Court Opinion

ID: 4186976
Source: CourtListenerOpinion
Date Created: 2017-07-18 15:01:25.521304+00
Date Added: 2024-06-11T14:40:00.148984
License: Public Domain

United States Court of Appeals
         FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued February 10, 2017                 Decided July 18, 2017

                         No. 15-1246

        SIERRA CLUB AND CALIFORNIA COMMUNITIES
                    AGAINST TOXICS,
                      PETITIONERS

                               v.

        ENVIRONMENTAL PROTECTION AGENCY AND
             E. SCOTT PRUITT, ADMINISTRATOR,
        U.S. ENVIRONMENTAL PROTECTION AGENCY,
                       RESPONDENTS

        On Petition for Review of Final Action of the
       United States Environmental Protection Agency

     Neil Gormley argued the cause for petitioners. With him on
the briefs was James S. Pew.

     Eileen T. McDonough, Attorney, U.S. Department of
Justice, argued the cause for respondents. With her on the brief
was John C. Cruden, Assistant Attorney General, was on the
brief.

     Jeffrey A. Knight and Bryan M. Stockton were on the brief
for amicus curiae Coalition for Clean Air Implementation in
support of respondents.
                                 2

   Before: ROGERS and MILLETT, Circuit Judges, and
SENTELLE, Senior Circuit Judge.

   Opinion for the Court filed by Senior Circuit Judge
SENTELLE.

     SENTELLE, Senior Circuit Judge: Sierra Club and California
Communities Against Toxics (collectively “Sierra Club”)
petition for review of the Environmental Protection Agency’s
(“EPA”) determination that EPA had satisfied its responsibilities
under 42 U.S.C. § 7412(c)(6) to establish “maximum achievable
control technology” (“MACT”) standards for emissions of
certain hazardous air pollutants (“HAPs”). Petitioners contend
that as to three of the HAPs, EPA arbitrarily relied upon
standards set previously to regulate other emissions without
justifying its decision to treat those previously regulated
emissions as “surrogates” for the § 7412(c)(6) HAPs. EPA
moves the court to dismiss the petition as untimely and disputes
it substantively. Because we conclude that the petition is not
untimely and that EPA did not adequately respond to
petitioners’ comments raising the issues concerning the use of
surrogacy in the administrative proceedings, we deny the motion
to dismiss and order the matter remanded to EPA for further
proceedings.

                       I. BACKGROUND

     Congress enacted the current version of § 7412 as part of
the Clean Air Act Amendments of 1990 to further its original
intent, “to reduce hazardous air pollutants.” See Sierra Club v.
EPA, 353 F.3d 976, 979 (D.C. Cir. 2004). In general, that
section requires MACT standards for “major source[s]” of air
pollutants, that is to say, those with potential to emit ten tons or
more of a single HAP or twenty-five tons or more of a
combination of HAPs per year. See 42 U.S.C. § 7412(a)(1)
                                3

(describing major sources); see also § 7412(d). Congress
singled out a category of specific pollutants of a particularly
hazardous nature for special treatment under § 7412(c)(6). With
respect to those pollutants, Congress required EPA, as pertinent
to this petition, to regulate emissions of seven specific hazardous
air pollutants more stringently than the statute required for
pollutants in general. Specifically, EPA was required to list
categories and subcategories of sources of such HAPs
accounting for at least 90% of the aggregate emissions of each.
See § 7412(c)(6). EPA was further required to establish and
subject these listed sources to MACT standards, see id., even if
it would have otherwise had discretion to apply a less-stringent
standard to any area sources on the list, see § 7412(d)(5). The
statute specifically required EPA to conclude these duties by
November 15, 2000. § 7412(c)(6).

     Much activity followed, both administratively and in
litigation. Although petitioners devote much ink to a rehash of
the years of proceedings, we will describe the intervening events
briefly, with only enough detail to support our decision in the
present controversy. As mentioned, in addition to the creation
of MACT standards, § 7412 required EPA to perform the
preliminary duty of listing sources of the seven specific HAPs.
See § 7412(c)(6). “In 1998 EPA published its conclusion that it
had satisfied” that preliminary duty. Sierra Club v. EPA, 699
F.3d 530, 531 (D.C. Cir. 2012). Sierra Club petitioned this court
for review of that determination. We dismissed the petition as
premature, determining that the Clean Air Act “precluded
review of the agency’s source-listing under § [7412](c)(6) until
the agency had issued emissions standards thereunder . . . .” Id.
(explaining Sierra Club v. EPA, No. 98-1270, 1998 WL 849408,
at *1 (D.C. Cir. Nov. 24, 1998), in which we dismissed the
petition, relying on 42 U.S.C. § 7412(e)(4)).
                                4

     Thereafter, when EPA failed to meet the November 2000
statutory deadline for promulgating the (c)(6) list and MACT
standards, Sierra Club brought a district court action to compel
compliance with the statute, which ultimately led to our 2012
decision in Sierra Club. After the district court had ordered the
agency to comply with its statutory duties, EPA issued a
determination that it had “completed sufficient standards to meet
the 90 percent requirement” of § 7412(c)(6). Sierra Club, 699
F.3d at 532 (citation omitted). Sierra Club petitioned for review.
Then, as now, EPA moved for dismissal of the petition as
untimely. We disagreed. Id. at 532-34. We also concluded that
EPA had not complied with its duty to provide the period of
notice and comment. Id. at 534-35. We vacated and remanded
for further proceedings. Id. at 535.

     Thereafter, EPA began administrative proceedings which
ultimately led to the final rule under review. More specifically,
at the time of our remand, the order that Sierra Club had
obtained from the district court was still outstanding. Sierra
Club moved the district court to enforce its prior order with
respect to several of the § 7412(c)(6) HAPs. Sierra Club v.
McCarthy, 61 F. Supp. 3d 35, 38-39 (D.D.C. 2014). The district
court, perceiving that EPA had not complied with its prior order,
“direct[ed] EPA to initiate a process of notice and comment
rulemaking before it reissues or, after consideration of the
comments submitted, reconsiders or modifies its
Determination.” Id. at 41. The court required that the final
action “include a statement explaining its basis” and required
EPA to “respond to the comments that it receive[d].” Id.
Subsequently, EPA published the notice of rulemaking and final
rulemaking that Sierra Club contests as arbitrary and capricious
in this case.

    Expressing its intent to comply with the district court’s
order, EPA issued this notice of proposed rulemaking entitled
                               5

“Completion of Requirement to Promulgate Emissions
Standards,” 79 Fed. Reg. 74,656 (Dec. 16, 2014) (“Proposed
Determination”). The notice expressly provided for comments,
as required in the district court’s 2014 order. Sierra Club filed
comments. As pertinent to the present controversy, EPA’s
proposed rule included three HAPs upon which Sierra Club’s
comments and present petition focus: polychlorinated biphenyls
(“PCBs”), polycyclic organic matter (“POM”), and
hexachlorobenzene (“HCB”).

     As to each of the three HAPs, Sierra Club contends that
EPA’s final rule does not comply with the requirements of
§ 7412(c)(6) that as to every pollutant covered by the section,
EPA must provide sufficient standards for the categories and
subcategories of “sources accounting for not less than 90 percent
of the aggregate emissions of each such pollutant . . . .” 42
U.S.C. § 7412(c)(6). In terms of the issues preserved by
petitioners for review in this proceeding, Sierra Club’s main
argument is that the agency improperly relied on “surrogates.”
That is to say, rather than issuing new specific standards, the
agency relied on previously set emission limits for another
hazardous air pollutant or compound, “which serves as a
surrogate for the targeted section [7412](c)(6) [pollutant].”
Proposed Determination, 79 Fed. Reg. at 74,677. After
receiving petitioners’ comments on its proposed rule, EPA
published the final rule now under review: “Completion of
Requirement to Promulgate Emissions Standards,” 80 Fed. Reg.
31,470 (June 3, 2015) (codified at 40 C.F.R. pt. 63) (“Final
Determination”).

     Sierra Club filed the present petition. EPA moved to
dismiss the petition as untimely. For the reasons set forth
below, we deny the motion to dismiss and grant remand for
further proceedings.
                                  6

                          II. ANALYSIS

                     A. Standard of Review

     EPA’s final rule is subject to judicial review under 42
U.S.C. § 7607(b)(1). We review such final rules under the
standards of the Administrative Procedure Act, 5 U.S.C.
§ 706(2), and will set the rule aside if it is “arbitrary, capricious,
an abuse of discretion, or otherwise not in accordance with law.”
Id. § 706(2)(A). Insofar as the agency has interpreted the Clean
Air Act, we apply the standard of Chevron, U.S.A., Inc. v.
NRDC, 467 U.S. 837 (1984). That is, if “the intent of Congress
is clear,” that is the end of the analysis. Id. at 843-45. If it is
ambiguous, then we ask if the agency’s interpretation is
reasonable, and if so, we uphold the agency’s construction. Id.
In the present controversy, petitioners’ challenge is directed to
the decisions of EPA, not primarily to its interpretation of the
statute.

                          B. Timeliness

     EPA’s motion to dismiss is based on the argument that
Sierra Club’s objections to the standards used in the final
determination are actually challenges to “the adequacy of the
pre-existing standards,” that is, the MACT standards with
respect to the surrogate pollutants. Resp’ts’ Br. at 37. EPA
relies on the judicial review provision of the Clean Air Act,
which provides that any petition for review of the
Administrator’s promulgation of standards “shall be filed within
sixty days from the date notice of such promulgation, approval,
or action appears in the Federal Register . . . .” 42 U.S.C.
§ 7607(b)(1). We note that the statute further provides an
exception “if such petition is based solely on grounds arising
after such sixtieth day,” and that any such petition “shall be filed
within sixty days after such grounds arise.” Id. For reasons
                                7

similar to those set forth by us in Sierra Club v. EPA, 699 F.3d
530, we agree with petitioners.

     In the prior decision, we held that “[i]f Sierra Club is
correct . . . the agency action Sierra Club challenges is only the
Determination, which (in its view) repurposed previous
rulemakings to satisfy EPA’s § [7412](c)(6) obligations,”
making the challenge “timely” as it “could not be brought at all
until after EPA identified the rules that it believed satisfied its
responsibilities under § [7412](c)(6).” Sierra Club, 699 F.3d at
534.

     The same reasoning applies here. Sierra Club again
challenges the present determination that EPA had satisfied
§ 7412(c)(6) through its promulgation of MACT standards for
surrogate emissions rather than for the listed (c)(6) HAPs
themselves. That issue could not be reviewed prior to the
issuance of the final rule now before us. Petitioners could not
raise those objections until the final rule employing the
surrogates was released. Petitioners do not, for example, attack
the adequacy of the listing or standards with respect to any
surrogate pollutant, but only the repurposing of standards for
satisfaction of the § 7412(c)(6) requirements with respect to
PCBs, POM, and HCB. It is therefore clear that our reasoning
in Sierra Club applies equally to the present case. Sierra Club’s
present challenge to the interaction of the surrogacy decisions
with the 90% (c)(6) requirements is timely, and the motion to
dismiss will be denied.

                  C. The Substantive Petition

     We wish to make clear at the outset that the question before
us is the narrow one of the adequacy of EPA’s justification for
the use of surrogates. Insofar as the parties characterize this
petition as a challenge to the achievement of the 90%
                                8

requirement, that question rises or falls with surrogacy. EPA
has published a purported 90% listing. However, the adequacy
of the MACT standards for the 90% requirement relies upon the
propriety of the use of the surrogates. As to those issues,
petitioners’ challenge is timely. This does not determine
whether it is meritorious. Petitioners raised their objections to
the use of the surrogates in comments. We have frequently held
in various contexts that, in APA review, we will often find
agency decisions arbitrary or capricious where the agency has
failed to respond to major substantive comments. See Pub.
Citizen, Inc. v. FAA, 988 F.2d 186, 197 (D.C. Cir. 1993)
(citations omitted); see also NRDC v. EPA, 859 F.2d 156, 188-
89 (D.C. Cir. 1988). In this case, the agency’s responses to the
comments consisted principally of the same timeliness argument
we rejected above. Therefore, if we conclude that the
substantive comments raised meritorious issues unanswered by
EPA, then we must remand for further proceedings.

     We have in the past approved the use of surrogates by EPA.
We have ruled that “EPA may use a surrogate to regulate
hazardous pollutants if it is ‘reasonable’ to do so.” Nat’l Lime
Ass’n v. EPA, 233 F.3d 625, 637 (D.C. Cir. 2000) (citation
omitted). Therefore, Sierra Club does not argue, nor do we
hold, that surrogates may not be used. The question is whether
the current use of surrogates is reasonable.

     This Court has identified three potential tests for evaluating
the sufficiency of a surrogacy designation. National Lime
“established a three-part analysis for determining whether the
use of [a particular surrogate] for HAPs is reasonable . . . .”
Sierra Club, 353 F.3d at 984. That three-part test requires EPA
to determine if (1) the relevant hazardous air pollutant is
invariably present in the proposed surrogate; (2) control
technologies for the proposed surrogate indiscriminately capture
the relevant HAP along with other pollutants; and (3) the control
                               9

of the surrogate is the only means by which facilities achieve
reductions in emissions of the hazardous air pollutant. See id.;
see also U.S. Sugar Corp. v. EPA, 830 F.3d 579, 628 (D.C. Cir.
2016) (The reasonableness inquiry “requires the surrogate’s
emissions to share a close relationship with the emissions of the
[target hazardous air pollutant].”); Mossville Envtl. Action Now
v. EPA, 370 F.3d 1232, 1242 (D.C. Cir. 2004) (The
reasonableness inquiry “merely requires ‘that there [be] a
correlation between [the surrogate and the target hazardous air
pollutants].’” (quoting Nat’l Lime, 233 F.3d at 639)). Applying
those standards, in Sierra Club, we held that the use of a
surrogate was reasonable. Sierra Club, 353 F.3d at 984-85.
Even if the surrogates in the present case are different than a
specific surrogate considered in Sierra Club or in National Lime,
the three-part test is nonetheless instructive.

     In this context, as in the prior cases, EPA must demonstrate
the reasonableness of the use of a particular surrogate in a
specific context. Although EPA provided some explanation of
the surrogacy relationships in this case, see Proposed
Determination, 79 Fed. Reg. at 75,677-80, EPA failed to
respond adequately to comments disputing those explanations.
In the proposed determination, EPA admits that “in some
standards promulgated prior to [its] development of the baseline
emissions inventory . . . , the EPA did not always explain the
surrogacy relationship.” Proposed Determination, 79 Fed. Reg.
at 74,678; see also Final Determination, 80 Fed. Reg. at 31,471-
72 (final determination noting that proposed determination
explained the surrogate standards). In the final determination,
it then proceeds to provide brief information on the newly
“explained” surrogacy relationships but does not substantively
respond to comments on those purported explanations, urging
instead that the relevant standards had not been reopened and
thus could not be substantively challenged. Despite comments
urging that EPA’s surrogacy claims needed additional analysis
                               10

and data in support to establish their reasonableness, EPA
responded that such comments “mischaracterize[d]” its
“proposed determination,” as “the legitimacy of the standards”
it relied on is “far outside the scope of the proposed”
determination. Final Determination, 80 Fed. Reg. at 31,477.
Thus, EPA did not need “to respond to those comments.” Id.

     EPA cannot hide behind the established nature of the
standards it uses when it applies new surrogacy relationships.
By admitting that “the proposed determination in some instances
clarifies the surrogacy relationship,” EPA makes irrelevant its
point that “the proposal does not discuss or attest to the
substance of the standards previously promulgated.” See Final
Determination, 80 Fed. Reg. at 31,480. In its admission, EPA
belies its own claim that the determination was “only . . . the
mathematical and technical basis for the EPA’s calculation.” Id.
Providing brand-new clarification of some surrogacy
relationships necessarily rendered it substantive and EPA’s
failure to explain sufficiently these newly “clarified”
relationships and respond to the associated comments dooms the
current determination. While the parties make other arguments,
all are either restatements of the propositions contained in the
major issue or do not warrant separate discussion. We wish to
make clear that we are not holding that EPA’s decision is
substantively incorrect. Indeed we express no opinion on that
subject. We simply remand the matter to EPA for further
proceedings, which should include the explanations omitted
from the present determination.

                        CONCLUSION

     For the reasons set forth above, we conclude that EPA
failed to explain its proposed reliance on surrogates and thus its
determination does not satisfy 42 U.S.C. § 7412(c)(6). We
therefore hold that Sierra Club’s timely petition for review is

                                                Granted in part.