Petition — Ruckelshaus v. Natural Resources Defense Council, Inc.

8 2 3 1 591 ee os US,

No = | MAR 25 1983

——— > _—

ALEXANDER L. STEVAS,

Iu the Supreme Court of the Uuited States —_|

OCTOBER TERM, 1982

ADMINISTRATOR, ENVIRONMENTAL PROTECTION

AGENCY, PETITIONER

Vv.

NATURAL RESOURCES DEFENSE COUNCIL, INC., ET AL.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR THE

DISTRICT OF COLUMBIA CIRCUIT

REx E. LEE

Solicitor General

CAROL E. DINKINS

Assistant Attorney General

JOSE R. ALLEN

NANCY S. BRYSON

Attorneys

Department of Justice

Washington, D.C. 20530

(202) 683-2217

WILLIAM F. PEDERSEN

CHAELES S. CARTER

Attorneys

Environmental Protection Agency

Washington, D.C. 20460

A I lene le a e

QUESTION PRESENTED

Whether the Clean Air Act prohibits EPA from

allowing a state to adopt a plantwide approach to new

source review in nonattainment areas in circum-

stances where the state can demonstrate that its state

implementation plan including such a new source re-

view program contains all of the elements required by

the Clean Air Act and provides for timely attainment

and maintenance of air quality standards.

PARTIES TO THE PROCEEDING

In addition to the Natural Resources Defense

Counci!, respondents include Citizens for a Better En-

vironment, Inc. and the Northwestern Ohio Lung As-

sociation, Inc. Nominal respondents include Chevron

USA, Inc. (petitioner in No. 82-1005) and the Amer-

ican Iron and Steel Institute, the American Petroleum

Institute, the Chemical Manufacturers Association,

General Motors Corporation, and the Rubber Manu-

facturers Association (petitioners in No. 82-1247).

Other respondents under Rule 19.6 include various

member companies of two of the organizations that

are petitioners in No, 82-1247, and a group of 81

electric power generating companies and two electric

utility trade associations, all of which were intervenor-

respondents in the court of appeals. Those additional

respondents are listed at 82-1247 Pet. iii nn.1, 2 and 3.

(I)

TABLE OF CONTENTS

Page

os sandoioioebpncbbebasdqoseesscscons 1

ss panadesnbaananpovonvensnte 2

Statute and regulations involved ...00.0.0...........0.000cccceeeees 2

i, ss ceanaedibacnosnsddpsacsbosnnsese 2

Reasons for granting the petition ..............0.0000.000....000 12

i sasecsanebecessonesscacenecone 25

TABLE OF AUTHORITIES

Cases:

Alabama Power Co. v. Costle, 636 F.2d 323....5, 11, 21, 22

ASARCO, Inc. v. EPA, 578 F.2d 319 ................ 11, 21, 22

FCC v. National Citizens Committee For Broad-

a. scimsvorcensscevecece 19

Phelps Dodge Corp. v. NLRB, 313 U.S. 177 ............ 20

Train V. Natural Resources Defense Council, Inc.,

a cnouuonocrsase 12, 18, 15, 18, 19

Union Electric Co. Vv. EPA, 427 U.S. 246 .............. 18,19

Statutes, regulations and rule:

Act of July 14, 1955, ch. 360, 69 Stat. 322 ............. 14

Air Quality Act of 1967, Pub. L. No. 90-148, 81

I sanaseecsasecccenscecese 14

Clean Air Act of 1970, Pub. L. No. 91-604, 84 Stat.

1676 (formerly 42 U.S.C. 1857 et seq.) .............. 8,14

Section 101 (a) (8), 42 U.S.C. 1857 (a) (8)...... 8, 15

Section 107(a), 42 U.S.C. 1857c-2(a) ............ 4, 14-15

Section 109, 42 U.S.C. 1857¢-4 2000000000... 4

Section 110(a) (2), 42 U.S.C. 1857c-5(a) (2).. 4

Section 111, 42 U.S.C. 1857¢-6 20000000000... 21

Clean Air Act as amended, Pub. L. No. 95-95, 91

Stat. 685, 42 U.S. (Supp. IV) 7401 et sezq......... 2,4

Section 101(a) (3), 42 U.S.C. (Supp. IV)

a 8, 15

IV

Statutes, regulations and rule—Continued : Page

Section 107(a), 42 U.S.C. (Supp. IV) 7407

ahaa talcraldanliia eins nedboes 4, 26

Section 109, 42 U.S.C. (Supp. IV) 7409............ 4

Section 110(a) (2), 42 U.S.C. (Supp. IV)

eB GRR dew patie nares ia ata Sak eee 4

Section 110(a) (2) (1), 42 U. S.C. (Supp. IV)

NI sian clase ccenavvieneeti 6

Section 111, 42 U.S.C. (Supp. IV) 7411............ 21

Section 111(a) (4), 42 U.S.C. (Supp. IV)

I ai cs ts nae ae os bascedrcaciioansas 5

Sections 160-169, 42 U.S.C. (Supp. IV) 7470-

IRR fe aR ate MRT AS IN LETS OO 9

Section 165(a) (4), 42 U.S.C. (Supp. IV)

UN aN deities 22

Sections 171-178, 42 U.S.C. (Supp. IV) 7501-

Rin Taree eres PE eae Se 4,15

Section 171(4), 42 U.S.C. (Supp. IV) 7501

ONL See ALONG BR ROR le 2 ee ROP 5

Section 172(a)(1), 42 U.S.C. (Supp. IV)

> ERR eT i ae ah ies 5

Section 172(a) (2), 42 U.S.C. (Supp. IV)

SRILA SEER US Seve SEO 5

Section 172(b), 42 U.S.C. (Supp. IV) 7502

SEBS SA EDS tosis tt NED SO es his Le Ne .. 6,16

Section 172(b) (2), 42 U.S.C. (Supp. IV)

ES Sgn 5

Section 172(b) (3), 42 U.S.C. (Supp. IV)

TOC TR MIDE. skcsscnsesccssce! Resa.) 2 accstemestasais 5

Section 172(b) (5), 42 U.S.C. (Supp. IV)

Sanaa MESS a Sel J OR Re 6

Section 178, 42 U.S.C. (Supp. IV) 7508 ........ 5

Section 173(1), 42 U.S.C. (Supp. IV) 7503

OR nescek bitch achceecdeae iain Seton lascamanba 6

Section 173(2), 42 U.S.C. (Supp. IV) 7503

We acedknincehecncciccapincrnasuesscdiasanbaiiberctanieis tuaghetetteces 6

Section 173(3), 42 U.S.C. (Supp. IV). 7503

SREP a NSP Nise LRAT EN a pie i oer a 6

Section 178(4), 42 U.S.C. (Supp. IV) 7503

I Gieassepaceh ee 6

V

Statutes, regulations and rule—Continued: Page

Section 301(a)(1), 42 U.S.C. (Supp. IV)

I ok a caadndsuaepessideninimiannnaiel 12

Section 302(j), 42 U.S.C. (Supp. IV) 7602

a tte lel uae al actin dan seahadileriniuceahsdanadeunmebenatetet 5

Section 307(b) (1), 42 U.S.C. (Supp. IV)

ee! ccaancqpibaktacmel dates 9,24

40 C.F.R. (1981):

Part 51:

Bee BTDCTD CTP CED i cccoccecccsccccasccccones 7

BOOTEO SALE CS) CE) CI) cnccccssccsecsssrcieesecece 7

Bection 61.1864) (1) (ix) .........00.ccccccocsseess. 8

Part 52:

I MND OOD ooo. cacdncscsrnscesinsonckesecoocs 7,8

IN SAI GED oo. ccncunassduccaseonniionas 7

IE PE COPD vvneccscécccccccsmnenndesnsstunbocns x

40 C.F.R.:

MERLOT ac ieee aI a EER Rp Be oe Oe ra CP 4

Part 51

i csc encchesenbepaeecaininnaien 2

RENE BROCE NCD UD) cicscesccesscavepessaccossens 8

I TE os oh estsnetasebiomanbe 8

a a cactncnelcandesaseeasatgubansonaies 2

Miscellaneous:

44 Fed. Reg. (1979):

ERS RY CORD eee a me Law eee 7

ea ass cncaisnnibipduelaaes dhsbiiedbods 7

45 Fed. Reg. (1980):

ia secepevnchosnonnihadadndectartebinrs 8

PP. 52696-52698 0.0.0... eeeeceeceeeeeeee ena ar 8

46 Fed. Reg. (1981):

Ce ta ireslmicireannndnbamninan 8

EGS aca Sai Sa ae Se 8

H.R. Rep. No. 95-294, 95th Cong., Ist Sess.

Oo ignite ny UB TEE A hee eon EOD 15

S. Rep. No. 95-127, 95th Cong., lst Sess. (1977).. 16

Iu the Supreme Court of the United States

OCTOBER TERM, 1982

No.

ADMINISTRATOR, ENVIRONMENTAL PROTECTION

AGENCY, PETITIONER

v.

NATURAL RESOURCES DEFENSE COUNCIL, INC., ET AL.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR THE

DISTRICT OF COLUMBIA CIRCUIT

The Solicitor General, on behalf of the Administra-

tor of the Environmental Protection Agency, petitions

for a writ of certiorari to review the decision of the

United States Court of Appeals for the District of

Columbia Circuit in this case.

OPINIONS BELOW

The opinion of the court of appeals (82-1005 Pet.

App. A-1 to A-20) is reported at 685 F.2d 718.’

' The petitions in No. 82-1005, Chevron U.S.A., Inc. v. Nat-

ural Resources Defense Council, et al., and No. 82-1247, Amer-

ican Iron and Steel Institute, et al. v. Natural Resources De-

fense Council, et al., also seek review of the judgment of the

(1)

2

JURISDICTION

The judgment of the court of appeals was entered

on August 17, 1982. Timely petitions for rehearing

were denied (82-1005 Pet. App. B-22 to B-25) on

October 27, 1982. The jurisdiction of this Court is

invoked under 28 U.S.C. 1254(1).

STATUTE AND REGULATIONS INVOLVED

Pertinent provisions of the Clean Air Act, 42 U.S.C.

(Supp. IV) 7401 et seq., are reproduced at 82-1247

Pet. App. la-10a. Pertinent portions of implement-

ing regulations, 40 C.F.R. 51.18(j), are reproduced

at 82-1247 Pet. App. 32a-33a.

STATEMENT

This case presents a question as to the meaning of

the term “stationary source” as it is employed (with-

out any explicit statutory definition) in key provisions

of the 1977 Amendments to the Clean Air Act. Those

provisions require states that had not, by 1977, met

national air quality standards established under stat-

utory authority by the Environmental Protection

Agency to establish permit programs regulating the

construction of “new or modified major stationary

sources” of air pollution. To fill the definitional void

left by the statute, in October 1981, after allowing

for notice to the public and consideration of com-

ments received, the Environmental Protection Agency

adopted by regulation a definition that had earlier

been proposed in 1979. The 1981 regulation permits

court of appeals in this case. We will not respond separately

to these petitions. Because the materials required to be re-

produced by Rule 21(k) are included within the previously

filed petitions we refer to those petitions where appropriate,

rather than duplicating the materials found there.

3

the states to adopt a “plantwide” definition of “sta-

tionary source” that treats an entire industrial plant

as single source. It thus exempts from the formal

new source review process addition of equipment and

modifications to existing equipment within a plant

if increased emissions from the new or modified

unit are offset by corresponding decreases from an-

other unit within the plant so that aggregate plant

emissions do not increase more than de minimis

amounts. Under the 1981 regulations the states also

retained the option to treat each component of a plant

as a separate source. Thirty-one states have to date

availed themselves of the plantwide source definition

and have sought to modify the state implementation

plans required under the Act to incorporate that ap-

proach. In this ease, however, the United States

Court of Appeals for the District of Columbia Circuit

invalidated the EPA’s 1981 regulations, concluding

that the general purposes of the 1977 Amendments to

the Act left the Agency with no discretion to sanction

a plantwide definition in this context.

1. As amended in 1970, the Clean Air Act estab-

lished a federal-state partnership which recegnizes

that “the prevention and control of air pollution at

its source is the primary responsibility of States and

local governments.” Section 101(a)(3), 42 U.S.C.

1857(a)(3) and 42 U.S.C. (Supp. IV) 7401(a) (3).?

The Environments] Protection Agency (“EPA”) was

* At the time of the 1970 Amendments, Pub. L. No. 91-604,

84 Stat. 1676, the Act was codified at 42 U.S.C. 1857 et seq.

In 1977 the Act was further amended. As amended, the Act

was reclassified to 42 U.S.C. (Supp. IV) 7401 et seq. Where

reference is made to pre-1977 provisions that were not ma-

terially changed by the amendments of that year citations to

both the former and present codifications are provided.

4

required to establish a set of primary and secondary

National Ambient Air Quality Standards (“NAAQS’’).

Section 109, 42 U.S.C. 1857c-4 and 42 U.S.C. (Supp.

IV) 7409.* The primary NAAQS, were to be designed

to protect the public health, while the secondary

NAAQS were designed to protect public welfare.

Following promulgation of the NAAQS by EPA,

each state was required to adopt a plan, known as a

“state implementation plan” or “SIP,” to attain and

maintain the EPA-promulgated NAAQS by the dead-

lines established in the Act. Sections 107(a) and

110(a) (2), 42 U.S.C. 1857¢e-2(a) and 1857c-5(a) (2)

and 42 U.S.C, (Supp. IV) 7407(a) and 7410(a) (2).

For primary standards this date was generally 1975.

If the SIP provided for timely attainment and main-

tenance of the NAAQS and otherwise complied with

the requirements of the Act, the Administrator was

required to approve it. Section 110(a) (2), 42 U.S.C.

1857c-5 (a) (2) and 42 U.S.C. (Supp. IV) 7410(a) (2).

2. Many areas of the country failed to attain the

primary NAAQS by the deadlines established in the

1970 amendments. Congress accordingly amended

. the Act in 1977 to address this problem. Clean Air

Act Amendments of 1977, Pub. L. No. 95-95, 91 Stat.

685. In Part D of Title I of the amended act* Con-

gress adopted special provisions to be applied in the

so-called nonattainment areas. Congress directed the —

states to submit substantially revised SIPs for the

Administrator’s approval. In order to be approved

* Pursuant to this authority, the Administrator has promul-

gated primary and secondary NAAQS for sulfur dioxide

(SO_), particulate matter, carbon monoxide (CO), nitrogen

dioxide (NO), photochemical oxidants and lead. 40 C.F.R.

Part 50.

* 42 U.S.C. (Supp. IV) 7501-7508.

5

by the Administrator, a revised SIP was required to

provide for attainment of the primary NAAQS by

December 31, 1982." In addition, revised SIPs were

required to comply with the provisions of Section

172(b) of the Clean Air Act, 42 U.S.C. (Supp. IV)

7502(b), including, inter alia, implementation of all

reasonably available control measures as expeditiously

as practicable, annual incremental reductions in emis-

sions from existing sources leading to “ieasonable

further progress” toward attainment, and a permit

program governing construction of “new or modified

major stationary sources” of air pollution.*

The permit program for new or modified sources is

commonly referred to as the new source review pro-

gram. Section 173, 42 U.S.C. (Supp. IV) 7503, es-

tablished four mandatory elements for such a pro-

gram. First, permits to construct may be issued only

if the owner or operator of a proposed new or modi-

fied major source obtains sufficient emission reduc-

tions in the region to offset the increased emissions

from that source, and allow for reasonable further

542 U.S.C. (Supp. IV) 7502(a)(1). If a state demon-

strated that it could not meet the 1982 deadline for attainment

of the primary NAAQS for carbon monoxide and ozone, the

Administrator was authorized to grant further extensioy to

December 31, 1987. 42 U.S.C. (Supp. IV) 7502(a) (2).

*Section 172(b)(2) and (38), 42 U.S.C. (Supp. IV)

7502(b) (2) and (3). A stationary source is defined as a

“major” one if it “directly emits or has the potential to emit,

one hundred tons per year or more of any air pollutant * * *.”

Section 302(j), 42 U.S.C. (Supp. IV) 7602(j). An existing

major source is “modified” whenever its emissions increase

by more than a de minimis amount, as determined by EPA.

See Sections 111(a) (4) and 171(4), 42 U.S.C. (Supp. IV)

7411(a) (4) and 7501(4) ; Alabama Power Co. v. Costle, 636

F.2d 328, 400 (D.C. Cir. 1979).

6

progress toward attainment, or, alternatively, if the

increased emissions will not exceed an allowance fvi'

growth budgeted by the state pursuant to Section

172(b) (5), 42 U.S.C. (Supp. IV) 7502(b) (5). See

Section 173(1), 42 U.S.C. (Supp. IV) 7503(1). See-

ond, the source must be equipped with state-of-the-art

emissions controls meeting a standard described as the

“lowest achievable emission rate.” Section 173(2),

42 U.S.C. (Supp. IV) 7503(2). Third, the permit

applicant must certify that all the other sources

owned, operated, or controlled by him in the state are

in compliance with the applicable SIP. Section 173(3),

42 U.S.C. (Supp. IV) 7503(8). Finally, no permit

may be issued unless the state is carrying out the appli-

cable implementation plan for the nonattainment area

in which the proposed source is to be located. Section

173(4), 42 U.S.C. (Supp. IV) 7503(4).

To prevent further degradation of air quality in

nonattainment areas while the states formulate their

revised SIPs, Congress required each state to impose

a limited conditional moratorium on the construction

or modification of major stationary sources in such

areas until EPA approves a revised Part D SIP. Sec-

tion 110(a)(2)(1), 42 U.S.C. (Supp. IV) 7410(a)

(2) (1).

3. Although the new source permit review pro-

gram and the construction moratorium each apply to

“major stationary sources,” the term “source” is not

defined in the Act for the purposes of the nonattain-

ment program. Since enactment of Part D, two com-

peting constructions of the term source have been sug-

gested. Under the first, a plantwide definition, an

entire plant is treated as a “source.” * Under such a

7 Such a definition is frequently described as employing a

“bubble” concept.

7

definition, when emissions from one process unit with-

in the plant are increased, or a new process unit is

added, the change need not undergo formal new

source review if the operator can reduce emissions

of the same pollutant elsewhere within the plant so

that total emissions do not increase by more than a

de minimis amount.* Under an alternative construc-

tion of the statute, each process unit within a plant

is viewed as a “source;” any major new process unit

or any significant increase in emissions from an ex-

isting unit triggers formal new source review, even

if aggregate emissions from the plant of which the

unit is a part decrease or remain the same.

b. In 1979, EPA proposed regulations to govern

the new source review programs contained in revised

SIPs required by Part D of the amended Clean Air

Act. 44 Fed. Reg. 51924, 51933. These rules would

have permitted states with approved revised SIPs to

adopt a “plantwide” definition of source. States with-

out approved revised SIPs, however, would have been

required to use a unit-by-unit definition of source un-

der which emissions from each part of a plant were

reviewed individually. /bid.

In the final new source review regulations promul-

gated on August 7, 1980, the Agency reversed itself.

It adopted what is commonly referred to as the “dual

definition” of “stationary sources.”” Under that defi-

nition, both an entire plant and discrete pieces of

pollutant-emitting equipment within a plant were

treated as “sources.” * The states were therefore re-

§ That is, if total emissions do not increase sufficiently that

the change is deemed a “modification” of the plantwide source

for purposes of the new source review. See supra p. 5 note 6.

* ee 40 C.F.R. 51.18(j) (1) (ii), (iii) (1981); and 40

C.F.R. 52.24 (f) (2), (3) (1981).

8

quired to subject new and modified emission produc-

ing equipment units located in nonattainment areas

to new source review under all circumstances where

emissions from the specific equipment increased by

more than threshold amounts (see supra p. 5 note 6)

irrespective of any actual effect upon aggregate plant

emissions or air quality. They were also required to

subject an entire plant to new source review if emis-

sions from the plant as a whole increased by more than

a threshold amount, even if no increase exceeding the

threshold occurred at any particular unit. See 45 Fed.

Reg. 52676, 52696-52698 (1980)."°

Seven months later EPA proposed to restore the

“plantwide” definition of source for nonattainment

new source review. 46 Fed. Reg. 16280 (1981) (82-

1247 Pet. App. 10a-18a). That definition was for-

mally promulgated on October 14, 1981. 40 C.F.R.

51.18(j) (1) (ii) ; 40 C.F.R. 52.24(f) (2) ; see 46 Fed.

Reg. 50.66 (1981) (82-1247 Pet. App. 19a-33a)."

EPA identified two concerns as warranting this

© In addition, the August 7, 1980 regulations treated sub-

stantially reconstructed process units as new sources. 40

C.F.R. 51.18(j) (1) (ix) (1981); 40 C.F.R. 52.24(f) (9)

(1981). The effect of this approach was to require formal

new source review of such reconstructed facilities even when

emissions were not greater than those of the equipment super-

seded. See supra p. 5 note 6 & p. 7 note 8.

'! In the October 14, 1981, regulations EPA also eliminated

the special reconstructed source rule that had been adopted

in 1980 (see supra note 10), explaining that in light of the

plantwide definition of source adopted, a reconstruction re-

quirement no longer was necessary. The agency anticipated

that an entire plant rarely would be reconstructed (82-1247

Pet. App. 25a-26a).

9

change. First, the revised definition conformed to the

definition previously established for stationary sources

under the separate Prevention of Significant Deteriora-

tion (PSD) program established by the 1977 Amend-

ments to the Act, Section 160-169, 42 U.S.C. (Supp.

IV) 7470-7479 (82-1247 Pet. App. 32a).’* Second,

EPA concluded that states should have discretion as+¢9

how to define “stationary sources,” provided that

their SIPs still meet the basic requirements of the

statute (id. 28a-25a). Accordingly, EPA explained

that states could shift to a plantwide definition only

if they could “demonstrate that their plans, as re-

vised, continue to demonstrate [reasonable further

progress] and attainment’—the fundamental statu-

tory requirements (82-1247 Pet. App. 24a).

4a. On November 18, 1981, the Natural Resources

Defense Council (“NRDC”), Citizens for a Better

Environment, Inc. and the Northwestern Ohio Lung

Association, Inc., filed a petition for review of the

EPA’s October 1981 regulations in the United States

Court of Appeals for the District of Columbia Circuit.”

NRDC argued that the amended definition was in-

‘2 The PSD program is designed to prevent the deteriora-

tion of air quality in areas in which ambient air is cleaner

than required by national standards. The agency adopted a

plantwide definition of “stationary sources” for PSD purposes

at the same time it adopted the dual definition for nonattain-

ment new source review. Maintenance of disparate definitions

was deemed burdensome by EPA because an area may be des-

ignated “attainment” for one pollutant and “nonattainment”

for another, and a single plant may therefore be subject to

both sets of rules.

‘Under Section 307(b) (1) of the Act, 42 U.S.C. (Supp.

IV) 7607 (b) (1), the D.C, Circuit has exclusive jurisdiction to

entertain actions for judicial review of nationally applicable

regulations promulgated by EPA.

10

valid for three reasons. First, it was alleged to con-

flict with what NRDC characterized as a longstanding

congressional understanding that the term “source”

comprehended each item of process equipment within a

plant. Second, NRDC argued that EPA’s plantwide

definition conflicted with the fundamental purposes

of the nonattainment program because it exempted

from new source review many new facilities that

would be subject to review under the dual definition.

Third, NRDC contended that under prior decisions of

the D.C, Cireuit, use of a plantwide source definition

was permissible only for programs intended for air

quality maintenance and was forbidden for programs

directed at air quality enhancement, such as the non-

attainment program established in 1977 in Part D of

the Clean Air Act.

In response, EPA observed first that neither the

statute nor the legislative history prescibed a par-

ticular definition of “source”. The agency argued

further that there was no evidence of a settled or

clear congressional understanding of the term. EPA

contended that given the absence of controlling lan-

guage or legislative history, adoption of the plantwide

definition was a reasonable exercise of its discretion.

EPA argued that its regulations carried out Con-

gress’ intention that economic growth be allowed to

occur in nonattainment areas to the extent consistent

with the drive toward attainment and the deadlines

for attaininent established by the 1977 Amendments.

Finally, EPA argued that the D.C. Circuit’s previous

decisions cited by NRDC were inapposite because the

regulatory programs considered in those decisions

were substantially different in design and purpose

from the Part D new source review program.

11

b. The court of appeals granted the petition for

review and vacated EPA’s October 14, 1981, regula-

tions (82-1005 Pet. App. A-20). The court did not

respond directly to EPA’s contentions; nor did it

rely on the primary arguments advanced by NRDC.

The court acknowledged (82-1005 Pet. App. A-8, A-17

note 39) that (as EPA contended) neither the statu-

tory language nor the legislative history prescribed

any definition for the term “stationary sources.” The

court nevertheless concluded that two of its prior de-

cisions, ASARCO, Inc. vy. EPA, 578 F.2d 319 (1978)

and Alabama Power Co, vy. Costle, 686 F.2d 328

(1979), required rejection of the Agency’s regula-

tions. Those decisions, in the court’s view, together

established (82-1005 Pet. App. A-16; emphasis added)

a bright line test for determining the propriety

of EPA’s resort to a bubble concept. The bubble

concept * * * is mandatory for Clean Air Act

programs designed merely to maintain existing

air quality; it is inappropriate * * * in programs

enacted to improve the quality of ambient air.

Pretermitting any view as to “the decision we

would reach if the line drawn in Alabama Power and

ASARCO did not control our judgment” (id. at A-4

note 7), the court summarily concluded that because

the overall objective of the entire nonattainment pro-

gram was to ameliorate air quality so as to achieve

conformity with national air quality standards, a

plantwide definition of the term source may not in

any circumstances be employed for purposes of the

new source review program (id. at A-17 to A-18).

The court deemed irrelevant to its consideration evi-

dence that Congress intended to allow the states a

substantial measure of flexibility in achieving the re-

quired air quality standards, and the fact that the

12

new source review program is but one facet of the

larger nonattainment program (id. at A-18 to A-19).

These considerations were thought not to reflect the

controlling purpose of the nonattainment program.

The court stated (id. at A-19)

In the Alabama Power-ASARCO context, “pur-

pose” clearly means goal, objective. The goal of

the nonattainment program is undoubtedly to im-

prove air quality in regions lagging behind in

meeting the NAAQSs.

In the court’s view that purpose precluded use of the

plantwide “stationary source” definition.”

REASONS FOR GRANTING THE PETITION

The decision of the court of appeals is contrary to

well established limits upon the scope of judicial re-

view of administrative action. Remarkably, the

Agency’s regulation was invalidated even though the

court of appeals acknowledged that it was unable to

discern any controlling statutory language or legisla-

tive history. In the circumstances, the agency acted

well within its authority, Section 301(a)(1), 42

U.S.C. (Supp. IV) 7601(a) (1), to promulgate regu-

lations to carry out the purposes of the Act. And the

court of appeals was without authority to invalidate

the agency’s regulations so long as they rested upon

a reasonable interpretation of the Act. Train v. Nat-

ural Resources Defense Council, Inc., 421 U.S. 60, 86

(1975).

Instead of pointing to any controlling statutory

language or legislative history, the court of appeals’

™ The court also invalidated EPA's deletion of the recon-

structed facilities rule, pee supra p. 8 notes 10 & 11, reasoning

that that aspect of the’agency's action depended upon its adop-

tion of the plantwide source definition (82-1005 Pet. App.

A-19 to A-20).

13

decision rests upon a bright line rule ostensibly es-

tablished by its prior decisions, the application of

which turns upon the overall purpose of the statutory

program. But in the setting of this case the purpose

attributed to Congress is entirely an artifact—it does

not rest upon statutory language or legislative his-

tory, and thus reflects only the policy judgment of the

court of appeals. And the dichotomy applied by the

court of appeals caused it to reject as irrelevant criti-

cal features of the actual statutory design. Thus,

while the ultimate purpose of the nonattainment pro-

gram as a whole is assuredly to achieve an improve-

ment in ambient air quality, that mandate for im-

provement is not open-ended; the statutory objective

is attainment of specific air quality standards. More-

over, the new source review program is merely one

of an arsenal of tools which Congress required the

states to employ in the pursuit of those standards.

The statute and legislative history make-clear that

the states were to have substantial discretion as to

how the specific tools made available under the Act

were to be balanced in a state implementation plan.

The court of appeals’ conclusion that the air quality

improvement purpose of the nonattainment program

required adoption of a particular definition of a term

Congress did not define is accordingly unsound.

This Court has recognized that Congress intended

in the Clear Air Act to allow the states substantial

discretion in selecting the measures necessary to meet

the air quality improvement goals established by Con-

gress and the Agency. Train v. Natural Resources

Defense Council, Inc., supra, 421 U.S. at 79. The

decision of the court of appeals, however, requires the

Agency to disapprove implementation plans submitted

by 31 states even if they meet all of the requirements

14

of the Clean Air Act, simply because they provide for

attainment through strategies that accommodate a

plantwide approach to new source review. Absent a

compelling indication that Congress constrained the

agency to reject such plans—and none has been iden-

tified in this case—that is an impermissible result.

The question presented is of substantial national

importance, affecting the regulatory agencies of 31

states, and thousands of businesses subject to their

jurisdiction. Because exclusive jurisdiction in this

matter is by statute vested in the D.C. Circuit (save

only for this Court), and because that court declined

to reconsider its decision en banc, further review is

warranted.

1. The decision of the court of appeals signifi-

cantly alters the historic federal-state relationship

created by Congress to deal with air pollution, by de-

priving the states of flexibility to determine how they

will achieve the primary national ambient air quality

standards.

a. From the first congressional efforts in 1955 to

abate the problems of air pollution, Act of July 14,

1955, ch. 360, 69 Stat. 322, to the present, the indi-

vidual states have been vested with primary respon-

sibility for the control and prevention of air pollution

at its source. This was so under the Air Quality Act

of 1967, Pub. L. No. 90-148, 81 Stat. 485, and under

the comprehensive amendments adopted by Congress

in 1970, Pub. L. No, 91-604, 84 Stat. 1676. Although

the 1970 amendments sharply increased the federal

responsibility for air pollution control, they explic-

itly preserved the principle of state responsibility:

“(E]ach State shall have primary responsibility for

assuring air quality within the entire geographic

area comprising such State * * ©.” Section 107(a),

15

42 U.S.C. 1857¢e-2(a) and 42 U.S.C. (Supp. IV)

7407(a)." This Court described the federal-state

partnership in Train v. Natural Resources Defense

Council, Inc., 421 U.S. 60, 79 (1975):

The Agency is plainly charged by the Act with

the responsibility for setting the national ambient

air standards. Just as plainly, however, it is

relegated by the Act to a secondary role in the

process of determining and enforcing the specific,

source-by-source emission limitations which are

necessary if the national standards it has set are

to be met. {Footnote omitted. ]

Congress did not abandon this principle in enacting

the 1977 Amendments to the Act. In Part D to the

1977 Amendments, 42 U.S.C. (Supp. IV) 7501-7508,

Congress developed a detailed strategy requiring the

revision of all state implementation plans for those

areas of the country that were not yet in attainment.

As the House noted, Part D had “two main pur-

poses :”

(1) to allow reasonable economic growth to con-

tinue in an area while making reasonable fur-

ther progress to assure attainment of the stand-

ards by a fixed date; and (2) to allow States

greater flexibility for the former purpose than

EPA’s present interpretative regulations afford.

H.R. Rep. No. 95-294, 95th Cong., Ist Sess. 221

(1977) (emphasis added). In addition, the Senate

stated that a “fundamental concern” was “[t]he need

to augment the responsibility, authority, and effective-

'’ See also Section 101(a) (3), 42 U.S.C. 1857(a) (3) and

42 U.S.C. (Supp. IV) 7401(a) (3): “the prevention and con-

trol of air pollution at its source is the primary responsibility

of States and local governments.”

16

ness of State and local air pollution control programs”

because ‘“[t]he problem of air pollution exists at the

State and local level [which] is where the public

understands the problem [and] where the resources

must be directed.” S. Rep. No. 95-127, 95th Cong.,

Ist Sess. 10 (1977). Accordingly, Congress amended

the Act to give the states “additional time and flexi-

bility” (id. at 3) to revise their plans in order to at-

tain the ambient standards and meet the new require-

ments of Section 172(b), 42 U.S.C. (Supp. IV)

7502(b). As the Senate noted (S. Rep. No. 95-127,

supra, at 10):

The authority of States and localities to imple-

ment air pollution control programs within the

framework of a national policy must be encour-

aged. The framework proposed in this bill is

flexible in terms of the discretion in choosing

methods for attaining firm national goals. States

and localities are given broad discretion to make

decisions, while maintaining the minimum na-

tional air quality baselines designed to protect

health and welfare, prevent discrimination among

States, protect national resources within States,

and provide guidance on the technical and the

economic implications of various national pol-

a".

Proper implementation of the amendments in

this bill will significantly enhance the Federal-

State relationship and will provide the States and

localities with the flexibility they need, while at

the same time providing a mechanism to assure

that national policy is implemented.

Thus, it is clear that the Act and its legislative his-

tory reflect the continuing intention to leave states

considerable latitude in achieving the mandated emis-

sion reductions, both generally and with specific ref-

erence to the nonattainment program of Part D.

17

b. The court of appeals decision strips the states

of significant latitude in applying Part D in their

efforts to achieve attainment. As promulgated by

EPA, the plantwide definition of source is an op-

tional strategy that the states may, but need not, se-

lect, and that is available only under carefully limited

circumstances. In adopting a plantwide definition of

source for this program, the Agency has acted in

keeping with the Act. As promulgated by EPA, the

plantwide definition of source is available to the

states only if they “demonstrate that their plans, as

revised, continue to demonstrate [reasonable fur-

ther progress] and attainment,” and thus continue

to satisfy the basic statutory requirements (82-1247

Pet. App. 24a). And the plantwide definition does not

permit construction or modification of a process unit

unless any increased emissions are offset by decreased

emission from another component within the same

facility so that aggregate emissions do not increase

beyond a de minimis level. Thus, the plantwide defi-

nition gives states the flexibility and the authority to

determine how to structure their new source review

programs. Yet, it insures that the states remain sub-

ject to the overriding statutory command that their

state implementation plans satisfy the requirements

established by Congress."

There is no suggestion in the court of appeals’ opin-

ion that by employing the plantwide definition for

‘6 Promoting state flexibility is not an abstract concern. In

several areas around the country the major cause of non-

attainment is automobile-related pollutants (carbon monoxide

and ozone) and not stationary source emissions. Only by re-

ducing automobile emissions can attainment be expected in

18

new source review, the states would be unable to dem-

onstrate achievement of the attainment goals estab-

lished by Congress. The court apparently deemed

that question irrelevant (82-1005 Pet. App. A-18 to

A-19). Instead, the panel faulted the Agency for con-

ferring undue flexibility upon the states. Contrary

to the court of appeals’ suggestion (id. at A-19),

however, the Agency’s regulations do not allow the

states to determine whether federal! requirements

such as new source review should be applied. The

issue, of course, is not whether a state must have

a new source review program as part of its revised

state implementation plan. Clearly it must. Rather,

the question is whether the states may he allowed

to determine the scope to be afforded that program

and latitude to employ those strategies they find

most effective in meeting the attainment goal es-

tablished by Congress, when the statutory language

does not require a particular choice of strategy.

Train v. Natural Resources Defense Council, Inc., su-

pra, 421 U.S. at 69; and Union Electric Co. v. EPA,

427 U.S. 246, 266 (1976), strongly suggest that such

latitude exists under the Act. The court of appeals’

decision, however, compels EPA to disapprove any

SIP employing a plantwide definition, even where the

state has demonstrated that an equipment-specific

definition of source is not necessary to insure timely

such areas. Hence, it makes little sense to force a state to

expend its resources performing full-blown reviews of modifi-

cations of stationary sources when such review will have little

material impact on ambient air quality. It is far more fruitful

to allow such a state to focus its energies on more productive

pollution reduction endeavors. The plantwide definition of

source allows for precisely this sort of flexibility.

19

attainment of the standards. The result is plainly

contrary to congressional intent, and this Court’s

decisions.

2. In repudiating the Agency’s definition of source

for failing to satisfy the “purpose” of the nonattain-

ment program, the court of appeals violated estab-

lished principles of judicial review. This Court has

“accorded great deference to the Administrator’s con-

struction of the Clean Air Act.” Union Electric Co.

v. EPA, supra, 427 U.S. at 256. The Agency’s inter-

pretation of the Act need only be “sufficiently reason-

able” to survive judicial scrutiny. Train v. Natural

Resources Defense Council, Inc., supra, 421 U.S. at

87. These principles apply with special force, we sub-

mit, when Congress has given no guidance on an issue

that the Agency is perforce obliged to address. See

FCC y. National Citizens Committee For Broad-

casting, 486 U.S. 775, 813-814 (1978).

The decision below is irreconcilable with these fun-

damental tenets of judicial review. The court ac-

knowledged that neither the statutory text nor its

legislative history offered any clear guidance respect-

ing the meaning to be assigned to the term “station-

ary sources” (82-1005 Pet. App. A-8, A-17, n.39).

Yet, the Agency’s effort to fill this statutory vacuum

was rejected because it wa> thought to be out of

harmony with the larger purpose of the nonattain-

ment program as a whole. Both the court’s analytical

approach and its understanding of the Clean Air Act

were seriously flawed.

a. According to the court of appeals, for the pur-

pose of defining a source, every program under the

Clean Air Act has one of two purposes: enhancement

of air quality or maintenance of existing air quality.

In the court’s view, if the provisions of the Act for

20

which a plantwide definition have been proposed fall

on the enhancement side of this “bright line,” such a

definition is precluded. If the provisions for which

the definition has been proposed pertain to mainte-

nance, the definition is mandatory. Just as the court’s

decision deprives states of flexibility in implementing

a key provision of the Act, it also strips the Agency

of any discretion to interpret it. As a result of the

court’s test, the Agency never has any discretion to

define what a source is—a remarkable conclusion

given Congress’ silence on the subject.

The application given this judicial litmus test is

unacceptable for two additional reasons. First, the

court of appeals did not even suggest that the result

of its application conforms to congressional intent,

which, of course, is the proper standard for deter-

mining the validity of the agency’s regulations. The

court’s insistence that its decision was compelled by a

“bright line’ test derived from its other decisions

should not be permitted to disguise the fact that the

court’s decision, because not based on legislative in-

tent, represents a departure from the “narrow con-

fines of the law into the more spacious domain of

policy” (Phelps Dodge Corp. v. NLRB, 313 U.S. 177,

194 (1941)).

Second, the court of appeals’ reasoning rides rough-

shod over the statutory design. The new source re-

view program is but one component of the larger non-

attainment program. The nonattainment program it-

self requires improvement of air quality to meet fixed

standards; it is not a mandate for the maximum

feasible reduction in emissions. Accordingly, it sim-

ply does not follow from the overall ultimate purpose

of the nonattainment program that new source re-

view must be applied on a unit-by-unit basis rather

than a plantwide basis. Thus, EPA’s 1981 regulations

21

are fully consistent with the purpose of the nonattain-

ment program as reflected in the statutory language

itself.

b. The court of appeals’ prior decisions in ASARCO

and Alabama Power do not support its decision in

this case. In each of those cases the court of appeals

undertook to determine whether a plantwide definition

of sources subject to a particular Clean Air Act

program was consistent with legislative intent. In

ASARCO, the court of appeals concluded that appli-

cation of a plantwide approach under the technology-

based new source performance standards (NSPS)

program was contrary to legislative intent. 578 F.2d

at 327-329." In Alabama Power, by contrast, the

court held that use of a plantwide definition was man-

datory under the Prevention of Significant Deteriora-

tion (PSD) program because Congress intended

sources to undergo review “only where industrial

changes might increase pollution in an area, not

where an existing plant changed its operations in

ways that produced no pollution increase.” Alabama

Power, supra, 636 F.2d at 401.

Although the D.C. Circuit took pains in Alabama

Power to distinguish its holding there from its prior

holding in ASARCO, it did not do so on the basis of

the “bright line” test suggested by the panel here.

The distinction recognized was tied instead to funda-

mental differences in regulatory design between the

NSPS and PSD programs. This was not the sim-

plistic dichotomy between air quality enhancement

and maintenance constructed by the panel in this case.

Rather, the distinction observed was between the

‘The new source performance standards program was

created by Section 111 ef the Act in 1970, see 42 U.S.C. 1857c-

6 and 42 U.S.C. (Supp. IV) 7411, and applies irrespective of

the air quality of an area.

22

technology-forcing design of the NSPS program,

which requires the installation of stringent emission

controls on new emission producing equipment with-

out regard to existing air quality, see ASARCO, su-

pra, 578 F.2d at 328-329, and the intent of the PSD

program, which is concerned with the impact of new

source construction: on existing air quality. Alabama

Power, supra, 636 F.2d at 401.

Differences between the NSPS program and the non-

attainment new source review program are of criti-

cal significance here. As discussed above, the NSPS

program is a technology-based program that applies

without regard to the impact of a regulated facility’s

emissions on ambient air quality. NSPS requirements

apply whether or not ambient standards have been

attained and continue to apply for the life of the

plant. The NSPS program employs a single means:

a long-term, technology-forcing program designed to

increase the pollution control efficiency of industrial

plants as capital stock is replaced. In contrast, the

nonattainment new source review program is in-

extricably linked to ambient air quality. It is called

into play only in those areas in which national am-

bient air quality standards have not been attained,

and its application terminates when the standards

have been achieved."* In addition, the nonattainment

18 The panel declined to distinguish between the NSPS pro-

gram and the nonattainment new source review program,

noting that the latter program contains a technology-forcing

component as well (82-1005 Pet. App. A-16 n.38). What the

court failed to realize is that the PSD program also contains

a technology-forcing component. See Section 165(a) (4), 42

U.S.C. (Supp. IV) 7475(a) (4). Hence, the mere existence

of a technology-forcing component is no basis for rejecting

the suggested distinction. The issue is not whether a program

contains a technology-forcing component, but when the pro-

gram, with its technology-forcing component, should be trig-

gered. In the Agency's view, the Part D new source review

23

program employs several different strategies, of which

new source review is but one, to ensure attainment of

the national standards,”

The decision of the court of appeals in this case is

thus unsupported by the rationale of its prior deci-

sions. In place of the analysis employed in the court’s

prior decisions, which focused upon congressional-owet

intent, the court has now drawn an arbitrary line

that does not respond to actual legislative intent, and

that allows no room for exercise of administrative

discretion in circumstances, such as those presented,

where Congress has not confined the Agency in its

implementation of the Act.

3. The issue presented by this case is of substantial

practical importance, for, pursuant to the Agency’s

regulations, 31 states have sought to adopt a plant-

wide approach to new source review. Under the court

of appeals’ decision, however, the Agency is compelled

to disapprove those states’ SIPs and to require the

submission of revised versions that return to a dual

definition of source. If new source review may not

be conducted on a plantwide basis, each state will be

required to carry out time-consuming preconstruction

program, like the PSD program, should be triggered only

when emissions will increase by more than a de minimis

amount.

'° See supra p. 5. The provisions of the nonattainment pro-

gram directed at reduction of existing excessive emissions

were necessarily the primary instrument adopted for achiev-

ing attainment. The new source review program was never

intended to carry the full load of insuring attainment of the

national standards; on the contrary, it was principally de-

signed to make certain that emissions from new or modified

sources do not undercut a state’s affirmative attainment

strategy.

24

review of individual modifications to existing plants,

even if the state demonstrates, and EP.\ finds, that

such reviews are not necessary to ensure attainment

and maintenance of the national standards. More-

over, in adopting the 1981 regulations, the agency de-

termined that the plantvide definition would remove

disincentives to plant modernization (82-1247 Pet.

App. 26a). The decision of the court of appeals may

accordingly have adverse economic impacts that are

not required by the terms of the Clean Air Act.

Finally, review by this Court is necessary because

there is no possibility of litigating the issue further

in another court of appeals. Pursuant to Section

307(b) (1), 42 U.S.C. (Supp. IV) 7607(b) (1), the

D.C. Circuit has exclusive jurisdiction to review EPA

regulations of nationwide applicability. Further re-

view is available only in this Court.

To be sure when Congress revisits the Clean Air

Act, it may speak to this issue and provide a defini-

tion for the term at issue in this case. But given

Congress’ failure to act in the past, uncertainty as

to whether and when it will act in the future, and

the present importance of the issue, review by this

Court is warranted at this time.

25

CONCLUSION

The petition for a writ of certiorari should be

granted.

Respectfully submitted.

REX E, LEE

Solicitor General

CAROL E. DINKINS

Assistant Attorney General

JOSE R, ALLEN

NANCY S. BRYSON

Attorneys

WILLIAM F. PEDERSEN

CHARLES S. CARTER

Attorneys

Environmental Protection Agency

Washington, D.C. 20460

MARCH 1988

WU. 8. GOVERNMENT PRINTING OFFICE, 1903 40196! 1315