Opinion ID: 186132
Heading Depth: 4
Heading Rank: 1

Heading: Absence of Rationale

Text: Industry Petitioners first attack EPA for failing to set forth a rationale for its classification of units based on aggregate plant capacity. According to petitioners, even if EPA may legally distinguish among MWCs based on this characteristic, it did so here without explaining why such classification was appropriate. Although we would ordinarily consider a challenge to an agency’s rulemaking rationale as a form of substantive attack, in this case petitioners level only a procedural charge. That is, they do not contend that it would be substantively unreasonable for the Agency to distinguish among MWCs based on the aggregate capacities of the plants at which they are located. Rather, they simply contend that the Agency has failed altogether to proffer a rationale for so doing. Industry Petitioners assert that EPA’s failure violates the requirement of CAA § 307(d) that each proposed and promulgated rule be accompanied by a ‘‘statement of its basis and purpose’’ that includes a summary of ‘‘the major legal interpretations and policy considerations underlying’’ the rule. 42 U.S.C. § 7607(d)(3), (d)(6)(A). EPA responds by claiming that petitioners are foreclosed from making this charge because they did not satisfy the exhaustion requirement of CAA § 307(d)(7)(B), 42 U.S.C. § 7607(d)(7)(B), by objecting with reasonable specificity to EPA’s failure to articulate a rationale during the public comment period. We disagree for two reasons. First, a number of commenters plainly did challenge the Agency’s failure to explain its subcategorization rationale during the rulemaking.12 Second, as we held in Appalachian Power Co. 12 See Comments of Dutchess and Islip (J.A. 1830); Comments of Institute of Clean Air (J.A. 1841); Comments of Illinois Environmental Protection Agency (J.A. 2089). It is sufficient that an issue was raised by any commenter; the party petitioning for judicial review need not have done so itself. See Reytblatt v. Nuclear Regulatory Comm’n, 105 F.3d 715, 721 (D.C. Cir. 1997); accord Cellnet Communication, Inc. v. FCC, 965 F.2d 1106, 1109 (D.C. Cir. 1992) (‘‘Consideration of the issue by the agency at the behest of another party is enough to preserve it.’’). 19 v. EPA, the EPA at all times ‘‘retains a duty to examine key assumptions as part of its affirmative burden of promulgating and explaining a nonarbitrary, non-capricious rule,’’ and therefore must justify its basic ‘‘assumption[s] even if no one objects TTT during the comment period.’’ 135 F.3d 791, 818 (D.C. Cir. 1998) (quoting Small Refiner Lead Phase–Down Task Force v. EPA, 705 F.2d 506, 534–35 (D.C. Cir. 1983)) (internal quotation marks omitted). As there is no question that the validity of the distinction between large and small aggregate plant capacities was a key assumption underlying the 2000 Rule, EPA was duty-bound to set forth its rationale for subcategorizing on that basis. We thus turn to the underlying question: Did EPA explain its decision to establish subcategories based on aggregate plant capacity? We are, frankly, stunned to find that it did not. As the Agency concedes, there is not one word in the proposed or final rule that explains why the Agency chose to distinguish among small MWCs on the basis of the aggregate capacities of the plants at which they are located. Indeed, other than arguing that petitioners are barred from raising the issue, the text of EPA’s brief does not even respond to Industry Petitioners’ argument that the failure to provide a rationale dooms the 2000 Rule. In a footnote to its brief, EPA does assert that the Agency ‘‘articulated its rationale for distinguishing among MWC units based on aggregate capacity when it proposed the first comprehensive MWC regulations in 1989.’’ Respondent’s Br. at 32 n.31 (citing Emission Guidelines: Municipal Waste Combustors, 54 Fed. Reg. 52,209, 52,219–20 (Dec. 20, 1989)). That rationale, which was contained in the preamble to a rule that EPA proposed but never adopted, stated as follows: The proposed capacity aggregation is necessary because of the common practice within the MWC industry of constructing multiple MWC’s at the same location. This aggregation ensures that similar MWC plants with similar emission potential are subject to the same emission guidelines regardless of the number of individual MWC’s at the plants. Because multiple MWC’s can have the 20 same emission quality impacts as a larger single MWC, it is reasonable to apply the proposed emission guidelines to all existing MWC’s at the same locationTTTT 54 Fed. Reg. at 52,219–20. At oral argument, EPA further asserted that this 1989 rationale was ‘‘incorporated’’ into the 2000 Rule, and thus was sufficient to satisfy the requirement of CAA § 307(d). We are not persuaded. While an express statement of intent to incorporate a rationale contained in another, specific document might satisfy the Agency’s statutory obligation, EPA made no such statement here. The sum and substance of the statement in the 2000 Rule that the Agency regards as incorporating the 1989 preamble reads as follows: Docket No. A–98–18 [1998] and associated Docket Nos. A–90–45 [1990] and A–89–08 [1989] contain supporting information for the emission guidelines. The dockets are available for public inspection and copyingTTTT 65 Fed. Reg. at 76,378; see 64 Fed. Reg. at 47,234 (identical statement in proposed rule). That statement does not expressly ‘‘incorporate’’ anything, let alone refer interested parties or the courts to a specific document containing the Agency’s rationale. At best, it is an invitation to search through a mountain of documents, contained in three rulemaking dockets stretching back over a decade, in pursuit of ‘‘supporting information.’’ Such a vague reference cannot possibly satisfy § 307(d)’s instruction that each proposed and promulgated rule ‘‘shall be accompanied by’’ a ‘‘statement of basis and purpose’’ that ‘‘shall include a summary of TTT the major legal interpretations and policy considerations underlying the proposed rule.’’ 42 U.S.C. § 7607(d)(3) (emphasis added); see id. § 7607(d)(6)(A). A rationale buried in a document published in 1989 simply does not ‘‘accompany’’ a rule proposed and promulgated more than a decade later. Nor can such a reference satisfy the fundamental requirement of nonarbitrary administrative decisionmaking: that an agency set forth the reasons for its actions. See Motor Vehicle Mfrs. Ass’n of 21 United States, Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 48–50 (1983); Appalachian Power Co., 135 F.3d at 818; see also Small Refiner, 705 F.2d at 551 (‘‘A rule without a stated reason is necessarily arbitrary and capricious.’’). Without a readily accessible statement of the agency’s rationale, interested parties cannot comment meaningfully during the rulemaking process. Nor can they, or the courts, determine whether the agency has acted capriciously or whether its statutory interpretation is reasonable under Chevron’s second step. Although EPA’s failure to set forth its rationale requires us to remand the 2000 Rule for further consideration, see State Farm, 463 U.S. at 57, that defect does not require us to vacate the rule. See Allied–Signal, Inc. v. Nuclear Regulatory Comm’n, 988 F.2d 146, 150 (D.C. Cir. 1993) (‘‘An inadequately supported rule TTT need not necessarily be vacated.’’). We decline to do so for several reasons. First, the 1989 rationale pointed to by EPA is sufficient to persuade us that the Agency ‘‘may be able to explain’’ the subcategorization decision it made in 2000. Id. at 151. That rationale also militates against a finding that the error was ‘‘so serious TTT that there is a substantial likelihood that the rule would have been significantly changed’’ if it had not been made. 42 U.S.C. § 7607(d)(8). At the same time, there is no doubt that ‘‘the consequences of vacating’’ would be ‘‘quite disruptive.’’ Allied–Signal, Inc., 988 F.2d at 151. Indeed, it was concern over just such disruption of EPA’s pollution control program that ultimately persuaded us to remand rather than vacate the 1995 large-unit regulations, originally invalidated in Davis. See Davis County Solid Waste Mgmt. v. EPA, 108 F.3d 1454, 1458 (D.C. Cir. 1997) (expressing concern ‘‘that vacating the standards for large units could have significant deleterious effects on MWC emissions control’’). Accordingly, rather than vacate, we remand the 2000 Rule to EPA ‘‘for it to develop a reasoned’’ explanation for its decision to subcategorize on the basis of aggregate plant capacity. Allied–Signal, Inc., 988 F.2d at 151; see, e.g., Radio–Television News Directors Ass’n v. FCC, 184 F.3d 872, 888–89 (D.C. Cir. 22 1999); American Mining Cong. v. EPA, 907 F.2d 1179, 1190 (D.C. Cir. 1990).