SSM Litigation Group v. EPA

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued January 14, 2025 Decided September 5, 2025

No. 23-1267

SSM LITIGATION GROUP,

PETITIONER

v.

ENVIRONMENTAL PROTECTION AGENCY,

RESPONDENT

CALIFORNIA COMMUNITIES AGAINST TOXICS, ET AL.,

INTERVENORS

On Petition for Review of a Final Action

of the Environmental Protection Agency

Russell S. Frye argued the cause and filed the briefs for

petitioner.

Daniel R. Dertke, Attorney, U.S. Department of Justice,

argued the cause for respondent. With him on the brief was

Todd Kim, Assistant Attorney General.

Joshua Smith, Andrea Issod, Deena Tumeh, Seth L.

Johnson, Patton Dycus, John D. Walke, and Emily K. Davis

2

were on the brief for environmental intervenors in support of

respondent.

Before: RAO and WALKER, Circuit Judges, and GINSBURG,

Senior Circuit Judge.

Opinion for the Court filed by Circuit Judge RAO.

RAO, Circuit Judge: Pollution control technology

sometimes fails due to an emergency or other unforeseen event.

During such emergencies, a stationary source of air pollution

may exceed its emission limitations. For decades, the

Environmental Protection Agency recognized this reality by

providing an affirmative defense to liability for excess

emissions caused by emergency events. In 2023, the agency

rescinded the defense, concluding it was unlawful because it

encroached on the judiciary’s authority under the Clean Air Act

to impose “appropriate civil penalties.” 42 U.S.C. § 7604(a). In

addition, EPA maintained the defense was unlawful because it

could be construed as an exemption that rendered emission

standards non-continuous in violation of the Clean Air Act.

In its petition for review, SSM Litigation Group argues

EPA’s rescission of the Title V affirmative defense was

arbitrary and capricious because it rests entirely on erroneous

legal justifications. We agree and therefore grant the petition.

I.

The Clean Air Act authorizes EPA to impose emission

standards and limitations for various sources of air pollution,

including factories and power plants. The Act defines an

emission limitation as “a requirement … which limits the

quantity, rate, or concentration of emissions of air pollutants on

a continuous basis.” 42 U.S.C. § 7602(k). As relevant here,

3

EPA sets emission limitations based on the capabilities of

pollution control technology. See, e.g., id. §§ 7411, 7412. Title

V of the Clean Air Act, enacted in 1990, establishes a

permitting regime for facilities that emit air pollution. Id.

§§ 7661 et seq. This regime “consolidate[d] existing air

pollution requirements into a single document, the Title V

permit.” U.S. Sugar Corp. v. EPA, 830 F.3d 579, 597 (D.C. Cir.

2016) (cleaned up).

All operators of stationary sources of air pollution are

required to apply for and hold a Title V permit, which must list

the “enforceable emission limitations and standards”

applicable to the source under the Clean Air Act. 42 U.S.C.

§ 7661c(a); see id. § 7661a(a). If an operator violates the

emission limitations and standards incorporated in its permit,

the operator can be sued for injunctive relief and “any

appropriate civil penalties.” Id. § 7604(a); see id. § 7413(b).

But the permit also creates a “shield” from liability that treats

compliance with the permit’s terms as compliance with

applicable Clean Air Act requirements. Id. § 7661c(f).

Shortly after Congress enacted Title V, EPA promulgated

regulations that created a narrow defense for stationary sources

that exceed their emission limitations due to an emergency

event. See 57 Fed. Reg. 32250, 32306 (1992) (establishing

affirmative defense for holders of state-issued Title V permits);

61 Fed. Reg. 34202, 34239 (1996) (extending affirmative

defense to holders of federally issued permits). These

regulations created “an affirmative defense to an action brought

for noncompliance with … technology-based emission

limitations” during an emergency. 40 C.F.R. § 70.6(g)(2)

(2022). The regulations defined an emergency as “any situation

arising from sudden and reasonably unforeseeable events

beyond the control of the source, including acts of God,” that

“causes the source to exceed a technology-based emission

4

limitation under the permit, due to unavoidable increases in

emissions attributable to the emergency.” Id. § 70.6(g)(1)

(2022). To qualify for the defense, the permittee was required

to prove that “[a]n emergency occurred,” that the facility was

“being properly operated,” and that the permittee had taken “all

reasonable steps” to minimize excess emissions during the

emergency. Id. § 70.6(g)(3) (2022). If the defense applied, a

permittee would not be found in violation of the Clean Air Act

for exceeding its emission limitations. Id. § 70.6(g)(2) (2022).

For decades, EPA retained the Title V affirmative defense

for emergencies. In 2016, however, EPA proposed rescinding

the defense on the ground that it unlawfully encroached on the

judiciary’s role to impose “any appropriate civil penalties” for

Clean Air Act violations. 42 U.S.C. § 7604(a); see 81 Fed. Reg.

38645, 38648–49 (2016) (discussing NRDC v. EPA, 749 F.3d

1055 (D.C. Cir. 2014)). In the alternative, EPA concluded the

defense was unlawful because it operated as an exemption from

otherwise applicable emission limitations, rendering those

limitations non-continuous in violation of 42 U.S.C. § 7602(k).

81 Fed. Reg. at 38648 n.12 (discussing Sierra Club v. EPA, 551

F.3d 1019 (D.C. Cir. 2008)). EPA rescinded the defense in a

final rule issued in 2023. 88 Fed. Reg. 47029, 47030–31

(2023).

SSM Litigation Group (“SSM”), a coalition of trade

associations some of whose members operate stationary

sources of air pollution and hold Title V permits, petitioned for

review.

II.

We begin, as we must, with our jurisdiction. We have

exclusive jurisdiction over petitions challenging “any …

nationally applicable regulations promulgated, or final action

taken, by the [EPA] Administrator.” 42 U.S.C. § 7607(b). The

5

government and environmental intervenors maintain that SSM

has failed to demonstrate standing. Because SSM is an

association ultimately representing entities directly regulated

under Title V, we conclude it has standing to challenge the

rescission of the Title V affirmative defense.

A.

To demonstrate associational standing, “an organization

must show that (1) its members would otherwise have standing

to sue in their own right; (2) the interests it seeks to protect are

germane to the organization’s purpose; and (3) neither the

claim asserted nor the relief requested requires the participation

of individual members in the lawsuit.” Int’l Dark-Sky Ass’n,

Inc. v. FCC, 106 F.4th 1206, 1217 (D.C. Cir. 2024) (cleaned

up). At the time SSM submitted its petition, the D.C. Circuit

Rules required a direct review petitioner to “set forth the basis

for the claim of standing” in its opening brief and, if standing

is not apparent from the administrative record, to establish

standing through “arguments and evidence.”1 D.C. Cir. R.

28(a)(7) (2024). In applying this rule, we have “allowed

petitioners to proceed if a reply brief fleshes out a timely raised

theory of standing and also makes standing patently obvious

and irrefutable.” Sierra Club v. U.S. Dep’t of Energy, 107 F.4th

1012, 1015 (D.C. Cir. 2024) (cleaned up).

B.

The parties do not dispute that the interests SSM seeks to

protect are germane to its purpose or that the claim asserted and

relief sought—reversal of a rule—do not require the

1

D.C. Circuit Rule 28(a)(7) has since been amended, effective

August 11, 2025, to require all petitioners to include, in their opening

briefs, arguments and evidence establishing standing, regardless of

whether standing is apparent from the administrative record.

6

participation of individual members. Int’l Dark-Sky Ass’n, 106

F.4th at 1217. They disagree only over whether SSM has

demonstrated, in accordance with our local rules, that it has

members that would have standing to sue in their own right.

We conclude SSM has made this showing.

SSM raised a straightforward theory of standing in its

opening brief. It explained that it is a coalition of trade

associations “whose members operate stationary sources of air

pollution subject to operating permits issued under [Clean Air

Act] Title V” and who were protected “under an affirmative

defense provision” for emergencies. SSM Br. at 18. In other

words, SSM’s member associations have members that are

directly regulated under Title V and that have been exposed to

liability by EPA’s rescission of the affirmative defense

included in their permits. That injury is redressable by an order

of this court setting aside the rescission regulation.

Neither EPA nor intervenors question that a holder of a

Title V permit would have standing to sue if its permit included

the affirmative defense. EPA argues only that SSM failed to

provide evidence that it represents such permit holders. To be

sure, SSM neglected in its opening brief to attach declarations

from any member association, instead providing those

declarations only in its reply brief. But that delay in providing

evidence of standing is excusable because (1) the

administrative record “went a long way toward showing

standing”; (2) the reply brief declarations did not raise a new

theory of standing and made standing “patently obvious”; and

(3) EPA “suffered no prejudice” from the delay. Nat’l Council

for Adoption v. Blinken, 4 F.4th 106, 112 (D.C. Cir. 2021).

First, when filing its petition, SSM reasonably concluded

the administrative record was sufficient to establish its

standing. As SSM pointed out in its opening brief, numerous

7

commenters in the rulemaking process raised a similar theory

of injury caused by the rescission of the affirmative defense.

See, e.g., J.A. 55 (comment by Ohio Chemistry Technology

Council, et al., explaining its “members are subject to

regulation by Ohio’s … fully-approved Title V operating

permit program, and have a direct and substantial interest in the

action proposed by EPA”); J.A. 59 (comment by a trade

association explaining its “members own and operate

manufacturing facilities … affected by the proposed change in

the operating permit program regulations because they are

required to have [Clean Air Act] operating permits”). At the

time SSM filed its petition, Circuit Rule 28(a)(7) required

evidence of standing only when standing was “not apparent

from the administrative record.” D.C. Cir. R. 28(a)(7) (2024).

But the record here demonstrates that directly regulated Title

V permit holders are injured by the rescission—an entirely

obvious and straightforward theory of standing.

SSM’s reliance on the administrative record in its opening

brief was reasonable, particularly because the requirement that

an association identify specific members is most salient when

an association represents third parties who are not directly

regulated. See, e.g., Sierra Club v. EPA, 292 F.3d 895, 901–02

(D.C. Cir. 2002) (evaluating whether individuals had standing

to challenge rule regulating facilities generating or treating

toxic wastewater); Chamber of Commerce v. EPA, 642 F.3d

192, 200–10 (D.C. Cir. 2011) (evaluating whether automobile

dealers had standing to challenge rule regulating automobile

manufacturers); Twin Rivers Paper Co. LLC v. SEC, 934 F.3d

607, 613–14 (D.C. Cir. 2019) (evaluating whether retirees had

standing to challenge rule regulating investment funds). SSM

asserted its members represent directly regulated Title V permit

holders, and the explanation of why such directly regulated

entities have standing is clearly established by the

administrative record.

8

Second, although SSM did not identify specific regulated

entities in its opening brief, it provided the necessary

declarations in its reply brief, which “ma[de] standing patently

obvious and irrefutable.” Dep’t of Energy, 107 F.4th at 1015

(cleaned up). In its reply brief, SSM attached declarations from

member associations that corroborated its original theory of

standing. For example, the American Chemistry Council

attested that it is part of SSM and that its members “have

facilities required to have an operating permit under Title V of

the Clean Air Act,” some of which “are located in states that

had approved state Title V permitting programs that contained

Title V affirmative defense provisions.” Reply Br., Ex. B.,

Decl. of Dr. Kimberly White. The American Forest and Paper

Association attested to similar facts. See Reply Br., Ex. A,

Decl. of Timothy Hunt (attesting the Title V affirmative

defense “had been either stated in or incorporated by reference

in” the Title V permits “that some or all” of the associations’

members’ are required to have). These declarations make

standing patently obvious and irrefutable because they confirm

that the facilities SSM ultimately represents are “object[s] of

the action (or forgone action) at issue.” Lujan v. Defs. of

Wildlife, 504 U.S. 555, 561 (1992).

At oral argument, EPA suggested the reply brief

declarations were deficient because they failed to name

individual facilities. Our precedents are clear, however, that

“anonymity is no barrier to standing on this record” because

SSM’s members are “directly regulated by the … [r]ule” and

naming them would “add[] no essential information bearing on

the injury component of standing.” Advocs. for Highway &

Auto Safety v. Fed. Motor Carrier Safety Admin., 41 F.4th 586,

594 (D.C. Cir. 2022) (cleaned up). EPA does not, and cannot,

maintain that a directly regulated facility protected by the

affirmative defense lacks standing to challenge its rescission.

And there is no serious dispute that SSM’s reply brief

9

declarations—made under penalty of perjury—establish that

SSM represents such facilities.

Finally, because SSM’s standing is irrefutable and the

reply brief declarations merely bolster its original theory of

standing, EPA “was not prejudiced by its inability to respond

to the supplemental declarations.” Cmtys. Against Runway

Expansion, Inc. v. FAA, 355 F.3d 678, 685 (D.C. Cir. 2004);

see also Dep’t of Energy, 107 F.4th at 1015 (same). We may

consider these reply brief declarations, which conclusively

establish that SSM has associational standing.

III.

On the merits, we conclude EPA’s rescission of the

affirmative defense was not reasonably explained and not in

accordance with law. See 42 U.S.C. § 7607(d)(9)(A)

(authorizing reviewing court to “reverse any … action found to

be … arbitrary, capricious, an abuse of discretion, or otherwise

not in accordance with law”); Ethyl Corp. v. EPA, 51 F.3d

1053, 1064 (D.C. Cir. 1995) (explaining the Clean Air Act’s

standard of review “is essentially the same” as that of the

Administrative Procedure Act). The agency justified its

rescission exclusively on legal grounds, asserting the Title V

affirmative defense was unlawful for two alternative reasons.

First, EPA primarily maintained the affirmative defense

encroached on the judiciary’s statutory authority to assess civil

penalties. In the alternative, EPA stated the defense functioned

as an exemption that rendered emission limitations non-

continuous in violation of the Clean Air Act. Because the

10

agency’s rescission regulation was premised entirely on

erroneous legal justifications, it must be reversed.

A.

EPA justified its rescission of the Title V affirmative

defense primarily on the ground that the defense unlawfully

encroached on the judiciary’s role under the Clean Air Act to

assess penalties for violations of emission limitations. See 88

Fed. Reg. at 47030–34. EPA based this conclusion on NRDC

v. EPA, which held that a partial affirmative defense to

monetary penalties unlawfully restricted the judiciary’s

statutory authority to impose “appropriate civil penalties.” 749

F.3d at 1063 (quoting 42 U.S.C. § 7604(a)). EPA now

concedes—and the environmental intervenors largely do not

dispute—that the primary rationale for the rescission has been

foreclosed by our intervening decision in Environmental

Committee of Florida Electric Power Coordinating Group,

Inc. v. EPA, 94 F.4th 77 (D.C. Cir. 2024) (“Florida Electric”).

In Florida Electric, we clarified the critical distinction

between a true affirmative defense that operates as a complete

defense to Clean Air Act liability—as does the Title V defense

for emergencies—and an affirmative defense that merely

“precludes certain remedies after a source has violated an

emission rule.” Id. at 114. The latter is better understood as a

limitation on remedies. Id. at 86 (discussing different types of

affirmative defenses). Under the Clean Air Act, the EPA has

no authority to create a regulatory “defense” that limits the

remedial authority granted by Congress to the federal courts.

Id. at 114–15. But a complete affirmative defense, like the one

at issue here, is permissible because it relates to the antecedent

question of liability and therefore does not impinge on the

judiciary’s authority to award “appropriate civil penalties.” 42

U.S.C. § 7604(a).

11

Because the Title V affirmative defense is a complete

defense to liability, not a limitation on judicial remedies, EPA’s

primary rationale for its rescission was erroneous.

B.

EPA and the environmental intervenors also defend the

rescission regulation on the ground that the Title V affirmative

defense is effectively an exemption from applicable emission

limitations and therefore renders those limitations not

“continuous” in violation of the Clean Air Act, as interpreted

by this court in Sierra Club v. EPA, 551 F.3d at 1027–28. This

rationale finds no support in the Clean Air Act or Sierra Club.

The Clean Air Act requires EPA to establish emission

standards. See, e.g., 42 U.S.C. § 7412(d). And the Act defines

an emission standard or limitation as a requirement that “limits

the quantity, rate, or concentration of emissions of air

pollutants on a continuous basis.” Id. § 7602(k) (emphasis

added). Reading these provisions together in a case involving

section 112 standards, we interpreted the Clean Air Act to

require “that some section 112 standard apply continuously.”

Sierra Club, 551 F.3d at 1028. We held that a regulation that

expressly lifted section 112 standards during periods of startup,

shutdown, and malfunction was contrary to the Act. Id.

The reasoning of Sierra Club, however, does not support

EPA’s contention that the Title V affirmative defense is

unlawful. The agency’s argument conflates two distinct legal

concepts: an affirmative defense to liability and an ex ante

exemption from an emission standard. An affirmative defense

allows a defendant to avoid liability, but it does not alter the

underlying legal requirements.2 See Wright & Miller, 5 Fed.

2

The concept of an affirmative defense derives from the common

law pleading device known as confession and avoidance. See

12

Prac. & Proc. Civ. § 1270 (4th ed. updated May 2025). The

very concept of an affirmative defense assumes that a legal

standard remains in force, because otherwise there would be no

claim—and no need for an affirmative defense. See Wright v.

Southland Corp., 187 F.3d 1287, 1303 (11th Cir. 1999) (“An

affirmative defense is generally a defense that, if established,

requires judgment for the defendant even if the plaintiff can

prove his case.”). Unlike the regulatory exemption in Sierra

Club, which suspended emission standards during certain

times, the Title V affirmative defense for emergencies does not

lift applicable standards. Because the emission standards are

never lifted, they apply “on a continuous basis” as required by

the Clean Air Act. 42 U.S.C. § 7602(k).

EPA leans on the fact that in Florida Electric we described

complete affirmative defenses as “creat[ing] an exemption

from the normal emission rule” and as “functionally

exemptions.” 94 F.4th at 114, 116. Those descriptions,

however, were necessary only to distinguish complete

affirmatives defenses from partial affirmative defenses—and

to explain why the complete affirmative defenses did not

encroach on the judiciary’s power to choose appropriate

remedies for a Clean Air Act violation. Id. at 114. We did not

otherwise collapse the legal distinction between an affirmative

defense and an ex ante exemption from a legal standard. And,

as EPA acknowledges in its brief, Florida Electric did not

reach the question of whether a complete affirmative defense

Shipman, Common-Law Pleading § 166, p. 299–301 (3d ed. 1923).

Confession and avoidance contrasts with demurrer, which is an

assertion that a claim is legally insufficient on its own terms. See id.

§§ 146–47, p. 277–79. Today, litigants make such insufficiency

assertions through a motion to dismiss, Fed R. Civ. P. 12(b)(6),

whereas affirmative defenses must typically be raised in a responsive

pleading, Fed R. Civ. P. 8(c)(1).

13

would render an emission limitation non-continuous in

violation of the Clean Air Act. See id.; EPA Br. at 40.

Squarely presented with that question, we now hold that a

complete affirmative defense to liability does not render an

emission limitation non-continuous under 42 U.S.C. § 7602(k).

EPA therefore cannot justify its rescission of the Title V

affirmative defense on the ground that it renders emission

limitations non-continuous.

***

EPA rescinded a thirty-year-old affirmative defense on the

ground that it was unlawful under the Clean Air Act. EPA’s

reasoning, however, cannot be squared with the text of the

Clean Air Act or our precedents. Because EPA offered no

independent policy rationale, its rescission regulation was

unreasonable and not in accordance with law. We therefore

grant the petition and reverse the rescission.

So ordered.