Emergency Application — American Forest & Paper Association, et al., Applicants v. Environmental Protection Agency, et al.
Supreme Court briefOct 13, 2023
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No. 23A_____
In the Supreme Court of the United States
A MERICAN F OREST & P APER A SSOCIATION ; A MERICA ’ S P OWER ; A SSOCIATED
E LECTRIC C OOPERATIVE , I NC .; D ESERET P OWER E LECTRIC C OOPERATIVE ;
M IDWEST O ZONE G ROUP ; N ATIONAL M INING A SSOCIATION ; THE N ATIONAL
R URAL E LECTRIC C OOPERATIVE A SSOCIATION ; O HIO V ALLEY E LECTRIC
C ORPORATION ; THE P ORTLAND C EMENT A SSOCIATION ;
W ABASH V ALLEY P OWER A LLIANCE ,
Applicants,
v.
E NVIRONMENTAL P ROTECTION A GENCY AND M ICHAEL S. R EGAN ,
A DMINISTRATOR ,
Respondents.
EMERGENCY APPLICATION
FOR IMMEDIATE STAY OF FINAL AGENCY ACTION
PENDING DISPOSITION OF PETITION FOR REVIEW
To the Honorable John G. Roberts, Jr.,
Chief Justice of the Supreme Court of the United States and Circuit Justice
for the District of Columbia Circuit
Michael B. Schon
LEHOTSKY KELLER COHN LLP
200 Massachusetts Ave NW
Washington, DC 20001
(512) 693-8350
Mithun Mansinghani
LEHOTSKY KELLER COHN LLP
629 W. Main St.
Oklahoma City, OK 73102
(512) 693-8350
Counsel for National Mining
Association
Jonathan Y. Ellis
Counsel of Record
Allison D. Wood
Makram B. Jaber
MCGUIREWOODS LLP
888 16th Street N.W., Suite 500
Black Lives Matter Plaza
Washington, DC 20006
(202) 857-2420
jellis@mcguirewoods.com
Counsel for America’s Power, Associated
Electric Cooperative, Inc., Deseret Power
Electric Cooperative, the National Rural
Electric Cooperative Association, Ohio Valley
Electric Corporation, the Portland Cement
Association, Wabash Valley Power Alliance
David M. Flannery
Kathy G. Beckett
Keeleigh S. Utt
Steptoe & Johnson, PLLC
707 Virginia Street, East
Post Office Box 1588
Charleston, WV 25326
(304) 353-8000
Dave.Flannery@steptoe-johnson.com
Kathy.Beckett@steptoe-johnson.com
Keeleigh.Utt@steptoe-johnson.com
Edward L. Kropp
Steptoe & Johnson PLLC
PO Box 36425
Indianapolis, Indiana 46236
317-946-9882
Skipp.kropp@steptoe-johnson.com
Counsel for American Forest & Paper
Association and Midwest Ozone Group
P A RT I E S T O T H E P RO CE E D I N G S
A. Parties to this Application
i. D.C. Cir. No. 23-1190, Am. Forest & Paper Assoc. v. EPA
Petitioner: American Forest & Paper Association.
Respondents: The United States Environmental Protection Agency; Michael
S. Regan, EPA Administrator.
Intervenors: City Utilities of Springfield, Missouri.
ii. D.C. Cir. No. 23-1191, Midwest Ozone Group v. EPA
Petitioner: Midwest Ozone Group.
Respondents: The United States Environmental Protection Agency; Michael
S. Regan, EPA Administrator.
Intervenors: City Utilities of Springfield, Missouri
iii. D.C. Cir. No. 23-1195, Associated Electric Cooperative, Inc. v. EPA
Petitioners: Associated Electric Cooperative, Inc.; Deseret Generation &
Transmission Co-Operative, d/b/a Deseret Power Electric Cooperative; Ohio
Valley Electric Corporation; Wabash Valley Power Association, Inc., d/b/a
Wabash Valley Power Alliance; America's Power; National Rural Electric
Cooperative Association; Portland Cement Association.
Respondents: The United States Environmental Protection Agency; Michael
S. Regan, EPA Administrator.
Intervenors: City Utilities of Springfield, Missouri
iv. D.C. Cir. No. 23-1199, National Mining Association v. EPA
Petitioner: National Mining Association.
i
Respondents: The United States Environmental Protection Agency; Michael
S. Regan, EPA Administrator.
Intervenors: City Utilities of Springfield, Missouri
B. Additional Parties to these Consolidated Cases
i. D.C. Cir. No. 23-1157, State of Utah v. EPA
Petitioner: The State of Utah, by and through its Governor, Spencer J. Cox,
and its Attorney General, Sean D. Reyes.
Respondents: The United States Environmental Protection Agency; Michael
S. Regan, EPA Administrator.
Intervenors: City Utilities of Springfield, Missouri; City of New York;
Commonwealth of Massachusetts; Commonwealth of Pennsylvania; District
of Columbia; Harris County, Texas; State of Connecticut; State of Delaware;
State of Illinois; State of Maryland; State of New Jersey; State of New York;
State of Wisconsin; Air Alliance Houston; Appalachian Mountain Club;
Center for Biological Diversity; Chesapeake Bay Foundation; Citizens for
Pennsylvania’s Future; Clean Air Council; Clean Wisconsin; Downwinders
at Risk; Environmental Defense Fund; Louisiana Environmental Action
Network; Sierra Club; Southern Utah Wilderness Alliance; Utah Physicians
for a Healthy Environment.
ii. D.C. Cir. No. 23-1181, Kinder Morgan v. EPA
Petitioner: Kinder Morgan, Inc.
Respondents: The United States Environmental Protection Agency; Michael
S. Regan, EPA Administrator.
ii
Intervenors: City Utilities of Springfield, Missouri; Commonwealth of
Massachusetts; Commonwealth of Pennsylvania; District of Columbia;
Harris County, Texas; State of Connecticut; State of Delaware; State of
Illinois; State of Maryland; State of New Jersey; State of New York; State of
Wisconsin; City of New York.
iii. D.C. Cir. No. 23-1183, State of Ohio v. EPA
Petitioners: State of Ohio; State of West Virginia; State of Indiana.
Respondents: The United States Environmental Protection Agency; Michael
S. Regan, EPA Administrator.
Intervenors: City Utilities of Springfield, Missouri; City of New York;
Commonwealth of Massachusetts; Commonwealth of Pennsylvania; District
of Columbia; Harris County, Texas; State of Connecticut; State of Delaware;
State of Illinois; State of Maryland; State of New Jersey; State of New York;
State of Wisconsin.
iv. D.C. Cir. No. 23-1193, Interstate Natural Gas Association of America v. EPA
Petitioners: Interstate Natural Gas Association of America; American
Petroleum Institute.
Respondents: The United States Environmental Protection Agency; Michael
S. Regan, EPA Administrator.
Intervenors: City Utilities of Springfield, Missouri.
v. D.C. Cir. No. 23-1200, American Iron and Steel Institute v. EPA
Petitioners: American Iron and Steel Institute.
iii
Respondents: The United States Environmental Protection Agency; Michael
S. Regan, EPA Administrator.
Intervenors: City Utilities of Springfield, Missouri.
vi. D.C. Cir. No. 23-1201, State of Wisconsin v. EPA
Petitioners: State of Wisconsin.
Respondents: The United States Environmental Protection Agency; Michael
S. Regan, EPA Administrator.
Intervenors: City Utilities of Springfield, Missouri; Sierra Club; Midwest
Ozone Group.
vii. D.C. Cir. No. 23-1202, Enbridge (U.S.) Inc. v. EPA
Petitioners: Enbridge (U.S.) Inc.
Respondents: The United States Environmental Protection Agency; Michael
S. Regan, EPA Administrator.
Intervenors: City Utilities of Springfield, Missouri.
viii. D.C. Cir. No. 23-1203, American Chemistry Council v. EPA
Petitioners: American Chemistry Council; American Fuel & Petrochemical
Manufacturers.
Respondents: The United States Environmental Protection Agency; Michael
S. Regan, EPA Administrator.
Intervenors: City Utilities of Springfield, Missouri.
ix. D.C. Cir. No. 23-1205, TransCanada Pipeline USA Ltd. v. EPA
Petitioners: TransCanada Pipeline USA Ltd.
iv
Respondents: The United States Environmental Protection Agency; Michael
S. Regan, EPA Administrator.
Intervenors: City Utilities of Springfield, Missouri.
x. D.C. Cir. No. 23-1206, Hybar LLC v. EPA
Petitioners: Hybar LLC
Respondents: The United States Environmental Protection Agency; Michael
S. Regan, EPA Administrator.
Intervenors: City Utilities of Springfield, Missouri.
xi. D.C. Cir. No. 23-1207, United States Steel Corporation v. EPA
Petitioners: United States Steel Corporation.
Respondents: The United States Environmental Protection Agency; Michael
S. Regan, EPA Administrator.
Intervenors: City Utilities of Springfield, Missouri.
xii. D.C. Cir. No. 23-1208, Union Electric Company v. EPA
Petitioners: Union Electric Company, d/b/a Ameren Missouri.
Respondents: The United States Environmental Protection Agency; Michael
S. Regan, EPA Administrator.
Intervenors: City Utilities of Springfield, Missouri.
xiii. D.C. Cir. No. 23-1209, State of Nevada v. EPA
Petitioners: State of Nevada.
Respondents: The United States Environmental Protection Agency; Michael
S. Regan, EPA Administrator.
Intervenors: City Utilities of Springfield, Missouri.
v
xiv. D.C. Cir. No. 23-1211, Arkansas League of Good Neighbors v. EPA
Petitioners: Arkansas League of Good Neighbors.
Respondents: The United States Environmental Protection Agency; Michael
S. Regan, EPA Administrator.
Intervenors: City Utilities of Springfield, Missouri.
vi
C O R P O RA T E D I S C L O S U RE S T A T E M E N T
Pursuant to Rule 29.6, applicants state as follows:
AMERICAN FOREST & PAPER ASSOCIATION
The American Forest & Paper Association (“AF&PA”) is a continuing
association of individuals operated for the purpose of promoting the general interests
of its membership. The AF&PA represents nearly 87% of the pulp, paper, packaging,
and tissue products industry which employs 925,000 skilled workers. The AF&PA is
a trade association and has no outstanding shares or debt securities in the hand of
the public. It has no parent company, and no publicly held company has a 10% or
greater ownership interest in AF&PA.
AMERICA’S POWER
America’s Power is a nonprofit membership corporation organized under the
laws of the District of Columbia and is recognized as a tax-exempt trade association
by the Internal Revenue Service under Section 501(c)(6) of the Internal Revenue
Code. America’s Power is the only national trade association whose sole mission is to
advocate at the federal and state levels on behalf of coal-fueled electricity, the coal
fleet, and its supply chain. America’s Power supports policies that promote the use of
coal to assure a reliable, resilient, and affordable supply of electricity to meet our
nation’s demand for energy.
America’s Power is a trade association. It has no parent corporation, and no
publicly held company owns a 10% or greater interest in America’s Power.
vii
ASSOCIATED ELECTRIC COOPERATIVE, INC.
Associated Electric Cooperative, Inc. (“AECI”) is a rural electric cooperative
that provides wholesale power and high-voltage transmission to its six regional
generation and transmission cooperative member-owners. In addition to providing
power sales and transmission service to its member cooperatives, AECI also takes
and provides transmission service through enabling transmission agreements with
and makes off-system power sales to various counterparties in the United States.
These six regional generation and transmission cooperatives, in turn, supply
wholesale power to fifty-one distribution cooperatives in Missouri, three distribution
cooperatives in southeast Iowa, and nine distribution cooperatives in northeast
Oklahoma, serving more than 2,000,000 customers at 910,000 meters. AECI has no
parent company, and no publicly held company has a 10% or greater ownership
interest in AECI.
DESERET POWER ELECTRIC COOPERATIVE
Deseret Generation & Transmission Co-Operative d/b/a Deseret Power Electric
Cooperative (“Deseret”) certifies that it is a nonprofit, regional generation and
transmission cooperative, owned by its five member systems, serving approximately
65,000 customers in Utah, Colorado, Wyoming, Nevada, and Arizona. Neither
Deseret, nor its member cooperatives issue stock, and therefore no publicly held
company owns 10% or more of their stock.
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MIDWEST OZONE GROUP
The Midwest Ozone Group (“MOG”) is a continuing association of
organizations and individual entities operated to promote the general interests of its
membership on matters related to air emissions and air quality. MOG has no parent
companies, subsidiaries, or affiliates that have issued shares or debt securities to the
public, although specific individuals in the membership of MOG have done so. MOG
has no outstanding shares or debt securities in the hands of the public. It has no
parent company, and no publicly held company has a 10% or greater ownership
interest in MOG.
NATIONAL MINING ASSOCIATION
The National Mining Association (“NMA”) is a nonprofit national trade
association that represents the interest of the mining industry, including every major
coal company operating in the United States. NMA has approximately 280 members,
whose interests it represents before Congress, the administration, federal agencies,
the courts, and the media. NMA is not a publicly held corporation. It has no parent
corporation, and no publicly held company has 10% or greater ownership interest in
NMA.
NATIONAL RURAL ELECTRIC COOPERATIVE ASSOCIATION
The National Rural Electric Cooperative Association (“NRECA”) is the
nonprofit national trade association for electric cooperatives. On behalf of its
members, NRECA participates in administrative and judicial proceedings involving
or affecting its members’ interests. NRECA has no parent company, and no publicly
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held company has a 10% or greater ownership interest in NRECA. NRECA is an
incorporated entity.
OHIO VALLEY ELECTRIC CORPORATION
The Ohio Valley Electric Corporation (“OVEC”) is a corporation originally
formed by a consortium of utility companies for purposes of constructing and
operating electric generating units to serve the electric energy needs of uranium
processing facilities owned by the United States Department of Energy. OVEC owns
the Kyger Creek generating station in Ohio, and OVEC’s wholly owned subsidiary
Indiana-Kentucky Electric Corporation owns the Clifty Creek generating station in
Indiana. OVEC has no parent company. American Electric Power Company, Inc., and
Buckeye Power, Inc., each owns greater than 10% of the equity in OVEC.
PORTLAND CEMENT ASSOCIATION
The Portland Cement Association (“PCA”), founded in 1916, is the premier
policy, research, education, and market intelligence organization serving America’s
cement manufacturers. PCA represents a majority of U.S. cement production
capacity. PCA promotes safety, sustainability, and innovation in all aspects of
construction, fosters continuous improvement in cement manufacturing and
distribution, and generally promotes economic growth and sound infrastructure
investment. PCA is a trade association and has no parent corporation, and no publicly
held company owns a 10% or greater interest in PCA.
x
WABASH VALLEY POWER ALLIANCE
Wabash Valley Power Association, Inc. d/b/a Wabash Valley Power Alliance
(“WVPA”) certifies that it is a nonprofit, generation and transmission cooperative,
owned by twenty-three member-owned rural cooperative systems, serving more than
330,000 homes, businesses, farms, and schools – impacting more than a million
people – across 50 counties in Indiana, 30 counties in Illinois, and four counties in
Missouri. Neither WVPA, nor its member cooperatives issue stock, and therefore no
publicly held company owns 10% or more of their stock.
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T A BL E O F C O N T E N T S
Page
PARTIES TO THE PROCEEDINGS………………………………………..…….…………i
RULE 29.6 STATEMENT……………………………………………………….…….…….vii
INTRODUCTION………………………………………………………………………………1
OPINON BELOW………………………………………………………………………………4
JURISDICTION………………………………………………………………………………..4
STATUTORY AND REGULATORY PROVISIONS………………………………….…..4
STATEMENT…………………………………………………………………………………...5
I.
Statutory Background………………………..……………………………………5
II.
EPA’s Promulgation of State Implementation Plan Disapprovals and the
Federal Plan………………………………………………………………………...6
III.
The Federal Plan Before and After the Court-Ordered Stays of the State
Plan Disapprovals………………………………………………………………….8
IV.
Differences Between the Federal Plan and Past Federal Implementation
Plans…….………………………………………………………………………….11
REASONS FOR GRANTING THE APPLICATION…………………………………….12
I.
Applicants Are Likely to Succeed on the Merits in this Case, which
Warrants this Court’s Discretionary Review…………………………………13
A.
The Federal Plan as Promulgated No Longer Exists, and EPA
Never Analyzed or Allowed Comment on the Smaller,
Transformed Version…………………………………………………14
B.
Even if the Federal Plan Still Consisted of All 23 States, It
Would Nonetheless Violate the Clean Air Act……………………20
II.
Absent a Stay, the Applicants and Their Members Will Suffer
Substantial Irreparable Harms……...………………………………………..25
III.
The Balance of Equities and the Public Interest Favor a Stay…………..27
CONCLUSION………………………………………………………………………………..29
xii
T A BL E O F A U T H O R I T I E S
Page(s)
Cases
Alabama v. EPA,
No. 23-11173 (11th Cir. Aug. 17, 2023) ................................................................... 8
Allete, Inc. v. EPA,
No. 23-1776 (8th Cir. July 5, 2023).......................................................................... 8
Am. Fuel & Petrochemical Manufacturers v. EPA,
3 F.4th 373 (D.C. Cir. 2021) ................................................................................... 20
Arkansas v. EPA,
No. 23-1320 (8th Cir. May 25, 2023)........................................................................ 7
Belmont Mun. Light Dep’t v. FERC,
38 F.4th 173 (D.C. Cir. 2022) ................................................................................. 20
EPA v. EME Homer City Generation, L.P.,
572 U.S. 489 (2014) .................................................................. 2, 6, 9, 13, 15, 16, 21
Hollingsworth v. Perry,
558 U.S. 183 (2010) .......................................................................................... 13, 27
Kentucky v. EPA,
No. 23-3216 (6th Cir. May 31, 2023).................................................................... 7, 8
Lucas v. Townsend,
486 U.S. 1301 (1988) .............................................................................................. 12
Michigan v. EPA,
135 S. Ct. 2699 (2015) ............................................................................................ 13
Missouri v. EPA,
No. 23-1719 (8th Cir. May 26, 2023)........................................................................ 7
Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co.,
463 U.S. 29 (1983) .................................................................................................. 19
Nat’l Fuel Gas Supply Corp. v. FERC,
59 F.3d 1281 (D.C. Cir. 1995) ................................................................................ 19
Nevada Cement Company v. EPA,
No. 23-682 (9th Cir. July 3, 2023)............................................................................ 8
xiii
Nken v. Holder,
556 U.S. 418 (2009) ................................................................................................ 13
Nken v. Mukasey,
555 U.S. 1042 (2008) .............................................................................................. 12
In re NTE Connecticut, LLC,
26 F.4th 980 (D.C. Cir. 2022) ................................................................................. 25
Oklahoma v. EPA,
No. 23-9514 (10th Cir. July 27, 2023)...................................................................... 8
Philip Morris v. Scott,
131 S. Ct. 1 (2010) .................................................................................................. 25
Texas v. EPA,
No. 23-60069 (5th Cir. May 1, 2023).............................................................. 7, 8, 27
Thunder Basin Coal Co. v. Reich,
510 U.S. 200 (1994) ................................................................................................ 25
Tulsa Cement et al. v. EPA,
No. 23-9551 (10th Cir. July 20, 2023).............................................................. 16, 17
Union Elec. Co. v. EPA,
427 U.S. 246 (1976) .................................................................................................. 5
Utah v. EPA,
No. 23-1157 (D.C. Cir. Sept. 22, 2023)............................................................. 10, 17
Utah v. EPA,
No. 23-9509 (10th Cir. July 27, 2023)...................................................................... 8
West Virginia v. EPA,
142 S. Ct. 2587 (2022) ............................................................................................ 13
West Virginia v. EPA,
No. 23-1418 (4th Cir. Aug. 10, 2023) ................................................................... 2, 8
Federal Statutes
Administrative Procedure Act of 1946, 5 U.S.C. §§ 551–559, Pub. L. No.
79–404, 60 Stat. 237 (1946).................................................................... 3, 14, 17, 18
5 U.S.C. § 553 ......................................................................................................... 14, 18
5 U.S.C. § 705 ........................................................................................................... 4, 12
xiv
28 U.S.C. § 1254 ....................................................................................................... 4, 12
All Writs Act of 1789, 28 U.S.C. § 1651 .................................................................. 4, 12
28 U.S.C. § 2101 ........................................................................................................... 12
42 U.S.C. § 7407(a) .................................................................................................... 2, 5
42 U.S.C. § 7607 ............................................................................................................. 4
42 U.S.C. § 7410 ..................................................................................................... 2, 5, 6
42 U.S.C. § 7607(d) ................................................................................................ 14, 18
Other Authorities
Air Plan Disapproval; AL, MS, TN; Interstate Transport Requirements
for the 2015 8-Hour Ozone National Ambient Air Quality
Standards, 87 Fed. Reg. 9545 (Feb. 22, 2022) ......................................................... 6
Air Plan Disapproval; California; Interstate Transport of Air Pollution
for the 2015 8-Hour Ozone National Ambient Air Quality
Standards, 87 Fed. Reg. 31,443 (May 24, 2022) ...................................................... 6
Air Plan Disapprovals; Interstate Transport of Air Pollution for the
2015 8-Hour Ozone National Ambient Air Quality Standards,
88 Fed. Reg. 9336 (Feb. 13, 2023) ............................................................................ 7
Federal ‘‘Good Neighbor Plan’’ for the 2015 Ozone National Ambient
Air Quality Standards,
88 Fed. Reg. 36,654 (June 5, 2023) ........................................... 2, 4, 7, 8, 10, 11, 15,
16, 18, 21, 23, 24, 27
Federal “Good Neighbor Plan” for the 2015 Ozone National Ambient
Air Quality Standards: Response to Additional Judicial Stays of SIP
Disapproval Action for Certain States,
88 Fed. Reg. 67,102 (Sept. 9, 2023).......................................................................... 9
Federal “Good Neighbor Plan” for the 2015 Ozone National Ambient
Air Quality Standards: Response to Judicial Stays of SIP
Disapproval Action for Certain States,
88 Fed. Reg. 49,295 (July 31, 2023) ......................................................................... 8
Federal Implementation Plan Addressing Regional Ozone Transport
for the 2015 Ozone National Ambient Air Quality Standard,
87 Fed. Reg. 20,036 (Apr. 6, 2022) ........................................................................... 7
xv
National Ambient Air Quality Standards for Ozone,
80 Fed. Reg. 65,292 (Oct. 26, 2015) ......................................................................... 6
Ozone NAAQS Interstate Transport SIP Disapprovals – Response to
Comment (RTC) Document Document (2015), available at
https://t.ly/ikB1A ...................................................................................................... 6
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TO THE HONORABLE JOHN G. ROBERTS, JR.,
CHIEF JUSTICE OF THE SUPREME COURT OF THE UNITED
STATES AND CIRCUIT JUSTICE FOR THE DISTRICT OF
COLUMBIA CIRCUIT:
The Applicants, ten industry parties consisting of national trade associations
and individual electric generating companies, respectfully request an immediate stay
of the Environmental Protection Agency’s (“EPA”) final rule entitled “Federal ‘Good
Neighbor Plan’ for the 2015 Ozone National Ambient Air Quality Standards,” 88 Fed.
Reg. 36,654 (June 5, 2023) (“Federal Plan”). The Applicants have petitions for review
of the Federal Plan pending in the United States Court of Appeals for the District of
Columbia Circuit and, due to the immediate harm from the Federal Plan, moved for
a stay pending that court’s review. A divided panel of that court denied the motion,
with Judge Walker stating he would have stayed the Federal Plan.
The Applicants agree with and incorporate the Application by Ohio, Indiana,
and West Virginia filed with this Court on October 13, 2023. The Applicants will not
repeat the States’ arguments here but will amplify the reasons why the Federal Plan
merits this Court’s review, is likely unlawful, and poses immediate and irreparable
harm to various industries, including electric generation, paper, steel, cement, and
mining, as demonstrated in more detail in the declarations accompanying this
application.
INTRODUCTION
This case involves a stubborn refusal by EPA to admit that the legal
foundation for a massive, multi-state, regulatory program (the “Federal Plan”) is
irreparably flawed—as an extraordinary consensus of seven courts of appeals have
recognized. EPA’s willful decision to move forward has simultaneously abrogated the
rights of States to regulate air pollution within their borders and improperly forced
industries regulated by the Federal Plan into the immediate expenditure of hundreds
of millions of dollars pending the lower court’s review, all while jeopardizing the
reliability of the electric grid.
The Clean Air Act’s “core principle” is “cooperative federalism.” EPA v. EME
Homer City Generation, L.P., 572 U.S. 489, 511 n.14 (2014). States assume “primary
responsibility for assuring air quality….” 42 U.S.C. § 7407(a). EPA may step into the
role of the States and issue a rule like the Federal Plan only if EPA lawfully
determines that a State’s plan violates the statute. Id. § 7410(c)(1).
After missing its statutory deadline to review State plans by years, EPA
disapproved 21 State plans en masse. 88 Fed. Reg. 9336 (Feb. 13, 2023). State and
industry commenters informed EPA that those State-plan disapprovals were likely
unlawful, and federal courts of appeals began agreeing, swiftly issuing stays of
individual state plan disapprovals. Relying on its unlawful state-plan disapprovals
as the legal predicate, EPA nevertheless published the Federal Plan for those 21
States, plus an additional two States. 88 Fed. Reg. at 36,654. Ultimately, entities in
12 of the 23 affected States challenged and sought stays of their disapprovals in
various courts of appeals. Every single one of those courts (the Fourth, 1 Fifth, Sixth,
Eighth, Ninth, Tenth, and Eleventh Circuits) have granted stays.
1 The stay of the disapproval of West Virginia’s State plan is administrative, pending
the Fourth Circuit’s consideration of that State’s stay motion. West Virginia v. EPA,
2
When seven courts of appeals find that the legal prerequisite for the Federal
Plan is likely unlawful, EPA should realize that something has gone awry. Rather
than admit the error of its ways, however, EPA has pressed forward with
implementing its Federal Plan in the remaining 11 States—despite the fact that EPA
premised the rule on its applicability to 23 states, arguing “[n]ationwide consistency
in approach is particularly important in the context of interstate ozone transport….”
Id. at 36,673. Because of the removal of the 12 stayed States, the Federal Plan is a
shell of its original design, eviscerating EPA’s analysis underpinning the rule, which
addressed only a 23-State program as a whole. In other words, EPA is implementing
an 11-state mutant rule that it did not analyze, provide notice of, or take comment
on. That momentous action to force its multi-state federal plan, heedless of warnings
from court after court that its central pillars are fundamentally unsound, violates the
Clean Air Act and the Administrative Procedure Act.
Yet, this irredeemably flawed Federal Plan is now in effect. If this Court does
not enter a stay, the Federal Plan will continue to harm the sectors of industry subject
to it. By EPA’s own estimates, the Federal Plan will cost between $8.2 and $13 billion,
with regulated entities like Applicants and their members incurring between $770
and $910 million per year during the course of litigation. Id. at 36,852. Costs on
individual entities are crushing and are being imposed with full force in the 11 States
where the Federal Plan is in effect. For example, just one regulated source, Applicant
No. 23-1418 (4th Cir. Aug. 10, 2023) (stay pending argument scheduled for October
27, 2023).
3
Ohio Valley Electric Corporation, states that it “will begin to incur costs within the
next six months” and will be “required to spend between $80-$100 million in the next
two years.” Brown Decl. ¶¶32, 36. A stay from this Court is the only way for sources
subject to the Federal Plan to avoid this irreparable harm.
Accordingly, Applicants respectfully request the Court to enter a stay of EPA’s
Federal Plan during the pendency of their petitions for review.
OPINION BELOW
The D.C. Circuit’s order denying the Applicants’ motion for a stay is
unpublished and may be found at App’x 1. EPA’s Federal Plan is published at 88 Fed.
Reg. 36,654 (June 5, 2023) and reprinted beginning at App’x 2. The unpublished order
notes that while the majority of the panel comprised of Judges Pillard, Walker, and
Childs denied the stay, “Judge Walker would stay the federal implementation plan
in question.”
JURISDICTION
This Court has jurisdiction over this Application pursuant to 28 U.S.C.
§ 1254(1) and authority to grant the Applicants relief under the Administrative
Procedure Act, 5 U.S.C. § 705, the Clean Air Act, 42 U.S.C. § 7607, and the All Writs
Act, 28 U.S.C. § 1651(a).
STATUTORY AND REGULATORY PROVISIONS
Pertinent statutory and regulatory provisions are reprinted beginning at App’x
268.
4
STATEMENT
I.
Statutory Background
Congress embedded directly into the Clean Air Act the principle of cooperative
federalism, expressly stating that “[e]ach State shall have the primary responsibility
for assuring air quality within the entire geographic area comprising such State….”
42 U.S.C. § 7407(a). EPA establishes national ambient air quality standards
(“NAAQS”) for certain pollutants, including ozone. Id. §§ 7408, 7409. Each State then
must develop within three years a State implementation plan that “specif[ies] the
manner in which [the NAAQS] will be achieved and maintained.” Id. §§ 7407(a),
7410(a)(1).
These plans must satisfy several statutory requirements, including the Act’s
“Good Neighbor” provision. Id. § 7410(a)(2)(D)(i)(I). That provision delegates to each
State the task of ensuring no “emissions activity within the State” will emit “in
amounts which will … contribute significantly to nonattainment in, or interfere with
maintenance by, any other State with respect to any” NAAQS.” Id.
Once a State develops and submits its plan, EPA “shall approve” the plan
within 18 months “if it meets all of the applicable requirements of” the Clean Air Act.
Id. § 7410(k)(3); see also Union Elec. Co. v. EPA, 427 U.S. 246, 257 (1976). Only if
EPA lawfully determines that a State plan violates the statute may EPA promulgate
a “Federal implementation plan” for that State. 42 U.S.C. § 7410(c)(1).
When EPA is permitted to issue a federal plan, it “cannot require a State to
reduce its output of pollution by more than is necessary” to ensure the State will not
contribute significantly to another State’s inability to attain or maintain the NAAQS.
5
EME Homer, 572 U.S. at 521-22. If EPA does, it engages in unlawful “over-control.”
Id. “EPA has a statutory duty to avoid over-control….” Id. at 523.
II.
EPA’s Promulgation of State Implementation Plan Disapprovals and
the Federal Plan
In 2015, EPA lowered the NAAQS for ozone from 75 to 70 parts per billion. 80
Fed. Reg. 65,292, 65,293-94 (Oct. 26, 2015). This required States to develop
implementation plans for the revised NAAQS, including plans addressing the Good
Neighbor provision, within three years (i.e., by October 26, 2018). 42 U.S.C.
§ 7410(a)(1). After States submitted their plans, EPA had a statutory duty to approve
or disapprove them within eighteen months (i.e., no later than April 2020). Id.
§ 7410(k)(1)-(3). After blowing past this statutory deadline by years, EPA issued
proposed disapprovals for 19 States on February 22, 2022, 2 followed by proposed
disapprovals for an additional four States on May 24, 2022. 3 Commenters repeatedly
warned EPA that these proposed disapprovals were unlawful because they were
based on unlawful reasoning. See, e.g., EPA, 2015 Ozone NAAQS Interstate
Transport SIP Disapprovals – Response to Comment (RTC) Document at 12, 15, 29,
33, 57, 81, 189, available at https://t.ly/ikB1A.
2 87 Fed. Reg. 9545 (Feb. 22, 2022) (Alabama, Mississippi, Tennessee); 87 Fed. Reg.
9798 (Feb. 22, 2022) (Arkansas, Louisiana, Oklahoma, Texas); 87 Fed. Reg. 9838
(Feb. 22, 2022) (Illinois, Indiana, Michigan, Minnesota, Ohio, Wisconsin); 87 Fed.
Reg. 9498 (Feb. 22, 2022) (Kentucky); 87 Fed. Reg. 9463 (Feb. 22, 2022) (Maryland);
87 Fed. Reg. 9533 (Feb. 22, 2022) (Missouri); 87 Fed. Reg. 9484 (Feb. 22, 2022) (New
York, New Jersey); 87 Fed. Reg. 9516 (Feb. 22, 2022) (West Virginia). Comments on
each of these proposals were due on April 25, 2022.
3 87 Fed. Reg. 31,443 (May 24, 2022) (California); 87 Fed. Reg. 31,485 (May 24, 2022)
(Nevada); 87 Fed. Reg. 31,470 (May 24, 2022) (Utah); 87 Fed. Reg. 31,495 (May 24,
2022) (Wyoming). Comments on each of these proposals were due on July 25, 2022.
6
Before the deadline for submitting comments on the proposed disapprovals of
the State plans had even expired (and before EPA had even proposed to disapprove
some of the States’ plans), EPA proposed a comprehensive federal implementation
plan to regulate emission sources through a single multi-state program. 87 Fed. Reg.
20,036, 20,073 (Apr. 6, 2022) (noting it was “promulgating FIPs to address these
obligations on a nationwide scale”). Commenters again repeatedly warned EPA that
going forward with a federal plan would be unlawful because the state-plan
disapprovals—which are the legal predicate of a federal plan under the Clean Air
Act—were unlawful. See 88 Fed. Reg. at 36,672-75; EPA, Federal “Good Neighbor
Plan” for the 2015 Ozone National Ambient Air Quality Standards: Response to
Public Comments on Proposed Rule [87 FR 20036, April 6, 2022] at 2-6, 9-11, 145-48,
152-55, available at bit.ly/3EaNAi8.
Despite the warnings regarding the unlawful nature of EPA’s proposed
disapproval, the Agency finalized the disapprovals of the plans for 21 States in
February 2023. 88 Fed. Reg. 9336 (Feb. 13, 2023). A mix of states and industry parties
in 12 States challenged their state-plan disapprovals in their respective circuits and
moved for stays of the disapprovals. By late May 2023, the Fifth Circuit, Sixth Circuit,
and the Eighth Circuit had issued stays of the disapprovals for five States, 4
4 Texas v. EPA, No. 23-60069 (5th Cir. May 1, 2023) (Texas and Louisiana); Arkansas
v. EPA, No. 23-1320 (8th Cir. May 25, 2023); Missouri v. EPA, No. 23-1719 (8th Cir.
May 26, 2023); Kentucky v. EPA, No. 23-3216 (6th Cir. May 31, 2023) (administrative
stay pending consideration of stay motion that was granted in July 2023, see infra
note 5).
7
concluding that EPA’s state plan disapprovals were likely unlawful. Meanwhile, stay
motions were pending for various other courts of appeals.
EPA nonetheless moved forward on June 5, 2023, with publishing the Federal
Plan, which covers 23 States and became effective August 4, 2023. 88 Fed. Reg. at
36,654. During the time between the publication of the Federal Plan and its effective
date, the wave of federal courts of appeals issuing stays of the state plan disapprovals
became a tsunami. Every single one of the 12 state-plan disapprovals that was
challenged has now been stayed. 5
In sum, every circuit to have considered the issue—the Fourth, Fifth, Sixth,
Eighth, Ninth, Tenth, and Eleventh Circuits—has stayed EPA’s disapprovals,
explicitly or implicitly finding that the States and industries challenging those
disapprovals are likely to succeed on the merits.
III.
The Federal Plan Before and After the Court-Ordered Stays of the
State Plan Disapprovals
EPA has recognized in two interim final rules that it cannot impose its plan in
the 12 States where EPA’s state-plan disapprovals have been stayed because those
state plan disapprovals form the legal predicate for the Federal Plan. 6 As a result of
5 Texas v. EPA, No. 23-60069 (5th Cir. June 8, 2023) (Mississippi); Nevada Cement
Company v. EPA, No. 23-682 (9th Cir. July 3, 2023) (Nevada); Allete, Inc. v. EPA, No.
23-1776 (8th Cir. July 5, 2023) (Minnesota); Kentucky v. EPA, No. 23-3216 (6th Cir.
July 25, 2023); Oklahoma v. EPA, No. 23-9514 (10th Cir. July 27, 2023); Utah v. EPA,
No. 23-9509 (10th Cir. July 27, 2023); Alabama v. EPA, No. 23-11173 (11th Cir. Aug.
17, 2023); West Virginia v. EPA, No. 23-1418 (4th Cir. Aug. 10, 2023) (administrative
stay pending argument scheduled for October 27, 2023).
6 Federal “Good Neighbor Plan” for the 2015 Ozone National Ambient Air Quality
Standards: Response to Judicial Stays of SIP Disapproval Action for Certain States,
88 Fed. Reg. 49,295 (July 31, 2023) (Arkansas, Kentucky, Louisiana, Mississippi,
8
the removal of these 12 States from the Federal Plan, however, the plan that EPA is
now imposing in the remaining 11 States bears little resemblance to the one it
proposed, took comment on, and finalized.
This Court in EME Homer described EPA’s chosen methodology for
constructing a federal Good Neighbor plan; EPA started with that same methodology
for the Federal Plan at issue here. See id. at 36,741, 36,748. Under this methodology,
EPA identifies the (upwind) States that its air quality modeling predicted would be
contributing more than de minimis amounts of ozone to (downwind) States that will
have difficulty attaining the NAAQS. See EME Homer, 572 U.S. at 500-01. It then
determines what emissions controls would be “cost-effective” by calculating which
controls would produce the “combined effect … on air quality in downwind States”
necessary to eliminate significant upwind ozone contribution, assuming every
upwind State uniformly expended the same amounts to control their emissions. Id.
at 501. “EPA estimated, for example, the amount each upwind State’s [ozone-causing]
emissions would fall if all pollution sources within each State employed every control
measure available at a cost of $500 per ton or less.” Id. So if upwind States A and B
were both linked to downwind State C, EPA’s methodology requires the reductions
necessary to make upwind contributions to State C insignificant, assuming both
Missouri, Texas); Federal “Good Neighbor Plan” for the 2015 Ozone National Ambient
Air Quality Standards: Response to Additional Judicial Stays of SIP Disapproval
Action for Certain States,88 Fed. Reg. 67,102 (Sept. 9, 2023) (Alabama, Minnesota,
Nevada, Oklahoma, Utah, West Virginia).
9
States A and B expended the same amount per tons of emissions in control measures.
See id. at 519-20.
Next, “[f]or each regulated upwind State, EPA created an annual emissions
‘budget,’” which “represented the quantity of pollution an upwind State would
produce in a given year if its in-state sources implemented all pollution controls
available at the chosen cost thresholds.” Id. at 502. Thus, the emissions budget for
each State stems from EPA’s “cost-effectiveness” methodology, which assumes the
same expenditure on emissions controls “applied uniformly to all regulated upwind
States” to achieve EPA’s desired “combined effect” downwind. Id. at 501-02. Finally,
EPA pairs these budgets with a “cap-and-trade” system allocating each upwind
State’s “emission budget among its in-state sources” and allowing sources emitting
below their allocation to “sell unused ‘allocations’ to sources” in any other upwind
State that is part of the federal plan. Id. at 503 & n.10.
EPA thus describes the Federal Plan as a “national-scale, multi-state” federal
implementation plan to address “interstate transport of ozone-causing pollutants
through a series of integrated multi-state emissions allowance trading programs for
power plants [and] uniform requirements for certain, high-emitting non-power plant
industrial sources.” EPA Resp. to Pet.’s Mot. To Sever, Doc. No. 2018488, Utah v.
EPA, No. 23-1157 (D.C. Cir. Sept. 22, 2023). Indeed, this is how EPA designed the
Federal Plan to operate. See 88 Fed. Reg. at 36,673 (“The approach of this [federal
implementation plan] ensures both national consistency across all states and
consistency and continuity with our prior interstate transport actions for other
NAAQS.”); id. at 36,691 (noting “the purpose of this rule is to address the interstate
10
transport of ozone on a national scale” and that “upwind regions associated with each
receptor typically span at least two, and often far more, states”).
The Federal Plan that EPA originally designed no longer exists as a result of
the court-ordered stays. Nearly 90% of the power plant emissions that EPA
contemplated serving as both the basis for its emissions limitations and for a robust
emissions allowance trading market have been removed from the program. Similarly,
60% of the emission reductions from all other sources are now excluded from the
Federal Plan. See EPA, Good Neighbor Plan for 2015 Ozone NAAQS Maps,
https://t.ly/zQK9L (“Good Neighbor Maps”) (App’x 296-97). Moreover, EPA never
analyzed the costs, efficacy, and burdens of the version of the rule it is now
implementing. Nor did it ever examine the effect of the removal of 12 states on the
trading program for electric generating units.
IV.
Differences Between
Implementation Plans
the
Federal
Plan
and
Past
Federal
While the Federal Plan is similar to prior federal Good Neighbor plans in some
respects, it also creates a host of never-before-seen regulatory programs. As with prior
plans, EPA’s trading program starts by using “preset emissions budgets” for each
State. 88 Fed. Reg. at 36,662. EPA claims the emissions reductions required by each
statewide budget are in the amount necessary to eliminate that State’s alleged
significant contribution to any downwind State’s inability to attain or maintain the
NAAQS. Id. at 36,657, 36,667. But on top of those budgets, EPA here decided to
impose “enhancements” to require that “pollution controls will be operated” even if
11
the States would no longer contribute significantly to other States’ ozone issues
without such operation. Id. at 36,662.
For the first time in any interstate transport program, EPA also has subjected
non-power generating industries to stringent emission limitations. The Federal Plan
covers, among others, cement kilns and boilers in iron mills, steel mills, pulp, paper,
and paperboard mills, and pipeline engines. Id. at 36,658.
REASONS FOR GRANTING THE APPLICATION
This Court should stay the Federal Plan, which has a legal foundation
premised on the disapprovals of State plans that seven Circuits have confirmed are
likely unlawful. The 11-State Federal Plan now being implemented was never
analyzed by EPA nor made available for notice-and-comment rulemaking.
Under the Administrative Procedure Act, this Court—as a “reviewing court …
to which a case may be taken … on application for certiorari or other writ”—“may
issue all necessary and appropriate process to postpone the effective date of an agency
action.” 5 U.S.C. § 705; see also 28 U.S.C. §§ 1254, 1651, 2101; Nken v. Mukasey, 555
U.S. 1042 (2008). And under “well settled” principles, such “equitable relief” is
appropriate here. Lucas v. Townsend, 486 U.S. 1301, 1304 (1988) (Kennedy, J., in
chambers).
In addition, to the extent required for such relief, there is: “(1) a reasonable
probability that four Justices will consider the issue sufficiently meritorious to grant
certiorari; (2) a fair prospect that a majority of the Court w[ould] vote to reverse [a]
judgment below [upholding the Federal Plan]; and (3) a likelihood that irreparable
12
harm will result from the denial of a stay.” Hollingsworth v. Perry, 558 U.S. 183, 190
(2010); see Nken v. Holder, 556 U.S. 418, 427-29 (2009).
This Court should stay the Federal Plan pending further review.
I.
Applicants Are Likely to Succeed on the Merits in this Case, which
Warrants this Court’s Discretionary Review.
Given the wide-ranging impact of the Federal Plan and the faulty foundation
of unlawful state plan disapprovals on which it rests, this Court would likely grant
certiorari in this case and reverse any decision by the D.C. Circuit upholding the
Federal Plan. The Federal Plan is an enormous federal regulation with national
importance, which EPA itself estimates will cost between $8.2 billion and $13 billion.
This Court has granted certiorari in several similarly important Clean Air Act cases
arising over the past decade. See, e.g., West Virginia v. EPA, 142 S. Ct. 2587 (2022);
Michigan v. EPA, 135 S. Ct. 2699 (2015); EME Homer, 572 U.S. at 506.
More than just the toll on the economy, the Federal Plan also represents an
unprecedented abrogation of the congressionally granted rights of States. In
remarkable unanimity, seven courts of appeals have found that EPA’s disapprovals
of 12 State plans, which formed a crucial basis for the 23-State Federal Plan, were
likely unlawful. Despite its Federal Plan being fundamentally undermined, EPA
insists it remains viable. And now, this gigantically expensive rule has gone into
effect in 11 States and will cause irreparable harm to States, industry, and
consumers.
Accordingly, this case merits this Court’s discretionary review and, for the
reasons given below, Applicants are likely to succeed on the merits.
13
A.
The Federal Plan as Promulgated No Longer Exists, and EPA
Never Analyzed or Allowed Comment on the Smaller,
Transformed Version.
The 23-State Federal Plan is likely to be vacated by the D.C. Circuit or by this
Court because it rests on a legally faulty foundation—EPA’s disapproval of State
plans. Every circuit that has reviewed those disapprovals has issued stays
recognizing that EPA’s action was likely unlawful. See supra at pp. 7-8 & nn. 4, 5.
While EPA has removed the 12 States that are the subject of the stays from the
Federal Plan, the Federal Plan was premised on inclusion of those States. It thus
cannot lawfully be implemented anywhere consistent with the Clean Air Act and the
Administrative Procedure Act.
EPA never noticed, analyzed, or took comment upon the 11-State Federal Plan
it is now implementing—a clear violation of all the procedures required under the
Clean Air Act and the Administrative Procedure Act for notice-and-comment
rulemaking. 42 U.S.C. § 7607(d)(3); 5 U.S.C. § 553. Moreover, EPA’s insistence on
moving forward in the remaining States regardless of this fundamental flaw is almost
certain to be held arbitrary and capricious. EPA’s attempt to make workable its
collapsing Federal Plan by severing the inseverable—as if it would have imposed the
same plan on 11 States that it would have if all 23 States were included—is unlawful
and contrary to its own statements and analysis justifying its Federal Plan.
1.
EPA Premised the Federal Plan on the Inclusion of all 23
States.
The administrative record clearly demonstrates that in many fundamental
respects, EPA premised its Federal Plan on the inclusion of all 23 States. EPA’s
Federal Plan started by distributing emissions limitations among all upwind States
14
in the Plan by assuming sources within all of those States would impose controls at
the same costs. See supra at pp. 9-10. As this Court explained, EPA’s “cost-effective”
methodology assumes the same expenditure on emissions controls “applied uniformly
to all regulated upwind States” at a level sufficient to achieve EPA’s desired
“combined effect” downwind. EME Homer, 572 U.S. at 501-02 (emphasis added); see
also 88 Fed. Reg. at 36,741. EPA justified “[a]pplying these emissions control
strategies on a uniform basis across all linked upwind states” as “an efficient and
equitable solution to the problem of allocating upwind-state responsibility for the
elimination of significant contribution.” 88 Fed. Reg. at 36,741 (emphasis added). It
then sets its emissions “budgets” for each State based on this analysis that assumed
all 23 States would be included in its Federal Plan. See EME Homer, 572 U.S. at 50102.
In addition to its interdependent state budgets (the “cap” in its “cap-and-trade”
program), another fundamental feature of EPA’s Federal Plan is its interstate
emissions allowance trading program (the “trade”). See id., 572 U.S. at 503 & n.10.
Necessarily, EPA’s analysis of the benefits and efficiencies of that trading program
presumed inclusion of all 23 States in the program. 88 Fed. Reg. at 36,657. EPA itself
explained the emissions trading marketplace depended on breadth because “[b]roader
marketplaces generally provide greater market liquidity and therefore make trading
programs better at providing … advantages” such as “cost minimization” and
“operational flexibility.” Id. at 36,766 n.295; see also id. at 36,760 (noting EPA was
adopting a trading program “because of the inherently greater flexibility that [it] can
provide”); id. at 36,771 (responding to commenters concerned with grid reliability by
15
pointing to the interstate trading program). As with any market, the price of emission
allowances depends heavily on the supply of those allowances, and therefore the
number of States in the program. See id. at 36,775. Indeed, EPA recently stated that
“the Plan depends on the continuing operation of ‘interdependent’ interstate
mechanisms, like the allowance trading program, that reach beyond state or regional
borders.” EPA’s Motion to Dismiss or Transfer Petitions for Improper Venue, Tulsa
Cement et al. v. EPA, at 16, No. 23-9551 (10th Cir. July 20, 2023) (“EPA Motion to
Dismiss or Transfer”).
Moreover, EPA justified the Federal Plan based on its claimed benefits: the
purported “meaningful” air quality improvements that would result “collectively”
from the inclusion of all 23 States in the Federal Plan. See 88 Fed. Reg. at 36,683;
accord id. at 37,648; see also EME Homer, 572 U.S. at 502. EPA claimed: “When the
effects of these emissions reductions are assessed collectively …, the cumulative
improvements in ozone levels at downwind receptors … are both measurable and
meaningful….” 88 Fed. Reg. at 36,741 (emphasis added). Indeed, this cumulative
analysis was EPA’s basis for showing it was acting within the bounds of the Good
Neighbor provision: EPA’s analysis of “whether the rule achieves a full remedy to
eliminate ‘significant contribution’ while avoiding over-control” was based on “the
identified reductions” from all 23 States in the Federal Plan as “combined and
collectively analyzed to assess their effects on downwind air quality.” Id. at 36,719
(emphasis added); see id. at 36,743, 36,747-48 (listing only the “aggregate” and
“collective” air quality improvements); see also EME Homer, 572 U.S. at 523.
16
As EPA describes it, its 23-State Federal Plan is one that is “interstate” and
“interdependent.” EPA Motion to Dismiss or Transfer at 16. EPA emphasizes that its
Federal Plan is a “coordinated, 23-state program … in a long line of national-scale,
multi-state federal implementation plans that have addressed interstate transport of
ozone-causing pollutants through a series of integrated multi-state emissions
allowance trading programs.” EPA Resp. to Pet.’s Mot to Sever, Doc. #2018488, Utah
v. EPA, No. 23-1157 (D.C. Cir. Sept. 22, 2023); see also EPA Opp. to Admin. Stay, Doc.
#2008854, Utah v. EPA, No. 23-1157 at 1 (D.C. Cir. July 20, 2023) (describing the
Federal Plan as a “coordinated, interstate emissions control program” covering “23
states”). The premise that the Federal Plan would include all 23 States in an
interdependent program undergirded everything from EPA’s cost-effectiveness
analysis to its benefits determinations and from the emissions caps to the trading
program.
2.
The Current 11-State Federal Plan Violates the Basic
Principles of the Clean Air Act and the
Administrative Procedure Act.
EPA is now implementing its interdependent 23-State Federal Plan in only 11
States. It is required to do so because numerous federal courts of appeals have held
that EPA likely violated the most basic requirement of the Clean Air Act by
undermining the careful balance between state and federal authority that Congress
prescribed. See supra at p. 5. Despite commenters and courts informing EPA of the
Federal Plan’s unlawful foundations—the disapproval of individual State plans—
EPA published and is implementing it anyway in 11 States. Applicants are likely to
succeed in demonstrating EPA’s actions are unlawful for at least three reasons.
17
First, the Federal Plan violates basic requirements of the Clean Air Act and
the Administrative Procedure Act by failing to provide notice and comment on an 11State federal implementation plan rather than the 23-State plan originally
contemplated. 42 U.S.C. § 7607(d)(1)(B), (3); 5 U.S.C. § 553(b), (c). The stays of the
Federal Plan in 12 States have forced EPA to remove those States from its Plan, but
EPA’s decision to nonetheless implement an 11-State plan is unlawfully enforcing a
rule EPA never proposed, received comments on, analyzed, or lawfully promulgated.
As explained above, EPA analyzed only a 23-State plan, justifying many fundamental
parts of that Plan on the inclusion of all 23 States. The difference is especially stark
because removing 12 States with stays from the Federal Plan means nearly 90% of
the power plant emissions reductions and 60% of the non-power plant emission
reductions that EPA analyzed as part of its rulemaking are now excluded from the
Federal Plan. See Good Neighbor Maps at App’x 296-97.
The 11-State plan that is currently being implemented has never been
analyzed by EPA. For example, EPA never performed an 11-State analysis of: (i) costeffective emissions controls (the basis for each State’s emissions budget); (ii) the
efficacy of the trading program; or (iii) the downwind air quality benefits. See 88 Fed.
Reg. at 36,666, Table 1.C-1; EPA, Regulatory Impact Analysis for the Final Federal
Good Neighbor Plan Addressing Regional Ozone Transport for the 2015 Ozone
National Ambient Air Quality Standard at 24-25, available at https://t.ly/x6P5l
(examining various scenarios none of which involved removal of more than half the
States or a State-level analysis). No one—not States, nor members of the public, nor
18
even EPA itself—has analyzed or commented on this completely altered version of a
rule that is now imposing enormous costs.
Second, the Federal Plan is arbitrary and capricious because it “entirely fail[s]
to consider an important aspect of the problem….” Motor Vehicle Mfrs. Ass’n v. State
Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983). Namely, EPA failed to appreciate
that its state plan disapprovals—the necessary legal predicate for the Federal Plan—
are likely unlawful and thus not in effect. The agency never considered the likely
scenario that a significant number of its state plan disapprovals would be stayed or
vacated, rendering large portions of the Federal Plan inoperable. Commenters alerted
EPA to the unlawfulness of the state plan disapprovals, those disapprovals were
challenged in a dozen states with litigants moving for stays, and now seven courts of
appeals have granted those stays, confirming that those disapprovals were likely
unlawful. See supra at pp. 7-8 nn. 4, 5. Those court-ordered stays did not make EPA’s
state plan disapprovals likely unlawful; they simply declared what the law always
was, including when EPA finalized the Federal Plan. See Nat’l Fuel Gas Supply Corp.
v. FERC, 59 F.3d 1281, 1289 (D.C. Cir. 1995). Indeed, three courts stayed the state
plan disapprovals in five States before EPA published its Federal Plan in the Federal
Register. Supra at pp. 7-8 & n.4. Yet, EPA entirely failed to reconsider its analysis
based on this reality before consummating its final agency action. Despite all of the
warnings and everything EPA knew before it published the Federal Plan, EPA
charged forward.
This mess is one of EPA’s own making. It proposed the Federal Plan before its
state plan disapprovals were finalized (or, in some cases, before the disapprovals of
19
some states’ plans had even been proposed), see supra at p. 7, began to finalize the
Federal Plan despite warnings that the state plan disapprovals were likely unlawful
and court challenges to them began to mount, and published the Federal Plan in the
Federal Register even after three courts of appeals started declaring its state
disapprovals were likely unlawful. That is arbitrary and capricious.
Third, EPA’s rulemaking makes no sense with 12 States excised and is thus
arbitrary and capricious for this reason too. These 12 States are not severable from
EPA’s analysis and justifications for the Federal Plan; those things “cannot function
sensibly without” including all 23 States that were part of EPA’s uniform costthresholds, trading program, downwind benefits justification, and the like. Belmont
Mun. Light Dep’t v. FERC, 38 F.4th 173, 188 (D.C. Cir. 2022). EPA does not and
cannot argue that “the agency would have adopted” the same plan for 11 States by,
for example, imposing the exact same emissions controls on those 11 States had it
known a bevy of upwind States would not also have been subject to those controls.
Am. Fuel & Petrochemical Manufacturers v. EPA, 3 F.4th 373, 384 (D.C. Cir. 2021).
EPA cannot lawfully salvage a rule in shambles by implementing the bits and pieces
still left. The Federal Plan is a shell of its original self, rendering the analysis
underpinning the rule incoherent and irrelevant. It will likely be vacated after full
merits consideration and therefore must be stayed now.
B.
Even if the Federal Plan Still Consisted of All 23 States, It Would
Nonetheless Violate the Clean Air Act.
Even assuming that the Federal Plan EPA is now implementing is the one
that underwent notice-and-comment rulemaking, Applicants are likely to prevail
20
because the Plan violates the Clean Air Act and this Court’s precedent. It unlawfully
“over-controls” emissions and capriciously includes non-power generating industrial
sources, contrary to the statutory requirements and EPA’s own analysis.
1. This Court has explained that EPA cannot “over-control”: it “cannot require
a State to reduce its output of pollution by more than is necessary to achieve
attainment in every downwind State” or by more than would be necessary for a
particular state to eliminate all of its “significant[]” contributions to downwind sites.
EME Homer, 572 U.S. at 521-22. But that is exactly what the Federal Plan is
designed to do.
EPA first determined what emissions budgets are necessary to ensure
compliance with the Good Neighbor provision, as it had with prior rulemakings. 88
Fed. Reg. at 36,754 (projecting emissions budgets to be a “full remedy” by the
conclusion of the 2026 ozone season). Then, on top of that, EPA imposed
“enhancements” for power plants to further ratchet the budgets downward—
regardless of whether further ratcheting is needed to eliminate significant
contribution. See id. at 36,764 (explaining “enhancements” are to “better sustain
incentives to control emissions over time”); id. at 36,751 (declining to evaluate overcontrol after EPA’s dynamic budget enhancements take effect in 2030); see also id. at
36,685.
For example, EPA set each State’s annual emissions budgets for its cap-andtrade program at the level of emissions sufficient to eliminate significant downwind
contributions. But beginning in 2030, an enhancement called “dynamic budgeting”
will reduce the State’s budget if a power plant shuts down or limits operation, or if a
21
State otherwise does not use allowances available to it. Id. at 36,663. In each of those
scenarios, changes on the ground mean a large amount of the emissions that EPA
deemed to be “contributing significantly” to downwind ozone are not occurring,
making the State’s contribution to downwind locations less significant or possibly
insignificant. Nonetheless, dynamic budgeting would shrink the entire budget for the
State, making the budgets more stringent and well-below what EPA already
determined was necessary to eliminate significant contribution. That facially and
systematically over-controls.
Similarly, EPA’s “enhancements” require certain power plants to relinquish
some of their unused allowances when they bank more than enough to comply with
the cap-and-trade budgets or emit above certain amounts. Id. at 36,664, 36,766. EPA
tacitly concedes that this is not to prevent significant contribution, but rather to
“continuously incentiviz[e] sources to reduce their emissions even when they already
hold sufficient emissions allowances….” Id. at 36,766. Because those power plants
would have already created or purchased sufficient allowances to eliminate
significant contribution, however, the Federal Plan facially requires more than is
necessary.
2. EPA also capriciously shoe-horned other sectors of the economy into the
Federal Plan in excess of its authority.
EPA completely disregarded whether the substantial costs of including those
sources could justify the nearly immeasurable benefit on air quality. EPA proposed a
“uniform cost” framework to determine the “amount of emissions that is in excess of
the emissions control strategies that EPA has deemed cost-effective” to eliminate
22
significant contributions. 88 Fed. Reg. at 36,676. In other words, it set a threshold
($7,500 per ton of reduction) above which control measures are too expensive to justify
the purported benefit. As other Applicants explain with respect to pipeline engines,
EPA then proceeded to ignore it. See Emergency Application for Stay of Final Agency
Action During Pendency of Petitions for Review, Kinder Morgan, Inc., et al. v. EPA
(Oct. 13, 2023).
For example, when EPA looked at cement kilns in its proposal, it wrongly
assumed the kilns did not already have emissions controls for the relevant pollutants
and determined they could achieve substantial reductions below the cost threshold
on an industry-wide basis. See Portland Cement Association Comments at 9 (June
21, 2022) (“PCA Comments”) (App’x 306) But three-quarters of the kilns EPA
evaluated already had controls in place, so the tons of reduction would be much
smaller (and therefore, the cost per ton much higher) than EPA predicted. Id. Despite
being provided actual data on kiln emissions, id. at 9-10, EPA doubled down on its
false assumptions in the Federal Plan. 88 Fed. Reg. at 36,826; see also id. at 36,739
(showing projections of reductions with what EPA falsely assumed would be
“additional” controls). If EPA had simply relied on the actual, verifiable data, rather
than assumptions, it would have excluded cement kilns.
EPA’s treatment of the costs for the paper industry is similarly baffling. EPA
concluded that it could achieve a grand total of 0.0117 parts billion in ozone
reductions (recall that the standard is 70 parts per billion) by requiring boilers at
pulp and paper mills to install equipment that has never been used on them in the
United States. See American Forest & Paper Association Comments at 6 (June 21,
23
2022), Docket ID No. EPA-HQ-OAR-2021-0668-0516 (“AF&PA Comments”) (App’x
335); EPA’s Non-EGU Screening Assessment Memo at 16, Docket ID No. EPA-HQOAR-2021-0668-0150, Table 5, available at https://t.ly/pzIM6; Noe Decl. ¶12. EPA
wrongly estimated that it would cost $3,800 per ton to do so. Noe Decl. ¶10. That was
off by an order of magnitude; the industry calculated the average cost at $37,900 per
ton. Id. Rather than exclude these boilers, EPA came up with a new cost estimate of
$14,134 per ton, 88 Fed. Reg. at 36,740, Table V.C.2-3, and provided new excuses for
exceeding the original $7,500 per ton threshold, without providing any fair notice or
opportunity to comment on this new threshold. Id. at 36,746.
Worse still, some of Federal Plan’s requirements are completely unmoored
from the proposal. The Federal Plan requires steel industry reheat furnaces to have
in place a plan by August 2024 to install equipment called “Low NOx Burners” and
to achieve a 40% reduction in nitrogen oxide emissions from those furnaces by 2026.
Id. at 36,879. But this requirement was not in the proposal at all. So, the steel
industry had no opportunity to comment on it. Accordingly, regulated sources need
to make immediate decisions in 2023 on whether to upgrade or retire furnaces and
natural gas boilers in advance of judicial review of the Federal Plan. Balserak Decl.
¶¶6-8.
In short, even EPA’s Federal Plan as originally envisioned was fundamentally
flawed. Applicants are therefore likely to succeed on the merits for these reasons, too.
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II.
Absent a Stay, the Applicants and Their Members Will Suffer
Substantial Irreparable Harms.
The Applicants and their members will suffer irreparable harm if the Federal
Plan is not stayed. “[C]omplying with a regulation later held invalidated almost
always produces the irreparable harm of nonrecoverable compliance costs.” Thunder
Basin Coal Co. v. Reich, 510 U.S. 200, 220-21 (1994) (Scalia, J., concurring) (emphasis
in original). In Philip Morris v. Scott, 131 S. Ct. 1 (2010) (Scalia, J., in chambers),
Justice Scalia recognized that “[i]f expenditures cannot be recouped, the resulting
loss may be irreparable.” Id. at 4. He accordingly found irreparable harm had
adequately been demonstrated where the applicants showed they would irrevocably
expend $270 million before the Court could even consider the claim. Id. Economic
injuries are also irreparable when unlawful agency action deprives companies of
“very significant future revenues” which will be “permanently” lost, even if the action
is ultimately overturned. In re NTE Connecticut, LLC, 26 F.4th 980, 991 (D.C. Cir.
2022).
Applicants and their members face both kinds of irreparable harm. The
Federal Plan requires Applicants and their members to reduce emissions drastically.
To reach compliance in time, they will have to immediately begin the process of
installing prohibitively expensive emissions controls, incurring “hundreds of millions
of dollars in capital compliance and construction costs.” Farah Decl. ¶12; see also
Brown Decl. ¶36; Balserak Decl. ¶¶9-10; Maule Decl. ¶6; Piotrowski Decl. ¶5; Toso
Decl. ¶34-36.
Sources that cannot feasibly install new emissions controls will be forced to
buy emissions allowances from other parties, decrease their production, or cease
25
operations altogether. Marshall Decl. at 2-3 (explaining sources may need to “reduce
generating hours to meet emission restrictions” if “sufficient allowances” are not
available); Balserak Decl. ¶8 (explaining sources “will need to immediately make a
decision … on whether to upgrade or retire” units); Alban Decl. ¶27 (Federal Plan
will “likely force many baseload generation assets to retire”); Brown Decl. ¶21
(explaining the Federal Plan will require OVEC to either transition a unit to only
seasonal production or consider retirement); Toso Decl. ¶37 (PCA member has
identified a real possibility it may cease operations). And because there will be both
fewer emissions allowances and higher demand as a result of 12 States being removed
from EPA’s intended Federal Plan, utility sources will be forced to either purchase
allowances at a significantly higher premium or curtail operations. Farah Decl. ¶11
(explaining a spike in demand for allowance prices in 2022 imposed an additional $50
million in operating costs for a single plant); Brown Decl. ¶20 (“OVEC can no longer
rely on a viable allowance trading market … to meet future compliance obligations.”).
Even setting aside the costs of the emissions controls themselves, electric
generating units and industrial facilities will incur significant additional costs
related to “the process of initiating engineering, design, and procurement” of controls
by 2026 that “would be unnecessary” if the Federal Plan is held invalid. Balserak
Decl. at 3-4; see also Brown Decl. ¶32 (OVEC must begin the “process immediately”
and will “incur costs within the next six months”); Alban Decl. ¶24 (utilities have
“very little time to develop power supply plans and environmental compliance plans”);
Purvis Decl. ¶32; Farah Decl. ¶15 (“Mon Power will need to take imminent action in
order to comply”); Champion Decl. ¶9 (Georgia Pacific will be required to “start
26
contracting immediately” to comply “with the tight timeframe”); Maule Decl. ¶7;
Kotara Decl. ¶5; Piotrowski Decl. ¶7; Toso Decl. ¶30.
The paper industry, in particular, will incur significant costs to design,
install, and operate new controls, some of which have never been applied in that
industry. Noe Decl. ¶12. The capital costs of these investments for only three units of
one company range from $45 to $125 million and will impact the market
competitiveness of affected mills. Champion Decl. ¶¶6-8; see also Kotara Decl. ¶4.
The total capital cost for such units in the paper industry would be $660 million.
AF&PA Comments at 2.
As noted above, some companies may cease operations at specific sources
altogether. For those sources that must reduce or cease their use of coal to comply
with the Federal Plan, the Plan will also drastically harm the coal mine operators
that supply those sources with their fuel. Brock Decl. ¶¶15-17; Adams Decl. ¶¶10-13;
Hamilton Decl. ¶¶12-14; Bridgeford Decl. ¶¶11-14.
III.
The Balance of Equities and the Public Interest Favor a Stay.
“In close cases the Circuit Justice or the Court will balance the equities and
weigh the relative harms to the applicant and to the respondent.” Hollingsworth, 558
U.S. at 190. Any such balancing also favors a stay. First, a stay will not harm any
other parties. EPA ignored its statutory deadline to disapprove the State plans it now
proposes to replace for years. It cannot now argue a brief stay will cause sweeping
public harms. See Texas v. EPA, No. 23-60069, Stay Order, Slip Op. at 24 (5th Cir.
May 1, 2023). Despite the Federal Plan’s immediate harms to Applicants, it would
not actually result in any significant emission reductions for years. See 88 Fed. Reg.
27
at 36,785-86, Table VI.B.4.c-1. Nor will a stay interfere with projected future declines
in nationwide ozone levels due to existing, robust ozone controls and regulations
already in place.
Second, the public interest strongly supports a stay. The significant compliance
costs to electricity generators that the Federal Plan will inflict may be passed on to
ratepayers, including some ratepayers who will not be able to bear additional energy
costs. Brown Decl. ¶45; Alban Decl. ¶24; Purvis Decl. ¶¶24, 33, 58; Farah Decl. ¶14.
In addition, if regulated companies reduce operations or stop operating
altogether, communities around the country will lose jobs and tax revenue. See, e.g.,
Fuentes Decl. ¶¶5-7; Purvis Decl. ¶¶33, 35, 58; Farah Decl. ¶10; Brock Decl. ¶15.
Because the Federal Plan will require sources to reduce their reliance on the most
reliable power—like coal-fired generation—it will increase grid instability and
unreliability. Fuentes Decl. ¶¶5, 8; Alban Decl. ¶¶26, 28; Purvis Decl. ¶¶25, 33, 54;
Brown Decl. ¶27.
In addition, electric reliability experts and grid operators have noted reliability
troubles that the Federal Plan will exacerbate. See PJM, Energy Transition in PJM
(Feb. 24, 2023) at 7, available at bit.ly/3YirOCr (noting the combined result of the
Federal Plan and others has “the potential to result” in “significant generation
retirements” in a condensed time); North American Electric Reliability Corporation,
2023 Summer Reliability Assessment Infographic (May 2023) (noting reliability
concerns), available at bit.ly/3qa6Jh4.
Finally, EPA’s disapproval of State plans is being litigated in multiple circuits,
and those courts have issued multiple stays. EPA’s decision to forge ahead anyway
28
threatens an impossible tangle of regulatory obligations on sources, especially since
the Federal Plan was designed to work with 23, not 11 States. A stay by this Court
will allow orderly review of EPA’s unlawful actions.
CONCLUSION
For the foregoing reasons, Applicants respectfully request an immediate stay
of EPA’s Federal Plan.
Dated: October 13, 2023
Respectfully submitted,
/s/ Mithun Mansinghani
Michael B. Schon
LEHOTSKY KELLER COHN LLP
200 Massachusetts Ave NW
Washington, DC 20001
(512) 693-8350
mike@lkcfirm.com
/s/ Jonathan Y. Ellis
Jonathan Y. Ellis
Counsel of Record
Allison D. Wood
Makram B. Jaber
Aaron M. Flynn
MCGUIREWOODS LLP
888 16th Street N.W., Suite 500
Black Lives Matter Plaza
Washington, DC 20006
jellis@mcguirewoods.com
awood@mcguirewoods.com
mjaber@mcguirewoods.com
aflynn@mcguirewoods.com
Mithun Mansinghani
LEHOTSKY KELLER COHN LLP
629 W. Main St.
Oklahoma City, OK 73102
(512) 693-8350
mithun@lkcfirm.com
Counsel for National Mining
Association
Counsel for America’s Power, Associated
Electric Cooperative, Inc., Deseret Power
Electric Cooperative, the National Rural
Electric Cooperative Association, Ohio
Valley Electric Corporation, the Portland
Cement Association, Wabash Valley Power
Alliance
29
/s/ David M. Flannery
David M. Flannery
Kathy G. Beckett
Keeleigh S. Utt
STEPTOE & JOHNSON, PLLC
707 Virginia Street, East
Post Office Box 1588
Charleston, WV 25326
(304) 353-8000
Dave.Flannery@steptoe-johnson.com
Kathy.beckett@steptoe-johnson.com
Edward L. Kropp
STEPTOE & JOHNSON PLLC
PO Box 36425
Indianapolis, Indiana 46236
317-946-9882
Skipp.kropp@steptoe-johnson.com
Counsel for American Forest & Paper
Association and Midwest Ozone Group
30
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.