1 of 11 DOCUMENTS

NATURAL RESOURCES DEFENSE COUNCIL, PETITIONER v.

ENVIRONMENTAL PROTECTION AGENCY AND GINA MCCARTHY, IN HER

OFFICIAL CAPACITY AS ADMINISTRATOR, U.S. ENVIRONMENTAL

PROTECTION AGENCY, RESPONDENTS; CEMEX, INC., ET AL.,

INTERVENORS

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

UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA

CIRCUIT

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

October 24, 2013, Argued

April 18, 2014, Decided

PRIOR HISTORY: [*1]

On Petitions for Review of Final Actions of the United

States Environmental Protection Agency.

Portland Cement Ass'n v. EPA, 665 F.3d 177, 398 U.S.

App. D.C. 397, 2011 U.S. App. LEXIS 24577 (2011)

COUNSEL: James S. Pew and Seth L. Johnson argued

the causes for petitioners. With them on the briefs were

John Walke, Meleah Geertsma, and Avinash Kar.

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

argued the cause for respondents. With him on the brief

were Robert G. Dreher, Acting Assistant Attorney

General, and Steven E. Silverman, Attorney, U.S.

Environmental Protection Agency. Daniel R. Dertke and

T. Monique Peoples, Attorneys, U.S. Department of

Justice, entered appearances.

Carter G. Phillips argued the cause for intervenors. With

him on the briefs were Roger R. Martella Jr., Timothy K.

Webster, Ryan C. Morris, William M. Bumpers, Debra J.

Jezouit, Michael B. Schon, Deborah E. Jennings, Chet M.

Thompson, Beth S. Ginsberg, Jason T. Morgan, Ashley

C. Parrish, Cynthia A.M. Stroman, and Richard G. Stoll.

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

amici curiae SSM Coalition, et al. in support of

respondents.

JUDGES: Before: KAVANAUGH and SRINIVASAN,

Circuit Judges, and EDWARDS, Senior Circuit Judge.

Opinion for the Court filed by Circuit Judge

KAVANAUGH.

OPINION BY: KAVANAUGH

OPINION

KAVANAUGH, Circuit Judge: [*2] Portland cement

is the key ingredient in concrete. The basic process for

making Portland cement is much the same today as it was

when the material was first developed nearly 200 years

ago. Cement manufacturers pulverize limestone and

minerals, and then heat those raw materials to several

thousand degrees. The resulting substance, called clinker,

is then cooled and ground into a fine gray powder. This

powder -- called Portland cement -- is later combined

with sand, rocks, and water to make concrete.

The grinding and heating involved in cement

manufacturing has an unfortunate side effect: It releases

Page 1
into the air a number of hazardous air pollutants, most

notably mercury, hydrochloric acid, hydrocarbons, and

particulate matter. This case concerns EPA's efforts to

develop rules under the Clean Air Act to limit emissions

of those pollutants from cement plants.

In a previous decision, we considered EPA's first

attempt to create emission standards for the cement

industry, and we found the agency's action arbitrary and

capricious. See Portland Cement Association v. EPA, 665

F.3d 177, 398 U.S. App. D.C. 397 (D.C. Cir. 2011).

Following our ruling, EPA went back to the drawing

board and developed the emission standards [*3] at issue

here, the 2013 Rule.

Several environmental organizations, including the

Natural Resources Defense Council and the Sierra Club,

have petitioned for review of the 2013 Rule, arguing

primarily that certain aspects of the Rule contravene the

Clean Air Act. They also challenge EPA's decision to

create an affirmative defense for private civil suits in

which plaintiffs sue sources of pollution and seek

penalties for violations of emission standards. EPA's

affirmative defense would be available to defendants in

cases where an "unavoidable" malfunction had resulted in

impermissible levels of emissions.

We conclude that the emissions-related provisions of

EPA's 2013 Rule are permissible but that the affirmative

defense for private civil suits exceeds EPA's statutory

authority. We therefore grant the petitions in part and

vacate the portion of the Rule pertaining to the

affirmative defense. We deny the petitions in all other

respects.

I

Section 112 of the Clean Air Act, 42 U.S.C. § 7412,

requires EPA to establish technology-based emission

standards for major sources of certain hazardous air

pollutants. Emission standards must reflect "the

maximum degree of reduction in emissions" that EPA

[*4] determines is "achievable," taking into consideration

"the cost of achieving such emission reduction, and any

non-air quality health and environmental impacts and

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

resulting standards are commonly known as the

"maximum achievable control technology," or "MACT"

standards. See National Lime Association v. EPA, 233

F.3d 625, 630, 344 U.S. App. D.C. 97 (D.C. Cir. 2000).

EPA uses a two-step process for establishing MACT

standards. The agency begins by setting a minimum

stringency level, or "floor," based on the results achieved

by the best-performing similar sources. See 42 U.S.C. §

7412(d)(3). Once EPA sets the statutory floor, it then

determines, considering cost and the other factors listed

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

is "achievable," and if so then adopts that standard. EPA

calls these stricter requirements "beyond-the-floor"

standards. Sierra Club v. EPA, 479 F.3d 875, 877, 375

U.S. App. D.C. 228 (D.C. Cir. 2007).

When EPA sets an emission standard, it also

determines a schedule for compliance with that standard.

For existing sources, EPA must "provide for compliance

as expeditiously as practicable, but in no event later than

3 years after the effective [*5] date" of the emission

standard. 42 U.S.C. § 7412(i)(3)(A).

In 2010, pursuant to its Section 112 authority, EPA

promulgated National Emission Standards for Hazardous

Air Pollutants from the Portland Cement Manufacturing

Industry and Standards of Performance for Portland

Cement Plants, 75 Fed. Reg. 54,970 (Sept. 9, 2010). That

2010 Rule set or revised emissions limits for mercury,

hydrogen chloride, total hydrocarbons (a surrogate for

organic hazardous air pollutants such as benzene and

formaldehyde), and particulate matter (a surrogate for

certain non-mercury metals). Cement plants would be

required to comply with the new standards beginning in

September 2013. 75 Fed. Reg. at 54,993.

In addition to establishing emission standards, the

2010 Rule created an affirmative defense in private civil

suits when violations of the standards occurred because

of "unavoidable" malfunctions. See id. at 54,993, 55,053.

The affirmative defense replaced a previous EPA policy

creating an exemption from emissions limitations during

malfunction events. In a prior decision, this Court struck

down that exemption because it was inconsistent with the

requirement that emission standards apply continuously.

See [*6] Sierra Club v. EPA, 551 F.3d 1019, 1027-28,

384 U.S. App. D.C. 96 (D.C. Cir. 2008).

Industry groups petitioned this Court for review and

we found the 2010 Rule arbitrary and capricious and

remanded to EPA. We ruled specifically that, in

calculating the floor for MACT purposes, EPA had

arbitrarily included in its dataset information from

cement kilns properly classified as commercial

incinerators, which are regulated under a separate

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78 ERC (BNA) 1369
provision of the Act. See Portland Cement Association v.

EPA, 665 F.3d 177, 186-89, 398 U.S. App. D.C. 397

(D.C. Cir. 2011).

In our 2011 decision, however, we did not vacate the

emission standards set forth in the 2010 Rule or stay its

implementation pending EPA's reconsideration process,

stating that "it is unlikely that significant changes will be

made to the standards upon reconsideration." Id. at 189.

On remand, however, EPA made several relevant

changes to the Portland cement emission standards. See

National Emission Standards for Hazardous Air

Pollutants for the Portland Cement Manufacturing

Industry and Standards of Performance for Portland

Cement Plants, 78 Fed. Reg. 10,006 (Feb. 12, 2013) (the

2013 Rule).

First, consistent with our Portland Cement opinion,

EPA revised its dataset to exclude commercial [*7]

incinerators. When recalculated using the revised data,

the maximum emissions level for particulate matter -- the

floor -- was ultimately revised from 0.04 lb/ton to 0.07

lb/ton of clinker for existing kilns. See id. at 10,017-19.

And EPA declined to re-adopt the more stringent, 0.04

lb/ton limit of the 2010 Rule as a beyond-the-floor

standard. The agency reasoned that achieving that

additional increment of particulate reduction would not

be cost effective on a cost-per-ton basis. See id. at

10,020-21.

Second, citing additional compliance strategies

afforded cement manufacturers by the revised particulate

standard, EPA established a new compliance date of

September 2015 for that standard. See id. at 10,014. EPA

further concluded that although the emissions limits for

mercury, hydrochloric acid, and hydrocarbons remained

the same as in the 2010 Rule, the new September 2015

compliance date would also apply to those emission

standards. According to EPA, coordinating the

compliance date for particulate matter, mercury,

hydrochloric acid, and hydrocarbons was essential

because the latter standards "all typically involve some

element of [particulate matter] generation and capture

and so the [*8] controls must be integrated with

[particulate matter] control strategies." Id. at 10,022.

The 2013 Rule also retained the affirmative defense

for private civil suits when the defendant violated

emission standards due to an unavoidable malfunction.

EPA explained that in its view, the affirmative defense

was necessary to resolve a "tension" between the Clean

Air Act's requirement that emission standards apply at all

times and the fact that emission limits may sometimes be

exceeded for reasons beyond the control of the source.

See id. at 10,014.

NRDC, the Sierra Club, and other environmental

organizations have petitioned for review of various

aspects of the 2013 Rule. In Part II of this opinion, we

address petitioners' arguments regarding the emission

standards for particulate matter. In Part III, we address

petitioners' challenge to the compliance schedule

implementing some of the 2013 Rule's emission

standards. In Part IV, we consider whether EPA's

decision to create the affirmative defense to civil

penalties for certain malfunction-related events exceeds

the agency's statutory authority.

II

We first consider petitioners' challenges to the

emission standards for particulate matter.

A

The [*9] 2013 Rule ultimately set the emissions

level for particulate matter at 0.07 lb/ton of clinker for

existing kilns. The 2010 Rule had set the level at 0.04

lb/ton of clinker. Petitioners argue that the 2013 Rule

weakens the particulate matter standard in violation of

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

7412(d)(7). That provision, titled "Other requirements

preserved," states:

No emission standard or other

requirement promulgated under this

section shall be interpreted, construed or

applied to diminish or replace the

requirements of a more stringent emission

limitation or other applicable requirement

established pursuant to section 7411 of

this title, part C or D of this subchapter, or

other authority of this chapter or a

standard issued under State authority.

(emphases added). Petitioners maintain that EPA violated

Section 112(d)(7) because the 2013 Rule's particulate

matter standards "diminish or replace" the more stringent

standards in the 2010 Rule.

EPA responds that such a reduction does not violate

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78 ERC (BNA) 1369
Section 112(d)(7). In EPA's view, the most natural

reading of Section 112(d)(7) is that "other authority"

refers to authority other than Section 112 and other than

the parts [*10] of the Clean Air Act specifically

enumerated in Section 112(d)(7). Stated another way,

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

clause that makes clear that Section 112 does not

supersede the requirements of other, more restrictive

provisions of the Act.

By contrast, petitioners say that "other authority" of

the Act includes Section 112 itself, as well as other

provisions in the Act. Petitioners read the statute as an

anti-backsliding restriction on EPA's ability to voluntarily

reduce the stringency of any emission standard issued

under Section 112.

As EPA points out, however, when Congress has

sought to include that sort of anti-backsliding provision

in the Clean Air Act, it has done so directly and

explicitly. Cf., e.g., 42 U.S.C. § 7410(l) ("The

Administrator shall not approve a revision of a [State

Implementation Plan] if the revision would interfere with

any applicable requirement concerning attainment and

reasonable further progress"); id. § 7502(e) (specifying

pollution control requirements if "the Administrator

relaxes a national primary ambient air quality standard").

Section 112(d)(7) contains no such language.

Furthermore, EPA argues that petitioners' interpretation

[*11] of Section 112(d)(7) would mean that any change

to a rule issued under Section 112 -- even a necessary

change made just for technical reasons or because there

was a calculation error -- would be impermissible if the

change made the standard less stringent. EPA says that it

would be extraordinary if the statute precluded that kind

of necessary change.

In wading through this back-and-forth, we ultimately

need not decide whether EPA's reading is the better or

only reading of this statutory provision, but simply

whether it is a permissible reading. EPA administers the

Clean Air Act, and we must defer to its reasonable

interpretation of any ambiguities in the statute. See

Chevron U.S.A. Inc. v. NRDC, 467 U.S. 837, 843-44, 104

S. Ct. 2778, 81 L. Ed. 2d 694 (1984). Here, even if the

statute does not compel EPA's reading, and indeed even

if EPA's reading is not the better reading, the statute at a

minimum is sufficiently ambiguous on this point to

permit EPA's reading of "other authority." Because EPA's

reading is at least reasonable, we reject petitioners'

argument and rule for EPA at Chevron step two.

B

Petitioners also contend that EPA should have set a

more restrictive particulate matter standard when

considering whether to [*12] set "beyond-the-floor"

standards. Petitioners argue in particular that EPA

misinterpreted the statute to allow it to consider

cost-effectiveness when setting beyond-the-floor

standards.

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

maximum degree of reduction in emissions" that EPA

determines is "achievable." 42 U.S.C. § 7412(d)(2). To

determine that emission level, EPA first establishes a

minimum stringency level, or "floor," based on the

emission results achieved by the best-performing sources

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

sets the statutory floor, it then determines, based on cost

and the other factors listed in Section 112(d)(2), whether

a more restrictive, beyond-the-floor standard is

achievable.1

1 In relevant part, the statute reads: "Emissions

standards promulgated under this subsection and

applicable to new or existing sources of hazardous

air pollutants shall require the maximum degree

of reduction in emissions of the hazardous air

pollutants subject to this section (including a

prohibition on such emissions, where achievable)

that the Administrator, taking into consideration

the cost of achieving such emission reduction, and

any non-air quality health [*13] and

environmental impacts and energy requirements,

determines is achievable for new or existing

sources in the category or subcategory . . . ." 42

U.S.C. § 7412(d)(2) (emphasis added).

When it promulgated the 2013 Rule, EPA rejected

petitioners' argument to set a 0.04 lb/ton limit as a

beyond-the-floor standard. 78 Fed. Reg. at 10,020. EPA

estimated that a beyond-the-floor standard set at the 0.04

lb/ton level would result in a reduction of 138 tons of

particulate matter per year, at a cost of $37 million. Id.

Based on those estimates, EPA noted that the

cost-effectiveness of the potential beyond-the-floor

standard -- $268,000 per ton of particulate matter

removed -- was substantially lower than the

cost-effectiveness of other emission standards previously

rejected by EPA. See 78 Fed. Reg. at 10,021.

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78 ERC (BNA) 1369
Petitioners take issue with EPA's consideration of

cost-effectiveness as a component of the Section

112(d)(2) cost analysis. Petitioners contend that "cost" for

purposes of the statute only concerns whether "the

standard is too expensive for industry to achieve," in

essence, whether the standards would bankrupt the

industry. Pet'rs Br. 34.

EPA says that Congress afforded it wide latitude in

[*14] deciding how to balance cost and other

considerations when determining that maximum

achievable reduction in emissions. According to EPA,

Section 112 does not command EPA to use a particular

form of cost analysis. In taking cost into account, EPA

contends that it may determine whether the proposed

emission levels would be cost-effective. Indeed, EPA

notes that this Court has previously recognized EPA's

authority to consider cost-effectiveness in setting

standards under nearly identical provisions of the Clean

Air Act. See, e.g., Husqvarna AB v. EPA, 254 F.3d 195,

200, 349 U.S. App. D.C. 118 (D.C. Cir. 2001) ("Because

section 213 does not mandate a specific method of cost

analysis, we find reasonable the EPA's choice to consider

costs on the per ton of emissions removed basis.");

National Association of Clean Water Agencies v. EPA,

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

Husqvarna; EPA could consider cost-effectiveness in

setting a beyond-the-floor standard under Section

129(a)(2) of the Act).

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

decide whether EPA's reading is the only reading of this

provision. Even if the statute does not compel EPA's

approach, and even if EPA's reading is not the better

[*15] reading, we conclude that it is still at least a

reasonable reading given the various potential meanings

of "cost" in this context. Therefore, we reject petitioners'

argument that EPA was required to exclude consideration

of cost-effectiveness and to set a beyond-the-floor

standard of 0.04 lb/ton of clinker.

III

Next, we consider petitioners' claim that EPA acted

unreasonably in setting a compliance date of September

2015 for the emission standards for particulate matter,

mercury, hydrochloric acid, and hydrocarbons.

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

EPA must require compliance with emission standards

for existing sources "as expeditiously as practicable, but

in no event later than 3 years after the effective date of

such standard." 42 U.S.C. § 7412(i)(3)(A). Petitioners

here contend that EPA violated this timing provision by

"extending" the compliance deadline for the 2010 Rule

from September 2013 to September 2015.

As applied to the particulate matter standard, there is

a basic flaw in petitioners' argument: The 2013 Rule did

not simply "extend" the deadline for complying with the

2010 Rule. Rather, the 2013 Rule established new

particulate matter standards with a new [*16] effective

date of February 2013, and a new compliance date of

September 2015. EPA concluded that any earlier date of

compliance would not be practicable because of the

multi-year timeline for upgrading the technology

necessary to ensure compliance. See 78 Fed. Reg. at

10,024. As we have ruled before, EPA may reset the

compliance date for an emission standard when it

introduces a new standard with a new effective date, as

was the case for particulate matter in the 2013 Rule. See

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

(D.C. Cir. 2007).

According to petitioners, even if EPA could change

the compliance date for the particulate matter standard,

the agency could not do the same for the mercury,

hydrochloric acid, and hydrocarbon standards. The 2010

Rule set the emission levels for those pollutants, and the

2013 Rule did not alter the emission levels for those

pollutants. This situation does indeed present a bit of a

conundrum. On the one hand, we know under the terms

of the statute that EPA has set a compliance date of 2015

as the date that is as expeditious as practicable for

particulate matter. On the other hand, our prior decision

did not vacate the prior 2010 Rule, and the compliance

date for the [*17] other pollutants as set forth in that

Rule would otherwise be 2013.

This conundrum is resolved when one realizes that it

would be irrational and even absurd to have different

compliance dates for the different pollutants. EPA

explained that the technology is such that it would be

senseless to have different compliance dates. See 78 Fed.

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

compliance date for all the pollutants should be the same.

To be sure, they want 2013 not 2015 as the compliance

date. But they recognize the general undesirability of a

compliance date of 2013 for some of the pollutants and of

2015 for other pollutants. See Tr. of Oral Argument at

10-11. Finally and perhaps most importantly, our prior

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78 ERC (BNA) 1369
decision in this case also recognized, at least implicitly,

that there must be a single compliance date for all of the

pollutants. See Portland Cement Association, 665 F.3d at

189. Our decision necessarily relied on an assumption

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

pollutants, the date would be 2013. But if EPA changed

the level for one of the pollutants, the compliance date for

all the pollutants would move together. Petitioners'

argument for a 2013 [*18] compliance date would be

inconsistent with our prior decision.

In short, we reject petitioners' argument about the

2015 compliance date.

IV

We next consider petitioners' challenge to the

affirmative defense that EPA created for cases of

"unavoidable" malfunctions.

Section 304(a) of the Clean Air Act, 42 U.S.C. §

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

district court against sources that violate emission

standards. Under the law as originally enacted, a court

could order only injunctive relief as a remedy for a

violation. But as part of the 1990 amendments to the Act,

Congress expanded the citizen suit provision to give

district courts authority to impose "any appropriate civil

penalties," which may include monetary penalties. 42

U.S.C. § 7604(a).

In the 2010 Rule, EPA created an affirmative defense

to Section 304(a) for certain emissions violations caused

by "unavoidable" malfunctions. Under the affirmative

defense, the district court may assess penalties only if

violators "fail to meet [their] burden of proving all of the

requirements in the affirmative defense." 78 Fed. Reg. at

10,039. EPA retained the affirmative defense when it

promulgated the 2013 Rule. See 40 C.F.R. § 63.1344.

Petitioners [*19] now argue that the affirmative

defense exceeds EPA's statutory authority and that it is

for the courts to decide whether to create an affirmative

defense in these private civil suits, not EPA. We agree.

The threshold question is whether petitioners have

standing to challenge EPA's adoption of the affirmative

defense. Petitioners are environmental associations with

individual members across the country. EPA's affirmative

defense would immunize certain emissions that

petitioners contend should be penalized. Some of

petitioners' members will suffer from those higher

emissions, according to their affidavits. A ruling in their

favor would prevent those emissions and help alleviate

that harm. That's good enough. Petitioners have shown

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

have standing under Article III.

We turn, then, to the substance of petitioners'

challenge to the affirmative defense.

Section 304(a) grants "any person" the right to

"commence a civil action" against any person "who is

alleged to have violated (if there is evidence that the

alleged violation has been repeated) or to be in violation

of" an emission standard or limitation under the Clean

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

provides that the federal district courts "shall have

jurisdiction, without regard to the amount in controversy

or the citizenship of the parties, to enforce such an

emission standard or limitation . . . and to apply any

appropriate civil penalties." Id.

When determining whether civil penalties are

appropriate, district courts look to Section 113(e)(1) of

the Act, which directs courts to "take into consideration

(in addition to such other factors as justice may require)

the size of the business, the economic impact of the

penalty on the business, the violator's full compliance

history and good faith efforts to comply, the duration of

the violation as established by any credible evidence . . . ,

payment by the violator of penalties previously assessed

for the same violation, the economic benefit of

noncompliance, and the seriousness of the violation." 42

U.S.C. § 7413(e)(1).

Section 304(a) creates a private right of action, and

as the Supreme Court has explained, "the Judiciary, not

any executive agency, determines 'the scope' -- including

the available remedies -- 'of judicial power vested by'

statutes establishing private rights of action." City of

Arlington v. FCC, 133 S. Ct. 1863, 1871 n.3, 185 L. Ed.

2d 941 (2013) [*21] (emphasis added) (quoting Adams

Fruit Co. v. Barrett, 494 U.S. 638, 650, 110 S. Ct. 1384,

108 L. Ed. 2d 585 (1990)). Section 304(a) is in keeping

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

vests authority over private suits in the courts, not EPA.

As the language of the statute makes clear, the courts

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

penalties are "appropriate." By contrast, EPA's ability to

determine whether penalties should be assessed for Clean

Air Act violations extends only to administrative

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78 ERC (BNA) 1369
penalties, not to civil penalties imposed by a court. See 42

U.S.C. § 7413(d)(2)(B) (Administrator may

"compromise, modify, or remit, with or without

conditions, any administrative penalty"). To the extent

that the Clean Air Act contemplates a role for EPA in

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

7604(c)(2). EPA also of course could seek to participate

as an amicus curiae.

EPA argues that its proposed affirmative defense

simply fleshes out the statutory requirement that penalties

be applied only when "appropriate." But under this

statute, deciding whether penalties are "appropriate" in a

given private civil suit is a job for the courts, not for

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

can argue that penalties should not be assessed, based on

the factors in Section 113(e)(1) such as the defendant's

"full compliance history and good faith efforts to

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

argument as intervenor or amicus, to the extent such

status is deemed appropriate by the relevant court. But

under the statutory scheme, the decision whether to

accept the defendant's argument is for the court in the

first instance, not for EPA.

EPA alternatively contends that it is permitted to

create the affirmative defense because of Section

301(a)(1) of the Clean Air Act. See 78 Fed. Reg. at

10,014. That provision authorizes EPA's Administrator to

"prescribe such regulations as are necessary to carry out

his functions under" the Act. 42 U.S.C. § 7601(a)(1). But

we have consistently held that EPA's authority to issue

ancillary regulations is not open-ended, particularly when

there is statutory language on point. See, e.g., American

Petroleum Institute v. EPA, 52 F.3d 1113, 1119, 311 U.S.

App. D.C. 268 (D.C. Cir. 1995) ("the general grant of

rulemaking power to EPA cannot trump specific portions

of the CAA"); NRDC v. Reilly, 976 F.2d 36, 41, 298 U.S.

App. D.C. 88 (D.C. Cir. 1992) (EPA cannot use [*23] its

general rulemaking authority as justification for adding to

a statutorily specified list); Sierra Club v. EPA, 719 F.2d

436, 453, 231 U.S. App. D.C. 192 (D.C. Cir. 1983)

(same); see also Gonzales v. Oregon, 546 U.S. 243,

264-65, 126 S. Ct. 904, 163 L. Ed. 2d 748 (2006) ("It

would go . . . against the plain language of the text to

treat a delegation for the 'execution' of [the Attorney

General's] functions as a further delegation to define

other functions well beyond the statute's specific grants

of authority."). Those precedents establish a simple and

sensible rule: EPA cannot rely on its gap-filling authority

to supplement the Clean Air Act's provisions when

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

here.

On a different tack, EPA notes that Section 304(a)(1)

does not expressly deny EPA the ability to create an

affirmative defense, and EPA emphasizes that this Court

has frequently recognized the need for flexibility in the

administrative process. EPA Br. 46. That's true. But the

suggestion implicit in EPA's argument -- that we should

"presume a delegation of power absent an express

withholding of such power" -- is "plainly out of keeping

with Chevron . . . ." Railway Labor Executives'

Association v. National Mediation Board, 29 F.3d 655,

671, 308 U.S. App. D.C. 9 (D.C. Cir. 1994) [*24] (en

banc).

Finally, EPA suggests that an affirmative defense for

malfunctions is necessary to account for the tension

between requirements that emissions limitations be

"continuous" and the practical reality that control

technology can fail unavoidably. See 78 Fed. Reg. at

10,014. That is a good argument for EPA to make to the

courts -- and for the courts to then consider -- in future

civil cases when this issue arises. But it does not suffice

to give EPA authority to create an affirmative defense.2

2 The Fifth Circuit recently upheld EPA's partial

approval of an affirmative defense provision in a

State Implementation Plan. See Luminant

Generation Co. v. EPA, 714 F.3d 841 (5th Cir.

2013). We do not here confront the question

whether an affirmative defense may be

appropriate in a State Implementation Plan.

* * *

We grant the petitions for review with regard to

EPA's affirmative defense and vacate those portions of

the 2013 Rule pertaining to the defense. We deny the

petitions in all other respects.

So ordered.

Page 7

749 F.3d 1055; 2014 U.S. App. LEXIS 7281, *21;

78 ERC (BNA) 1369
108P1Z

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