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

Supreme Court, U.S.

FILED

JUL 2 1 2000

~ CLERK

IN THE

Supreme Court of the United States

AMERICAN TRUCKING ASSN’S, INC. et al.,

Cross-Petitioners,

Vv *

BROWNER, EPA ADMIN °

Respondent.

On Writ of Certiorari to the

United States Court of Appeals

for the District of Columbia Circuit

BRIEF OF AMICUS CURIAE MERCATUS CENTER

IN SUPPORT OF CROSS-PETITIONER

ERNEST GELLHORN

Counsel of Record

ANN G. WEYMOUTH

Suite 100

2907 Normanstone Lane, N.W.

Washington, D.C. 20008-2875

July 21, 2000 (202) 319-7104

5

. TABLE OF CONTENTS

Ee RUN ae ) INTEREST OF AMICUS CURIAE .cosossovscssossesnsseoe

BU AEE VG ao IE | ia Shan ARGUMENT..........

Tae cones) Ee | I. INTRODUCTION AND BACKGROUND.......

Bede Oe Bs ee ae: | | | | Il. THE OZONE AND PARTICULATE MAT-

Bae. als, Ne eh ae ne acne TER RULES ARE BASED ON UNCERTAIN

gas : | EVIDENCE THAT DOES NOT JUSTIFY

Pa aaa ae THE SELECTED NAAQS LEVELS .........

* A. EPA Failed to Develop Comparative

el to ue Justifications for the New NAAQS Levels..

Rare AED Ce ot cs SO Ler eee | | B. The Consideration of Other Factors Such

ENERO no site. ier ay CSc eI : as Comparative Costs and Benefits is

Pay yt Necessary for Developing Reliable and

“RISE Les GE alias bee i BECAUSE OF LEAD INDUSTRIES, EPA

‘nn aS eine FAILED TO EXAMINE COST

a ae ag : | A. Health-Health Effects.........ssssssssssssesssssesseee

ae Soler es | B. Wealth-Health Effects .....c...scssssssssssssssssseee

ii

TABLE OF CONTENTS—Continued

IV. UNDER CHEVRON, THIS COURT

SHOULD DECIDE WHETHER THE CLEAN

AIR ACT EXCLUDES CONSIDERATION

OF COSTS AND OTHER EFFECTS AND

REMAND TO EPA THE ISSUE OF

IDENTIFING SPECIFIC DETERMINATE

CRITERIA ....c0ccccccccccocsssoscossossosossossscsssessnsssoonees

V. CONCLUSION ......cccccccrsscscccccescscescssesossosssssessees

Page

NA ES TS

iii

TABLE OF AUTHORITIES

Cases:

American Petroleum Inst. v. Costle, 665 F.2d

1176 (D.C. Cir. 1981), cert. denied sub nom.

American Petroleum Inst. v. Gorsuch, 455

Lr

American Trucking Ass'ns, Inc. v. EPA, 175 F.3d

LL

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

Corrosion Proof Fittings v. EPA, 947 F.2d 1201

EE

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

1130 (D.C. Cir.), cert. denied, 449 U.S. 1042

Lechmere, Inc. v. NLRB, 502 U.S. 527 (1992) ......

Maislin Indus., U.S., Inc. v. Primary Steel, Inc,

a

National Fed'n of Federal Employees v. Dep't of

Interior, 526 U.S. 86 (1999) ...........ccccccscescseeseees

NRDC vy. EPA, 824 F.2d 1146 (D.C. Cir. 1987)...

NRDC vy. 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, 498 U.S. 1075 (1991) .........cccccccsccceeesees

Statutes and Regulations:

26 U.S.C. § SON(C)(3)scrrecccsccssscsssssssccecsessesssssssssceees

42 U.S.C. § TAOU(D)(1) .ascccccccssscccessccescssssssceesceseeees

42 U.S.C. § 7409(b)(1) cccccccsvccecssssssccscsssssssssseceeseee

42 U.S.C. § 7409(d)(2)(A) cccscsvccccesscccccsssssscceseecesee

42 U.S.C. § 7412(1b)(1)(B) scsssscsesccsccccsscssssssssssseeeees

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

Page

iv

TABLE OF AUTHORITIES—Continued

Page

61 Fed. Reg. 65,715 (Dec. 13, 1996) .........ceeeeeees 9

61 Fed. Reg. 65,764 (Dec. 13, 1996) ..........ceeeeeees 17

62 Fed. Reg. 38,652 (July 18, 1997) ........cccceeeeeeees 6, 7, 13

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

Miscellaneous:

Advisory Council on Clean Air Compliance

Analysis Letter to EPA (October 23, 1996),

docketed as EPA-SAB-Council-ltr-97-001

<http://www.gov/science | /coul9701 .pdf>......... 21

American Thoracic Society, Asthma on _ the

Rise in Urban Areas, 1996 _ Inter-

national Conference Articles, (1996) <http://

www.thoracic.org/ic/ic96/mon4.html> ...........+. 18

Kenneth J. Arrow, et al., /s There a Role for

Benefit-Cost Analysis in Environmental,

Health and Safety Regulation?, 272 Science

RE Ce cncscnsnsssassenentanncsnnnnsmnnmnmeniemamatennnnets 20

Stephen J. Breyer, Breaking the Vicious Circle:

Toward Effective Risk Regulation (1993).......... 18, 22

CASAC Letter to Carol Browner re: Ozone

(November 30, 1995) in Ozone JA 238............. 10

CASAC Letter to Carol Browner re: Particulate

Matter (June 13, 1996) in PM JA 31664 ............. 10, 11

Susan E. Dudley & Wendy L. Gramm, EPA's

Proposed Ozone Standard May Harm Public

Health and Welfare, 17 Int’! J. Risk Analysis

|) 13, 16

EPA, Calculations of the Impact of Tropospheric

zone Changes on UV-B Flux and Potential

Skin Cancers (Draft)(September 1994)(Cupitt,

Larry T.) in Ozone JA 3089-3 104.000... ccceeeeeee 15

. a- S maine:

aay 2 :

v

TABLE OF AUTHORITIES—Continued

EPA, Regulatory Impact Analyses for the

Particulate Matter and Ozone National

Ambient Air Quality Standards and Pro-

posed Regional Hazard Rule (July 16,

1997) — <http://www.epa.gov/ttn/oarpg/naags

Page

ESSERE aot aas amie ne 19, 20, 21

C. Boyden Gray, The Clean Air Act Under

Regulatory Reform, 11 Tul. Env. L. J. 235

Ralph L. Keeney, Estimating Fatalities Induced

by the Economic Costs of Regulations, 14 J.

Risk & Uncertainty 5 (1997) ........ccccccsseeseseeees

Letter from Frank E. Kruesi, Assistant Secretary

for Transportation Policy, to Sally Katzen,

Office of Information and Regulatory Affairs,

Office of Management and Budget (Nov. 20,

aU) vecnccnppntanencistennenansemennenisapeainiattinediatiasaaians

Randall Lutter, /s EPA's Ozone Standard

Feasible?, AEI-Brookings Joint Center for

Regulatory Studies, Regulatory Analysis

No. 99-6 (December 1999) <http://www.aei.

brookings.org/search/results.asp>.............00s0000-

Randall Lutter & John F. Morrall, Health-Health

Analysis: A New Way to Evaluate Health and

Safety Regulation, 8 J. Risk & Uncertainty 43-

GR i cnerecininsnstttcnsnaptnenntiiepnnattiiamenaammastcsiamtaas

Randall Lutter, John F. Morrall, Il, & W. Kip

Viscusi, The Cost-Per-Life-Saved Cutoff for

Safety-Enhancing Regulations, 37 Economic

Inquiry 599 (October 1999)

14

22

18

18

vi

TABLE OF AUTHORITIES—Continued

Randall Lutter & Christopher Wolz, UV-B

Screening by Tropospheric Ozone: Impli-

cations for the National Ambient Air Quality

Standard, Environmental Science & Tech-

nology, Vol. 31, NO. 3 (1997) ......ccceeeeeeeeeeeees

Mercatus Center, Comments on NAAQS for PM,

RSP 1997-1 (March 12, 1997) ........ccccscceeseereees

Mercatus Center, Comments on NAAQS for

Ozone, RSP 1997-2 (March 12, 1997).........00000

Merriam-Webster’s Collegiate Dictionary 61

(aba OB. TGFG) .ccccccccresccsccsssccessesesecsesssscssssosecs

Richard D. Morgenstern, Economic Analyses

at EPA: Assessing Regulatory Impact (Re-

sources for the Future 1997) ...........ccccccseseeereeeees

National Research Council, Paying Our Way:

Estimating Marginal Social Costs of Freight

Transportation, TRB Special Report #246

Presidential/Congressional Commission on Risk

Assessment and Risk Management,

Framework for Environmental Health Risk

Management, Vol. 1 (1997).......cccceseeeeseerreeeenees

Anne E. Smith, et al, Costs, Economic Impacts,

and Benefits of EPA’s Ozone and Particulate

Standards, Reason Public Policy Institute

SN |

Statement of EPA Administrator Carol M.

Browner before Senate Subcommittee on

Clean Air, Wetlands, Private Property &

Nuclear Safety of the Comm. on Environment

& Public Works, 105th Cong., Ist Sess. 280

Og 8,

Page

14

21

13, 15

Vii

TABLE OF AUTHORITIES—Continued

Statement of Marvin Frazier, DOE Office of

Health & Environmental Research, before

CASAC (March 21, 1995) in Ozone JA 258-

Cass R. Sunstein, Cognition and Cost-Benefit

Analysis, Univ. Chi. Law & Economics

Working Paper No. 85 (2d. Series) (October

1999) (forthcoming J. Legal Studies)

<http://www.law.uchicago.edu/Publications/W

IP icrctnininrcccntantitiiitietiicaiaiisiaitnans

Tammy O. Tengs & John D. Graham, The

Opportunity Cost of Haphazard Social

Investments in Life-Saving, ch. 8, in Risks,

Costs, and Lives Saved: Getting Better Results

from Regulation (Robert Hahn, ed. 1996) .........

Testimony of George T. Wolff before

Subcommittee on Clean Air, Wetlands, Private

Property & Nuclear Safety of the Senate

Committee on Environment & Public Works,

105th Cong., Ist Sess. 18 (Feb. 5, 1997)

Edward W. Warren & Gary E. Marchant, “More

Good Than Harm”: A First Principle for

Environmental Agencies and _ Reviewing

Courts, 20 Ecol. L. Q. 379 (1993)

Page

16

14

22

evesees 10, 11, 13

socnssnnussnesues 13, 20, 23

IN THE

Supreme Court of the United States

AMERICAN TRUCKING ASSN’S, INC. et al.,

Cross-Petitioners,

Vv .

BROWNER, EPA ADMIN.,

Respondent.

On Writ of Certiorari to the

United States Court of Appeals

for the District of Columbia Circuit

BRIEF OF AMICUS CURIAE MERCATUS CENTER

IN SUPPORT OF CROSS-PETITIONER

INTEREST OF AMICUS CURIAE

The Mercatus Center at George Mason University is a

nonprofit research and educational institution, as defined by

the Code of the Internal Revenue Service, 26 U.S.C.

§ 501(c)(3).' Its Regulatory Studies Program (“RSP”) is

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

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

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

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

whole or in part, and no persons other than the amicus curiae, its

members, or its counsel, have made a monetary contribution to its

preparation or submission. Counsel acknowledge the contribution of

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

writing of this brief.

2

dedicated to advancing knowledge of administrative

regulations and their effects on society. Through its Public

Interest Comment project, RSP submits independent analyses

of proposed rules in agency rulemaking proceedings. It filed

two such analyses with EPA on the proposed national

ambient air quality standards for ozone and particulate matter

during the comment period. Those comments focused on the

inadequacy of the scientific and economic foundation of the

proposed standards, the failure of EPA to consider offsetting

health risks and the disproportionate costs that would be

incurred in implementing the standards. Each is central to the

issue of the petition herein.

ARGUMENT

I. INTRODUCTION AND BACKGROUND

The issue in this case is whether the EPA and the lower

court correctly construed the Clean Air Act (“CAA”) when

they relied upon Lead Industries Ass'n, Inc. v. EPA, 647 F.2d

1130 (D.C. Cir.), cert. denied, 449 U.S. 1042 (1980), to

exclude indirect health effects, implementation costs, and

related risk considerations in setting National Ambient Air

Quality Standards (“NAAQS”). Section 109(b) of the CAA

directs EPA to set NAAQS at levels “requisite to protect the

public health” with an “adequate margin of safety.” 42

U.S.C. § 7409(b)(1). In Lead Industries, the D.C. Circwit

held that § 109 prohibited EPA from considering “ecoromic

or technological feasibility in setting ambient air quality

standards.” 647 F.2d at 1148. It specifically rejected

arguments that cost considerations were relevant in

establishing “margins of safety” under § 109 or that EPA had

to show “clear” health effects before approving standards for

protecting “public health.” /d. at 1154-1155; see id. at 1148,

Later decisions by the D.C. Circuit confirmed that EPA was

precluded from considering all factors of “ ‘economic and

technological feasibility,’ American Petroleum Inst. v.

a re oe yee

3

Costle, 665 F.2d 1176, 1185 (D.C. Cir. 1981), cert. denied

sub nom. American Petroleum Inst. v. Gorsuch, 455 U.S.

1034 (1982), including indirect health effects such as “costs

associated with alleged health risks from unemployment.”

NRDC vy. 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 unduly narrow reading of § 109 is not supported by

the CAA’s text, purpose, context, structure or legislative

history—or by common sense. It is, moreover, inconsistent

with the D.C. Circuit’s reading of a significant part of

§112(b)(1)(B) of the CAA, 42 U.S.C. § 7412(b)(1)(B), which

established the boundaries for hazardous pollutants “at the

level which in the [Administrator’s] judgment provides an

ample margin of safety to protect the public health.” In

NRDC vy. EPA, 824 F.2d 1146 (D.C. Cir. 1987) (en banc)

(“Vinyl Chloride”), the D.C. Circuit read § 112 as requiring

an EPA finding of “significant risk,” id. at 1153, and as

permitting consideration of non-health as well as compliance

costs and related matters in setting the emissions standards.

fd. at 1158, 1163-66. Thus, had the open-ended measure of

standard setting approved in Vinyl Chloride been adopted by

EPA and the D.C. Circuit in the instant case (rather than the

health restricted test of Lead Industries), it is unlikely that

this case or its companion, Docket No. 99-1257, would be

before the Court. That is, under that test, EPA’s discretion

would not have been largely unconfined, the requirements of

the nondelegation doctrine could have been satisfied, and a

NAAQS standard that properly took into account all relevant

factors, including implementation costs, could have beer

adopted.”

* The difference in the language of the two sections — “adequate” in

§ 109 and “ample” in § 112 — would have seemingly no impact on

whether cost and other factors were appropriate considerations in setting

pollutant levels. At most, these differences measure the quantum but not

4

These issues of statutory construction under § 109 are

persuasively addressed in Cross-Petitioners’ brief and we

endorse but do not repeat that analysis here.’ Our focus

instead is on the effect of EPA’s misguided reading of the

clause in § 109—that NAAQS levels for ozone and

particulate matter must “protect the public health” with an

“adequate margin of safety.” Because EPA’s reading

excludes consideration of important countervailing health and

welfare considerations (e.g., implementation costs as well as

direct and indirect health and welfare effects), the revised

NAAQS are unlikely to improve public health and welfare.

We examine the public health and welfare effects of different

decision rules that could be applied if EPA were not

constrained by Lead Industries, and show that these

alternative decision rules would better meet the statutory

directive of protecting public health with an adequate margin

of safety.

the kind of analytical support required for these EPA rules. See Merriam-

Webster's Collegiate Dictionary 61 (Deluxe ed. 1998) (“ample” is

something “more than adequate”).

* Amicus also is filing a brief in the companion “nondelegation” case

(Docket No. 99-1257) on the proper application of that doctrine in

interpreting § 109 of the CAA. Nonetheless, we believe that the issue

there is interconnected with the “substantive Lead Industries” case here

(Docket No. 99-1426) because a proper reading of § 109, requiring EPA

to consider cost, indirect health and related effects, will moot the

nondelegation issues in Docket No. 99-1257. On the other hand,

affirmance of the court of appeals in the nondelegation case (Docket No.

99-1257) will not resolve the substantive Lead Industries issues herein

because rejection of EPA’s interpretation of § 109 does not itself answer

the question of Congressional intent on the meaning of that section. That

question should be answered either by the Court (under Chevron step 1)

or by a reasonable interpretation by the agency (under Chevron step 2),

depending on whether Congress directly addressed the precise issues of

cost consideration. See pp. 23-4 infra.

5

The revised NAAQS rules at issue here represent a major

departure by EPA. Its prior standard for PM regulated all

particles larger than 10 microns; the revised standard expands

that regulatory scope by including fine particles of soot down

to 2.5 microns, which “are so small that several thousand of

them could fit on the type-written period of the end of a

sentence.” Statement of EPA Administrator Carol M.

Browner before Senate Subcommittee on Clean Air,

Wetlands, Private Property & Nuclear Safety of the Comm.

on Environment & Public Works, 105th Cong., Ist Sess. 280

(Feb. 12, 1997). The new rule generally retains the 1987

standards for particulate matter larger than 10 microns (PM)

but creates a new standard for fine particles larger than 2.5

microns (PMs). The PM25 standard specifies a maximum

annual average concentration of 15 and a daily maximum of

65 micrograms per cubic meter, summarized as 15/65

ug/m’. The previous ozone standard applied to concentrations

of .12 parts per million (ppm) averaged over one hour; the

new rule sets it at .08 ppm averaged over eight hours which

constitutes roughly a 10 percent reduction.* While

implementation cost estimates are necessarily imprecise,

responsible reviewers put total annual compliance costs for

the two standards between $46.3 billion (EPA’s estimate) and

$210 billion (Reason Public Policy Institute upper bound

estimate); the Mercatus Center estimated implementation

costs to be at least $100 billion annually. See discussion pp.

19 n.14, 20 & 22 n.16 infra.

EPA acknowledged that its selection of ozone and PM

levels—at .08 ppm for ozone and 15/65 g/m’ for PM) ;—

was not based on scientific evidence establishing a safe

threshold for ozone or PM health effects. Indeed, the

announced standards start from the assumption that there is

“The rule notes that an eight-hour standard of .09 ppm “generally

represents the continuation of the present level of protection.” NAAQS

Ozone Rule, 62 Fed. Reg. 38,856, 38,858 (July 18, 1997)(“Ozone Rule”).

6

no safe threshold below which ozone and PM would not pose

adverse health effects.” EPA therefore relied upon a “linear,

nonthreshold dose-response model” to evaluate the benefits

of each further reduction in ozone and PM.° However, under

this model. each further reduction in ozone and PM will be

found to improve public health (i.e., provide life-saving

benefits) no matter how “clean” the air already may be.

Thus, there is no standard above zero that could be said to be

“safe” or said not to cause adverse health effects.

Nonetheless, EPA did not set either standard at zero. It

understood, at least implicitly, that zero concentration levels

were technically infeasible, and that even if achievable, such

standards would impose severe economic and other costs that

dwarfed all possible benefits. American Trucking Ass'ns, Inc.

v. EPA, 175 F.3d 1027, 1038 & n4 (D.C. Cir. 1999).

Fettered by Lead Industries, however, EPA could not assert

that the costs of setting the standards at zero would outweigh

their benefits.’ EPA did not explain how or why it selected

> For PM, EPA suggests that a threshold may exist, but “the level or

even existence of population thresholds below which no effects occur

cannot be reliably determined by an examination of the results from the

available studies.” NAAQS PM Rule, 62 Fed. Reg. 38,652, 38,670 (July

18, 1997)("“PM Rule”).

*The linear, nonthreshold dose-response model that EPA used to

support its analysis relates the predicted change in health effects to a

change in the concentration of PM or ozone. Unlike other chemicals

regulated by EPA under this section of the CAA, EPA has no scientific

evidence of a threshold concentration below which PM or ozone will not

have health effects. This is the nonthreshold aspect of the model. The

linear aspect of the model assumes that regardless of the overall

concentration of ozone or PM to which an individual is exposed, a one

unit change in that concentration will have the same marginal effect on

public health.

” We use the terms “costs” and “benefits” here in their broadest senses

and include among them “risk” and “cost-benefit” analyses as well as

“wealth-health” and “health-health” effects (discussed pp. 12-23 infra).

7

the .08 ppm (ozone) or 15/65 g/m’ (PM25) levels as

compared with any other levels, and thus it did not identify a

principled basis for determining what concentrations of ozone

and PM in the atmosphere are adequate to protect public

health. This narrowly constrained decision structure, which

did not consider trade-offs between different health effects,

the cost of implementing a standard, or the health effects of

large compliance costs, conflicts with CAA § 101(b). That

section expressly identifies “promot{ing] the public health

and welfare and the productive capacity of its population” as

one of the primary purposes of the Clean Air Act. 42 U.S.C.

§ 7401(b)(1).

Confined by Lead Industries, EPA was forced to produce

an alternative, non-cost basis for the new ozone and PM

levels. As that alternative, it chose unbridled and essentially

unreviewable administrative discretion, asserting that

selecting the “adequate margin of safety” was “a policy

choice left specifically to the Administrator's judgment.”

Ozone Rule, 62 Fed Reg. at 38,857; see also PM Rule, 62

Fed. Reg. at 38,653. Thus, according to EPA, it is free under

CAA § 109 to select any point along a dose-response

continuum and claim that this point provides an adequate

margin of safety without regard to whether that margin could

be satisfied at a less stringent level or whether a more

stringent level was necessary.

Il. THE OZONE AND PARTICULATE MATTER

RULES ARE BASED ON _ UNCERTAIN

EVIDENCE THAT DOES NOT JUSTIFY THE

SELECTED NAAQS LEVELS

EPA’s own science advisors questioned whether its ozone

and PM standards would achieve EPA’s claimed public

health benefits. This uncertainty, when coupled with large

implementation costs, caused both outside experts and other

agencies within the government to question whether the air

8

quality concentration levels established by the standards were

justified. See, e.g., Letter from Frank E. Kruesi, Assistant

Secretary for Transportation Policy, to Sally Katzen, Office

of Information and Regulatory Affairs, Office of

Management and Budget (Nov. 20, 1996)(“It appears

incomprehensible that the Administration would commit to a

new set of standards and new efforts to meet such standards

without much greater understanding of the problem and its

solutions.”).

A. EPA Failed to Develop Comparative Justi-

fications for the New NAAQS Levels

The indeterminate nature of EPA’s supporting evidence for

its new standards was fostered by the narrowness of Lead

Industries’ direct health test. That is, forced to consider only

direct health measures (e.g., lung function) and prohibited

from considering indirect health effects (e.g., protection

against ultraviolet radiation) or compliance costs (e.g., Cost-

benefit comparisons), the EPA failed to develop any

justification for the specific levels selected in its NAAQS

standards. In particular, EPA was unable to explain why the

levels it selected, for example, of PM2,5 at 15/65 g/m’, were

appropriate as compared with any alternative such as a PM) 5s

level of 20/75 g/m’.

1. Ozone

The human clinical, epidemiological, and animal evidence

relied upon by EPA to support its more stringent ozone

standard does not explain why the level was set at .08 ppm

and not .07 or .09, or indeed at any point between the current

level and zero. The clinical studies of individuals running on

a treadmill detected changes in the force of exhalation of

persons exposed to ozone only at levels down to .08 ppm.

zone Rule, 62 Fed. Reg. at 38,859 & 38,863. Not only were

these measured responses “typically small or mild in nature,”

9

id. at 38,864, but also the effects were temporary and

reversible. More importantly, these studies did not examine

effects at levels lower than the proposed new standard of .08

ppm, and EPA did not distinguish between lung function

effects at .08 ppm and higher levels. /d. at 38,863-64.

Nor were these gaps filled by epidemiological studies. In

evaluating the effects of ozone, EPA reviewed studies

correlating high ozone concentrations and above normal

hospital admissions. /d. at 38,864. But as EPA admits, these

ozone hospital admissions only “represent a small fraction of

the total respiratory-related hospital admissions for

asthmatics” and provide no support for the particular ozone

standards of .08 because the studies report “no discernable

threshold at or below this level.” /d. Long-term laboratory

animal studies referenced by EPA did not fill this gap. While

subsequent dissection revealed changes in the biochemistry

and structure of the lungs, the animal studies showed no

change in behavior or function of the lungs at exposures

significantly higher than .08 ppm (.5 ppm to 1.0 ppm). 61

Fed. Reg. 65,715, 65,721 (Dec. 13, 1996). Indeed, at the

lowest exposure level examined of .12 ppm, animal studies

showed no effects at all. /d.

The issue here is not whether there is scientific evidence to

Support restrictions on ozone, but rather the absence of any

evidence showing why the .08 ppm standard is a correct or

reasonable level, or why a lower or higher level is not

better. Because of Lead Industries, EPA was not forced to

provide comparative evidence or consider other health or cost

effects that reduced the identified benefits from the new

standard or that offered a basis for a selected stopping point.

This unfocused state of the supporting evidence is even more

significant because EPA’s highly regarded Clean Air

10

Scientific Advisory Committee (“CASAC”)* did not endorse

the .08 ppm ozone standard. Im giving advice to the EPA

Administrator, the CASAC o»pilained that “there is no ‘bright

line’ which distinguishes amy of the proposed standards

(either the level or the number of allowable exceedances) as

being significantly more protective of public health” than the

existing standard. CASAC Letter to Carol Browner re:

zone (November 30, 1995) in Ozone JA 238.”

2. PM

The support for the PM); standard similarly fails to

identify why the new standard of 15/65 g/m? rather than

20/75 (or 12.5/20) was selected. Here there was a broad

consensus among CASAC members that available studies

supported the establishment of a standard for PM2 s; but there

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

PM,>; NAAQS.” CASAC Letter to Carol Browner re:

Particulate Matter (June 13, 1996) (“CASAC Letter”) in PM

JA 3164. In other words, EPA’s science advisors agreed that

fine particles warrant concern but the threat they present at

this time is too poorly understood to justify selection of any

particular level, or at least not a level of 15/65 ug/m’. Thus,

in his testimony before the Subcommittee on Clean Air,

Wetlands, Private Property & Nuclear Safety of the Senate

Committee on Environment & Public Works, 105th Cong.,

Ist Sess. 18 (Feb. 5, 1997), the chairman of CASAC, Dr.

George T. Wolff, emphasized the “many unanswered

* CASAC is a legislatively established body of independent experts

that provides advice to EPA on scientific and engineering issues. See 42

U.S.C. § 7409%(d)(2)(A).

*CASAC concurred (unanimously) that a measure of ozone that

focused on concentrations over an 8-hour period would be more

appropriate than the prior standard which measured concentrations over a

\-hour period. EPA states that the prior standard of .12 ppm measured

over | hour is equivalent to a standard of .09 ppm measured over 8 hours.

questions and uncertainties” left open by EPA’s supporting

evidence—e.g., which fine particles are hazardous, how to

interpret observed correlations between health effects and

PM—and concluded that it was impossible to rely upon

health effects as the sole basis for selecting any standard.

EPA was unable to identify the sources of particulates

which would need to be controlled if its regulations are to

have any beneficial effects on public health. The prepared

statement of CASAC Chair Dr. Wolff explained the problem:

PM and PM2> . . . are composed of four or five major

constituents and hundreds of trace constituents .... The

causative agent [of adverse public health effects} could

be some constituent of the PM rather than the total PM

or total PM2s which would require a control strategy

targeted at the causative constituent rather than at PMy,

or PMzs in general. . . . There is no biologically

plausible mechanism that could explain the apparent

relationship between acute mortality and PM at

concentrations that are a fraction of the present PM,

NAAQS. (/d. at 92-93.)

In brief, EPA’s official science advisors concluded with near

unanimity that the agency had not obtained critical missing

support for the level of its PM); rule. See CASAC Letter, PM

JA at 3165 (“[t}he Panel is unanimous . . . in its desire to

avoid being in a similar situation [of too little data with too

little time to evaluate and integrate it] when the next PM

NAAQS review cycle is under way by a future CASAC

Panel”).

B. The Consideration of Other Factors Such as

Comparative Costs and Benefits is Necessary

for Developing Reliable and Specific Standards

Forced to rely only upon direct evidence of adverse public

health effects in setting specific standards, EPA was left in a

12

quandary as to how to develop and support particular —

without being forced to select a zero standard. EPA clearly

considered tradeoffs when it chose to set a non-zero standard,

but it was not allowed to consider those trade-offs openly or

to use all the tools required for rational decision making. Ifa

reduction in ozone has harmful side effects (e.g.. reducing the

protection from ultraviolet rays, see pp.15-17 infra), that

information is critical in deciding whether and where to set

the standard. If the cost of reducing ozone and small particles

includes an increase in the number of asthma cases and more

deaths than lives saved, particularly among vulnerable groups

such as the urban poor, see pp. 17-19 infra, that information

should encourage setting the standard at a level that can be

achieved at more reasonable cost. How EPA's decision is

made—and, in particular, what information can be considered

and relied upon—is critical to whether the CAA s objective

of both improving public health and increasing productive

capacity will be achieved. 42 U.S.C. § 7401(b)(1).

IES, EPA

Ill. BECAUSE OF LEAD INDUSTRIES,

DECISION-MAKING IGNORED HEALTH AND

WEALTH TRADE-OFFS AND FAILED TO

EXAMINE COST CONSEQUENCES

In directing EPA to develop ambient air standards under

CAA § 109, Congress intended that when setting NAAQS

levels the agency should take account of all factors that could

impinge on public health. See Cross-Pet. Br. Part - (ex-

amining language, structure, context, purpose and legislative

history of § 109). The ruling in Lead Industries, that cost-

benefit analysis was not permissible and that only direct

health effects of the pollutant being regulated could be

considered, has thwarted the Congressional purpose. The

D.C. Circuit’s undue narrowing of EPA’s decision process

has meant that cost, feasibility, indirect health and wealth

effects—all of which are integral parts of public health policy

13

analysis—were not included. See generally Susan E. Dudley

& Wendy L. Gramm, EPA's Proposed Ozone Standard May

Harm Public Health and Welfare, 17 Int’! J. Risk Analysis

403 (1997); Edward W. Warren & Gary E. Marchant, “More

Good Than Harm”: A First Principle for Environmental

Agencies and Reviewing Courts, 20 Ecol. L. Q. 379 (1993);

cf. Presidential/Congressional Commission on Risk

Assessment and Risk Management, Framework for

Environmental Health Risk Management, vol. | at 38 (1997).

As the lower court demonstrated, EPA could have relied

upon a determinate decision rule that would eradicate “any

hint of direct health risk” by setting NAAQS levels at zero for

ozone and PM."” Cert. Pet. App. (Docket No. 99-1257) at

15a. But such a rule requiring “deindustrialization” was

rejected out of hand by EPA. As a consequence, EPA was

left with no guiding decision standard other than the

Administrator's subjective “policy judgment.” 62 Fed. Reg.

at 38,869 (ozone rule); id. at 38,691 (PM rule): see also

Testimony of George T. Wolff, supra at 17. This, the lower

court said, would violate the constitutional requirement that

the NAAQS standards set by EPA be based on some

determinate decision rule. Cert. Pet. App. (Docket No. 99-

1257) at 6a. The court further noted that “[e]veryday life

compels us all to make decisions balancing remote but severe

harms against a probability distribution of benefits,” id. at

16a, and suggested that EPA could develop a “generic unit of

harm” and determine how many such units are permissible

under the CAA in setting NAAQS standards. /d.

By definition, the balancing decisions made in everyday

life involve weighing the positive consequences of an action

against the negative consequences. Applied here, such a

An application of the “direct health effects” test in Lead Industries

would not have had the same consequences because lead was believed to

have a non-zero threshold—i.e., there were concentrations below which

no adverse health effects were found.

14

balancing would require that all factors be considered, not

just the negative health effects of pollutants in the air. To

guide that judgment the CAA should be read as permitting

cost-benefit analysis. Cost-benefit is merely a “regulatory

method that calls for regulators to identify, and make relevant

for purposes of decision, the good effects and the bad effects

of regulation, and to quantify those as much as possible in

terms of both dollar equivalents and life-years saved, hos-

pital admissions prevented, workdays gained, and so forth.”

Cass R. Sunstein, Cognition and Cost-Benefit Analysis p. 9,

Univ. Chi. Law & Economics Working Paper No. 85 (2d.

Series) (October 1999) (forthcoming J. Legal Studies)

<http://www.law.uchicago.edu/Publications/Working/index/h

tml>.'' Indeed, former EPA officials acknowledge that the

use of benefit-cost analysis at the beginning of the regulatory

process has led to significantly increased benefits and reduced

costs in the affected regulations. See Richard D. Morgen-

stern, Economic Analyses at EPA: Assessing Regulatory

Impact 2-3, 473-74 (Resources for the Future 1997) (former

Associate Assistant Administrator, EPA Office of Policy

Analysis).

Only by balancing the positive benefits of reducing ozone

and PM against offsetting negative consequences — of

achieving those reductions can EPA find an “intelligible

principle” on which to base its standards. This section offers

several balancing criteria applicable in that process. It begins

with health criteria and goes on to examine increasingly

broad decision rules to conclude that the statutory goals

'' See also C. Boyden Gray, The Clean Air Act Under Regulatory

Reform, \1 Tul. Env. L. J. 235, 260 (1998): “Making open and

accountable use of economic incentives and the law of diminishing

returns, as well as demanding that there be benefits to the public from a

rule net of any offsetting side-effects or dis-benefits, would . . . produce

more expansive air quality benefits, because costs saved in

implementation can be redirected to providing benefits.”

15

protecting public health and welfare are best promoted with

an open balancing of benefits and costs.

A. Health-Health Effects

EPA constrained its public health policy judgments to

preclude not only costs but many other factors that affect

public health, including other health effects. This single-

focus analysis violated basic risk management principles.

“Considering a risk in isolation cannot provide decision-

makers or the public with any sense of how important the risk

is, compared with other risks, or of the impact that reducing

or eliminating it might have on overall human and ecosystem

health.” Presidential/Congressional Commission on Risk

Assessment and Risk Management, supra at 38.

Had EPA engaged in a more complete analysis, it seems

clear that it would have been obliged to set the ozone

standard at a different level.'? In estimating the effects and

deciding the appropriate levels of permissible ozone

concentrations, EPA explicitly disregarded its own evidence

as well as evidence presented by other agencies that reducing

ground-level ozone to the EPA levels could reduce ozone’s

screening effect on harmful ultraviolet-B (“UV-B”) radiation

and lead to thousands of additional skin cancer and cataract

cases per year. See EPA, Calculations of the Impact of

Tropospheric Ozone Changes on UV-B Flux and Potential

Skin Cancers (Draft)(September 1994)(Cupitt, Larry T.) in

Ozone JA 3089-3104; Randall Lutter & Christopher Wolz,

'? The lower court unanimously reversed EPA's explicit disregard of

potential beneficial health effects of tropospheric (ground-level) ozone,

finding it a “bizarre” reading of the CAA to force EPA to “look{ | at only

one half of a substance’s health effects in determining the maximum level

for that substance.” Cert. Pet. App. (Docket No. 99-1257) at 47a. EPA

did not seek certiorari on this issue and, as a consequence, must go

through notice-and-comment rulemaking to address the evidence that

lowering the ozone NAAQS may have a negative net health effect.

16

UV-B Screening by Tropospheric Ozone: Implications for the

National Ambient Air Quality Standard, Environmental

Science & Technology, Vol. 31, No. 3 (1997). For example,

evidence in the record submitted by the Department of

Energy projected that a .0! ppm reduction in ozone

concentrations, as required by EPA’s ozone rule, would result

in 25 to 50 additional melanoma-caused fatalities, 130-260

additional incidences of cutaneous melanoma, 2,000-1 1,000

additional cases of non-melanoma skin cancer, and 13,000-

28,000 additional incidences of cataracts each year.

Statement of Marvin Frazier, DOE Office of Health &

Environmental Research, Before CASAC (March 21, 1995)

in Ozone JA 258-59. Critically, these negative results from

lowered ozone concentrations dwarfed EPA’s projected

positive health effects. Since none of the evidence reviewed

by EPA’s science advisors suggested that implementation of

EPA's stricter ozone rule would reduce human fatalities, the

loss of protective health benefits from current ozone levels

under the new rules would outweigh any health benefits that

could be gained from reduced ozone levels. See Susan E.

Dudley & Wendy L. Gramm, supra at 404:

[The Department of Energy’s analysis] suggests the rule

will induce 25-50 more fatalities each year (since EPA’s

best estimate of the health benefits of the new standard

do not include any reduced fatalities). To compare the

morbidity effects, we used EPA approaches to convert

health effects to dollars. We estimate that the negative

health impacts from this rule will exceed EPA’s best

estimate of the positive health effects by over $300

million per year.

Particulate matter also serves a beneficial screening

function against harmful UV-B radiation, although these

benefits, by themselves, do not outweigh the positive health

effects resulting from reductions in PM. Nonetheless, it is

unsound public policy and contrary to the CAA's

requirements to ignore the positive health effects of PM in

17

setting a standard designed to protect public health with an

adequate margin of safety. But that appears to be how EPA

proceeded here because of Lead Industries.

In its Advance Notice of Proposed Rulemaking for the

Ozone and PM standards 61 Fed. Reg. 65,764, 65,768 (Dec.

13, 1996), EPA described another unwelcome side effect of

reducing PM. It cautioned that “a reduction of a fine particle

precursor possibly can increase ozone or increase a different

fine particle component (e.g., SO, reductions leading to

increased ammonium nitrate or NO, reductions increasing

sulfate formation).” In other words, EPA recognized that the

reduction of fine particles as required by its PM); NAAQS

standard could increase emissions of other pollutants that may

have harmful health effects.

While consideration of health-health tradeoffs increases the

likelihood that public health will, on balance, be protected,

this methodology does not identify any specific standard (or

“intelligible principle”). For example, if the dose-response

function for both the beneficial UV-B effects and the

detrimental ozone or PM health effects are linear, and do not

exhibit a threshold, then a health-health decision rule will

drive the standard to zero in order to minimize levels of the

pollutant if the detrimental effects dominate (as may be the

case for PM) or lead EPA not to regulate the pollutant at all if

the beneficial effects dominate. (as may be the case for

ozone). Nonetheless, considering offsetting direct health

costs associated with a rule is essential if EPA is to optimize

public health.

B. Wealth-Health Effects

Just as both harmful and beneficial health affects should be

considered in determining whether a NAAQS. standard

satisfies the public health standard in § 109, similar

consideration should be given to the costs of implementing

18

EPA rules and of their effect on disposable family income. A

body of research indicates that serious health problems arise

when family living standards decline. See Stephen J. Breyer,

Breaking the Vicious Circle: Toward Effective Risk

Regulation 23 (1993) (“deprivation of real income itself has

adverse health effects, in the form of poorer diet, more heart

attacks, more suicides”).'*

The “wealth-health” decision rule translates such costs into

statistical deaths and counsels against imposing regulations

that are projected to cause a greater number of deaths

(through lower income) than they prevent. See Randall

Lutter & John F. Morrall, Health-Health Analysis: A New

Way to Evaluate Health and Safety Regulation, 8 J. Risk &

Uncertainty 43-66 (1994); Ralph L. Keeney, Estimating

Fatalities Induced by the Economic Costs of Regulations, \4

J. Risk & Uncertainty 5 (1997). Recent studies linking

income and mortality find that every $15 million decline in

net income induces one statistical death. See Randall Lutter,

John F. Morrall, Ul, & W. Kip Viscusi, The Cost-Per-Life-

Saved Cutoff for Safety-Enhancing Regulations, 37 Economic

Inquiry 599-608 (October 1999). The total number of

additional deaths attributable to the adverse wealth effects of

the ozone and PM rules ranges from 665 to 4,050 for the

ozone rule and 2,447 to 10,000 for the PM rule. Against

these numbers, EPA estimates that the ozone rule will prevent

350 fatalities and the PM rule another 3,300 to 16,000. In

other words, 315 to 3,700 additional deaths will occur under

'* Recent studies also suggest that poverty may be a more important

risk factor for asthma (which is the main health focus of the ozone and

PM rules) than air quality, so the extraordinary cost of these rules may

increase poverty—and thereby increase the very disease they are targeted

to diminish. See American Thoracic Society, Asthma on the Rise in

Urban Areas, 1996 International Conference Articles (1996)

<http://www.thoracic.org/ic/ic96/mon4.html> (“Poverty may be the num-

ber one risk factor for asthma.”).

19

the ozone rule, while more lives will be saved than lost under

the PM rule.'*

This analysis emphasizes the problems inherent in

narrowly constricting the factors that EPA can rely upon in

shaping and approving rules under the CAA. The NAAQS

regulations cannot be accurately assayed without including

the positive health benefits from ozone and PM as well as the

consequences of reducing consumer wealth and therefore of

increasing mortality.

C. Cost-Benefit Analysis

Proper application of health-health and wealth-health

effects are important in the design of rational NAAQS rules.

They nonetheless are limited tools. A full analysis of the

public health consequences of a major environmental rule

seeking to improve air quality must assess all the costs as

* Estimates of the annual cost of EPA's new ozone and PM rules range

widely. EPA estimated that the total will be $46.3 billion per year ($9.6

billion for ozone and $36.7 billion for PM). See EPA, Regulatory Impact

Analyses for the Particulate Matter and Ozone National Ambient Air

Quality Standards and Proposed Regional Hazard Rule 9-7 (July

16, 1997) <http://www.epa.gov/ttn/oarpg/naagsfin/ria.html> (“RIA”). The

1997 Mercatus Center analysis estimated that the full costs could exceed

$100 billion per year. Mercatus Center, Comments on NAAQS for PM,

RSP 1997-1 at 17 (March 12, 1997); Mercatus Center, Comments on

NAAQS for Ozone, RSP 1997-2 at C-3 (March 12, 1997). And a Reason

Public Policy Institute study estimated these costs as ranging from $20

billion to $60 billion per year for the ozone rule, and $70 to $150 billion

per year for the PM rule. Anne E. Smith, et al., Costs, Economic Impacts,

and Benefits of EPA's Ozone and Particulate Standards, Reason Public

Policy Institute 15 (June 1997) (“RPPI”). Using the $15 million income-

health relationship, EPA’s cost estimate would imply an increase in

mortality of 3,087 deaths each year. The RPPI’s estimates translate into

additional annual fatalities of 1,333 to 4,000 for the ozone rule and 4,667

to 10,000 for PM. To these numbers one also must add the 25-50

melanoma deaths noted earlier (p. 16 supra) that are attributable to

increased UV-B exposure because of reductions in ozone levels.

20

well as benefits of the intended regulation. The principle is

widely recognized and imbedded in agency rulemaking

subject to Presidential oversight. See, e.g., Executive Order

12,866, 58 Fed. Reg. 51,735 (Sept. 30, 1993) (even though

“some costs and benefits are difficult to quantify, [agencies

shall] propose or adopt a regulation only upon a reasoned

determination that the benefits of the intended regulation

justify its costs”). A cost-benefit analysis is simply a

comprehensive way of ensuring that a regulation does more

good than harm. See, e.g., Kenneth J. Arrow, et al., /s There

a Role for Benefit-Cost Analysis in Environmental, Health

and Safety Regulation?, 272 Science 221 (1996); see also

Edward W. Warren & Gary E. Marchant, supra. To deny an

agency the authority to examine all benefits and cosis—

whether focused on economic trade-offs, comparing risks,

evaluating technical requirements, analyzing feasibility, or

assessing other opportunity costs—is to consign its

regulations to weak and unsatisfactory justifications.

EPA did conduct a Regulatory Impact Analysis that

estimated the benefits and costs of the standards (in one year,

2010), although it argued that this information was “not

relevant to establishing the standards themselves.” RIA at

ES-3. EPA concluded that the cost of fully attaining the

ozone standard would be $9.6 billion and the benefits could

range from $1.5 billion to $8.5 billion in 2010. Thus, under

EPA’s estimate the ozone rule would impose costs in excess

of benefits of between $1.1 billion and $8.1 billion per year.

Meeting the PM standard in 2010, according to EPA's

estimates, would cost $36.7 billion, and offer benefits ranging

from $19.8 billion to $109.7 billion. R/A at 13-2. EPA thus

estimated that the net effect of achieving the PM standard in

2010 could range from net costs of $18 billion to net benefits

of $67 billion.

By EPA’s own analysis, the ozone rule clearly fails a cost-

benefit test, while the PM rule fails under certain

21

assumptions. Furthermore, EPA’s estimates have been

criticized as overstating benefits and understating costs. The

benefits figures are dominated by statistical deaths avoided

which, according to EPA’s approach, are valued at $4.8

- million each; but this figure “significantly overstates the

value most people would attach to the average number of life

years saved (per person) by the [Clean Air Act].” Advisory

Council on Clean Air Compliance Analysis Letter to EPA

(October 23, 1996), docketed as EPA-SAB-Council-

Itr-97-001<http://www.gov/science 1/coul9701.pdf>; see Na-

tional Research Council, Paying Our Way: Estimating

Marginal Social Costs of Freight Transportation, TRB

Special Report #246, at 159 (1996) (“12 years are lost on

average by a person who dies prematurely as a result of air

pollution”). Furthermore, the relationship between these

pollutants and mortality itself is in question. CASAC did not

review the studies EPA relied upon for the ozone mortality

effects, RIA 12-32, and it was concerned about “the many

unanswered questions and uncertainties associated with

establishing causality of the association between PM; and

mortality.” CASAC Letter, PM JA at 3164.

EPA recognized that its cost estimates were “speculative,”

RIA at 13-7, because it knew of no technologies to bring

many areas (at least 20% of the nation) into compliance with

the standards by 2010. It overcame this by first assuming the

deployment all known controls'> and then by assuming that

additional emissions reductions required to attain the

standards would cost $10,000 per ton. This arbitrary figure

'° To estimate the cost of full attainment, EPA first identified all known

technologies that could achieve emission reductions at $10,000 per ton or

less. These technologies combined were only predicted to achieve 23 to

38 percent, RIA at 7-9, of the emissions required to comply with the ozone

standard and 40 percent, R/A at 9-9, of the emissions required to comply

with the PM standard. EPA then assumed that the remaining emission

reductions could be achieved at $10,000 per ton.

22

unrealistically assumes that the remaining residual tons of

emissions can be removed as inexpensively as the earlier

tons. But see Stephen G. Breyer, supra at 11 (“Remov-

ing that last little bit can involve limited technological

choice, high costs, devotion of considerable agency re-

sources, large legal fees, and endless argument.”). Other

estimates place the costs of reducing the residual emissions

at between $30,000 and $90,000 per ton. RPP/ at 15;

see also Randall Lutter, Js EPA’s Ozone Standard

Feasible?, AEI-Brookings Joint Center for Regulatory

Studies, Regulatory Analysis No. 99-6 (December 1999)

<http://www.aei.brookings.org/search/results.asp> (“meeting

the standard in 2010 would cost nearly $5 trillion in one city,

and $70 billion in seven other cities”). Again, had such

calculations been considered as part of an explicit cost-benefit

analysis, EPA would have been forced to select different

NAAQS levels. '°

From a public health perspective, EPA’s deliberate

disregard of the costs of its NAAQS standards is a serious

deficiency because costs expended on reducing levels of

ozone and PM could otherwise be devoted to more beneficial

purposes. The net public benefit from a broader decision-

making focus can be substantial. One recent study conducted

at the Harvard Center for Risk Analysis found that a

reallocation of current spending from lower risk to higher risk

problems could more than double the number of lives saved.

See Tammy O. Tengs & John D. Graham, The Opportunity

'° Setting aside the likely overestimate of the benefits of the rules, and

simply correcting for the effect of the arbitrary cost cut-off on total cost

estimates suggests that both PM and ozone rules will impose social costs

far in excess of their benefits. As noted above, RPPI estimated total

ozone costs of between $20 billion and $60 billion per year, which is

significantly higher than EPA's expected benefits of $1.5 billion to $8.5

billion. Similarly, RPPI’s estimated costs of the PM rule range from $70

billion to $150 billion per year, compared to EPA’s projected benefits of

$19.8 billion to $109.7 billion.

23

Cost of Haphazard Social Investments in Life-Saving, ch. 8,

in Risks, Costs, and Lives Saved: Getting Better Results from

Regulation (Robert Hahn, ed. 1996). Such gains are likely

even when bureaucratic constraints, such as shifting funds

across agencies, remain in place.

The ultimate reason, however, for reversing the Lead

Industries ruling is that it misreads Congress’ obvious intent

when it required in § 109 that ambient air standards “protect

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

There is nothing in these terms or arywhere else in the Clean

Air Act requiring that major rules encompassing all aspects of

the economy be decided by looking selectively at only some

of the facts and some of the effects of the rules. Indeed, it is

irrational to suggest that Congress meant for EPA to do more

harm than good by its regulations. See E. Warren & G.

Marchant, supra at 417-28; see also Corrosion Proof Fittings

v. EPA, 947 F.2d 1201, 1221-22 (Sth Cir. 1991). Similarly,

Congress could not have meant that EPA was authorized to

set a standard at any level based on the Administrator’s

“policy judgment.” Direct health effects that are considered

under Lead Industries are important. But without identifying

how and where the benefits diminish or the costs increase,

arbitrary and erroneous decisions are inevitable. It is time, in

other words, to correct the long-standing mistake made in

Lead Industries that imposes an irrational decision-making

process on EPA that Congress never intended.

IV. UNDER CHEVRON, THIS COURT SHOULD

DECIDE WHETHER THE CLEAN AIR ACT

EXCLUDES CONSIDERATION OF COSTS AND

OTHER EFFECTS AND REMAND TO EPA THE

ISSUE OF IDENTIFYING SPECIFIC DETER-

MINATE CRITERIA

Lead Industries’ interpretation of the Clean Air Act to

exclude consideration of anything other than direct health

benefits is a question for the Court because it is clear that

24

Congress did not intend to constrain EPA’s assessment of the

effects of its NAAQS rules. See Chevron U.SA., Inc. v.

NRDC, 467 U.S. 837, 842-43 (1984) (no deference by court

where Congressional intent is clear); accord Federal Cert.

Opp. Br. (Docket No. 99-1426) at 9 (review of Lead

Industries as a Chevron step one case). Since Lead Industries

was a pre-Chevron case, the lower court was, within the

boundaries of stare decisis, bound by that determination. See

Maislin Indus., U.S., Inc. v. Primary Steel, Inc, 497 U.S. 116,

131 (1990) (once the Court has “determined a statute's clear

meaning, we adhere to that determination under the doctrine

of stare decisis, and we judge an agency’s later interpretation

of the statute against our prior determination of the statute's

meaning”); Lechmere, Inc. v. NLRB, 502 U.S. 527, 537

(1992); National Fed'n of Federal Employees v. Dep't of

Interior, 526 U.S. 86 (1999) (“NFFE” ).

However, that does not answer whether this Court or EPA

should decide in the first instance what “determinate

criterion” should be employed by EPA in “drawing lines” of

the levels of permissible pollutants pursuant to CAA § 109.

By its terms, § 109 requires consideration of the effect of the

selected standards on “public health” with an “adequate

margin of safety”; however, beyond that positive. require-

ment, § 109 does not rule out consideration of any health,

wealth or cost effects. By its terms, however, § 109 provides

no direct guidance on the criteria to be applied by EPA in

setting standards for particular pollutant levels or for setting

the parameters on how EPA’s authority is confined. The

circumstances here are similar to NFFE where the Court

found that even though the agency’s initial interpretation of

the ambiguous statutory term was reasonable, the issue had to

be remanded to the FLRA for reconsideration under the

newly defined mandate because it may have been clouded by

the erroneous reading of the D.C. Circuit. Thus, under

Chevron, the matter should be remanded to EPA to reinterpret

25

§ 109 under the new understanding of the factors that can be

considered. See 467 U.S. at 842-43.

Vv. CONCLUSION

The holding in Lead Industries that, in setting and revising

NAAQS under § 109 of the Clean Air Act, EPA may not

consider the costs, feasibility or other effects of implementing

the standards, should be set aside. By denying consideration

of cost-benefit as well as of health-health and wealth-health

effects, Lead Industries does more harm than good. Its

mischievous redesign of § 109 should be set aside. Only a

broad balancing of all consequences, such as are facilitated by

a robust cost-benefit analysis, will truly meet the Clean Air

Act’s goals.

Respectfully submitted,

ERNEST GELLHORN

Counsel of Record

ANN G. WEYMOUTH

Suite 100

2907 Normanstone Lane, N.W.

; Washington, D.C. 20008-2875

July 21, 2000 (202) 319-7104