Opinion ID: 186242
Heading Depth: 3
Heading Rank: 2

Heading: Arbitrary and Capricious Claim

Text: 82 Although we agree with EPA that the statute permits it to balance technological feasibility against cost and other factors in setting standards, we conclude that the Agency has not adequately explained its exercise of that discretion in this case. 83 First, EPA expected that manufacturers would apply advanced technologies on an engine-family-by-engine-family basis, and concluded that, by 2012, advanced technologies could be applied to models accounting for roughly 70% of new snowmobiles, but not the remaining models. See 67 Fed.Reg. at 68,273. Implicit in this conclusion is an assumption that no existing models could be eliminated. In other words, EPA assumed that manufacturers could not discontinue or replace any of the models — collectively accounting for roughly 30% of new snowmobiles - to which advanced technology could not be applied by 2012. That assumption, if it is to stand, must be grounded in appropriate consideration of the relevant statutory factors. EPA argues before this court that its position was based on cost considerations. However, we can find nothing in the record indicating that the Agency evaluated or reached any conclusions as to the cost of discontinuing models to which advanced technology could not be applied by 2012. Absolute certainty and precision on this point are not required, but a reasonable explanation clearly is necessary. Accordingly, we direct the Agency on remand to clarify the statutory and evidentiary basis of its position. 84 Second, even assuming that EPA correctly concluded that no models could be discontinued, the Agency failed to explain adequately how it arrived at the specific standards adopted. EPA did articulate several general reasons for its conclusion that greater emissions reductions could not be achieved by 2012. Most important, EPA found that, because of the wide variety of snowmobile models, the design and development work necessary to apply advanced technologies to all models would require significant time and investment. Id. The Agency noted that snowmobile manufacturers are resource constrained, and that those relying on external engine suppliers would find it more difficult to undertake rapid development of new technologies. Id. 85 This generalized discussion of the limiting factors does not explain how the Agency arrived at the specific conclusion that emissions reductions corresponding to application of advanced technologies to 70% of new snowmobiles were the most that could be achieved by 2012. The Agency's explanation of its reasoning could just as well support standards corresponding to 30% or 100% application in that time frame. And we find nothing in the record before us explaining the analysis and evidence underlying EPA's conclusions. 86 We emphasize that we do not view the standards adopted as facially unreasonable, nor have we found evidence in the record contradicting the Agency's ultimate decision. But in order to determine whether that decision reflects a rational connection between the facts found and the choice made, Motor Vehicle Mfrs. Ass'n, 463 U.S. at 43, 103 S.Ct. at 2866, a reasonable explanation of the specific analysis and evidence upon which the Agency relied is necessary. With its delicate balance of thorough record scrutiny and deference to agency expertise, judicial review can occur only when agencies explain their decisions with precision, for `[i]t will not do for a court to be compelled to guess at the theory underlying the agency's action....' Am. Lung Ass'n v. EPA, 134 F.3d 388, 392 (D.C.Cir.1998) (quoting SEC v. Chenery Corp., 332 U.S. 194, 196-97, 67 S.Ct. 1575, 1577, 91 L.Ed. 1995 (1947)). 87 In defense of its limited explanation for its decision, EPA refers us to a line of cases in which we have deferred to the Agency's predictions that a particular control technology will be available in the future. See Nat'l Petrochemical & Refiners Ass'n v. EPA, 287 F.3d 1130, 1144 (D.C.Cir.2002); Natural Res. Def. Council v. Thomas, 805 F.2d 410, 432-34 (D.C.Cir.1986); NRDC, 655 F.2d at 333. These cases stand for the proposition that, [i]n the absence of theoretical objections to the technology, the agency need only identify the major steps necessary for development of the device, and give plausible reasons for its belief that the industry will be able to solve those problems in the time remaining. Nat'l Petrochemical & Refiners Ass'n, 287 F.3d at 1144 (quoting NRDC, 655 F.2d at 333). 88 The issue here is different. In this case, EPA's decision does not involve a prediction about the development of a technology that is not yet available. Rather, it concluded that technology that is currently available could not be applied to all models within the available lead time. This decision was apparently based, not on technological obstacles per se, but rather on the cost and time required to optimize advanced technology for each snowmobile model on the market. Indeed, it is not clear whether there is any meaningful distinction between time and cost here; it may be that the pace of implementation is simply a function of the level of investment. Naturally, there will be some uncertainty in any estimate of how much money and time is needed to apply advanced technologies to each model or engine family and, accordingly, what scope of implementation is actually feasible in the time available. But this does not excuse EPA from offering any estimate whatsoever. We can defer to the Agency's prediction of the feasible pace of implementation only if it has adequately explained the basis of that prediction. As this court stated in NRDC, [t]he Clean Air Act requires EPA to look to the future in setting standards, but the agency must also provide a reasoned explanation of its basis for believing that its projection is reliable. This includes a defense of its methodology for arriving at numerical estimates. 655 F.2d at 328 (citing Int'l Harvester Co., 478 F.2d at 629).