

States have the option of submitting SIPs that modify 

some elements of the FIPs. See id. at 48,327-28. 

The first program year for which States can submit 

such SIPs is 2014. See id. States may also seek to 

replace the FIPs wholesale, as long as the SIP prohibits the amounts of NOx and SO2 emissions that EPA 

specified. See id. at 48,328. EPA says it would “review such a SIP on a case-by-case basis.” Id. But, importantly, the States do not have a post-Rule opportunity to avoid FIPs by submitting a SIP or SIP revision: The FIPs “remain fully in place in each covered 

state until a state’s SIP is submitted and approved by 

EPA to revise or replace a FIP.” Id. 

Since it issued the final rule in August 2011, EPA 

has taken several subsequent regulatory actions related to the Transport Rule. See 76 Fed. Reg. 80,760 

(Dec. 27, 2011) (finalizing six States’ inclusion in the 

Rule for ozone-season NOx); 77 Fed. Reg. 10,324 (Feb. 

21, 2012) (making technical adjustments to modeling 

and delaying assurance penalty provisions until 2014); 

77 Fed. Reg. 34,830 (June 12, 2012) (revising budgets 

for 13 States). 

 

The FIPs use allowance trading to enable covered plants within 

the States to comply as cost-effectively as possible. The program 

creates four allowance trading markets: one for annual NOx, one 

for ozone-season NOx, one for Group 1 SO2 States, and one for 

Group 2 SO2 States. See Transport Rule, 76 Fed. Reg. at 48,271. 

Power plants in Group 1 SO2 States may not purchase Group 2 SO2

allowances, and vice versa. See id. at 48,271-72. Otherwise, interstate trading is generally permitted. 
21a 

D 

An array of power companies, coal companies, labor 

unions, trade associations, States, and local governments petitioned for review of EPA’s Transport Rule. 

On December 30, 2011, this Court stayed the Rule 

pending a decision on the merits. See Order, No. 

11-1302, slip op. at 2 (D.C. Cir. Dec. 30, 2011). The 

Court’s order instructed EPA to “continue administering the Clean Air Interstate Rule pending the 

court’s resolution of these petitions for review.” Id. 

In Part II of this opinion, we address whether the 

Rule exceeds EPA’s authority to order upwind States 

to reduce “amounts which will . . . contribute 

significantly to nonattainment” in downwind States. 

In Part III, we address whether the statute permits 

EPA to issue FIPs without giving the States an initial 

opportunity to implement the required reductions 

through SIPs or SIP revisions. In Part IV, we consider the remedy. 

II 

In this Part, we analyze petitioners’ argument 

that EPA exceeded its statutory authority under 

the “good neighbor” provision. Under the statute, 

EPA is limited to ordering upwind States to reduce 

“amounts which will . . . contribute significantly 

to nonattainment” in downwind States. 42 U.S.C. 

§ 7410(a)(2)(D)(i). 

A 
22a 

The Transport Rule defines States’ obligations under Section 110(a)(2)(D)(i)(I) of the Clean Air Act, a 

provision sometimes described as the “good neighbor” 

provision. See 42 U.S.C. § 7410(a)(2)(D)(i)(I); Michigan v. EPA, 213 F.3d 663, 671 (D.C. Cir. 2000). The 

good neighbor provision requires that a State Implementation Plan, or SIP: 

(D) contain adequate provisions— 

(i) prohibiting, consistent with the provisions of 

this subchapter, any source or other type of emissions activity within the State from emitting any air 

pollutant in amounts which will— 

(I) contribute significantly to nonattainment 

in, or interfere with maintenance by, any other 

State with respect to any such national primary 

or secondary ambient air quality standard. 

. . . 

42 U.S.C. § 7410(a)(2)(D). The good neighbor provision recognizes that not all air pollution is locally generated: Some ambient air pollution “is caused or 

augmented by emissions from other states. Emissions from ‘upwind’ regions may pollute ‘downwind’ 

regions.” Appalachian Power Co. v. EPA, 249 F.3d 

1032, 1037 (D.C. Cir. 2001). 

Although the statute grants EPA significant discretion to implement the good neighbor provision, the 

statute’s text and this Court’s decisions in Michigan 

and North Carolina establish several red lines that 

cabin EPA’s authority. Those red lines are central to 

our resolution of this case. 
23a 

First, and most obviously, the text of Section 

110(a)(2)(D)(i)(I) tells us that the “amounts which will 

. . . contribute” to a downwind State’s nonattainment are at most those amounts that travel beyond an 

upwind State’s borders and end up in a downwind 

State’s nonattainment area. 12 The statute is not a 

blank check for EPA to address interstate pollution on 

a regional basis without regard to an individual upwind 

State’s actual contribution to downwind air quality. 

Moreover, the statutory text and this Court’s decision in North Carolina v. EPA demonstrate that EPA 

may not force a State to eliminate more than its own 

“significant” contribution to a downwind State’s nonattainment area—that is, to “exceed the mark,” as we 

put it in North Carolina. 531 F.3d 896, 921 (D.C. Cir. 

2008). Thus, once EPA reasonably designates some 

level of contribution as “insignificant” under the statute, it may not force any upwind State to reduce more 

than its own contribution to that downwind State minus the insignificant amount.13

 

12 At oral argument, EPA’s counsel refused to concede this 

point. 

13 For example, suppose that EPA determined that any upwind 

State whose contribution to a downwind State was less than 3 units 

did not “contribute significantly to nonattainment.” That would 

mean EPA had established 3 units as the significance floor. Other 

upwind contributors to that downwind State could not be required 

to reduce their downwind contributions below that floor. So an 

upwind State whose contribution to that downwind State is 30 units 

could be required to reduce its contribution by at most 27 units. 

Of course, that is not the only constraint on EPA’s authority to 

force the State to reduce its emissions. The other legal con-
24a 

Second, under the terms of the statute and as we 

explained in North Carolina, the portion of an upwind 

State’s contribution to a downwind State that “contribute[s] significantly” to that downwind State’s “nonattainment” necessarily depends on the relative contributions of that upwind State, of other upwind State 

contributors, and of the downwind State itself. Each 

upwind State may be required to eliminate only its own 

“amounts which will . . . contribute significantly” to a downwind State’s “nonattainment.” As explained in North Carolina, EPA may not require any 

upwind State to “share the burden of reducing other 

upwind states’ emissions.” Id. In other words, the 

statutory text—which refers to “amounts” which will 

“contribute significantly” to a downwind State’s “nonattainment”—contains not just an absolute component 

(meaning that an upwind State’s insignificant amounts 

are not covered) but also a relative component (meaning that each State’s relative contribution to the 

downwind State’s nonattainment must be considered). 

Moreover, the end goal of the statute is attainment 

in the downwind State. EPA’s authority to force 

reductions on upwind States ends at the point where 

the affected downwind State achieves attainment. 

Therefore, if the downwind State would attain the 

NAAQS but for upwind States’ contributions—that is, 

if the entire above-NAAQS amount is attributable to 

upwind States’ emissions—then the upwind States’ 

 

straints described in this Part can further lower a State’s maximum 

obligation. 
25a 

combined share is the entire amount by which the 

downwind State exceeded the NAAQS. And as we 

said in North Carolina, when EPA allocates that burden among the upwind States, EPA may not force any 

upwind State to “share the burden of reducing other 

upwind states’ emissions.” Id. Each upwind State 

must bear its own fair share. Therefore, the “significance” of each upwind State’s contribution cannot be 

measured in a vacuum, divorced from the impact of the 

other upwind States. Rather, the collective burden 

must be allocated among the upwind States in proportion to the size of their contributions to the downwind 

State’s nonattainment. Otherwise, EPA would violate 

the statute and our decision in North Carolina.

14

 

14 Before Congress adopted the current text in the Clean Air Act 

Amendments of 1990, the statutory text targeted amounts from an 

upwind State that would “prevent attainment” in a downwind State. 

42 U.S.C. § 7410(a)(2)(E) (1988) (emphasis added); cf. Pub. L. 

No. 101-549, § 101(b), 104 Stat. 2399, 2404 (1990). Under the 

“prevent attainment” standard, none of the three upwind States in 

that hypothetical would by itself be a but-for cause of the downwind 

State’s nonattainment. By moving from “prevent attainment” to 

“contribute significantly to nonattainment,” the 1990 Amendments 

dropped the requirement that an individual upwind State’s emissions on their own prevent downwind attainment or maintenance. 

See S. REP NO. 101-228, at 21 (1989) (“Since it may be impossible to 

say that any single source or group of sources is the one which 

actually prevents attainment, the bill changes ‘prevent attainment 

or maintenance’ to ‘contribute significantly to nonattainment or interfere with maintenance by,’ thus clarifying when a violation occurs.”). Instead, it now suffices if EPA identifies upwind emissions that, together with emissions from other upwind contributors, push a given downwind maintenance area above the NAAQS. 
26a 

A specific example helps illustrate that point. 

Suppose the NAAQS is 100 units, but the downwind 

State’s nonattainment area contains 150 units. Suppose further that the downwind State contributes 90 

units, and three upwind States contribute 20 units 

each. Because the upwind States are responsible for 

the downwind State’s exceeding the NAAQS by 50 

units, the downwind State is entitled to at most 50 

units of relief from the upwind States so that the 

downwind State can achieve attainment of the NAAQS. 

Distributing those obligations in a manner proportional to their contributions, each of the three upwind 

States’ significant contribution would be, at most, 16 2⁄3

units. Or suppose instead that the three upwind 

States contribute 10, 20, and 30 units respectively. 

Distributing those obligations in a manner proportional to their contributions, those three States’ significant 

contributions would be at most 8 1⁄3, 16 2⁄3, and 25 units, 

respectively, leading to the combined reduction of 50 

units needed for the downwind State to reach attainment.15

 

15 If the downwind State’s contribution alone would push it 

above the NAAQS, then the entire above-NAAQS amount cannot 

be attributed only to upwind States. The downwind State is 

responsible for its own share of the above-NAAQS amount. In 

that scenario, upwind States that contribute to the downwind State 

are collectively on the hook for that share of the above-NAAQS 

amount that is attributable to upwind States’ contributions. And, 

again, that collective burden must be allocated among the upwind 

States in proportion to the size of their contributions to the downwind State. Otherwise, one upwind State would be forced to 
27a 

In addition, our decisions in Michigan and North 

Carolina establish that EPA may consider cost, but 

only to further lower an individual State’s obligations. 

See Michigan, 213 F.3d at 675; North Carolina, 531 

F.3d at 918. Under Michigan, moreover, EPA may 

do so in a way that benefits some upwind States more 

than others. See 213 F.3d at 679. In other words, in 

order to prevent exorbitant costs from being imposed 

on certain upwind States, EPA may lower the obligations imposed on those States. 

Third, to conform to the text of the statute, EPA 

must also ensure that the combined obligations of the 

various upwind States, as aggregated, do not produce 

more than necessary “over-control” in the downwind 

States—that is, that the obligations do not go beyond 

what is necessary for the downwind States to achieve 

the NAAQS. 

Even when EPA carefully conforms to the above 

limits on its authority, the possibility of over-control in 

downwind States still arises because multiple upwind 

States may affect a single downwind State and, con-

 

“share the burden of reducing other upwind states’ emissions,” in 

violation of the statute. North Carolina, 531 F.3d at 921. 

An example helps illustrate that point. Suppose the NAAQS is 

100 units, and the downwind State’s air contains 180 units. The 

downwind State contributes 120 units, and three upwind States 

contribute 20 units each. The downwind State is 80 units over the 

NAAQS—but 20 units of that is its own responsibility. The upwind States must therefore provide at most 60 units of relief. 

Distributing those obligations proportionally, each of the three 

upwind States’ significant contribution would be, at most, 20 units. 
28a 

versely, a single upwind State may affect multiple 

downwind States. The requirement to prevent such 

over-control comes directly from the text of the statute: The good neighbor provision of the statute targets those emissions from upwind States that “contribute significantly to nonattainment” of the NAAQS. 

EPA may require only those reductions that are necessary for downwind States to attain the NAAQS. 

The good neighbor provision is not a free-standing tool 

for EPA to seek to achieve air quality levels in downwind States that are well below the NAAQS. Therefore, if modeling shows that a given slate of upwind 

reductions would yield more downwind air quality 

benefits than necessary for downwind areas to attain 

the NAAQS, EPA must attempt to ratchet back the 

upwind States’ obligations to the level of reductions 

necessary and sufficient to produce attainment in the 

downwind States.16

To be sure, as even petitioners acknowledge, there 

may be some truly unavoidable over-control in some 

downwind States that occurs as a byproduct of the 

necessity of reducing upwind States’ emissions enough 

 

16 For example, suppose that under the proportional approach 

explained above, State A would have to cut 5,000 tons of NOx to 

achieve its largest downwind obligation, while State B would have 

to cut 2,000 tons to achieve its largest downwind obligation. If 

EPA modeling showed that all downwind nonattainment would be 

resolved if those two upwind States’ combined reduction obligations were, say, 10% lower, EPA would have to ratchet back the upwind States’ reduction obligations by a total of 10%. That would 

ensure that upwind States were only forced to prohibit those emissions that “contribute significantly to nonattainment.” 
29a 

to meet the NAAQS in other downwind States. See 

Industry & Labor Reply Br. 11 n.2. For those reasons, EPA must have some discretion about how to 

reasonably avoid such over-control. Moreover, because multiple upwind States may affect a single 

downwind State, and because a single upwind State 

may affect multiple downwind States, it may not be 

possible to accomplish the ratcheting back in an entirely proportional manner among the upwind States. 

Our cases recognize as much. See Michigan, 213 

F.3d at 679; North Carolina, 531 F.3d at 908. But the 

point remains: EPA must avoid using the good 

neighbor provision in a manner that would result in 

unnecessary over-control in the downwind States. 

Otherwise, EPA would be exceeding its statutory 

authority, which is expressly tied to achieving attainment in the downwind States. 

B 

We now apply those principles to the EPA 

Transport Rule. “It is axiomatic that an administrative agency’s power to promulgate legislative regulations is limited to the authority delegated by Congress.” Bowen v. Georgetown Univ. Hosp., 488 U.S. 

204, 208 (1988); see also Michigan v. EPA, 268 F.3d 

1075, 1081 (D.C. Cir. 2001) (“EPA is a federal agency

—a creature of statute,” and may exercise “only those 

authorities conferred upon it by Congress.”). An 

agency may not exceed a statute’s authorization or 

violate a statute’s limits. If a statute is ambiguous, an 

agency that administers the statute may choose a 

reasonable interpretation of that ambiguity—but the 
30a 

agency’s interpretation must still stay within the 

boundaries of the statutory text. See Chevron U.S.A. 

Inc. v. NRDC, 467 U.S. 837, 842-44 (1984).17

In the Transport Rule, EPA used a two-stage approach to define “amounts which will . . . contribute significantly” to downwind attainment problems. The first stage identified those upwind States 

that were “significant contributors” to downwind attainment problems. EPA determined that a State’s 

contribution to a downwind nonattainment or maintenance area was significant if it exceeded a numerical 

“air quality threshold” of 0.8 ppb for ozone, 0.15 μg/m3

for annual PM2.5, and 0.35 μg/m3

 for 24-hour PM2.5. 

Transport Rule, 76 Fed. Reg. 48,208, 48,236 (Aug. 8, 

2011). States “whose contributions are below these 

thresholds,” EPA found, “do not significantly contribute to nonattainment or interfere with maintenance of 

the relevant NAAQS.” Id. Those upwind States 

were off the hook altogether. 

But an upwind State that exceeded the significance 

threshold at even one downwind State’s receptor was 

drawn wholesale into the Rule’s second stage—costbased emissions reductions. At that second stage, 

 

17 We set aside EPA’s action here if “arbitrary, capricious, an 

abuse of discretion, or otherwise not in accordance with law,” or if 

“in excess of statutory jurisdiction, authority, or limitations, or 

short of statutory right.” The standard we apply “is the same” 

under the judicial review provision of the Clean Air Act, 42 U.S.C. § 

7607(d)(9), as under the Administrative Procedure Act, 5 U.S.C. 

§ 706(2). Motor Vehicle Manufacturers Ass’n v. EPA, 768 F.2d 

385, 389 n.6 (D.C. Cir. 1985). 
31a 

EPA abandoned the previous measure of significance

—the numerical air quality thresholds, which were 

based on the quantity of pollution an upwind State sent 

to a downwind area. Instead, EPA switched over to 

relying on cost of reduction alone. EPA required 

each State’s power plants to cut all of the emissions 

they could eliminate at a given cost per ton of pollution 

reduced—regardless of the “amounts” of the State’s 

emissions EPA deemed to “contribute significantly” at 

stage one and regardless of the relative contributions 

of the other upwind States and the downwind State. 

We perceive at least three independent but intertwined legal flaws in EPA’s approach to the good 

neighbor provision. Those flaws correspond to the 

three requirements we outlined above that come from 

the statutory text. 

First, and most fundamentally, the Transport Rule 

is flawed because the requirement that EPA imposed 

on upwind States was not based on the “amounts” from 

upwind States that “contribute significantly to nonattainment” in downwind States, as required by the 

statute and our decision in North Carolina. 

Petitioners claim that the initial stage of EPA’s 

analysis—the numerical air quality thresholds, which 

used a bright-line test for whether a State’s downwind 

emissions “contribute significantly”—created a “‘floor’ 

below which any contribution is, by definition, viewed 

as insignificant.” Industry & Labor Br. 20. Petitioners argue that EPA has no statutory authority to 

compel States to reduce amounts of pollution that are 

“insignificant.” Therefore, petitioners contend that 
32a 

EPA could not ignore that floor at the later stage, 

when it calculated each State’s “significant contribution” based on cost.18

 

18 The dissent contends that this point was not preserved for 

judicial review and that the agency was not aware of this issue 

during the agency proceedings. See 42 U.S.C. § 7607(d)(7)(B). 

For several reasons, we are convinced EPA had more than “adequate notification of the general substance” of petitioners’ argument. NRDC v. EPA, 571 F.3d 1245, 1259 (D.C. Cir. 2009) (quoting South Coast Air Quality Mgmt. Dist. v. EPA, 472 F.3d 882, 891 

(D.C. Cir. 2006)). Indeed, one of the central questions in the long 

history of EPA’s efforts to implement the good neighbor provision 

has been whether EPA has complied with the basic statutory limits 

on its authority. So it is here. 

First, the Transport Rule proceeding arose out of this Court’s 

decision in North Carolina, on which petitioners’ argument relies. 

See Transport Rule, 76 Fed. Reg. at 48,211 (“EPA is promulgating 

the Transport Rule in response to the remand of the Clean Air 

Interstate Rule (CAIR) by the U.S. Court of Appeals for the District of Columbia Circuit”). In North Carolina v. EPA, this Court 

explained the applicable statutory limitations and instructed EPA 

on remand to craft a new rule “consistent with our opinion.” 550 

F.3d 1176, 1177 (D.C. Cir. 2008) (on rehearing). Instructing EPA 

to proceed in a manner “consistent with” North Carolina presupposes that EPA is aware of the Court’s opinion. And the opinion 

made clear that once EPA defines each upwind State’s “significant 

contribution,” it may not “require some states to exceed the mark.” 

531 F.3d at 921. In sum, EPA knew from the beginning that it 

was required to comply with North Carolina, including that part of 

the Court’s holding on which petitioners rely here. 

Second, EPA considered—and rejected—precisely the same argument in CAIR. EPA first acknowledged the comment: “Some 

commenters stated, more broadly, that the threshold contribution 

level selected by EPA should be considered a floor, so that upwind 

States should be obliged to reduce their emissions only to the level 
33a 

 

at which their contribution to downwind nonattainment does not 

exceed that threshold level.” CAIR, 70 Fed. Reg. 25,162, 

25,176-77 (May 12, 2005). It then dismissed that argument: 

“Most important for present purposes, as long as the controls yield 

downwind benefits needed to reduce the extent of nonattainment, 

the controls should not be lessened simply because they may have 

the effect of reducing the upwind State’s contribution to below the 

initial threshold.” Id. at 25,177. EPA’s rejection of the same argument in a prior rulemaking—indeed, in a prior rulemaking that 

is the direct progenitor of the current one—is highly relevant to 

whether the argument is preserved here. See, e.g., American 

Petroleum Institute v. EPA, 52 F.3d 1113, 1120 n.1 (D.C. Cir. 

1995); NRDC v. EPA, 824 F.2d 1146, 1151 (D.C. Cir. 1987) (en

banc); see also Appalachian Power Co. v. EPA, 135 F.3d 791, 818

(D.C. Cir. 1998) (“The purpose of the exhaustion requirement is to

ensure that the agency is given the first opportunity to bring its

expertise to bear on the resolution of a challenge to a rule.”). 

EPA’s prior rejection of the same argument in CAIR, together 

with this Court’s opinion in North Carolina, show that EPA “had 

notice of this issue and could, or should have, taken it into account.” 

NRDC, 824 F.2d at 1151. 

Third, EPA’s statements at the proposal stage indicated EPA was 

not open to reconsidering CAIR’s earlier rejection of petitioners’ 

argument. See Proposed Transport Rule, 75 Fed. Reg. 45,210, 

45,299 (Aug. 2, 2010) (“EPA evaluated a number of alternative 

approaches to defining significant contribution and interference 

with maintenance in addition to the approach proposed in this rule. 

Stakeholders suggested a variety of ideas. EPA considered all 

suggested approaches. . . . EPA is not proposing any of the 

alternative approaches listed here.”). By that point, EPA had 

already dismissed the two air quality-only approaches it considered 

and had indicated its firm commitment to the cost-based approach. 

See EPA, Alternative Significant Contribution Approaches Evaluated Technical Support Document 7 (July 2010) (EPA, Significant 

contribution TSD), J.A. 2312 (uniform cost-per- ton approach “has 

been successfully implemented before, with excellent environmen-
34a 

We agree with petitioners. The Transport Rule 

includes or excludes an upwind State based on the 

amount of that upwind State’s significant contribution 

to a nonattainment area in a downwind State. That 

much is fine. But under the Rule, a State then may 

be required to reduce its emissions by an amount grea-

 

tal results”); see also id. at 3-7, J.A. 2308-12. In light of the indications that EPA was aware of their objection but had no intention 

to revisit its approach (and indeed had already rejected the objection), the specificity of commenters such as Wisconsin and Tennessee was “reasonable” under the circumstances. 42 U.S.C. 

§ 7607(d)(7)(B); see, e.g., Wisconsin Cmt., J.A. 1293 (“EPA needs to 

primarily depend on air quality results instead of control costs in 

defining” significant contributions); Tennessee Cmt., J.A. 556 (“A 

lower cost threshold should be considered for any State that can 

reduce their contribution below 1% significance using cost thresholds below the maximum values ($2,000/ton for SO2 and $500/ton for 

NOx), if applicable. . . . We would like to see a summary for 

each State and pollutant that indicates, independently of cost, the 

amounts necessary to eliminate the significant contribution and 

interference with maintenance from upwind States.”); Delaware 

Cmt., J.A. 1756 (challenging EPA’s decision to depart from the air 

quality thresholds used for inclusion and to quantify States’ significant contributions based on cost considerations, not air quality); 

see also Appalachian Power, 135 F.3d at 817 (“the word ‘reasonable’ cannot be read out of the statute in favor of a hair-splitting 

approach”); id. at 818 (an objection need not be “phrased in exactly 

the same way in each forum”); South Coast, 472 F.3d at 891 (petitioners have “some leeway in developing their argument” on review). 

In sum, we are confident here that EPA had more than “adequate 

notification of the general substance of the complaint.” South 

Coast, 472 F.3d at 891. EPA was plainly on notice that its disregard of the significance floor was a potential legal infirmity in its 

approach. 
35a 

ter than the “significant contribution” that brought it 

into the program in the first place. That much is not 

fine. 

Put more plainly, EPA determined that a State was 

subject to the good neighbor provision if it contributed 

at least a certain threshold amount to air pollution in a 

downwind State. But EPA then imposed restrictions 

based on regionwide air quality modeling projections; 

those restrictions could require upwind States to reduce emissions by more than the amount of that contribution. 

EPA’s approach poses a fundamental legal problem

—one that derives from the text of the statute and 

from our precedents. Our decision in Michigan held 

that EPA may use cost considerations to require “termination of only a subset of each state’s contribution.” 

213 F.3d at 675. And our decision in North Carolina 

made clear that EPA may not use cost to force an 

upwind State to “exceed the mark.” 531 F.3d at 921.19

 

19 The Court in North Carolina reached these conclusions in its 

discussion of EPA’s use of power plant fuel mix to distribute NOx

reduction obligations among the CAIR States. See 531 F.3d at 

904, 918-21. EPA claims that the reasoning of that analysis is not 

relevant here because it did not relate to “general significant contribution issues,” but rather to the manner of calculating each 

State’s emissions budget. EPA Br. 23. 

That is a distinction without a difference. The fuel mix analysis 

increased some States’ obligations and reduced others’. EPA’s 

argument overlooks that no step in its analysis—however the step 

is labeled—may impose burdens on States or private entities unless 

those burdens are anchored in statutory authority. Under the 

statute, States are required to prohibit only those “amounts which 
36a 

By using a numerical threshold at the initial stage—

and thereby creating a floor below which “amounts” of 

downwind pollution were not significant—EPA defined 

the “mark,” to use the term employed in North Carolina. EPA could not then ignore that mark and redefine each State’s “significant contribution” in such a 

way that an upwind State’s required reductions could 

be more than its own significant contribution to a 

downwind State.20

EPA now claims that the Rule’s air quality thresholds were established for a “limited analytical purpose” and “otherwise say nothing about what part 

of each State’s contribution should be considered ‘significant.’” EPA Br. 33. That claim rings hollow. 

EPA itself said in the final rule that “states whose 

contributions are below these thresholds do not significantly contribute to nonattainment or interfere with 

maintenance of the relevant NAAQS.” Transport 

Rule, 76 Fed. Reg. at 48,236. EPA therefore acknowledged that amounts below the threshold are not 

 

will . . . contribute significantly to nonattainment” or “interfere with maintenance.” 42 U.S.C. § 7410(a)(2)(D)(i); see also 

North Carolina, 531 F.3d at 919. 

20 This particular issue was not presented in Michigan. In the 

1998 NOx Rule, EPA balanced various air quality factors using a 

“weight-of-evidence approach.” 63 Fed. Reg. 57,356, 57,381 (Oct. 

27, 1998). Unlike the Transport Rule, the 1998 NOx Rule did not 

employ a numerical threshold, nor any other “bright line criterion,” 

to screen out States at the first stage. Id. at 57,383. 
37a 

“amounts which will . . . contribute significantly” to downwind attainment problems.21

In short, EPA used the air quality thresholds to 

establish a floor below which “amounts” of air pollution 

do not “contribute significantly.” 22 The statute requires a State to prohibit at most those “amounts” 

which will “contribute significantly”—and no more. 

If amounts below a numerical threshold do not contribute significantly to a downwind State’s nonattainment, EPA may not require an upwind State to do 

more. The Transport Rule does not adhere to that 

 

21 EPA cannot avoid North Carolina by declining to quantify the 

“amount” of each State’s downwind contribution, “beginning its 

analysis with cost,” 531 F.3d at 918, and simply designating the 

output of that cost-based analysis each State’s “significant contribution.” The statutory term “amounts which will . . . contribute significantly” is not so elastic. See id. at 920 (“When a 

petitioner complains EPA is requiring a state to eliminate more 

than its significant contribution, it is inadequate for EPA to respond that it never measured individual states’ significant contributions.”). As explained above, “amounts which will . . . 

contribute” logically cannot exceed the amount of a pollutant that 

leaves a State’s borders and reaches a nonattainment area. And 

insignificant amounts must be excluded. Moreover, the “significance” of an upwind State’s emissions for a downwind area’s attainment problem cannot be divorced from the relative impact of 

other States’ contributions to that problem. 

22 EPA protests that it used the numerical thresholds only to 

determine “which upwind State contributions to downwind problems are so small as to warrant exclusion.” EPA Br. 31. But 

that must mean those “amounts” that are “so small as to warrant 

exclusion” are not “significant.” (It would be illogical to carve out 

a de minimis exception for emissions that are statutorily “significant.”) 
38a 

basic requirement of the statutory text and our precedents.23

Second, EPA’s Transport Rule also runs afoul of 

the statute’s proportionality requirement as described 

in our decision in North Carolina: EPA has “no 

authority to force an upwind state to share the burden 

of reducing other upwind states’ emissions.” 531 F.3d 

at 921; see Industry & Labor Br. 33 (in imposing SO2

budgets, EPA “did not even consider the relative contributions of the various States”). EPA’s “redistributional instinct may be laudatory,” North Carolina, 531 

F.3d at 921, but it cannot trump the terms of the statute. Under the statute, each upwind State that contributes to a downwind nonattainment area is responsible for no more than its own “amounts which will 

. . . contribute significantly” to the downwind 

State’s pollution problem. To be sure, under Michigan, EPA may rely on cost-effectiveness factors in 

order to allow some upwind States to do less than their 

full fair share. See 213 F.3d at 675; cf. Petitioning 

States’ Br. 17, Michigan, 213 F.3d 663 (No. 98-1497). 

 

23 EPA seems reluctant to acknowledge any textual limits on its 

authority under the good neighbor provision. At oral argument, 

EPA suggested that “reasonableness” is the only limit on its authority to use cost-effectiveness to force down States’ emissions. 

Tr. of Oral Arg. at 44-45. EPA would not rule out the possibility 

that under the good neighbor provision, it could require a State to 

reduce more than the State’s total emissions that go out of State. 

See id. at 43-45. But such a claim of authority does not square 

with the statutory text—“amounts” of pollution obviously cannot 

“contribute” to a downwind State’s pollution problem if they don’t 

even reach the downwind State. 
39a 

But when EPA asks one upwind State to eliminate 

more than its statutory fair share, that State is necessarily being forced to clean up another upwind State’s 

share of the mess in the downwind State. Under the 

statute and North Carolina, that is impermissible. 

Here, EPA’s Transport Rule violated the statute 

because it made no attempt to calculate upwind States’ 

required reductions on a proportional basis that took 

into account contributions of other upwind States to 

the downwind States’ nonattainment problems. 

In the same vein, EPA’s Transport Rule failed to 

take into account the downwind State’s own fair share 

of the amount by which it exceeds the NAAQS. See 

Industry & Labor Br. 24-25. How “significantly” an 

upwind State contributes to a downwind State’s nonattainment also depends in part on how much of the 

above-NAAQS amount comes from the downwind 

State itself. As we explained above, EPA therefore 

must factor in the downwind State’s own contribution, 

alongside those of the various upwind States. But 

EPA did not do that here. 

Third, and relatedly, EPA also failed to ensure that 

the collective obligations of the various upwind States, 

when aggregated, did not produce unnecessary overcontrol in the downwind States. EPA’s statutory authority, once again, is limited to attaining the NAAQS 

in the downwind States. EPA may not require upwind States to do more than necessary for the down-
40a 

wind States to achieve the NAAQS. Here, EPA did 

not try to take steps to avoid such over control.24

In sum, EPA’s authority derives from the statute 

and is limited by the statutory text.25 EPA’s reading 

of Section 110(a)(2)(D)(i)(I)—a narrow and limited 

provision—reaches far beyond what the text will bear. 

 

24 At the proposal stage in the proceeding that culminated in the 

Transport Rule, EPA considered a proportional approach that 

reflected many of the essential principles described above. See

EPA, Significant Contribution TSD at 6-7, J.A. 2311-12. Under 

that approach, the upwind contributors to a given downwind area 

would collectively have to provide a “defined air quality improvement” to the downwind State, in the amount by which the downwind State exceeded the NAAQS. Id. at 6, J.A. 2311. And the 

upwind States’ individual shares of that collective duty would be 

defined “in direct proportion to their original contribution[s]” to 

the downwind State. Id. EPA ultimately chose not to adopt that 

approach, however. 

25 The statute also requires upwind States to prohibit emissions 

that will “interfere with maintenance” of the NAAQS in a downwind State. “Amounts” of air pollution cannot be said to “interfere with maintenance” unless they leave the upwind State and 

reach a downwind State’s maintenance area. To require a State to 

reduce “amounts” of emissions pursuant to the “interfere with 

maintenance” prong, EPA must show some basis in evidence for 

believing that those “amounts” from an upwind State, together 

with amounts from other upwind contributors, will reach a specific 

maintenance area in a downwind State and push that maintenance 

area back over the NAAQS in the near future. Put simply, the 

“interfere with maintenance” prong of the statute is not an openended invitation for EPA to impose reductions on upwind States. 

Rather, it is a carefully calibrated and commonsense supplement to 

the “contribute significantly” requirement. 
41a 

Although the statutory text alone prohibits EPA’s 

Rule the statutory context provides additional support 

for our conclusion. The Supreme Court, in analyzing 

Section 109 of the Clean Air Act, rejected the premise 

that Congress would “alter the fundamental details of 

a regulatory scheme” in “ancillary provisions”—in 

other words, that Congress would “hide elephants in 

mouseholes.” Whitman v. American Trucking 

Ass’ns, 531 U.S. 457, 468 (2001). The good neighbor 

provision is one of more than 20 SIP requirements in 

Section 110(a)(2). It seems inconceivable that Congress buried in Section 110(a)(2)(D)(i)(I)—the good 

neighbor provision—an open-ended authorization for 

EPA to effectively force every power plant in the upwind States to install every emissions control technology EPA deems “cost-effective.” Such a reading 

would transform the narrow good neighbor provision 

into a “broad and unusual authority” that would overtake other core provisions of the Act. Gonzales v. 

Oregon, 546 U.S. 243, 267 (2006). We “are confident 

that Congress could not have intended to delegate a 

decision of such economic and political significance to 

an agency in so cryptic a fashion.” FDA v. Brown & 

Williamson Tobacco Corp., 529 U.S. 120, 160 (2000). 

* * * 

States are obligated to prohibit only those 

“amounts” of pollution “which will . . . contribute significantly” to downwind attainment problems—

and no more. Because the Transport Rule exceeds 

those limits, and indeed does not really try to meet 

those requirements, it cannot stand. 
42a 

III 

There is a second, entirely independent problem 

with the Transport Rule. EPA did not stop at simply 

quantifying each upwind State’s good neighbor obligations. Instead, in an unprecedented application of the 

good neighbor provision, EPA also simultaneously 

issued Federal Implementation Plans, or FIPs, to 

implement those obligations on sources in the States. 

EPA did so without giving the States an initial opportunity to implement the obligations themselves 

through their State Implementation Plans, or SIPs. 

The Clean Air Act ordinarily gives States the initial 

opportunity to implement a new air quality standard 

on sources within their borders; States do so by submitting SIPs. See 42 U.S.C. §§ 7407(a), 7410(a)(1). 

Here, by preemptively issuing FIPs, EPA denied the 

States that first opportunity to implement the reductions required under their good neighbor obligations. 

EPA justifies its “FIP-first” approach by pointing to 

its earlier findings that the States had failed to meet 

their good neighbor obligations. But those findings 

came before the Transport Rule quantified the States’ 

good neighbor obligations. EPA’s approach punishes 

the States for failing to meet a standard that EPA had 

not yet announced and the States did not yet know. 

Under the Act, EPA has authority to set standards, 

but the statute reserves the first-implementer role for 

the States. That division of labor applies not just to 

the NAAQS but also to the good neighbor provision, 

Section 110(a)(2)(D)(i)(I), as EPA itself has recognized 

several times in the past. When EPA defines States’ 
43a 

good neighbor obligations, it must give the States the 

first opportunity to implement the new requirements. 

A 

“Under the Clean Air Act, both the Federal Government and the States exercise responsibility for 

maintaining and improving air quality.” American 

Trucking Ass’ns v. EPA, 600 F.3d 624, 625 (D.C. Cir. 

2010). The Act sets forth a basic division of labor: 

The Federal Government establishes air quality standards, but States have primary responsibility for attaining those standards within their borders. See 

Train v. NRDC, 421 U.S. 60, 63-67 (1975); American 

Trucking, 600 F.3d at 625-26; Virginia v. EPA, 108 

F.3d 1397, 1406-10 (D.C. Cir. 1997); see also 42 U.S.C. 

§ 7401(a) (“The Congress finds . . . that air pollution prevention (that is, the reduction or elimination, 

through any measures, of the amount of pollutants 

produced or created at the source) and air pollution 

control at its source is the primary responsibility of 

States and local governments. . . . ”); 42 U.S.C. 

§ 7407(a) (“Each State shall have the primary responsibility for assuring air quality within the entire geographic area comprising such State. . . .”)26

 

26 The 1970 Amendments, which “sharply increased federal authority” in setting air quality standards, at the same time “explicitly preserved the principle” of State primacy in implementing pollution controls. Train, 421 U.S. at 64. The 1990 Amendments, 

which enacted the current text of Section 110(a)(2)(D)(i)(I), “did not 

alter the division of responsibilities between EPA and the states in 

the section 110 process.” Virginia, 108 F.3d at 1410. 
44a 

That statutory division of authority is strict. This 

Court has described the Train-Virginia line of cases 

as erecting a statutory “federalism bar” under Section 

110 of the Act. See Appalachian Power Co. v. EPA, 

249 F.3d 1032, 1046 (D.C. Cir. 2001) (citing Train, 421 

U.S. 60; Virginia, 108 F.3d 1397); Michigan v. EPA, 

213 F.3d 663, 687 (D.C. Cir. 2000). That statutory 

federalism bar prohibits EPA from using the SIP 

process to force States to adopt specific control measures. See Michigan, 213 F.3d at 687; Virginia, 108 

F.3d at 1410. 

In Train, the Supreme Court invoked that statutory 

division of labor in holding that the Clean Air Act gives 

EPA “no authority to question the wisdom of a State’s 

choices of emission limitations,” so long as the State’s 

SIP submission would result in “compliance with the 

national standards for ambient air.” 421 U.S. at 79. 

The Court stated: 

The Agency is plainly charged by the Act with the 

responsibility for setting the national ambient air 

standards. Just as plainly, however, it is relegated by the Act to a secondary role in the process of 

determining and enforcing the specific, source-bysource emission limitations which are necessary if 

the national standards it has set are to be met. 

Id. (emphasis added); see also Union Electric Co. v. 

EPA, 427 U.S. 246, 256, 269 (1976) (EPA may not 

reject a SIP on grounds of technical or economic infeasibility; that “would permit the Administrator or a 

federal court to reject a State’s legislative choices in 

regulating air pollution, even though Congress plainly 
45a 

left with the States, so long as the national standards 

were met, the power to determine which sources would 

be burdened by regulation and to what extent”). 

Similarly, in Virginia, this Court held that EPA had 

no authority under Section 110 to condition its approval of northeastern States’ SIPs on the States’ adoption 

of California’s vehicle emission control measures. See 

108 F.3d at 1401-10. The Court relied on the basic 

principle that the States, not EPA, are the primary 

implementers under Section 110. See id. at 1410 

(“section 110 does not enable EPA to force particular 

control measures on the states”). 

In sum, Title I of the Act establishes a “partnership 

between EPA and the states.” NRDC v. Browner, 57 

F.3d 1122, 1123 (D.C. Cir. 1995). The terms of that 

partnership are clear: EPA sets the standards, but 

the States “bear primary responsibility for attaining, 

maintaining, and enforcing these standards.” American Lung Ass’n v. EPA, 134 F.3d 388, 389 (D.C. Cir. 

1998). 

B 

With that basic structure in mind, we consider the 

question presented here: whether EPA may use its 

rulemaking authority to quantify States’ obligations 

under Section 110(a)(2)(D)(i)(I) and simultaneously 

issue Federal Implementation Plans, without giving 

the States a first opportunity to comply. 

We begin by briefly describing the set of statutory 

provisions on which EPA relies here. 
46a 

EPA is the first mover in regulating ambient air 

pollution in Title I of the Clean Air Act. Section 109 

requires EPA to promulgate NAAQS for common air 

pollutants. See Whitman v. American Trucking 

Ass’ns, 531 U.S. 457, 462 (2001) (citing 42 U.S.C. 

§ 7409(a)). But once EPA sets a NAAQS, “responsibility under the Act shifts from the federal government to the states.” Lead Industries Ass’n v. EPA, 

647 F.2d 1130, 1137 (D.C. Cir. 1980). 

Section 110 governs State Implementation Plans. 

Section 110(a)(1) requires States to submit SIPs to 

implement each new or revised NAAQS. See 42 

U.S.C. § 7410(a)(1). Section 110(a)(2) lists many 

elements that a SIP must contain in order to ensure 

that the Plan will be comprehensive enough to enable 

the State to attain the NAAQS. See 42 U.S.C. 

§ 7410(a)(2).27 The good neighbor provision, Section 

110(a)(2)(D)(i)(I), is one of those required elements. 

 

27 See, e.g., 42 U.S.C. § 7410(a)(2)(A) (SIP shall “include enforceable emission limitations and other control measures,” “as 

well as schedules and timetables for compliance”), 7410(a)(2)(B) 

(SIP shall provide for means to “monitor, compile, and analyze data 

on ambient air quality” and provide the data to EPA upon request), 

7410(a)(2)(C) (SIP shall “include a program to provide for the enforcement of  ” the control measures required by subparagraph (A)), 

7410(a)(2)(E) (SIP shall provide assurances that State and local 

authorities “will have adequate personnel, funding, and authority” 

under State and local law “to carry out such implementation plan”), 

7410(a)(2)(F) (SIP shall require “the installation, maintenance, and 

replacement of equipment” by “stationary sources to monitor emissions from such sources”). 
47a 

Section 110(c)(1) creates a federal backstop if the 

States fail to submit adequate SIPs. When EPA finds 

that a State “has failed to make a required submission” 

or “disapproves a State implementation plan submission in whole or in part” because of a SIP “deficiency,” 

EPA must “promulgate a Federal implementation 

plan” within two years, “unless the State corrects the 

deficiency” in the meantime in a manner approved by 

EPA. 42 U.S.C. § 7410(c)(1). In essence, the issue 

here is whether a State’s implementation of its good 

neighbor obligation can be considered part of the 

State’s “required submission” in its SIP (or whether 

the SIP can be deficient for failing to implement the 

good neighbor obligation) even before EPA quantifies 

the State’s good neighbor obligation. We think not. 

EPA’s quantifying of a State’s good neighbor obligation and setting of a State’s emissions budget is what 

“require[s]” the State to make a “submission” implementing that obligation on sources within the State. 

After EPA has set the relevant emissions budgets for 

each State, EPA may require States to submit new 

SIPs under Section 110(a)(1) or to revise their SIPs 

under Section 110(k)(5). That is the approach EPA 

has used in the past. In short, once EPA defines or 

quantifies a State’s good neighbor obligation, the State 

must have a reasonable time to implement that requirement with respect to sources within the State.28

 

28 Section 110(k)(5), the SIP call provision, authorizes EPA to 

“establish reasonable deadlines” not to exceed 18 months for SIP 

revisions, once notice is given. 42 U.S.C. § 7410(k)(5); cf. 1998 NOx

Rule, 63 Fed. Reg. at 57,451 (12-month deadline). 
48a 

In short, the triggers for a FIP are EPA’s finding 

that the SIP fails to contain a “required submission” or 

EPA’s disapproving a SIP because of a “deficiency.” 

But logically, a SIP cannot be deemed to lack a required submission or be deemed deficient for failing to 

implement the good neighbor obligation until after 

EPA has defined the State’s good neighbor obligation. 

Once it defines the obligation, then States may be 

forced to revise SIPs under Section 110(k)(5) or to 

submit new SIPs under Section 110(a)(1). Only if 

that revised or new SIP is properly deemed to lack a 

required submission or is properly deemed deficient 

may EPA resort to a FIP for the State’s good neighbor 

obligation. 

C 

1 

In light of Section 110(c)(1), EPA here made “a 

finding of failure to submit and/or disapproved a SIP 

submission” for each State with respect to each 

NAAQS for which that State would be covered. EPA 

Br. 44 (citing 42 U.S.C. § 7410(c)(1)); see also EPA, 

Status of CAA 110(a)(2)(D)(i)(I) SIPs Final Rule 

Technical Support Document (July 2011) (EPA, SIPs 

TSD), J.A. 3167.29 On the basis of those findings, 

 

29 EPA was cognizant of another potential obstacle: its own 

past approval of CAIR SIPs. CAIR covered the 1997 ozone and 

annual PM2.5 NAAQS, two of the three NAAQS at issue here. See

70 Fed. Reg. 25,162, 25,165 (May 12, 2005). Many covered States 

had submitted and received EPA approval of CAIR SIPs. See 

EPA, SIPs TSD, J.A. EPA apparently was concerned that those 
49a 

EPA asserted authority to issue the Transport Rule 

FIPs. 

But EPA’s many SIP disapprovals and findings of 

failure to submit share one problematic feature: EPA 

made all of those findings before it told the States what 

emissions reductions their SIPs were supposed to 

achieve under the good neighbor provision. See EPA, 

SIPs TSD, J.A. 3167. 

EPA sees no problem with that. In EPA’s view, 

there is no difference between a State’s obligation to 

comply with the NAAQS and a State’s good neighbor 

 

approved CAIR SIPs might deprive EPA of authority under Section 110(c)(1) to issue Transport Rule FIPs for those two NAAQS. 

EPA tried to address this in the final rule. It claimed that because North Carolina invalidated CAIR, approved CAIR SIPs no 

longer fulfilled States’ Section 110(a)(2)(D)(i)(I) obligations. See

Transport Rule, 76 Fed. Reg. 48,208, 48,219 (Aug. 8, 2011). It 

bears noting, however, that EPA continued to approve CAIR SIPs 

after North Carolina. See, e.g., 74 Fed. Reg. 65,446 (Dec. 10, 

2009). 

But to try to make sure, in the final Transport Rule EPA retrospectively “corrected” its past approvals of CAIR SIPs, to clarify 

its view that an approved CAIR SIP did not shield a State from the 

Transport Rule FIPs. See 76 Fed. Reg. at 48,219; see also 42 

U.S.C. § 7410(k)(6) (EPA may “revise” any approval the Administrator determines “was in error”). EPA made those “corrections” 

without using notice and comment rulemaking, despite the statutory requirement that EPA make any corrections “in the same 

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

Because the Transport Rule must be vacated in any event, we 

need not address here whether EPA’s “corrections” of CAIR SIP 

approvals exceeded its authority under Section 110(k)(6). 
50a 

obligation: States must submit SIPs addressing both 

within three years of a NAAQS or face FIPs. 

But there is a difference—a glaring one—between 

the two obligations. A NAAQS is a clear numerical 

target. For example, the NAAQS for annual PM2.5 is 

15 μg/m3. Every State knows precisely what numerical goal its SIP must achieve. If a State misses 

that clear numerical target, it has only itself to blame. 

By contrast, the good neighbor obligation is not a 

clear numerical target—far from it—until EPA defines 

the target. Even after EPA sets a NAAQS, an upwind State’s good neighbor obligation for that pollutant is nebulous and unknown. The statutory standard is “amounts” of pollution which will “contribute 

significantly to nonattainment” or “interfere with 

maintenance” of the new NAAQS in a downwind State. 

There is no way for an upwind State to know its obligation without knowing levels of air pollution in downwind States and then apportioning its responsibility 

for each downwind State’s nonattainment. Therefore, 

the upwind State’s obligation remains impossible for 

the upwind State to determine until EPA defines it.

30

 

30 As EPA itself has recognized in the past: “The precise nature and contents of such a submission is [sic] not stipulated in the 

statute. EPA believes that the contents of the SIP submission 

required by section 110(a)(2)(D)(i) may vary depending upon the 

facts and circumstances related to the specific NAAQS.” EPA, 

Guidance for State Implementation Plan Submissions to Meet Current Outstanding Obligations Under Section 110(a)(2)(D)(i) for the 

8-Hour Ozone and PM2.5 National Ambient Air Quality Standards 3 

(Aug. 15, 2006) (EPA, 2006 Guidance). 
51a 

Without further definition by EPA, a prohibition on 

“amounts which will . . . contribute significantly” is like a road sign that tells drivers to drive “carefully.” The regulated entities—here, the upwind 

States—need more precise guidance to know how to 

conform their conduct to the law. A SIP logically 

cannot be deemed to lack a “required submission” or 

deemed to be deficient for failure to meet the good 

neighbor obligation before EPA quantifies the good 

neighbor obligation. 

EPA faults the States for not hitting that 

impossible-to-know target with their SIP submissions. 

In effect, EPA’s view is that the only chance States 

have to hit the target is before EPA defines the target. 

By the time EPA makes the target clear, it’s already 

too late for the States to comply. 

Interestingly, outside of this litigation, EPA has itself recently and repeatedly recognized that it makes 

no sense for States to act until EPA defines the target. 

Just a few weeks ago, for example, in a separate proceeding EPA said that while some elements of a SIP 

submission are “relatively straightforward,” “others 

clearly require interpretation by EPA through rulemaking, or recommendations through guidance, in order to give specific meaning for a particular NAAQS.” 

77 Fed. Reg. 46,361, 46,363 (Aug. 3, 2012). “For example, section 110(a)(2)(D)(i) requires EPA to be sure 

that each state’s SIP contains adequate provisions to 

prevent significant contribution to nonattainment of 

the NAAQS in other states. This provision contains 

numerous terms that require substantial rulemaking 
52a 

by EPA in order to determine such basic points as 

what constitutes significant contribution.” Id. at n.7. 

Thus, EPA has said that the good neighbor provision 

“clearly require[s] interpretation by EPA through 

rulemaking, or recommendations through guidance, in 

order to give specific meaning for a particular 

NAAQS.” Id.; see also, e.g., 77 Fed. Reg. 45,320, 

45,323 & n.7 (July 31, 2012) (same); 77 Fed. Reg. 

43,196, 43,199 & n.7 (July 24, 2012) (same); 77 Fed. 

Reg. 22,533, 22,536 & n.7 (Apr. 16, 2012) (same); 76 

Fed. Reg. 40,248, 40,250 & n.5 (July 8, 2011) (same). 

In this litigation, however, EPA insists that the text 

of Section 110(c)(1) compels its FIP-first approach. 

But EPA pursues its reading of the statutory text 

down the rabbit hole to a wonderland where EPA 

defines the target after the States’ chance to comply 

with the target has already passed. Cf. FCC v. Fox 

Television Stations, Inc., 132 S. Ct. 2307, 2317 (2012) 

(“A fundamental principle in our legal system is that 

laws which regulate persons or entities must give fair 

notice of conduct that is forbidden or required.”); id. 

(“regulated parties should know what is required of 

them so they may act accordingly”); Christopher v. 

SmithKline Beecham Corp., 132 S. Ct. 2156, 2168 

(2012) (“It is one thing to expect regulated parties to 

conform their conduct to an agency’s interpretations 

once the agency announces them; it is quite another to 

require regulated parties to divine the agency’s interpretations in advance. . . .”). 

We take a different view. Statutory text “cannot 

be construed in a vacuum. It is a fundamental canon 
53a 

of statutory construction that the words of a statute 

must be read in their context and with a view to their 

place in the overall statutory scheme.” Roberts v. 

Sea-Land Services, Inc., 132 S. Ct. 1350, 1357 (2012) 

(quoting Davis v. Michigan Dep’t of Treasury, 489 

U.S. 803, 809 (1989)). 

Title I’s core two-step process is that the Federal 

Government sets end goals and the States choose the 

means to attain those goals. See Michigan, 213 F.3d 

at 687; see also Virginia, 108 F.3d at 1410. EPA’s 

theory—that EPA can define the end goals for the 

good neighbor provision and simultaneously issue 

federal plans to implement them—upends that process 

and places the Federal Government firmly in the driver’s seat at both steps. The FIP-first approach is 

incompatible with the basic text and structure of the 

Clean Air Act. 

In our view, determining the level of reductions required under Section 110(a)(2)(D)(i)(I) is analogous to 

setting a NAAQS. And determining the level of reductions under the good neighbor provision triggers a 

period during which States may submit appropriate 

SIPs under Section 110(a)(1) or SIP revisions under 

Section 110(k)(5). 

That approach fits comfortably within the statutory 

text and structure. In both situations—setting a 

NAAQS and defining States’ good neighbor obligations

—EPA sets the numerical end goal. And in both 

cases, once the standards are set, “determining the 

particular mix of controls among individual sources to 

attain those standards” remains “a State responsibil-
54a 

ity.” 1998 NOx Rule, 63 Fed. Reg. 57,356, 57,369 (Oct. 

27, 1998). 

2 

Other contextual and structural factors also support 

our conclusion that Section 110(a)(2)(D)(i)(I) preserves 

the basic principle that States, not the Federal Government, are the primary implementers after EPA has 

set the upwind States’ good neighbor obligations. 

Section 110’s particular function in the statutory 

scheme is to give the States the first opportunity to 

implement the national standards EPA sets under 

Title I. See 42 U.S.C. § 7410(a)-(c); see also Train, 

421 U.S. at 79; Virginia, 108 F.3d at 1410; Michigan, 

213 F.3d at 686-87. The good neighbor requirement’s 

placement in Section 110(a)—a provision calling for 

State-level regulation—strongly suggests that Congress intended States to implement the obligations set 

forth in Section 110(a)(2)(D)(i)(I). By contrast, if 

EPA’s FIP first interpretation were to prevail, Section 

110(a)(2)(D)(i)(I) would not fit well in Section 110(a). 

Moreover, Title I contains a separate provision, 

Section 126, that explicitly contemplates direct EPA 

regulation of specific sources that generate interstate 

pollution. See 42 U.S.C. § 7426(b)-(c); see also Appalachian Power, 249 F.3d at 1046. Section 126(b) 

permits a State to petition EPA for a finding that a 

source in a neighboring State emits pollution in violation of Section 110(a)(2)(D)(i). 31 See 42 U.S.C. 

 

31 Section 126(b)’s text refers to “section 7410(a)(2)(D)(ii).” 42 

U.S.C. § 7426(b). This Court has identified the cross-reference to 
55a 

§ 7426(b). Section 126(c) gives EPA discretion to impose severe sanctions, including “emission limitations 

and compliance schedules,” on a source for which a 

finding has been made. 42 U.S.C. § 7426(c); see also 

42 U.S.C. § 7509. The fact that Congress explicitly 

authorized EPA to use direct federal regulation to 

address interstate pollution suggests it did not contemplate direct Federal regulation in Section 

110(a)(2)(D)(i)(I). Cf. Whitman, 531 U.S. at 467-68; 

General Motors Corp. v. United States, 496 U.S. 530, 

541 (1990). And as this Court has previously held, 

that Section 126 imposes “extrinsic legal constraints” 

on State autonomy “does not affect a state’s discretion 

under § 110.” Appalachian Power, 249 F.3d at 1047 

(emphasis added). 

In sum, the text and context of the statute, and the 

precedents of the Supreme Court and this Court, establish the States’ first-implementer role under Section 110. We decline to adopt a reading of Section 

110(a)(2)(D)(i)(I) that would blow a hole in that basic 

structural principle.32

3 

The novelty of EPA’s approach underscores its 

flaws. In the past, EPA has applied the good neigh-

 

paragraph (ii), instead of paragraph (i), as scrivener’s error. See 

Appalachian Power, 249 F.3d at 1040-44. 32 We conclude that EPA’s interpretation on the FIPs issue is 

contrary to the text and context of the statute (a Chevron step 1 

violation), in the alternative is absurd (a Chevron step 1 violation), 

and again in the alternative is unreasonable (thus failing Chevron 

step 2 if we get to step 2). 
56a 

bor provision in the States-first way we have outlined 

here. 

The 1998 NOx Rule (which we addressed in Michigan) quantified each State’s good neighbor obligation 

but then gave the States 12 months to submit SIPs to 

implement the required reductions. See 63 Fed. Reg. 

at 57,358, 57,450-51; 42 U.S.C. § 7410(k)(5). Indeed, 

EPA explicitly assured States that the Rule did not 

intrude on their authority to choose the means to 

achieve the EPA-defined end goal. See 1998 NOx

Rule, 63 Fed. Reg. at 57,369. EPA then explained, 

persuasively, why it made sense not to deviate from 

Title I’s standard division of labor in the good neighbor 

context: 

The task of determining the reductions necessary to meet section 110(a)(2)(D) involves allocating 

the use of the downwind States’ air basin. This 

area is a commons in the sense that the contributing State or States have a greater interest in 

protecting their local interests than in protecting 

an area in a downwind State over which they do not 

have jurisdiction and for which they are not politically accountable. Thus, in general, it is reasonable to assume that EPA may be in a better position 

to determine the appropriate goal, or budget, for 

the contributing States, while leaving [it] to the 

contributing States’ discretion to determine the 

mix of controls to make the necessary reductions. 

Id. at 57,370 (emphases added). 

In Michigan, this Court held that the 1998 Rule did 

not transgress the Train-Virginia federalism bar. 
57a 

But the terms of the Michigan Court’s approval highlight how flagrantly the new Transport Rule crosses 

that line. We said: “EPA does not tell the states 

how to achieve SIP compliance. Rather, EPA looks 

to section 110(a)(2)(D) and merely provides the levels 

to be achieved by state-determined compliance mechanisms.” 213 F.3d at 687 (emphasis added). We 

emphasized that States had a “real choice” how to 

implement the required reductions. Id. at 688. 

Like the 1998 NOx Rule, the 2005 Clean Air Interstate Rule gave States the first crack at implementing 

the reductions required by EPA. See 70 Fed. Reg. 

25,162, 25,263 (May 12, 2005) (requiring SIPs within 18 

months). When EPA issued CAIR FIPs in April 

2006, about a year after it promulgated CAIR, it clarified that it intended the FIPs to serve as a “Federal 

backstop” to the ongoing SIP process, and did not 

intend to “take any other steps to implement FIP 

requirements that could impact a State’s ability to regulate their sources in a different manner” until “a year 

after the CAIR SIP submission deadline.” See CAIR 

FIPs, 71 Fed. Reg. 25,328, 25,330 (Apr. 28, 2006). 

That timetable, EPA assured the States, would allow 

EPA “to approve timely SIPs before implementation of 

FIP requirements occurs.” Id. at 25,331 (emphasis 

added). 

In both the 1998 NOx Rule and the 2005 CAIR, EPA 

was therefore careful not to infringe the States’ 

first-implemented role. EPA’s own past practice and 

statements illustrate the anomaly of its new FIP-first 

approach. 
58a 

D 

On a separate tack, EPA does not concede that it 

denied the States their rightful chance to implement 

their good neighbor obligations. It contends States 

did have an opportunity to submit SIPs. In EPA’s 

view, once it issued the 2006 24-hour PM2.5 NAAQS, 

States had three years under Section 110(a)(1) to seek 

and obtain EPA approval of SIPs addressing their 

good neighbor obligations. 

But to reiterate, the problem is that the three-year 

period expired before EPA issued the Transport Rule 

and defined the good neighbor obligations of upwind 

States. EPA has an answer for that—one we find extraordinarily unpersuasive. In its view, each State 

should have come up with (i) its own definition of 

“amounts which will . . . contribute significantly” and (ii) its own modeling and methodology for applying that definition. See EPA Br. 48 (“EPA has 

never stated that its methodology is the only way”) 

(emphasis omitted). 

In effect, EPA claims the statute requires each 

State to take its own stab in the dark at defining 

“amounts which will . . . contribute significantly” to a downwind State’s nonattainment. The State 

would then have to apply that homemade definition 

using its own homemade methodology.33

 

33 EPA points to guidance documents it issued in 2006 and 2009. 

Those documents further undermine EPA’s contention that the 

stab in the dark was a realistic opportunity for States to avoid 

being pulled into the Transport Rule FIPs. 
59a 

Of course, once a State takes its stab, EPA could 

disapprove it—especially if the State defined its own 

 

The 2006 document, published after CAIR but before North 

Carolina, did not apply to CAIR States. See EPA, 2006 Guidance

at 4. It told non-CAIR States that “EPA anticipates, based upon

existing information developed in connection with the CAIR, that

emissions from sources in States not covered by the CAIR do not

contribute significantly to nonattainment or interfere with maintenance of the 8-hour ozone or PM2.5 NAAQS in any other State.” 

Id. at 5. 

The 2009 guidance document concerned the 2006 24-hour PM2.5

NAAQS, which was not covered by CAIR. The seven-page document included three paragraphs of vague guidance on “significant 

contribution” under Section 110(a)(2)(D). See EPA, Guidance on 

SIP Elements Required Under Sections 110(a)(l) and (2) for the 

2006 24-Hour Fine Particle (PM2.5) National Ambient Air Quality 

Standards (NAAQS) 3 (Sept. 25, 2009) (EPA, 2009 Guidance) (“The 

state’s conclusion must be supported by an adequate technical analysis. Information to support the state’s determination with respect to significant contribution to nonattainment might include, 

but is not limited to, information concerning emissions in the state, 

meteorological conditions . . . , monitored ambient concentrations . . . , the distance to the nearest area that is not attaining the NAAQS in another state, and air quality modeling.”); cf. 

1998 NOx Rule, 63 Fed. Reg. at 57,370 (if EPA does not identify the 

“acceptable level of NOx reductions, the upwind State would not 

have guidance as to what is an acceptable submission”). 

The 2009 document ordered the States, equipped with 

that vague guidance, to submit SIPs to address Section 

110(a)(2)(D)(i)(I) for 24-hour PM2.5. But in the same breath, it 

warned them that EPA itself intended to “complete a rule to address interstate pollution transport in the eastern half of the continent and United States.” EPA, 2009 Guidance at 3. EPA did not 

say what would happen if a State’s approach did not coincide with 

the approach EPA was developing for its own rule, but experience 

tells the tale. 
60a 

obligation to be less than what EPA deemed it to be. 

Experience appears to bear that out: Petitioners 

point out that every Transport Rule State that submitted a good neighbor SIP for the 2006 24-hour PM2.5

NAAQS was disapproved. See State & Local Br. 

29-31; State & Local Reply Br. 5-7. 

That should not come as a surprise. In the 1998 

NOx Rule, EPA acknowledged that pre-Rule stabs in 

the dark were bound to fail. “Without determining an 

acceptable level of NOx reductions,” EPA warned, “the 

upwind State would not have guidance as to what is an 

acceptable submission.” Fed. Reg. at 57,370. And 

States would incur significant costs developing those 

SIP submissions. 

As EPA repeatedly reminds this Court, interstate 

pollution is a collective problem that requires a comprehensive solution. See EPA Br. 5 (“Absent effective federal control, individual States often have little 

economic or political incentive to self-impose regulatory controls (and attendant costs) within their States 

solely to address air quality problems in other 

States.”). And EPA itself has recognized that having 

each State independently guess at its own good neighbor obligations is not a plausible solution to interstate 

pollution: “It is most efficient—indeed necessary—

for the Federal government to establish the overall 

emissions levels for the various States.” 1998 NOx

Rule, 63 Fed. Reg. at 57,370 (emphasis added). 

Yet EPA now encourages us to suspend disbelief 

and conclude that under the statute, a State’s only 

chance to avoid FIPs is to make a successful stab in 
61a 

the dark—a feat that not one Transport Rule State 

managed to accomplish. EPA clearly does not believe 

the stab-in-the-dark approach would really permit 

States to avoid FIPs—its own past statements show 

that. But EPA’s authority to issue these FIPs rests 

on our accepting its rickety statutory logic. 

We decline the invitation. Our duty is to “interpret the statute as a symmetrical and coherent regulatory scheme and fit, if possible, all parts into an 

harmonious whole.” FDA v. Brown & Williamson 

Tobacco Corp., 529 U.S. 120, 133 (2000) (citations and 

internal quotation marks omitted). EPA’s FIP-first 

approach fails that test. 

When EPA quantifies States’ good neighbor obligations, it must give the States a reasonable first opportunity to implement those obligations. That approach 

reads Section 110(a)(2)(D)(i)(I) in harmony with the 

rest of Section 110. It preserves Title I’s FederalState division of labor—a division repeatedly reinforced by the Supreme Court and this Court. And it 

accords with the commonsense notion that Congress 

did not design the good neighbor provision to set the 

States up to fail.34

 

34 The dissent contends that the States’ challenge on this issue 

comes too late. We disagree. The dissent conflates (i) EPA’s 

prior disapproval of certain States’ SIPs and (ii) EPA’s decision to 

quantify the good neighbor obligation and to simultaneously issue 

FIPs rather than to issue a SIP call for SIP revisions (or to allow 

new SIPs). Petitioners are challenging only the latter point. 

And EPA announced its final decision to proceed that way in the 

Transport Rule itself. Put another way, the statute says that 
62a 

IV 

The decision whether to vacate a flawed rule “depends on the seriousness of the order’s deficiencies 

(and thus the extent of doubt whether the agency 

chose correctly) and the disruptive consequences of an 

interim change that may itself be changed.” AlliedSignal, Inc. v. NRC, 988 F.2d 146, 150-51 (D.C. Cir. 

1993) (internal quotation marks omitted); see also 

Davis County Solid Waste Mgmt. v. EPA, 108 F.3d 

1454, 1459 (D.C. Cir. 1997). 

Here, we have no doubt that the agency chose incorrectly. The Transport Rule stands on an unsound 

foundation—including EPA’s flawed construction of 

the statutory term “amounts which will . . . 

contribute significantly to nonattainment.” 42 U.S.C. 

§ 7410(a)(2)(D)(i). That deficiency is too fundamental to permit us to “pick and choose portions” of the 

rule to preserve. North Carolina v. EPA, 531 F.3d 

896, 929 (D.C. Cir. 2008). And as with the Clean Air 

Interstate Rule, the Transport Rule’s “fundamental 

flaws foreclose EPA from promulgating the same 

standards on remand.” Id. (internal quotation marks 

omitted). EPA’s chosen manner of implementing the 

 

EPA must issue a FIP within two years after a State fails to make 

a “required submission” or submits a deficient SIP. But a State 

cannot be “required” to implement its good neighbor obligation in a 

SIP “submission”—nor be deemed to have submitted a deficient 

SIP for failure to implement the good neighbor obligation—until it 

knows the target set by EPA. In this case, EPA set the relevant 

target in the Transport Rule. Petitioners’ challenge to the Transport Rule’s FIPs is entirely timely. 
63a 

Rule—issuing FIPs without giving the States a postRule opportunity to submit SIPs—also rests on a misreading of the statute. 

We therefore vacate the Transport Rule rulemaking 

action and FIPs, and remand to EPA. 

The remaining question is the status of CAIR. In 

North Carolina, this Court initially held that CAIR’s 

“fundamental flaws” required vacatur. 531 F.3d at 

929. On rehearing, the Court reconsidered its initial 

decision and modified its order to remand CAIR without vacatur. North Carolina v. EPA, 550 F.3d 1176, 

1178 (D.C. Cir. 2008). The Court noted that under 

our precedents, it is appropriate to remand without

vacatur “where vacatur would at least temporarily 

defeat the enhanced protection of the environmental 

values covered by the EPA rule at issue.” Id. (internal quotation marks, brackets, and ellipsis omitted). 

The Court was “convinced that, notwithstanding the 

relative flaws of CAIR, allowing CAIR to remain in 

effect until it is replaced by a rule consistent with our 

opinion would at least temporarily preserve the environmental values covered by CAIR.” Id. 

In accordance with our Order granting the motions 

to stay the Transport Rule, EPA has continued to 

administer CAIR. See Order, No. 11-1302, at 2 (D.C. 

Cir. Dec. 30, 2011); see also http://www.epa.gov/cair. 

Vacating CAIR now would have the same consequences that moved the North Carolina Court to stay its 

hand—and indeed might be more severe now, in light 

of the reliance interests accumulated over the intervening four years. We therefore conclude, as did the
64a 

Court in North Carolina, that the appropriate course 

is for EPA to continue to administer CAIR pending its 

development of a valid replacement.35

* * * 

We vacate the Transport Rule and the Transport 

Rule FIPs and remand this proceeding to EPA. EPA 

must continue administering CAIR pending the promulgation of a valid replacement. 

 So ordered. 

 

35 The North Carolina Court did “not intend to grant an indefinite stay of the effectiveness” of its decision. 550 F.3d at 1178. 

We likewise expect that EPA will proceed expeditiously on remand. 
65a 

ROGERS, Circuit Judge, dissenting: To vacate the 

Transport Rule, the court disregards limits Congress 

placed on its jurisdiction, the plain text of the Clean 

Air Act (“CAA”), and this court’s settled precedent 

interpreting the same statutory provisions at issue 

today. Any one of these obstacles should have given 

the court pause; none did. The result is an unsettling 

of the consistent precedent of this court strictly enforcing jurisdictional limits, a redesign of Congress’s 

vision of cooperative federalism between the States 

and the federal government in implementing the CAA 

based on the court’s own notions of absurdity and logic 

that are unsupported by a factual record, and a trampling on this court’s precedent on which the Environmental Protection Agency (“EPA”) was entitled to rely 

in developing the Transport Rule rather than be blindsided by arguments raised for the first time in this 

court. 

Congress has limited the availability of judicial review of challenges to final rules promulgated by the 

EPA in two ways that are relevant here. Under CAA 

section 307(b)(1), 42 U.S.C. § 7607(b)(1), petitions for 

judicial review must be filed within sixty days of 

promulgation of a final rule, and under CAA section 

307(d)(7)(B), 42 U.S.C. § 7607(d)(7)(B), “[o]nly an objection to a rule or procedure which was raised with 

reasonable specificity during the period for public 

comment . . . may be raised during judicial 

review.” The court has, until today, strictly enforced 

these requirements, which exist for two important 

reasons: to enforce repose so that the rulemaking 

process is not crippled by surprise challenges to mat-
66a 

ters that were rightfully presumed settled, and to 

guarantee an agency’s expert consideration and possible correction of any flaws in its rules before the matter reaches a court. Instead the court casts aside 

both jurisdictional provisions, upending these two fundamental principles. In so doing, the court thus fails 

to “maintain uniformity of the court’s decisions” on 

these “question[s] of exceptional importance.” FED.

R. APP. P. 35(a)(1) & (2). 

As one basis underlying its vacatur of the Transport 

Rule, the court permits a collateral attack on prior 

final rules in which EPA disapproved state implementation plan (“SIP”) submissions with respect to the 

“good neighbor provision,” CAA § 110(a)(2)(D)(i)(I), 

42 U.S.C. § 7410(a)(2)(D)(i)(I), or found States failed 

to submit such a SIP at all. In those Final SIP Rules, 

EPA unambiguously stated its interpretation that 

States had an independent obligation under section 

110(a) to submit “good neighbor” SIPs regardless of 

whether EPA first quantified each State’s emission 

reduction obligations. Under section 307(b)(1), 

States had sixty days to seek judicial review of those 

Final SIP Rules to challenge EPA’s interpretation of 

section 110(a). EPA’s authority to promulgate the 

federal implementation plans (“FIPs”), pursuant to 

section 110(c), in the Transport Rule was triggered by 

EPA having published those Final SIP Rules, and 

under section 307(b)(1) States may not collaterally 

attack the propriety of those Final SIP Rules now. 

This is not a mere technicality—EPA developed and 

promulgated the Transport Rule with the knowledge 

that all but three States did not seek judicial review of 
67a 

its interpretation of section 110(a) and in light of this 

court’s opinion in North Carolina v. EPA, 531 F.3d 896 

(D.C. Cir. 2008). The court therefore lacks jurisdiction under section 307(b)(1) to consider States’ belated 

challenge to EPA’s interpretation of section 110(a) as 

part of its review of the Transport Rule; the petitions 

challenging the Final SIP Rules filed by three States 

are not consolidated with the petitions challenging the 

Transport Rule, as they involve separate provisions of 

the CAA and different final rules. The court glosses 

over the plain text and structure of section 110 to avoid 

that reality, and in the process rewrites sections 110(a) 

and 110(c), altering the triggering mechanism for 

States’ obligations to submit “good neighbor” SIPs and 

EPA’s obligation to promulgate FIPs, based on its own 

speculative conclusion that the process Congress adopted is “impossible” for States to follow. To reach its 

conclusion, the court today holds that the CAA requires what it previously held the CAA ambiguously 

permits EPA to do. 

As another ground to vacate the Transport Rule, 

the court concludes that, under EPA’s two-step approach to defining “significant contribution” under 

the “good neighbor” requirement in section 

110(a)(2)(D)(i)(I), a State “may be required to reduce 

its emissions by an amount greater than the ‘significant contribution’ that brought it into the program in 

the first place.” Op. at 34. No objection was made 

during the Transport Rule administrative proceedings 

to EPA’s approach, let alone its statutory authority, to 

use different, unrelated measures of significance for 

inclusion and budget-setting. Acknowledging this, 
68a 

the court reaches beyond the Transport Rule administrative record, despite section 307(d)(7)(B)’s clear command, to find jurisdiction. But the three reasons it 

offers do not add up. By suggesting that EPA acted 

inconsistently with North Carolina in adopting a twostep approach, with different, unrelated measures of 

“significant contribution” for inclusion and budgetsetting, the court ignores that in North Carolina this 

court expressly declined to disturb that same approach. 531 F.3d at 916-17. In relying on a comment expressing a policy preference made during the 

administrative proceedings of the predecessor of the 

Transport Rule (to which petitioners failed to alert the 

court until rebuttal oral argument), the court ignores 

that the comment does not challenge EPA’s statutory 

authority to pursue its two-step approach, and the fact 

that no one petitioned the court in North Carolina for 

judicial review based on that comment, which is why 

the court in North Carolina left that approach undisturbed, see id. The court also ignores that the prior 

rulemaking docket was not incorporated into the 

Transport Rule administrative proceedings. Together, these “ignored” facts demonstrate that EPA had no 

reason to suspect any party before it in the Transport 

Rule administrative proceedings subscribed to the 

objection stated in the old comment, nor even to locate 

and consider that comment. Finally, EPA’s rejection 

on technical grounds of alternative approaches for 

measuring “significant contribution” based solely on 

air quality, not cost and air quality, during the Transport Rule administrative proceedings says nothing 

about whether EPA would have refused to entertain 
69a 

petitioners’ new objection in this court that EPA was 

statutorily required to modify its two-step approach by 

making the inclusion threshold of step-one a floor for 

reductions under the cost approach of step-two. The 

alternative approaches EPA considered and rejected 

are not even the approaches petitioners now endorse, 

and, in any event, cannot excuse a failure to state their 

objection with “reasonable specificity” during the 

Transport Rule administrative proceedings. 

The court’s remaining reasons for vacatur lack merit. First, the court concludes EPA violated the “good 

neighbor” provision’s “proportionality” requirement, 

but petitioners presented no such statutory authority 

argument in their briefs, instead challenging EPA’s 

grouping of States for purposes of SO2 reduction as 

arbitrary and capricious. Even if they had, the court 

lacks jurisdiction because the argument is premised on 

speculation that EPA’s two-step approach to measuring “significant contribution” might require States to 

reduce emissions by more than the amount that triggered their inclusion in the Transport Rule in the first 

place—the same argument over which the court lacks 

jurisdiction due to petitioners’ failure to challenge 

EPA’s statutory authority for its approach during the 

Transport Rule administrative proceedings. On the 

merits, the court’s “proportionality” conclusion contradicts the court’s opposite conclusion in North Carolina that EPA’s measurement of a State’s “significant 

contribution” did not have to correlate directly with its 

air quality impact “relative to other upwind states.” 

531 F.3d at 908 (citing Michigan v. EPA, 213 F.3d 663, 

679 (D.C. Cir. 2000)). Similarly, the court’s holding 
70a 

that EPA failed to consider the effect of in-state emissions is likewise premised on the subthreshold argument. Further, the court’s “in-State emissions” and 

its “over-control” conclusions are contradicted by the 

Transport Rule administrative record. 

I. 

Section 307(b)(1) of the CAA, 42 U.S.C. 

§ 7607(b)(1), requires a petition for judicial review of 

EPA final actions to be filed within sixty days of publication in the Federal Register. “The filing period in 

the Clean Air Act ‘is jurisdictional in nature’; if the 

petitioners have failed to comply with it, we are powerless to address their claim.” Med. Waste Inst. & 

Energy Recovery Council v. EPA, 645 F.3d 420, 427 

(D.C. Cir. 2011) (quoting Motor & Equip. Mfrs. Ass’n 

v. Nichols, 142 F.3d 449, 460 (D.C. Cir. 1998)). 

The Supreme Court has explained that “judicial review provisions are jurisdictional in nature and 

must be construed with strict fidelity to their terms. 

This is all the more true of statutory provisions 

specifying the timing of review, for those time limits 

are, as we have often stated, mandatory and jurisdictional, and are not subject to equitable tolling.” 

Slinger Drainage, Inc. v. EPA, 237 F.3d 681, 682 (D.C. 

Cir. 2001) (quoting Stone v. Immigration & Naturalization Serv., 514 U.S. 386, 405 (1995) (internal quotation marks, alterations, and citation omitted)). Accordingly, in Medical Waste this court dismissed a 

challenge to a final rule for lack of jurisdiction where 

petitioners failed to seek judicial review when EPA 

“first use[d]”its statutory approach, 645 F.3d at 427 
71a 

(emphasis added). “An objection is considered a collateral attack only if ‘a reasonable [petitioner] . . . 

would have perceived a very substantial risk that the 

[rule] meant what the [agency] now says it meant.” 

S. Co. Servs., Inc. v. FERC, 416 F.3d 39, 45 (D.C. Cir. 

2005) (internal quotations marks, citation, and alterations omitted). 

The Transport Rule, responding to States’ failures 

to submit adequate “good neighbor” SIPs, is a FIP 

that addresses the interstate transport of emissions in 

twenty-seven States in the eastern United States 

for three national ambient air quality standards 

(“NAAQS”): the 1997 8-hour ozone NAAQS, the 1997 

annual PM2.5 NAAQS, and the 2006 24-hour PM2.5

NAAQS.1 See Transport Rule, 76 Fed. Reg. 48,208 

(Aug. 8, 2011). In the Transport Rule, EPA determined that the same level of emission reduction obligations would apply for each of these three NAAQS. 

See id. at 48,264. Over a year prior to promulgating 

the Transport Rule, EPA promulgated Final SIP 

Rules publishing findings that twenty-nine States and 

 

1

 Section 110(a)(1) of the CAA provides that States must submit 

SIPs within three years (or less, if set by EPA) of promulgation of 

a NAAQS. Section 110(a)(2)(D), in turn, requires States to submit 

SIPs with “adequate provisions” 

(i) prohibiting, consistent with the provisions of this subchapter, any source or other type of emissions activity within the 

State from emitting any air pollutant in amounts which will— 

(I) contribute significantly to nonattainment in, or interfere 

with maintenance by, any other State with respect to any such 

national primary or secondary ambient air quality standard. 

42 U.S.C. § 7410(a)(2)(D)(i)(I). 
72a 

territories had failed to submit SIPs with the required 

“good neighbor” provisions for the 2006 24-hour PM2.5

NAAQS.2 See Failure to Submit Good Neighbor SIP 

Finding, 75 Fed. Reg. 32,673 (June 9, 2010); Tennessee 

Failure to Submit Good Neighbor SIP Finding, 76 

Fed. Reg. 43,180 (July 20, 2011). In these Final SIP 

Rules, EPA stated: 

This finding establishes a 2-year deadline for promulgation by EPA of a FIP, in accordance with section 110(c)(1), for any state that either does not 

submit or EPA cannot approve a SIP as meeting 

the attainment and maintenance requirements of 

[the “good neighbor” provision] for the 2006 24-

hour PM2.5 NAAQS. . . . This action . . . 

does not pertain to . . . a SIP Call pursuant 

to section 110(k)(5). 

Id. at 32,674; see also 76 Fed. Reg. at 43,180-81 (Tennessee). The Final SIP Rules further state that the 

findings of failure to submit were of nationwide scope 

 

2

 The States and territories were: Alaska, Colorado, Hawaii, 

Idaho, Illinois, Iowa, Louisiana, Maryland, Michigan, Minnesota, 

Montana, Nebraska, North Dakota, Oklahoma, Oregon, Pennsylvania, South Dakota, Utah, Virginia, Washington, West Virginia, 

Wisconsin, Wyoming, the District of Columbia, American Samoa, 

the Commonwealth of the Northern Mariana Islands, Guam, Puerto Rico, and the U.S. Virgin Islands. See Failure to Submit Good 

Neighbor SIP Findings, 75 Fed. Reg. at 32,674. (On July 20, 2011, 

EPA published an additional finding that Tennessee had failed to 

submit a “good neighbor” SIP for the 2006 24-hour PM2.5 NAAQS. 

See Tennessee Failure to Submit Good Neighbor SIP Finding, 76 

Fed. Reg. 43,180 (July 20, 2011). Tennessee is not a petitioner 

here. 
73a 

and effect, and therefore pursuant to section 307(b)(1), 

42 U.S.C. § 7607(b)(1), a petition for judicial review 

had to be filed with the D.C. Circuit within sixty days 

of the publication of the findings in the Federal Register. See Failure to Submit Good Neighbor SIP 

Finding, 75 Fed. Reg. at 32,675-76; Failure to Submit 

Good Neighbor SIP Finding (Tennessee), 76 Fed. Reg. 

at 43,182-83. No State filed a petition for judicial 

review. 

Other States submitted 2006 24-hour PM2.5 SIPs 

with “good neighbor” provisions, but EPA disapproved 

that portion of the SIP submissions of ten States covered by the Transport Rule: Alabama, Georgia, Indiana, Kansas, Kentucky, Missouri, New Jersey, New 

York, North Carolina, and Ohio.3

 In the Final SIP 

Rules, EPA rejected objections that States had no 

obligation to submit SIPs until EPA had quantified the 

States’ amount of “significant contribution” and that 

EPA was required to permit States to revise their 

SIPs prior to imposing a FIP pursuant to 42 U.S.C. 

§ 7410(c)(1).4

 The Final SIP Rules disapproving the 

 

3

 See Approval and Promulgation of Air Quality Implementation 

Plan; Alabama; Disapproval of Interstate Transport Submission for 

the 2006 24-Hour PM2.5 Standards, 76 Fed. Reg. 43,128 (July 20, 

2011); 76 Fed. Reg. 43,159 (Georgia); 76 Fed. Reg. 43,175 (Indiana 

& Ohio); 76 Fed. Reg. 43,143 (Kansas); 76 Fed. Reg. 43,136 (Kentucky); 76 Fed. Reg. 43,156 (Missouri); 76 Fed. Reg. 43,153 (New 

Jersey & New York); 76 Fed. Reg. 43,167 (North Carolina). 

4

 See 76 Fed. Reg. at 43,131-33 (Alabama); 76 Fed. Reg. at 

43,162-64 (Georgia); 76 Fed. Reg. at 43,176-79 (Indiana & Ohio); 76 

Fed. Reg. at 43,145-47 (Kansas); 76 Fed. Reg. at 46,139-41 (Kentucky); 76 Fed. Reg. at 43,170-72 (North Carolina). No comments 
74a 

“good neighbor” SIP submissions alerted the affected 

States that “petitions for judicial review must be filed 

in the United States Court of Appeals for the appropriate circuit by September 19, 2011,” see, e.g., 76 Fed. 

Reg. at 43,136 (Alabama), the sixty day deadline prescribed by CAA section 307(b)(1), 42 U.S.C. 

§ 7607(b)(1). Only Georgia, Kansas, and Ohio filed 

petitions for judicial review of EPA’s disapproval action and their petitions are not consolidated with the 

petitions now under review, as they challenge different 

final rules.5

A. 

Now that EPA has, as it warned, promulgated FIPs 

for States covered by the Transport Rule, State petitioners contend that EPA lacked authority to do so for 

 

were submitted to the proposed disapproval of Missouri’s “good 

neighbor” SIP submission, see 76 Fed. Reg. at 43,156, and only one 

unrelated comment was submitted to New York and New Jersey’s 

proposed disapproval, see 76 Fed. Reg. at 43,154. None of these 

three States is a petitioner here. 

5

 See Ohio v. EPA, No. 11-3988 (6th Cir.); Westar Energy, Inc. 

v. EPA, No. 11-1333 (D.C. Cir.); Kansas v. EPA, No. 12-1019 (D.C. 

Cir.); Georgia v. EPA, No. 11-1427 (D.C. Cir.). The court consolidated the two Kansas cases (Nos. 11-1333 and 12-1019) on January 10, 2012. See Order Case No. 12-1019 (Jan. 10, 2012). The

court also severed from Kansas’s Transport Rule petition, Case No. 

11-1329, its challenge to EPA’s disapproval of its “good neighbor”

SIP submission. See id. On January 10, 2012, the Sixth Circuit

granted the parties’ joint motion to hold the case in abeyance 

pending the outcome of the instant case. On January 18, 2012, the 

D.C. Circuit issued orders holding the Kansas and Georgia cases in 

abeyance pending the outcome of the appeal in the present case. 
75a 

the 2006 24-hour PM2.5 NAAQS because “a FIP can 

cure a deficiency only in a required submission, and 

States were not required to include SIP provisions to 

eliminate ‘significant contributions’ not yet defined by 

EPA legislative rule.” State Petrs’ Br. at 31. If a 

State wished to object that under section 110(a) it had 

no obligation to include “good neighbor” provisions in 

its SIP until EPA quantified its “significant contribution” in emission reduction budgets, then the CAA 

required it do so at the time EPA found it had not met 

its SIP “good neighbor” obligation. State petitioners 

offer no response in their reply brief to EPA’s position 

that this argument is a collateral attack barred by 

section 307(b)(1). See Resp.’s Br. at 46-47. 

Ignoring the plain terms of section 307(b)(1) as well 

as this court’s long-settled precedent, the court reaches the merits of this issue despite its lack of jurisdiction. In the Final SIP Rules finding States had failed 

to submit “good neighbor” SIPs, EPA put covered 

States on unambiguously “sufficient notice” that it 

interpreted the CAA as placing an independent obligation on each State to include adequate “good neighbor” 

provisions in its SIP regardless of whether EPA had 

prospectively quantified its amount of “significant 

contribution.” S. Co. Servs., 416 F.3d at 44. By the 

very nature of the Final SIP Rules, EPA was informing States that they had not met their obligation to 

submit “good neighbor” SIPs, an obligation States now 

contend they never had. Furthermore, EPA warned 

that its findings of failure to submit triggered the 

two-year FIP clock of section 110(c)(1), and not the 

SIP Call provision of section 110(k)(5). See Failure to 
76a 

Submit Good Neighbor SIP Finding, 75 Fed. Reg. at 

32,673-74; Failure to Submit Good Neighbor SIP 

Finding (Tennessee), 76 Fed. Reg. at 43,180-81. In 

alerting States to the judicial review deadline, EPA 

reiterated that States had sixty days to file “any petitions for review . . . related to [] findings of 

failure to submit SIPs related to the requirements of 

[the ‘good neighbor’ provision].” Failure to Submit 

Good Neighbor SIP Finding, 75 Fed. Reg. at 32,676; 

Failure to Submit Good Neighbor SIP Finding (Tennessee), 76 Fed. Reg. at 43,183 (emphases added). 

Not having sought judicial review of the Final SIP 

Rules determining that they failed to submit required 

“good neighbor” SIPs, States may not now object that 

they were not required to submit “good neighbor” 

SIPs until EPA first quantified their reduction obligations. “The sixty day window provided by statute 

has long since closed, and we may not reopen it and 

entertain a belated challenge . . . now.” Med. 

Waste, 645 F.3d at 427. Therefore, the court lacks 

jurisdiction over the collateral attacks by petitioners 

Louisiana, Michigan, Nebraska, Oklahoma, Virginia, 

and Wisconsin, as part of the Transport Rule petitions, 

on EPA’s interpretation of section 110(a) stated in the 

Final SIP Rules finding they failed to submit required 

“good neighbor” SIPs. 

Similarly on notice, neither Alabama nor Indiana 

petitioned for judicial review of EPA’s disapproval of 

their SIP submissions. In the Final SIP Rule disapproving Alabama’s SIP submission, EPA quotes one 

commenter as stating: 
77a 

EPA has not stated the amount of reduction they 

believe is needed to satisfy the transport requirements. . . . [T]he finish line isn’t even knowable (because EPA refuses to inform the states how 

much reduction is enough to satisfy the requirements). EPA seems to say that it has to be whatever the final Transport Rule says, even though 

there is no final Transport Rule. 

76 Fed. Reg. at 43,131. EPA responded that “the 

state obligation stems from the CAA itself. . . . 

States had an opportunity to conduct their own analyses regarding interstate transport.” Id. (emphasis 

added). EPA also warned that it was obligated to 

promulgate a FIP within two years of disapproving 

Alabama’s SIP, see id. at 43,132, and rejected comments that the SIP Call revision process of section 

110(k)(5) should apply, because, in its view, that provision applies only where there is an existing, approved 

SIP, see id. at 43,133. In its summary of Indiana’s 

comments on the proposed disapproval of its SIP submission, EPA noted that Indiana took the position that 

EPA “should provide [the State] the opportunity to 

revise its [] SIP once the Transport Rule is completed” 

and that a “FIP is [] contrary to the spirit of the CAA 

by unnecessarily limiting [S]tate authority.” 76 Fed. 

Reg. at 43,177. EPA responded, relying on the CAA’s 

plain text, that Indiana was required by section 110(a) 

to submit SIPs with adequate “good neighbor” provisions, and that upon disapproving its submission, EPA 

had a legal obligation under the CAA to promulgate a 

FIP. See id. Alabama and Indiana’s comments, 

along with EPA’s responses, demonstrate that the two 
78a 

States were on clear notice of EPA’s interpretation of 

the CAA as imposing an independent obligation on the 

States to submit “good neighbor” SIPs, even in the 

absence of EPA-quantified amounts of “significant 

contribution.” Yet neither Alabama nor Indiana 

sought judicial review of EPA’s Final SIP Rules disapproving their SIP submissions, and their attempt 

now to collaterally attack those Final SIP Rules is 

barred. See Med. Waste, 645 F.3d at 427. 

Given EPA’s clear statements in its Final SIP Rules 

disapproving States’ SIP submissions and finding they 

failed to submit required “good neighbor” SIPs, there 

is no basis to conclude that State petitioners might not 

have perceived a substantial risk that EPA meant 

what it said. See S. Co. Servs., 416 F.3d at 45. The 

instant case, involving consolidated petitions challenging the Transport Rule, is therefore not the appropriate forum to decide whether, under section 

110(a), States have an independent obligation to submit “good neighbor” SIPs when EPA has not first 

quantified amounts of “significant contribution.” 

EPA promulgated Final SIP Rules in which it made its 

interpretation clear; judicial challenge to those rules is 

the proper forum to decide the question.6

 

6

 The same is true for Ohio, Georgia, and Kansas, which petitioned for judicial review of EPA’s disapproval of their “good 

neighbor” SIP submissions. The court’s “review in th[e] [instant] 

case is limited to” the Transport Rule, and the court thus “lack[s] 

jurisdiction over” challenges to those States’ SIP disapprovals 

premised on whether they have an independent obligation to submit “good neighbor” SIPs. Coalition for Responsible Regulation, 
79a 

Indeed, the court itself forecasts this conclusion: 

“EPA’s many SIP disapprovals and findings of failure 

to submit share one problematic feature: EPA made 

all of those findings before it told the States what 

emission reductions their SIPs were supposed to 

achieve under the “good neighbor” provision.” Op. at 

47 (emphasis in original). However “problematic” the 

court views this “feature” of those Final SIP Rules, 

this is a “problem” this three-judge panel is powerless 

to resolve because it lacks jurisdiction under CAA 

section 307(b)(1) to entertain State petitioners’ “backdoor challenge” to EPA’s interpretation of section 

110(a) stated in those Final SIP Rules. Natural Res. 

Def. Council v. EPA, 824 F.2d 1146, 1150 (D.C. Cir. 

1987) (internal quotation marks omitted). 

 

Inc. v. EPA, 684 F.3d 102, 149 (D.C. Cir. 2012). The petitions filed 

by those States challenging their SIP disapprovals are not consolidated with the petitions before the court today, see supra n.5, and 

Ohio’s petition is pending in the Sixth Circuit. The court must 

therefore “decline [State] [p]etitioners’ invitation to rule on the 

merits of cases which are properly before different panels.” Id. 

This is all the more important here, where EPA has not yet been 

afforded the opportunity to assert an improper venue defense in 

the two cases pending before the D.C. Circuit. See Tex. Mun. 

Power Agency v. EPA, 89 F.3d 858, 867 (D.C. Cir. 1996); 42 U.S.C. 

§ 7607(b)(1) (petitions for review of SIP disapprovals may be 

brought only in the court of appeals “for the appropriate circuit”) 

(emphasis added). If Georgia, Kansas, and Ohio wish to avoid 

enforcement of the Transport Rule FIPs because they contend 

EPA’s SIP disapprovals were in error, the proper course is to seek 

a stay of EPA’s disapprovals in their pending cases; if granted, a 

stay would eliminate the basis upon which EPA may impose FIPs 

on those States. See 42 U.S.C. § 7410(c)(1)(B). 
80a 

The court responds that the dissent “conflates” 

State petitioners’ collateral attack on the Final SIP 

Rules announcing their Section 110(a) SIP obligations 

with State petitioners’ supposedly distinct argument 

that EPA cannot promulgate a FIP simultaneously 

with its quantification of a State’s emission reduction 

obligations. See Op. at 8 n.1, 58 n.34. This response 

misleadingly quotes the statute, and in the process, 

proves the dissent’s point. The court states “the statute says that EPA must issue a FIP within two years 

after a State fails to make a ‘required submission’ or 

submits a deficient SIP. But a State cannot be ‘required’ to implement its “good neighbor” obligation in 

a SIP ‘submission’ . . . until it knows the target 

set by EPA.” Id. at 58 n.34.7

 That is not what the 

statute says. Section 110(c) provides that: 

(1) The Administrator shall promulgate a Federal 

implementation plan at any time within 2 years after the Administrator—

(A) finds that a State has failed to make a required 

submission . . . or 

(B) disapproves a State implementation plan submission in whole or in part; 

 

7

 Notice the circularity in the court’s statement. The court 

says State petitioners’ “simultaneity” argument can be “[p]ut 

another way,” Op. at 58 n.34, as an argument that States had no 

section 110(a) SIP requirements until EPA quantified their emission reduction budgets. Under section 307(b)(1), that is exactly 

the argument that States were required to make in petitions for 

judicial review of the Final SIP Rules setting forth EPA’s section 

110(a) interpretation. 
81a 

unless the State corrects the deficiency, and the 

Administrator approves the plan or plan revision, 

before the Administrator promulgates such Federal 

implementation plan. 

42 U.S.C. § 7410(c)(1) (emphases added). EPA’s FIP 

obligation is therefore not triggered, without more, by 

a State’s mere failure to submit a SIP required by 

section 110(a), but instead by an explicit EPA Final 

Rule finding that the State either failed to submit a 

required SIP or an adequate SIP. A challenge to 

EPA’s interpretation of section 110(a) must therefore 

be brought as a petition for judicial review of those 

Final SIP Rules announcing that States failed to meet 

their section 110(a) “good neighbor” SIP obligations. 

See Med. Waste, 645 F.3d at 427. Under the plain 

terms of the CAA, EPA’s obligation (and authority) to 

promulgate a FIP is triggered by those Final SIP 

Rules, and the process by which EPA must promulgate 

a FIP is governed by section 110(c), not, as the court 

posits, by section 110(a). The court therefore, and 

not the dissent, does the conflating by turning what 

should be a challenge to EPA’s FIP authority under 

section 110(c) into a collateral attack on EPA’s interpretation of section 110(a) set forth in the prior Final 

SIP Rules. 

The plain text of section 110(c)(1) obligates EPA to 

promulgate a FIP “at any time” within two years of 

disapproving a SIP submission or finding a State failed 

to submit a SIP. 42 U.S.C. § 7410(c)(1). Moreover, 

nothing in section 110(c) requires EPA to reveal to 

States the content (i.e., the emission reduction budg-
82a 

ets) it intends to include in its FIP prior to proposing 

a FIP. Although the CAA allows States to submit 

SIPs to “correct[] the deficiency,” they must do so “before” EPA’s promulgation of a FIP, which may occur 

“at any time” within two years. Id. 

The court thus rewrites section 110(c)(1)’s unambiguous grant of authority to EPA (and ultimate obligation of EPA) to promulgate a FIP at any time within the two year window to read: “unless but not until

the State corrects the deficiency and the Administrator approves the [SIP] or [SIP] revision, before may

the Administrator promulgates such [FIP].” “[A]s 

the Supreme Court has emphasized time and again, 

courts have no authority to rewrite the plain text of a 

statute.” Kay v. FCC, 525 F.3d 1277, 1279 (D.C. Cir. 

2008). Because the CAA “means what it says,” EPA 

was required, after publishing disapprovals and findings of failure to submit SIPs, to promulgate FIPs 

within two years, and it was not required to wait for 

States first to submit SIPs. Landstar Express Am. 

v. Fed. Maritime Comm’n, 569 F.3d 493, 498 (D.C. Cir. 

2009). The court’s attempt to ferret out an argument 

about “simultaneity” as a distinct challenge properly 

brought against the Transport Rule based on EPA’s 

interpretation of section 110(a) is thus a straw man for 

its endorsement of State petitioner’s collateral attack 

on EPA’s interpretation of section 110(a) in the Final 

SIP Rules. Its rewriting of section 110(c) is made all 

the more remarkable by its recognition that “we must 

apply and enforce the statute as it’s now written.” 

Op. at 8. 
83a 

B. 

Even if the court had jurisdiction over State petitioners’ challenge to their independent obligation to 

submit “good neighbor” SIPs under CAA section 

110(a), its statutory analysis proceeds with no regard 

for the plain text and structure of the CAA or for the 

deference owed to permissible agency interpretations 

of statutes they administer where Congress has left a 

gap for the agency to fill or the statute is ambiguous. 

“As in all statutory construction cases,” the court 

must “begin with the language of the statute.” Barnhart v. Sigmon Coal Co., Inc., 534 U.S. 438, 450 (2002). 

“[C]ourts must presume that a legislature says in a 

statute what it means and means in a statute what it 

says there. When the words of a statute are unambiguous, then, this first canon is also the last: judicial 

inquiry is complete.” Id. at 461-62 (quoting Connecticut Nat. Bank v. Germain, 503 U.S. 249, 253-54 (1992) 

(internal quotation marks and citation omitted)). 

Thus, under Chevron U.S.A. Inc v. Natural Res. Def. 

Council, 467 U.S. 837, 842-44 (1984), the first step in 

statutory interpretation requires a determination of 

“whether Congress has directly spoken to the precise 

question at issue. If the intent of Congress is clear, 

that is the end of the mater; for the court, as well as 

the agency, must give effect to the unambiguously expressed intent of Congress,” id. If, after applying traditional tools of statutory construction, the court determines “the statute is silent or ambiguous with respect to the specific issue,” then, under step two, the 

court will defer to an agency’s statutory interpretation 
84a 

if it “is based on a permissible construction of the 

statute.” Id. at 843. 

The questions regarding States’ obligations to submit “good neighbor” SIPs are straightforward: 

(1) Do States have an independent obligation to submit SIPs with adequate “good neighbor” provisions; 

(2) if so, what triggers that obligation; (3) if there is 

an obligation, what is the deadline for the SIP submission; and (4) must EPA prospectively quantify each 

States’ amount of “significant contribution” to downwind nonattainment? The plain text of the statute 

provides equally straightforward answers: (1) Yes; 

(2) promulgation of a NAAQS; (3) within three years 

of promulgation of a NAAQS (unless the EPA Administrator prescribes a shorter deadline); and (4) no, but 

EPA may do so if it chooses. 

Section 109 of the CAA requires EPA to promulgate NAAQS, a national health-based standard. See 

42 U.S.C. § 7409. Section 110, in turn, provides that 

(a)(1) Each State shall . . . adopt and submit 

to the Administrator, within 3 years (or such shorter 

period as the Administrator may prescribe) after the

promulgation of a national primary air quality

standard (or any revision thereof) . . . a plan 

which provides for implementation, maintenance, 

and enforcement of such [] standard . . . within such State. 

(2) Each implementation plan submitted by a State 

under this chapter . . . shall 

. . . 
85a 

(D) contain adequate provisions— 

(i) prohibiting, consistent with the provisions of this subchapter, any source or other 

type of emissions activity within the State 

from emitting any air pollutant in amounts 

which will— 

(I) contribute significantly to nonattainment in, or interfere with maintenance 

by, any other State with respect to any 

such [NAAQS]. 

Id. §§ (a)(1) & (a)(2)(D)(i)(I) (emphases added). The 

plain text requires that within three years of EPA’s 

promulgation of a NAAQS, States shall submit SIPs, 

and those SIPs shall include adequate “good neighbor” 

provisions. This is the unambiguous obligation and 

chronology established by Congress. EPA has the 

first duty to set the NAAQS, and then States have 

series of follow-up duties, listed in section 110(a), to 

ensure attainment of the NAAQS. Among the duties 

clearly assigned to States is the inclusion in SIPs of 

adequate “good neighbor” provisions. 

The court views this “interpretation”—that is, reading the actual text of the statute—as a scene from 

Alice in Wonderland. See Op. at 50. It concludes 

that “[i]n our view, determining the level of reductions 

required under Section 110(a)(2)(D)(i)(I) is analogous 

to setting a NAAQS. And determining the level of reductions under the “good neighbor” provision triggers 

a period during which States may submit SIPs.” Id. 
86a 

at 51. Even if the court’s analogy were sound,8 the 

premise of its analogy does not support its conclusion 

that EPA’s determination of emission reduction obligations triggers States’ obligations to submit “good 

neighbor” SIPs. Rather, the court rewrites a 

decades-old statute whose plain text and structure 

establish a clear chronology of federal and State responsibilities. Nowhere does the CAA place a requirement on EPA to quantify each State’s amount of 

“significant contribution” to be eliminated pursuant to 

the “good neighbor” provision, let alone include any 

provision relieving States of their “good neighbor” SIP 

obligations in the event EPA does not first quantify 

emission reduction obligations.9

 The court’s “view” 

that EPA “determining the level of reductions under 

the “good neighbor” provision triggers the period 

 

8

 NAAQS are determined based on what is “requisite to protect 

the public health” and “public welfare,” 42 U.S.C. §§ 7409(b)(1) & 

(2), and are a uniform national standard. The “good neighbor” 

provision, on the other hand, is not a separate national standard, 

but instead is simply one of the CAA’s State-specific mechanisms 

to ensure attainment of the NAAQS. See 42 U.S.C. 

§ 7410(a)(2)(D)(i)(I). 

9

 The court’s comparison of section 110 to section 126, see Op. at 

52, conflates direct federal regulation of sources with EPA’s statutory authority to enforce requirements that States comply with

their “good neighbor” SIP obligations. Given that Congress included a specific provision obligating EPA to promulgate FIPs if 

States fail to submit adequate SIPs within three years of promulgation of a NAAQS, see CAA § 110(c)(1); 42 U.S.C. § 7410(c)(1), and 

EPA relies on it in the Transport Rule, section 126's federal authorization to regulate specific sources of emissions has no bearing 

on the statutory analysis here.
87a 

during which States may submit SIPs” is irrelevant in 

view of the unambiguously plain text of section 

110(a)(1) and (a)(2)(D)(i)(I), and, if the statute were 

ambiguous, the court would be required to defer to 

EPA’s interpretation that States have an independent 

obligation to submit “good neighbor” SIPs within 

three years of promulgation of the NAAQS because 

that interpretation is permissible under the statute, 

see Chevron, 467 U.S. at 843. The court’s “role is ‘not 

to ‘correct’ the text so that it better serves the statute’s purposes’; nor under Chevron may [the court] 

‘avoid the Congressional intent clearly expressed in 

the text simply by asserting that [the court’s] preferred approach would be better policy. The Congress has spoken plainly. . . . ” Virginia Dep’t 

of Med. Assistance Servs. v. Dep’t of Health & Human 

Servs., 678 F.3d 918, 926 (D.C. Cir. 2012) (quoting 

Engine Mfrs. Ass’n v. EPA, 88 F.3d 1075, 1089 (D.C. 

Cir. 1996)). 

Furthermore, the court’s holding is entirely at odds 

with the holding in Michigan v. EPA, 213 F.3d 663 

(D.C. Cir. 2000), see LaShawn A. v. Barry, 87 F.3d 

1389, 1395 (D.C. Cir. 1996) (en banc). In Michigan, 

State petitioners contended that EPA violated the 

CAA by prospectively informing States what their 

nitrogen oxides (NOx) emission reduction budgets 

needed to be to adequately eliminate their amounts of 

“significant contribution” under the “good neighbor” 

provision, thus acknowledging their independent obligation to submit adequate “good neighbor” SIPs, see 

213 F.3d at 686-87. State petitioners in Michigan 

argued that EPA had no authority to do what the 
88a 

State petitioners now before the court contend EPA 

has no authority not to do. In Michigan the court 

deferred, pursuant to Chevron step two, to EPA’s 

interpretation it could set State emissions budgets 

prospectively, given section 110’s “silence” on the 

question, as a permissible exercise of EPA’s general 

rulemaking authority under CAA section 301(a)(1), 42 

U.S.C. § 7601(a)(1).10 Inverting Michigan’s analysis 

of section 110, the court holds that under Chevron step 

one, see Op. at 53 n.32, section 110 itself unambiguously requires EPA to prospectively inform States of 

their “good neighbor” emission reduction requirements. See id. at 46-53. Nothing in section 110, section 301, or any other section of the CAA requires 

EPA to do this. Instead the court today turns 

“may” into “must,” and holds that if EPA does not 

exercise its general rulemaking authority in the manner of the court’s design, then section 110(a)(1)’s and 

110(a)(2)(D)(i)(I)’s mandatory, unambiguous requirements that States submit adequate “good neighbor” 

SIPs within three years of the promulgation of a 

NAAQS are erased from the statute by judicial fiat 

—relieving States of the duty Congress imposed. 11

 

10 Section 301(a)(1) of the CAA provides that “[t]he Administrator is authorized to prescribe such regulations as are necessary 

to carry out his functions under this chapter.” 42 U.S.C. 

§ 7601(a)(1). 

11 Suffice it to say, it is extraordinarily unusual for a court to 

conclude, at Chevron step one, that it must delete mandatory 

obligations from a statute in order to accord with Congress’s plain 

intent. See Op. at 53 n.32. It is all the more unusual to suggest 
89a 

The court offers no explanation for how its holding can 

be squared with Michigan in this regard. 

The court’s rationale for rewriting the CAA’s plain 

text is its own conclusion that “the upwind State’s 

obligation remains impossible for the upwind State to 

determine until EPA defines it.” Id. at 48 (first 

emphasis added). In its words, the statute “requires 

each State to take its own stab in the dark . . . 

[and] apply [a] homemade definition using its own 

homemade methodology.” Id. at 55. The court concludes EPA’s interpretation (that is, following the 

statute’s plain text) produces absurd results, see id. at 

53 n.32. Pretermitting whether there is a shred of 

record evidence to show such an impossibility, a statutory outcome is absurd [only] if it defies rationality[;] 

. . . an outcome so contrary to perceived social

values that Congress could not have intended it.” 

Landstar Express, 569 F.3d at 498-99 (internal quotation marks and citations omitted) (emphases added). 

To the extent the court’s rationale hinges on its speculation that States lack technical capability and information, this blinks at reality. As counsel for EPA 

emphasized at oral argument, see Tr. Oral Arg. at 59, 

61, without contradiction by any petitioners’ counsel 

during rebuttal oral argument, States are fully capable 

of measuring interstate transport of emissions by conducting modeling, and they have done so before and 

continue to do so: “The states can make that effort, 

and they can submit SIPs to EPA. Again, that is how 

 

that an agency’s interpretation is “impermissible” at Chevron step 

two when the interpretation parrots the text of the statute. 
90a 

the process works in the states that aren’t included in 

these transport regions.” Id. at 61. Indeed, as this 

court has recognized, States are charged with operating air quality monitors; “[e]xhaustive technical specifications regulate the States’ operation of a network of 

air monitors that collect air quality data for any given 

area.” Catawba Cnty., N.C. v. EPA, 571 F.3d 20, 30 

(D.C. Cir. 2009); cf. ATK Launch Sys. v. EPA, 669 

F.3d 330, 334 (D.C. Cir. 2012). The air quality monitoring data collected by the States is publically available in the National Emissions Inventory.12 That is, 

State air quality divisions are no strangers to complex 

air quality and meteorological modeling of interstate 

transport of emissions.13

 

12 See U.S. EPA, Technology Transfer Network Clearinghouse 

for Inventories & Emissions Factors, available at http://www.epa.

gov/ttnchie1/eiinformation.html (last visited July 23, 2012); see also 

U.S. EPA, Technology Transfer Network Clearinghouse for Regulatory Atmospheric Modeling, available at http://www.epa.gov/ttn/

scram/aqmindex.htm (last visited July 23, 2012) (providing modeling tools). 

13 To cite one example: the State of Texas. The Texas Council 

on Environmental Quality (“TCEQ”) has published an extensive 

description of its air quality modeling activities and capabilities on 

its website. “The TCEQ uses state of the art computer models to 

simulate the meteorological conditions and chemical reactions that 

contribute to the formation of air pollutants.” TCEQ, Introduction to Air Quality Modeling, available at http://m.tceq.texas.gov/

airquality/airmod/overview/am_intro.html (last visited July 23, 

2012). Furthermore, “TCEQ uses state-of-the-science, fourdimensional computer models that incorporate atmospheric physical laws and measured observations to predict weather conditions 

over space and time.” TCEQ, Introduction to Air Quality Model-
91a 

No petitioner suggests that States lack the capability to measure their interstate emissions of pollutants 

or to access that information from other States to 

independently determine emission reduction budgets, 

much less that they have not had time to do so; rather 

their reason for not doing so appears to stem from 

insistence (supported by industry sources) that their 

reduction of emissions not be one iota greater than is 

necessary for downwind States to attain and maintain 

NAAQS and that it is easier (and presumably less 

costly, see Oral Arg. Tr. 58) for EPA to figure this out 

than it is for the individual States to do so, working 

cooperatively and using any EPA guidance. This may 

be so but it does not demonstrate that Congress’s 

scheme, protecting States’ choices about how to meet 

NAAQS requirements, in part by independently determining ways to meet their “good neighbor” obligation as the States argued in Michigan, is absurd. 

It is true, as the court notes, see Op. at 53-55, that 

in two previous “good neighbor” rulemakings EPA afforded States the opportunity to submit SIPs after announcing emission reduction budgets. But an agency 

is not forever restricted to its previous policy choices 

or statutory interpretations; instead, it may change 

course provided it acknowledges it is doing so, pre-

 

ing: Meteorological Modeling, http://m.tceq.texas.gov/airquality/

airmod/overview/am_met.html (last visited July 23, 2012. Indeed, 

TCEQ uses the same model EPA used to model emission 

contributions—CAMx. EPA notes in its brief that Texas provided 

some of the technical data that led to its inclusion in the final 

Transport Rule. See EPA Br. at 109. These are far from “homemade” methodologies. See Op. at 55. 
92a 

sents “good reasons” for doing so, and its approach is 

“permissible under the statute.” FCC v. Fox Television Stations, Inc., 556 U.S. 502, 515 (2009). Agencies “need not demonstrate to a court’s satisfaction 

that the reasons for the new policy are better than the 

reasons for the old one.” Id. The discretion agencies

enjoy in modifying their policy approaches is particularly expansive where the agency declines to exercise 

its discretionary rulemaking authority, as EPA did 

here. “It is only in the rarest and most compelling of 

circumstances that this court has acted to overturn an 

agency judgment not to institute rulemaking.” 

WWHT, Inc. v. FCC, 656 F.2d 807, 818 (D.C. Cir. 

1981). 

Here, EPA acknowledged its previous approach, see 

Transport Rule, 76 Fed. Reg. at 48,217; NPRM, 75 

Fed. Reg. at 45,222-223, and explained its decision in 

response to comments requesting States be given time 

to submit SIPs before EPA imposed the Transport 

Rule FIPs. EPA stated, first, that it had no authority 

to alter the statutory deadlines for SIP submissions

and that the CAA did not require it to issue a rule 

quantifying States’ “good neighbor” obligations, see 

Transport Rule, 76 Fed. Reg. at 48,220; second, that 

the court in North Carolina, in remanding rather than 

vacating CAIR, “emphasized EPA’s obligation to 

remedy [CAIR’s] flaws expeditiously” and thus “EPA 

d[id] not believe it would be appropriate to establish a

lengthy transition period to the rule which is to replace 

CAIR,” Transport Rule, 76 Fed. Reg. at 48,220; and 

third, that in North Carolina this court also required 

EPA to align upwind States’ emission reduction dead-
93a 

lines with the NAAQS attainment dates of “2015 or 

earlier,” see North Carolina, 531 F.3d at 930.14 EPA’s 

decision to adhere to the plain text of the statute, and 

not to exercise its discretionary general rulemaking 

authority, see Michigan, 213 F.3d at 686-87, was thus 

well-explained by the time pressures imposed by this 

court. See Fox Television, 556 U.S. at 515. Inasmuch as those time pressures were animated as well 

by concern for the public health and welfare—

Congress required that attainment with the NAAQS 

occur “as expeditiously as practicable.” 42 U.S.C. 

§§ 7502(a)(2)(A) & 7511; see North Carolina, 531 F.3d 

at 930—the instant case is particularly ill-suited for 

overturning EPA’s exercise of its discretion in not 

adding an additional rulemaking step to the process. 

Given that the court “will overturn an agency’s deci-

 

14 That EPA may, under different circumstances, view it as 

preferable to prospectively quantify States’ emission reduction 

obligations, see Op. at 49, is irrelevant to whether EPA’s stated 

reasons for departing, in the Transport Rule from its previous 

approach are adequate, given the court’s instruction in North Carolina to expeditiously replace the flawed CAIR and align NAAQS 

attainment dates. The context of the federal register citations is, 

EPA’s points out, EPA’s review of a submitted SIP; the preamble 

does not state EPA must engaged in detailed interstate transport 

analysis before States must meet their statutory SIP obligations. 

Furthermore, consistent with the federal register citations noted 

by the court, EPA has traditionally issued guidance to States on 

calculating their “good neighbor” emission reduction obligations 

and it did so here, see, e.g., EPA Guidance on SIP Elements Required Under Sections 110(a)(1) and (2) for the 2006 24-hour Fine 

Particle (PM2.5) National Ambient Air Quality Standards (NAAQS) 

(Sept. 25, 2009). 
94a 

sion not to initiate a rulemaking only for compelling 

cause,” and one of those few compelling reasons is 

when the decision declining to promulgate a rule exacerbates “grave health and safety problems for the 

intended beneficiaries of the statutory scheme,” Midwest Indep. Transmission Sys. Operator, Inc. v. 

FERC, 388 F.3d 903, 911 (D.C. Cir. 2004) (internal 

quotation marks and citation omitted), it hardly makes 

sense for the court to require EPA to promulgate a 

rule when the effect will be to delay health benefits. 

Indeed, the court is most reluctant to require agencies 

to promulgate rules “when the interests at stake are 

primarily economic,” id., and the court’s view that it is 

“impossible” for States to comply with their independent “good neighbor” obligation under section 110(a) is 

animated by the burdens that obligation imposes on 

States and industry sources, see Oral Arg. Tr. 58. 

In sum, the court’s conclusion that it would have 

been a “homemade” “stab in the dark” for the States to 

submit adequate “good neighbor” SIPs prior to promulgation of the Transport Rule lacks a basis in fact, 

and the court’s speculation that EPA would have inevitably disapproved such submissions, see Op. at 56-57, 

is just that—speculation. And if that happened, 

States could judicially challenge the disapprovals, 

seeking a stay to avoid application of the Transport 

Rule FIPs. Absent record evidence to suggest that 

the plain text of the CAA’s “good neighbor” SIP obligation on States leads to “an outcome so contrary to 

perceived social values that Congress could not have 

intended it,” Landstar Express, 569 F.3d at 498-99 

(internal quotation marks and citations omitted) (em-
95a 

phasis added), the court is bound, in view of the host of 

responsibilities placed on States in the CAA, to enforce 

the statute as Congress wrote it in plain terms, to give 

deference to EPA’s permissible interpretations where 

the CAA is silent or ambiguous, and to adhere to the 

court’s interpretation of EPA’s authority in Michigan, 

as well as acknowledge, as the expert agency has advised without contradiction, that States have demonstrated competence to satisfy their plain statutory 

“good neighbor” obligations. 

II. 

The court also is without jurisdiction to hold that 

EPA lacked statutory authority to use a different 

measure of “significant contribution” for setting emission reduction budgets, unrelated to its measure of 

“significance” for purposes of threshold inclusion of 

individual States in the Transport Rule. Op. at 34-37. 

Petitioners contended that there was a hypothetical 

possibility that “application of cost-effective controls [] 

could drive a State’s emissions below the point that, 

under phase one, would have excluded the State from 

any regulation whatsoever.” State Petrs’ Br. at 35; 

Industry & Labor Petrs’ Br. at 22-24.15 Because no 

 

15 As EPA responded, nothing in the record suggests this hypothetical possibility actually would occur as a result of the Transport 

Rule, see Resp.’s Br. at 33-34 & n.20; id. at 32 n.18, and the point of 

choosing a “cost” that is “effective” for each State assumes only a 

reasonable subset of emissions will be reduced. See Oral Arg. Tr. 

at 44-46. Furthermore, contrary to the court’s suggestion, see Op. 

37 n.23, EPA explained that selecting a cost below $500/ton of 

emissions would permit States to stop operating existing controls, 
96a 

objection was made during the Transport Rule administrative proceedings to EPA’s statutory authority 

to adopt its two-step approach, the court thus 

lacks jurisdiction to decide this issue. See CAA 

§ 307(d)(7)(B), 42 U.S.C. § 7607(d)(7)(B). The jurisdictional question is not close; the court’s effort to 

avoid this court’s well-settled precedent fails clearly. 

A. 

Section 307(d)(7)(B) of the CAA provides that 

“[o]nly an objection to a rule or procedure which was 

raised with reasonable specificity during the period for 

public comment . . . may be raised during judicial review.” 42 U.S.C. § 7607(d)(7)(B) (emphasis 

added). The court has “‘strictly’ enforce[d] this requirement,” Mossville Envtl. Action Now v. EPA, 370 

F.3d 1232, 1238 (D.C. Cir. 2004) (quoting Motor & 

Equip. Mfrs. Ass’n v. Nichols, 142 F.3d 449, 462 (D.C. 

Cir. 1998)); see also Natural Res. Def. Council v. EPA, 

571 F.3d 1245, 1259 (D.C. Cir. 2009). The court also 

has made clear that “[r]easonable specificity requires 

something more than a general challenge to EPA’s 

approach.” Mossville, 370 F.3d at 1238 (internal quotation marks and alteration omitted). The court’s enforcement of this requirement has been most strict in 

the context of statutory authority objections: 

While there are surely limits on the level of congruity required between a party’s arguments before an 

administrative agency and the court, respect for 

 

thus increasing, rather than decreasing, pollution. See Transport 

Rule, 76 Fed. Reg. at 48,256-57. 
97a 

agencies’ proper role in the Chevron framework 

requires that the court be particularly careful to 

ensure that challenges to an agency’s interpretation 

of its governing statute are first raised in the administrative forum. 

Cement Kiln Recycling v. EPA, 255 F.3d 855, 860 

(D.C. Cir. 2001) (quoting Natural Res. Def. Council, 

Inc. v. EPA, 25 F.3d 1063, 1074 (D.C. Cir. 1994)) (emphasis added). Consistently, until now, the court has 

held that failure to object specifically to EPA’s lack of 

statutory authority is grounds for dismissal of such 

objections in this court. See, e.g., Natural Res. Def. 

Council v. EPA, 559 F.3d 561, 563-64 (D.C. Cir. 2009); 

Engine Mfrs. Ass’n v. EPA, 88 F.3d 1075, 1097 (D.C. 

Cir. 1996); Ohio v. EPA, 997 F.2d 1520, 1528 (D.C. Cir. 

1993); Linemaster Switch Corp. v. EPA, 938 F.2d 1299, 

1308 (D.C. Cir. 1991); Natural Res. Def. Council v. 

Thomas, 805 F.2d 410, 427 (D.C. Cir. 1986). 

Notably on point, in Cement Kiln the court held 

that comments stating a policy preference to EPA 

were insufficient to preserve for judicial review objections that the preferred approach was statutorily required, 255 F.3d at 860-61. “[T]hese comments merely argued that EPA could permissibly consider [the 

approach], not (as petitioners now argue) that [the 

CAA] requires [the approach].” Id. at 860 (internal 

quotation marks and citation omitted) (emphases in 

original). And “the parties were not saved by the fact 

that they had made other technical, policy, or legal 

arguments before the agency. Indeed, if such were 

the rule, a party could never waive a legal claim as 
98a 

long as the party in fact appeared and argued something before the agency.” Nat. Res. Def. Council, 25 

F.3d at 1074 (internal quotation marks omitted) (emphasis added). 

Petitioners rely on two comments in an attempt to 

show a challenge to EPA’s statutory authority to the 

approach it adopted was presented during the Transport Rule administrative proceedings. See Industry 

& Labor Petrs.’ Reply Br. at 6, n.1. Neither is sufficient. Tennessee commented that “[a] lower cost 

threshold should be considered for any State that can 

reduce their contribution below 1% significance using 

cost thresholds below the maximum values ($2,000/ton 

for SO2 and $500/ton for NOx), if applicable.” Tennessee Comments on 2010 Proposed Transport Rule, 

Attachment 1, at 1 (Aug. 27, 2010). But this comment 

does not suggest that EPA is statutorily barred from 

following its approach. See Cement Kiln, 255 F.3d at 

860-61; Natural Res. Def. Council, 25 F.3d at 1073-74. 

Furthermore, Tennessee’s comment does not even 

suggest a policy preference that the one percent of 

NAAQS threshold level be a floor. Rather, Tennessee’s comment specifically mentions States reducing 

contributions below the threshold without suggesting 

that result would violate the CAA. Thus, the only 

thing Tennessee commented on with “reasonable specificity” was that EPA consider not using a uniform cost 

threshold for all States. 

Wisconsin’s comment also does not demonstrate the 

statutory authority challenge now advanced by petitioners in this court was preserved. First, Wisconsin 
99a 

stated that it “support[ed] the 1% contribution threshold . . . for identifying states that are significant 

contributors to downwind state’s air quality nonattainment and maintenance problems.” Wisconsin 

Comments, at 1 (Oct. 1, 2010). Wisconsin further 

stated: 

State final emission budgets (2014) need to be set 

with a stronger linkage to residual air quality impact from the [electricity generating unit (“EGU”)] 

on downwind sites compared to the current proposed linkage of limiting emission reductions by 

an arbitrarily low cost threshold. EPA has set 

which states have contribution reduction responsibility based on air quality impact, but appears to 

default to a modeling of the most efficient regional 

EGU control program based exclusively on costeffectiveness. 

In defining significant contribution, EPA should 

place a greater emphasis on air quality impact (contribution) remedy than the assessed state-by-state 

marginal control cost-effectiveness of proposed 

remedy in the setting of the 2014 state budgets for 

EGU reductions. Issues are both legal and a concern for some level of EGU system control installation equity between nearby states and between facilities with differing coal types which are dispatched within the same electricity markets. 

Id. at 7 (emphases added). Wisconsin nowhere suggested that EPA is statutorily required to use the one 

percent inclusion threshold as a floor for emission reductions; it simply urged that EPA “should” put a 
100a 

“greater emphasis” on air quality impacts at the individual EGU level. Indeed, Wisconsin commented 

that the cost threshold was too low, the exact opposite 

of what petitioners now claim. See Industry & Labor 

Petrs.’ Br. at 31-34. The closest Wisconsin comes to 

raising a statutory authority argument is its statement 

that the “issues are [] legal;” but that vague comment 

is in a sentence indicating the State’s preference that 

EPA regulate at the EGU, rather than the State level, 

in order to achieve “EGU system control installation 

equity.” Wisconsin Comments, at 7. 

Consequently, neither Tennessee’s nor Wisconsin’s 

comments argued “with reasonable specificity” that 

EPA was statutorily required to treat the threshold 

inclusion level in its two-step approach to defining 

“significant contribution” as a floor in calculating 

emission reduction requirements.16 Nor do they even 

present a policy preference for such an approach 

and, indeed, can be interpreted as supporting subthreshold reductions. Even if the comments implied 

a challenge, which they do not, an implied challenge is 

insufficient because 

that is not the way the regulatory system is structured. Such a standard would require agencies to 

 

16 The court adds a cite, see Op. at 34 n.18, to a comment from 

Delaware: “It is Delaware’s opinion that an upwind state’s emissions contribution is significant . . . based on the emissions 

and their effect on air quality, and is independent of cost considerations.” This is not a statutory authority objection to the two-step 

approach, and in any event EPA’s rejection of Delaware’s “opinion” 

was sustained in Michigan, 213 F.3d at 679. 
101a 

review perpetually all of the ‘implied’ challenges in 

any challenge they receive. We will not impose 

such a burden on the agency. All that [petitioner] 

had to do was draft one sentence that specifically 

challenged EPA’s decision. It did not, and that 

specific challenge is thus not preserved. 

. . . 

[T]he only way [the comments] could be read as 

placing the EPA on notice is to place the burden on 

EPA to cull through all the letters it receives and 

answer all of the possible implied arguments. 

Such a rule would defeat the statutory requirement 

for “reasonable specificity.” 

Mossville, 370 F.3d at 1239-40. None of the comments during the Transport Rule administrative proceedings approaches the level of “reasonable specificity” required for this court to have jurisdiction over 

petitioners’ new statutory authority argument. 

B. 

Acknowledging this, the court nonetheless concludes that it has jurisdiction to address this new issue 

because “EPA was on notice that its disregard of the 

significance floor was a potential legal infirmity in its 

approach.” Op. at 34 n.18. None of the three reasons the court offers for its conclusion that there need 

not be objections raised “with reasonable specificity 

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

§ 7607(d)(7)(B), is convincing. 

First, the court states that EPA was required “to 

craft a new rule consistent with [North Carolina],” Op. 
102a 

at 32 n.18 (internal quotation marks and citation omitted), and thus should have been alerted to petitioners’ 

new objection, raised for the first time now in this 

court. But in North Carolina the court specifically 

permitted the exact same approach in CAIR. Discussing this approach, the court explained: 

[S]tate SO2 budgets are unrelated to the criterion 

(the “air quality factor”) by which EPA included 

states in CAIR’s SO2 program. Significant contributors, for purposes of inclusion only, are those 

states EPA projects will contribute at least 0.2 μ/m3

of PM2.5 to a nonattainment area in another state. 

While we would have expected EPA to require 

states to eliminate contributions above this threshold, EPA claims to have used [as its] measure 

. . . emissions that sources within a state can 

eliminate by applying “highly cost-effective controls.” EPA used a similar approach in deciding 

which states to include in the NOx SIP Call, which 

Michigan did not disturb since “no one quarrel[ed] 

either with its use of multiple measures, or the way 

it drew the line at” the inclusion stage. 213 F.3d at 

675. Likewise here, the SO2 Petitioners do not 

quarrel with EPA drawing the line at 0.2 μ/m3 or its 

different measure of significance for determining 

states’ SO2 budgets. Again, we do not disturb this 

approach. 

North Carolina, 531 F.3d at 916-17 (emphases added). 

There is no basis to conclude that EPA acted inconsistently with North Carolina by replicating the approach the court left undisturbed. It is true that in 
103a 

North Carolina the court rejected EPA’s use of fuel 

factors in allocating allowances for the CAIR trading

program because doing so redistributed reduction

responsibilities to the benefit of States with more 

coal-fired electricity generation, see id. at 920-21. 

The court stated that EPA 

may not require some states to exceed the mark. 

Because the fuel-adjustment factors shifted the 

burden of emission reductions solely in pursuit of 

equity among upwind states—an improper reason

—the resulting state budgets were arbitrary and 

capricious. 

Id. at 921 (emphases added). But a holding that EPA 

had acted arbitrarily in designing its trading program 

cannot fairly be deemed to alert EPA that it might 

exceed its statutory authority in using an approach to 

measuring “significant contribution” that the court 

specifically declined to disturb. Cf. Natural Res. Def. 

Council v. EPA, 571 F.3d 1245, 1259 (D.C. Cir. 2009) 

(“EPA cannot be expected to take [an] argument, 

raised in support of one specific objection, and apply it 

sua sponte to another provision.”). EPA was entitled, 

in the absence of objection in the Transport Rule administrative proceedings, to rely in promulgating the 

Transport Rule upon the court’s decision not to disturb 

its approach. And the fact that after North Carolina 

no comment in the Transport Rule administrative proceedings objected that EPA was exceeding its statutory authority in adopting its approach underscores 

the fact that EPA was not acting inconsistently with 
104a 

North Carolina in light of a few sentences about fuel 

factors plucked out of context. 

Second, reaching farther afield, the court points to a 

comment submitted during the CAIR rulemaking that 

it deems sufficient, when combined with the holding in 

North Carolina, to “show that EPA ‘had notice of this 

issue and could, or should have, taken it into account.’” 

Op. at 33 n.18 (quoting Natural Res. Def. Council v. 

EPA, 824 F.2d at 1146, 1151 (D.C. Cir. 1987)).17 The 

CAIR comment stated “that the threshold contribution 

level selected by EPA should be considered a floor, so 

that upwind States should be obliged to reduce their 

emissions only to the level at which their contribution 

to downwind nonattainment does not exceed that 

threshold level.” CAIR, 70 Fed. Reg. 25,162, 

25,176-77 (May 12, 2005). This comment, which was 

not cited in any petitioners’ brief to this court but first 

mentioned by industry petitioners during rebuttal oral 

argument, cannot carry the weight the court assigns to 

it particularly in light of the holding in North Carolina. The court generally does not entertain arguments raised for the first time in a reply brief, see 

Altman v. SEC, 666 F.3d 1322, 1329 (D.C. Cir. 2011); 

North Carolina, 531 F.3d at 924 n.6, let alone for the 

first time at oral argument, see Roth v. U.S. Dep’t of 

Justice, 642 F.3d 1161, 1181 (D.C. Cir. 2011); Ark Las 

Vegas Rest. Corp. v. NLRB, 334 F.3d 99, 108 n.4 (D.C. 

 

17 Remarkably, the court quotes a case in which the common law 

exhaustion doctrine, rather than CAA section 307(d)(7)(B), applied: 

the rule at issue was promulgated prior to enactment of section 

307(d)(7)(B). See Natural Res. Def. Council, 824 F.2d at 1150-51. 
105a 

Cir. 2003), much less during rebuttal oral argument, 

see Coalition of Battery Recyclers Ass’n, 604 F.3d at 

623; Old Dominion Dairy Products, Inc. v. Sec. of 

Defense, 631 F.2d 953, 961 n.17 (D.C. Cir. 1980). The 

reason is simple: “in order to prevent ‘sandbagging 

of appellees and respondents,’ we do not consider 

arguments that were raised neither in the opening 

brief nor by respondents.” S. Coast Air Quality 

Mgmt. Dist. v. EPA, 554 F.3d 1076, 1081 n.* (D.C. Cir. 

2009) (quoting Sitka Sound Seafoods, Inc. v. NLRB, 

206 F.3d 1175, 1181 (D.C. Cir. 2000)). Here that 

reason has particular resonance because EPA was 

relying on the court’s decision in North Carolina, 531 

F.3d at 916-17, to “not disturb” its two-step approach 

to defining “significant contribution,” and no one referenced the CAIR comment during the Transport Rule 

administrative proceedings. 

Even setting aside the starkly novel forfeiture standard the court has chosen to apply to industry petitioners, the cited CAIR comment is insufficient to 

establish that the issue of EPA’s statutory authority 

was properly preserved for the court to have jurisdiction to address it. The court relies on a footnote in 

American Petroleum Institute v. EPA, 52 F.3d 1113, 

1120 n.1 (D.C. Cir. 1995), for the proposition that it is 

“highly relevant” if an agency previously “reject[ed] [] 

the same argument in a prior rulemaking,” Op. at 33 

n.18. Although the CAIR comment communicates a 

policy preference, this court has distinguished between 

comments presenting policy preferences and those 

presenting statutory authority objections, see, e.g., 

Cement Kiln, 255 F.3d at 860-61, and technical and 
106a 

policy arguments are insufficient to preserve objections to EPA’s statutory authority. See Nat. Res. 

Def. Council, 25 F.3d at 1074. The CAIR comment 

that EPA rejected in the other rulemaking is therefore 

not “the same argument” that petitioners belatedly 

attempt to raise now. Furthermore, in American 

Petroleum, the court concluded that the jurisdictional 

question was “close” inasmuch as EPA had explicitly 

incorporated the docket from the previous rulemaking 

in the second rulemaking, and the previous rulemaking 

had been aborted, such that there was no intervening 

opportunity for judicial review. See Am. Petroleum, 

52 F.3d at 1120 n.1. Neither of those factors that 

made American Petroleum a close case is present 

here. The Transport Rule was promulgated to replace CAIR, but the CAIR docket was never incorporated into the Transport Rule docket—perhaps because of the court’s instruction in North Carolina that 

EPA “redo its analysis from the ground up.” 531 

F.3d at 929. EPA would have had no reason to 

reexamine the voluminous CAIR docket in search for 

objections that were not raised before the court in 

North Carolina. Also, unlike the aborted rule whose 

docket EPA incorporated in American Petroleum, in 

CAIR there was an intervening opportunity for judicial review. Yet no one sought judicial review of 

CAIR on the basis of the CAIR comment now relied on 

by the court. This precise circumstance was relied 

upon by the court in North Carolina in declining to 

disturb EPA’s approach. See id. at 917; see Med. 
107a 

Waste, 645 F.3d at 427. 18 Once the court in North 

Carolina declined to disturb EPA’s approach, because 

no objection to EPA’s authority to adopt its approach 

had been raised to the court, petitioners were required 

to inform EPA during the Transport Rule administrative proceedings that they objected to EPA’s statutory 

authority to pursue that approach. See 42 U.S.C. 

§ 7607(d)(7)(B). If American Petroleum presented a 

“close” jurisdictional question, then the jurisdictional 

question here is easily decided. 

Third, the court concludes that “EPA’s statements 

at the proposal stage indicated EPA was not open to 

reconsidering CAIR’s earlier rejection of petitioners’ 

argument,” and that because EPA had dismissed “the 

two air quality-only approaches it considered,” the 

comments of Tennessee, Wisconsin, and Delaware 

 

18 The fact that Kansas, Nebraska, and Oklahoma were not regulated under CAIR, and thus would have a newly ripened claim, see 

Coalition for Responsible Regulation, 684 F.3d at 129-32, does not 

mean that those States are relieved from making that claim during

the Transport Rule administrative proceedings, as CAA section

307(d)(7)(B) requires. This is all the more true here because the

petitioners who were subject to CAIR abandoned the CAIR comment now relied on by the court when they sought judicial review. 

To suggest that EPA should have foreseen that Kansas, Nebraska, 

and Oklahoma, despite not making an objection to the proposed 

Transport Rule on this ground, secretly did object on the basis of a 

comment made during a rulemaking to which they were not parties, 

and was abandoned on judicial review by those who made it, distorts the ripeness and CAA exhaustion doctrines beyond recognition and “give[s] parties to Clean Air Act proceedings a powerful 

weapon for delaying and sandbagging Agency action.” Lead 

Indus. Ass’n Inc. v. EPA, 647 F.2d 1130, 1173 (D.C. Cir. 1980).
108a 

were “‘reasonable’ under the circumstances,” Op. at 

33, n.18. But there was no such “earlier rejection of 

petitioners’ argument” in CAIR because the CAIR 

comment did not suggest that EPA exceeded its statutory authority by following its two-step approach to 

defining “significant contribution.” See Cement Kiln, 

255 F.3d at 860-61. Furthermore, industry petitioners acknowledge in their Reply Brief that they “are 

not advocating an ‘air quality-only’ approach,” but 

instead a cost-based approach with a floor for emission 

reduction obligations. Industry & Labor Petrs’ Reply Br. at 10. So, EPA’s rejection of two alternative 

air quality only approaches has no bearing on whether 

EPA would have been willing to entertain an objection 

during the Transport Rule administrative proceedings 

that the “good neighbor” provision required it to use 

the threshold level for a State’s inclusion in the Transport Rule as a floor for emission reduction obligations. 

Nothing in this court’s precedent on CAA section 

307(d)(7)(B), 42 U.S.C. § 7607(d)(7)(B), supports the 

court’s tortured efforts to avoid the jurisdictional 

limits in the CAA and seize jurisdiction where petitioners clearly fall far short of preserving their claim 

by objecting to EPA’s statutory authority during the 

Transport Rule administrative proceedings with “reasonable specificity.” The court does not acknowledge 

this court’s precedent setting a strict standard for 

preservation of statutory authority objections, which 

demonstrates the inconsistency of the court’s exercise 

of jurisdiction today. See, e.g., Natural Res. Def. 

Council, 559 F.3d at 563-64; Am. Farm Bureau Fed’n 

v. EPA, 559 F.3d 512, 538 (D.C. Cir. 2009); Natural 
109a 

Res. Def. Council v. EPA, 571 F.3d 1245, 1259 (D.C. 

Cir. 2009); Mossville, 370 F.3d at 1238; Cement Kiln, 

255 F.3d at 860-61; George E. Warren Corp. v. EPA, 

159 F.3d 616, 629 (D.C. Cir. 1998); Motor & Equip. 

Mfrs. Ass’n, 142 F.3d at 462; Natural Res. Def. Council, 25 F.3d at 1074; Ohio v. EPA, 997 F.2d at 1528-29; 

Natural Res. Def. Council v. EPA, 937 F.2d 641, 

647-48 (D.C. Cir. 1991); Linemaster Switch Corp., 938 

F.2d at 1308; Thomas, 805 F.2d at 425-27; Lead Indus. 

Ass’n, 647 F.2d at 1173. 

Rather than confront the force of this precedent, 

the court relies on phrases from a few opinions suggesting a more flexible standard, see Op. at 31-34 

n.18, but tellingly omits any discussion of the analyses 

or outcomes in those cases. This is because even 

where the court has mentioned flexibility, the comments at issue were either significantly more specific 

than the comments of Tennessee and Wisconsin, and 

were thus sufficient, or were more specific but nonetheless deemed Wanting. For example, in Natural 

Resources Defense Council v. EPA, 571 F.3d 1245, 

1259 (D.C. Cir. 2009), the court suggested there is 

“leeway” but concluded, in words that resonate here, 

that “EPA cannot be expected to take [an] argument, 

raised in support of one specific objection, and apply it 

sua sponte to another provision.” Id. at 1259-60. 

The irony in the court’s reliance on this case is that it 

expects EPA to read North Carolina in precisely the 

opposite manner—it concludes EPA should have taken 

a holding about “exceeding the mark” in the CAIR 

trading allowance program and sua sponte applied it to 

the methodology for calculating “significant contribu-
110a 

tion,” even though the court explicitly declined to 

disturb that methodology. See supra Pt. II.B. In 

Appalachian Power, 135 F.3d 791, 817 (D.C. Cir. 

1998), the court concluded the “argument . . . 

during the comment period [was]—in substance, if not 

in form, the same objection” raised before the court, 

whereas here the comments of Tennessee and Wisconsin did not raise the statutory authority objection now 

urged upon the court in either form or substance. 

The court also relies on Natural Resources Defense 

Council v. EPA, 824 F.2d 1146, 1150-51 (D.C. Cir. 

1987) (en banc), which involved common law exhaustion, not CAA section 307(d)(7)(B), and in that case the 

issue was “explicitly raised . . . in comments” 

before the EPA, id. at 1151. And although observing 

in South Coast Air Quality Management District v. 

EPA, 472 F.3d 882, 891-92 (D.C. Cir. 2009), that petitioners have “some leeway,” the court concluded that 

leeway did not permit the petitioner to rely upon a 

general procedural preference stated in a cover letter 

to its comments to alert EPA to the details of the objections to a final rule. 

None of the court’s proffered reasons for ignoring 

section 307(d)(7)(B)’s jurisdictional limitations has 

merit on its own, nor in combination. “[Z]ero plus 

zero [plus zero] equals zero.” U.S. v. Clipper, 313 

F.3d 605, 609 (D.C. Cir. 2002). 

III. 

The court’s remaining reasons for vacating the 

Transport Rule are also either beyond its jurisdiction 

or unpersuasive. 
111a 

First, the court concludes that EPA violated the 

CAA by not calculating the required emission reductions “on a proportional basis that took into account 

contributions of other upwind States to the downwind 

States’ nonattainment problems.” Op. at 38. This is 

so, the court says, because in Michigan the court only 

permitted cost to be considered as a way “to allow 

some upwind States to do less than their full fair 

share,” not more. Id. Petitioners have not argued 

that EPA violated the CAA by not calculating emission 

reductions on a proportional basis, as the court suggests. See Anna Jaques Hosp. v. Sebelius, 583 F.3d 

1, 7 (D.C. Cir. 2009). The statement in industry petitioners’ brief that the court quotes, see Op. at 37, instead maintains that EPA was arbitrary and capricious in the way it grouped States for 2014 sulfur 

dioxide (SO2) budgets because, they claimed, EPA did 

so without “consider[ing] relative contributions of the 

various States,” Industry & Labor Petrs’ Br. at 33. 

This challenge is limited to the asserted arbitrariness 

of how certain States were categorized for one pollutant’s budget for one year. The court lacks jurisdiction to consider sua sponte an objection to EPA’s statutory authority not raised by petitioners within the 

sixty day period required under CAA section 307(b)(1), 

42 U.S.C. § 7607(b)(1); see Med. Waste, 645 F.3d at 

427. As this court has previously said, “[t]o rely on 

relief plaintiffs never requested on a claim they never 

made would be to conclude that zero plus zero equals 

more than zero.” NAACP, Jefferson Cnty. Branch v. 

U.S. Sugar Corp., 84 F.3d 1432, 1438 (D.C. Cir. 1996). 
112a 

Second, even if petitioners had raised a “proportionality” statutory authority objection, this objection 

and the court’s conclusion are premised on the speculative possibility that the Transport Rule might require States to reduce emissions to a level below the 

one percent of NAAQS inclusion threshold of EPA’s 

two-step approach to defining “signification contribution,” and thus more than their statutory fair share

—an argument over which the court also lacks jurisdiction. See supra Part II. Further, the court’s 

conclusion is at odds with North Carolina where the 

court concluded that EPA’s measure of significant 

contribution need not “directly correlate with each 

State’s individualized air quality impact on downwind 

nonattainment relative to other upwind states.” 531 

F.3d at 908 (emphasis added); see LaShawn A., 87 

F.3d at 1395. It also ignores that in Michigan the 

court expressly permitted the use of uniform cost 

thresholds to measure “significance,” and likewise 

permitted the “ineluctabl[e]” result of small and large 

contributors being required to make the same amount 

of reductions. 213 F.3d at 679. Without jurisdiction 

to reach an argument on whether the Transport Rule 

requires States to reduce more than their statutory 

fair share, Michigan requires the conclusion that 

EPA’s choice of cost thresholds in the Transport Rule 

was permissible. 

Next, the court concludes that EPA failed to consider the effect of in-State emissions of downwind 

States on their own nonattainment and interference 

with maintenance problems, see Op. at 38. Petitioners conceded at oral argument that this “in-State con-
113a 

tribution” contention was “not actually an independent 

statutory authority argument,” Oral Arg. Tr. at 32, but 

merely a repackaged version of the objection to the 

possibility of reductions below the one percent of 

NAAQS inclusion threshold, an argument over which 

the court lacks jurisdiction, see supra Part II. Even 

if the court had jurisdiction to address it, the court’s 

conclusion is unsupported by the record. EPA examined the various cost threshold for each State, and 

in so doing considered 

how much air quality improvement in downwind 

states result[ed] from upwind state emission reductions at different levels; whether, considering upwind emission reductions and assumed local (instate) reductions, the downwind air quality problems would be resolved; and the components of the 

remaining downwind air quality problem (e.g., 

whether it is a predominantly local or in-state 

problem, or whether it still contains a large upwind 

component). 

Transport Rule, 76 Fed. Reg. at 48,256 (emphases 

added); see id. at 48,259 (concluding remaining nonattainment problem in Liberty-Clairton was the result of 

local emissions). EPA thus in fact examined the 

contribution of downwind States to their own nonattainment problems.

Finally, the court concludes that EPA “did not try 

to take steps to avoid” collective over-control, Op. at 

39. This conclusion too is unsupported by the record. 

The Transport Rule was not projected to achieve attainment of all downwind nonattainment and mainte-
114a 

nance problems attributed to upwind States. See id. 

at 48,210, 48,232, 48,247-48; Resp.’s Br. at 38 n.24. 

Because EPA’s analysis demonstrated instances of 

“remaining downwind air quality problems,” Transport 

Rule, 76 Fed. Reg. at 48,256, there is no support for 

the court’s conclusion that the Transport Rule resulted 

in collective overcontrol. 

IV. 

The Transport Rule, as EPA observes, represents 

“the culmination of decades of Congressional, administrative, and judicial efforts to fashion a workable, 

comprehensive regulatory approach to interstate air 

pollution issues that have huge public health implications.” Resp.’s Br. at 12. The legislative history to 

amendments of the CAA documents Congress’s frustration with the upwind States’ historic failure to take 

effective action on their own to curtail their contributions to problems of pollution in downwind States, 

leading to amendments to strengthen EPA’s hand. 

The court ignores Congress’s limitations on the court’s 

jurisdiction and decades of precedent strictly enforcing those limitations and proceeds to do violence to the 

plain text of the CAA and EPA’s permissible interpretations of the CAA, all while claiming to be “apply[ing] and enforc[ing] the statute as it’s now written.” Op. at 8. The result is the endorsement of a 

“maximum delay” strategy for regulated entities, 

rewarding States and industry for cloaking their objections throughout years of administrative rulemaking procedures and blindsiding the agency with both a 

collateral attack on its interpretation of section 110(a) 
115a 

and an objection raised for the first time in this court, 

despite the court’s previous decisions declining to 

disturb the approach EPA adopted in the Transport 

Rule. 

To reach the result—vacating the Transport Rule—

the court does several remarkable things. It seizes 

jurisdiction over the issue of States’ independent 

“good neighbor” obligation by allowing States to pursue a collateral attack on Final SIP Rules from which 

they either failed timely to file petitions for review or 

their petitions challenging those rules have not been 

consolidated with the petitions challenging the Transport Rule that are before this three-judge panel. It 

asserts jurisdiction over industry’s challenge to EPA’s 

two-step approach to defining “significant contribution” by excusing industry from its failure to preserve 

the issue by first presenting it to EPA and then resting jurisdiction on a comment in another rulemaking 

that was first cited by industry in rebuttal oral argument and cannot bear the weight the court assigns to it 

because it did not challenge EPA’s statutory authority 

to adopt its two-step approach. All this is contrary to 

Congress’s limitations on the court’s jurisdiction and 

this court’s precedent enforcing those limitations. 

The rest of the court’s analysis recalibrates Congress’s 

statutory scheme and vision of cooperative federalism 

in the CAA. Along the way, the court abandons any 

consideration that an agency is entitled to repose, 

absent objection during its administrative proceedings, 

when a court, here on two occasion, expressly leaves 

undisturbed its two-step approach to enforcing a statute it administers and no objection is raised during the 
116a 

Transport Rule administrative proceedings. Then, in 

dictum, the court offers suggestions as to how EPA 

might fix the problems the court has created upon 

rewriting the CAA and trampling on this court’s precedent in North Carolina and Michigan. 

None of this is to suggest that EPA should be excused from the statutory limits on its authority or any 

material procedural missteps under the CAA or the 

APA. But neither can the court ignore jurisdictional 

limits or substantive provisions that Congress wrote in 

clear terms and EPA’s permissible interpretations of 

the CAA in addressing statutory silence or ambiguity. 

Rather it underscores why, as a programmatic and 

public health matter, Congress concluded there are 

important reasons for jurisdictional limits and administrative exhaustion that this court heretofore has 

steadfastly acknowledged in recognizing both the 

limits of its jurisdiction and of its role in enforcing the 

CAA as Congress wrote it. 

Accordingly, I respectfully dissent.