Cal. Cmty. Against Toxics v. Envtl. Prot. Agency

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued April 1, 2019 Decided August 20, 2019

No. 18-1085

CALIFORNIA COMMUNITIES AGAINST TOXICS, ET AL.,

PETITIONERS

v.

ENVIRONMENTAL PROTECTION AGENCY AND ANDREW

WHEELER, ADMINISTRATOR, U.S. ENVIRONMENTAL

PROTECTION AGENCY,

RESPONDENTS

AIR PERMITTING FORUM, ET AL.,

INTERVENORS

Consolidated with 18-1095, 18-1096

On Petitions for Review of Action of the

United States Environmental Protection Agency

Sanjay Narayan argued the cause for Environmental

Petitioners. With him on the briefs were James S. Pew, Tomás

E. Carbonell, Vickie Patton, Surbhi Sarang, John Walke, Emily

Davis, Thomas Zimpleman, and Keri N. Powell.

Kavita P. Lesser, Deputy Attorney General, Office of the

Attorney General for the State of California, argued the cause

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for petitioner State of California. With her on the briefs were

Xavier Becerra, Attorney General, David A. Zonana, Deputy

Attorney General, and Jonathan Wiener, Deputy Attorney

General.

Eric Grant, Attorney, U.S. Department of Justice, argued

the cause for respondents. On the brief were Jeffrey Bossert

Clark, Assistant Attorney General, Jonathan D. Brightbill,

Deputy Assistant Attorney General, and Scott Jordan,

Attorney, U.S. Environmental Protection Agency.

Shannon S. Broome argued the cause for intervenors-

respondents Air Permitting Forum, et al. With her on the briefs

were Charles H. Knauss, Leslie Sue Ritts, Makram B. Jaber,

and Andrew D. Knudsen.

David M. Friedland, Leslie A. Hulse, Felicia H. Barnes,

Steven P. Lehotsky, Michael B. Schon, and amici curiae

American Chemistry Council, et al. in support of respondents.

Before: ROGERS and WILKINS, Circuit Judges, and

SILBERMAN, Senior Judge.

Opinion for the Court filed by Circuit Judge WILKINS.

Dissenting Opinion filed by Circuit Judge ROGERS.

This case asks us to determine the nature of an agency

action, an inquiry that – paradoxically – is quotidian but

abstruse. When we are confronted with agency action, the

litany of questions is by now very well-rehearsed: Is it final? Is

it ripe? Is it a policy statement? Is it an interpretive rule? Is it a

legislative rule? Despite the clarity of these questions,

however, predictable answers have eluded courts and

commentators. See, e.g., Perez v. Mortg. Bankers Ass’n., 135

3

S. Ct. 1199, 1204 (2015) (describing the question of how to

distinguish between legislative and interpretive rules as “the

source of much scholarly and judicial debate”); Ticor Title Ins.

Co. v. FTC, 814 F.2d 731, 745 (D.C. Cir. 1987) (opinion of

Williams, J.) (characterizing the law governing finality and

ripeness as “chaotic”); Ronald M. Levin, Rulemaking and the

Guidance Exemption, 70 ADMIN L. REV. 264, 348 (2018) (“The

standard view among commentators is that [distinguishing

between legislative and nonlegislative rules] is exceptionally

perplexing and incoherent.”). Indeed, the nature of agency

action, it seems, is too often in the eye of the beholder. We

resolve the instant matter, therefore, with our eye toward the

“continuing project” of clarifying this “byzantine” area of the

law. Nat’l Min. Ass’n v. McCarthy, 758 F.3d 243, 246 (D.C.

Cir. 2014).

The agency action before us is a 2018 memorandum

(“Wehrum Memo”) that William L. Wehrum, Assistant

Administrator for the Environmental Protection Agency’s

(“EPA”) Office of Air and Radiation, issued to all Regional Air

Division Directors. The Wehrum Memo declares that the plain

language of § 112 of the Clean Air Act (“Act” or “CAA”), 42

U.S.C. § 7412, compels the conclusion that a source of toxic

emissions classified as “major” can reclassify to an “area

source,” and thereby ease its regulatory burden, at any time

after it limits its potential to emit to below the major source

threshold. J.A. 1. The Wehrum Memo states that it supersedes

a prior 1995 EPA memorandum (“Seitz Memo”) issued by

John Seitz, then Director of EPA’s Office of Air Quality

Planning and Standards, which interpreted § 112 to mean that

once EPA classifies a source as major, that source can never

reclassify to area source status, even if it limits its potential to

emit to below the major source threshold. Id.

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Petitioners are the State of California and a group of

environmental organizations whose citizens and members,

respectively, breathe the air in the vicinity of regulated sources.

EPA is the Respondent, and a group of industry organizations

have joined as Intervenor. Petitioners contend that we can and

should review the Wehrum Memo because it is final agency

action and prudentially ripe. Moreover, Petitioners argue, the

Wehrum Memo is a legislative rule, and it is therefore

procedurally defective under the Administrative Procedure Act

(“APA”), 5 U.S.C. § 551 et seq., because EPA failed to provide

notice and comment before issuing it, see id. § 553. But even

if we hold that the Wehrum Memo is an interpretive rule (for

which notice and comment is not required, see id.), Petitioners

contend that we still must vacate it because EPA’s

interpretation of § 112 is incorrect. Respondent and Intervenor

retort that this Court lacks jurisdiction over the Wehrum Memo

because it is not final agency action. Alternatively, they argue,

we should not review it because it is not prudentially ripe. If,

however, we find the Wehrum Memo final and ripe,

Respondent and Intervenor assert, we must deny the petitions

because it is an interpretive rule and is thus procedurally sound,

and its interpretation of § 112 is correct.

For the reasons explained herein, we hold that the Wehrum

Memo is not final agency action, and we dismiss the petitions

for lack of subject matter jurisdiction under the Act. We

express no opinion as to whether the Wehrum Memo is

prudentially ripe, an interpretive rule or a legislative rule, or on

the merits of its interpretation of § 112. In holding that the

Wehrum Memo is not final, we emphasize two points. First,

when assessing the nature of an agency action (including

whether it is final), courts should resist the temptation to define

the action by comparing it to superficially similar actions in the

caselaw. Rather, courts should take as their NorthStar the

unique constellation of statutes and regulations that govern the

5

action at issue. Second, although all legislative rules are final,

not all final rules are legislative, and the finality analysis is

therefore distinct from the test for whether an agency action is

a legislative rule.

I.

Because they share a progenitor, a reliable approach to

understanding a James Baldwin novel is to compare it,

according to a set of criteria, to another work in his oeuvre.

Indeed, a thematic reading of Giovanni’s Room is sure to

inform such a reading of The Fire Next Time, and vice versa.

Not so, however, with respect to the broad set of phenomena

we categorize as agency action. Because few, if any, of them

are governed by the exact same combination of statutes and

regulations, it is a mistake to assume – even if they appear

facially similar – that they can lend each other definition

through comparison, or that they are decipherable under a

common rubric. Rather, to ascertain the nature of an agency

action, courts should ground the analysis in the idiosyncratic

regime of statutes and regulations that govern it. We have great

sympathy for the desire to develop a one-size-fits-all heuristic.

See, e.g., Nat’l Min., 758 F.3d at 251 (“. . . all relevant parties

should instantly be able to tell whether an agency action is a

legislative rule, an interpretive rule, or a general statement of

policy . . . .”). But this desire is perhaps misplaced, since, as we

once said of interpretation itself, agency action is “a chameleon

that takes its color from its context.” American Min. Congress

v. EPA, 995 F.2d 1106, 1111 (D.C. Cir. 1993).

Accordingly, we turn first to the CAA provisions and EPA

regulations that govern the Wehrum Memo.

Congress enacted the CAA, 42 U.S.C. § 7401 et seq., to

“protect and enhance the quality of the Nation’s air

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resources . . . . ” Id. § 7401(b)(1). Toward this end, § 112

requires EPA to regulate “Hazardous Air Pollutants,” i.e. toxic

emissions such as chloroform. Id. § 7412. Congress

established an initial list of hazardous air pollutants, id.

§ 7412(b)(1), but the Act requires EPA to curate it, deleting or

adding hazardous air pollutants over time according to certain

criteria, id. § 7412(b)(2)-(3). Based on this list, the Act

mandates EPA to create a second list of categories of sources

of hazardous air pollutants, id. § 7412(c), like asphalt

processing plants and industrial dry-cleaning facilities, see

Revision of Source Category List under Section 112 of the

Clean Air Act, 70 Fed. Reg. 37819-01 (June 30, 2005).

Importantly, the Act distinguishes between “major” and “area”

sources. Id. § 7412(a)(1)-(2). According to the Act’s

definitional provisions, a major source means any source

within a listed category that “emits or has the potential to emit

considering controls, in the aggregate, 10 tons per year or more

of any [listed hazardous air pollutant] or 25 tons per year or

more of any combination of [listed hazardous air pollutants].”

Id. § 7412(a)(1). Area source means “any stationary source of

[hazardous air pollutants] that is not a major source.” Id.

§ 7412(a)(2).

Whether EPA classifies a source as major or area has

major consequences for both sources of hazardous air

pollutants, which must comply with emissions standards, and

regulatory beneficiaries, who live, work, recreate – and thus

regularly breathe the air – near sources of hazardous air

pollutants. For major sources, the Act requires EPA to establish

stringent emissions caps that result in “the maximum degree of

reduction in emissions . . . (including a prohibition on such

emissions, where achievable).” Id. § 7412(d). EPA refers to

these emissions limitations as “Maximum Achievable Control

Technology” (“MACT”) standards. J.A. 1. The Act mandates

that MACT standards be “no less stringent than the emission

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control that is achieved in practice by the best controlled

similar source.” Id. § 7412(d)(3). By contrast, for area sources,

EPA need not set emissions caps at all, save under limited

circumstances. See id. § 7412(c)(3). Moreover, where the

agency chooses to cap emissions for an area source, it may set

emissions limits based on “Generally Available Control

Technology” (“GACT”) standards, which are far more lenient

than their MACT counterparts.1

Of course, emissions caps are of little use if sources do not

comply with them. Presumably in recognition of this, Congress

enacted Title V of the CAA, 42 U.S.C. § 7661 et seq., which

makes it unlawful for a source subject to regulations under the

Act – including GACT or MACT standards under § 112 – to

operate without a permit, see id. § 7661a(a). Specifically,

within a year of becoming subject to an obligation under the

Act, Title V requires a source to submit a permit application

and compliance plan to a state permitting authority. Id.

§ 7661b(b)-(c). In addition, a source must certify its

compliance annually and submit to inspection, monitoring, and

reporting requirements. Id. § 7661c(a)-(c). A source may apply

to modify its permit, 40 C.F.R. § 70.7(e), and state permitting

authorities must provide for public comment and a hearing on

all permit applications that they receive, 42 U.S.C. §

7661a(b)(6).

But what if a state permitting authority issues or denies a

permit application on a ground that a regulated source, or a

1

As we have observed, the Act does not provide any parameters for

setting GACT standards, but its legislative history describes GACT

as “‘methods . . . [that] are commercially available and appropriate

for application . . . considering economic impacts and the technical

capabilities of firms to operate and maintain the emissions control

systems.’” U.S. Sugar Corp. v. EPA, 830 F.3d 579, 595 (D.C. Cir.

2016) (quoting S. REP. NO. 101-228, at 171 (1989)).

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regulatory beneficiary believes contravenes the Act? Congress

apparently foresaw this circumstance, too. Indeed, Title V

provides a detailed administrative process that dictates exactly

when and how regulated sources and regulatory beneficiaries

may seek EPA review of a state permitting authority’s action,

and, ultimately, judicial review of EPA action. See id. § 7611d.

The process works as follows. First, state permitting authorities

must submit to EPA all proposed operating permits. Id.

§ 7611d(a)(1). If any permit contains a provision that the

Administrator determines is not in compliance with the Act, the

Administrator must object in writing, and provide a statement

of reasons for the objection, within forty-five days after

receiving a copy of the proposed permit. Id. § 7661d(b)(1). If,

within ninety days of an EPA objection, a permitting authority

fails to submit a revised permit that satisfies the objection, the

Administrator must issue or deny the permit in accordance with

the Act. Id. § 7661d(c). Notably, refusing to revise a permit to

conform with an EPA objection does not expose a permitting

authority to any sort of penalty or liability whatsoever. If the

Administrator does not object in writing within forty-five days

of receiving a proposed permit, any person – including a

regulated source or a regulatory beneficiary – may, within

sixty days after EPA’s forty-five-day objection period expires,

petition the Administrator to object. Id. § 7661d(b)(2). The

Administrator must grant or deny such a petition within sixty

days after it is filed. Id.

Importantly, for reasons that will become clear, § 7661d

specifies: (1) that “[n]o objection shall be subject to judicial

review until the Administrator takes final action to issue or

deny a permit under this subsection,” id. § 7661d(c); and (2)

that the Administrator’s denial of a petition to object “shall be

subject to judicial review under section 7607,” id.

§ 7661d(b)(2). In turn, § 7607 contains the Act’s umbrella

judicial review provision, which confers jurisdiction in the

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appropriate circuit for regionally applicable final action of the

Administrator and in this Court for, inter alia, final action of

the Administrator that is “nationally applicable.” Id.

§ 7607(b)(1).

With an understanding of the major statutory provisions

and some of the regulations that govern the Wehrum Memo,

we now provide fuller descriptions of the Wehrum Memo’s

predecessor, the Seitz Memo, and the Wehrum Memo itself.

Where appropriate, we take care to note additional applicable

CAA provisions and EPA regulations.

In 1995, without providing notice and comment, John

Seitz – then Director of EPA’s Office of Air Quality Planning

and Standards – issued a memorandum to “clarify when a

major source of [hazardous air pollutants] can become an area

source” under § 112. J.A. 232 (underline in original). A major

source may reclassify to an area source by limiting its potential

to emit to below the major source threshold, the Seitz Memo

concluded, only until the first date on which it must comply

with a MACT standard or any other substantive regulatory

requirement under the Act. Id. at 236. The Seitz Memo referred

to this policy as “once in, always in.” Id. In other words, under

the Seitz Memo, once EPA classifies a source as major under

§ 112 and its first compliance date passes, the source is

ineligible to reclassify as an area source, even if it takes an

enforceable limit on its potential to emit to below the major

source threshold. Despite EPA’s stated intention to do so, see

J.A. 234, the agency never formalized the Seitz Memo through

notice and comment rulemaking. Nevertheless, the Seitz Memo

has remained in effect for nearly twenty-five years.

On January 25, 2018, however, EPA announced it was

reversing course. That day, William L. Wehrum, Assistant

Administrator for EPA’s Office of Air and Radiation, and

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“principal adviser to the Administrator in matters pertaining to

air and radiation programs,” 40 C.F.R. § 1.41, issued a four-

page memo to the agency’s Regional Air Division Directors; it

announced that EPA would no longer interpret § 112 in

accordance with the Seitz Memo. Indeed, the Wehrum Memo

explains, the agency cannot interpret § 112 in accordance with

the Seitz Memo because the statute’s plain-language “compels

the conclusion” that a major source becomes an area source at

such time when it takes an enforceable limit on its potential to

emit to below the major source threshold. J.A. 1. Congress, the

Wehrum Memo argues, placed no “temporal limitations” on

when a major source is eligible to reclassify as an area source.

Id. at 3. Accordingly, the Wehrum Memo declares that when

a source previously classified as major limits its potential to

emit to below the major source threshold, it “will no longer be

subject either to the major source MACT or other major source

requirements that were applicable to it as a major source under

CAA section 112.” Id. at 1. In addition, the Wehrum Memo

states that it “supersedes” the Seitz Memo, id., and it instructs

that “[t]he Regional offices should send this memorandum to

states within their jurisdiction,” id. at 4.

II.

Before explaining why the Wehrum Memo is not final

agency action, we take a moment to clarify the proper test for

finality. In this Court, its contours have become blurred amidst

the “considerable smog,” Ass’n. of Flight Attendants v. Huerta,

785 F.3d 710, 717 (D.C. Cir. 2015), enshrouding the related

but separate analysis of whether an agency action is a

legislative rule. In Flight Attendants, for example, we framed

the finality inquiry as asking whether an action is “non-

binding” or a “binding legislative rule,” Flight Attendants, 785

F.3d at 716, and we held that the guidance document at issue

was nonfinal because it was “not a legislative rule carrying the

11

‘force and effect of law,’” id. (quoting Perez, 135 S. Ct. at

1204). Likewise, in National Mining, we opined that in order

to analyze whether an action is final, we must first “take a step

back” and analyze whether the rule is a legislative rule,

interpretive rule, or general statement of policy. Nat’l Min.

Ass’n, 758 F.3d at 251-52. The most important factor in this

analysis, we continued, is whether an action has “actual legal

effect,” id. at 252, and we held that the action at issue did not

and was therefore unreviewable, id. at 252-53.

Subsuming the finality analysis within the test for whether

a rule is legislative is not always inappropriate; if a rule is

legislative it has the force and effect of law, and a legislative

rule is thus necessarily final. As the Supreme Court has twice

reminded us within the last five years, however, if a rule is final

it is not necessarily legislative, and therefore the finality

analysis is distinct from the test for whether an agency action

is a legislative rule.

In United States Army Corps of Engineers v. Hawkes Co.,

136 S. Ct. 1807 (2016), the Court affirmed that the two-prong

test in Bennett v. Spear, 520 U.S. 154 (1997), remains finality’s

touchstone, see Hawkes, 136 S. Ct. at 1813 (quoting Bennett,

520 U.S. at 177-78) (“First, the agency action must mark the

consummation of the agency’s decisionmaking process . . . .

And second, the action must be one by which rights or

obligations have been determined, or from which legal

consequences will flow.”). In Hawkes, the question of whether

the agency action at issue was the consummation of the

agency’s decisionmaking process was not in dispute.

Accordingly, the Court’s analysis focused on whether the

action satisfied the second prong of Bennett. Notably, in

undertaking this inquiry, the Court neither asked whether the

action at issue had the force and effect of law nor made a single

mention of legislative rules. Rather, the Court’s inquiry

12

focused on whether the action at issue gave “rise to ‘direct and

appreciable legal consequences.’” Hawkes, 136 S. Ct. at 1814

(quoting Bennett, 520 U.S. at 178).

Perez, too, makes clear that the finality analysis is distinct

from the test for whether a rule is legislative. There, the Court

affirmed the “longstanding recognition that interpretive rules

do not have the force and effect of law.” Perez, 135 S. Ct. at

1208 (internal citations omitted). Accordingly, overruling

Paralyzed Veterans of Am. v. D.C. Arena L.P., 117 F.3d 579

(D.C. Cir. 1997), the Court held that the APA does not require

an agency to provide notice and comment in amending an

interpretive rule, even if the new rule deviates significantly

from its predecessor. Id. at 1206. In so holding, the Court

reassured regulated entities and regulatory beneficiaries that

they are not without recourse should an agency – perhaps to

evade notice and comment – repudiate a longstanding

interpretive rule by way of a second interpretive rule. Id. at

1209. In such a circumstance, the Court explained, an affected

party can seek judicial review pursuant to the APA. Id. Because

only final agency action is reviewable under the APA, see 5

U.S.C. § 704, Perez thus affirms that interpretive rules can be

final, and, by implication, that the test for finality is

independent of the analysis for whether an agency action is a

legislative rule rather than an interpretive rule.

As commentators explain, maintaining an independent

finality analysis is not merely a theoretical nicety; it has several

salutary effects in practice. For example – as Perez alludes to,

see 135 S. Ct. at 1209 – maintaining a finality analysis that is

distinct from the test for whether a rule is legislative permits

courts to review nonlegislative rules and thus safeguards

against agencies evading both judicial review and notice and

comment by acting via nonlegislative rules. See William Funk,

Final Agency Action After Hawkes, 11 N.Y.U. J. L. & LIBERTY

13

285, 304 (2017). This is especially important when viewed

from the perspective of regulatory beneficiaries, who are

generally not parties to enforcement actions, and, therefore,

may only be able to challenge nonlegislative rules via judicial

review. See Nina A. Mendelson, Regulatory Beneficiaries and

Informal Agency Policymaking, 92 CORNELL L. REV. 397, 420-

24 (2007).

Having clarified the proper test for finality, we now apply

it to the Wehrum Memo. Consistent with the interpretive

method we endorse herein, we hew closely to the CAA

provisions and EPA regulations appertaining thereto.

Our first question is whether the Wehrum Memo “mark[s]

the consummation of [EPA’s] decisionmaking process.”

Hawkes, 136 S. Ct. at 1813 (quoting Bennett, 520 U.S. at 177-

78). It does. Notably, neither Respondent nor Intervenor offer

substantive argument to the contrary. They were smart to save

their ink. The Wehrum Memo unequivocally states that the

plain language of § 112 “compels” the legal conclusion that

qualifying major sources can reclassify at such time that they

take an enforceable limit on their potential to emit to below the

major source threshold. J.A. 1. In other words, the Wehrum

Memo does not advance what EPA believes is a reasonable

interpretation of § 112; it advances what EPA believes is the

only permissible interpretation of the statute. Moreover, no

mere subordinate issued the Wehrum Memo. Far from it. The

Assistant Administrator for the Office of Air and Radiation

issued it. As discussed, under EPA regulations, he is the

“principal advisor to the Administrator in matters pertaining to

air and radiation,” see 40 C.F.R. § 1.41, and, as we have held

previously with respect to the Assistant Administrator for the

Office of Air and Radiation, nothing within EPA’s regulations

provides us “reason to question his authority to speak for the

EPA.” Her Majesty the Queen in Right of Ontario v. EPA, 912

14

F.2d 1525, 1532 (D.C. Cir. 1990) (internal citations omitted).

Cf. Soundboard Ass’n. v. FTC, 888 F.3d 1261, 1267-69 (D.C.

Cir. 2018), cert denied 139 S. Ct. 1544, 2019 WL 1590248

(Apr. 15, 2019) (Federal Trade Commission (“FTC”) staff

opinion letter not consummation of agency’s decisionmaking

process because FTC regulations expressly delineated between

Commission advice and staff advice and provided petitioners

opportunity to seek opinion from Commission itself).

Moreover, EPA published notice of the Wehrum Memo, and

reiterated its principal conclusion, in the Federal Register. See

83 Fed. Reg. 5543-01 (Feb. 8, 2018). Accordingly, the

Wehrum Memo can only reasonably be described as EPA’s last

word on when a major source can reclassify to an area source

under § 112.

Because the Wehrum Memo satisfies Bennett’s first prong,

we ask next whether it has “direct and appreciable legal

consequences.” Hawkes, 136 S. Ct. at 1814 (quoting Bennett,

520 U.S. at 178). Petitioners argue that it does because it

creates a new right – i.e. it allows major sources unable to

reclassify to area sources under the Seitz Memo to so

reclassify. Cal. Pet’rs’ Br. 17-20. Respondent counters that the

Wehrum Memo does not change the rights of regulated

sources. EPA Br. 26-28. Whether or not a regulated source has

the right to reclassify, Respondent contends, is only determined

within the Title V permitting process. Id. (citing 42 U.S.C. §

7661d).

For reasons now explained, we hold that the Wehrum

Memo does not have a single direct and appreciable legal

consequence.

Hawkes instructs that whether an agency action has direct

and appreciable legal consequences is a “‘pragmatic’” inquiry.

Id. at 1815 (quoting Abbot Labs. v. Gardner, 387 U.S. 136, 149

15

(1967)). In characterizing the inquiry as pragmatic, we do not

take the Court to be encouraging some sort of common-sense

approach. Quite the opposite. We take it as counseling lower

courts to make Bennett prong-two determinations based on the

concrete consequences an agency action has or does not have

as a result of the specific statutes and regulations that govern

it. Thus, in Hawkes, the Court held, in part, that the agency

determination at issue had direct and appreciable legal

consequences because, under the applicable statutes and

regulations, if petitioners failed to heed the determination they

did so at the risk of significant criminal and civil penalties. Id.

And the cases Hawkes relies on as past examples of the

“pragmatic approach [the Court] has long taken to finality”

hold similarly. Id. (citing and quoting Sackett v. EPA, 566 U.S.

120, 126 (2012) (holding that agency action at issue satisfied

Bennett prong-two because, under the relevant statutes and

regulations, it appeared to expose petitioners to double

penalties in a future enforcement proceeding and to limit their

ability to obtain a certain type of permit); Abbot Labs., 387 U.S.

at 152 (holding that action at issue had a “sufficiently direct

and immediate” impact on petitioners, such that judicial review

was appropriate, because, under the governing statutes and

regulations, noncompliance risked “serious criminal and civil

penalties”); Frozen Food Express v. United States, 351 U.S.

40, 44 (1956) (same)).

Quite recently, in Valero Energy Corporation v. EPA, No.

18-1028, 2019 WL 2587837 (D.C. Cir. June 25, 2019), we

affirmed this approach. At issue there, like here, was whether

an EPA guidance document that declared the agency’s

interpretation of a statute was final under the Act. We held that

it was not. Assessing it within the context of the Act, we

emphasized that: (1) the guidance imposed no obligations,

prohibitions, or restrictions; (2) it put no party to the choice

between costly compliance and the risk of a penalty of any sort;

16

(3) EPA acknowledged at oral argument that the guidance had

no independent legal authority; and (4) that the Act provided

regulated parties a statutory mechanism by which to challenge

any EPA action that was premised on the statutory

interpretation that the guidance advanced. Valero, 2019 WL at

*3-5.

Assessing the Wehrum Memo under Hawkes and in

accordance with Valero, we find that it is not final. True, it

unequivocally declares that major sources, at such time that

they limit their potential to emit to below the major source

threshold, “will no longer be” subject to MACT standards.

J.A. 1. Viewed within the context of the Act, however, the

Wehrum Memo is all bark and no bite. As Respondent averred

twice at oral argument, neither EPA nor any regulated source

can rely on the Wehrum Memo within the Title V permitting

process or in any other proceeding. Oral Arg. 50:15-50:27,

1:01:13-1:01:50. In other words, as Respondent concedes,

although the Wehrum Memo forecasts EPA’s position as to

§ 112, it has no independent legal authority. In addition, under

the Act and EPA regulations, a state permitting authority that

refuses to comply with the Wehrum Memo faces no penalty or

liability of any sort. Further still, the instant matter does not

present a circumstance where the action at issue may be legally

consequential because its binds agency staff and affected

parties have no means (outside of judicial review) by which to

challenge it. To the contrary, the Act contains clear provisions

pursuant to which: (1) a state permitting authority can refuse to

apply the Wehrum Memo and seek judicial review if EPA

issues a permit over its refusal, id. § 7661d(c); and (2) a

regulatory beneficiary can petition EPA to object to a state

permitting authority’s application of the Wehrum Memo and

seek judicial review if EPA denies the petition, id. §

7661d(b)(2).

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Accordingly, although the Wehrum Memo, in no uncertain

terms, forecasts EPA’s definitive interpretation of § 112, it has

no direct and appreciable legal consequences: neither EPA nor

regulated sources can rely on it as independently authoritative

in any proceeding; state permitting authorities face no penalty

or liability of any sort in ignoring it; and state permitting

authorities and regulatory beneficiaries have clear statutory

avenues by which to challenge a permitting decision adopting

the reasoning of the Wehrum Memo and seek judicial review

if EPA fails to sustain their challenges. Under § 7661d(c), if a

state permitting authority refuses to issue a permit allowing a

major source to reclassify as an area source, and EPA

subsequently issues such a permit following the reasoning of

the Wehrum Memo, judicial review is appropriate. Under

§ 7661d(b)(2), if EPA, following the reasoning of the Wehrum

Memo, denies a petition from any person asking the agency to

object to a state permitting authority’s issuance of a permit that

allows a major source to reclassify as an area source, judicial

review is appropriate. Indeed, because Congress specified that

“[n]o objection shall be subject to review until the

Administrator takes final action to issue or deny a permit under

this subsection,” § 7661d(c), we would contravene

Congressional intent if we were to hold that a memo that

merely forecasts a future objection is final agency action and

subject to judicial review at this time.

The dissent insists that the Wehrum Memo satisfies

Bennett’s second prong because it “altered the legal regime.”

Dis. Op. 12. Indeed, the dissent forewarns, the Wehrum Memo

“commands, orders, and dictates [to]” EPA employees, id. at 4,

and “state permitting authorities are subject to” the statutory

interpretation it advances, id. Said differently, according to the

dissent, because of the Wehrum Memo, sources subject to

MACT standards that limit their potential to emit to below the

major source threshold are now “assured that they will be

18

subject to decreased regulation with EPA’s support.” Id. at 12

(emphasis added).

While the question is not free from doubt, we respectfully

disagree. As noted above, we must remain laser focused on

whether the Wehrum Memo gives “rise to ‘direct and

appreciable legal consequences.’” Hawkes, 136 S. Ct. at 1814

(quoting Bennett, 520 U.S. at 178), and when viewed in its

specific regulatory context, it does not. “[M]ajor sources must

comply with technology-based emission standards requiring

the maximum degree of reduction in emissions EPA deems

achievable, . . . [and] [i]n order to obtain an operating permit

under title V of the [CAA], major sources must comply with

extensive monitoring, reporting and record-keeping

requirements. Nat'l Min. Ass'n v. U.S. E.P.A., 59 F.3d 1351,

1353 (D.C. Cir. 1995). Major sources must obtain a permit in

order to operate, and unless and until that permit is amended or

set aside, the stringent requirements set forth therein must be

complied with while that equipment is operational. The

Wehrum Memo itself does not revoke or amend a single

permit. As acknowledged by the Ohio environmental

authorities in materials cited by petitioners, “[i]f you want to

take advantage of the new guidance [in the Wehrum Memo],

you will need to submit an application to modify your current

permit.” Environmental Pet’rs’ Br., Standing Addendum 0198.

Assuredly, although the Wehrum Memo advises EPA

employees of the agency’s position as to § 112, it does not bind

state permitting authorities or assure regulated entities of the

ability to reclassify. As EPA concedes, EPA Br. 21, 25, in

receiving such an application to modify a permit, a state

permitting authority may – with total impunity – ignore the

Wehrum Memo and deny the application. It is true that the

Administrator must issue a revised permit over the state

permitting authority’s protest if he or she believes that the

statute so requires, § 7661d(c), but in such a case, the statute

19

explicitly provides the state permitting authority a mechanism

by which to seek judicial review of the Administrator’s action.

Id. Regardless of whether Congress generally intended to

allow pre-enforcement review of guidance documents under

some circumstances in the CAA, here, as described above,

Congress specifically directed that judicial review shall not be

available until the Title V permit amendment process reaches a

conclusion, see §§7661d(b)(2), 7661d(c). Congress’ explicit

understanding of finality in this specific statutory context

controls our consideration of the instant guidance document,

which pertains to that same permit amendment process.

***

Before concluding, we note that we have twice had

occasion to ask whether an EPA guidance document that

implicated the Act’s Title V permitting process was final

agency action: first in Appalachian Power Co. v. EPA, 208

F.3d 1015, 1021 (D.C. Cir. 2000), then in National

Environmental Development Ass’n v. EPA, 752 F.3d 999 (D.C.

Cir. 2014). In each, we found that the guidance at issue was

final. A brief analysis of our reasoning in those cases

demonstrates why the Wehrum Memo is not.

In Appalachian Power, at issue was a nineteen-page

guidance document relating to certain monitoring requirements

for Title V sources. Appalachian Power, 208 F.3d at 1019-20.

In assessing our jurisdiction over the guidance, we did not

consider § 7611d. Instead, we framed our jurisdiction solely in

terms of § 7607(b)(1). See id. at 1021 n. 10 (“Our jurisdiction

extends to ‘any . . . nationally applicable . . . final action taken

by,’ the EPA ‘Administrator.’”) (quoting 42 U.S.C.

§ 7607(b)(1))). We predicated our holding that the guidance

was final on the following findings. First, we found that it

required state permitting authorities to: (1) “review their

20

emission standards and the emission standards EPA has

promulgated to determine if the standards provide enough

monitoring;” and (2) “insert additional monitoring

requirements as terms or conditions of a permit . . . if they

believe existing requirements are inadequate, as measured by

EPA’s multi-factor, case-by-case analysis set forth in the

Guidance.” Id. at 1022. Second, we found that EPA did not

dispute petitioners’ assertion that state permitting authorities

were relying on EPA’s guidance in insisting that regulated

sources utilize a monitoring method that was more burdensome

than the monitoring method set out under existing EPA

regulations. Id. at 1023 & n.17. Finally, we found that a

challenge to an individual permit applying the guidance would

not be heard in this Court, presumably because we felt any such

challenge would have only regional implications. Id. at 1023 n.

18.

In National Environmental, the guidance document before

us explained that, due to a decision of the Sixth Circuit, EPA

was altering a certain interpretation of its regulations only for

Title V sources located within the Sixth Circuit’s jurisdiction.

Nat’l Envtl., 752 F.3d at 1003. As in Appalachian Power, in

assessing our jurisdiction over the guidance, we asked only

whether it was final under § 7607(b)(1) and made no mention

of § 7661d. Id. at 1006. In holding that it was final, we found

that the “finality and legal consequences” of the guidance

“were made plain” when EPA “relied on [it]” in approving a

Federal Implementation Plan (“FIP”) “involving a company

located outside the jurisdiction of the Sixth Circuit.” Id. at 1007

(citing 78 Fed. Reg. 17836, 17842 & n. 10 (March 22, 2013)).

Indeed, within the FIP approval – which is a final, legislative

rule carrying the force and effect of law – EPA cited the

guidance as the sole authority for the legal conclusion that

certain regulations applied to certain sources located outside of

21

the Sixth Circuit’s jurisdiction. See 78 Fed. Reg. 17836, 17842

& n.10 (March 22, 2013)

Appalachian Power and National Environmental are thus,

contrary to what the dissent suggests, see Dis. Op. 2-3, distinct

from the instant matter in a crucial respect. In those cases, we

held that the guidance documents at issue were final under §

7607(b)(1), without reference to § 7661d, because EPA and

state permitting authorities wielded them to effectuate legal

consequences. In Appalachian Power, we found that the

guidance at issue required state permitting authorities to take at

least two specific actions and that EPA did not deny that state

permitting authorities used it to coerce regulated sources to

adopt a stricter monitoring method. In National Environmental,

we found that EPA cited the guidance, within a binding FIP

approval, as the sole authority in support of a legal conclusion.

By contrast, the Wehrum Memo does not require any entity or

person to do anything, and EPA concedes that it has not, will

not, and cannot rely on it in any proceeding. Accordingly,

unlike in Appalachian Power and National Environmental, we

have no basis to conclude, without reference to § 7661d, that

we have jurisdiction over the guidance before us under

§ 7607(b)(1). We note, in addition, that in Appalachian Power,

we found that we would lack jurisdiction over challenges to

permitting decisions applying the guidance at issue. Here,

however, any party entitled to review under § 7661d that

wishes to challenge an application of the Wehrum Memo in this

Court will be so heard, since the Wehrum Memo’s principal

conclusion is nationally applicable. See § 7607(b)(1).

In sum, we find that the Wehrum Memo – assessed within

the context of the Act and EPA regulations – is not final agency

action, and we dismiss the petitions for lack of subject matter

jurisdiction under the Act. The Wehrum Memo marks the

consummation of EPA’s decisionmaking process as to when a

22

major source may reclassify to an area source under § 112. But

the Wehrum Memo does not have direct and appreciable legal

consequences: it does not require anyone to do anything;

neither EPA nor regulated sources can rely on it in any

proceeding; state permitting authorities face no penalty or

liability in ignoring it; state permitting authorities and

regulatory beneficiaries have clear statutory avenues by which

to challenge it and seek judicial review if EPA refuses to heed

their challenges; and any such challenges, if so desired, will be

heard in this Court.

III.

To conclude, we note that we are under no illusion that this

opinion will be the Rosetta Stone of understanding the nature

of agency action. Developing this area of the law is indeed an

“important continuing project.” Nat’l Min. Ass’n, 758 F.3d at

251. Nonetheless, today we humbly submit our contribution

toward clarifying this somewhat gnarled field of jurisprudence.

In ascertaining the nature of an agency action, we emphasize,

courts should look first to the matrix of statutes and regulations

governing that specific action. In addition, we offer a gentle

reminder that the finality analysis is sui generis, separate and

distinct from the test for whether an agency action is a

legislative rule.

So ordered.

ROGERS, Circuit Judge, dissenting: On February 8, 2018,

EPA formally announced in the Federal Register that “the plain

language of the definitions of ‘major source’. . . and of ‘area

source’ in Section 112 of the [Clean Air Act] compels the

conclusion that a major source becomes an area source at such

time that the source takes an enforceable limit on its potential

to emit [] hazardous air pollutants [] below the major source

thresholds . . . .” 83 Fed. Reg. 5543 (Feb. 8, 2018) (emphasis

added). “In such circumstances, a source that was previously

classified as major . . . will no longer be subject either to the

major source [maximum achievable control technology] or

other major source requirements that were applicable to it as a

major source under CAA section 112.” Id. Further, EPA stated

this guidance memorandum “supersedes” the prior guidance in

the May 1995 Seitz memorandum barring such

reclassifications. Id. The guidance memorandum referred to

in the Federal Register Notice was issued under the signature

of William L. Wehrum, EPA Assistant Administrator for the

Office of Air and Radiation. Petitioners now seek pre-

enforcement review of the Wehrum Memorandum pursuant to

42 U.S.C. § 7607(b)(1), contending that the guidance

memorandum is a legislative rule issued without notice and

comment.

I.

Section 7607(b)(1) provides that this court shall have

jurisdiction to review nationally applicable “final action taken”

by the Administrator of EPA. 42 U.S.C. § 7607(b)(1). The

term “final action” in Section 7607(b)(1) is synonymous with

“final agency action” in the Administrative Procedure Act

(“APA”), 5 U.S.C. § 704. Whitman v. Am. Trucking Ass’ns,

Inc., 531 U.S. 457, 478 (2001). The finality inquiry itself is

governed by the test articulated in Bennett v. Spear, 520 U.S.

154 (1997). Sackett v. EPA, 566 U.S. 120, 126–27 (2012). An

agency action is final if: (1) the action marks the

“consummation of the agency’s decisionmaking process,” and

2

(2) the action is one “by which rights or obligations have been

determined, or from which legal consequences will flow.”

Bennett, 520 U.S. at 177–78 (internal quotation marks and

citation omitted) (emphases added).

The Supreme Court has “characterized the special judicial

review provision of the CAA, 42 U.S.C. § 7607(b), as one of

those statutes that specifically provides for ‘preenforcement’

review.” Whitman, 531 U.S. at 479 (citing Ohio Forestry

Ass’n, Inc. v. Sierra Club, 523 U.S. 726 (1998)). In addressing

ripeness, the Court has pointed out that the CAA “permit[s]

‘judicial review directly, even before the concrete effects

normally required for APA review are felt.’” Id. at 479–80

(quoting Lujan v. National Wildlife Federation, 497 U.S. 871,

891 (1990)). This court, in turn, recognized that “Congress has

emphatically declared a preference for immediate review with

respect to Clean Air Act rulemaking,” NRDC v. EPA, 643 F.3d

311, 320 (D.C. Cir. 2011) (internal quotations and citations

omitted), which is what petitioners contend the Wehrum

Memorandum is. So understood, the statutory scheme not only

allows but encourages pre-enforcement review of final actions

such as the Wehrum Memorandum.

A.

The court has repeatedly held that judicial review is

available pursuant to Section 7607(b)(1) for guidance

documents that bind EPA officials on how to make Title V

permitting decisions.

In Appalachian Power Co. v. EPA, 208 F.3d 1015, 1020

(D.C. Cir. 2000), the court considered a guidance document

instructing that a source’s Title V permit must include periodic

monitoring requirements to ensure compliance with certain

federal or state standards. The guidance document thus

reflected “a position [EPA] plans to follow in reviewing State-

3

issued permits” and “a position EPA officials in the field are

bound to apply.” Id. at 1022. The court explained that the

guidance document had legal consequences for both

enforcement officials and regulated entities because it “reads

like a ukase. It commands, it requires, it orders, it dictates.”

Id. at 1023. The court held that the guidance document was a

final action over which the court had jurisdiction pursuant to

Section 7607(b). Id. at 1022–23 & n.10.

Also, in National Environmental Development Ass’n’s

Clean Air Project v. EPA, 752 F.3d 999, 1007 (D.C. Cir. 2014),

this court held that a guidance document on how EPA would

determine whether groups of activities qualified as a “single

stationary source” or multiple sources in Title V permits was a

final action. The guidance document had legal consequences,

the court explained, because it “provides firm guidance to

enforcement officials about how to handle permitting

decisions” and “compels agency officials” to apply certain

permitting standards. Id. (emphasis in original). The court

held that the guidance was “final agency action that is subject

to judicial review” pursuant to Section 7607(b)(1). Id. at 1006–

07.

Similarly, in the context of review of state implementation

plans required by the CAA, the court held in Natural Resources

Defense Council, 643 F.3d at 320, that a guidance document

that “definitively interpreted” a provision of the CAA “altered

the legal regime” because it required EPA officials to consider

alternatives to a specific program when reviewing state

implementation plans. The court explained that the guidance

“binds EPA regional directors and thus qualifies as final.” Id.

In sum, the court has repeatedly held that guidance

documents, which on their face bind enforcement officials to

apply a certain standard or interpretation under the CAA,

4

including in the Title V context, are final actions subject to

review pursuant to Section 7607(b)(1).

The Wehrum Memorandum states the law that EPA

officials must apply in Title V permitting. Addressed to EPA

Regional Air Division Directors, the Wehrum Memorandum

“provides firm guidance to enforcement officials about how to

handle permitting decisions.” Nat. Envmtl. Dev., 752 F.3d at

1007. By its express terms, the Wehrum Memorandum

unequivocally provides the interpretation of Section 112 that is

to be applied by EPA employees. See NRDC, 643 F.3d at 320.

The Wehrum Memorandum explains that the plain text of

Section 112 “compels the conclusion that a major source

becomes an area source at such time that the source takes an

enforceable limit on its potential to emit . . . below major

source thresholds.” Wehrum Memorandum at 1 (emphasis

added). Referencing its legal consequences, the Wehrum

Memorandum instructs that upon taking such a limit on its

potential to emit below the major source thresholds, a source

“will not be subject thereafter to those requirements applicable

to the source as a major source under CAA section 112.” Id. at

4 (emphasis added). Like the guidance document in

Appalachian Power, 208 F.3d at 1023, the Wehrum

Memorandum “reads like a ukase.” It commands, orders, and

dictates without caveats or disclaimers about the binding nature

of its statutory interpretation. Compare id., with Nat. Mining

Ass’n v. McCarthy, 758 F.3d 243, 252–53 (D.C. Cir. 2014). It

expressly “supersedes” EPA’s prior interpretation, stating that

the Seitz Memorandum is withdrawn, “effective immediately.”

Wehrum Memorandum at 1.

Under the statutory scheme, state permitting authorities

are subject to the statutory interpretation announced in the

Wehrum Memorandum stating EPA’s unequivocal position.

The Wehrum Memorandum directs EPA enforcement officials

5

to send the memorandum to the States and thereby, in light of

the Federal Register Notice, puts States doubly on notice that

EPA’s interpretation of Section 112 has changed, effective

immediately. Given the text, structure, and purpose of the

CAA, state permitting authorities are not free to ignore EPA’s

new interpretation of Section 112. The statutory scheme is

based on a partnership between federal and state governments,

whereby EPA sets federal standards and States develop

implementation plans to set emissions limitations and

standards to conform to these federal standards. Appalachian

Power, 208 F.3d at 1019. “Typically, EPA delegates to the

States its authority to require companies to comply with federal

standards.” Id. The terms and conditions in permits issued

under Title V incorporate the applicable federal standards for

individual sources. Id. Reinforcing that States must act in

conformity with the Wehrum Memorandum, the CAA

prohibits the Administrator of EPA from approving a state

implementation plan under Title V except “to the extent that

the program meets the requirements of [the CAA].” 42 U.S.C.

§ 7661a(d)(1). If a State proposes to issue an individual permit

that does not comply with the CAA requirements, then the

Administrator “shall” object. Id. § 7661d(b)(1). The

Administrator is authorized to modify an individual permit. Id.

§ 7661d(e). The CAA even contemplates that a state permitting

authority can be sanctioned for not adequately administering

and enforcing a program. Id. § 7661a(i).

In sum, by announcing an unequivocal interpretation of

which federal standards apply to which sources under the CAA,

“EPA expects States to fall in line.” Appalachian Power, 208

F.3d at 1023. Through the Wehrum Memorandum, EPA has

instructed its employees that the plain text of the CAA includes

no temporal limitation on the reclassification of “major

sources.” By publicly announcing an unequivocal statement

that the plain text of the CAA “compels” its conclusion, EPA

6

has given States their “marching orders” to allow

reclassification of major sources. Id. And States have heeded

EPA’s direction. See, e.g., Kuiken Decl. ¶¶ 6, 11 & Att.;

McCloud Decl. ¶¶ 6, 10 & Att.; Gharrity Decl. Att. (Ohio EPA

publication providing guidance to regulated entities treating the

Wehrum Memorandum as binding); see also Standing Add. 43,

45, 48, 52–53, 57, 275.

Therefore, under this court’s precedent issuance of the

Wehrum Memorandum is final action subject to judicial review

pursuant to Section 7607(b)(1) because it provides EPA’s

unequivocal interpretation on the reclassification of “major

sources,” thereby binding EPA enforcement officials.

B.

Contrary to the court’s conclusion, the Wehrum

Memorandum is final action under the two-prong Bennett v.

Spear test. 520 U.S. at 177–78. First, the Wehrum

Memorandum marks the consummation of EPA’s

decisionmaking process with respect to its interpretation of

whether Section 112 of the CAA allows major sources to

reclassify as area sources at any time. The Wehrum

Memorandum is unequivocal — if a major source “takes an

enforceable limit on its potential to emit . . . below the major

source thresholds,” the CAA “compels” that the source can

reclassify as an area source at that time. Wehrum

Memorandum at 1. It states the official position of the EPA

Administrator; in signing the guidance memorandum, the

Assistant Administrator for the Office of Air and Radiation was

acting on behalf of the Administrator. See 40 C.F.R. § 1.41;

Her Majesty the Queen in Right of Ontario v. EPA, 912 F.2d

1525, 1532 (D.C. Cir. 1990). Addressed to the Regional Air

Division Directors, it instructs the Regional offices on what

Section 112 of the CAA “compels,” and to “send this

memorandum to states within their jurisdiction.” Id. at 4. By

7

Federal Register Notice, EPA announced to the public it had

abandoned its prior interpretation and now concluded the plain

text of Section 112 imposed no temporal limit on

reclassifications by “major sources.” 83 Fed. Reg. at 5543.

Regardless of whether EPA may change its position in the

future, see, e.g., Gen. Elec. Co. v. EPA, 290 F.3d 377, 380

(D.C. Cir. 2002); Appalachian Power, 208 F.3d at 1022, the

Wehrum Memorandum marks EPA’s unequivocal statutory

interpretation of whether “major sources” may, at any time,

reclassify under the CAA upon limiting their potential to emit

hazardous pollutants.

Second, the Wehrum Memorandum is an action “from

which legal consequences will flow” because it announces a

binding change in the legal regime. Bennett, 520 U.S. at 178

(emphasis added); see also U.S. Army Corps of Engineers v.

Hawkes Co., 136 S. Ct. 1807, 1814–15 (2016); NRDC, 643

F.3d at 319–20; Indep. Equip. Dealers Ass’n v. EPA, 372 F.3d

420, 427 (D.C. Cir. 2004); Appalachian Power, 208 F.3d at

1020–21. The Wehrum Memorandum alters the legal regime

by changing the regulatory requirements for any “major

source” that “takes an enforceable limit on its potential to emit

. . . below major source thresholds.” Wehrum Memorandum at

1. Those sources now have the opportunity to reclassify as area

sources at any time by limiting their potential to emit below

major source thresholds and thereafter will not be subject to the

more onerous major source requirements, such as the

Maximum Achievable Control Technology standards.

The court’s recent decision in Valero Energy Corp. v.

EPA, 927 F.3d 532 (D.C. Cir. 2019) reaffirms that legal

consequences will flow from the Wehrum Memorandum.

There, the court held legal consequences did not flow from a

guidance document that interpreted EPA’s duty to conduct

“periodic reviews” of renewable fuel standards under 42

8

U.S.C. § 7545(o)(11) and explained how EPA’s prior actions

fulfilled any statutory duty to conduct periodic reviews. Id. at

535. The document did not purport bind EPA to its

interpretation and had no identifiable effect on the regulated

community. Id. at 536–37. Here, in contrast, the Wehrum

Memorandum announces a binding interpretation that has an

identifiable effect on major sources that take enforceable limits

on their potential to emit below major source thresholds.

EPA’s contrary position, that the Wehrum Memorandum

is not final because it has no immediate impact or direct legal

consequences for specific sources, misstates the finality test.

“The test for finality . . . is not so narrow — it is met if ‘the

action [is] one by which rights or obligations have been

determined, or from which legal consequences will flow.’”

Harris v. FAA, 353 F.3d 1006, 1011 (D.C. Cir. 2004) (quoting

Bennett, 520 U.S. at 178) (emphasis added). The court’s

suggestion that the Wehrum Memorandum is “all bark and no

bite,” Op. 16, ignores its plain text as well as the second clause

of the second prong of the Bennett v. Spear test. With EPA’s

blessing, legal consequences will flow from the Wehrum

Memorandum no later than when “major sources” take

enforceable limits on their potential to emit below “major

source” thresholds and obtain new or modified Title V permits.

Indeed, such legal consequences have already occurred; EPA

acknowledged that at least two “major sources” in Indiana have

reclassified as area sources as of filing of the briefs in the

instant appeal, and the Sierra Club has identified numerous

other “major sources” that are eligible to reclassify. Resp’t’s

Br. 29; Kuiken Decl. ¶ 6 & Att.; McCloud Decl. ¶ 5 & Att.

Additionally, the opportunity for judicial review at a later

time has no direct bearing on the availability of pre-

enforcement review of the Wehrum Memorandum. Section

7661d provides for judicial review under Section 7607 of an

9

Administrator’s objection or denial of a petition to object to a

specific Title V permit for a specific source. 42 U.S.C.

§ 7661d(b). Petitioners are not challenging a source-specific

objection. Instead, they seek review of a generally applicable

guidance document pursuant to Section 7607(b), which

provides for judicial review of such a general guidance

document that is a “final action.” Id. § 7607(b)(1). The two

provisions for judicial review serve different purposes.

Judicial review of national standards at the start of the

regulatory process can ensure that Congress’s intent is being

carried out before States and the regulated community must

take costly implementing actions, while later enforcement

review can ensure compliance with terms and conditions in

individual permits. Nothing in the text, structure, purpose, or

legislative history of the CAA indicates the availability of

review of a decision in a source-specific Title V proceeding

under Section 7661d would preclude pre-enforcement review

of a general guidance document under Section 7607(b). That

both exist in the CAA is a rational approach for complex

legislation where Congress intended to bring about significant

changes to the status quo impacting the environment, the

public, and entities emitting hazardous air pollutants. See

Appalachian Power, 208 F.3d at 1017; see generally Hon.

Henry A. Waxman, An Overview of the Clean Air Act

Amendments of 1990, 21 ENVTL. L. 1721, 1723, 1742 (1991).

Put otherwise, the provision of judicial review of Title V permit

decisions “in one section of a long and complicated statute” is

hardly sufficient to overcome Congress’s decision to provide

pre-enforcement review. See Sackett, 132 S. Ct. at 1373. Not

only does nothing in the text of Section 7661d override the

provision for pre-enforcement review under Section 7607(b),

the Supreme Court has acknowledged the CAA encourages

pre-enforcement judicial review. See Whitman, 531 U.S. at

479 (quoting Ohio Forestry, 523 U.S. at 737); see also NRDC,

643 F.3d at 320.

10

Furthermore, Congress’s express purpose in enacting the

CAA was “to promote the public health and welfare and the

productive capacity of [the Nation’s] population.” 42 U.S.C.

§ 7401(b)(1). Delaying the opportunity for judicial review

until individual source permit enforcement proceedings could

effectively squelch the opportunity for regulatory beneficiaries

to obtain judicial review of an agency’s position. See Nina A.

Mendelson, Regulatory Beneficiaries and Informal Agency

Policymaking, 92 CORNELL L. REV. 397, 420–24 (2007)

(“Mendelson”). Title V does provide regulatory beneficiaries

the opportunity to file a petition to object and to seek judicial

review of denial of a petition to object in individual permitting

proceedings. 42 U.S.C. § 7661d(b)(2). Yet requiring

regulatory beneficiaries to monitor and to file petitions in

individual permit proceedings throughout the United States

requires resources that may constrain beneficiaries’ ability to

seek judicial review. See Mendelson at 451–52. Pre-

enforcement judicial review of a nationally applicable

guidance document, in contrast, is more accessible for

regulatory beneficiaries. Precluding pre-enforcement review

would impose a burden Congress has not required.

Notably, irrelevant to the finality inquiry is the fact that the

Wehrum Memorandum is deregulatory rather than regulatory.

This is the fallacy underlying the court’s efforts to distinguish

our precedent on the basis that the Wehrum Memorandum does

not require anyone to do anything. See Op. 21. Although the

Supreme Court and this court have regularly been confronted

with challenges to regulatory actions as too strong or too weak

and held that agency actions that require parties to take certain

actions or expose parties to penalties are final, see, e.g.,

Hawkes, 136 S. Ct. at 1814–15; Sackett, 566 U.S. at 126; Nat.

Mining Ass’n, 758 F.3d at 252; CSI Aviation Servs., Inc. v.

DOT, 637 F.3d 408, 412–13 (D.C. Cir. 2011), the focus of the

11

inquiry has been on whether the legal regime has changed. The

Wehrum Memorandum changed the legal regime by enabling

certain regulated entities to become subject to decreased

regulation — an opportunity not clearly available under the

CAA, much less under EPA’s prior interpretation. Prior to

EPA’s issuance of guidance, enforcement officials had

discretion to interpret the CAA as either allowing or

prohibiting “major source” reclassification after the first

compliance date. See NRDC, 643 F.3d at 319–20. Now that

discretion has been withdrawn as regulated “major sources” are

eligible to be reclassified at any time upon taking emissions

limitations.

Further, the Supreme Court has held that legal

consequences can flow from the “denial of a safe harbor.”

Hawkes, 136 S. Ct. at 1814. In Scenic America, Inc. v. DOT,

836 F.3d 42, 56 (D.C. Cir. 2016), this court recognized that

legal consequences would flow from a guidance document that

created a safe harbor whereby digital billboard permits would

not be denied on the basis of violating certain standards. And

in determining whether a document was a “rule” under the

Toxic Substance Control Act in General Electric, 290 F.3d at

384–85, this court held that a guidance document that “appears

to bind [EPA] to accept applications using a total toxicity factor

of 4.0 (mg/kg/day)-1” imposed binding obligations, explaining

that “if the language of the document is such that private parties

can rely on it as a norm or safe harbor by which to shape their

actions, it can be binding as a practical matter.” Id. at 383

(quoting Robert A. Anthony, Interpretive Rules, Policy

Statements, Guidances, Manuals, and the Like—Should

Federal Agencies Use Them to Bind the Public?, 41 DUKE L.J.

1311, 1328–29 (1992)). The Wehrum Memorandum creates a

safe harbor for “major sources” by removing a prior barrier to

reclassification — those sources that take an enforceable limit

on their potential to emit below the “major source” threshold

12

are assured that they will be subject to decreased regulation

with EPA’s support. This safe harbor has a “clear legal effect

on regulated entities.” See Scenic America, 836 F.3d at 56.

For these reasons, the Wehrum Memorandum is final

action, reviewable pursuant to Section 7607(b)(1). It is an

agency action with the telltale signs of finality — it presents a

unequivocal interpretation of requirements under the CAA; it

is binding on its face; and it altered the legal regime by

providing an opportunity for “major sources” that take

enforceable limits on their potential to emit below the “major

source” thresholds to reclassify as “area sources” at any time.

“Once the agency publicly articulates an unequivocal position

. . . and expects regulated entities to alter their primary conduct

to conform to that position, the agency has voluntarily

relinquished the benefit of postponed judicial review.” Ciba-

Geigy Corp. v. EPA, 801 F.3d 430, 436 (D.C. Cir. 1986).

II.

The question remains whether the Wehrum Memorandum

is an agency action ripe for review. To decide whether an

agency’s action is ripe for review, courts generally consider the

“fitness of the issues for judicial decision” and the “hardship to

the parties of withholding court consideration.” Ohio Forestry,

523 U.S. at 733 (quoting Abbott Labs. v. Gardner, 387 U.S.

136, 149 (1967)). In Appalachian Power, 208 F.3d at 1023

n.18, the court held that a guidance document that reflected

EPA’s settled position regarding periodic monitoring

requirements in Title V permits was ripe for review because the

propriety of EPA’s statutory interpretation would “not turn on

the specifics of any particular permit.” Id. EPA’s guidance

document was “national in scope and Congress clearly

intended this court to determine the validity of such EPA

actions,” see 42 U.S.C. § 7607, yet “[a] challenge to an

13

individual permit would not be heard in this court,”

Appalachian Power, 208 F.3d at 1023 n.18.

The same is true here. Whether EPA was required, as

petitioners contend, to promulgate the Wehrum Memorandum

through notice-and-comment rulemaking and whether EPA’s

statutory interpretation in the Wehrum Memorandum is proper

will not turn on the specifics of any particular permit. EPA has

announced that “a major source that takes an enforceable limit

on its [potential to emit] . . . no matter when the source may

choose to take measures to limit its [potential to emit] . . . will

not be subject thereafter to those requirements applicable to the

source as a major source under CAA section 112.” Wehrum

Memorandum at 4 (emphasis added). Its guidance is national

in scope, as the court looks only to the face of an agency action

to determine whether the action is nationally applicable.

Dalton Trucking, Inc. v. EPA, 808 F.3d 875, 881 (D.C. Cir.

2015); Am. Road & Trans. Builders Ass’n v. EPA, 705 F.3d

453, 456 (D.C. Cir. 2013). Any objection or denial of a petition

to object to a Title V permit would apply solely to the specific

source applying for the Title V permit; inclusion of a general

statutory interpretation that may apply as precedent in future

Title V permit proceedings would not render the action

nationally applicable under 42 U.S.C. § 7607(b)(1). See Sierra

Club v. EPA, 926 F.3d 844, 849–50 (D.C. Cir. 2019).

Concluding that petitioners’ challenges are not ripe until the

Wehrum Memorandum is applied in an individual Title V

permit proceeding would frustrate Congress’s intent that

“nationally applicable” actions such as the Wehrum

Memorandum be reviewable in this court pursuant to 42 U.S.C.

§ 7607(b)(1). Under the court’s approach, challenges would

instead be directed to appropriate regional courts. See Op. 16–

17; see e.g., Sierra Club, 926 F.3d at 847–50.

14

In any event, petitioners’ challenges are fit for judicial

review because they present purely legal issues. See Nat. Envtl.

Dev., 752 F.3d at 1008; Gen. Elec., 290 F.3d at 380. Whether

Section 112 of the CAA allows “major sources” to reclassify

as “area sources” at any time upon taking enforceable limits on

their potential to emit is a question of statutory interpretation

that will not benefit from further factual development. See

Ohio Forestry, 523 U.S. at 733. Given EPA’s conclusion that

the plain text “compels” the interpretation in the Wehrum

Memorandum, this is not a circumstance in which judicial

review would hinder EPA’s effort to refine its position. See id.

at 735. Nor will petitioners’ claims under the APA be affected

by further factual development. See Gen. Elec., 290 F.3d at

380. In view of Congress’s stated preference for immediate

review under the CAA, NRDC, 643 F.3d at 320, the court need

not consider hardship to the parties of delaying review, see

Cement Kiln Recycling Coal. v. EPA, 493 F.3d 207, 215 (D.C.

Cir. 2007); Gen. Elec., 290 F.3d at 381. As noted, the CAA is

a statute that “permit[s] judicial review directly, even before

the concrete effects normally required for APA review are

felt.” Whitman, 531 U.S. at 479 (quoting Lujan v. Nat’l

Wildlife Fed’n, 497 U.S, 871, 891 (1990)).

III.

The APA requires that a legislative rule, which carries the

“force and effect of law,” Ass’n of Flight Attendants-CWA,

ARL-CIO v. Huerta, 785 F.3d 710, 716 (D.C. Cir. 2015)

(quoting Perez v. Mortgage Bankers Ass’n, 135 S. Ct. 1199,

1204 (2015)), must be promulgated pursuant to notice-and-

comment rulemaking. Id. To determine whether agency action

carries the force and effect of law, the court generally looks to

the actual legal effect (or lack thereof) of the agency action,

paying particular attention to the express words used in the

document. Flight Attendants, 785 F.3d at 717; Nat. Mining,

15

758 F.3d at 252. “[A] document that reads like an edict is likely

to be binding, while one riddled with caveats is not.” Flight

Attendants, 785 F.3d at 717. The court also considers whether

the action was published in the Federal Register or the Code of

Federal Regulations, and whether the action has binding effects

on the agency or private parties. Ctr. for Auto Safety v. Nat.

Highway Traffic Safety Admin., 452 F.3d 798, 806–07 (D.C.

Cir. 2006) (citing Molycorp, Inc. v. EPA, 197 F.3d 543, 545

(D.C. Cir. 1999)); see also Flight Attendants, 785 F.3d at 717;

Nat. Mining, 758 F.3d at 252. An agency’s adoption of a

binding norm that could not be properly promulgated absent

the notice-and-comment rulemaking required by the APA

“obviously would reflect final agency action.” Ctr. for Auto

Safety, 452 F.3d at 804; see also Flight Attendants, 785 F.3d at

716. When an agency action is final because it creates a

binding norm that alters the legal regime, the question of

whether the action is a legislative rule is “easy.” NRDC, 643

F.3d at 320.

That is the situation here. The Wehrum Memorandum

makes its legal effect clear; it “reads like an edict,” Flight

Attendants, 785 F.3d at 717, instructing regional offices that

the “unambiguous language” of Section 112 of the CAA

“compels” “major source” reclassifications. Wehrum

Memorandum at 1, 3. The document itself contains no

disclaimers or caveats. Upon taking an enforceable limit on

their potential to emit “below major source thresholds,” major

sources “will not be subject thereafter” to “major source”

regulations. Id. at 4 (emphasis added). EPA’s Federal Register

Notice announced the new interpretation and binds EPA to the

changed legal regime. As such, the Wehrum Memorandum is

a legislative rule that failed to conform to the APA’s notice-

and-comment requirement. Cf. Gen. Elec., 290 F.3d at 385.

16

Accordingly, I would grant the petitions for review and

vacate the Wehrum Memorandum, and I respectfully dissent.