Cross Petition — American Trucking Assns., Inc. v. Browner

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Supreme Court. U waht

FILED

noe wu 21 200

IN THE i CLERK

Supreme Court of the United States —

AMERICAN TRUCKING ASSOCIATIONS, INC., CHAMBER OF

COMMERCE OF THE UNITED STATES, ET AL., *

Cross-Petitioners,

CAROL M. BROWNER, ADMINISTRATOR OF THE

ENVIRONMENTAL PROTECTION AGENCY, ET AL.,

Cross-Respondents.

ON WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

BRIEF FOR CROSS-PETITIONERS

ROBIN S. CONRAD EDWARD W. WARREN

NATIONAL CHAMBER Counsel of Record

LITIGATION CENTER, INC. ROBERT R. GASAWAY

1615 H Street, N.W. JEFFREY B. CLARK

Washington, D.C. 20062 DARYL JOSEFFER

(202) 463-5337 KIRKLAND & ELLIS

Counsel for Cross-Petitioner 655 Fifteenth Street, N.W.

Chamber of Commerce of the Washington, D.C. 20005

United States (202) 879-5000

CHARLES FRIED

1525 Massachusetts Avenue

Cambridge, MA 02138

(617) 495-4636

Counsel for Cross-Petitioners

American Trucking Associations, Inc.

and Chamber of Commerce of the

United States

* Additional Parties and Counsel Listed on Inside Cover

July 21, 2000

AE RTT ONE SO TEES EE A IT OT ECE NT

6h WHER

BETH L. LAW

ROBERT S. DIGGES

ATA LITIGATION CENTER

2200 Mill Road

Alexandria, VA 22314

Counsel for American Trucking

Associations, Inc., Burns Motor

Freight, Inc., Garner Trucking, Inc.,

and Genie Trucking Line, Inc.

Gary H. BAISE

ELIZABETH S. POLINER

BAISE, MILLER & FREER, P.C.

1020 19th Street, N.W.

Suite 400

Washington, D.C. 20036

Counsel for Equipment

Manufacturers Institute

DAVID M. FRIEDLAND

BEVERIDGE & DIAMOND

1350 I Street, N.W.

Suite 700

Washington, D.C. 20005

Counsel for National Small

Business United, The American

Portland Cement Alliance, and The

Glouster Company, inc.

ERIKA Z. JONES

TIMOTHY S. BISHOP

ADAM C. SLOANE

MAYER, BROWN & PLATT

1909 K Street, N.W.

Washington, D.C. 20006

Counsel for American Farm Bureau

Federation

ROBERT R. GASAWAY

KIRKLAND & ELLis

655 Fifteenth Street, N.W.

Suite 1200

Washington, D.C. 20005

Counsel for American Road and

Transportation Builders

Association

JAN S. AMUNDSON

NATIONAL ASSOCIATION OF

MANUFACTURERS

1331 Pennsylvania Avenue, N.W.

Washington, D.C. 20004

Counsel for National Association

of Manufacturers

DIMETRIA G. (JIM) DASKAL

THE DASKAL LAW GROUP

3 Church Circle

Suite 500

Annapolis, MD 21401

Counsel for National Coalition of

Petroleum Retailers

DOUGLAS |. GREENHAUS

NATIONAL AUTOMOBILE

DEALERS ASSOCIATION

8400 Westpark Drive

McLean, VA 22102

Counsel for National Automobile

Dealers Association

JEFFREY L. LEITER

CHET M. THOMPSON

COLLIER, SHANNON, RILL &

SCOTT

3050 K Street, N.W., Suite 400

Washington, D.C. 20007

Counsel for Non-Ferrous

Founders’ Society

(i)

QUESTION PRESENTED

Whether the Clean Air Act requires that the Environmental

. Protection Agency must, in setting nationwide air-quality

standards, ignore all factors other than health effects relating to

pollutants in the air, given that consideration of such factors

would permit both the Agency and reviewing courts to avoid

confronting constitutional nondelegation issues.

(ii)

PARTIES TO THE PROCEEDINGS

Cross-Petitioners are: Americen Trucking Associations,

Inc., Chamber of Commerce of the United States, National

Coalition of Petroleum Rets Jers, Burns Motor Freight, Inc.,

Garner Trucking, Inc., Gem Tinacking Line, Inc., National

Automobile Dealers Association, National Association of

Manufacturers, National Smal) Business United, The American

Portland Cement Alliance, The Glouster Company, Inc., Non-

Ferrous Founders’ Society, Eqywipment Manufacturers Institute,

American Farm Bureau Federation, and American Road and

Transportation Builders Asseciation.

None of these cross-petitioners has any parent

corporations, and no publicly traded company owns 10 percent

or more of any of these cross-petitioners’ stock.

Respondents are: Carol M. Browner, the Administrator of

the Environmental Protection Agency, and the Environmental

Protection Agency.

The following additional entities participated as parties in

the court of appeals: Alliance of Automobile Manufacturers

(formerly American Automobile Manufacturers Association),

American Chemistry Council (formerly Chemical

Manufacturers Association), American Forest and Paper

Association, American Iron and Steel Institute, American Lung

Association, American Petroleum Association, American

Public Power Association, Appalachian Power Company,

Atlantic City Electric Company, Baltimore Gas and Electric

Company, James Bassage, Carolina Power & Light Company,

Centerior Energy Corporation, Central and South West

Services, Inc., Central Hudson Gas & Electric Corporation,

Central Illinois Light Company, Central Illinois Public Service

Company, Central Power & Light Company, ClINergy

Corporation, Citizens for Balanced Transportation, Cleveland

Electric Company, Columbus Southern Power Company,

ComEd Company, Consumers Energy Company, Dayton

(iii)

Power & Light Company, Delmarva Power & Light Company,

The Detroit Edison Company, Duke Energy Company,

Duquesne Light Company, Edison Electric Institute,

FirstEnergy Corporation, Florida Power Corporation, Michael

Gregory, Idaho Mining Association, Illinois Power Company,

Indiana Michigan Power Company, Indianapolis Power &

Light Company, Jacksonville Electric Authority, Kansas City

Power & Light Company, Judy’s Bakery, Kennecott Energy

and Coal Company, Kennecott Corporation, Kennecott

Services Company, Kentucky Power Company, Kentucy

Utilities Company, Louisville Gas and Electric Company,

Madison Gas and Electric Company, Commonwealth of

Massachusetts, David Matusow, Brain McCarthy, Meridian

Gold Company, The State of Michigan, Midwest Ozone Group,

Minnesota Power, Monongahela Power Company, National

Association of Home Builders, National Indian Business

Association, National Mining Association, National Paint and

Coatings Association, National Petrochemical & Refiners

Association, National Rural Electric Cooperative Association,

National Stone Association, Nevada Mining Association, The

State of New Jersey, Newmont Gold Company, Northern

Indiana Public Service Company, Oglethorpe Power

Corporation, The State of Ohio, Ohio Edison Company, Ohio

Power Company, Ohio Valley Electric Corporation, Oklahoma

Gas & Electric Company, PacificCorp, Plains Electric

Generation & Transmission Cooperative, Inc., Phoenix Cement

Company, The Potomac Edison Company, Potomac Electric

Power Company, PP&L Resources, Public Service Company

of New Mexico, Richard Romero, Salt River Project

Agricultural Improvement & Power District, Small Business

Survival Committee, South Carolina Electric & Gas Company,

Southern Company, Tampa Electric Company, Toledo Edison

Company, Union Electric Company, United Mine Workers of

America, AFL-CIO, Virginia Power, Western Fuels

Association, West Penn Power Company, The State of West

(iv)

Virginia, West Virginia Chamber of Commerce, and Wisconsin

Electric Power Company.

The following participated as amici curiae in the court of

appeals: Representative Tom Bliley, Senator Orrin G. Hatch,

Connecticut, New Hampshire, New York, and Vermont.

(v)

TABLE OF CONTENTS

Page

tn +¢ecteebaceenenseesseee sdecsedda ]

OPINIONS AND ORDERS BELOW ................. 2

PEED K6.nb6edednescveddpensceesesessees 2

PERTINENT CONSTITUTIONAL AND STATUTORY

Tue onteucéencdedisbbecessemenens 2

DOSE EE BEM GOUEED ccc cc ccccccvcccccevees 2

Ph, ccncagdectensdéestccccevedans 2

Pe ID cv vccacccnéeceeoccaveasuta 4

1. The QOuome Rulemaking ...........ccccsceess 4

ee (Er 11

C. The Congressional Response ................... 19

D. The Court of Appeals Proceedings ............... 20

fy SD conactdcecabusscteoeeses 20

i 23

E. The Grant of the Petition and Cross-Petition ....... 24

SUMMARY OF THE ARGUMENT ................ 25

SEE 86 666g std bewedsteseddeescassdevess 27

1. THIS COURT’S DECISIONS NEGATE THE

PREMISES ON WHICH LEAD INDUSTRIES IS

PE 6c occbenscecescevecdssnccesess 28

Il. THE ACT’S TEXT, STRUCTURE AND PURPOSE

SHOW THAT EPA MUST CONSIDER NON-

HEALTH FACTORS IN SETTING NAAQS ...... 32

(vi)

A. Section 109(b)(1)’s “Public Health” Focus

Necessarily Entails Consideration of Non-Health

POE s cccdedbéscnbcnsadbdaneeescienssee 33

B. The Supporting Provisions in Sections 108(a),

108(b) and 109(d) Confirm that Non-Health

Factors, Including Compliance Costs, Are to Be

Considered in Setting NAAQS ............... 37

C. The Statutory Purpose Confirms that EPA Must

Consider Non-Health Factors in_ Setting

SUOMI och baenssdsectecndéncedssumbanees 42

Ill. EPA MAY ACTUALLY BE CONSIDERING NON-

HEALTH FACTORS IN SETTING NAAQS WHILE

USING LEAD INDUSTRIES AS A SHIELD

AGAINST EXECUTIVE, CONGRESSIONAL AND

FUICAAL, QVEOURED oc ccccccccccccssvccess 43

A. EPA Cannot Distinguish NAAQS Standard-

Setting from Analogous Clean Air Act Provisions

Where the Agency Has Successfully Argued that

Non-Health Factors May Be Considered ....... 45

B. Rejecting Lead Industries Will Help to Insure

Effective Executive, Congressional and Judicial

Oversight for NAAQS Standard-Setting ....... 47

CREE - ccccccovcccsccodaschecesooeseees 50

(vii)

TABLE OF AUTHORITIES

Page

Cases:

ALA v. Browner,

CIV-93-643 (D. Ariz. Oct. 6, 1994) .............. 12

Allentown Mack Sales & Serv., Inc. v. NLRB,

ED ie eign csednccanseseee 49

Allied Local & Regional Mfrs. Caucus v. EPA,

No. 98-1526, 2000 WL 737750

i a PPE . ccodcsneeccensoesevess 50

American Med. Ass'n v. Reno,

FF Fee CEP Cee Gale BROOD ccc ccccccccccecese 49

American Petroleum Inst. v. Costle,

665 F.2d 1176 (D.C. Cir. 1981) ............0000- 27

AT&T Corp. v. lowa Utils. Bd.,

8 I ere 25, 31

Bennett v. Spear,

EE ac ccheusskiusvdecnenedses 39

Bowen v. American Hosp. Ass'n,

EE cd ei cadencbscesceouedsees 49

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

EE nS vnc cukncacdeseceseseess 23

Christensen v. Harris County,

120 S. Ct. 1655 (2000) .......... , danbeeeens 32

Clinton v. New York,

a io J ine ca ndaguieebedeeeass 31

Fahey v. Mailone,

in +i. cep cena ddbedbestetetes 31

(viii)

FDA v. Brown & Williamson Tobacco Corp.,

Se es Gas HS IED co wc cceccsccdescees 25, 31, 47

FDIC v. Meyer, |

Se EE Deb cddccsoccdeenwenees 33, 36

George E. Warren v. EPA,

Se ee a Ge POUED occ ccccccsscecnses 46

Gulf Oil Corp. v. Copp Paving Co.,

Pe MEE Rctevodscdunssusseddoumans 42

Holloway v. United States,

ey PE hb cd Sd ACN dscunctdoewanenee 28

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

ee EEE one ctachedcceueeuceas 25, 30, 31

International Union, United Auto., Aerospace

& Agric. Implement Workers of Am.,

UAW vy. OSHA,

om i Pree ee 30

Lead Indus. Ass'n v. EPA,

647 F.2d 1130 (D.C. Cir. 1980) ......... 1, 20, 27, 39

MCI v. AT&T,

Be ED 6th 006% vine esesvedeseweal 31

Motor & Equip. Mfrs. Ass'n v. EPA,

Gee Cee HOSS Cs GE COFED vi civccccccsccces 38

Motor Vehicle Mfrs. Ass'n v. State

Farm Mut. Auto. Ins. Co.,

GE Dn Ps os 6 bcc cckbdndececccccsenes 49

NRDC v. EPA,

824 F.2d 1146 (D.C. Cir. 1987) ........ 27, 32, 39, 47

(ix)

NRDC v. EPA,

902 F.2d 962 (D.C. Cir. 1990), vacated in part,

921 F.2d 326 (D.C. Cir.), cert. dismissed sub nom.

Alabama Power Co. v. NRDC,

ee ee 28

NRDC v. EPA,

Se ee a GE BOUED 6occdcccscccesdtes 47

Pegram v. Herdrich,

120 S. Ct. 2143 (2000) tenet eee eeeeeereereees 36

Robinson v. Shell Oil Co..,

8 I ere ee 28

Schenck v. Pro-Choice Network, ,

ee 28

State of Michigan v. EPA,

No. 98-1497, 2000 WL 180650 ©

SD Sa ED oo vieecescecsccocees 45, 46

Thompson v. Clark,

ee a CE OED cscs ndenveccevecces 50

United States v. Ron Pair Enters., Inc.,

eee ee ee ee ahae 28

Statutes:

os code eduasdenceuetedeceevndes 2

Clean Air Act § 107(d),

EE obs sce eeeedenewseankees 4, 40

Clean Air Act § 108(a),

SE EE ond ndenaehedees saneeccesae’ 3

Clean Air Act § 108(a)(2),

SED ni cccnesccoeedseecaves 37, 38

Clean Air Act § 108(b)(1),

es OF PUREED ove dccddvcccovevcecccess 40

Clean Air Act § 108(d),

Ss PED sn nccdicdccudccwidevasddbun 40

Clean Air Act § 109,

Ss Ec ddeccnchdsdgewstabeennstnen 2

Clean Air Act § 109(b)(1),

as et ED covcteccesecocaseduses 3, 33

Clean Air Act § 109(b)(2),

ess tt ED ccctcnndensesceinweeeeion 3

Clean Air Act § 109(d),

ee ED ekacccvessneedseuckacessens 3

Clean Air Act § 109(d)(2)(C)iv),

Se es PEEIED ccccdccccocsuécses 41

Clean Air Act § 110,

aus cesnadeneehueuswascheuusdes 3

Clean Air Act § 110(a),

RIED ccciccesacdssnduedeeubineny 4

Clean Air Act § 171,

SEE -acauntcusnevuaaneasnesenssense 3

Clean Air Act § 172(a)(1),

o, Me EE a 0 hckcagewkhekndd dhceenee ees 4

Clean Air Act § 172(a)(2), :

Se ees te ED vcd ddcccoussentwcdes tous 4

Clean Air Act § 181(a)(1),

ee es ED cncacccdnedueeatehesd dann 5

Clean Air Act § 181(a)(1), ;

ate PED sc dccnatdonecdceestanobnss +

Clean Air Act § 201,

TE EE sn ced sb-denceeddueesncensebecus 3

Clean Air Act § 211(k)(8),

GB UBL, B TRUE oc vcccccccccescocccecses 46

(xi)

Clean Air Act § 302(h),

SER Es er ae eee ere 38

Clean Air Act § 307(d)(3),

ER a ee ee ee 39-41

Clean Air Act § 307(d)(4)(B)(i), .

Ge Ue © PPE oc cccccccccccccccces 39

Clean Air Act § 307(d)(6)(B),

es ee ED og co cuvctasccceseccess 40

Clean Air Act § 307(d)(9),

ee ee cubes 49

Pub. L. No. 105-178, § 6101, 112 Stat. 465 (1998) ... 19, 20

ee noe oc cece eu seuckedens 33

Unfunded Mandates Reform Act,

he i inie bce Chbekbadevadedies 48

Unfunded Mandates Reform Act,

gt ER na EP ee 48

Unfunded Mandates Reform Act,

a eee 48

Unfunded Mandates Reform Act,

a os oa ds 48

Unfunded Mandates Reform Act,

ee ow al 48

Unfunded Mandates Reform Act,

a ed eal 48

Unfunded Mandates Reform Act,

RE Re me RE ee mC 48

Miscellaneous: .

36 Fed. Reg. 8,186 (Apr. 30, 1971) ................ 5,12

(xii)

44 Fed. Reg. 8,202 (Feb. 8, 1979) ................00.. 5

57 Fed. Reg. 38,832 (Aug. 27, 1992)... ..... ccc cccccces 6

58 Fed. Reg. 51,735 (Sept. 30, 1993) ............. 47, 48

62 Fed. Reg. 38,421 (July 18, 1997) .............. 19, 45

62 Fed. Reg. 38,652 (July 18, 1997) ... 2, 11, 12, 15-18, 39

62 Fed. Reg. 38,856 (July 18, 1997) ... 2, 4, 6-8, 10, 30, 39

H.R. Rep. 95-294, 95th Cong., 1st Sess. 10 (1977) ...... 41

Legislative History of the Clean Air Act |

Amendments of 1970, Vol.I ...... cece ccccees 42

Stephen G. Breyer et al., Administrative Law &

Regulatory Policy (4th ed. 1999) ................ 30

Committee for the Study of the Future of Public Health,

Division of Health Care Services, Institute of

Medicine, THE FUTURE OF PUBLIC HEALTH (1988) .. 34

George C. Cunningham, A Public Health Perspective

on the Control of Predictive Screening for

Breast Cancer, 7 Health Matrix: J.

ee ED a vk as webedeschacdeasceees 35

Lawrence O. Gostin & James G. Hodge, Jr., The Public

Health Improvement Process in Alaska: Toward

a Model Public Health Law,

Se i Ny OO I 64 ob ocd nd cdddsecdeve 36

Lawrence O. Gostin & Zita Lazzarini, Prevention of

HIV/AIDS Among Injection Drug Users: The

Theory and Science of Public Health and

Criminal Justice Approaches to Disease Prevention,

BBP ere ere 35

Lawrence O. Gostin, ef al., The Law and the Public's

Health: A Study of Infectious Disease Law

in the United States, 99 Colum. L. Rev. 59 (1999) .. 35

(xiii)

David R. Holtgrave et al., Human Immunodeficiency

Virus Counseling, Testing, Referral, and

Partner Notification Services, A Cost-Benefit Analysis,

153 Arch. Intern. Med. (1993) ...............4.. 35

Stephen Huebner & Kenneth Chilton, EPA 's Case for New

Ozone & Particulate Standards: Would Americans

Get Their Money's Worth?, Center for the Study of

American Business Policy Study (1997) ....... 11, 16

Peter D. Jacobson, et al., Litigation and Public-Health

Policy Making: The Case of Tobacco Control,

24 J. Health Pol. Pol’y & L. 769 (1999) ........... 35

Dana C. Joel, Surprising Critics of the New Clean Air

Standards: The U.S. Government, Citizens for a

Sound Economy Foundation Issue Analysis

EE Cs chi ee dhedaeh beantvasheees 16, 19

Mark K. Landy, ef al., THE ENVIRONMENTAL PROTECTION

AGENCY: ASKING THE WRONG QUESTIONS FROM

ee 42, 44

Randall Lutter, Js EPA 's Ozone Standard Feasible?,

Joint Center for Regulatory Studies (Dec. 1999) .... 11

Michael J. Malinkowski, Globalization of Biotechnology

and the Public Health Challenges Accompanying It,

FS ee ree 35

Thomas O. McGarity, REINVENTING RATIONALITY

Dt Li ctadEitenlsteehehuddenteveedee sed 44

National Research Council, RETHINKING THE

OZONE PROBLEM IN URBAN &

REGIONAL AIR POLLUTION 4 (1991) ............... 5

Wendy E. Parmett, Tobacco, HIV, and the

Courtroom: The Role of Affirmative Litigation

in the Formation of Public Health Policy,

PP ee CUUPEUEED os cb cccescecsccess 35

(xiv)

Andrew Porteous, DICTIONARY OF ENVIRONMENTAL

SCIENCE AND TECHNOLOGY (2d ed. 1996) ......... 34

Sustainable Redevelopment of Brownfields: Using

Institutional Controls to Protect Public Health,

29 BLM. HDS CIGGOD .ccccccssvcsvaetbesenes 35

Wendy E. Wagner, The Science Charade in Toxic

Risk Regulation, 95 Colum. L. Rev. 1613 (1995) ... 44

WEBSTER’S NINTH NEW COLLEGIATE DICTIONARY

(9th ed. 1987) ..... PNR ee: = - uceséecunuemel 39

Darrell A. Winner & Glen R. Cass, Effect of Emissions

Control on the Long-Term Frequency Distribution

of Regional Ozone Concentrations,

34 Environ. Sci. & Technol. 2612 (June 15, 2000) .. 11

C.E.A. Winslow, THE COST OF SICKNESS AND THE PRICE

OF HEALTH, World Health Organization,

Monograph Series No. 7 (1951) ..........0500055 34

INTRODUCTION

Two decades ago, the D.C. Circuit ruled in Lead Industries

Ass'n v. EPA, 647 F.2d 1130, 1148, 1153-54 (D.C. Cir. 1980),

that the Environmental Protection Agency (“EPA” or “the

Agency”) must ignore all factors “other than health effects

relating to pollutants in the air” in setting National Ambient Air

Quality Standards (“NAAQS”). Pet. App. 15a (internal

quotation omitted). That decision was wrong when decided

and remains wrong to this day. The text of Clean Air Act

(“CAA” or “Act”) section 109(b)(1), a host of surrounding

statutory provisions, and the Act’s overall purposes all belie the

notion that Congress intended to prohibit EPA from weighing

all relevant factors in setting air-quality standards. Now, the

same erroneous Lead Industries interpretation threatens to do

more harm than good by apparently sanctioning new ozone

(“O,;”) and particulate matter (“PM”) standards that EPA must

concede (ozone) or that quite possibly (PM) have costs that

outweigh their predicted health benefits.

The court below invalidated both of EPA’s standards on

constitutional nondelegation grounds, but only because it

believed Lead Industries precluded EPA from setting standards

based on a commonsense weighing of benefits and costs.

Under Lead Industries, that decision was surely correct. But

this Court need not reach constitutional nondelegation issues at

all if it rejects Lead Industries and interprets the Act as

contemplating the weighing of various pros and cons, including

the supposed “non-health” factors presently embargoed under

Lead Industries. Besides being supported by the statutory text,

that outcome will further Congress’ aim of protecting “public

health” and promote reasoned EPA decisionmaking, while also

facilitating effective Executive Branch and Congressional

oversight of EPA’s NAAQS under Executive Order 12,866 and

recently-enacted statutory provisions.

OPINIONS AND ORDERS BELOW

The final EPA rules on review are reported at 62 Fed. Reg.

38,652 and 62 Fed. Reg. 38,856. The opinion of the court of

appeals (Appendix to the Government’s Petition (“Pet. App.”)

la-69a) is reported at 175 F.3d 1027. The opinions on the

petitions for rehearing (Pet. App. 70a-101a) are reported at 195

F.3d 4.

EPA’s rules and Regulatory Impact Statement have been

lodged with the clerk. The ether record materials cited herein

may be found in the D.C. Circuit joint appendices for the ozone

and PM cases (“OJA” and “PMJA,” respectively).

JURISDICTION

The court of appeals entered its judgment on May 14,

1999. On October 29, 1999, timely petitions for panel

rehearing were granted in part and denied in part, with

suggestions for en banc rehearing denied in their entirety. The

Government’s petition for certiorari was timely filed on

January 28, 2000, and the conditional cross-petition was timely

filed on February 28, 2000. Supreme Court Rule 12.5 and 28

U.S.C. § 1254(1) provide the basis for jurisdiction.

PERTINENT CONSTITUTIONAL AND STATUTORY

PROVISIONS

The following statutory and regulatory provisions are

central to this case: the Clean Air Act, the Unfunded Mandates

Reform Act, and Executive Order 12,866, relevant portions of

which are set forth in the Appendix to this brief.

STATEMENT OF THE CASE

A. The Clean Air Act

This case requires the Court to construe for the first time

Clean Air Act section 109, the core provision of the Nation’s

air pollution control program. CAA § 109, 42 U.S.C. § 7409.

Under section 109, EPA must set National Ambient Air Quality

Standards for the “criteria” pollutants listed under section

108(a)(1) of the Act, 42 U.S.C. § 7408(a)(1). Once EPA sets

a NAAQS for a pollutant, the Act’s Title I requires that all

States enforce that NAAQS against the stationary emission

sources within their borders. See CAA §§ 110, 171 ef seq., 42

U.S.C. §§ 7410, 7501 et seq. In addition, the NAAQS levels

set by EPA heavily influence the setting of mobile source

emission standards by EPA (and certain States) consistent with

the Act’s Title II. See CAA § 201 et seg., 42 U.S.C. § 7521 et

seq. These stationary sources include essentially all businesses,

large and small, plus facilities operated by federal, State, and

local governments. Mobile sources include, not just cars,

trucks, trains, and airplanes, but also smaller emission sources,

including boats, snowmobiles, and even lawn mowers. The

NAAQS levels chosen by EPA, more so than any other federal

regulatory decisions, pervasively impact the Nation’s economy.

NAAQS are formulated by a lengthy process consisting of

a series of discrete steps. EPA first develops an “air quality”

“criteria document” for “each air pollutant . . . emissions of

which . . . cause or contribute to air pollution which may

reasonably be anticipated to endanger public health or welfare,”

and which “results from numerous and diverse mobile or

stationary sources.” CAA § 108(a), 42 U.S.C. § 7408(a). After

these criteria documents are reviewed by a scientific advisory

committee established by section 109(d) of the Act, known as

the Clean Air Scientific Advisory Committee or “CASAC,”

EPA proposes primary and secondary NAAQS, and these also

are reviewed by CASAC. See CAA § 109d), 42 U.S.C.

§ 7409(d). The primary NAAQS established by EPA must be

set at levels “requisite to protect the public health” with “an

adequate margin of safety.” CAA § 109(b)(1), 42 U.S.C.

§ 7409(b)(1) (emphasis added). The secondary NAAQS must

be set at levels “requisite to protect the public welfare.” CAA

§ 109(b)(2), 42 U.S.C. § 7409(b)(2) (emphasis added).

Following promulgation of a NAAQS, EPA designates

every geographic area in the nation (known as an “air quality

control region”) as “attainment,” “nonattainment,” or

“unclassifiable.” CAA § 107(d), 42 U.S.C. § 7407(d). Each

nonattainment area is then “classified” based on “factors such

as the severity of nonattainment in such area and the

availability and feasibility of . . . pollution control measures”

for the area, and then, based on that classification, it is assigned

an attainment date. See CAA § 172(aX1, 2), 42 U.S.C.

§ 7502(a)(1, 2) (“Subpart 1”). Primary responsibility for

meeting the attainment deadlines falls to the States, through the

adoption and enforcement of State Implementation Plans

(“SIPs”). See CAA § 110(a), 42 U.S.C. § 7410(a).

Additionally, the 1990 amendments to the Act establish a

specific plan directed at reducing ozone levels nationwide and

eventually solving the intractable nonattainment problems for

that pollutant that have persisted since the setting of the first

NAAQS in 1971. Under that statutory plan, each ozone

nonattainment area is assigned a classification based on the

extent of its noncompliance with the ozone air-quality

standards set by EPA in 1979, as well as a specific attainment

date based on those classifications. See CAA § 181(a)(1), 42

U.S.C. § 7511(a)(1) (“Subpart 2”).

B. The 1996 Rulemakings

In the early 1990s, EPA initiated proceedings to reconsider

the NAAQS for ozone, originally set in 1971 and revised in

1979, and PM, originally set in 1971 and revised in 1987.

1. The Ozone Rulemaking

Ground-level ozone, often called smog, is formed through

the reaction of volatile organic compounds (“VOCs”) and

oxides of nitrogen (“NOx”) in the air, with the highest

concentrations usually occurring during sunny, hot summer

days. See 62 Fed. Reg. 38,856, 38,858 (July 18, 1997). Ozone

levels are enhanced by human activity, but ozone also occurs

naturally since both NOx (a product of burning) and VOCs

(compounds emitted by vegetation) are present in nature.

According to EPA, peak background (i.e., natural) levels of

ozone generally range from 0.3 to 0.5 parts per million

(“ppm”), and vary from region to region. See OJA 1830

(EPA’s Ozone Staff Paper).

Elevated ozone levels are associated with various

respiratory problems (ranging from discomfort to severe

respiratory constriction) that can compound asthma and other

lung ailments. EPA first addressed ozone in 1971 when it set

a one-hour photochemical oxidant NAAQS at a level of 0.08

ppm, not to be exceeded more than once annually in each air

quality control region. See 36 Fed. Reg. 8,186 (Apr. 30, 1971).

While technically covering a broader category of compounds,

compliance with the photochemical oxidant standard was

judged by measuring ozone alone. States were required to meet

this standard by 1975, but as of 1977, most regions of the

country were far from compliance. See National Research

Council, RETHINKING THE OZONE PROBLEM IN URBAN &

REGIONAL AIR POLLUTION 4 (1991) (“RETHINKING OZONE”).

In 1979, EPA partially responded by reevaluating the health

evidence on which the original standard had been based and

revising the maximum one-hour reading (now renamed the

ozone NAAQS) upward to 0.12 ppm. See 44 Fed. Reg. 8,202

(Feb. 8, 1979). Congress also extended the deadline for

compliance until 1982 for most areas, and until 1987 for areas

not expected to be able to meet the 1982 deadline. See

RETHINKING OZONE at 4. Ozone levels declined significantly

after 1979, but most large metropolitan areas were still not in

NAAQS compliance by 1990. See OJA 1823 (Ozone Staff

Paper); RETHINKING OZONE at 4; Pet. App. 32a. Accordingly,

Congress in the 1990 Amendments established the current

Subpart 2 attainment schedule, which sets varying compliance

deadlines, extending to 2010. See CAA § 181(a)(1), 42 U.S.C.

§ 7511(a)(1); Pet. App. 32a.

In 1992, EPA began its periodic, five-year review of the

ozone NAAQS by updating the section 108 ozone air quality

~~.

criteria (“the Criteria Document”). See 57 Fed. Reg. 38,832

(Aug. 27. 1992). Once review of that document was

completed, EPA staff prepared an “Assessment of Scientific

and Technical Information” (the “Ozone Staff Paper”) that

synthesized the Criteria Document’s technical information and

made recommendations to the Administrator. See OJA 1790-

2293. The Ozone Staff Paper recognized that most ozone

health effects are transient and reversible, and that there is

“only limited, suggestive evidence” that “[a]n increase in daily

mortality [is] associated with O, exposure.” /d. at 1870.

Specifically, while “[s]everal efforts have been made to find

associations between long-term O, exposure and chronic

respiratory dysfunction and disease,” these “associations

between O, exposure and chronic health impacts have not been

sufficiently demonstrated in humans.” /d. at 1871; see also id.

at 1870. The Staff Paper suggested adoption of a revised ozone

NAAQS between a 0.07 and a 0.09 ppm daily maximum eight-

hour ozone level, based on three-year averages of somewhere

between the second- to the fifth-highest annual ozone

concentration. See id. at 1974-77. (As the Staff explained, a

0.09 ppm level averaged over eight hours is roughly equivalent

to the current 0.12 ppm level averaged over one hour. See 62

Fed. Reg. at 38,856, 38,858.) In so doing, the Paper predicted

that the Administrator’s selection among these broad options

would require a “policy judgment,” since exposure to ozone

presents “a continuum of risk,” as opposed to a threshold below

which adverse health effects cease to occur. OJA 1971-72,

1976.

CASAC reviewed both the Criteria Document and the

Staff Paper. CASAC agreed that, because “ozone may elicit a

continuum of biological responses down to background

concentrations,” “the paradigm of selecting a standard at the

lowest-observeable-effect level and then providing an

‘adequate margin of safety’ is no longer possible.” OJA 237.

Moreover, this “continuum” is such that “there is no “bright

line’ which distinguishes any of the proposed standards (either

the level or the number of allowable exceedances) as being

significantly more protective of health.” Jd at 238. “For

example, the differences in the percent of outdoor children . . .

responding between the present standard and the most stringent

proposal . . . are small and their ranges overlap for all health

endpoints.” /d. CASAC accordingly was reluctant to

recommend any specific standard to the Administrator. See id.

Acknowledging that the issue is not scientific, several CASAC

members went on to express what they termed “‘personal’

preferences,” with four favoring a standard of at least 0.09

ppm. three favoring 0.08 ppm, and one favoring a range of

0.08-0.09 ppm. See id

In announcing the final standard, the Administrator stated

both that “it is likely that O, may elicit a continuum of

biological responses down to background concentrations” and

that “a zero-risk standard is neither possible nor required by the

Act.” 62 Fed. Reg. at 38,863. She agree i that “there is no

break point or bright line that differentiates between acceptable

and unacceptable risks,” but chose a 0.08 ppm standard over a

0.09 ppm standard because “[t}he general population as well as

children and asthmatics would breathe cleaner air as a direct

result of . . . the proposed standard.” Jd. at 38,864, 38,868.

The Administrator “recognize[d],” however, that there was

merit to “the views of those who argue that similarly large

improvements in public health protection would result from a

standard set at 0.07 ppm as compared to the proposed standard,

_ such that, based on the same reasoning, the evidence warrants

a standard set at 0.07 ppm.” Jd.

The Administrator offered three reasons for not going that

far. First, no CASAC member had expressed a “*personal’

preference” for a 0.07 ppm standard. See 62 Fed. Reg. at

38,868. Second, “(t]he most certain O,-related effects . . . are

transient and reversible (particularly at O, exposures below

0.08 ppm), and the more serious effects . . . are less certain.”

Id. Third, the Agency noted that “a 0.07 ppm level would be

closer to peak background levels.” /d. In her Response to

Comments document, the Administrator stated that peak

background levels vary from region to region, and are generally

in the range of 0.03 to 0.05 ppm. See OJA 173-77.

Rulemaking commenters argued that selection of any

NAAQS level would be arbitrary without consideration of the

costs of achieving compliance. The Administrator rejected

this point, saying that the Agency and the D.C. Circuit had

previously “interpreted section 109 of the Act as precluding

consideration of the economic costs or technical feasibility of

implementing NAAQS in setting them.” 62 Fed. Reg. at

38,878. As for constraints on her discretion, the Administrator

asserted that she was free to select any standard within the

proposed range, and that her decision was “largely judgmental

in nature” and need follow “no generalized paradigm”; nor

need she even decide “what risk is ‘acceptable’” through

quantification “or any other metric.” /d. at 38,883. As for

whether she needed to follow a consistent standard-setting

approach or provide a definite meaning to key statutory terms,

the Administrator said that she “is not limited to any single

approach to determining the margin of safety and may, in her

judgment, choose a two-step approach, or perhaps some other

approach, depending on the particular circumstances

confronting her in a given NAAQS review.” /d.

One thing the Administrator did not (and could not) say

was that compliance costs and similar data were unavailable to

illuminate the consequences of her decision. EPA endeavored

in this case, as it had over the years, to keep cost data and other

types of countervailing evidence—specifically, all evidence

other than medical data showing adverse health consequences

of pollution—out of the criteria development and CASAC

review process. For instance, EPA refused to permit CASAC

to review scientific literature showing that ground-level ozone,

like stratospheric ozone, has beneficial effects in shielding the

public from harmful ultra-violet radiation. See, e.g., OJA 255-

71, 2666, 2676, 2759, 2849, 3089. The United States

Department of Energy (“DOE”), attempting to impress the

significance of these studies on CASAC, testified that revising

the ozone NAAQS in the range proposed by the EPA Staff

Paper would produce an estimated 2,000-11,000 additional

cases of skin cancer per year, 130-260 additional cases of

melanoma (including 25-30 deaths per year), plus 28,000

additional cataract cases annually. /d. at255-71. DOE stressed

that these detrimental health effects are “at least as well

established as the relationship between ozone concentrations

and lung disease.” /d at 257. A study by Office of

Management and Budget staff members similarly concluded

that the “adverse health effects of ... EPA’s more stringent

NAAQS may be similar in magnitude to the respiratory-related

beneficial effects of such an O, reduction.” /d. at 2759, 2764;

see also id. at 3089. CASAC members expressed interest in

this issue, and EPA conceded that DOE’s concern “could be

big.” /d. at 267. Nevertheless, EPA concluded that these data

were legally beyond the bounds of consideration. See id. at

210.

Similarly, CASAC was forbidden by the Administrator

from considering the data on compliance costs assembled in

response to Executive Order 12,866 (President Clinton). Those

data, prepared by EPA’s economic consultants, estimated that

the costs of bringing all areas of the country into compliance

with the revised ozone NAAQS by 2010 would be $9.6 billion

per year. By comparison, EPA predicted that the benefits

would range from $1.5 billion to $8.5 billion annually.

Regulatory Impact Analyses for the Particulate Matter and

Ozone National Ambient Air Quality Standards and Proposed

Regional Haze Rule (July 16, 1997) (“RIA”) at ES-11, ES-17.

The RIA estimated that an interim step—*partial

attainment”—would cost $1.1 billion annually, with benefits in

the range of $0.4 to $2.1 billion per year. /d. at ES-12, ES-17.

The difference between the high and low ends of EPA’s

benefits ranges is accounted for almost entirely by benefits that

the RIA said could arise from preventing certain cases of

“premature mortality.” See RIA at ES-17 (“Mortality benefits

represent about 90% of the high end benefit estimates.”). But

the CASAC-reviewed Staff Paper found no persuasive

evider.ce of any such mortality effects. See supra, at 6. To

resolve this inconsistency, the RIA cited subsequent studies,

not analyzed in the Staff Paper or reviewed by CASAC, which

were said to “document a possible relationship between ozone

and premature mortality.” RIA at 12-15. In the parallel PM

rulemaking, however, EPA stated it could not rely on such

unreviewed studies, “based on its long-standing practice of

basing NAAQS decisions on studies and related information

included in the pertinent air quality criteria and available for

CASAC review.” 62 Fed. Reg. at 38,862. In any event, EPA

ultimately acknowledged “substantial uncertainty” on this

point. Jd. Once these mortality-reduction benefits and certain

PM-related benefits are excluded, see RIA 12-15, EPA’s

estimate of the costs of full compliance exceeds its benefits

estimates six times over ($9.6 compared to $1.5 billion). See,

e.g., ES-11, ES-17.

EPA’s cost estimates changed substantially between the

draft and final RIAs. EPA derived final cost estimates by

assuming that all reasonably available control technologies

with an annual cost per ton of emissions reductions of $10,000

or less would be used. See RIA at 7-7. The Agency further

determined that attainment of the revised ozone NAAQS would

require a 2,529 ton reduction in daily NOx emissions, and a

3,455 ton reduction in daily VOC emissions. See id. at 7-10.

The Agency next estimated that the nation could achieve 22-24

percent of this NOx reduction target and 37-43 percent of the

EPA VOC reduction target with technologies that satisfy the

$10,000 cost cap, and deemed these reductions “partial

attainment.” See id. at 7-9. When the Agency then estimated

the cost of full compliance, it again assumed that attainment

costs for the remainder of the required reductions (comprising

the bulk of all required reductions) also would not exceed

$10,000 per ton—even though all identifiable technologies

costing less than that amount were already accounted for in the

“partial attainment” figure. See id. at 9-5.

Because there is no empirical basis for EPA’s $ 10,000 per

ton cost cutoff, EPA conceded that it “has much less

confidence in these cost estimates” than it does in its partial

attainment estimates. RIA at ES-12. That caveat is seconded

by a recent study asserting that EPA’s full-attainment cost

estimates assume an “implausibly high rate of technological

progress.” Randall Lutter, Js EPA 's Ozone Standard Feasible ?,

Joint Center for Regulatory Studies at 7 (December 1999)

(emphasis added); see also Darrell A. Winner & Glen R. Cass,

Effect of Emissions Control on the Long-Term Frequency

Distribution of Regional Ozone Concentrations, 34 Environ.

Sci. & Technol. 2612, 2617 (June 15, 2000). While the effect

of EPA’s $10,000 cost cutoff was not apparent until the final

RIA, the President’s Council of Economic Advisors reached a

comparable conclusion when it projected that EPA’s ozone

NAAQS would cost between $11.6 billion and $60 billion,

compared to benefits of $200 million to $1 billion. See

Memorandum from Alicia Munnell, CEA, to Art Frass, OMB,

dated 12/13/96 (“CEA Memo”) (cited in Stephen Huebner &

Kenneth Chilton, EPA's Case for New Ozone & Particulate

Standards: Would Americans Get Their Money's Worth?,

Center for the Study of American Business Policy Study 27

(1997) (“Huebner & Chilton’).

2. The PM Rulemaking

Unlike ozone, particulate matter is not a single substance.

PM is instead the “generic term for a broad class of chemically

and physically diverse substances that exist as discrete particles

(liquid droplets or solids) over a wide range of sizes.” 62 Fed.

Reg. 38,652, 38,653 (July 18, 1997). These particles originate

from both manmade and natural sources and may be either

emitted directly or formed in the atmosphere through

transformations of gaseous emissions, including VOCs, NOx,

and sulfur oxides (“SOx’’). Jd. The particles vary in size, a fact

that EPA deems important both because particles’ size

“determines their behavior in the respiratory system,” and

because it determines their “atmospheric lifetime,” which is “a

key consideration in assessing health effects information

because of its relationship to exposure.” PMJA 1914(PM Staff

Paper). EPA has explained that “[t]he chemical and physical

properties of PM vary greatly with time, region, meteorology,

and source category, thus complicating the assessment of health

and welfare effects.” 62 Fed. Reg. at 38,653.

EPA has believed for years that, taken as a whole, PM is

associated with respiratory and cardiovascular problems,

including premature mortality. See 62 Fed. Reg. at 38,656.

The initial PM NAAQS, issued in 1971, targeted airborne

particles up to 45 micrometers in size, particles commonly

referred to as total suspended particulate, or TSP. See 36 Fed.

Reg. 8186 (Feb. 8, 1971); PMJA 1909 (Staff Paper). In 1987,

EPA changed the “indicator” of PM from TSP to PM;o, which

encompasses particles with a mean aerometric diameter less

than or equal to 10 wm.

The rulemaking that produced the PM standards in this

case occurred “under a highly-accelerated, court-ordered

schedule,” 62 Fed. Reg. at 38,654 & n.3 (citing ALA v.

Browner, CIV-93-643 (D. Ariz. Oct. 6, 1994)), that had EPA

struggling to complete both its PM Criteria Document and its

PM Staff Paper. Echoing the Criteria Document, the PM Staff

Paper stated that it is “important to emphasize the unusually

large uncertainties associated with establishing standards for

PM relative to other single component pollutants for which

NAAQS have been set.” PMJA 2153. The Staff Paper went on

to explain that “[w]Jhile severe effects at the high concentrations

of air pollution in the historical episodes are widely accepted as

being causally related, there is less consensus as to the most

appropriate interpretation of studies finding associations of

health effects with ambient levels of PM below the current

NAAQS.” /d. at 1993. Moreover, “[t]he majority of the

evidence concerning health effects of PM exposure comes from

epidemiological studies,” which measure statistical correlation

but not necessarily causation. /d. The Staff Paper found this

point significant because “it has proven to be difficult to

separate individual effects of multiple pollutants” in certain PM

studies, raising the possibility that observed correlations might

be due to “confounding” factors, not PM. /d. at 2002-03.

Further complicating matters, the Staff Paper explained

that “available . . . information yields no demonstrated

biological mechanism(s) that can explain the associations

between ambient PM exposure and mortality and

morbidity. ... Thus, any discussion of possible mechanisms

linking ambient PM exposures to mortality and morbidity

effects is necessarily limited to hypotheses derived from animal

or human studies conducted at exposure levels of PM

constituents far higher than found in ambient air.” PMJA 1952.

The Staff Paper thus concluded that “there is an urgent need to

expand ongoing research on the mechanisms by which PM... .

may cause adverse health effects.” Jd. at 1959.

The most serious of the health effects noted by the Staff

Paper is a “small but significant increas[e] in mortality and

morbidity in some sensitive populations at concentrations

below the levels of the current ambient standards for PM.”

PMJA 2019. However, “it is reasonable to expect that some of

the mortality associated with short-term pollution is occurring

in the weakest individuals who might have died within days

even without PM exposure.” /d. at 1972. The Staff Paper thus

cautioned that “it is not possible to confidently estimate

quantitatively” the extent to which lives are actually shortened.

Id. at 1974. Here again, the Paper recommended that “[m]ore

research is needed.” /d. at 2156.

The Staff Paper recommended establishing separate

standards for fine and coarse PM. Fine PM consists of particles

measuring between approximately 0 and 3 um in diameter;

coarse PM consist of particles between approximately 1 and

10 um. PMJA 2127. The Paper acknowledged that “the

epidemiological data providing a direct comparison of the

health effects of fine and coarse particles are quite limited in

comparison to that of PM,) (which contains both coarse and

fine mode fractions).” /d. at 2020. It speculated nonetheless

that fine particles “are a better surrogate for that fraction of

ambient PM that is most clearly associated with the health

effects observed in community air pollution studies at levels

below the current standards.” /d. at 2049. It also asserted that

fine particles are potentially more dangerous to public health

because they penetrate deeper into the respiratory system. See,

e.g., id. at 1914.

As with ozone, the PM Staff Paper declined to recommend

specific standards, saying instead that the ultimate choice of a

PM standard is a “policy” decision. PMJA 2136. PM presents

a “continuum of exposures,” such that “attempting to identify

‘lowest observed effects levels’ and adding margins of safety

below such levels is not an appropriate approach in this case.”

Id. at 2134-35. Moreover, “[r]elative to other single pollutants

for which NAAQS have been set, establishing appropriate

ranges of levels for PM,. s [fine PM] standards involves

unusually large uncertainties.” /d. at2135. In considering this

“continuum,” the PM Staff Paper (like the Ozone Staff Paper)

did not take into account any offsetting health or non-health

factors. See id. at 2134-25.

After reviewing the Criteria Document and Staff Report,

CASAC recommended that EPA retain the current PM,

NAAQS and establish a PM,; NAAQS. PMJA 3162. But it

reached “no consensus on the level, averaging time, or form of

a PM,; NAAQS.” Jd. CASAC instead provided the Agency

with a table setting forth the disparate views of its members.

-_ --—— == =<. — ——lllllllll

CASAC’s cover letter stated that the table “appears to defy

further characterization,” but “[p]art of this diversity of opinion

can be attributed to the accelerated review schedule” ordered by

the Arizona district court. /d. at 3163. CASAC, like EPA’s

Staff Paper, stressed that “[t]he Agency must immediately

implement a targeted research program to address .. .

unanswered questions and uncertainties,” in order “to avoid

being in a similar situation when the next PM NAAQS review

cycle is under way.” Jd. at 3163-64; see also id. at 3142-43.

According to the table transmitted by CASAC, only two of

the 21 panelists endorsed an annual PM, , standard as low as the

15 g/m’ standard ultimately adopted by EPA, while eight of

the 21 opposed establishing an annual PM,, standard at all.

PMJA 3165. The majority of members opposing the low PM, ,

standard chosen by EPA “were influenced, to varying degrees,

by the many unanswered questions and uncertainties regarding

the issue of causality.” /d at 3163. CASAC was especially

critical of epidemiological studies, since that evidence “is not

unambiguous” given that “[t}he risk factors being reported are

not large and they have relatively large uncertainties.” /d. at

3140. CASAC also emphasized that “[i]t is of paramount

importance to know whether some, most, or all of the deaths

are advanced by only one or several days.” /d. at 3141.

EPA’s final rule acknowledged the great “uncertainty in

the characterization of health effects attributable to exposure to

ambient PM.” 62 Fed. Reg. at 38,655. Based primarily on

epidemiological studies, however, the Administrator

determined that the existing PM NAAQS was insufficient from

a public health standpoint. See, e.g. id at 38,655. The

Administrator agreed that there is no known causal mechanism

whereby PM levels below the existing NAAQS could harm

public health. See id. at 38,656. She also acknowledged that

the health effects at issue might be caused by only certain types

of particles, not PM generally. See id. at 38,667. Despite these

“significant uncertainties,” she determined that there is an

“adequate basis for regulatory decision making at this time.”

Id. at 38,655.

The Administrator recognized in selecting a fine PM

standard that, as with ozone, she faced both uncertainties and “a

continuum of effects associated with exposures to varying

levels of PM.” 62 Fed. Reg. at 38,673. In response to

comments that the selection of any level along that continuum

would be arbitrary unless balanced against countervailing

considerations, the Administrator again asserted her prerogative

to promulgate revised NAAQS using ad hoc analysis that

recognizes “no generalized paradigm,” that “may not be

amenable to quantification in terms of what risk is ‘acceptable’

or any other metric,” and that is “largely judgmental in nature.”

Id. at 38,688.

The Administrator’s most basic choice was her decision to

regulate PM based on particle size rather than chemical

composition. She explained that “the available evidence is not

sufficient to exclude nitrates or any other class of fine

particles.” 62 Fed. Reg. at 38,667 & n.26 (emphasis added).

In contrast, she set different standards for small (“fine”) and

large (“coarse”) particles, despite agreeing that the evidence on

this point was also not entirely satisfactory, as relatively few

studies have addressed fine PM, as opposed to PM generally.

See id. at 38,665; see also Huebner & Chilton at 11-12 (only 7

of the 27 studies identified in Staff Paper actually address

PM, ;); Draft Memorandum from Rosina Bierbaum, OSTP, to

Sally Katzen, OIRA (President’s Office of Science and

Technology Policy determines that “[t]he database for actual

levels of PM,, is . . . very poor,” “only a handful of studies

have actually studied PM, , per se,” and “current data do not

support clear associations of PM effects with . . . fine

particles”) (as quoted in Dana C. Joel, Surprising Critics of the

New Clean Air Standards: The U.S. Government, Citizens for

a Sound Economy Foundation Issue Analysis (Apr. 9, 1997)

(“Surprising Critics of the New Clean Air Standards”). The

selection of PM,, as the fine PM indicator was thus made

“largely [as] a policy judgment.” 62 Fed. Reg. at 38,665.

The Administrator’s selection of a coarse particle indicator

was also a subject of considerable discussion. Here, the

Administrator retained the current PM,. measure, rather than

accepting the “views of several CASAC panel members” who

“suggested” replacing it with a PM,,, , indicator—an indicator

that measures only coarse particles and excludes fine ones. 62

Fed. Reg. at 38,668. She defended that selection by asserting

that “the only studies of clear quantitative relevance to effects

most likely associated with coarse fraction particles have used

undifferentiated PM,9,” and making the pragmatic observation

that a “large” “monitoring network” is “already in place for

PM, .” /d. (emphasis added).

Having chosen to regulate both fine and coarse PM and set

the indicators for both, the Administrator proceeded to set

actual standards. She determined that she would not adjust the

levels of the current annual and 24-hour PM,, standards

“[g]iven the uncertainties in the available scientific evidence.”

62 Fed. Reg. at 38,678. As for fine PM, she decided to

promulgate an annual standard to control emissions generally,

and a supplementary 24-hour standard to protect against high

peak concentrations and seasonal emissions, explaining that

this would be the most “efficient approach.” See id. at 38,570.

Whereas “uncertainties” in the “scientific evidence,”

62 Fed. Reg. at 38,678, had prompted her to leave in place the

current PM,, standards, the Administrator decided with respect

to an annual fine PM standard that she would regulate, “despite

well recognized uncertainties,” down to levels “somewhat

below where the body of epidemiological evidence is most

consistent and coherent.” /d. at 38,675 (emphasis added). In

her view, “the strength of the evidence of effects increases for

concentrations that are at or above the long term (e.g. , annual)

mean levels reported for [certain] studies.” Jd at 38,676.

Studies reported in the Criteria Document had found mean

concentrations to “range from about 11 g/m’ to 30 wg/m’.” Jd.

After reciting these results, the Administrator concluded that

“[t]aken together, and placing greatest weight on those studies

that were clearly statistically significant, this evidence suggests

that an annual standard level of 15 g/m’ is appropriate.” Jd.

The Administrator did not dispute that this level is “below the

range of annual data most strongly associated with both short-

and long-term exposure effects.” Jd. (emphasis added). Nor

did she rely on peak background levels or transiency and

irreversibility of health effects, as she had in choosing an ozone

NAAQS. See id.

The Administrator then concluded that, having enacted

such a strict annual fine PM standard, there was “no need to

consider levels in the lower portion” of the range suggested for

the 24-hour fine PM standard. 62 Fed. Reg. at 38,677.

“Further,” she said that “the risk associated with peak 24-hour

exposures in otherwise clean areas is not well enough

understood at this time to provide a basis for selecting the more

restrictive levels in the range of 50 to 65 ug/m’.” Jd. Based on

these rationales, she chose a 65 g/m’ level. See id. She did

not discuss either the levels at which the evidence is “most

strongly associated” with exposure effects, nor the mean

concentrations from studies, as she had in choosing an annual

PM,;NAAQS. See id.

As with the ozone NAAQS, the Administrator also did not

consider predicted compliance costs or any other non-medical

information bearing on the consequences of her action. See 62

Fed. Reg. at 38,683; PMJA 312, 319 (EPA’s Response to

Comments). EPA acknowledged, however, that full attainment

with its revised PM NAAQS by 2010 would cost at least

$37 billion annually, making this standard the most expensive

environmental program ever. Even “partial attainment,” as

defined by EPA, would cost $8.6 billion. See RIA at ES-12,

13. In contrast, the Agency estimated the benefits of full

attainment to range from $20 to $110 billion, and those of

partial attainment to range from $19 to $104 billion. See id. at

12-1.

As with ozone, the difference between the high and low-

end benefits estimates consists primarily in how mortality

benefits are estimated and valued. See, e.g., RIA at 12-44. The

RIA calculated the high end estimates by valuing every avoided

premature mortality at $4.8 million. See id. at 12-15, 16, 41.

The RIA made an alternative estimate, however, in response to

criticisms that estimating benefits from PM reductions should

be based on “not only how many premature deaths are avoided,

but . . . how long these deaths are postponed.” /d. at 12-16.

That alternative, reflected in EPA’s low-end estimates, assigned

a set value to every “statistical life-year extended.” On that

assumption, the fine PM standards’ predicted benefits are

significantly less than their predicted costs. See id.

The PM cost calculations are also similar to the ozone

calculations in that they impose a $10,000 cost cap for “partial

attainment,” then assume that full attainment can be reached

with measures that do not exceed this cap. See RIA at 6-16,

9-7. The President’s Council of Economic Advisors

determined that EPA’s analysis “understates the true costs . . .

by orders of magnitude.” CEA Memorandum (as quoted in

Surprising Critics of the New Clean Air Standards at 1).

C. The Congressional Response

Congress responded to EPA’s final rules by postponing

implementation of the revised ozone and PM standards, thus

providing time for pre-implementation judicial review. See

Pub. L. No. 105-178, §§ 6101-03, 112 Stat. 465 (1998).

Specifically, Congress codified an Executive Order, issued the

same day as the final ozone and PM rules, that delayed the

implementation of the PM NAAQS until at least 2005. See id.

§ 6102; 62 Fed. Reg. 38,421, 38,427-28 (July 18, 1997).

Congress also pushed back implementation of the ozone

NAAQS by one year. See Pub. L. No. 105-178, § 6103(a).

And Congress emphasized that “[nJothing” in its action “shall

be construed . . . to be a ratification of the ozone or [PM]

standards.” Jd. § 6104.

D. The Court of Appeals Proceedings

1. Panel Proceedings

Before the D.C. Circuit, EPA continued to assert that it is

barred from considering non-health factors including

compliance costs in setting NAAQS, and that it is even barred

from considering the protective health effects of ground-level

ozone. See, e.g, EPA Ozone Br. at 43. Based on Lead

Industries, the D.C. Circuit agreed with the Agency’s refusal to

consider compliance costs. “Our cases read § 109(b)(1) as

barring EPA from considering any factor other than ‘health

effects relating to pollutants in the air.”” Pet. App. 15a (citing,

inter alia, Lead Industries, 647 F.2d at 1148). The D.C. Circuit

emphasized that its “Lead Industries decision was made in

Chevron step one terms,” and held that Lead Industries

unambiguously “precludes” EPA from considering costs. See

id. at 19a.

The D.C. Circuit disagreed, however, with EPA’s claim

that “nothing in the statute requires [the Administrator] to make

any specific ‘findings’ or to structure her decisionmaking in

any particular way.” EPA Ozone Br. at 43 (emphasis added).

Instead, the court held that section 109 must be construed to

provide some “intelligible principle” that guides the exercise of

agency discretion. See Pet. App. 5a. The court founda wat

EPA’s construction of the Act fails this test by not “speak[{ing]

to the issue of degree.” /d. at 7a. It then illustrated the point by

using the Agency’s justification for choosing a 0.08 ppm level

for ozone. See id. at 8a-1la. The court explained that, while

EPA claims to have chosen 0.08 ppm over 0.09 ppm “because

more people are exposed to more serious effects at 0.09 than at

0.08,” it “never contradict[ed] the intuitive proposition,

confirmed by data in its Staff Paper, that reducing the [0.08]

PEELE LL PE Oe rm

standard to [0.07] would bring about comparable changes.” /d.

at 8a. EPA responded that “a 0.07 standard would be ‘closer to

peak background levels,”” but “a 0.08 level, of course, is also

closer to these peak levels than 0.09.” /d. at 9a (emphasis in

original).

The court discounted the Administrator’s reliance on

individual CASAC members on the ground that they merely

stated their “personal” preferences—preferences that provided

no reasoned basis for preferring a 0.08 ppm or 0.09 ppm level

to a 0.07 ppm level. See Pet. App. 8a. As the court put it:

EPA’s explanations for its decisions amount to

assertions that a less stringent standard would allow

the relevant pollutant to inflict a greater quantum of

harm on public health, and that a more stringent

standard would result in less harm. Such arguments

only support the intuitive proposition that more

pollution will not benefit public health, not that

~ keeping pollution at or below any particular level is

“requisite” or not requisite to “protect the public

health” with an “adequate margin of safety ... .”

Id. at 7a.

The court found the same flaws in EPA’s attempts to

justify its PM NAAQS. EPA defended those standards “on the

basis that there is greater uncertainty that health effects exist at

lower levels than the level of the standard.” Pet. App. 10a. But

the court responded that “the increasing-uncertainty argument

is helpful only if some principle reveals how much uncertainty

is too much. None does.” Jd The court accordingly

“remand[ed] the cases for EPA to develop a construction of the

act that satisfies” the nondelegation doctrine and, “if

appropriate, modify the disputed NAAQS in accordance with

that construction.” /d. at 4a-5a.

The D.C. Circuit emphasized that, although some form of

cost-benefit or similar analysis could ordinarily serve as the

necessary “intelligible principle,” such an approach “is not

available” because of Lead Industries. Pet. App. 15a (internal

quotation omitted). The court suggested one alternative

construction for the Agency to consider, a principled “criterion

of probability” analysis based on a “generic unit of harm that

takes into account population affected, severity and

probability.” /d. at 16a. The court acknowledged, however,

that since “EPA may not consider cost,” it may have to

“conclud{e] that there is no principle available” that would be

constitutionally sufficient. /d. at 18a. Judge Tatel dissented

from the court’s nondelegation analysis. See id. at 59a.

In contrast, the court unanimously reversed EPA’s refusal

to consider the potential health protective effects of ground-

level ozone, labeling “bizarre” the Agency’s contention “that a

statute intended to improve human health would . . . lock the

agency into looking at only one half of a substance’s health

effects in determining the maximum level for that substance.”

Pet. App. 47a. As for particulate matter, the court also

unanimously reversed the Agency’s use of PM,, as an indicator

for coarse PM. The court explained that, having determined

that coarse and fine particles should be regulated separately,

EPA acted arbitrarily and capriciously by using an indicator for

coarse particles that includes fine particles. See id. at 49a-53a.

The court further noted that EPA’s reliance on a “pragmatic”

basis for this decision—specifically, the fact that a monitoring

program for PM, 9 already exists—is contrary to EPA’s own

position that it may not consider pragmatic factors in setting

NAAQS. See id. at 52a-53a.

Finally, the court of appeals addressed Subpart 2 of the

Act, which establishes a specific schedule for reducing ozone

levels nationwide. See supra, at 4,5. The court accepted

EPA’s contention that, notwithstanding the detailed provisions

of Subpart 2, the Agency may still revise the ozone NAAQS.

See Pet. App. 3la-43a. In doing so, however, the court

unanimously rejected EPA’s contention that “Subpart 2

OR Oe RO OP

specifically provides classifications and attainment dates only

for nonattainment designations under the [existing] ozone

NAAQS.” /d. at 37a. The text and drafting history of this

provision confirm that it applies to all ozone NAAQS,

including revised NAAQS. See id. at 38a-39a. Because

Congress’ handiwork was “purposeful and not the drafting error

that EPA’s interpretation implies,” “EPA is precluded from

enforcing a revised primary ozone NAAQS other than in

accordance with the classifications, attainment dates, and

control measures set out in Subpart 2.” /d. at 34a, 39a.

2. Rehearing Proceedings

In response to EPA’s rehearing petition, the panel

underscored that, because EPA’s statutory interpretation lacked

an “intelligible principle,” remand to the agency was the

appropriate remedy: “[JJust as we must defer to an agency’s

reasonable interpretation of an ambiguous statutory term, we

must defer to an agency’s reasonable interpretation of a statute

containing only an ambiguous principle by which to guide its

exercise of delegated authority.” Pet. App. 76a (citing Chevron

U.S.A. Inc. v. NRDC, 467 U.S. 837, 866 (1984)). The panel

also dismissed EPA’s continuing contention that it should not

be required to consider its standards’ detrimental health effects,

noting that the Agency’s further arguments do not “warrant

consideration in a published opinion.” /d. at 82a.

The panel also unanimously rejected EPA’s new argument

that it lacked jurisdiction to reach the Subpart 2 issue because

the Agency “has taken no final action implementing the revised

NAAQS.” Pet. App. 77a, 79a. The court explained that EPA’s

promulgation of the revised NAAQS “triggered” certain

statutory provisions that “impose a number of requirements

upon the states.” Jd. at 78a.

The panel also rejected EPA’s reiterated contention that

Subpart 2 amounts to a scrivener’s error. See Pet. App. 79a.

The panel noted that “all five Subparts of the Clean Air Act

providing requirements for nonattainment areas” contain the

same language. /d. The panel then clarified that its holding

merely meant that a revised ozone NAAQS “can be enforced -

only in conformity with Subpart 2,” not necessarily that such a

NAAQS “cannot be enforced” at all. /d. at 8la. Judge Tatel

concurred, noting that this would “leav[e] open the possibility”

that Subpart 2 applies only until an area attains the existing

ozone NAAQS, such that “in areas that have attained the ozone

standard, nothing precludes enforcement of the new standard”

outside of the Subpart 2 framework. /d. at 88a, 89a. The en

banc court unanimously denied rehearing on this issue.

Two opinions dissenting from the denial of rehearing en

banc addressed the main statutory interpretation questions. See

Pet. App. 92a. Judge Silberman’s dissent disagreed with the

panel majority’s use of the nondelegation doctrine, but

emphasized that he was “quite uncertain” whether EPA’s

analysis satisfied the demands of the “arbitrary and capricious

standard.” Jd. at 95a-96a. Judge Tatel, joined by Chief Judge

Edwards and Judge Garland, also dissented from denial of

rehearing because he disagreed with the panel’s use of the non-

delegation canon. See id. at 97a.

E. The Grant of the Petition and Cross-Petition

The Government petitioned for certiorari on the

nondelegation and Subpart 2 issues, and ATA cross-petitioned

to challenge the court of appeals’ holding that EPA must

“ignore all factors ‘other than health effects relating to

pollutants in the air’” in setting NAAQS. Cross-Pet. (i). ATA

argued that the cross-petition should be granted because

reversing the D.C. Circuit on this point would permit the Court

to “avoid[] the constitutional nondelegation issue on which

EPA focuses.” Jd. at 1. This Court granted both petitions, and

set a briefing schedule. See 120 S. Ct. 2193 (2000); 120 S. Ct.

2003 (2000).

SUMMARY OF THE ARGUMENT

The court of appeals recognized the trilemma logically

entailed by the Lead Industries interpretation: either (1) the

Act must direct EPA to set a zero-level NAAQS for non-

threshold pollutants like ozone and PM; or (2) EPA must be

empowered to select arbitrarily some level above zero for these

pollutants (the selection necessarily being arbitrary because any

forthright consideration of medical factors alone would likely

produce zero standards); or else (3) Lead Industries must have

been wrongly decided.

What the D.C. Circuit did not say expressly was that it is

entirely unreasonable to assume Congress would have

delegated the authority presupposed by options (1) and (2). If

Congress ever intended the “zero risk” standards of option

(1)}—which, the court of appeals noted, would require “de-

industrialization” or worse, Pet. App. 15a n.4—then surely

Congress, and not EPA, would be required to make that policy

choice explicitly. See Industrial Union Dep’t v. American

Petroleum Inst., 448 U.S. 607, 646, 675 (1980) (opinions of the

plurality and Rehnquist J., concurring) (“Benzene”). Likewise,

the second option, arbitrary selection of some level above zero,

runs afoul of this Court’s decisions requiring agencies “to apply

some limiting standard” in the exercise of delegated authority.

See AT&T Corp. v. Iowa Utils. Bd., 525 U.S. 366, 386-90

(1999) (emphasis in original). Finally, options (1) and (2) alike

presuppose that Congress might delegate to EPA, the courts, or

both, extraordinary authority and discretion over decisions of

great “economic and political significance’—a further

- presumption that cannot be squared with this Court’s

precedents. See, e.g., FDA v. Brown & Williamson Tobacco

Corp., 120 S. Ct. 1291, 1315 (2000) (“[W]e are confident that

Congress could not have intended to delegate a decision of such

economic and political significance . . . in so cryptic a

fashion.”). See Part I, infra.

Logically, then, the third option—that Lead Jndustries was

wrongly decided—must be the case and, in fact, is the case

under any straightforward interpretation of the Act. First,

primary NAAQS are set at levels “requisite to protect the public

health” “with an adequate margin of safety.” Because “public

health” is left undefined, that term must be given its “ordinary”

and “natural” meaning. By 1970, when section 109(b) was

enacted, public health had already taken the meaning given it

by public health professionals whose job is to improve health

through a synthesis of the medical and social sciences,

including economics. Tellingly, the critical role that costs play

within this public health tradition is directly at odds with Lead

Industries’ absolute bar on considering such factors in setting

NAAQS. See Part II.A, infra.

Second, provisions surrounding section 109(b) give further

testimony to the important role countervailing factors should

play in NAAQS rulemakings. Specifically, the information on

which NAAQS are to be “based” is not limited to the section

108(a)(2) Criteria Document (which itself should properly

include non-medical information), but also includes CASAC’s

findings, recommendations, and comments, as well as

comments and data from the public. Section 108(b)

accordingly requires EPA to develop data on control costs

simultaneously with preparation of the Criteria Document and

well in time to be used in the relevant NAAQS rulemaking.

Likewise, section 109(d) requires, inter alia, that CASAC

“advise the Administrator of any adverse public health, welfare,

social, economic or energy effects which may result from”

EPA’s proposed NAAQS. See Part II.B, infra. Finally, as the

record here demonstrates, EPA simply cannot achieve the Act’s

statutorily-codified purpose of “public health” protection—or

even avoid doing more harm than good—without taking

countervailing factors into account. See Part II.C, infra.

One last option requires exploration. Perhaps,

notwithstanding Lead Industries, EPA often does consider

countervailing factors such as compliance costs in setting

NAAQS— albeit covertly and beyond public view. In fact, the

scholarly literature establishes that economic analyses played

significant, behind-the-scenes roles in setting both the 1979

ozone NAAQS and the 1987 PM NAAQS. The

Administrator’ s repeated invocations of her wide, discretionary

powers of “judgment” therefore might be meant as hints that

such analyses played similar roles here. Such disguised

decisionmaking would underscore the conflict between EPA’s

professed interpretation of section 109 and its practice under

analogous Clean Air Act provisions, where, notwithstanding

Lead Industries, the Agency has openly and successfully

claimed authority to consider economic factors. See Part III.A,

infra. Even more important, however, such concealed

decisionmaking would (1) undermine Presidential oversight

under the cost-and-benefit-assessment provisions of Executive

Order 12,866; (2) defeat similar requirements of the Unfunded

Mandates Reform Act of 1995; and (3) subvert the foundational

premises of judicial review on traditional rationality grounds.

See Part III.B, infra. For all of the above reasons, Lead

Industries should be rejected by the Court.

ARGUMENT

As noted in our certiorari briefing, the D.C. Circuit has

treated Lead Industries as a precedential leper—diseased but

untouchable—ever since it re-endorsed it in fashioning a

consensus interpretation of another Clean Air Act provision in

NRDC v. EPA, 824 F.2d 1146, 1154-58 (D.C. Cir. 1987) (en

banc) (“Vinyl Chloride”). Lead Industries itself directly

addressed and rejected only arguments that an “economic and

technological feasibility” test must be used in establishing

“margins of safety” under section 109, and that the Agency

must show “clear” health effects before regulating. Lead Indus.

Ass'n v. EPA, 647 F.2d 1130, 1148, 1153-54 (D.C. Cir. 1980).

But the D.C. Circuit has since read Lead Industries to preclude

consideration of all factors of “cost,” American Petroleum Inst.

v. Costle, 665 F.2d 1176, 1185 (D.C. Cir. 1981), and even

indirect health effects such as “health risks from

unemployment” caused by a more stringent NAAQS. NRDC

v. EPA, 902 F.2d 962, 973 (D.C. Cir. 1990), vacated in part,

921 F.2d 326 (D.C. Cir.), cert. dismissed sub nom. Alabama

Power Co. v. NRDC, 498 U.S. 1075 (1991). This line of cases

has become so extreme that the panel below brushed aside

without comment arguments that the Agency erred by ignoring

health effects resulting from disruption of the States’ ongoing

air-quality improvement efforts. See OJA 223; PMJA 319.

“lead Industries,” as used below and elsewhere, has thus

become a shorthand for the D.C. Circuit’s extreme insistence

that all countervailing factors (excepting only a pollutant’s

direct health benefits) are “non-health” factors and therefore

barred from EPA’s consideration in setting NAAQS.

I. THIS COURT’S DECISIONS NEGATE THE

PREMISES ON WHICH LEAD INDUSTRIES 1S

PREDICATED.

No statute, and certainly not the Clean Air Act provisions

at issue here, can be interpreted in a contextual vacuum. To be

sure, “[t]he task of resolving the dispute over the meaning of”

statutes must begin “with the language of the statute itself.”

United States v. Ron Pair Enters., Inc., 489 U.S. 235, 241

(1989). But “as [this Court] ha[s] repeatedly stated, the

meaning of statutory language, plain or not, depends on

context.” Holloway v. United States, 526 U.S. 1, 7 (1999)

(internal quotation and citations omitted); see also, ¢.g.,

Schenck v. Pro-Choice Network, 519 U.S. 357, 395 (1997)

(opinion of Breyer, J.) (“Words take on meaning from

context.”). The requirements for NAAQS standard-setting,

therefore, must be decided within “the broader context of [the

statute],” including the nature of the problem Congress sought

to solve. Robinson v. Shell Oil Co., 519 U.S. 337, 345 (1997).

The court of appeals set out the context here in detail. To

begin with, “EPA regards ozone definitely, and PM likely, as

nonthreshold pollutants, i.e., ones that have some possibility of

some adverse health impact (however slight) at any exposure

level above zero.” Pet. App. 5a. Accordingly, “the only

concentration for ozone and PM that is utterly risk-free, in the

sense of direct health impacts, is zero.” /d. at 6a. EPA thus

recognizes “that a less stringent standard would allow the

relevant pollutant to inflict a greater quantum of harm on public

health, and that a more stringent standard would result in less

harm.” /d. at 7a. But that truism does not mean “that keeping

pollution at or below any particular level is ‘requisite’ or not

requisite to ‘protect the public health’ with an ‘adequate margin

of safety.”” Jd.

Logically, this context forces EPA to pursue just one of

three regulatory options. First, “EPA could make its criterion

the eradication of any hint of direct health risk” —an approach

that “would require the agency to set the permissible levels of

both pollutants here at zero.” Pet. App. 15a. “A zero-risk

policy might seem to imply de-industrialization, but in fact

even that seems inadequate to the task (and even if the calculus

is confined to direct risks from pollutants, as opposed to risks

from the concomitant poverty).” /d. at 15an.4. As EPA’s Staff

Paper and a World Bank report show, “PM (at least) results

from almost all combustion, so only total prohibition of fire or

universal application of some heretofore unknown control

technology would reduce manmade emissions to zero.” /d.

Second, EPA could select a non-zero standard without

considering the factors that might counsel in favor of or against

a more or less stringent NAAQS. But the difficulty with this

option is that any such selection must, of necessity, be made

arbitrarily. In these very rulemakings, “the agency rightly

recognizes that the question is one of degree,” but nonetheless

“offers no intelligible principle by which to identify a stopping

point.” Pet. App. lla. Indeed, EPA all but admits to having

made arbitrary choices by repeatedly asserting that it was free

to follow an ad hoc standard-setting approach that recognizes

“no generalized paradigm,” that “may not be amenable to

quantification in terms of what risk is ‘acceptable’ or any other

metric,” and that is “largely judgmental in nature.” 62 Fed.

Reg. at 38,864, 38,683, 38,688.

Finally, “cost-benefit analysis, races ‘ioned in [Jnternational

Union, United Automobile, Aerespace & Agricultural

Implement Workers of America, UAW v. OSHA, 938 F.2d 1310,

1319-21 (D.C. Cir. 1991) (“Lockout/Tagout I’)\,” would

provide a third alternative for NAAQS standard-setting but for

the fact that it is precluded by Lead Industries. Pet. App. 14a-

15a. The court of appeals’ citation makes clear that, as used

below, “cost-benefit analysis” means “only a systematic

weighing of the pros and cons.” Lockout/Tagout I, 938 F.2d at

1321; accord Stephen G. Breyer, et al., Administrative Law &

Regulatory Policy 181 (4th ed. 1999) (“cost-benefit criteria

would be understood in a less technical and more

commonsensical way, as an invitation to balancing a range of

variables”). This concept is broad enough to include properly

performed analyses under “significant risk” and similar rubrics.

Cf Benzene, 448 U.S. at 641-42 (plurality opinion). Indeed,

the court below suggested that EPA might develop an

intelligible principle based on one such approach —“a generic

unit of harm,” reflecting “Quality-Adjusted Life Years.” /d. at

16a-18a. But the court recognized that even that approach

might well be precluded by Lead Industries. See id. at 18a.

Only the third of these options—a systematic weighing of

pros and cons based upon rejection of Lead Industries —can be

squared with this Court’s precedents. As an initial matter, the

option of a zero-risk policy is expressly disclaimed by even

EPA, see Pet. App. 15a; supra at 7, and, in any event, could not

be adopted without the clearest possible evidence of

congressional intent. As this Court has noted, it is generally

“unreasonable to assume that Congress intended to give [an

agency] the unprecedented power over American industry” to

“impose enormous costs that might produce little, if any,

benefit.” Benzene, 448 U.S. at 645 (plurality opinion); see also

id. at 675-76 (opinion of Rehnquist, J.). Needless to say, there

is no such evidence of intent here.

The second option, non-zero standards set by

decisionmakers blinded to all countervailing factors, is

similarly precluded by this Court’s decisions. As Jowa Utilities

holds, all congressional delegations “require” the agency “to

apply some limiting standard, rationally related to the goals of

the Act.” Jowa Utilities, 525 U.S. at 388 (first emphasis in

original). The need for such limiting principles is especially

compelling where, as here, the entire economy is to sbe

regulated. See Fahey v. Mallone, 332 U.S. 245, 250 (1947)

(holding that delegations confering power over “unprecedented

economic problems of varied industries” must be more precise

than those regarding “a single type of enterprise”); Clinton v.

New York, 524 U.S. 417, 487 (1998) (Breyer J, concurring).

Because selection of any non-zero NAAQS cannot be made

“rationally” without a weighing of pros and cons, see Jowa

Utilities, 525 U.S. at 388, any non-zero NAAQS established

under Lead Industries will necessarily be arbitrary.

Both zero-risk and arbitrarily-set standards also suffer from

a further flaw under this Court’s decisions. Lead Industries

must mean either (as the D.C. Circuit says) that Congress itself

barred EPA from considering countervailing factors—an

implausible proposition for the reasons summarized below, see

Part Il—or else that Congress delegated to EPA the discretion

to ignore all “non-health” factors in setting NAAQS. This

Court traditionally “hesitates,” however, “before concluding

that Congress has intended such an implicit delegation.” FDA

v. Brown & Williamson Tobacco Corp., 120 S. Ct. 1291, 1296,

1314 (2000). Indeed, “[i]t is highly unlikely that Congress

would leave” choices of such magnitude to an administrative

agency. MCI] v. AT&T, 512 U.S. 218, 231 (1994). Thus, “[t}he

implausibility of Congress’s leaving a highly significant issue

unaddressed . . . is assuredly one of the factors to be considered

in determining whether there is ambiguity.” Christensen v.

Harris County, 120 S. Ct. 1655, 1664 n.1 (2000) (Scalia J.,

concurring); accord id. at 1667 (Breyer, J., dissenting)

(Chevron deference inapplicable “where one has doubt that

Congress actually intended to delegate interpretative authority

to the agency.”)

This Court’s decisions alone are therefore enough to prove

that Lead Industries was wrongly decided—unless, perhaps, the

statutory text were so absolutely clear as to lead inescapably to

the conclusion that Congress deliberately precluded EPA from

considering all supposedly “non-health” factors in setting

NAAQS. But just the opposite is the case. Far from

compelling the Lead Industries reading, the statutory text of

section 109(b)(1), the surrounding statutory provisions and the

Act’s public health purpose all show that Congress

contemplated that EPA would weigh such factors in the

standard-setting balance.

Il. THE ACT’S TEXT, STRUCTURE AND PURPOSE

SHOW THAT EPA MUST CONSIDER NON-

HEALTH FACTORS IN SETTING NAAQS.

The D.C. Circuit has most authoritatively stated its

rationale for Lead Industries as follows: “ambient air standards

set under section 109(b) must be based on ‘air quality criteria,’

which section 108 defines as comprising several elements, all

related to health,” thereby excluding “non-health” factors.

Vinyl Chloride, 824 F.2d at 1157-59. That rationale is

demonstrably wrong. First, the key text of section 109(b) was

added in 1970 to direct that EPA protect “public health,” a term

of art that traditionally signals the consideration of both

medical and economic factors. See Part II.A, infra. Second,

surrounding statutory provisions in sections 108(a), 108(b) and

109(d) all confirm that what the D.C. Circuit implies are “non-

health” factors, including compliance costs, are to be

considered in setting NAAQS. See Part II.B, infra. Finally, the

Act’s purposes, as stated in section 101(b), further reinforce the

role that these factors must play in standard-setting. See Part

IL.C, infra.

A. Section 109(b)(1)’s “Public Health” Focus

Necessarily Entails Consideration of Non-Health

Factors. .

The Act’s core standard-setting provision, section

109(b)(1), reads as follows:

National primary ambient air quality standards . . .

shall be ambient air quality standards the attainment

and maintenance of which in the judgment of the

Administrator, based on such criteria and allowing an

adequate margin of safety, are requisite to protect the

public health.

42 U.S.C. § 7409(b)(1). The aim of this provision is manifestly

to protect “public health,” but precisely what is meant by those

two words (or other key terms like “adequate” or “requisite” or

“margin of safety”) is nowhere defined. We do know that

section 109(b) was added by Congress in 1970 to replace a

previous State/federal enforcement mechanism that provided

that pollution that “endangers the health or welfare of any

persons shall be subject to abatement.” See Pub. L. No. 90-148

§ 108(a) (emphasis added). It is therefore logical to presume

that Congress intended to shift the focus away from pollution

that endangers “any person” and toward a broader concept of

“public health.”

With no definition in the statute itself, “public health” must

be construed “in accordance with its ordinary or natural

meaning.” FDIC v. Meyer, 510 U.S. 471, 476 (1994). “Public

health” was, of course, a well-established profession in 1970.

The discipline then, as now, is practiced through a synthesis of

medical and social sciences, with a significant emphasis on

economics. As the shift away from the language referring to

the “health” of “any person” and toward the aggregate

expression “public health” implies, the 1970 Congress must

have expected EPA to set standards by acting like public health

professionals, engaged in the traditional practice of their

combined medical and social science discipline.

The authoritative public health definition available to the

1970 Congress appeared in C.E.A. Winslow’s THE COST OF

SICKNESS AND THE PRICE OF HEALTH, published in 1951 as a

study for the World Health Organization on the comparative

costs and effectiveness of various measures for controlling

tuberculosis. That study defines “public health” as follows:

Public health is the science and the art of preventing

disease, prolonging life, and promoting physical

health and efficiency [by various means including] the

development of social machinery which will ensure to

every individual in the community a standard of

living adequate to the maintenance of health.

Id. at 28 (emphasis added). As is evident from the title and

contents of Winslow’s seminal work, costs provide an

important counter-balance in the practice of “public health,” as

Winslow understood the term. In particular, costs are integral

in choosing the “social machinery” for providing specific forms

and levels of health protection and in determining the effect

which specific measures will have on the population's

“standard of living.” See id. Indeed, Winslow himself

exemplifies the use of cost data for these purposes by

discussing the relative economic merits of preventative versus

curative strategies. See id. at 28-29.

It is therefore significant that Winslow’s public health

definition is cited to this day in leading technical dictionaries.

See Andrew Porteous, DICTIONARY OF ENVIRONMENTAL

SCIENCE AND TECHNOLOGY 445 (2d ed. 1996) (“The basic

definition of public health has been given by C.E.A. Winslow,

THE COST OF SICKNESS AND THE PRICE OF HEALTH; accord

Committee for the Study of the Future of Public Health,

Division of Health Care Services, Institute of Medicine, THE

—————

FUTURE OF PUBLIC HEALTH 39 (1988) (calling Winslow’s

definition “[oJne of the earliest deliberate efforts to define

public health’s mission [and] still one of the most frequently

cited”). Moreover, Winslow’s concept of public health as

considering costs through the synthesis of the medical and

social sciences remains influential not just in works of

reference, but also in the scholarly literature. '

' See David R. Holtgrave et al., Human Immunodeficiency Virus

Counseling, Testing, Referral, and Partner Notification Services, A

Cost-Benefit Analysis, 153 Arch. Intern. Med. (1993); Peter D. Jacobson,

et al., Litigation and Public-Health Policy Making: The Case of Tobacco

Control, 24 J. Health Pol. Pol’y & L. 769, 800 (1999) (“In any given public

health issue, the balance will vary depending on the nature and extent of the

abridgment of individual liberties, the nature and costs of the public health

intervention, the alternatives to governmental intervention, the voluntariness

of the activity, and the extent of harm to third persons in the absence of

governmental activity.”); George C. Cunningham, A Public Health

Perspective on the Control of Predictive Screening for Breast Cancer, 7

Health Matrix: J. of L.-Med. 31, 36 (1997) (breast cancer screenings must

be cost-beneficial and cost-effective); Michael J. Malinkowski,

Globalization of Biotechnology and the Public Health Challenges

Accompanying It, 60 Alb. L. Rev. 119, 163 (1996) (“The myriad of

biotechnology capabilities now reaching commerce cannot be made

sufficiently available to maximize improvements to public health without

cost-benefit analysis.”); Sustainable Redevelopment of Brownfields: Using

Institutional Controls to Protect Public Health, 29 E.L.R. 10243 (1999)

(“Among the issues relevan: to the effectiveness of institutional controls are

how long the risk is expected to remain, how many people may be exposed,

potential exposure pathways, whether children may be exposed, how the

population may change during the life of the risk, the cost of implementing

the control, and the health and safety consequences of exposure.”);

Lawrence O. Gostin, et al., The Law and the Public's Health: A Study of

Infectious Disease Law in the United States, 99 Colum. L. Rev. 59, 128

(1999) (“Public health law reform should promote public health goals by

mandating cost-effective alternatives”); Wendy E. Parmett, Tobacco, HIV.

and the Courtroom: The Role of Affirmative Litigation in the Formation of

Public Health Policy, 36 Hous. L. Rev. 1663, 1687 & n.147 (1999)

(“classic model of public health law” considers a form of cost-benefit

analysis); Lawrence O. Gostin & Zita Lazzarini, Prevention of HIV/AIDS

(continued...)

Although it is surely impossible to elicit a single

formulation of what it means to “protect public health,” there

can be no doubt that the phrase has long connoted a sensitivity

to comparative costs and benefits. Indeed, it may be possible

to generalize from the academic literature that “[p]ublic health

interventions should be based on the degree of risk, the cost and

efficacy of the response, and the burden on human rights.”

Lawrence O. Gostin & James G. Hodge, Jr., The Public Health

Improvement Process in Alaska: Toward a Model Public

Health Law, 17 Alaska L. Rev. 77, 83 (2000) (emphasis added).

But whatever precise formulation of the role of costs and

similar considerations is chosen, the fact remains that the

practice of modern “public health” means that these factors, at

a minimum, must be considered. Indeed, this Court itself

recently recognized in a different context that Congress could

not have intended health concerns to exclude all consideration

of cost, since the determination what degree of “risk” is

“unacceptabl[e]” necessarily “depend[s] on a judgment about

the appropriate level of expenditure for health care in light of

the associated . . . risk.” Pegram v. Herdrich, 120 S. Ct. 2143,

2150 (2000). There is accordingly no way to reconcile the

“ordinary and natural” meaning of “public health,” see Meyer,

510 U.S. at 476, with Lead Industries’ absolute bar on the

consideration oi such factors.

' (...continued)

Among Injection Drug Users: The Theory and Science of Public Health and

Criminal Justice Approaches to Disease Prevention, 46 Emory L.J. 587

(1997) (“the public health perspectiv[e] . . . readily lends itself to a

consequentialist analysis,” specifically, “weighing the benefits, costs, and

harms generated by each approach, to determine which yields the greatest

aggregate value”).

B. The Supporting Provisions in Sections 108(a),

108(b) and 109(d) Confirm that Non-Health

Factors, Including Compliance Costs, Are to Be

Considered in Setting NAAQS.

The Lead Industries line of cases has never focused on the

meaning of public health as outlined above. Those precedents

seek instead to tease out a definition, not directly, but by

negative implication from the fact that section 109(b)(1) directs

that NAAQS be promulgated “based on such criteria,”

presumably meaning the criteria document described in section

108(a)(2). Section 108(a)(2) requires EPA to develop:

Air quality criteria for an air pollutant [that] shall

accurately reflect the latest scientific knowledge

useful in indicating the kind and extent of all

identifiable effects on public health or welfare which

may be expected from the presence of such pollutant

in the ambient air, in varying quantities.

CAA § 108(a)(2), 42 U.S.C. § 7408(a)(2) (emphasis added).

The provision then sets forth, in its subparagraphs (A), (B), and

(C), three specific types of material that a criteria document

“shall include” “to the extent practicable”: (A) “variable

factors” which may alter the effects of the pollutant on “public

heath or welfare;” (B) other “air poilutants” that “may interact”

with the pollutant under study in the atmosphere “to produce an

adverse effect on public health or welfare;” and (C) “any

known or anticipated adverse effects on welfare.” /d.

As an initial matter, Subparagraph (C) by its terms

apparently contemplates that the criteria documents should go

beyond public health (however defined) and include

information on “any known or anticipated adverse effects on

public welfare.” “Welfare” is then defined by the Act to mean

effects on “soils, water, crops vegetation, manmade materials,

animals, wildlife, weather, visibility, and climate, damage to

and deterioration of property . . . as well as effects on economic

values and on personal comfort and well-being.” CAA

§ 302(h), 42 U.S.C. § 7602(h) (emphasis added). Under any

straightforward reading of these texts, the criteria document

must therefore include information on “adverse” effects on

“economic values and personal comfort”—concepts that surely

are broad enough to encompass non-health factors such as

compliance costs. Of course, such data are essential for setting

“secondary” NAAQS under section 109(b)(2). But nothing in

either section 108 or section 109 limits the use of cost and

similar data to the setting of “secondary” standards, or excludes

such information from consideration in setting “primary”

standards, such as those at issue here.

The D.C. Circuit has never addressed the text of section

108(a)(2)(C) except obliquely and in dictum. See Motor &

Equip. Mfrs. Ass'n v. EPA, 627 F.2d 1095, 1117-18 (D.C. Cir.

1979) (“MEMA’”). The D.C. Circuit’s MEMA dictum suggests,

however, that criteria documents need only assess those

“welfare effects” attributable to airborne pollution itself, not

welfare effects that attend NAAQS compliance. See id. at 1118

(“The terms ‘public health and welfare’ . . . encompass

economic values, but only to reflect the economic costs of

pollution, not the social costs of pollution control.”). But that

reading is contradicted by the immediately preceding text of

section 108(a)(2), which says that “[a]ir quality criteria for an

air pollutant shall accurately reflect . . . all identifiable effects

on public health or welfare which may be expected from the

presence of such pollutant in the ambient air, in varying

quantities.” CAA § 108(a)(2), 42 U.S.C. § 7408(a)(2)

(emphasis added). This broad directive to assess “all

identifiable effects” on “welfare” attributable to “the presence

of such pollutant in the ambient air” is, of course, precisely the

meaning which the MEMA court would give to the entirely

separate statement in section 108(a)(2)(C). The MEMA dictum

thus violates the “cardinal principle of statutory construction”

that statutes must be read so as “to give effect, if possible, to

every clause and word of a statute.” Bennett v. Spear, 520 U.S.

154, 173 (1997).

The D.C. Circuit also has assumed that section 108(a)(2)

“outlines the criteria”—that is, the exclusive criteria—‘on

which air quality standards are to be based.” Vinyl Chloride,

824 F.2d at 1159 (quoting Lead Industries, 647 F.2d at 1149

n.37) (emphasis added). But the text of section 109(b)(1) does

not compel this reading and other provisions of sections 108

and 109 positively refute it. First, the D.C. Circuit’s

interpretation fails to read “criteria” in conjunction with the rest

of the Act. Outside of the Clean Air Act, “criteria” can and

often do refer to standards on which “a decision may be based. ”

See WEBSTER’S NINTH NEW COLLEGIATE DICTIONARY 307 (9th

ed. 1987). As used in section 108, however, “criteria” refers

not to decisional standards, but to the compilations of

information that the Act requires EPA to use in NAAQS

standard-setting. EPA itself refers to each such compilation in

capital letters as a “Criteria Document.” See, e.g., 62 Fed Reg.

at 38,654 (PM rule); 62 Fed. Reg. at 38,857 (Ozone rule).

Second, a Criteria Document does not remotely establish

the exclusive compendium of decisional information necessary

for NAAQS standard-setting. The Act directs EPA to set

standards “based on” criteria documents; it does not require that

standards be “based solely on” criteria documents. Section 108

instead identifies information that criteria documents must

“include,” but are not necessarily limited to—the information

listed in subparagraphs (A), (B), and (C) of section 108(a)(2).

The Act then directs EPA to consider the Criteria Document in

conjunction with other informational sources, including the

“findings, recommendations and comments” of CASAC, CAA

§ 307(d)\(3), 42 U.S.C. § 7607(d)(3), plus “written comments,

data, or documentary information” submitted by the public,

CAA § 307(d\(4\B)i), 42 US.C. § 7607(d)(4)(B)i).

Moreover, Congress plainly expected that all of these

data—even those outside the Criteria Document—would be

part of the Administrator’s decisionmaking data set. The Act

thus expressly provides that EPA must respond to significant

public “comments, criticism, and new data,” CAA

§ 307(d)(6)(B), 42 U.S.C. § 7607(d)(6)(B), and offer “an

explanation of the reasons” for departures from CASAC’s

recommendations. CAA § 307(d)(3), 42 U.S.C. § 7607(d)(3).

Congress also made plain that compliance cost data, again

including data not contained in a Criteria Document, are among

the types of information that EPA necessarily must consider.

The 1970 amendments added not just section 109(b), but also

an elaborated requirement in section 108(b) that EPA

issue—‘“simultaneously” with the Criteria Document and

before EPA opens a NAAQS rulemaking—“information” on

the “cost” of “air pollution control techniques.” CAA

§ 108(b)(1), 42 U.S.C. § 7408(b)(1). Section 108(b)(1)

mandates that this cost information be provided to “states and

appropriate air pollution control agencies,” “announced in the

Federal Register,” and “made available to the general public.”

CAA § 108(d), 42 U.S.C. § 7408(d). Given the Act’s extensive

procedural provisions, the requirement that cost information be

provided simultaneously with a criteria document means that it

must be made available at least three or four years before States

begin planning compliance with a revised NAAQS. In the

meantime, EPA must provide time for CASAC review, issue a

proposal to revise a NAAQS, promulgate a final NAAQS, and

make area designations of compliance or non-compliance with

the new standard. See CAA § 107(d), 42 U.S.C. § 7407(d).

The self-evident purpose of section 108(b)(1)’s otherwise

inexplicably premature mandate must be to equip States,

localities, and others with the information needed to criticize

EPA’s consideration of compliance costs in NAAQS standard-

setting proceedings. Cf CAA § 307(d)(6)(B), 42 U.S.C.

§ 7607(d)(6)(B) (EPA required to “respond to significant”

public “comments, criticism, and new data”) (emphasis added).

i ee

If there were any doubt on this point, it was laid to rest by

the 1977 Amendments, which added the requirement that

CASAC “advise the Administrator” on both health

considerations and countervailing factors, including “any

adverse public health, welfare, social, economic, or energy

effects which may result from various strategies for attainment

and maintenance of” the NAAQS. CAA § 109(d)(2)(C)(iv), 42

U.S.C. § 7409(d)(2)(C)\(iv) (emphasis added). EPA cannot

seriously maintain that this required advice was to play no role

in the setting of revised NAAQS, for the Act also expressly

specifies that whenever EPA notices proposed NAAQS

revisions, it must summarize “any pertinent findings,

recommendations, and comments” by CASAC (including

advice under section 109(d)(2)(C)(iv)), and justify any

significant departures from CASAC’s recommendations. CAA

§ 307(d)(3), 42 U.S.C. § 7607(d)(3) (emphasis added); accord

H.R. Rep. 95-294, 95th Cong., Ist Sess. 10 (1977) (“In

deciding whether revision or promulgation of a new standard is

necessary, the Administrator must consider the advice of an

independent scientific review committee.”).

The court below incorrectly rejected this interpretation,

however, claiming that section 109(d)(2)(C)(iv) is aimed

largely at state officials and NAAQS implementation efforts.

See Pet. App. 21a. But that reading is contradicted by both the

provision’s text and the statutory structure. Section

109(d)(2)(C)(iv) could not be clearer—the advice called for by

that provision is to be given to “the Administrator,” not to State

officials. Moreover, section 109, by its terms, exclusively

concerns the setting of NAAQS by the EPA Administrator. It

is other sections of the Act, including section 110 and all of

Subpart 2 of Part D of Title I, that govern NAAQS

implementation by the States. Accordingly, both the plain

language and the placement of section 109(d)(2)(C)(iv) compel

the conclusion that CASAC’s economic advice is intended to

be used in setting NAAQS.

C. The Statutory Purpose Confirms that EPA Must

Consider Non-Health Factors in Setting NAAQS.

Considering all of the above provisions “in light of” the

Act’s “purposes and legislative history,” Gulf Oil Corp. v.

Copp Paving Co., 419 U.S. 186, 197 (1974), further reinforces

the requirement that EPA engage in a commonsense weighing

of benefits and costs. The first purpose of the Act, stated in

section 101(b)(1), is “to protect and enhance the quality of the

Nation’s air resources so as to promote the public health and

welfare and the productive capacity of its population.”

42 U.S.C. § 7401(b)(1) (emphasis added). This statement of

purpose underscores that NAAQS, the engine that drives the

national pollution control program, must be geared to provide

“public health” protection as traditionally defined. It also

makes plain that the aim of the Act is nof to protect the

Nation’s air resources for their own sake, but “so as” to

“promote public health and welfare and the productive capacity

of its population.” Jd. (emphasis added). This statement is a

reminder that in the Clean Air Act, “public health and welfare”

can never be divorced from “the productive capacity” upon

which both necessarily depend.’

2 The legislative history reinforces this point. The 1970 committee reports

do not directly address the question whether compliance costs should be

considered in setting NAAQS, apparently because Congress simply

assumed that benefits would dwarf those costs. A study in the

Congressional Record thus estimates that air pollution impostd costs on the

economy that “amount to many billions of dollars a year.” Legislative

History of the Clean Air Act Amendments of 1970, Vol. I at 248-49. The

National Institute of Environmental Health further estimated “[t)he cost of

environmentally induced disease” alone to be “$38 billion a year.” Id. at

124 (emphasis added). By contrast, control costs were expected to total

only $2.6 billion through 1975, plus an additional $1.9 billion in 1975, id.

at 249—an estimate that in retrospect proved far too low. See Mark K.

Landy, et al., THE ENVIRONMENTAL PROTECTION AGENCY: ASKING THE

WRONG QUESTIONS FROM NIXON TO CLINTON 67-70 (1994).

Given the Act’s codified purpose and the traditional

understanding of “public health,” EPA is compelled to ask in

each case whether its NAAQS will do more good than harm for

public. The record here almost certainly produces a negative

answer for ozone and, quite possibly, a negative answer for PM

as well. EPA’s ozone RIA, for example, shows that annual

ozone compliance costs will exceed benefits by $1.1 billion to

$8.1 billion for each year by 2010. RIA at ES-11, ES-17. By

contrast, the high-end estimate of EPA’s PM RIA purports to

show net benefits. But, if CASAC’s reservations about fine-

particle mortality are credited, the predicted benefits fall to

EPA’s low-end estimate, which means that costs also exceed

benefits for full attainment of the PM NAAQS. See supra at

19. Moreover, government officials outside EPA have

uniformly faulted EPA’s projected compliance costs for both

ozone and PM as significantly understated. See supra at 11, 19.

Finally, EPA’s benefit estimates for both rules omit all offsets

for health “disbenefits” of lower pollution levels, such as the

diminished ground-level screening of ultra-violet radiation that

OMB analysts project could be “similar in magnitude to the

respiratory-related beneficial effects of [an ozone] reduction.”

OJA at 2759, 2764; see also id. at 3089; supra at 8-9.

Ill. EPA MAY ACTUALLY BE CONSIDERING NON-

HEALTH FACTORS IN SETTING NAAQS WHILE

USING LEAD INDUSTRIES AS A SHIELD AGAINST

EXECUTIVE, CONGRESSIONAL AND JUDICIAL

OVERSIGHT.

The history of past revisions to the ozone and PM

standards shows that economic considerations almost inevitably

play a role in setting NAAQS, and, equally significantly, that

economic analyses can push decisionmakers in the direction of

both more lenient standards (as in the 1979 ozone revisions)

and more stringent ones (as in the 1987 PM revisions). In

revising the ozone NAAQS in 1979, Administrator Costle

admittedly took costs into account. In that case, the Regulatory

Analysis Review Group, established by a Carter Administration

Executive Order, prepared detailed estimates of expected

compliance costs assuming various NAAQS levels. See Mark

K. Landy, et al., THE ENVIRONMENTAL PROTECTION AGENCY:

ASKING THE WRONG QUESTIONS FROM NIXON TO CLINTON 67-

70 (1994). Despite EPA’s interpretation that non-health factors

were excluded from consideration, these estimates were

carefully considered by Administrator Costle and were the

centerpiece of heated debates between EPA and the Council of

Economic Advisors over the appropriate level of a revised

NAAQS. /d. at 70-73. Administrator Costle later admitted that

the level he selected took into account both medical and

economic considerations. See Wendy E. Wagner, The Science

Charade in Toxic Risk Regulation, 95 Colum. L. Rev. 1613,

1641-43 (1995).

The story was much the same when EPA last revised the

PM NAAQS in 1987, albeit with a twist. There, the EPA

Office of Policy Analysis prepared a cost-benefit assessment

that tended to support selecting the new PM NAAQS from the

lower end of the range proposed by the Staff Paper. See

Thomas O. McGarity, REINVENTING RATIONALITY 47-48

(1991). Administrator Ruckelshaus, while expressing

consternation that “he could not consider the cost and benefit

information,” stated nonetheless that the RIA (which was an

outgrowth of this earlier economics staff analysis) “played no

role whatsoever in his decisionmaking process . . . because he

declined to read it.” Jd. at 50,61. Still, “the knowledge among

lower-level work group participants and midlevel managers [of

the cost-benefit analysis] no doubt increased their comfort with

recommending that the Administrator choose an option from

the low end of the range.” /d. at 61.

In light of this history, it certainly would not be surprising

if EPA staff (or even the Administrator herself) privately

consulted the available economic studies in setting these

revised NAAQS. Indeed, the D.C. Circuit reversed the

Administrator for running afoul of Lead Industries by relying

on a “pragmatic” consideration—specifically, “administrative

convenience”—in selecting PM,, as the indicator for coarse

PM. See Pet. App. 52a-53a; supra at 17. The Administrator

also relied expressly on “efficien{[cy]” concerns in deciding to

promulgate both an annual and a 24-hour NAAQS for PM, ,.

See 62 Fed. Reg. at 38,670; supra at 17. And simultaneously

with the issuance of the NAAQS, the Administrator issued a

“soft” $10,000 compliance-cost cap per ton of emissions

reductions based on the RIA. See 62 Fed. Reg. at 38,429.

As demonstrated below, this suggestive evidence raises

still more fundamental questions about the viability of Lead

Industries. The possibility that the Administrator may have

considered supposedly non-health factors here, coupled with

the fact that EPA routinely reads analogous Clean Air Act

provisions to permit consideration of such factors, counsels the

utmost skepticism when confronting EPA’s continuing embrace

of Lead Industries. See Part Ill.A, infra. And even more

important, Lead Industries improperly shields EPA’s

decisionmaking from otherwise applicable executive,

congressional and judicial oversight mechanisms. See Part

Il1.B, infra. These two points present further grounds for

rejecting Lead Industries.

A. EPA Cannot Distinguish NAAQS Standard-Setting

from Analogous Clean Air Act Provisions Where

the Agency Has Successfully Argued that Non-

Health Factors May Be Considered.

Notwithstanding Lead Industries, EPA has successfully

argued that similarly worded Clean Air Act provisions permit

consideration of supposedly non-health factors, most recently

in State of Michigan v. EPA, No. 98-1497, 2000 WL 180650

(D.C. Cir. Mar. 3, 2000). State of Michigan involved an

interstate pollution transport provision prohibiting “any air

pollutant in amounts which will . . . contribute significantly” to

nonattainment of the national standards. CAA

§ 7410(aXK2KD\iX); 42 US.C. § 7410(aK2”D\iX)

(emphasis added). EPA argued this provision allows it to

require upwind States to impose “highly cost-effective

controls,” namely controls capable of removing NOx at “a cost

of $2,000 or less per ton.” 2000 WL 180650, at *8.

The D.C. Circuit accepted EPA’s interpretation based on

an analysis that began by posing the following question: “[C]an

an agency sensibly decide whether a risk is ‘significant’

without also examining the cost of eliminating it?” Jd. at *11

(internal quotation omitted). The court then ruled: “It is only

where there is a ‘clear congressional intent to preclude

consideration of cost’ that we find agencies barred from

considering costs.” /d. at *12. Turning to the provision at

issue, the court acknowledged that, like other provisions of the

Act, it was “[a] mandate directed to some environmental benefit

.. . phrased in general quantitative terms (‘ample margin of

safety,’ ‘substantial restoration,’ and ‘major’), [that] contains

not a word alluding to non-health tradeoffs.” /d. Afiter

discussing its precedents interpreting these provisions, the court

concluded that “in each case we found that in making its

judgments of degree the agency was free to consider the costs

of demanding higher levels of environmental benefit. So too

here.” Jd.

Nor is State of Michigan the first D.C. Circuit case to

uphold EPA’s authority to consider compliance costs under

Clean Air Act provisions that aim to improve air quality.

George E. Warren v. EPA, for example, upholds consideration

of costs under the Act’s anti-dumping provision, CAA

§ 211(k)(8), 42 U.S.C. § 7545(k\(8), which requires that

conventional gasoline from each supplier remain as clean as it

was in 1990. 159 F.3d 616, 623 (D.C. Cir. 1998). Similarly,

NRDC v. EPA upholds EPA’s use of a cost-benefit analysis in

determining whether to add various categories of industrial

sources to the list of “major” sources under the Act’s

“prevention of significant deterioration” provisions. 937 F.2d

641, 643 (D.C. Cir. 1991). And, of course, the D.C. Circuit,

sitting en banc in Vinyl Chloride, has also upheld consideration

of costs in setting “ample margins of safety” for hazardous air-

pollutant limitations. 824 F.2d at 1154-58.

In short, EPA’s bald assertion of a NAAQS exception to

otherwise well-established interpretive practice is unavailing.

Certainly, this claimed exception finds no support in the

statutory context or text. See Parts I and II, supra. Moreover,

even if the Act did not require that countervailing factors be

considered, EPA still could not maintain that it is permitted to

ignore those factors, given Brown & Williamson and similar

decisions of this Court. See supra at 31-32.

B. Rejecting Lead Industries Will Help to Insure

Effective Executive, Congressional and Judicial

Oversight for NAAQS Standard-Setting.

The well-established Executive Branch mechanisms for

overseeing agency rulemaking will work in the NAAQS

context only if Lead Industries is rejected. For over twenty-

five years, the Office of the President has overseen most major

regulatory initiatives by requiring steps designed to ensure that

such programs are cost-beneficial and cost-effective. President

Clinton’s Executive Order 12,866, like similar Orders from

previous Presidents, is directly enforced by the Executive, not

the Judiciary. See 58 Fed. Reg. 51,735, § 10 (Sept. 30, 1993).

The stated “philosophy” of that Order is that “agencies should

assess all costs and benefits of available regulatory alternatives,

including the alternative of not regulating.” Jd. § 1(a). “Costs

and benefits shall be understood to include both quantifiable

measures (to the fullest extent that these can be measured) and

qualitative measures of costs and benefits that are difficult to

quantify, but nevertheless essential to consider.” /d.

Significantly, however, the Order provides that “in

choosing among alternative regulatory approaches, agencies

should select those approaches that maximize net benefits

(including potential economic, environmental, public health

and safety, and other advantages; distributional impacts; and

equity), unless a statute requires another regulatory

approach.” Id. (emphasis added). This highlighted proviso is

then elaborated in section 1(b), which provides that the

agencies must adhere to these principles only “to the extent

permitted by law.” Given this proviso, NAAQS standard-

setting will enjoy a blanket exemption from Presidential

regulatory oversight so long as Lead Industries is the law.

Lead Industries poses essentially the same problems for

congressional regulatory oversight. In 1995, Congress enacted

the Unfunded Mandates Reform Act (“UMRA”), 2 U.S.C.

§ 1501 ef seq., to “requir[e] that Federal agencies . . . consider

estimates of the budgetary impact of regulations . . . upon State,

local and tribal governments and the private sector.” /d.

§ 1501(7)(B). Congress further directed that, in promulgating

each major proposed rule, the agency prepare a document that

includes “a qualitative and quantitative assessment of the

anticipated costs and benefits of the Federal mandate,” id.

§ 1532(a)(2); see also id. § 1511(a), and then select the “least

costly, most cost-effective or least burdensome alternative that

achieves the objectives of the rule,” id § 1535(a). As with

Executive Order 12,866, however, UMRA’s provisions, which

are directly enforced by Congress, rather than the courts, apply

only unless otherwise prohibited by law. See id. §§ 1532(a),

1535(b)(2). This exception likewise means that congressional

oversight of NAAQS standard-setting under UMRA will not

apply unless Lead Industries is rejected.

Lead Industries also threatens, for precisely the same

reasons, the very foundations of effective judicial review. The

Clean Air Act, like the APA, requires the Agency to engage in

reasoned, non-arbitrary decisionmaking. See CAA § 307(d)(9),

42 U.S.C. § 7607(d)(9). Under this form of traditional

rationality review, “[n]ot only must an agency’s decreed result

be within the scope of its lawful authority, but the process by

peo

which it reaches that result must be logical and rational.”

Allentown Mack Sales & Serv., Inc. v. NLRB, 522 U.S. 359, 374

(1998). A necessary foundation for that review is the “strict

and demanding requirement” that “an agency must cogently

explain why it has exercised its discretion in a given manner.”

Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co.,

463 U.S. 29, 48 (1983). Otherwise, the courts could not begin

to determine whether the agency had exercised its discretion in

a reasoned manner, and “expertise, the strength of modern

government, [would] become a monster which rules with no

practical limits on its discretion.” Jd.

To the extent that EPA actually considers costs, while

maintaining publicly that it does not, Lead Industries

jeopardizes the fundamental presuppositions under which

Congress delegates authority to EPA in the first instance. The

“recognition of Congress’ need to vest administrative agencies

with [delegated authority] carries with it the correlative

responsibility of the agency to explain the rationale and factual

basis for its decision . . . .” Bowen v. American Hosp. Ass'n,

476 U.S. 610, 627 (1986) (plurality opinion). This requirement

that agencies explain the actual basis for their decision “helps

maintain public accountability” by exposing those decisions to

public and congressional scrutiny. See, e.g., American Med

Ass'n v. Reno, 57 F.3d 1129, 1134 (D.C. Cir. 1995).

Finally, the alternative possibility that EPA truly is nor

considering costs runs afoul of a different reasoned

decisionmaking requirement—the requirement that agencies

undertake “consideration of the relevant factors” and “consider

[each] important aspect of the problem.” State Farm, 463 U.S.

at 42. Non-health factors are “relevant” for NAAQS standard-

setting for all of the statutory reasons detailed above. But it is

not just the Clean Air Act itself that establishes their relevance:

all of the most important decisionmakers in the NAAQS

context have also deemed such factors critical to making the

kind of hard choices that EPA necessarily must make in setting

NAAQS. That is true for EPA, as in State of Michigan, for

President Clinton, as in Executive Order 12,866, and for

Congress, as in the UMRA legislation.

UMRA is particularly instructive because it represents a

congressional determination that costs are relevant, and thus

should be considered under this Court’s earlier decision in State

Farm. As Judge Garland recently explained for the D.C.

Circuit, the courts “may consider [such statutes] in determining

whether EPA complied with the overall requirement that an

agency’s decisionmaking be neither arbitrary nor capricious,”

even though they are not judicially-enforceable in their own

right. Allied Local & Regional Mfrs. Caucus v. EPA, No. 98-

1526, 2000 WL 737750, at *16 (D.C. Cir. June 16, 2000)

(interpreting UMRA and an analogous statute); accord

Thompson v. Clark, 741 F.2d 401, 408 (D.C. Cir. 1984) (Scalia,

J.) (“To say that an agency’s compliance with [the statute] is

not reviewable as such is not to say that the agency can ignore

with impunity the effect of its rules”).

In sum, the context, text, structure, and purpose of the Act,

as well as related sources of law, all confirm that EPA must

consider countervailing “non-health” factors in setting

NAAQS. If there were any doubt on that score, however,

nondelegation considerations would require that they be

resolved in favor of considering costs and other countervailing

factors. The reasons why the nondelegation doctrine

independently requires that Lead Industries be repudiated will

be explained in our next brief.

CONCLUSION

For the foregoing reasons, this Court should reverse the

decision of the court of appeals to the extent that it precludes

EPA from considering factors other than health effects relating

to pollutants in the air, and order that court to vacate EPA’s

ozone and PM NAAQS and remand for EPA to reconsider its

standards under a proper interpretation of the Act.

APPENDIX

CAA § 101, 42 U.S.C. § 7401. Congressional findings and

declaration of purpose

(a) Findings—

The Congress finds

(1) that the predominant part of the Nation's population

is located in its rapidly expanding metropolitan and other urban

areas, which generally cross the boundary lines of local

jurisdictions and often extend into two or more States;

(2) that the growth in the amount and complexity of air

pollution brought about by urbanization, industrial

development, and the increasing use of motor vehicles, has

resulted in mounting dangers to the public health and welfare,

including injury to agricultural crops and livestock, damage to

and the deterioration of property, and hazards to air and ground

transportation;

=! (3) that air pollution prevention (that is, the reduction or

elimination, through any measures, of the amount of pollutants

produced or created at the source) and air pollution control at

its source is the primary responsibility of States and local

governments; and

(4) that Federal financial assistance and leadership is

essential for the development of cooperative Federal, State,

regional, and local programs to prevent and control air

pollution.

(b) Declaration

The purposes of this subchapter are—

(1) to protect and enhance the quality of the Nation's air

resources So as to promote the public health and welfare and the

productive capacity of its population;

(2) to initiate and accelerate a national research and

development program to achieve the prevention and control of

air pollution;

(3) to provide technical and financial assistance to State

and local governments in connection with the development and

execution of their air pollution prevention and control

programs; and

(4) to encourage and assist the development and

operation of regional air pollution prevention and control

programs.

A primary goal of this chapter is to encourage or

otherwise promote reasonable Federal, State, and local

governmental actions, consistent with the provisions of this

chapter, for pollution prevention.

CAA § 108, 42 U.S.C. § 7408. Air quality criteria and

control techniques

(a) Air pollutant list; publication and revision by

Administrator; issuance of air quality criteria for air

pollutants

(1) For the purpose of establishing national primary and

secondary ambient air quality standards, the Administrator shall

within 30 days after December 31, 1970, publish, and shall

from time to time thereafter revise, a list which includes each

air pollutant—

(A) emissions of which, in his judgment, cause OF

contribute to air pollution which may reasonably be anticipated

to endanger public health or welfare;

(B) the presence of which in the ambient air results from

numerous or diverse mobile or stationary sources; and

before December 31, 1970, but for which he plans to issue air

quality criteria under this section.

(2) The Administrator shall issue air quality criteria for

an air pollutant within 12 months after he has included such

pollutant in a list under paragraph (1). Air quality criteria for

an air pollutant shall accurately reflect the latest scientific

knowledge useful in indicating the kind and extent of all

identifiable effects on public health or welfare which may be

expected from the presence of such pollutant in the ambient air,

in varying quantities. The criteria for an air pollutant, to the

extent practicable, shall include information on—

(A) those variable factors (including atmospheric

conditions) which of themselves or in combination with other

factors may alter the effects on public health or welfare of such

air pollutant;

(B) the types of air pollutants which, when present in

the atmosphere, may interact with such pollutant to produce an

adverse effect on public health or welfare; and

welfare.

(b) Issuance by Administrator of information on air

pollution control techniques; standing consulting

committees for air pollutants; establishment; membership

(1) Simultaneously with the issuance of criteria under

subsection (a) of this section, the Administrator shall, after

consultation with appropriate advisory committees and Federal

departments and agencies, issue to the States and appropriate

air pollution control agencies information on air pollution

control techniques, which information shall include data

relating to the cost of installation and operation, energy

requirements, emission reduction benefits, and environmental

impact of the emission control technology. Such information

shall include such data as are available on available technology

and alternative methods of prevention and control of air

pollution. Such information shall also include data on

alternative fuels, processes, and operating methods which will

result in elimination or significant reduction of emissions.

**4%

CAA § 109, 42 U.S.C. § 7409. National primary and

secondary ambient air quality standards

(a) Promulgation

(1) The Administrator—

(A) within 30 days after December 31, 1970, shall

publish proposed regulations prescribing a national primary

ambient air quality standard and a national secondary ambient

air quality standard for each air pollutant for which air quality

criteria have been issued prior to such date; and

(B) after a reasonable time for interested persons to

submit written comments thereon (but no later than 90 days

after the initial publication of such proposed standards) shall by

regulation promulgate such proposed national primary and

secondary ambient air quality standards with such

modifications as he deems appropriate.

(2) With respect to any air pollutant for which air

quality criteria are issued after December 31, 1970, the

Administrator shall publish, simultaneously with the issuance

of such criteria and information, proposed national primary and

secondary ambient air quality standards for any such pollutant.

The procedure provided for in paragraph (1)(B) of this

subsection shall apply to the promulgation of such standards.

(b) Protection of public health and welfare

(1) National primary ambient air quality standards,

prescribed under subsection (a) of this section shall be ambient

air quality standards the attainment and maintenance of which

in the judgment of the Administrator, based on such criteria and

allowing an adequate margin of safety, are requisite to protect

the public health. Such primary standards may be revised in the

same manner as promulgated.

(2) Any national secondary ambient air quality standard

prescribed under subsection (a) of this section shall specify a

level of air quality the attainment and maintenance of which in

the judgment of the Administrator, based on such criteria, is

requisite to protect the public welfare from any known or

anticipated adverse effects associated with the presence of such

air pollutant in the ambient air. Such secondary standards may

be revised in the same manner as promulgated.

EEE

(d) Review and revision of criteria and standards;

independent scientific review committee; appointment;

advisory functions

**#4%

(2)(A) The Administrator shall appoint an independent

scientific review committee composed of seven members

including at least one member of the National Academy of

Sciences, one physician, and one person representing State air

pollution control agencies.

(B) Not later than January 1, 1980, and at five-year

intervals thereafter, the committee referred to in subparagraph

(A) shall complete a review of the criteria published under

section 7408 of this title and the national primary and

secondary ambient air quality standards promulgated under this

section and shall recommend to the Administrator any new

national ambient air quality standards and revisions of existing

criteria and standards as may be appropriate under section 7408

of this title and subsection (b) of this section.

Administrator of areas in which additional knowledge is

required to appraise the adequacy and basis of existing, new, or

revised national ambient air quality standards, (ii) describe the

research efforts necessary to provide the required information,

(iii) advise the Administrator on the relative contribution to air

pollution concentrations of natural as well as anthropogenic

activity, and (iv) advise the Administrator of any adverse public

health, welfare, social, economic, or energy effects which may

result from various strategies for attainment and maintenance

of such national ambient air quality standards.

CAA § 307, 42 U.S.C. § 7607. Administrative proceedings

and judicial review

*¥**

(d) Rulemaking

(1) This subsection applies to—

(A) the promulgation or revision of any national

ambient air quality standard under section 7409 of this title,

(3) In the case of any rule to which this subsection

applies, notice of proposed rulemaking shall be published in the

Federal Register, as provided under section 553(b) of Title 5,

shall be accompanied by a statement of its basis and purpose

and shall specify the period available for public comment

(hereinafter referred to as the “comment period”). The notice

of proposed rulemaking shall also state the docket number, the

location or locations of the docket, and the times it will be open

to public inspection. The statement of basis and purpose shall

include a summary of—

(A) the factual data on which the proposed rule is based;

_(B) the methodology used in obtaining the data and in

analyzing the data; and

. (C) the major legal interpretations and policy

considerations underlying the proposed rule.

The statement shall also set forth or summarize and provide a

reference to any pertinent findings, recommendations, and

comments by the Scientific Review Committee established

under section 7409(d) of this title and the National Academy of

Sciences, and, if the proposal differs in any important respect

from any of these recommendations, an explanation of the

reasons for such differences. All data, information, and

documents referred to in this paragraph on which the proposed

rule relies shall be included in the docket on the date of

publication of the proposed rule.

*++?+

. (5) In promulgating a rule to which this subsection

applies (i) the Administrator shall allow any person to submit

written comments, data, or documentary information . . . .

. (6)(A) The promulgated rule shall be accompanied by

(i) a statement of basis and purpose like that referred to in

paragraph (3) with respect to a proposed rule and (ii) an

explanation of the reasons for any major changes in the

promulgated rule from the proposed rule.

(B) The promulgated rule shall also be accompanied by

a response to each of the significant comments, criticisms, and

new data submitted in written or oral presentations during the

comment period.

+++

Unfunded Mandates Reform Act, 2 U.S.C. § 1501. Purposes

The purposes of this chapter are—

(1) to strengthen the partnership between the Federal

Government and State, local, and tribal governments;

(2) to end the imposition, in the absence of full

consideration by Congress, of Federal mandates on State, local,

and tribal governments without adequate Federal funding, in a

manner that may displace other essential State, local, and tribal

governmental priorities;

(3) to assist Congress in its consideration of proposed

legislation establishing or revising Federal programs containing

Federal mandates affecting State, local, and tribal governments,

and the private sector by—

(A) providing for the development of information about

the nature and size of mandates in proposed legislation; and

(B) establishing a mechanism to bring such information

to the attention of the Senate and the House of Representatives

before the Senate and the House of Representatives vote on

proposed legislation;

(4) to promote informed and deliberate decisions by

Congress on the appropriateness of Federal mandates in any

particular instance;

(5) to require that Congress consider whether to provide

funding to assist State, local, and tribal governments in

complying with Federal mandates, to require analyses of the

impact of private sector mandates, and through the

dissemination of that information provide informed and

deliberate decisions by Congress and Federal agencies and

retain competitive balance between the public and private

sectors;

(6) to establish a point-of-order vote on the

consideration in the Senate and House of Representatives of

legislation containing significant Federal intergovernmental

mandates without providing uate ing to

= . adequate funding to comply with

(7) to assist Federal agencies in their consideration of

proposed regulations affecting State, local, and tribal

governments, by—

(A) requiring that Federal agencies develop a process to

enable the elected and other officials of State, = and tribal

governments to provide input when Federal agencies are

developing regulations; and

. (B) requiring that Federal agencies prepare and consider

estimates of the budgetary impact of regulations containing

Federal mandates upon State, local, and tribal governments and

the private sector before adopting such regulations, and

ensuring that small governments are given special consideration

in that process; and

. (8) to begin consideration of the effect of previously

imposed Federal mandates, including the impact on State, local,

and tribal governments of Federal court interpretations of

Federal Statutes and regulations that impose Federal

intergovernmental mandates.

Unfunded Mandates Reform Act, 2 U.S.C. § 1511. Cost of

regulations

(a) Sense of the Congress

It is the sense of the Congress that Federal agencies

should review and evaluate planned regulations to ensure that

the cost estimates provided by the Congressional Budget Office

will be carefully considered as regulations are promulgated.

+++

10a

2 U.S.C. § 1532. Statements to accompany significant

regulatory actions

(a) In general

Unless otherwise prohibited by law, before

promulgating any general notice of proposed rulemaking that

is likely to result in promulgation of any rule that includes any

Federal mandate that may result in the expenditure by State,

local, and tribal governments, in the aggregate, or by the private

sector, of $100,000,000 or more (adjusted annually for

inflation) in any | year, and before promulgating any final rule

for which a general notice of proposed rulemaking was

published, the agency shall prepare a written statement

containing—

(1) an identification of the provision of Federal law

under which the rule is being promulgated;

(2) a qualitative and quantitative assessment of the

anticipated costs and benefits of the Federal mandate, including

the costs and benefits to State, local, and tribal governments or

the private sector, as well as the effect of the Federal mandate

on health, safety, and the natural environment and such an

assessment shall include—

(A) an analysis of the extent to which such costs to

State, local, and tribal governments may be paid with Federal

financial assistance (or otherwise paid for by the Federal

Government); and

(B) the extent to which there are available Federal

resources to carry out the intergovernmental mandate;

(3) estimates by the agency, if and to the extent that the

agency determines that accurate estimates are reasonably

feasible, of—

(A) the future compliance costs of the Federal mandate;

and

lla

(B) any disproportionate budgetary effects of the

Federal mandate upon any particular regions of the nation or

particular State, local, or tribal governments, urban or rural or

other types of communities, or particular segments of the

private sector;

(4) estimates by the agency of the effect on the national

economy, such as the effect on productivity, economic growth,

full employment, creation of productive jobs, and international

competitiveness of United States goods and services, if and to

the extent that the agency in its sole discretion determines that

accurate estimates are reasonably feasible and that such effect

is relevant and material; and

(S)(A) a description of the extent of the agency's prior

consultation with elected representatives (under section 1534 of

this title) of the affected State, local, and tribal governments;

(B) a summary of the comments and concerns that were

presented by State, local, or tribal governments either orally or

in writing to the agency; and

comments and concerns.

(b) Promulgation

In promulgating a general notice of proposed

rulemaking or a final rule for which a statement under

subsection (a) of this section is required, the agency shall

include in the promulgation a summary of the information

contained in the statement.

Any agency may prepare any statement required under

subsection (a) of this section in conjunction with or as a part of

any other statement or analysis, provided that the statement or

analysis satisfies the provisions of subsection (a) of this section.

12a

§ 1535. Least burdensome option or explanation required

(a) In general

Except as provided in subsection (b) of this section,

before promulgating any rule for which a written statement 1s

required under section 1532 of this title, the agency shall

identify and consider a reasonable number of regulatory

alternatives and from those alternatives select the least costly,

most cost-effective or least burdensome alternative that

achieves the objectives of the rule, for—

(1) State, local, and tribal governments, in the case ofa

rule containing a Federal intergovernmental mandate; and

(2) the private sector, in the case of a rule containing a

Federal private sector mandate.

(b) Exception

The provisions of subsection (a) of this section shall

apply unless—

(1) the head of the affected agency publishes with the

final rule an explanation of why the least costly, most

cost-effective or least burdensome method of achieving the

objectives of the rule was not adopted; or

(2) the provisions are inconsistent with law.

No later than 1 year after March 22, 1995, the Director

of the Office of Management and Budget shall certify to

Congress, with a written explanation, agency compliance with

this section and include in that certification agencies and

rulemakings that fail to adequately comply with this section.

l3a

Executive Order 12866, 58 Fed. Reg. 51,735 (Sept. 30, 1993)

Regulatory Planning and Review

The American people deserve a regulatory system that

works for them, not against them: a regulatory system that

protects and improves their health, safety, environment, and

well-being and improves the performance of the economy

without imposing unacceptable or unreasonable costs on

society; regulatory policies that recognize that the private sector

and private markets are the best engine for economic growth;

regulatory approaches that respect the role of State, local, and

tribal governments; and regulations that are effective,

consistent, sensible, and understandable. We do not have such

a regulatory system today.

With this Executive Order, the Federal Government

begins « program to reform and make more efficient the

regulatory process. The objectives of this Executive order are

to enhance planning and coordination with respect to both new

and existing regulations; to reaffirm the primacy of Federal

agencies in the regulatory decision-making process; to restore

the integrity and legitimacy of regulatory review and oversight;

and to make the process more accessible and open to the public.

In pursuing these objectives, the regulatory process shall be

conducted so as to meet applicable statutory requirements and

with due regard to the discretion that has been entrusted to the

Federal agencies.

Accordingly, by the authority vested in me as President

by the Constitution and the laws of the United States of

America, it is hereby ordered as follows:

Section 1. Statement of Regulatory Philosophy and

Principles.

(a) The Regulatory Philosophy. Federal agencies should

promulgate only such regulations as are required by law, are

necessary to interpret the law, or are made necessary by

compelling public need, such as material failures of private

l4a

markets to protect or improve the health and safety of the

public, the environment, or the well-being of the American

people. In deciding whether and how to regulate, agencies

should assess all costs and benefits of available regulatory

alternatives, including the alternative of not regulating. Costs

and benefits shall be understood to include both quantifiable

measures (to the fullest extent that these can be usefully

estimated) and qualitative measures of costs and benefits that

are difficult to quantify, but nevertheless essential to consider.

Further, in choosing among alternative regulatory approaches,

agencies should select those approaches that maximize net

benefits (including potential economic, environmental, public

health and safety, and other advantages; distributive impacts;

and equity), unless a statute requires another regulatory

approach.

(b) The Principles of Regulation. To ensure that the

agencies’ regulatory programs are consistent with the

philosophy set forth above, agencies should adhere to the

following principles, to the extent permitted by law and where

applicable:

(1) Each agency shall identify the problem that it

intends to address (including, where applicable, the failures of

private markets or public institutions that warrant new agency

action) as well as assess the significance of that problem.

(2) Each agency shall examine whether existing

regulations (or other law) have created, or contributed to, the

problem that a new regulation is intended to correct and

whether those regulations (or other law) should be modified to

achieve the intended goal of regulation more effectively.

(3) Each agency shall identify and assess available

alternatives to direct regulation, including providing economic

incentives to encourage the desired behavior, such as user fees

or marketable permits, or providing information upon which

choices can be made by the public.

15a

(4) In setting regulatory priorities, each agency shall

consider, to the extent reasonable, the degree and nature of the

risks posed by various substances or activities within its

jurisdiction.

(5) When an agency determines that a regulation is the

best available method of achieving the regulatory objective, it

shall design its regulations in the most cost-effective manner to

achieve the regulatory objective. In doing so, each agency shall

consider incentives for innovation, consistency, predictability,

the costs of enforcement and compliance (to the government,

regulated entities, and the public), flexibility, distributive

impacts, and equity.

(6) Each agency shall assess both the costs and the

benefits of the intended regulation and, recognizing that some

costs and benefits are difficult to quantify, propose or adopt a

regulation only upon a reasoned determination that the benefits

of the intended regulation justify its costs.

(7) Each agency shall base its decisions on the best

reasonably obtainable scientific, technical, economic, and other

information concerning the need for, and consequences of, the

intended regulation.

(8) Each agency shall identify and assess alternative

forms of regulation and shall, to the extent feasible, specify

performance objectives, rather than specifying the behavior or

manner of compliance that regulated entities must adopt.

(9) Wherever feasible, agencies shall seek views of

appropriate State, local, and tribal officials before imposing

regulatory requirements that might significantly or uniquely

affect those governmental entities. Each agency shall assess the

effects of Federal regulations on State, local, and tribal

governments, including specifically the availability of resources

to carry out those mandates, and seek to minimize those

burdens that uniquely or significantly affect such governmental

entities, consistent with achieving regulatory objectives. In

16a

addition, as appropriate, agencies shall seek to harmonize

Federal regulatory actions with related State, local, and tribal

regulatory and other governmental functions.

(10) Each agency shall avoid regulations that are

inconsistent, incompatible, or duplicative with its other

regulations or those of other Federal agencies.

(11) Each agency shall tailor its regulations to impose

the least burden on society, including individuals, businesses of

differing sizes, and other entities (including small communities

and governmental entities), consistent with obtaining the

regulatory objectives, taking into account, among other things,

and to the extent practicable, the costs of cumulative

regulations.

(12) Each agency shall draft its regulations to be simple

and easy to understand, with the goal of minimizing the

potential for uncertainty and litigation arising from such

uncertainty.

*e eK

Section 10. Judicial Review.

Nothing in this Executive order shall affect any

otherwise available judicial review of agency action. This

Executive order is intended only to improve the internal

management of the Federal Government and does not create

any right or benefit, substantive or procedural, enforceable at

law or equity by a party against the United States, its agencies

or instrumentalities, its officers or employees, or any other

person.

**e%

PROT nT er ae

ROBIN S. CONRAD

NATIONAL CHAMBER

LITIGATION CENTER, INC.

1615 H Street, N.W.

Washington, D.C. 20062

(202) 463-5337

Counsel for Chamber of

Commerce of the

United States

BETH L. LAW

ROBERT S. DIGGES

ATA LITIGATION CENTER

2200 Mill Road

Alexandria, VA 22314

Counsel for American

Trucking Associations, Inc.,

Burns Motor Freight, Inc.,

Garner Trucking, Inc.

JAN S. AMUNDSON

NATIONAL ASSOCIATION OF

MANUFACTURERS

1331 Pennsylvania Avenue, N.W.

Washington, D.C. 20036

Counsel for National

of Manufacturers

DIMETRIA G. (JIM) DASKAL

THE DASKAL LAW GROUP

3 Church Circle

Suite 500

Annapolis, MD 21401

Counsel for National

Coalition of Petroleum Retailers

Respectfully submitted,

EDWARD W. WARREN

Counsel of Record

ROBERT R. GASAWAY

JEFFREY B. CLARK

DARYL JOSEFFER

KIRKLAND & ELLIS

655 Fifteenth Street, N.W.

Washington, D.C. 20005

(202) 879-5000

CHARLES FRIED

1525 Massachusetts Avenue

Cambridge, MA 02138

(617) 495-4636

Counsel for American

Trucking Associations, Inc.

and Chamber of Commerce

of the United States

GARY H. BAISE

ELIZABETH S. POLINER

BAISE, MILLER & FREER, P.C.

1020 19th Street, N.W.

Washington, D.C. 20036

Counsel for Equipment

Manufacturers Institute

DAVID M. FRIEDLAND

BEVERIDGE & DIAMOND

1350 I Street, N.W.

Suite 700

Washington, D.C. 20005

Counsel for National Small

Business United, The

American Portland Cement

Alliance, and The Glouster

Company, Inc.

DOUGLAS I. GREENHAUS

NATIONAL AUTOMOBILE

DEALERS ASSOCIATION

8400 Westpark Drive

McLean, VA 22102

Counsel for National

Automobile Dealers

Association

JEFFREY L. LEITER

CHET M. THOMPSON

COLLIER, SHANNON, RILL &

SCOTT

3050 K Street, N.W.

Suite 400

Washington, D.C. 20007

Counsel for Non-Ferrous

Founders’ Society

ERIKA Z. JONES

TIMOTHY S. BISHOP

ADAM C. SLOANE

MAYER, BROWN & PLATT

1909 K Street, N.W.

Washington, D.C. 20006

Counsel for American Farm

Bureau Federation

ROBERT R. GASAWAY

KIRKLAND & ELLIS

655 Fifteenth Street, N.W.

Suite 1200

Washington, D.C. 20005

Counsel for American Road

and Transportation Builders

Association

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.