Reply Brief — Ohio, et al., Applicants v. Environmental Protection Agency, et al.

No. 23A349

In the Supreme Court of the United States

___________________________________

OHIO, ET AL.

Applicants

v.

ENVIRONMENTAL PROTECTION AGENCY, ET AL.

Respondents.

_______________________________________________________

ON APPLICATION FOR STAY OF ADMINISTRATIVE ACTION TO THE UNITED

STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT

_____________________________________________________

REPLY IN SUPPORT OF STATE APPLICANTS’ EMERGENCY

APPLICATION FOR A STAY OF ADMINISTRATIVE ACTION

_______________________________________________________

DAVE YOST

Attorney General of Ohio

MATHURA J. SRIDHARAN*

* Counsel of Record

ZACHERY P. KELLER

Deputy Solicitors General

30 E. Broad St., 17th Floor

Columbus, OH 43215

(614) 466-8980

Mathura.Sridharan@OhioAGO.gov

Counsel for the State of Ohio

(Additional counsel listed after signature block)

TABLE OF CONTENTS

Page

TABLE OF AUTHORITIES .......................................................................................... ii

REPLY ............................................................................................................................ 1

I.

The Court should apply its standard for stays pending appeal, not its

standard for injunctions pending certiorari. ................................................ 1

II.

The States will likely prevail on the merits. ................................................ 3

A.

In finalizing the federal plan, the EPA failed to account for the likely

illegality of its contemporaneous rulemaking. ........................................ 3

B.

The EPA’s contrary arguments are unpersuasive. ................................. 8

III.

The States, their industries, and their citizens will be irreparably

harmed without a stay. ............................................................................... 15

IV.

The other Nken factors warrant a stay. ...................................................... 18

CONCLUSION............................................................................................................. 19

i

TABLE OF AUTHORITIES

Cases

Page(s)

American Petroleum Institute v. Costle,

609 F.2d 20 (D.C. Cir. 1979) .................................................................................. 11

Appalachian Power Co. v. EPA,

135 F.3d 791 (D.C. Cir. 1998) .................................................................................. 8

Arkansas v. EPA,

No. 23-1320 (8th Cir.) ............................................................................................... 5

Bartenwerfer v. Buckley,

598 U.S. 69 (2023) .................................................................................................... 8

Bennett v. Spear,

520 U.S. 154 (1997) ................................................................................................ 11

Coal. to Def. Affirmative Action v. Granholm,

473 F.3d 237 (6th Cir. 2006) .................................................................................. 18

Doe v. Mills,

142 S. Ct. 17 (2021) .................................................................................................. 2

EPA v. EME Homer City Generation, L.P.,

572 U.S. 489 (2014) ...................................................................................... 4, 14, 15

FTC v. Std. Oil Co.,

449 U.S. 232 (1980) ................................................................................................ 11

Hollingsworth v. Perry,

558 U.S. 183 (2010) .................................................................................................. 2

Kentucky v. EPA,

No. 23-3216 (6th Cir.) ............................................................................................... 5

Kentucky v. EPA,

Nos. 23-3216/3225, 2023 U.S. App. LEXIS 18981 (6th Cir. July 25,

2023).......................................................................................................................... 6

Masias v. EPA,

906 F.3d 1069 (D.C. Cir. 2018)................................................................................. 8

Michigan v. EPA,

576 U.S. 743 (2015) ............................................................................................ 4, 12

ii

Nat’l Fed’n of Ind. Bus. v. Dep’t of Labor,

595 U.S. 109 (2022) ........................................................................................ 2, 3, 18

Nken v. Holder,

556 U.S. 418 (2009) ........................................................................................ 2, 3, 18

Portland Cement Ass’n v. EPA,

665 F.3d 177 (D.C. Cir. 2011) .............................................................................. 4, 7

Texas v. EPA,

829 F.3d 405 (5th Cir. 2016) .................................................................................... 4

Texas v. EPA,

No. 23-60069, 2023 U.S. App. LEXIS 13898 (5th Cir. May 1, 2023) .................. 5, 6

Texas v. EPA,

No. 23-60069 (5th Cir.) ............................................................................................. 5

Trout Unlimited v. Pirzadeh,

1 F.4th 738 (9th Cir. 2021) ..................................................................................... 11

Utah v. EPA,

No. 23–9509 (9th Cir.) .............................................................................................. 5

West Virginia v. EPA,

577 U.S. 1126 (2016) ................................................................................................ 2

West Virginia v. EPA,

No. 23–1418 (4th Cir.) ............................................................................................ 14

Zen Magnets, LLC v. Consumer Prod. Safety Comm’n,

841 F.3d 1141 (10th Cir. 2016) ................................................................................ 4

Statutes

5 U.S.C. §706 .................................................................................................................. 4

42 U.S.C. §7407 .......................................................................................................... 1, 4

42 U.S.C. §7410 .......................................................................................... 4, 5, 7, 12, 18

42 U.S.C. §7607 .................................................................................................... 4, 8, 11

Other Authorities

87 Fed. Reg. 20036 (Apr. 6, 2022) ................................................................................. 5

iii

88 Fed. Reg. 36654 (June 5, 2023) ........................................................ 1, 5, 6, 8, 12, 13

88 Fed. Reg. 49295 (July 31, 2023) ......................................................................... 6, 10

88 Fed. Reg. 67102 (Sept. 29, 2023) .............................................................................. 6

Associated Press, After climate bill passage, WVa natural gas plant

unveiled (Sept. 16, 2022) ........................................................................................ 17

EPA, Good Neighbor Plan for 2015 Ozone NAAQS...................................................... 6

EPA, Response to Public Comments .......................................................................... 6, 9

Interstate Natural Gas Ass’n of Am. Comments (June 21, 2022) ............................... 9

Ohio EPA Comment (Aug. 25, 2023) ........................................................................... 10

Ohio EPA Correspondence with State Sources (Aug. 23, 2023) ................................. 16

Order, Arkansas v. EPA, No. 23-1320 (8th Cir. May 25, 2023) ................................... 5

Order, Missouri v. EPA, No. 23-1719 (8th Cir. May 26, 2023) .................................... 5

Press Release, EPA Announces Final “Good Neighbor” Plan to Cut

Harmful Smog, Protecting Health of Millions from Power Plant,

Industrial Air Pollution (Mar. 15, 2023) ................................................................. 5

U.S. Steel Corp. Comments (June 21, 2022)................................................................. 9

iv

REPLY

The Clean Air Act leaves the States with “the primary responsibility for assuring air quality” in this country. 42 U.S.C. §7407(a). But, over the last two years, the

EPA has tried to seize control. Most relevant here, after years of delay, the EPA

recently rejected state-implementation plans governing upstate emissions for nearly

half the country. It then rushed to insert its own federal plan as a replacement. See

Federal ‘Good Neighbor Plan’ for the 2015 Ozone National Ambient Air Quality, 88

Fed. Reg. 36654 (June 5, 2023). The EPA’s power grab turns the Clean Air Act’s

cooperative-federalism structure on its head. And the federal plan resulting from

that power grab is arbitrary and capricious. Quite tellingly, the plan is already a

failure. Given judicial stays and interim rulemaking, the federal plan—published

only a few months ago—now applies to less than half of the States, and less than 25%

of the emissions, that the EPA intended to cover. The EPA, however, insists that its

plan remain in place for some upwind States, even with most upwind States exempt.

Because this case is of great importance, because the state applicants (Ohio,

Indiana, and West Viginia) are likely to succeed on their challenges, and because the

federal plan will cause irreparable harm in the meantime, the Court should stay application of the federal plan while the state applicants and others challenge the plan

in the D.C. Circuit.

I.

The Court should apply its standard for stays pending appeal, not its

standard for injunctions pending certiorari.

A. Begin with the legal standard that governs. The state applicants request

a stay pending review in the court of appeals. Four factors guide consideration of this

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request: “(1) whether the stay applicant has made a strong showing that he is likely

to succeed on the merits; (2) whether the applicant will be irreparably injured absent

a stay; (3) whether issuance of the stay will substantially injure the other parties

interested in the proceeding; and (4) where the public interest lies.” Nken v. Holder,

556 U.S. 418, 434 (2009) (quotation omitted). As explained below, all four of these

factors favor awarding a stay here.

B. The EPA sees things differently. It suggests that the state applicants need

to clear the Court’s injunction standard, which they argue requires a higher justification than a request for a stay. EPA Opp. 16. The EPA is wrong. This Court has

previously “stayed” illegal agency actions “pending disposition of … petitions for review.” West Virginia v. EPA, 577 U.S. 1126 (2016) (emphasis added); accord Nat’l

Fed’n of Ind. Bus. v. Dep’t of Labor, 595 U.S. 109, 113 (2022) (per curiam). And the

lower court similarly denied a stay—not an injunction.

When deciding whether to grant a stay pending review in the court of appeals,

this Court considers whether the applicant “is likely to succeed on the merits.” Nken,

556 U.S. at 434. By way of comparison, to obtain a stay “pending the filing and disposition of a petition for certiorari” by this Court, an applicant must also show “a

reasonable probability that four Justices will consider the issue sufficiently meritorious to grant certiorari.” Hollingsworth v. Perry, 558 U.S. 183, 190 (2010) (per curiam);

see also Doe v. Mills, 142 S. Ct. 17, 18 (2021) (Barrett, J., joined by Kavanaugh, J.,

concurring in the denial of application for injunctive relief pending disposition of a

forthcoming petition for a writ of certiorari). But when an applicant seeks a stay

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pending further review as of right in the court of appeals, this Court’s merits inquiry

need consider only the underlying strength of the applicant’s claim. Indeed, just a

year ago, the Court stayed federal-agency action without discussing whether the

Court would later grant review. See generally Nat’l Fed’n of Ind. Bus., 595 U.S. 109.

Likewise here, the Court should assess the present request using the ordinary Nken

factors.

Disregarding this case’s posture, the EPA faults the state applicants for failing

to expressly address the likelihood of future review in this case. EPA Opp. 16–17,

41–42. But even if that was an applicable factor, the significance of this case is obvious, both because of its federalism implications and because of its practical implications. And the EPA’s attempt to seize nationwide control of air-quality regulation

has sparked litigation across the circuits. On top of that, the state applicants’ challenge raises a significant question about arbitrary-and-capricious review: specifically, what obligations do federal agencies have to account for contemporaneous rulemaking and significant changes in circumstances before final publication? Finally,

the panel below was divided; one judge would have granted the state applicants a

stay pending review. Combining these characteristics, this is the type of case that

the Court is reasonably likely to hear down the road.

II.

The States will likely prevail on the merits.

A.

In finalizing the federal plan, the EPA failed to account for the

likely illegality of its contemporaneous rulemaking.

Turn then to the merits. And start with the statutory principle that federal

agencies, including the EPA, must refrain from action that is “arbitrary, capricious,

3

an abuse of discretion, or otherwise not in accordance with law.” 5 U.S.C. §706(2)(A);

42 U.S.C. §7607(d)(9)(A). In other words, federal agencies must “engage in reasoned

decisionmaking.” Michigan v. EPA, 576 U.S. 743, 750 (2015) (quotation omitted).

Among other things, agencies must keep track of “contemporaneous and closely related rulemaking.” Portland Cement Ass’n v. EPA, 665 F.3d 177, 187 (D.C. Cir. 2011)

(per curiam); see also Zen Magnets, LLC v. Consumer Prod. Safety Comm’n, 841 F.3d

1141, 1150 (10th Cir. 2016). That is, an agency must “acknowledge and account for”

the “regulatory posture the agency creates” through close-in-time rulemaking. Portland Cement Ass’n, 665 F.3d at 187.

The rulemaking process here fell well short of reasoned decisionmaking. To

understand why, recall both what the Clean Air Act requires and how it divides compliance responsibilities. Under the Act’s “good neighbor” provision, “upwind States”

must “reduce emissions to account for pollution exported beyond their borders.” EPA

v. EME Homer City Generation, L.P., 572 U.S. 489, 499 (2014); 42 U.S.C.

§7410(a)(2)(D). The Act makes the States primarily responsible for assuring the nation’s air quality. §7407(a). The Act thus leaves it to each State to formulate a plan

for meeting its good-neighbor obligations. See §7410(a)(2)(D)(i)(I). The EPA reviews

each state plan, but its review is “ministerial” in nature. Texas v. EPA, 829 F.3d 405,

411 (5th Cir. 2016) (quotation omitted). The EPA “shall approve” any state plan that

meets statutory requirements, §7410(k)(3), regardless of whether the EPA has a differing vision of how best to meet statutory goals. Correspondingly, the EPA has

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authority to issue a federal-implementation plan for a State only if the agency

properly disapproves of the State’s implementation plan. See §7410(c)(1).

The EPA desires a larger role in this regulatory program.

Last year, it

launched a coordinated attack, announcing its intent to reject the implementation

plans of nearly half the States in the Union. See States’ Appl. 6–7. The agency soon

unveiled a federal plan to “resolve” the good-neighbor obligations for the disapproved

States. Federal Implementation Plan Addressing Regional Ozone Transport, 87 Fed.

Reg. 20036, 20038 (Apr. 6, 2022). This past February, the EPA finalized its disapprovals of state plans. Several States immediately challenged those disapprovals in

court. See, e.g., Texas v. EPA, No. 23-60069 (5th Cir.) (filed Feb. 14, 2023); Utah v.

EPA, No. 23-9509 (9th Cir.) (filed Feb. 13, 2023); Arkansas v. EPA, No. 23-1320 (8th

Cir.) (filed Feb. 16, 2023); Kentucky v. EPA, No. 23-3216 (6th Cir.) (filed March 13,

2023). The EPA pressed on anyway, publicly announcing its final plan in mid-March.

Press Release, EPA Announces Final “Good Neighbor” Plan to Cut Harmful Smog,

Protecting Health of Millions from Power Plant, Industrial Air Pollution (Mar. 15,

2023), https://perma.cc/Q6RG-U3UG. By May, States were already receiving judicial

relief staying the EPA’s actions as to state-plan disapprovals. Texas v. EPA, No. 2360069, 2023 U.S. App. LEXIS 13898 (5th Cir. May 1, 2023) (per curiam); Order, Arkansas v. EPA, No. 23-1320 (8th Cir. May 25, 2023); Order, Missouri v. EPA, No. 231719 (8th Cir. May 26, 2023). The EPA nonetheless continued on, publishing its federal plan in early June. 88 Fed. Reg. at 36656.

5

Only a few months in, the federal plan is already a failure. Because of judicial

stays, and the EPA’s own interim rulemaking exempting certain States, the federal

plan currently applies to only 11 of the 23 States it was supposed to cover. See Stays

of SIP Disapproval Action for Certain States, 88 Fed. Reg. 49295 (July 31, 2023); Response to Additional Judicial Stays of SIP Disapproval Action for Certain States, 88

Fed. Reg. 67102 (Sept. 29, 2023). With so many States exempt, the plan now covers

less than 25% of the emissions it initially intended to regulate. See EPA, Good Neighbor Plan for 2015 Ozone NAAQS (last updated June 30, 2023), computed from data

maps available at https://www.epa.gov/csapr/good-neighbor-plan-2015-ozone-naaqs

(last visited Oct. 31, 2023).

The plan’s failure was inevitable. The EPA’s efforts to convert the Clean Air

Act into a top-down system of regulation were always going to cause trouble later on.

For example, to disapprove the plans of so many States all at once, the EPA needed

to “move the administrative goalpost” by going back on its earlier guidance and using

information not available when the States crafted their own implementation plans.

Texas, 2023 U.S. App. LEXIS 13898 at *23–25; see also Kentucky v. EPA, Nos. 233216/3225, 2023 U.S. App. LEXIS 18981, *10–11 (6th Cir. July 25, 2023). Unsurprisingly, given this workaround, every one of the seven circuits to have considered a

state-plan disapproval has stayed the EPA’s actions. See States’ Appl. 9, 11–12.

But just as important, the federal plan’s failure was foreseeable. During the

rulemaking process, commenters previewed the many legal problems with the EPA’s

disapprovals of state plans. See 88 Fed. Reg. at 36671–72; EPA, Response to Public

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Comments at 2–6, 9–11, 145–48, 152–55, https://perma.cc/N7CK-3YTE. And, as detailed more fully below, courts were already staying the EPA’s actions before the EPA

took final agency action through its publication of the federal plan.

The final wrinkle is that the problems with the state-plan disapprovals were

always going to be fatal to the federal plan. The EPA’s legal authority to issue a

nationwide federal plan for 23 States was predicated on proper disapproval of each

State’s implementation plan. See §7410(c)(1). And a key feature of the federal plan

was its nationwide scope and that upwind States would be collectively responsible for

good-neighbor obligations. More precisely, given “the ‘thorny’ causation problem of

interstate pollution,” the EPA set out to allocate responsibility for emissions reductions in “an efficient and equitable” manner among the 23 upwind States the plan

purports to cover. Id. at 36741.

Connecting the dots, the federal plan is arbitrary and capricious. The EPA

failed “to acknowledge and account for” the regulatory complications it created

through near-simultaneous rulemaking. See Portland Cement Ass’n, 665 F.3d at 187.

During its rulemaking on the federal plan, the EPA downplayed the many flaws in

its decisions to disapprove state plans. As a result, the EPA never engaged with the

strong likelihood that the federal plan would not go into effect for many of the States

the plan intended to cover. The EPA, in turn, never seriously considered whether its

plan would remain an effective, efficient, and equitable solution for dividing emission

responsibilities among upwind States if the plan did not apply to all of the intended

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States. See 88 Fed. Reg. at 36719, 36741. In fewer words, the EPA set out to develop

a coordinated, nationwide plan, but it arbitrarily ignored that it was overstepping.

B.

The EPA’s contrary arguments are unpersuasive.

The EPA and other respondents make multiple attempts to avoid and refute

the state applicants’ arguments. None are convincing.

Process. The EPA hopes that the Court will simply dodge the merits. The

EPA argues, incorrectly, that no commentor raised the state applicants’ concerns during rulemaking. EPA Opp. 19–21. By way of background, the Clean Air Act limits

judicial review to objections which were “raised with reasonable specificity during the

period for public comment.” §7607(d)(7)(B). That language is phrased in passive

voice, thus “pull[ing] the actor off the stage.” Bartenwerfer v. Buckley, 598 U.S. 69,

75 (2023). It follows that a litigating party “need not have personally raised” an objection so long as there is “a commenter who did.” Masias v. EPA, 906 F.3d 1069,

1080 (D.C. Cir. 2018). And “the word ‘reasonable’ cannot be read out of the statute”:

“the Act does not require that precisely the same argument that was made before the

agency be rehearsed again, word for word, on judicial review.” Appalachian Power

Co. v. EPA, 135 F.3d 791, 817–18 (D.C. Cir. 1998) (per curiam).

Here, commentors raised the objections the state applicants now press with

reasonable specificity. The EPA argues otherwise, but it grounds its argument in a

false premise. The agency suggests that, to preserve the state applicants’ challenge,

commentors needed to identify judicial stays already in place. See EPA Opp. 20. But

the state applicants’ challenge is about more than judicial stays—it is about the EPA

overlooking the inevitable, foreseeable, and fatal problems with its plan. Above 6–7.

8

With the state applicants’ actual argument in mind, turn to the comments.

Many commentors argued that the flaws in the EPA’s disapproval of state plans deprived the EPA of authority to promulgate a federal plan. Response to Public Comments at 2–6, 9–11, 145–48, 152–55, https://perma.cc/N7CK-3YTE. One commentor,

for example, argued that the EPA’s actions were “the exact opposite of cooperative

federalism.” Id. at 4. Others argued that the EPA contradicted its previous guidance.

Id. at 9. Still others argued that the EPA erred by using data unavailable to the

States when they submitted their plans. Id. at 10–11.

Other commentors went on to stress that the legal problems with the EPA’s

actions would lead to enforcement problems downfield. One such commentor warned

that the EPA’s rushed approach was “at the expense of a reasoned and defensible

rule.”

Interstate Natural Gas Ass’n of Am. Comments at 7 (June 21, 2022),

https://perma.cc/E9TC-TAZL. “Pushing forward” with the federal plan, that commentor went on, “will have unintended consequences that will negatively impact regulated parties” and will “invite[] litigation alleging that EPA has acted arbitrarily

and capriciously.” Id. Another commentor likewise predicted that the EPA’s broad

interpretation of its authority would lead to “legal challenges to any final rule in the

same form as the Proposed Rule.” U.S. Steel Corp. Comments at 9 (June 21, 2022),

https://perma.cc/34KL-4SKP. The EPA’s actions, that commenter explained, risked

“stringing out any rulemaking in constant challenges” and “likely jettisoning the uniformity that [the] EPA purports to seek.” Id. at 10.

9

The EPA also requested comments on the effects of its exemptions, issued as

part of the agency’s interim rulemaking. 88 Fed. Reg. at 49300. At that point, with

the EPA exempting several “large source[s] of emissions,” Ohio submitted that the

EPA should withdraw its federal plan until the agency was able to take “all the appropriate state emissions” into account. Ohio EPA Comments at 1–2 (Aug. 25, 2023),

https://perma.cc/7QTD-6GWM.

All told, these public comments should have been more than enough to spark

meaningful consideration of whether litigation would upend uniform application of

the EPA’s ambitious federal plan. The EPA is thus wrong to cast the state applicants’

arguments as being “based on events that postdated” the federal plan. See EPA Opp.

19. And, because commenters had already set forth the federal plan’s legal flaws—

along with the likely ramifications of those flaws—the state applicants did not need

to request the agency’s reconsideration before bringing their challenges. Contra EPA

Opp. 21.

A related—but distinct—argument about the timing of events is also worth

unpacking. As the state applicants stressed in their initial filing, courts were already

beginning to stay the EPA’s actions when, in June, the agency published its final plan

in the Federal Register. It is true, as the EPA counters, that the agency had publicly

announced its federal plan in mid-March—shortly before the judicial stays began piling up. See EPA Opp. 20. What are the statutory implications of this sequence?

Under the Clean Air Act, after a “rule” is “promulgated,” the EPA may not “base[]”

its rule “on any information or data which has not been placed in the docket.”

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§7607(d)(6)(C). The D.C. Circuit has held that a rule is “promulgated” when a “rule

is signed and announced” to the public. American Petroleum Institute v. Costle, 609

F.2d 20, 24 (D.C. Cir. 1979). Taking that understanding, the EPA could not have

added new information upon which to “base”—that is, support—its “rule” after the

agency publicly announced it in mid-March. But it does not follow that the EPA could

ignore the surrounding world the second it announced its federal plan. Rather, the

EPA had a separate statutory obligation to refrain from arbitrary and capricious “action.” See §7607(d)(9). And agency “action” does not become final, this Court has

taught, until “the consummation of the agency’s decisionmaking process.” Bennett v.

Spear, 520 U.S. 154, 177–78 (1997) (quotation omitted). For rulemaking, that typically means publication. See FTC v. Std. Oil Co., 449 U.S. 232, 239 (1980); Trout

Unlimited v. Pirzadeh, 1 F.4th 738, 750 (9th Cir. 2021).

In this case, the EPA published its final rule in June—so its action did not

become final until after courts were staying state-plan disapprovals. The EPA, it

follows, was wrong to ignore the judicial stays that were issued before it published

the federal plan. But even if those stays came too late for consideration, they still

confirm what the agency should have seen coming.

Merits. The EPA’s arguments on the merits fare no better. Consider first the

relationship between the federal plan and the EPA’s disapproval of state plans. The

EPA insinuates that any problems with its disapproval of States’ implementation

plans are separate from—and irrelevant to—the agency’s decision to finalize the federal plan. See EPA Opp. 21–22. That cannot be right. Again, the EPA had authority

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to issue a federal plan for 23 States only if it properly disapproved the implementation plans of 23 States. See §7410(c)(1). Thus, the validity of the federal plan is

necessarily tied to the validity of the EPA’s state-plan disapprovals. If anything, the

EPA’s rushed approach made things even worse for the agency. By timing the federal

plan on the heels of the state-plan disapprovals, the EPA guaranteed that problems

with the state-plan disapprovals would unravel the federal plan as well.

The EPA seems to accept that its plan is—at present—a shadow of what the

agency intended. See EPA Opp. 25. The EPA submits, however, that its plan remains

a fair allocation of responsibilities because (1) the federal plan “operates State by

State,” (2) exempting some covered States from the plan does “not alter the obligations that” the plan imposes on non-exempt States, and (3) there was no minimum

number of States needed for the plan to “operate coherently.” Id. at 24–25.

The problem with these arguments is that the agency did not make them earlier. As this Court has explained, an agency cannot rely on post-hoc rationalizations

in support of its rulemaking. Michigan, 576 U.S. at 758. The EPA did not develop

the just-stated line of reasoning during its rulemaking process. At that point, the

EPA reasoned that its plan was an equitable allocation of responsibilities for the 23

covered States. E.g., 88 Fed. Reg. at 36719, 36741. And the agency ignored the strong

possibility that courts would disagree with its actions and, consequently, that its plan

would not go into effect for many of the intended States. As a result, the EPA never

contemplated whether its plan would remain equitable if it applied unevenly to the

States it purported to cover. Rather, the EPA emphasized during rulemaking that

12

uniform application was a critical part of its plan’s equity. The agency said, for example, that “consistency in rule requirements across all jurisdictions” was “vital” to

ensuring an “efficient and equitable” “remedy for ozone transport.” Id. at 36691 (quotations omitted). Noticeably, the EPA’s current rationales move the goalposts from

an “equitable” plan that fairly divides responsibilities, id. at 36741, to a plan that

merely “operate[s] coherently,” see EPA Opp. 24. But the EPA cannot now shift its

reasoning in litigation.

It was also not enough for the EPA to declare its plan severable. Contra EPA

Opp. 24. Within its final rulemaking, the EPA offered a cursory discussion about the

severability of the federal plan. 88 Fed. Reg. at 36693. But that discussion—like the

remainder of the EPA’s final rule—did not address whether the federal plan would

remain a fair division of responsibilities if it did not apply equally to the 23 upwind

States the EPA intended to cover. Similarly, the EPA did not address whether allowing for severability would put covered States at a competitive disadvantage to exempted States. Nor did the EPA address whether the federal plan’s trading program

(for emission allowances) would remain effective with “fewer States participat[ing].”

See EPA Opp. 26. Put it this way: to succeed on their challenge, the state applicants

do not need this Court (or the D.C. Circuit) to reach an answer as to “what minimum

number of States” the federal plan must cover to be equitable and effective. Contra

EPA Opp. 22–23. The point is instead that the EPA did not ever grapple with that

and related questions, even though it chose to write a rule that presumed to cover—

and fairly allocate responsibility among—23 upwind States.

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The EPA’s optimism about litigation over state-plan disapprovals is also no

reason to withhold relief now. See EPA Opp. 22. The agency suggests that it may

ultimately prevail in litigation concerning the state-plan disapprovals, which would

in turn lift the stays currently in place. The suggestion is a shaky one, given the

agency’s poor results in the circuits so far. Regardless, the mere possibility of the

EPA’s future success is not a good reason for allowing unequal application of the federal plan now, while the federal plan remains stayed for most of the intended States.

In addition to the EPA, other respondents—consisting of advocacy groups and

other States—also oppose a stay. Their arguments largely overlap with the EPA’s

arguments; and those arguments fail for the reasons just discussed. But the state

respondents further argue that this case amounts to an improper collateral attack on

state-plan disapprovals. State Resp. Opp. 25–27. That is incorrect. West Virginia,

for its part, does not need to mount any collateral attack, as it directly challenged its

state-plan disapproval in another suit. West Virginia v. EPA, No. 23-1418 (4th Cir.).

Ohio and Indiana, for their parts, did not challenge the disapproval of their plans.

Those States thus accept that they will be subject to a plan that is different from the

ones they initially proposed. But that does not mean Ohio and Indiana must accept

a federal plan that is the product of unreasoned decisionmaking. This Court’s procedural analysis in EME Homer, 572 U.S. 489, shows as much. There, the Court allowed States to proceed on challenges to a federal plan even though they failed to

submit an adequate state plan. Many of the States’ arguments related to the disapproval of state plans, but the “gravamen” of the challenge was about the EPA’s later

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action. Id. at 507. The same holds true here: even if the EPA validly disapproved of

Ohio’s and Indiana’s plans, the EPA made an unreasoned decision in promulgating a

nationwide federal plan when so many other States would be exempt.

III.

The States, their industries, and their citizens will be irreparably

harmed without a stay.

A. Without a stay, the States have sustained—and will continue to sustain—

serious, irreparable injuries. As a reminder, the federal plan is currently effective in

Ohio and Indiana. An administrative stay remains in place for West Virginia, at least

as of the date of this filing. But it is unclear how long that temporary stay will last,

as the Fourth Circuit tied it to the resolution of West Virginia’s pending motion to

stay, on which the court heard oral argument last week. See States’ Appl. 12, 23.

With every day that passes, non-exempt States must spend a significant

amount of time and money on complying with the federal plan. States’ Appl. 23. The

States must commit these resources to satisfy their obligations to review and issue

permits under the new plan; and they must also expend resources to ensure that

emission sources within their borders are able to comply with the federal plan. Id. at

23–25. Of course, the States cannot later recover these spent resources from the federal government—so these injuries are necessarily irreparable.

The federal plan injures the States in other ways, too. Because the States must

expend resources complying with the federal plan, they have had to stop or slow progress on other infrastructure projects. See App.C-15–16 (Crowder Decl. ¶43). Making

matters worse, the federal plan undermines the States’ electricity-generation

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capacity and destabilizes their power grids. See States’ Appl. 25. Finally, the federal

plan injures the States’ sovereign authority to regulate air quality themselves.

B. The contrary arguments of the EPA and its supporters fold under scrutiny.

For instance, the EPA submits that the States face no burden because compliance

obligations apply to emission sources, not to the States themselves. EPA Opp. 47.

But, in arguing as much, the EPA does not refute the state applicants’ evidence that

the federal plan imposes increased permitting obligations and other compliance-related tasks on the States. Again, since the federal plan went into effect, the States

must shoulder the arduous task of issuing and updating Title V permits and updating

monitoring capabilities to reflect the federal plan’s requirements. See, e.g., App.B-7–

8 (Hodanbosi Decl. ¶¶18–19); App.C-14–16 (Crowder Decl. ¶¶41–43). That the EPA

views the costs associated with these tasks as “traditional” costs that the States

should incur, EPA Opp. 47, does not make these costs disappear. And just because

the States must take on some permitting and compliance costs under the statutory

scheme does not mean that the EPA can force the States to incur extra costs through

unlawful action. The EPA’s position also downplays that the States will naturally

incur costs to help ensure industries comply with the federal plan. See Ohio EPA

Correspondence with State Sources (Aug. 23, 2023), https://perma.cc/83CB-9BZW;

App.B-10 (Hodanbosi Decl. ¶24).

Contrary to the state respondents’ suggestions, State Resp. Opp. 22, it is not

overly speculative to say that the federal plan shifts resources away from other projects. Time and money spent adjusting to the federal plan cannot be spent elsewhere.

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In West Virginia, adjusting to the federal plan will place a “significant strain” on that

State’s permitting division. App.C-15–16 (Crowder Decl. ¶43). The result will be to

shift state personnel’s attention away from other projects, including the State’s first

combined-cycle energy plant. See id.; Associated Press, After climate bill passage,

WVa natural gas plant unveiled (Sept. 16, 2022) https://perma.cc/WJD7-ZJNR.

The state applicants’ grid-stability concerns are also far from speculative. Contra EPA Opp. 47; State Resp. Opp. 23. One electric-grid emergency recently came to

pass, threatening Ohio among other jurisdictions. See App.B-5–6, 14–21 (Hodanbosi

Decl. ¶13 and Exhibit A). In that instance, emergency action (suspending regulatory

limits) averted disaster. Id. But that near miss provides little comfort moving forward. Further, it is no solution to say that compliance deadlines remain a few years

away. See State Resp. Opp. 2. Like other regulated industries, power plants must

make proactive investment decisions in advance to comply with future requirements.

See App.E-6 (Farach Decl. ¶15). These decisions—about engineering, design, procurement, and construction—cannot be undone or quickly become too costly to undo.

See id. And some plants, after contemplating the investments needed for compliance,

may well decide (before the courts give an ultimate answer here) that the costs of

operating are simply too great.

Finally, the EPA brushes aside the state applicants’ concerns about their sovereignty. But in doing so, the EPA presumes that it is right on the merits. See EPA

Opp. 48. If the EPA is wrong on the merits, then its unlawful actions necessarily

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harm the state applicants’ sovereignty, including by subjecting some States to less

favorable regulation than others.

IV.

The other Nken factors warrant a stay.

The final two Nken factors call “for assessing the harm to the opposing party

and weighing the public interest.” 556 U.S. at 435. “These factors merge when the

Government is the opposing party.” Id. And the “public interest lies in a correct

application” of the law. Coal. to Def. Affirmative Action v. Granholm, 473 F.3d 237,

252 (6th Cir. 2006) (Sutton, J.) (quotation omitted). Combining these points, the equities and the public interest also favor a stay. If the federal plan is unlawful, the

state applicants should be relieved from the harms the plan is imposing now.

The EPA argues otherwise, trumpeting the purported benefits of its federal

plan and the purported harms of delay. EPA Opp. 48–49; see also State Resp. Opp.

14–19. But, if the EPA’s actions violated the requirements Congress has placed on

agency decisionmaking, then it is not this Court’s role to weigh the policy “tradeoffs”

of the federal plan. See Nat’l Fed’n of Ind. Bus., 595 U.S. at 120. In any event, the

EPA’s arguments overstate the implications of a stay. In terms of emissions reductions, judicial stays across the country have already dramatically reduced the effectiveness of the federal plan. As for any delay in further regulation, the EPA has itself

to blame for that. The EPA sat nearly five years on the state applicants’ proposed

implementation

plans—well

past

its

statutory

deadline

§§7410(k)(1)(B), (k)(2)—so its present calls for urgency ring hollow.

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for

acting,

see

CONCLUSION

The Court should stay the federal-implementation plan pending judicial review.

Respectfully submitted,

DAVE YOST

Ohio Attorney General

/s/ Mathura J. Sridharan

MATHURA J. SRIDHARAN*

*Counsel of Record

ZACHERY P. KELLER

Deputy Solicitors General

30 E. Broad St., 17th Fl.

Columbus, Ohio 43215

614-466-8980

Mathura.Sridharan@OhioAGO.gov

Counsel for State of Ohio

THEODORE E. ROKITA

Attorney General of Indiana

PATRICK MORRISEY

Attorney General of West Virginia

JAMES A. BARTA

Deputy Solicitor General

Office of the Indiana Attorney General

IGC-South, Fifth Floor

302 West Washington Street

Indianapolis, IN 46204

(317) 232-0709

James.Barta@atg.in.gov

LINDSAY S. SEE

Solicitor General

MICHAEL WILLIAMS

Principal Deputy Solicitor General

Office of the West Virginia Attorney General

State Capitol, Bldg 1, Room E-26

Charleston, WV 25305

(682) 313-4550

Lindsay.S.See@wvago.gov

Counsel for State of Indiana

Counsel for State of West Virginia

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