Reply Brief — American Forest & Paper Association, et al., Applicants v. Environmental Protection Agency, et al.
Supreme Court briefNov 1, 2023
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No. 23A351
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.
APPLICANTS’ REPLY IN SUPPORT OF 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. N.W.
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
Edward L. Kropp
Steptoe & Johnson PLLC
PO Box 36425
Indianapolis, Indiana 46236
317-946-9882
Counsel for American Forest & Paper
Association and Midwest Ozone Group
T A BL E O F C O N T E N T S
Page
INTRODUCTION ………………….………………………………………………………….1
ARGUMENT ………………………………...…………………………………………………3
I.
This Case Warrants the Court’s Discretionary Review and Applicants Are
Likely to Succeed on the Merits in this Case ………………...……………….3
A.
EPA failed to provide an opportunity for comment on the 11State plan it is actually implementing and failed to consider the
likely unlawfulness of the State plan disapprovals when it
published the Federal Plan ………………………………….………4
B.
Applicants’ claims are procedurally improper …………………..10
C.
Even if the Federal Plan consisted of all 23 States, it would
nonetheless violate the Clean Air Act …………………………….13
1. The Federal Rule results in impermissible over-control……13
2. EPA’s efforts to address challenges to the merits of the
Federal Plan related to other sectors of the economy are
without merit ..……………………………………………………15
II.
Petitioners Will Suffer Irreparable Harm Absent a Stay ……….………..16
III.
The Balance of Equities and the Public Interest Favor a Stay…………..20
CONCLUSION ……………………………………………………………………………….22
i
TABLE OF AUTHORITIES
Page(s)
Cases
Alabama v. EPA,
No. 23-11173 (11th Cir. Aug. 17, 2023) ................................................................. 12
Alon Refining Krotz Springs, Inc. v. EPA,
936 F.3d 628 (D.C. Cir. 2019) ........................................................................ 3, 9, 12
Am. Fuel & Petrochemical Mfrs. v. EPA,
3 F.4th 373 (D.C. Cir. 2021) ..................................................................................... 8
Auer v. Robbins,
519 U.S. 452 (1997) .................................................................................................. 3
Hollingsworth v. Perry,
558 U.S. 183 (2010) .................................................................................................. 3
Honeywell International, Inc. v. EPA,
705 F.3d 470 (D.C. Cir. 2013) (Kavanaugh, J.) ..................................................... 12
Michigan v. EPA,
135 S. Ct. 2699 (2015) ............................................................................................ 17
Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co.,
463 U.S. 29 (1983) ................................................................................................ 6, 8
Nat. Res. Def. Council v. EPA,
559 F.3d 561 (D.C. Cir. 2009) .................................................................................. 5
Nat. Res. Def. Council v. Nat’l Highway Traffic Safety Admin.,
894 F.3d 95 (2d Cir. 2018) ........................................................................................ 5
Sierra Club v. EPA,
884 F.3d 1185 (D.C. Cir. 2018)............................................................................... 16
Texas v. EPA,
829 F.3d 405 (5th Cir. 2016) .................................................................................. 19
Texas v. EPA,
No. 23-60069, Stay Order, Slip Op. (5th Cir. May 1, 2023) .................................. 18
Thunder Basin Coal Co. v. Reich,
510 U.S. 200 (1994) (Scalia, J., concurring) .......................................................... 16
ii
Wisconsin v. EPA,
938 F.3d 303 (D.C. Cir. 2019) ................................................................................ 21
Statutes
Administrative Procedure Act of 1946, 5 U.S.C. §§ 551–559, Pub. L.
No. 79–404, 60 Stat. 237 (1946) ..................................................................... 2, 6, 12
5 U.S.C. § 553 ............................................................................................................... 12
5 U.S.C. § 706 ............................................................................................................... 12
Clean Air Act, 42 U.S.C 7401, Pub L. No. 84-159,
69 Stat. 322 (1955) ...................................................2, 5, 6, 9, 10, 11, 12, 13, 14, 22
42 U.S.C. § 7410 ......................................................................................... 2, 6, 9, 14, 22
42 U.S.C. § 7412 ........................................................................................................... 14
42 U.S.C. § 7607 ........................................................................... 2, 5, 10, 11, 12, 13, 15
Other Authorities
1 C.F.R. § 18.13(a).......................................................................................................... 5
40 C.F.R. § 52.40(e) ...................................................................................................... 19
Timothy Cama & Lydia Wheeler, Supreme Court overturns landmark
EPA air pollution rule, THE HILL, June 29, 2015 .................................................. 17
Comment of Air Pollution Control Program, Missouri Department of
Natural Resources (2022), https://t.ly/4O1kl......................................................... 11
Comment of Air Stewardship Coalition (2022), https://t.ly/vByeY ............................ 11
Comments of the Midwest Ozone Group (2022), https://t.ly/ensMc .......................... 10
Comment of U.S. Steel (2022), https://t.ly/gFDT3 ...................................................... 11
Federal ‘‘Good Neighbor Plan’’ for the 2015 Ozone National Ambient
Air Quality Standards,
88 Fed. Reg. 36,654 (June 5, 2023) ............................... 1, 5-8, 12, 14, 15, 17, 19, 21
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)........................................................................ 20
iii
Federal Implementation Plan Addressing Regional Ozone Transport
for the 2015 Ozone National Ambient Air Quality Standard,
87 Fed. Reg. 20,036 (Apr. 6, 2022) ......................................................................... 17
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) ....................................................................... 20
U.S. EPA, Ground Level Ozone Basics (2023), https://t.ly/OJe0S; ............................ 20
U.S. EPA, Ozone Trends (1980-2022), https://t.ly/7G47K.......................................... 20
U.S. EPA, Rules that Help States Reduce Emissions and Meet Ozone
Standards (2023), https://t.ly/JOyIG; .................................................................... 21
iv
INTRODUCTION
What EPA is attempting here is unprecedented. Never before in a rulemaking
of this type has EPA encountered multiple courts of appeals telling it that the
underlying legal foundations for its rule are likely unlawful and then proceeded to
publish and implement it anyway. Rather than recognize that what is left of its
Federal Plan bears no resemblance to the one it analyzed and took comment on, EPA
has gone rogue, charging ahead despite the core assumptions undergirding the rule
being seriously undermined.
A stay is necessary to preserve the status quo while this extraordinary tactic
is litigated. No one disputes that the Federal Plan will cost billions of dollars that
cannot be recovered. 88 Fed. Reg. 36,654, 36,852 (June 5, 2023). Those costs begin
now. Infra 17-20. Meanwhile, there would be little to no harm to EPA, Intervenors,
or the public from a stay pending judicial review. Contrary to EPA’s hyperbolic
claims, a stay would not leave ozone forming emissions uncontrolled. See EPA Resp.
4, 23. There are a whole suite of state and federal regulatory requirements in place
that actively and vigorously control ozone pollution, including intrastate
requirements addressing the very same national ambient air quality standards that
triggered this proceeding. Infra 20-21. What is more, the projected ozone reductions
from implementing the 23-State Plan that EPA analyzed, rather than the 11-State
Plan it is now implementing, are so small that they would be considered de minimis
even under EPA’s own standards. Infra 21-22.
EPA’s attempt to excuse its behavior on the merits is similarly unavailing. It
claims that it could not have known its State plan disapprovals were likely unlawful,
even though three courts of appeals stayed those disapprovals in five States before
EPA published the Federal Plan in the Federal Register—the relevant time a rule
becomes final such that it can impose legal obligations and be challenged in court.
Had EPA not charged forward, it would have then had the ability to analyze and take
comments on the impacts of removing the additional seven States for which the plan’s
legal predicate was stayed by four additional courts of appeals soon thereafter. In
fact, Congress provided EPA with two years to issue a federal implementation plan
following its disapproval of the State plans. 42 U.S.C. § 7410(c)(1).
EPA’s procedural artifice, that no court can review the Federal Plan because
no objections were raised during the comment period, is similarly flawed. Numerous
commenters alerted EPA that the Federal Plan would require alteration because of
the serious flaws with its very legal foundation, the unlawful State plan disapprovals.
Moreover, the Clean Air Act specifically authorizes judicial review of claims “based
solely on grounds arising” after the comment period and initial deadline for judicial
review, 42 U.S.C. § 7607(b)(1), especially where judicial decisions alter a rule.
EPA’s decision to blind itself to the reality that removing 12 States from a
program that it says is designed to be nationally applicable and that it analyzed only
as a 23-State whole is inherently inconsistent with the Administrative Procedure Act
(“APA”) and the Clean Air Act. To preserve the core principles of administrative law
2
that an agency must analyze its regulations and allow the public an opportunity for
comment, and to prevent irreparable harm, this Court should grant the applications.
ARGUMENT
I.
This Case Warrants the Court’s Discretionary Review and Applicants
Are Likely to Succeed on the Merits in this Case.
There is a reasonable probability that four Justices will consider the issues
raised in this case sufficiently important to grant certiorari. See Hollingsworth v.
Perry, 558 U.S. 183, 190 (2010). EPA and Intervenors try to portray this case as a
routine matter unworthy of this Court’s attention. Yet even they claim that the
challenged rulemaking is one of immense importance. See EPA Resp. 49-50; Pub. Int.
Resp. 31-34; NY Resp. 14-15; see also Appl. 13.
Moreover, this case is about far more than “highly complex and technical facts.”
EPA Resp. 41. It poses an important question of administrative law: whether an
agency may publish and implement a rule despite a core legal basis of the rule being
fundamentally unsound, as confirmed by “judicial decisions that significantly
‘changed the legal landscape’” of the rule. Alon Refining Krotz Springs, Inc. v. EPA,
936 F.3d 628, 646 (D.C. Cir. 2019) (quoting Honeywell International, Inc. v. EPA, 705
F.3d 470, 473 (D.C. Cir. 2013) (Kavanaugh, J.)). This Court often grants certiorari in
cases like this that present important questions of administrative law, even those
that arise in mundane circumstances. See, e.g., Auer v. Robbins, 519 U.S. 452 (1997)
(supplying an important administrative law principle regarding deference to agency
interpretations in the context of an overtime pay dispute between police officers and
3
the City of St. Louis). Certiorari is hardly limited to questions of statutory
interpretation, as EPA suggests. See EPA Resp. 42.
Here, States and the regulated community should not be forced to comply with
a rule where EPA ignored that several courts of appeals found the rule likely rests on
an unlawful foundation and where the rule is a shell of the form EPA proposed and
analyzed. Administrative agencies cannot disregard their obligations to provide a
reasoned analysis of the regulation at hand and to provide an opportunity for notice
and comment on the rule that the agency is actually implementing. Because this case
warrants this Court’s review and because Applicants are likely to succeed on the
merits, a stay is warranted to prevent irreparable harm.
A.
EPA failed to provide an opportunity for comment on the 11State plan it is actually implementing and failed to consider the
likely unlawfulness of the State plan disapprovals when it
published the Federal Plan.
EPA does not dispute that it never took comment on or analyzed the 11-State
version of the plan it is now implementing or that it never analyzed the important
question of what effect removing one or more of the 23 States from the Federal Plan
would be if the States’ comments were correct. See Appl. 18-20. And it cannot deny
that every court to examine the issue has now confirmed what commenters warned:
that the State plan disapprovals are, in fact, likely unlawful. Instead, EPA attempts
several inartful dodges to salvage its rule.
EPA starts by sidestepping the reality that several courts of appeals had
already found EPA’s State plan disapprovals were likely unlawful (starting in early
May) before publication of the Federal Plan in the Federal Register (on June 5, 2023).
4
See Appl. 19. Instead, EPA claims its rule was final when it issued a press release
revealing the pre-publication version of the Federal Plan on March 15, 2023, arguing
this makes the later-issued court stays irrelevant. EPA Resp. 14, 20, 26-27; see also
NY Resp. 29. EPA provides no legal basis for that claim. To the contrary, a regulation
“does not have legal effect until it is published in the Federal Register.” Nat. Res. Def.
Council v. Nat’l Highway Traffic Safety Admin., 894 F.3d 95, 106 (2d Cir. 2018); see
also Nat. Res. Def. Council v. EPA, 559 F.3d 561, 565 (D.C. Cir. 2009) (“Agencies must
publish substantive rules in the Federal Register to give them effect” as “[a]n
unpublished final rule … can have no legal consequences[.]”); 88 Fed. Reg. at 36,811
(acknowledging “the effective date of the rule will be 60 days after the date of the final
rule’s publication in the Federal Register”) (emphasis omitted).
The Clean Air Act similarly contemplates that a regulation under the statute
has the force of law only after it is published in the Federal Register. See, e.g., 42
U.S.C. § 7607(b)(1) (time for seeking judicial review tied to Federal Register
publication). Before the Federal Plan was published in the Federal Register, the
Fifth, Sixth, and Eighth Circuits had stayed the State plan disapprovals for five
States. Appl. 7 & n.4. And stay motions were pending in other courts for other States.
EPA did not have to move forward with finalizing the Federal Plan through
publication in the Federal Register. See 1 C.F.R. § 18.13(a) (“A document that has
been filed for public inspection with the Office of the Federal Register but not yet
published, may be withdrawn from publication or corrected by the submitting
agency.”). By doing so without stopping to think what effect these decisions had on
5
the Federal Plan and its underlying analysis, EPA “entirely failed 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).
EPA and Intervenors next attempt to characterize Applicants’ arguments as
improper attacks on EPA’s disapprovals of State plans. EPA Resp. 21; NY Resp. 2527. Not so. No one disputes that EPA may issue a federal implementation plan only
after EPA has lawfully determined that a State’s plan is inadequate. See 42 U.S.C.
§ 7410(c)(1); EPA Resp. 14-15. Nor does anyone dispute that 12 States are no longer
subject to the Federal Plan as a result of the stays issued by seven courts of appeals.
Applicants are not challenging here the State plan disapprovals themselves. Rather,
Applicants contend that, as the legal and factual predicate for the 23-State Federal
Plan, the State plan disapproval’s likely unlawfulness fundamentally undermines the
Federal Plan’s analytical rationales and justifications, and that no one was allowed
to comment on this 11-State version of the Federal Plan in violation of the Clean Air
Act and the APA. See Appl. 17-20.
EPA’s principal argument is that the “record and the reasoning underlying the
Rule make plain” that it can “apply the Rule to the 11 States whose plan disapprovals
have not been challenged.” EPA Resp. 22. EPA’s reasoning presumed inclusion of all
23 States in analyzing and justifying core aspects of its Plan. Appl. 14-17; see also 88
Fed. Reg. at 36,671. Neither EPA nor the Intervenors point to any analysis of the
Federal Plan on either a State-by-State or an 11-State basis. Indeed, EPA has
characterized the Federal Plan as an “interdependent,” “national-scale,” “integrated,”
6
and “coordinated, interstate emissions control program” covering “23 states.” Appl.
17 (citations omitted).
EPA acknowledges that it defined what downwind contributions are
“significant” by reference to the potential “total emissions reductions” from uniform
emissions controls “to reduce the States’ collective contribution.” EPA Resp. 7-8.
EPA’s methodology for setting statewide budgets “is based primarily on analysis of
several alternative levels of [ozone-forming] emissions control stringency applied
uniformly across all of the linked states,” which EPA claims “serves to apportion the
reduction responsibility among collectively contributing upwind states … that are
collectively responsible for downwind air quality impacts.” 88 Fed. Reg. at 36,719
(emphasis added). EPA “select[s] a level of control stringency” only after analyzing
those collective “downwind air quality impacts” and assuming they are imposed on
all States in the plan. Id. That analysis, which assumes all 23 States are in the
Federal Plan, is “central to EPA’s … quantification of significant contribution.” Id.
EPA nonetheless insists that under the statute, it “could have promulgated 23
separate rules[.]” EPA Resp. 24-25 (emphasis added). But the Court has before it
what EPA did do, not some counterfactual amalgam. Thus, while EPA could have
pursued 23 completely independent State plans, EPA long ago abandoned that
course. It rejected an approach where it defined the emissions amount any given
State would be required to eliminate wholly independently from all other upwind
States, choosing instead to formulate its Federal Plan by reference to the collective
7
downwind effects of imposing emissions controls on all States in the Plan at uniform
costs. See EME Homer, 572 U.S. at 514-20.
No matter, EPA argues, because it has decreed that the Federal Plan is
severable. EPA Resp. 27. EPA points to its bald statement that “this rule is severable
along … state … jurisdictional lines, such that the rule can continue to be
implemented as to any remaining jurisdictions.” 88 Fed. Reg. at 36,693. But this
conclusory statement alone does not make it so, especially where it lacks any
analytical support. EPA does not—and cannot—point to any analysis of what controls
would be cost-effective on a State-by-State basis, the efficacy of the trading program,
or the effects on downwind air quality if even a single State was removed from the
Federal Plan. Cf. Appl. 9-10, 14-16. Administrative law principles require something
more than a baldfaced, unsupported statement. See State Farm, 463 U.S. at 48-49
(“We have frequently reiterated that an agency must cogently explain why it has
exercised its discretion in a given manner[.]”) (citations omitted).
Rather, to demonstrate severability, EPA must show that it “would have
adopted” the same rule had it known 12 States could not be included because their
State plan disapprovals were likely unlawful. Am. Fuel & Petrochemical Mfrs. v. EPA,
3 F.4th 373, 384 (D.C. Cir. 2021). But despite being challenged to prove as much,
Appl. 20, EPA can point to no evidence that its calculations, analyses, and budgets
would have been the same had only 11 States been included.
Instead, EPA incredibly argues that Applicants failed to “specify what
minimum number of States they believe the Rule must cover in order to constitute a
8
rational exercise of agency authority.” EPA Resp. 22-23. But the problem is that EPA
did not analyze any variation of its 23-State rule or provide the bases and rationale
for imposing its 11-State plan and subject those to public comment. Those
responsibilities fall squarely on EPA, and it has failed to meet them.
EPA’s final argument is that it had a “statutory obligation to establish” a
federal plan for the remaining 11 States. EPA Resp. 23; see also NY Resp. 28.
Although it is true that once EPA has disapproved a State’s plan it must issue a
federal plan for that State, Congress gave EPA two years to do so. 42 U.S.C.
§ 7410(c)(1). Here, that means EPA has until February 2025 to issue a Federal Plan.
There is no need under the statute for EPA to issue a federal plan justified by no
analysis and subject to no comment in the remaining 11 States right now. EPA also
notes that it needs to issue federal plans before certain attainment deadlines. EPA
Resp. 23. But EPA was years late in acting on the State plans. See Appl. 6. Had it
done so in a timely manner, the attainment deadlines would not be an issue. EPA
cannot disregard its obligations under the Clean Air Act and then expect the
regulated community to suffer the consequences of an unlawful rule. The same is true
with regard to Intervenors’ argument that EPA could not postpone the rule because
of a court-ordered deadline. NY Resp. 28. EPA’s agreement to an unreasonable
deadline in a consent decree, id. at 7 n.6, cannot justify a rule that no longer makes
sense and that lacks a lawful foundation.
9
B.
Applicants’ claims are procedurally proper.
Perhaps recognizing that EPA’s State plan disapprovals, and the bevy of court
decisions holding them likely unlawful, form a crumbling foundation on which to base
the Federal Plan, EPA and Intervenors invoke a procedural gambit. They claim that
Applicants’ challenge to the 11-State Federal Plan being implemented is
unexhausted. EPA Resp. 19-21; NY Resp. 28. That is wrong for at least three reasons.
First, with respect to the original 23-State Federal Plan, commenters did alert
EPA with “reasonable specificity during the period for public comment,” 42 U.S.C.
§ 7607(d)(7)(B), that the Federal Plan: (1) was fatally flawed due to EPA’s unlawful
disapproval of State plans; and (2) would require revision and a new round of
comments on that basis. When EPA initially proposed to disapprove the State plans,
commenters repeatedly warned EPA that the proposals were based on unlawful
reasons and faulty analyses, and they did so again when EPA proposed its Federal
Plan. See Appl. 6-7. Every single one of the States that have obtained stays of EPA’s
disapproval of their State plans warned EPA about its unlawful treatment of their
plans. The Applicants here did the same. See, e.g., Comment of the Midwest Ozone
Group at 10-13, https://t.ly/ensMc (collecting comments from various States asserting
that their plans were lawful and explaining that it was “legally necessary and
appropriate that EPA revise its [proposed Federal Plan] to allow states the Clean Air
Act’s enumerated opportunity to respond to EPA’s findings . . . before proposing a
[federal plan]” and pointing out that if the States were correct that alternative
10
thresholds for what constitutes a “significant contribution” were acceptable, many
States would be removed from the program).
Commenters further explained that moving forward despite EPA’s unlawful
disapproval of State plans would vitiate the analysis underpinning the rule and
necessitate a new proposal. See, e.g., Comments of Air Stewardship Coalition at 14,
https://t.ly/vByeY (EPA’s unlawful State plan disapprovals “would require [EPA] to
conduct a new assessment and modeling of contribution [for public comment]”).
Contrary to EPA and Intervenors’ assertions, it took no speculation to understand
that EPA built the Federal Plan on a faulty foundation that would require substantial
revision, even without the court rulings that confirmed those concerns. 1
Second, even if the sole basis for Applicants’ arguments were the later-issued
court stays (and not also the public comments that predicted those stays), the Clean
Air Act specifically authorizes petitions for review based on grounds “arising after”
both the comment period and the default deadline for seeking judicial review. 42
U.S.C. § 7607(b) (petitioners may pursue claims based “solely on grounds arising
after” the 60-day period for judicial review if they file them “within sixty days after
such grounds arise”). As then-Judge Kavanaugh explained, one quintessential
ground “arising after” the comment period is a court decision that alters the rule or
1 See also Comment of Mo. Dept. of Nat. Res. at 14, https://t.ly/4O1kl (instructing
EPA to redo its evaluation of costs to covered facilities to address major changes to
the Federal Plan); Comment of U.S. Steel at 43, https://t.ly/gFDT3 (explaining that
part of the problem with EPA prematurely issuing its Federal Plan was that
significant changes would require additional comment).
11
its bases and therefore “change[s] the legal landscape” faced by petitioners. Honeywell
International, Inc. v. EPA, 705 F.3d 470, 473 (D.C. Cir. 2013).
Meanwhile, the provision EPA relies upon is a “non-jurisdictional exhaustion
requirement” that “merely fills a narrow gap” by creating a reconsideration process
for objections that solely arose during the limited period “after the close of the
comment period, yet within the time specified for judicial review.” Alon Refining, 936
F.3d at 647-48. Here, commenters objected that the State plan disapprovals forming
the basis of the Federal Plan were unlawful during the comment period, supra 10-11,
courts began holding that these disapprovals were likely unlawful before the period
for judicial review began, Appl. 7 & n.4 (stays issued as to five States on May 1, 25,
26, and 31, 2023), and courts continued so holding after the initial time for judicial
review closed, see, e.g., Alabama v. EPA, No. 23-11173 (11th Cir. Aug. 17, 2023). See
88 Fed. Reg. at 36,654 (Federal Plan published on June 5, 2023, commencing the
initial time for judicial review, which closed sixty days later on August 4, 2023, under
42 U.S.C. § 7607(b)).
Third, the exhaustion provision EPA cites for matters that “arose after the
period for public comment,” 42 U.S.C. § 7607(d)(7)(B), is inapplicable because, for the
11-State rule EPA is implementing, there was no public comment period at all. Both
the Clean Air Act and the APA make it unlawful for EPA to implement legislative
rules that have not been subject to notice and comment. Id. § 7607(d)(1)-(9); 5 U.S.C.
§§ 553, 706. It is undisputed that the 11-State version of the rule that EPA currently
is implementing was never subject to notice and comment. See Appl. 18-19. Neither
12
EPA nor the public have had an opportunity to analyze the “basis and purpose” for
this new rule, its altered “factual data,” its altered “methodology,” or its altered
“major legal interpretations and policy considerations.” See 42 U.S.C. § 7607(d)(3).
EPA’s attempt to completely shield its mutant rule from review should not be
countenanced.
C.
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 could move forward with only 11 States,
the Federal Plan violates the Clean Air Act and this Court’s precedent because it
impermissibly “over-controls” emissions and arbitrarily includes non-power
generating industrial sources, contrary to the statute and EPA’s own analysis.
1.
The Federal Rule results in impermissible over-control.
EPA designed its Federal Plan in a manner that results in unlawful overcontrol of power plants through its emissions budget “enhancements,” in direct
contravention to this Court’s precedent. Appl. 21-22. EPA acknowledges these
“enhancements” are designed to reduce a State’s emissions budget when, for instance,
a power plant shuts down. EPA Resp. 40. Thus, if EPA determined that budgeting a
State 2,000 tons of emissions is sufficient to eliminate its significant downwind
contributions by 2026, and afterwards a plant in that State that emits 500 of those
tons shuts down, dynamic budgeting would reduce the State’s emissions budget to
account for the shutdown. That necessarily over-controls emissions more than
necessary to ensure a State does not “contribute significantly” to another State’s
13
ozone issues, since the original budget was designed by EPA to purportedly eliminate
significant contributions. See EME Homer, 572 U.S. at 521-22.
EPA justifies this by saying the enhancements are meant to ensure individual
sources within a State do not “idle controls.” EPA Resp. 40. But the Good Neighbor
Provision is not a part of the Clean Air Act concerned with ensuring individual
sources are running emissions controls to the maximum extent. Cf. 42 U.S.C. § 7412
(authorizing EPA to set standards for new sources based on “the maximum degree of
reduction” achievable). Rather it is focused on “amounts” of emissions statewide that
“contribute significantly” to downwind issues. Id. § 7410(a)(2)(D)(i). Since the
statewide “amounts” will be reduced below EPA’s own significant contribution budget
after, for example, a power plant retires, EPA’s further enhancements to that budget
have nothing to do with preventing significant contribution. They therefore exceed
EPA’s limited statutory authority.
As a rearguard, EPA claims its “analysis” confirmed that no “over-control”
would occur. EPA Resp. 40. But that analysis was conducted only through “the 2026
analytic” year, and EPA refused to engage in “further overcontrol analysis” beyond
2026. 88 Fed. Reg. at 36,751. Meanwhile, enhancements like dynamic budgeting only
go into effect after 2026, as EPA acknowledges. EPA Resp. 11. Thus, EPA’s “analysis”
of the 2026 budgets did not address at all, much less support, that its enhancements
14
do not over-control as budgets nosedive in subsequent years. 2 See 88 Fed. Reg. at
36,907.
2.
EPA’s efforts to address challenges to the merits of the
Federal Plan related to other sectors of the economy are
without merit.
EPA completely fails to address the concerns that have been raised about the
Federal Plan’s unsupported attempt to justify controls on cement kilns, the paper
industry, and the steel industry. EPA Resp. at 37-39.
EPA based its inclusion of the cement industry in the Rule on a snowball of
inaccuracies. EPA falsely assumed cement plants in affected States lacked any
existing controls. See Appl. 23. This allowed EPA to artificially inflate the impact of
new controls and suppress the actual costs of those controls. PCA Comments at 9
(App’x 306). EPA does not dispute it misapprehended the number of cement kilns
with controls; it just claims that “[a]ny kiln whose existing control technology enables
it to meet the applicable emissions limit need not change anything to comply with the
Rule.” EPA Resp. 37. That is beside the point. EPA’s assumption that no kilns had
any existing controls greatly inflated the assumed emissions benefit of requiring all
kilns to install costly controls. If the analysis had been done properly, no one in the
cement industry would be subject to this Rule at all, because the proposed additional
2 EPA also claims that “as-applied” challenges to the Federal Plan’s enhancements
can be brought after 2026, EPA Resp. 41, but because the enhancements facially are
designed to over-control, an as-applied challenge is not necessary. Moreover, if such
a challenge is brought years from now, EPA will surely argue that the 60-day statute
of limitations has expired. See 42 U.S.C. § 7607(b)(1).
15
controls would not be cost-effective—even under EPA’s own definition. Had EPA
relied on empirical evidence in the record, see Appl. 9-10, 23, rather than wrong
assumptions, its own methodology would have excluded that industry. See Sierra
Club v. EPA, 884 F.3d 1185, 1198 (D.C. Cir. 2018) (citing State Farm, 463 U.S. at 43)
(finding EPA decision arbitrary and capricious where its “conclusion appears to be
counter to the only empirical evidence EPA had before it”).
EPA’s assessment of costs for the paper industry is similarly misplaced. See
Appl. 23-24. EPA’s only response is to baldly assert that the expertise and data
provided by the paper industry were merely “commenter submitted data” that EPA
can disregard at its whim. EPA Resp. 38. Reasoned decision making requires more.
And EPA does not dispute that the requirement in the Federal Plan that steel
industry reheat furnaces install and operate “Low NOx Burners” is not found in the
proposed rule at all. Id. at 40. Rather, the Agency contends denying the steel industry
(and the public in general) an opportunity to comment on errors in EPA’s analysis and
assumptions regarding that technology, Balserak Decl. ¶¶6-8, somehow provided
“more flexibility.” EPA Resp. at 39. That makes no sense.
For all of these reasons, Applicants are likely to succeed on the merits.
II. Petitioners Will Suffer Irreparable Harm Absent a Stay.
“[C]omplying with a regulation later held invalid 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).
Worse, because of the time it takes to litigate a massive rule like this one, the result
16
would be a sizeable unrecoverable expenditure on unnecessary equipment and
services, even if the rule is later overturned and that result is held unlawful. 3 See
Appl. 25-27.
No one disputes compliance with the Federal Plan by 2026 requires
construction of expensive controls. See, e.g., EPA Resp. 44; 88 Fed. Reg. 36,768 (A
“control stringency reflecting universal installation and operation of [selective
catalytic reduction (“SCR”)] technology at large coal-fired [power plants] … is
appropriate at Step 3.”). And EPA recognizes sources without such controls must
immediately initiate engineering, designing, and procuring them. See 88 Fed. Reg.
20,036, 20,101 (Apr. 6, 2022) (companies must “begin engineering and financial
planning now to be prepared to meet [EPA’s] implementation timetable”); 88 Fed.
Reg. at 36,755; see also Appl. 25-27 (citing declarations). EPA, however, seeks to
minimize these expenditures as “initial design and planning” and “preliminary
analysis and engineering steps.” EPA Resp. 44.
As the Applicants declare, however, engineering, designing, and procuring
controls of the types required by the Rule by 2026 are not small expenditures. See,
e.g., Appl. 25-26; Brown Decl. ¶36 (App’x 481)4 (OVEC “will be required to spend
3 For instance, when this Court rejected EPA’s justification for its Mercury Air Toxics
Standards in Michigan v. EPA, 135 S. Ct. 2699 (2015), EPA boasted that because of
the time it took to litigate that rule “investments have been made and most plants
are already well on their way to compliance.” Timothy Cama & Lydia Wheeler,
Supreme Court overturns landmark EPA air pollution rule, THE HILL, June 29, 2015,
https://t.ly/hrRKK.
Page 8 of the Brown Declaration, which contains paragraphs 36-43, was
inadvertently out of place in the Appendix. This page can be found at page 481 of the
4
17
between $80-$100 million in the next two years.”); Talley Decl. ¶¶29-31 (Even if the
Rule is “overturned by the Court one year from now, initial costs would likely amount
to millions of dollars in unrecoverable costs.”); Zahn Decl. ¶17 (“A substantial portion
of [the $1 billion] cost [of SCRs at NRG] would be required to be expended in 2023….”).
EPA’s declarants believe otherwise, yet provide no data, only ipse dixit. Unlike
Applicants’ declarants, however, EPA’s declarants do not have first-hand knowledge
of operating a power plant or an industrial facility, commissioning the engineering,
design, and procurement of these types of controls, or entering into contracts with
substantial cancellation clauses. Not surprisingly, seven federal courts of appeals
have stayed underlying State plan disapprovals on a standard that required
consideration of the irreparable harm the Federal Plan would cause. See, e.g., Texas
v. EPA, No. 23-60069, Stay Order, Slip Op. at 22-23 (5th Cir. May 1, 2023).
Intervenors note that the controls the Federal Plan would require for power
plants by 2026 have already been installed at about 66% of coal plants. See, e.g., Pub.
Int. Resp. 21. They do not—and cannot—claim, however, that these are inexpensive
controls. And if 66% of coal plants have them already, 34% do not, and the cost of
additional controls, depending on their size and the number of units to be retrofitted,
is between hundreds of millions and one billion dollars. See Brown Decl. ¶36 (App’x
481); Zahn Decl. ¶17. Intervenors also speculate that every unit has previously
evaluated these types of controls. Pub. Int. Resp. 29. There is no evidence of that, and
Appendix. The remainder of the Brown Declaration is at pages 289-295 of the
Appendix.
18
in any event, a preliminary economic evaluation for whether it would make sense to
install SCR controls is a far cry from the detailed and costly engineering, design, and
procurement of the equipment for such controls.
In short, “[b]ecause plant emission controls take several years to install,”
Petitioners “will have to begin installation almost immediately.” Texas v. EPA, 829
F.3d 405, 433 (5th Cir. 2016). By the time this case comes to a final decision, sources
would have had to already conduct project development, complete detailed
engineering, and perform site work and mobilization, and they will have likely
entered into contracts for construction with substantial cancellation fees. Brown Decl.
¶¶32-35; Balserak Decl. ¶¶7-8; Noe Decl. ¶¶10-14. These massive compliance costs
would irreparably harm Applicants because they would be unnecessary without the
Federal Plan and unrecoverable if the plan is vacated. App. 26-27.
EPA also suggests industries outside the power sector can avoid immediate
harm simply because they have the “potential for compliance extensions of up to three
additional years.” EPA Resp. 43. Not so. No source that postpones installation activity
while awaiting the court’s decision would be eligible for an extension on that basis.
See 88 Fed. Reg. at 36,870 (“Each request for a compliance extension shall
demonstrate that the owner or operator has taken all steps possible to install the
controls necessary for compliance….”) (emphasis added). Moreover, even for eligible
plants, extensions are discretionary. Alternatively, industrial sources struggling to
gain timely compliance strategies are required to submit case-by-case emission limit
requests by August 5, 2024. 40 C.F.R. § 52.40(e). Those sources must demonstrate
19
technical “impossibility or extreme economic hardship”; therefore, the industrial
facility must invest in third party engineering and relevant data gathering now. See
Appl. 26-27. So, industrial sources are required to invest millions of dollars to avoid
aimlessly investing hundreds of millions in unproven EPA strategies. See id. at 27.
III.
The Balance of Equities and the Public Interest Favor a Stay.
After attempting to downplay the immediate irreparable injuries that
Applicants suffer, EPA claims that Applicant’s injuries are outweighed by purported
injuries to the government and the public interest. EPA Resp. 48. EPA has failed to
explain, however, how its perceived harm or the public interest outweighs preserving
the status quo.
First, EPA is flat out wrong to suggest that a stay would leave “emissions
within [upwind States] not controlled at all during the pendency of these
proceedings.” EPA Resp. 23, 49. As EPA is well aware, a robust array of federal and
state regulations, coupled with industry initiatives, are in place, and they have led to
a 29% decrease in national average ozone concentrations from 1980 to 2022. EPA,
Ozone Trends, https://t.ly/7G47K. EPA itself touts that it already has in place
“numerous rulemakings pursuant to the Good Neighbor Provision,” Resp. 6, and will
“continue implementation of requirements addressing good neighbor obligations” for
ozone, 88 Fed. Reg. at 49,300; 88 Fed. Reg. at 67,105. In addition, pollutants that
contribute to ozone remain subject to in-state restrictions from state and federal
requirements addressing the prior (2008) and current (2015) national ambient air
quality standards for ozone, the national ambient air quality standards for nitrogen
20
dioxide, vehicle transportation standards, and regional haze and visibility rules. U.S.
EPA, Ground Level Ozone Basics, https://t.ly/OJe0S; U.S. EPA, Rules that Help
States Reduce Emissions and Meet Ozone Standards, https://t.ly/JOyIG; see also Ohio
Application App. C, Crowder Decl. ¶46.
Second, EPA and Intervenors claim that a stay would prevent “significant
benefits to the residents of downwind States.” EPA Resp. 48-49; NY Resp. 14
(characterizing the harm to downwind States from a stay as “severe”). That is belied
by EPA’s own rulemaking record. EPA has long maintained that contributions less
than one percent of the applicable national ambient air quality standard are “de
minimis.” EME Homer, 572 U.S. at 499. For the ozone national ambient air quality
standards, which are set at 70 parts per billion (“ppb”), one percent is 0.70 ppb. Here,
EPA’s own data show that if all 23 States were included in the Federal Plan, the
average benefit at downwind locations would be a mere 0.06 ppb reduction in 2023
and a 0.66 ppb reduction by 2026. 88 Fed. Reg. at 36,742-43, 36,747-48. Thus, while
Intervenors allege harms in 2023 in places like Cook County, Illinois, and Fairfield
County, Connecticut, 5 NY Resp. 19; Env. Resp. 34, the data show that the air quality
improvements in those areas in 2023 from a 23-State Federal Plan’s controls is tiny:
between 0.02 ppb and 0.10 ppb, 88 Fed. Reg. at 36,743. And over 75% of the purported
benefits of even these minuscule air quality improvements are no longer in place
5 With regard to Fairfield, Connecticut, none of the Intervenors, including New York,
acknowledge the observation by the D.C. Circuit that a “significant share” of the
ozone impacting Fairfield, Connecticut is from one state alone—New York. Wisconsin
v. EPA, 938 F.3d 303, 317 (D.C. Cir. 2019).
21
because the Federal Plan has been stayed in 12 States, Appl. 11, rendering irrelevant
these benefits and those touted in the Intervenors’ response, NY Resp. 16. Any way
you slice it, that is categorically de minimis.
Third, EPA’s urgency to meet statutory deadlines is concocted. While it is true
that EPA may develop a federal plan any time after it disapproves a State plan, EME
Homer, 572 U.S. at 509, the Clean Air Act gives EPA up to two years to do so, 42
U.S.C. § 7410(c)(1). Thus, because EPA issued its final State plan disapprovals in
February 2023, it has until February 2025 to issue a federal plan. It has plenty of
time to craft a federal plan that actually analyzes emissions sources, costs, controls,
and amounts of emissions in any States for which it has validly disapproved State
plans within the statutory deadline. Moreover, had EPA not missed its deadlines to
approve or disapprove State plans by years, none of its purported concerns about
future attainment deadlines would exist. See Appl. 6, 27; contra EPA Resp. 49-50.
EPA should not be heard to complain that its own delay betrays the public interest
in preventing irreparable harm from its own unlawful actions.
CONCLUSION
For the foregoing reasons, Applicants respectfully request an immediate stay
of EPA’s Federal Plan. 6
6 EPA also claims that Applicants’ arguments challenge only particular aspects of the
Federal Plan, such that the whole plan should not be stayed. EPA Resp. 50-51. But
Applicants’ contention—that the core bases for the 23-State plan are likely
unlawful—relates to the entire rule. Unsurprisingly, Judge Walker in dissent stated
he would have stayed the Federal Plan—not just part of it. In any event, at a
minimum, this Court should stay the Federal Plan as to the industries seeking a
22
Dated: November 1, 2023
Respectfully submitted,
/s/ Mithun Mansinghani
Michael B. Schon
LEHOTSKY KELLER COHN LLP
200 Massachusetts Ave. N.W.
Washington, DC 20001
(512) 693-8350
/s/ Jonathan Y. Ellis
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
jellis@mcguirewoods.com
Mithun Mansinghani
LEHOTSKY KELLER COHN LLP
629 W. Main St.
Oklahoma City, OK 73102
(512) 693-8350
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
/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
Edward L. Kropp
STEPTOE & JOHNSON PLLC
PO Box 36425
Indianapolis, Indiana 46236
317-946-9882
Counsel for American Forest & Paper
Association and Midwest Ozone Group
stay—power (electric generating units), cement, paper, steel, and pipelines—and as
to all industries in the States seeking stays—Ohio, Indiana, and West Virginia.
23
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.