Amicus Curiae Brief — Whitman v. American Trucking Assns., Inc.

(2 9 | Supreme Court, U.S.

No. 99-1257 FILED ~

IN THE CLERK

Supreme Court of the Anited States”

BROWNER, EPA ADMINISTRATOR,

Petitioners,

Vv.

AMERICAN TRUCKING ASSOCIATIONS, INC. et al.,

Respondents.

On Writ of Certiorari to the

United States Court of Appeals for the

District of Columbia Circuit

BRIEF OF AMICUS CURIAE MERCATUS CENTER

IN SUPPORT OF RESPONDENT

ERNEST GELLHORN

Counsel of Record

ANN G. WEYMOUTH

Suite 100

2907 Normanstone Lane, N.W.

: _ Washington, D.C. 20008-2725

September | 1, 2000 (202) 319-7104

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TABLE OF CONTENTS

TERE GP RAT TURIIIE UTED cecsccseccssscsvsscesnsccennensesseseges

INTEREST OF AMICUS CURIAE. .........ccccccosccrssecesecees

INTRODUCTION AND SUMMARY OF ARGU-

FRATEIEEIICE cxcsesncssnsecessnsnnsssnnenenennsmnennauasqemansmusnerenmans

I. REQUIRING EPA TO IDENTIFY LIMITING

CRITERIA IN ITS AUTHORITY UNDER THE

CLEAN AIR ACT IS CONSISTENT WITH

THE NONDELEGATION DOCTRINE AND

ESTABLISHED PRECEDENTS ..............:00000

A. The Nondelegation Doctrine’s Requirement

That Agency Authority Be Confined By

Some “Intelligible Principle” Is Applied

FOI cncecnnicermmmimnmmmansiin

1. The Nondelegation Doctrine Is Applied

Indirectly To Narrow Interpretations Of

Rae CAE cesses

2. The Nondelegation Doctrine Is Applied

Indirectly Through The “Clear State-

TROT” ROGUITSTRCIE .....ccccccccccecoscccsecsecsess

B. As Interpreted By EPA, Section 109 Of The

Clean Air Act Would Allow EPA To Set

NAAQS Without Reference To Any “De-

CUTNIRD CORTRRIIIE cccccccscccscsncssecessessennentneene

C. Remanding The Matter To EPA To Identify

The Criteria For Determining The Level Of

Nonthreshold Pollutants Is Required By

GRR censccntmnmsininniinmmneein

10

11

iil

TABLE OF CONTENTS—Continued

Il. REVIEW OF LEGISLATIVE RULES UNDER

THE ADMINISTRATIVE PROCEDURE ACT

IS NO SUBSTITUTE FOR THE NONDELE-

Se Se PENEE TED cossccesnscvvcesovecnnsncvecssecssouess

Ill. EPA DID NOT RECOGNIZE ANY LIMITA-

TIONS ON ITS DISCRETION TO SET

NAAQS FOR OZONE AND PARTICULATE

Page

15

16

19

TABLE OF AUTHORITIES

Cases: Page

A.L.A. Schechter Poultry Corp. v. United States,

Se es Re GO Pecrcenescsenenssensnescensmnesemensemens 3, 6,7

Amalgamated Meat Cutters & Butcher Workmen of

N.A, v. Connally, 337 F. Supp. 737 (D.D.C.

Eee EOE 9,17

American Power & Light Co. v. SEC, 329 U.S. 90

aE 5,9

Ashwander v. TVA, 297 U.S. 288 (1936)...........00. 6

AT&T Corp. v. lowa Utilities Bd., 525 U.S. 336

Ett atelinittnitesinncarssuaienenpsmnsnsmetesenmnimspemonmengssnael 8,9, 14

Buttfield v. Stranahan, 192 U.S. 470 (1904).......... 5

Carter v. Carter Coal Co., 298 U.S. 238 (1936)... 3

Central Forwarding, Inc. v. ICC, 698 F.2d 1266

SET eee eee ctecnesennnensnsnenssnseventesennnenensncesseeneses 13

Chevron U.S.A. Inc. v. NRDC, 467 U.S. 837

ee ene 14, 15

Cliffdale Assocs., \03 F.T.C. 110 (1984)............... 7

Clinton v. City of New York, 524 U.S. 417

ir av el cedesnseestsonnteensnennnnevenenemapenasencsnsnenepentamnenenees 5

Dickinson v. Zurko, 527 U.S. 150 (1999) .............. 17

FDA v. Brown & Williamson Co., 120 S.Ct. 1291

RT nr 5

Greene v. McElroy, 360 U.S. 474 (1959) ............4 1]

Haig v. Agee, 453 U.S. 280 (1981) oo... eceeeeeees 11

Hoctor v. USDA, 82 F.2d 165 (7th Cir. 1996) ....... 14

Industrial Union Dep't v. American Petroleum

Inst., 448 U.S. 607 (1980)...........:cccccceessereeeeeeees 8

INS v. Cardoza-Fonseca, 480 U.S. 421 (1987) ..... 9

J.W. Hampton, Jr. & Co. v. United States, 276 U.S.

Be ee ccerensnsnsenenmnemasnscenmnemnamnsensennssemmannane 5

Jones v. United States, 120 S.Ct. 1904 (2000)....... 5

Kent v. Dulles, 357 U.S. 116 (1958) ......ccccccceeeeees 3, 10

iv

TABLE OF AUTHORITIES—Continued

Page

Lead Industries Ass'n, Inc. v. EPA, 647 F.2d 1130

(D.C. Cir.), cert. denied, 449 U.S. 1042

eee ierniereneenensanntaseaninaaiantanetiiciieiisicaaidinniilaiiaaaitaiiag |

Marks v. United States, 430 U.S. 188 (1977) ........ 8

MCI Telecommunications Corp. v. AT&T, 512 U.S.

ee iireicineticnnciinhaiiincitiaiatiaaliaatadiiditaitaaiah italia )

Mistretta v. United States, 488 U.S. 361 (1989)... 5

Motor Vehicle Mfrs. Ass'n v. State Farm Mutual

Automobile Ins. Co., 463 U.S. 29 (1983)........... 16

National Cable Television Ass'n, Inc. v. United

PU ones 7

Panama Refining Co. v. Ryan, 293 U.S. 388

eee tacinsencnetieitinsienianesenuaiiaaitaliiaaiaiaiiaiaitinialaiiaiiditai 3

Rust v. Sullivan, 500 U.S. 173 (1991)... eee 11, 15

Touby v. United States, 500 U.S. 160 (1991)......... 8,9, 12

United States v. X-Citement Video, Inc., 513 U.S.

ee rcieritestcinrrenstanteeasibinehietiehiataicaritciiainitiniieiaati 5

Yakus v. United States, 321 U.S. 414 (1944)......... 17

Zemel v. Rusk, 381 U.S. 1 (1965) ...........cccceeeeeeeeees 7

Statutes and Regulations:

oF eens 0) CU nnannirecninensniinnsennieenniiiniiaimensite 15, 16

Ba Celie Ci i ee rccncnrensssssementansomnimenapnieneenenetes 7

Se ce 0 ee cnncsnennneninetecsntnminnmeninens |

SS Dies © Pee icannennmnicsnnementemnnn l

62 Fed. Reg. 38,652 (July 18, 1997) .........cccceesees passim

62 Fed. Reg. 38,856 (July 18, 1997) 00... eee passim

Miscellaneous:

CASAC Letter to Carol Browner re: Ozone (No-

vember 1995) in Ozone JA 238 ........cccccceeceeeeeee 18

Vv

TABLE OF AUTHORITIES—Continued

Page

FTC, Commission Statement of Policy on the

Scope of Consumer Unfairness Jurisdiction, 4

Trade Reg. Rep. (CCH) $13,203 (Dec. 17,

_ 7

FTC, Policy Statement on Deception, 4 Trade Reg.

Rep. (CCH) 913,205 (Oct. 14, 1983)... 7

Peter Strauss et al., Cases and Comments on Ad-

ministrative Law (9th ed. 1995) .........cccceceeeeeeeees 5

A. Vermeule, Saving Constructions, 85 Geo. L.J.

| ee 6

INTEREST OF AMICUS CURIAE

The Mercatus Center at George Mason University is a non-

profit research and educational institution, as defined by the

Code of the Internal Revenue Service, 26 U.S.C. § 501(c)(3).'

Its Regulatory Studies Program (RSP) is dedicated to advancing

knowledge of administrative regulations and their effect on so-

ciety. Through its Public Interest Comment Project, RSP sub-

mits independent analyses of proposed rules in agency rulemak-

ing proceedings. It filed two such analyses with EPA on the

proposed National Ambient Air Quality Standards for ozone and

particulate matter during the comment period. Those comments

identified the absence of any principled standards in EPA’s se-

lection of the levels of permissible ozone and particulate matter.

INTRODUCTION AND SUMMARY OF ARGUMENT

The principal issue in this case is whether the Environmental

Protection Agency's (EPA) interpretation of Section 109 of the

Clean Air Act (CAA), 42 U.S.C. § 7409, is consistent with the

constitutional doctrine that congressional delegations of law-

making power must state an “intelligible principle” confining

agency discretion within cognizable grounds.” The CAA was

interpreted by both EPA and the court below, pursuant to Lead

Industries Ass'n, Inc. v. EPA, 647 F.2d 1130 (D.C. Cir.), cert.

' The statements in this brief do not represent an official position of

George Mason University. The parties’ written consents to the filing of this

brief have been filed with the Clerk of Court. Pursuant to Rule 37.6, amicus

curiae states that no counsel for a party authored this brief in whole or in

part, and no persons other than the amicus curiae, its members, or its coun-

sel, have made a monetary contribution to the preparation or submission of

this brief. Counsel acknowledge the contributions of Wendy L. Gramm, Di-

rector, and Susan E. Dudley, Senior Research Fellow, at the Mercatus Center,

to the writing of this brief.

* We do not address either the “ripeness” or the “subpart 2” issues raised

by petitioner.

2

denied, 449 U.S. 1042 (1980)(Lead Industries), as prohibiting

consideration of “any factor other than ‘health effects relating

to pollutants in the air’” in setting National Ambient Air Quality

Standards (NAAQS) for ozone or particulate matter (PM). Pet.

Cert. App. at 15a.

As aconsequence, EPA’s rules setting permissible ozone and

particulate matter levels did not openly examine cost, risk or

other adverse effects of the standards despite a clear correlation

between such implementation “costs” and overall health effects

on the public. See generally Mercatus Amicus Br. (99-1426) at

1 1-23; General Electric Company Amicus Br. (99-1426) at 4-18.

Nor did the ozone and PM rules identify a specific standard or

measurable factor under the CAA as the basis for the selected

NAAQS levels. Instead, EPA asserted that Congress delegated

to it unlimited “discretion to make the ‘policy judgment’” of

where the standard should be set. Pet. Cert. App. at 12a; see 62

Fed. Reg. 38,856, 38,869 (July 18, 1997); 62 Fed. Reg. 38,652,

38,691 (July 18, 1997). Under this framework, however, there

is no principle or “determinate criterion” that EPA must satisfy

in demonstrating that the levels it selected were authorized.

Thus, the court of appeals found that EPA’s interpretation of

CAA §109, if not corrected, would raise serious questions under

the nondelegation doctrine.

EPA argues that the decision of the court below, which states

that EPA should interpret the CAA so as to avoid violation of

the nondelegation doctrine, is “novel,” “unprecedented,” “con-

trary to the purpose of the delegation doctrine” and without any

“basis in this Court’s precedents.” Pet. Br. at 18, 26 & 28; see

also Pet. Cert. Br. at 9 (court of appeals’ decision a “radical de-

parture” from 65 years of consistent nonapplication of the non-

delegation doctrine). In fact, however, it is EPA that has radi-

cally misread both this Court’s application of the nondelegation

principle and the lower court’s adherence to clear precedent.

All that the lower court held is that EPA’s interpretations of the

3

CAA cannot disregard the nondelegation doctrine in reading

§ 109,

EPA acknowledges, as it must, that the nondelegation doc-

trine continues to be a viable principle underlying basic consti-

tutional jurisprudence governing congressional grants of author-

ity to administrative agencies. It cannot deny that both this

Court and lower courts have adopted narrow readings of agency

organic statutes where necessary to avoid constitutional invalid-

ity under the nondelegation doctrine. Constitutional principles

are frequently preserved by indirect means, see, e.g., Kent v.

Dulles, 357 U.S. 116 (1958), but this less confrontational ap-

proach does not alter the importance or effect of the constitu-

tional requirement.

The limited application of the nondelegation doctrine to read

statutes narrowly is a reflection of the Court’s prudent use of the

rule.’ However, this restrained use does not contradict the doc-

trine’s importance as a foundational principle governing agency

authority or its continuing validity.

Thus, despite EPA’s hyperbole, the only distinctive aspect of

the ruling below is not that the court of appeals construed the

agency's reading of the CAA as raising “serious constitutional

issues,” but rather that the court did not interpret the CAA for -

itself. The lower court recognized that, as interpreted by EPA,

the CAA did not spell out the requisite standards by which EPA

was to set appropriate NAAQS levels. Thus, it remanded the

matter to EPA for it to decide in the first instance whether an-

other permissible interpretation was possible and reasonable.

Pet. Cert. App. at 14a, 57a-58a. That deferential approach is

* This Court has applied the “strong form” of the nondelegation doctrine

to overturn legislation on only three occasions: Panama Refining Co. v.

Ryan, 293 U.S. 388 (1935) (Panama Refining), A.L.A. Schechter Poultry

Corp. v. United States, 295 U.S. 495 (1935) (Schechter Poultry), Carter v.

Carter Coal Co., 298 U.S. 238, 310-12 (1936).

4

commanded by Chevron where, as here, the statute is “silent or

ambiguous” on the “precise question at issue,” and it allows “the

agency an opportunity to extract a determinate standard on its

own.” Pet. Cert. App. at I4a.

ARGUMENT

I. REQUIRING EPA TO IDENTIFY LIMITING

CRITERIA IN ITS AUTHORITY UNDER THE

CLEAN AIR ACT IS CONSISTENT WITH THE

NONDELEGATION DOCTRINE AND ESTAB-

LISHED PRECEDENTS

Contrary to EPA’s overheated rhetoric, the court below did

not invalidate the CAA or interfere with the agency’s broad au-

thority to regulate air quality. Nor did the court expand or alter

the traditional use of the nondelegation doctrine when it rejected

EPA’s interpretation of the CAA as authorizing EPA to select

any level based simply on its “policy judgment.” 62 Fed. Reg.

at 38,869 (ozone rule); id. at 38,691 (PM rule). Rather, the

lower court held that EPA must first determine whether the stat-

ute can reasonably be read more narrowly before adopting such

an extreme interpretation of § 109. The lower court thought

such an interpretation was possible—e.g., by development,

among other possibilities, of a “generic unit of harm.” Pet. Cert.

App. at 16a. As we and others have demonstrated, the statutory

language does not prohibit EPA’s reliance on sound decision

making standards such as health-health, wealth-health and cost-

benefit measures. See, e.g., Mercatus Amicus Br. (99-1426) at

12-22.

This ruling by the court of appeals is remarkable only for its

ordinariness in applying the nondelegation doctrine in a limited

sphere. It holds that it is the agency’s responsibility to interpret

the statute in a manner that is consistent with the principles of

the nondelegation rule and to avoid unchanneled delegations of

discretion to the agency. This ruling is buttressed by the undis-

puted principle of statutory construction that statutes should be

5

read so as to avoid constitutional confrontations. See, e.g.,

Jones v. United States, 120 S.Ct. 1904, 1911 (2000); United

States y. X-Citement Video, Inc., 513 U.S. 64, 78 (1994)."

A. The Nondelegation Doctrine’s Requirement That

Agency Authority Be Confined By Some “Intelli-

gible Principle” Is Applied Pragmatically

EPA does not dispute the core requirement of the nondelega-

tion doctrine that legislative authority delegated by Congress to

the executive must state “intelligible principles,” /.W. Hampton,

Jr. & Co. v. United States, 276 U.S. 394, 409 (1928), by which

the agency is given a “primary standard” to guide its action.

Buttfield v. Stranahan, 192 U.S. 470, 496 (1904); see Clinton v.

City of New York, 524 U.S. 417, 443-44 (1998). It is satisfied

where “Congress clearly delineates the general policy, the public

agency which is to apply it, and the boundaries of this delegated

authority.” Mistretta v. United States, 488 U.S. 361, 372-73

(1989) (quoting American Power & Light Co. v. SEC, 329 U.S.

90, 105 (1946)).

Despite these strong statements, the nondelegation doctrine

has not been applied directly to invalidate enabling legislation

since 1936. Seen. 3 supra. That does not mean that the doc-

trine has been abandoned. It is still a principled underpinning of

basic separation of powers jurisprudence. In point of fact, its

presence and indirect application have had an “important and

continuing ‘shadow’ impact” on the reading and review of

legislative delegations of authority to administrative agencies.

Peter Strauss et al., Cases and Comments on Administrative Law

* Such applications also are consistent with probable congressional intent

because it is unlikely that the legislature intended to grant such unbridled

power to a single administrator whose decisions are subject to deferential

review. See FDA v. Brown & Williamson Co., 120 S.Ct. 1291, 1314 (2000)

(citing Stephen G. Breyer, Judicial Review of Questions of Law and Policy,

38 Admin. L. Rev. 363, 370 (1986)).

6

92 (9th ed. 1995). This indirect application usually results in a

determination either that the agency discretion is narrower than

claimed or that the claimed authority was not delegated because

there was no clear statement of legislative intent to do so. Both

approaches use the doctrine as an interpretive tool in order to

avoid addressing constitutional objections. See Ashwander v.

TVA, 297 U.S. 288, 347 (1936) (Brandeis, J., concurring); A.

Vermeule, Saving Constructions, 85 Geo. L.J. 1945, 1948-49

(1997).

1. The Nondelegation Doctrine Is Applied Indi-

rectly To Narrow Interpretations Of Agency

Authority

The seeds of this more limited, indirect application of the

nondelegation doctrine are contained in its most celebrated case,

Schechter Poultry. There, this Court contrasted the uncanalized

(see 295 U.S. at 551, Cardozo, J., concurring) delegation of au-

thority given the President to control wages and prices under the

National Industrial Recovery Act with the broad authority given

to the Interstate Commerce Commission and the Federal Radio

Commission to regulate in the public interest, convenience or

necessity and to the Federal Trade Commission to prohibit un-

fair or deceptive trade practices. /d. at 538-40, 552. In the case

of the FRC and FTC, the delegations were upheld because the

agencies’ authority was restricted by specialized procedures,

common law antecedents establishing basic substantive princi-

> EPA’s argument that the lower court “incorrectly” applied the nondele-

gation doctrine to rule that the CAA § 109, as interpreted, was invalid, Pet.

Br. at 18, misreads the court’s holding. The court of appeals did not hold

that the CAA was unconstitutional or that it should be so interpreted. In-

stead, what it said is that there appeared to be other interpretations of the

CAA available which would incorporate the required “intelligible principle”

and that the agency was to determine whether such a ruling was consistent

with its view of the Act. Pet. Cert. App. at 14a, 16a-17a.

7

ples, and limited coverage to specific industries or business

practices. /d. at 539-40.°

The primary applications of the nondelegation doctrine by

this Court interpreting agency authority narrowly in order to

avoid finding an unconstitutional delegation of power are:

¢ Zemel v. Rusk, 381 U.S. | (1965): upholding validity of

area restrictions on passports after narrowing the Secretary

of State’s discretion by determining that the enabling act

“authorizes only those passport refusals and restrictions

‘which it could fairly be argued were adopted by Congress

in light of prior administrative practice.’ [quoting Kent v.

Dulles, supra) So limited, the Act does not constitute an

invalid delegation.” /d. at 18.

¢ National Cable Television Ass'n, Inc. v. United States, 415

U.S. 336 (1974): reviewing agency authority to assess op-

erating cost fees against regulated parties at a level reflect-

ing “direct and indirect cost[s] to the Government, value to

the recipient, [and] public policy.” /d. at 338. The Court

acknowledged that “if [the public policy terms were] read

literally” the statute would permit the FCC to act in the

“manner of an Appropriations Committee of the House.”

Id. at 341. Thus, it upheld the delegation only after

“read[ing] the Act narrowly to avoid [these] constitutional

problems.” /d. at 342; see id. (quoting from Schechter

Poultry that “Congress is not permitted to abdicate or to

transfer to others the essential legislative functions with

which it is thus vested’’).

* Fulfilling the Court's expectations, over time, the meaning of this ena-

bling authority has been narrowed further as the problems they address were

more fully understood. See, e.g., FTC, Policy Statement on Deception, 4

Trade Reg. Rep. (CCH) 913,205 at 20,911-12 (Oct. 14, 1983) (stating ele-

ments applicable to deception cases); Cliffdale Assocs., 103 F.T.C. 110

(1984) (same); FTC Act Amendments of 1994, 108 Stat. 1691, 95 (codified

at 15 U.S.C. §§ 41-57c) (definition of “unfair acts and practices” borrowed

from FTC, Commission Statement of Policy on the Scope of Consumer Un-

fairness Jurisdiction, 4 Trade Reg. Rep. (CCH) 413,203 (Dec. 17, 1980)).

8

¢ Industrial Union Dep't v. American Petroleum Inst., 448

U.S. 607 (1980) (Benzene): overturning interpretation of

the OSH Act and holding that regulation of airborne car-

cinogens at the lowest level feasible requires a showing of

“significant risk.” 415 U.S. at 614-15. The plurality justi-

fied this narrower interpretation as follows:

[The Government’s interpretation of] the statute

would make such a “sweeping delegation of legisla-

tive power” that it might be unconstitutional under the

Court’s reasoning in [Schechter Poultry and Panama

Refining|. A construction of the statute that avoids

this kind of open-ended grant should certainly be fa-

vored. (/d. at 646)’

¢ Touby vy. United States, 500 U.S. 160 (1991): upholding

Attorney General’s discretion to temporarily add or remove

psychoactive drugs as prohibited or controlled substances

only after the Government conceded limits on that discre-

tion by requiring further testing before additions could be

made to the most harmful category and by acknowledging

that judicial review would be available as a defense to a

criminal prosecution.

¢ AT&T Corp. v. lowa Utilities Bd., 525 U.S. 336 (1999)

(lowa Utilities): reversing FCC’s reading of its statutory

” Then-Justice Rehnquist concurred expressly relying on a direct applica-

tion of the nondelegation doctrine to invalidate the first sentence of § 6(b)(5)

of the Act. /d. at 672. The plurality’s narrower application of the doctrine is

the ruling of the case. See Marks v. United States, 430 U.S. 188, 193 (1977)

(“When a fragmented Court decides a case and no single rationale explaining

the result enjoys the assent of five Justices, ‘the holding of the Court may be

viewed as that position taken by those Members who concurred in the judg-

ments on the narrowest grounds,’” quoting Gregg v. Georgia, 428 U.S. 153,

169 n.15 (1976)). Thus, contrary to Judge Silberman’s dissent from the de-

nial of rehearing en banc, Pet. Cert. App. at 93a, the narrower holding of the

Benzene plurality is a binding ruling and not a “makeweight| | tossed into the

analysis, in light of Justice Rehnquist’s concurrence, to help justify the re-

sult.” /d.

9

authority under the Telecommunications Act of 1996, 110

Stat. 56, codified as amended 47 U.S.C. § 251, of the con-

ditions on which local exchanges were to be open to com-

petition. The agency’s interpretation of the statutory terms

(“necessary” and “impair’’) was unreasonable under Chev-

ron step two because the FCC had failed to supply any

“limiting standard, rationally related to the goals of the

Act,” 525 U.S. at 388, and because it permitted private par-

ties rather than the FCC to set the content of the law. /d. at

389. Although the Court did not cite any nondelegation

Cases as support, these rationales are the twin touchstones

of Schechter Poultry (see pp. 6-7, supra).”

One influential lower court case, Amalgamated Meat Cutters

& Butcher Workmen of N.A. v. Connally, 337 F. Supp. 737

(D.D.C. 1971) (Leventhal, J., for 3-judge court) (Amalgamated

Meat Cutters), also is noteworthy for identifying restrictions

within a statute whose broad delegation of authority otherwise

would have been invalid. There the court upheld non-wartime

wage and price controls only after finding that the administra-

tive authority was confined by substantive price control prece-

dents and after incorporating other process restrictions. /d. at

758 (administrative “standards once developed limit the latitude

of subsequent executive action”). The court further noted that

“there is an on-going requirement of intelligible administrative

policy that is corollary to and implementing of the legislature’s

ultimate standard and objective.” /d. at 759. See aiso American

* Other decisions by this Court similarly have read statutes narrowly in

order to avoid finding that an agency’s authority includes the power to

change its mandate—albeit without specifically relying upon the nondelega-

tion doctrine. See MCI Telecommunications Corp. v. AT&T, 512 U.S. 218,

225 (1994) (reading word “modify” narrowly to reject FCC reading of tariff

filing requirements as giving it sole discretion “to make even basic and fun-

damental changes in the scheme created” by Congress); INS v. Cardoza-

Fonseca, 480 U.S. 421 (1987).

10

Power & Light Co. v. SEC, 329 U.S. at 104 (upholding provt-

sion in the Public Utility Holding Company Act, 15 U.S.C.

§ 79k(b)(2), that prohibited “unduly complicated corporate

structures and inequitable distributions of voting power against

a nondelegation doctrine attack because, looking at the “purpose

of the Act, its factual background and the statutory context In

which they appear,” the Commission was given “a veritable

code of rules . . . to follow”).

2. The Nondelegation Doctrine Is Applied Indi-

rectly Through The “Clear Statement” Re-

quirement

Another, more nuanced application of the indirect nondelega-

tion doctrine is the “clear statement” rule which provides that

enabling acts should be construed narrowly so as to avoid sub-

stantial constitutional issues absent an express congressional

mandate requiring the challenged rule or practice. The clear

statement rule, like the nondelegation doctrine, is based on the

principle that Congress, not just the agency, must expressly con-

sider and speak clearly to the constitutional issue. The primary

cases, in addition to the case under review herein, adopting this

form of the indirect nondelegation rule, are:

© Kent v. Dulles, 357 U.S. 116 (1958): interpreting Secretary

of State’s passport authority narrowly to deny him the

power to refuse a passport on grounds of political belief.

The Court noted that it would “not readily infer that Con-

gress gave the Secretary of State unbridled discretion . . . .

Id. at 129. Citing Youngstown Sheet & Tube and Panama

Refining, the Court ruled that delegated powers trenching

on liberty interests—here the “right of exit’— must be

pursuant to the lawmaking functions of the Congress and

“must be adequate to pass scrutiny by the accepted tests.

Id. Thus, it “construe[d] narrowly all delegated powers

that curtail or dilute them.” /d. However, where the ad-

ministrative policy was “‘sufficiently substantial and con-

sistent’ to compel the conclusion that Congress has

[implicitly] approved it,” Haig v. Agee, 453 U.S. 280, 306

(1981) (citing Zemel v. Rusk, supra), the delegation is re-

viewed in light of those restrictions.

* Greene v. McElroy, 360 U.S. 474 (1959): refusing to find

an implicit congressional delegation of authority to the De-

partment of Defense to administer a constitutionally ques-

tionable security clearance program. The Court reasoned

that “[w]ithout explicit action by lawmakers, decisions of

great constitutional import and effect” should not be “rele-

gated . . . to administrators who, under our system of gov-

ernment, are not endowed with authority to decide” large

constitutional questions. /d. at 507.

* Rust v. Sullivan, 500 U.S. 173, 191 (1991): holding that

abortion counseling regulations did “not raise the sort of

‘grave and doubtful constitutional questions’ that would

lead us to assume that Congress did not intend to authorize

their issuance. Therefore, we need not invalidate the regu-

lations in order to save the statute from unconstitutional-

ity.”” (citations omitted)

This summary of decisions considering the indirect (“weak

form”) of the nondelegation doctrine shows that this Court has

not hesitated to apply it to rein in administrative discretion

where the agency has asserted that its authority gives it un-

bounded power to regulate. As shown further below, we believe

that EPA’s reading of § 109 of the CAA is just such an errone-

Ous interpretation. It therefore should be curtailed as the court

of appeals demonstrated.

B. As Interpreted By EPA, Section 109 Of The

Clean Air Act Would Allow EPA To Set NAAQS

Witl out Reference To Any “Determinate Crite-

rion”

EPA advocates a simplistic view that the nondelegation doc-

trine is limited to the “strong form” cases which, they point out,

have not been applied to invalidate any delegation since 1936.

But its brief fails to consider, much less apply, those cases

12

which read enabling statutes narrowly or require a “clear state-

ment” in order to avoid a direct confrontation with the nondele-

gation rule. Thus, EPA’s argument fails to consider this Court's

jurisprudence indirectly applying the nondelegation doctrine as

set forth in Zemel, National Cable, Benzene, lowa Utilities,

MCI, Amalgamated Meat Cutters, and Kent.” Further, its ipse

dixit that CAA § 109 “plainly satisfies the nondelegation doc-

trine,” Pet. Br. at 26 n.20, is no substitute for analysis. Nor are

other provisions of the CAA, Congress’ frequent amendment of

the Act, or the applicability of internal APA-type procedures

and external judicial review, id. at 22-26, an adequate alterna-

tive. These provisions do not give EPA guidance on the appli-

cable criteria for setting the appropriate NAAQS levels.

Nowhere in its 50-page “analysis” does EPA demonstrate

how any of the “directives” in § 109 of the CAA constrict

EPA's discretion in setting ozone or particulate matter levels—

i.e., ozone at .08 ppm rather than .07 or .09. For example, EPA

asserts that the “intelligible principle” standard is satisfied (in

part) by the statutory requirement in § 109(b)(1)(A)-(B) that “a

pollutant must ‘reasonably be anticipated to endanger public

health or welfare’ and be emitted from ‘numerous or diverse

* * * sources’” in order to be regulated. Pet. Br. at 23. While

EPA correctly quotes the statutory words, it does not show how

that language confines EPA’s discretion on setting the level for

nonthreshold pollutants. Because both ozone and particulate

matter can cause adverse health effects at any level above zero,

* EPA attempts to rely on Touby (discussed p. 8 supra) as supporting its

argument that the CAA puts “‘multiple specific restrictions” on EPA's dis-

cretion. Pet. Br. at 25 & n.19. But that argument was upheld in Touby only

after the Government greatly narrowed its interpretation of the reach of the

Controlled Substances Act and conceded that further testing was required

before drugs could be added to the list of controlled substances by the Attor-

ney General and that a defendant charged with a violation could always chal-

lenge the classification despite the Act's very restricted review provisions.

See Touby, 500 U.S. at 169-70 (Marshall, J., concurring).

13

see Mercatus Center Amicus Br. (99-1426) at 6, § 109 identifies

only categories of pollutants that can be regulated, not the range

or basis for selecting any specific NAAQS level.

In addition, the procedural and judicial review devices set

forth in the CAA do not provide further guidance. If such “pro-

cedural and review restrictions” were sufficient, a statute that

authorizes EPA to “go forth and do good” without regard to im-

plementation costs would be sufficient to satisfy the nondelega-

tion doctrine. See Central Forwarding, Inc. v. ICC, 698 F.2d

1266, 1284 (Sth Cir. 1983) (rejecting expansive interpretation of

the National Transportation Policy, “which paraphrased says

little more than ‘go forth and do good,’ as a congressional grant

of rulemaking authority might well amount to an unconstitu-

tional delegation of legislative authority”).

EPA’s argument fails to identify any “determinate criterion”

elsewhere in the statute, legislative history or other rules which

EPA must weigh in setting NAAQS levels. Costs are ruled out

because of Lead Industries. EPA has not identified health-

health, wealth-health or any other decision framework from

which such guidance could be obtained. See Mercatus Center

Amicus Br. (99-1426). Therefore, the CAA must be reinter-

preted consistent with the nondelegation doctrine if the ambient

air program is to be extended to aew ozone levels or particulate

matter.

C. Remanding The Matter To EPA To Identify The

Criteria For Determining The Level Of

Nonthreshold Pollutants Is Required By Chevron

There is one element in the lower court’s application of the

nondelegation doctrine that could be said to be “novel” or “un-

precedented.” Its ruling that EPA rather than the reviewing

court should, in the first instance, determine the meaning em-

bedded in § 109 regarding the criterion(ia) that governs the es-

tablishment of NAAQS levels is distinctive. Pet. Cert. App. at

4a (court ordered “remand [of] the cases for EPA to develop a

14

construction of the act that satisfies this constitutional [i.e., non-

delegation] requirement”). In all prior cases applying the indi-

rect nondelegation doctrine, see pp. 7-11 supra, the court rather

than the agency determined the meaning of the statute.'” On the

other hand, the new direction provided by the lower court here,

of remanding the issue to the agency, is simply an adaptation of

the indirect nondelegation doctrine to current standards of judi-

cial review.

Under Chevron U.S.A. Inc. v. NRDC, 467 U.S. 837, 842-44

(1984), reviewing courts are to defer to reasonable agency inter-

pretations of statutes that do not clearly reveal Congress’ intent

on the precise issue in question. Just as EPA was allowed in

Chevron to determine whether Congress meant that EPA’s regu-

lation of “stationary sources” of pollution allowed it the choice

between measuring emissions solely by each individual source

or on a plant-wide basis, here it is for EPA to interpret the

meaning of § 109 and to identify the determinate criteria consis-

tent with Congress’ intent.

The identification of the numerical equivalent or level nec-

essary to “protect public health” with an “adequate margin of

safety” (per CAA § 109) for nonthreshold pollutants is essen-

tially a legislative task consistent with EPA’s authority to issue

NAAQS as legislative rules. Thus, it is particularly appropriate

that the agency be directed to fill in the meaning of this statutory

standard through legislative rulemaking. See also Hoctor v.

lowa Utilities might be said to be an exception because there the Court

found that the 1996 Telecommunications Act was ambiguous and thus under

Chevron step two was to be interpreted by the FCC. Even then, however, the

Court substituted its reading for the agency's because the agency's reading

was not “reasonable.” 525 U.S. at 392. Further, the Court not only held that

the FCC had failed to identify any restrictive standard, but also that private

parties, rather than the FCC, were to decide the critical policy issues. On the

other hand, the Court vacated the FCC rule because it was based on an erro-

neous interpretation, id. at 391-92, and to allow it to identify the limiting

standard in a manner consistent with the Court's reading of the Act.

15

USDA, 82 F.2d 165 (7th Cir. 1996) (Posner, C.J.) (numerical

requirements involve legislative judgments which agencies are

better positioned to make). Under the lower court’s ruling,

EPA’s interpretation will be upheld (if reasonable) if it provides

a standard which it applied when determining the particular

NAAQS levels.

Enforcement of the nondelegation doctrine, to require that

NAAQS levels be consistent with Congress’ stated purpose of

protecting the public health with an adequate margin of safety,

is consistent with the policy bases of Chevron. Not only is EPA

a quasi-legislative body held accountable by the President’s au-

thority over it, but also EPA is the body best positioned to de-

termine the range of policy choices Congress intended when it

drafted § 109. 467 U.S. at 865-66. Nor should there be any

concern that under these circumstances the agency’s interpreta-

tion is “carved in stone.” To the contrary, it can be modified as

necessary to meet changing circumstances. All that the court of

appeals did was eliminate one of those choices, namely, EPA’s

interpretation that it could select particular NAAQS levels sim-

ply based on its “policy judgment” without regard to any deter-

minate criterion. But once it identifies the criteria it will apply

in selecting the NAAQS levels, those criteria can still be modi-

fied as long as the changed interpretation is plausible and is jus-

tified by cogent reasons. See Rust v. Sullivan, 500 U.S. at 186-

87.

Il. REVIEW OF LEGISLATIVE RULES UNDER THE

ADMINISTRATIVE PROCEDURE ACT IS NO

SUBSTITUTE FOR THE NONDELEGATION

DOCTRINE

Review under the Administrative Procedure Act’s “arbitrary

and capricious” test, 5 U.S.C. § 706(2)(A), is not a substitute,

as Judge Silberman contends, for application of the nondelega-

tion doctrine to control standardless discretion. Pet. Cert. App.

at 95a-96a. The nondelegation doctrine, as applied by the court

16

of appeals, requires that EPA determine Congress’ intent when

it prescribes NAAQS to protect public health with an adequate

margin of safety. As long as EPA’s interpretation of the Con-

gressional intent restricts administrative discretion to under-

standable bounds, it will not be disturbed by the nondelegation

doctrine. And as long as that interpretation by EPA is reason-

able—i.e., a permissible and reasonable interpretation of

§ 109— it will be upheld under Chevron.

On the other hand, application of the arbitrary and capricious

test under § 706(2)(A) of the APA requires that the particular

NAAQS levels selected by EPA must reflect a reasoned deci-

sion. That is, the facts must be supported by sufficient evi-

dence, and the inferences drawn from them, as well as the policy

rationale and ultimate conclusions, must be adequately con-

nected, explained and justified. Motor Vehicle Mfrs. Ass'n v.

State Farm Mutual Automobile Ins. Co., 463 U.S. 29, 43 (1983).

The nondelegation doctrine looks to the interpretation given

the Congressional statute and asks whether the authorized ad-

ministrative action is confined by intelligible standards. By con-

trast, arbitrary and capricious review does not look at the statu-

tory authority and its definiteness. Rather, it examines the ad-

ministrative action itself and asks whether the rule is the product

of reasoned decisionmaking. Defining the authority and discre-

tion granted by Congress is not the same thing as deciding

whether agency policy choices are adequately supported by the

record and reasons. The two requirements complement each

other; one is not a substitute for the other.

ill. EPA DID NOT RECOGNIZE ANY LIMITATIONS

ON ITS DISCRETION TO SET NAAQS FOR

OZONE AND PARTICULATE MATTER

EPA argues, in the alternative, that its choices were “chan-

nel{ed]” and “narrow[er] than the [lower] court acknowledged.”

Pet. Br. at 31-34. It contends that its discretion was limited

both by “upper” and “lower” bounds, id. at 31, by “the latest

17

scientific knowledge on the health effects” of PM and ozone,

and by the requirements of reasoned decision making (i.e., “that

the agency consider relevant factors, apply them to relevant

facts, respond to criticisms and adequately explain its ration-

ale”). /d. at 32,

But process, while important, is no substitute for substantive

standards. Indeed, without some standard, judicial review is

unlikely to be effective in controlling arbitrary action. Amalga-

mated Meat Cutters, 337 F, Supp. at 759. Thus, EPA’s process-

based argument is meaningless. It would uphold virtually any

regulatory scheme subject to the procedural requirements and

traditional “arbitrary and capricious” test under the Administra-

tive Procedure Act, regardless of the absence of any limits on

the agency’s substantive authority. Because virtually all agen-

cies are now governed by similar APA requirements, see Dick-

inson v. Zurko, 527 U.S. 150 (1999), this assertion, if accepted,

would nullify the nondelegation doctrine. To be sure, proce-

dural and judicial requirements are important constraints on

agency discretion if the substantive provisions, express or oth-

erwise, include intelligible principles or standards by which the

agency action is measured. See Yakus v. United States, 321

U.S. 414, 437 (1944). However, neither procedural nor judicial

review requirements limit policy choices where no substantive

criteria are identified. EPA’s rulemaking record included moun-

tains of “scientific evidence,” but EPA cannot identify anythin

in the record that supports one NAAQS level over another.’

We thus turn to the first two contentions.

'' In addition, EPA’s brief often claims evidentiary support where none is

there. For example, its reference to a CASAC review as supporting an upper

bound of .08 ppm on ozone (Pet. Br. 33, cross referencing id. at 13-14) is in

error. That review occurred in 1993 unrelated to the rulemaking at issue

here; it does not refer to the CASAC review relied upon as support for the

challenged rule; and it concluded that the ozone standard should not be tight-

ened. Thus, it is disingenuous at best for EPA to rely upon this study as a

basis for a tighter standard.

18

Contrary to EPA’s contentions, its rulemaking statement

never identified either an upper or lower bound for the stan-

dards. (Indeed, the preambles to the final ozone and PM rules

never use such terms.) For example, the citation to PM App.

2145 & 2147 (Pet. Br. at 31) refers only to the “staff's judg-

ment” on consideration of “an annual PM) s standard set below a

level reflecting approximate equivalence with the current annual

NAAQS,” and to their “belie f]” that a level of 12.5 upgm’ is

appropriate because it is “the lowest cutpoint for a possible

threshold.” Neither staff opinion was adopted by the Adminis-

trator and neither was said to be a limitation on her discretion.

Nor is there any support in the rulemaking record that EPA

was confined by the “latest scientific knowledge” on its selec-

tion of the PM and ozone levels. EPA’s statement in the final

PM rule nowhere defines a range for the standard. The cited

pages (Pet. Br. at 32 referencing 62 Fed. Reg. at 38,675-77)

mention only the ranges observed in different studies and con-

cludes without explanation that the level selected (of 15 ppgm’ ’)

is appropriate. EPA’s referenced scientific support for the

ozone rule (Pet. Br. at 32 cross referencing p. 13 citing 62 Fed.

Reg. at 38,863-64) is similarly untrustworthy. EPA cites a 1993

CASAC review of the prior standard to suggest that the existing

.12 ppm one-hour standard is an upper bound. However, even

this limitation provides no guidance as to the level at which the

NAAQS should be set. In any event, this conclusion was not

endorsed by CASAC in its review of the current standard. There

it said only that “there is no ‘bright line’ which distinguishes

any of the proposed standards . . . as being significantly more

protective of public health.” CASAC Letter to Carol Browner

re: Ozone (November 1995) in Ozone JA 238.

No matter how EPA now seeks to dress-up its rulemaking

analysis and assert that its discretion is “narrowly” confined,

Pet. Br. at 31; see id. at 25, in fact it relied solely on the bald

claim that determining the “adequate margin of safety” was a

19

“policy judgment left specifically [by CAA § 109] to the Ad-

ministrator’s judgment.” 62 Fed: Reg. at 38,857; 62 Fed. Reg.

at 38,653.

CONCLUSION

For the foregoing reasons, this Court should affirm the deci-

sion of the court of appeals and remand the matter to EPA for it

to interpret § 109 of the CAA in light of the requirements of the

nondelegation doctrine.

Respectfully submitted,

ERNEST GELLHORN

Counsel of Record

ANN G. WEYMOUTH

Suite 100

2907 Normanstone Lane, N.W.

Washington, D.C. 20008-2725

September 11, 2000 (202) 319-7104