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

'

No. 99-1426 JUL 2 | 2000

In The Supreme Court of the United States

AMERICAN TRUCKING ASSOCIATIONS, ef ai.,

Petitioners,

vs.

CAROL M. BROWNER, ADMINISTRATOR OF THE

ENVIRONMENTAL PROTECTION AGENCY, ef al.,

Respondents.

On Writ of Certiorari To The United States Court of

Appeals For The District of Columbia Circuit

MOTION FOR LEAVE TO FILE BRIEF AMICUS

CURIAE AND BRIEF AMICUS CURIAE FOR THE

AMERICAN BOILER MANUFACTURERS

ASSOCIATION SUPPORTING PETITIONERS

GENE E. GODLEY

Counsel of Record

SCOTT H. SEGAL

SHANNON H. RATLIFF, II

LISA M. JAEGER

BRACEWELL & PATTERSON, L.L.P.

2000 K Street, N.W., Suite 500

Washington, D.C. 20006-1872

(202) 828-5800

Counsel for Amicus Curiae

American Boiler Manufacturers Association

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229°

No. 99-1426

In The

Supreme Court of the United States

AMERICAN TRUCKING ASSOCIATIONS, ef al.,

Petitioners,

Vs.

CAROL M. BROWNER, ADMINISTRATOR OF THE

ENVIRONMENTAL PROTECTION AGENCY, ef al.,

Respondents.

MOTION FOR LEAVE TO FILE BRIEF AMICUS

CURIAE AND BRIEF AMICUS CURIAE

The American Boiler Manufacturers Association

hereby respectfully moves for leave to file the attached brief

amicus curiae in the above-referenced case. The consent of

the attorney for Respondent and all Pe’*.oners except one

have been obtained. Amicus has attempted but has been

unsuccessful in reaching attorney of record for Citizens for

Balanced Transportation, et al. Amicus has obtained the

consent of the attorney for several individuals who have

joined that brief, but has not obtained consent of the counsel

of record. Accordingly, the American Boiler Manufacturers

Association hereby moves for leave to file the attached brief

amicus curiae.

The American Boiler Manufacturers Association

("ABMA") represents the manufacturers of commercial,

industrial and utility steam generating and fuel burning

equipment, as well as suppliers to the industry. ABMA

promotes the common business interests of the boiler

manufacturing industry and the safe, environmentally friendly

use of the products and services of its members. ABMA

serves to generate support in state and federal governments for

industry concerns, while also informing the public of vitality,

environmental consciousness and high-tech orientation of the

boiler industry.

Participating as amicus curiae, ABMA hopes to aid the

Court in its consideration of the writ of certiorari by providing

insight into the complexities of setting environmental standards

and the need for full consideration of all factors bearing on

these decisions.

Respectfully Submitted,

GENE E. GODLEY

Counsel of Record

ScoTT H. SEGAL

SHANNON H. RATLIFF, II

LIsA M. JAEGER

BRACEWELL & PATTERSON, L.L.P.

2000 K Street, N.W., Suite 500

Washington, D.C. 20006-1872

(202) 828-5800

Counsel for Amicus Curiae

American Boiler Manufacturers

Association

—_——_ ae = -

TABLE OF CONTENTS

Page

Interest of Amicus Curiae .......................4.. l

EE ee 2

STU UU esa cagesceccescovcccccccces 3

ELS SIO TPET TET EE ETE 16

TABLE OF AUTHORITIES

FEDERAL CASES Page

American Trucking Ass'n, Inc. v. EPA, 175 F.3d 1027

modified, 195 F.3d 4 (1999) ............. 4,8

Industrial Union Dept., AFL-CIO v. American Petroleum

Inst., 448 U.S. 607 (1980) ........... 4,5,8,9

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

MD «ccc cecceces passim

Natural Resources Defense Council, Inc. v. EPA, 824 F.2d

DT, ME «cccecesccceces 13,14

State of Michigan v. EPA, No. 98-1497 2000 U.S. App.

LEXIS 3209 (D.C. Cir., March 3, 2000)

DUPUEEEEeeSdeeceeecocececs 3,10,11,13,14

FEDERAL STATUTES

CLEAN AIR ACT § 101(b)(1), 42 U.S.C. § 7401(0)(1) .... 4

CLEAN AIR ACT § 108, 42 U.S.C. § 7408 ....... 3,4,14

CLEAN AIR AcT § 109, 42 U.S.C. § 7409 ...... 3,4,5,16

CLEAN AIR ACT § 110(a)(2)(D), 42 U.S.C.

BONED a ccuarcecdsveennnaen 11,12,14

FEDERAL REGULATIONS

62 Fed. Reg. 38,856, 38,883 (July 18, 1997) ........ 6

63 Fed. Reg. 57,356 (Oct. 27, 1998)

MISCELLANEOUS

Oxford Concise English Dictionary (9" ed. 1995)

RICHARD B. BELZER, The Peril and Promise of Risk

Assessment, REGULATION (Fall 1991) at 40

KEVIN L. FAST, Treating Uncertainty as Risk:

The Next Step in the Evolution of Environmental

Regulation, 26 ELR 10627 (December 1996)... . 6

MARK E. SHERE, The Myth of Meaningful Environmental

Risk Assessment, 19 HARVARD ENVTL. L. REV. 409

Dh ¢ovbecesdsckuees aene eee 6

WENDY E. WAGNER, The Science Charade in Toxic Risk

Regulation, 95 COLUMBIA L. REV. 1613 (NOVEMBER

1995).

CENTER FOR RISK ANALYSIS, HARVARD SCHOOL OF PUBLIC

HEALTH, A HISTORICAL PERSPECTIVE ON RISK

ASSESSMENT IN THE FEDERAL GOVERNMENT,

(MARCH 1994).

-ii-

ee coe ae ES

— Se

ee ee a ietintiees

RHYS JENKINS, Environmental Regulation and International

Competitiveness: A Review of Literature and Some

European Evidence, (UNITED NATIONS UNIVERSITY

INSTITUTE FOR NEW TECHNOLOGIES, JANUARY 1998)7

U.S. ENVIRONMENTAL PROTECTION AGENCY, NATIONAL AIR

QUALITY AND EMISSIONS TRENDS REPORT 1996. . . 7

ROBERT W. CRANDALL, FREDERICK H. RUETER AND WILBUR

A. STEGER, Clearing the Air, EPA's Self-Assessment

of Clean Air Policy, 4 REGULATION 35 (1996) ... 7

STEPHEN BREYER, Breaking the Vicious Circle: Toward

Effective Risk Regulation (HARVARD UNIVERSITY

PEE Gas conseinndencesedaduse 8

SHELDON MEYERS, Applications of De Minimis IN DE

MINIMIS RISK 103 (CHRIS WHIPPLE, ED., 1987). .. 9

MARCH SADOWITZ, Tailoring Cost-Benefit Analysis to

Environmental Policy Goals: Technology-Health-

Based Environmental Standards in the Age of Cost-

Benefit Analysis, 2 B.U.J. Sci. & TECH. L. 11 (199690

In The

Supreme Court of the United States

AMERICAN TRUCKING ASSOCIATIONS, ef al.,

Petitioners,

vs.

CAROL M. BROWNER, ADMINISTRATOR OF THE

ENVIRONMENTAL PROTECTION AGENCY, ef al.,

Respondents.

BRIEF FOR THE AMERICAN BOILER

: MANUFACTURERS ASSOCIATION

AS AMICUS CURIAE SUPPORTING PETITIONER

INTEREST OF AMICUS CURIAE '

The American Boiler Manufacturers Association

("ABMA") is a national non-profit association representing the

manufacturers of commercial, industrial and utility steam-

generating and fuel-burning equipment, as well as suppliers to

' Pursuant to Rule 37.6 of the Rules of this Court, counsel hereby

certifies that the brief submitted on behalf of amicus curiae American Boiler

Manufacturers Association was not authored in whole or in part by counsel

for a party, and no person or entity other than the American Boiler

Manufacturers Association and its members has made a monetary

contribution to the preparation of this brief.

ie

the industry. The primary goal of ABMA is to promote the

common business interests of the boiler manufacturing industry

and to promote the safe, environmentally friendly use of the

products and services of its members. ABMA jointly serves

as a vehicle for generating support in the state and federal

governments for industry concerns, while also informing the

public of the vitality, environmental consciousness and high-

tech orientation of the boiler industry.

SUMMARY OF ARGUMENT

The implementation of the federal Clean Air Act,

coupled with the increasing efficiencies of industrial energy

production, have resulted in a record of ever greater air quality

in the United States. While initial gains in air quality were the

result of relatively cost-effective control strategies and process

changes, more recent regulation has focused on a diminishing

range of costly controls. When Congress drafted the Act, they

made it clear that economic and technological feasibility was

to be an important part of the regulatory decision-making

calculus. As society faces diminishing returns regarding its

environmental regulations, it is particularly important that

appropriate use of cost considerations be an overt, forthright

and accurate component of the implementation of the Clean Air

Act.

Amicus contends that the U.S. Environmental

Protection Agency is already cognizant of its obligation to

consider costs in Clean Air Act decisions, despite the

anomalous ruling of Lead Industries Ass'n. v. EPA, 647 F.2d

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

the subjective and inaccurate mechanism of risk assessment is

used, and cost and technological feasibility figure in to these

calculations in inconsistent and unsatisfactory ways. It is

<2.

inconceivable that a methodologically flawed procedure such

as risk assessment can filter cost and technological data, while

such data cannot be utilized by the Agency directly, in the light

of day. Second, Amicus observes that the ruling in Lead

Industries has become increasingly detached from the reality

of Agency action in which cost considerations are embraced in

a sub rosa fashion. As an example, in the recent rulemaking

regarding the control of nitrogen oxide, at issue in State of

Michigan v. EPA, No. 98-1497 2000 U.S. App. LEXIS 3209

(D.C. Cir., March 3, 2000), the operative basis for regulatory

action was the threshold at which such action was cost-

effective. Despite the Agency histrionics involved in such an

opaque use of cost considerations, the D.C. | Circuit

nevertheless found the underlying use of cost within the

discretion of the Agency.

In short, consideration of economic and technological

feasibility are an everyday reality in the implementation of the

Clean Air Act. Amicus contends that this Court can restore

the use of cost and technological factors to a more open

environment, consistent with the plain meaning of the Clean

Air Act and administrative process.

ARGUMENT

Under § 109 of the Clean Air Act ("CAA"), the

Administrator of the Environmental Protection Agency must

set national ambient air quality standards ("NAAQS") for

ozone that “allow[{] an adequate margin of safety" and are

"requisite to protect public health." CAA § 109(b), 42 U.S.C.

§ 7409(b). The Administrator must base the NAAQS on

“criteria” reflecting scientific data for public health and

welfare. CAA § 108(a), 42 U.S.C. § 7408(a). At the time of

setting a NAAQS for a pollutant, the Administrator must also

*

compile data relating to emission control technologies,

installation and operation costs, energy requirements,

environmental impacts and alternative methods of emissions

control. CAA § 108(b)(1), 42 U.S.C. § 7408(b)(1). The

Statute therefore requires the Administrator to undertake a

significant effort to gather a large amount and wide range of

data in the NAAQS-setting process, including economic data.

Construing § 109 in Lead Industries, the U.S. Court of

Appeals for the D.C. Circuit held that economic or

technological factors may not be considered when setting a

NAAQS; rather public health alone must govern the decision.

Lead Indus., 647 F.2d at 1149. Contrary to this holding of

the D.C. Circuit, a fair reading of the law does not preclude

consideration of the cost and feasibility of adopting one

emission standard over another. This position is supported by

a plain reading of the statute, other provisions of the statute,

and legislative history. These points have been briefed

thoroughly by Petitioners in this case, American Trucking

Associations, Inc. v. EPA, 175 F.3d 1027, modified, 195

F.3d 4 (1999), and Amicus will not elaborate on them.’

2 One purpose of the Clean Air Act relevant to Amicus perhaps

left unaddressed by others briefing this case, is Congress's desire to protect

“public health and welfare and the produc’ive capacity of its population."

CAA § 101(b)(1), 42 U.S.C. § 7410 (emphasis added). Given its plain

meaning, the nation's “productive capacity" refers to the "power of"

“producing goods." Oxford Concise English Dictionary 1092 (9" ed. 1995).

Thus, the Act should be read to protect the ability of the nation to produce

goods in tandem with the public health and welfare. Such an interpretation

would be consistent with this Court's earlier acknowledgment of Congress's

inherently reasonable approach to regulation: "There can be little doubt that

Congress intended OSHA to balance reasonably the societal interest in

health and safety with the often conflicting goal of maintaining a strong

national economy. /ndustrial Union Dept., AFL-CIO v. America Petroleum

Inst., 448 U.S. 607, 669 n. 6 (1980) ("Benzene") (Powell, J., concurring).

-4-

pu

Amicus will demonstrate that EPA's own actions, with respect

to risk assessment and past Clean Air Act rulemakings, are

inconsistent with any blanket rejection of economic

consideration. Rather, EPA selectively employs the use of

such data, apparently in support of preconceived outcomes.

EPA's current sub rosa use of economic data is frankly

inconsistent with the spirit and purpose of public participation

in the rulemaking process as well as the Clean Air Act itself.

As the Lead Industries court pointed out, promulgating

NAAQS "presents complex questions of science, law, and

social policy." Jd. at 1146. Amicus posits that the weight of

the science, law and social policy strongly favors the

interpretation of § 109 that allows for reasoned consideration

of economic and technological feasibility.

I. Risk Assessment, relied on by EPA to set NAAQS,

is a fundamentally flawed, uncertain calculus, that

must be supplied with all possible supporting

documentation including factors now precluded from

consideration under Lead Industries.

By definition, the selection of an air quality standard

to protect public health is an uncertain task. As the D.C.

Circuit noted in Lead Industries, these decisions often involve

the "very frontiers of scientific knowledge" and lack consensus

in the scientific community. Lead Industries, 647 F.2d at

1160. In an attempt to minimize the guesswork in setting

environmental standards, agencies turned to risk assessment,

a methodology that purported to rationalize the process. This

Court endorsed this practice in Benzene; it now serves as the

standard basis for setting environment and health standards.

Risk assessment does not eliminate uncertainty,

however; it merely substitutes one type of uncertainty for

another. It is fair to say that risk assessment can create more

uncertainty than it resolves. How to identify a public health

"risk," whether it should be diminished or elimiuated, and

how to achieve that goal through regulation pose virtually

intractable dilemmas for Congress, agencies and courts. See

generally, Richard B. Belzer, The Peril and Promise of Risk

Assessment, Regulation (Fall 1991) at 40; Kevin L. Fast,

Treating Uncertainty as Risk: The Next Step in the Evolution

of Environmental Regulation, 26 ELR 10627 (December

1996). Even in the rulemaking at issue here, EPA made clear

that the standard it adopted “may not be amenable to

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

metric." 62 Fed. Reg. 38,856, 38,883 (July 18, 1997).

Thus, EPA's own process makes the point: risk

assessment lacks objectivity, due to its foundation in

assumptions and projections. Mark E. Shere, The Myth of

Meaningful Risk Assessment, 19 Harvard Envtl. L Rev. 409

(1995). See also, Wendy E. Wagner, The Science Charade in

Toxic Risk Regulation, 95 Columbia L. Rev. 1613 (November

1995). When used to set environmental standards, it has

"flaws in current practice, which cause exaggerated risk

estimates, [that] are harmful because they cause unnecessary

resource expenditures in the public and private sectors."

CENTER FOR RISK ANALYSIS, HARVARD SCHOOL OF PUBLIC

HEALTH, A HISTORICAL PERSPECTIVE ON RISK ASSESSMENT IN

THE FEDERAL GOVERNMENT, (MARCH 1994), at 38.

The crux of Amicus's argument is that EPA has not

avoided cost considerations through use of risk assessment. It

has merely sublimated the logical desire for cost-beneficial

outcomes into an uncertain process likely to produce unwise

and unwelcome results. Amicus believes that if the Clean Air

Act is broad enough to encompass risk assessment, surely the

statute contemplates more overt and methodologically sound

use of cost and technological feasibility data as suggested by

Petitioners.

The failure to squarely deal with the fundamental

matters of cost and feasibility unjustly "wreaks havoc" on the

regulated community. Productivity and continued viability of

business depend on certainty. Certainty in the law is the

Starting point. But it also entails anticipation of what capital

expenditures will be necessary two or three years down the

road. The ability of U.S. firms to compete internationally is

directly affected by the amount and timing of investment

needed to keep up with pollution control mandates in the U.S.

Rhys Jenkins, Environmental Regulation and International

Competitiveness: A review of Literature and Some European

Evidence, (United Nations University Institute for New

Technologies, January 1998) at 19.

According to EPA, the average reduction of ambient

concentrations of the six CAA criteria pollutants was 33%

from 1987 to 1996. To achieve these reductions, stationary

sources invested $9.8 billion in 1987 and $10 billion in 1989

(reported in 1996 dollars). Robert W. Crandall, Frederick H.

Rueter and Wilbur A. Steger, Clearing the Air, EPA's Self-

Assessment of Clean Air Policy, 4 Regulation 35, 45 (1996)

(citing U.S. Environmental Protection Agency, National Air

Quality and Emissions Trends Report 1996).

> These costs cited in the EPA Self-Assessment do not include

marginal costs.

xX

Yet, each time standards are tightened, requiring

greater controls for narrower gains, sources muct consider the

marginal cost and technological feasibility of meeting those

standards. Achieving even greater reductions “can involve

limited technological choice, high cost, devotion of

considerable agency resources, large legal fees, and endless

argument." Stephen Breyer, Breaking the Vicious Circle:

Toward Effective Risk Regulation (Harvard University Press

1993) at 11. Further tightening standards through NAAQS

revisions increases the need for cost consideration

proportionately.

Petitioners in American Trucking Ass'ns attempted to

distinguish Lead Industries from the present case by arguing

that Lead Industries entailed setting an initial NAAQS, while“

the present case deals with revising an existing NAAQS. The

court below could “discern no legally relevant difference" that

would permit prohibiting cost consideration for setting

NAAQS while allowing cost consideration for revising

NAAQS. Id. at 1040.

Amicus agrees and further can discern no relevant

policy difference. Cost and technological feasibility bear on

standard setting and revision. However, it is also true that

greater reduction requirements compel greater scrutiny of the

ability of industry to meet the standards and remain viable.

This Court has not historically been blind to such practical

realities. In Benzene, this Court assessed whether under the

Occupational Safety and Health Act an agency could mandate

a near zero-tolerance level of benzene in the workplace. A

plurality of the Court rejected that outcome, viewing as

"unreasonable" an assumption "that Congress intended to give

the secretary the unprecedented power over American industry

that would result" from that approach. 448 US 607, 645 (U.S.

-8-

1980). The plurality of the Court went on to prevent that

outcome by reading the limitation "significant risk" into the

provision being construed. /d.

Of course, in Benzene the Court was construing a

Statute that expressly included a reasonableness standard for

setting exposure limits. The Clean Air Act provision before

the Court today has no similar express limitation. It strains

credulity nonetheless to believe that the universal guidepost of

reasonableness does not apply with equal force in the present

case.

"It may be true. . . that the Act as a whole

expresses a distinct preference for safety over

dollars. But that expression of preference, as I

read it, falls far short of the proposition that the

Secretary must eliminate marginal or

insignificant risks of material harm right down

to an industry's breaking point."

Benzene, 448 U.S. at 683 (Rehnquist, concurring).

In essence, risk assessment is a filter through which

economic and technological constraints are viewed. It is

inconceivable that the Clean Air Act allows for the filter (with

all its methodological shortcomings) but makes illegal the

consideration of such constraints in a direct and forthright

manner.‘

* Such a result is inconsistent even with EPA's own intentions.

See also, Sheldon Meyers, Applications of De Minimis IN DE MINIMIS

RISK 103 (CHRIS WHIPPLE, ED., 1987) (authored by an EPA official,

describing economic forces as compelling cost/benefit consideration,

explaining that EPA practice includes feasibility and cost consideration in

-9.

Il. Continued Adherence to Lead Industries Ignores the

Reality that the Agency Does Consider Costs and

Will Lead to Sub Rosa Consideration of Costs in

Future Rulemakings

In addition to the impacts on the regulated community

of continued adherence to Lead Industries, it is clear that cost

is currently a factor in NAAQS decision-making as a matter of

practical and political necessity.” Only recently, the D.C.

Circuit addressed the issue of NAAQS cost assessment in State

of Michigan v. EPA, 2000 U.S. App. LEXIS 3209, at *24-

*39. This case arose as a challenge to an EPA rule setting

statewide emissions limits for nitrogen oxide ("NOx"), to be

implemented through NOx limits on stationary sources in state

implementation plans ("NOx SIP Rule").°

setting de minimis risk, and suggesting that such agency deliberations

should be conducted "in full public view.")

* As one commentator has observed, "{i]gnoring the cost

implications of the environmental policy has become politically infeasible

given the drive for reduced government." March Sadowitz, Tailoring

Cost-Benefit Analysis to Environmental Policy Goals: Technology-Health-

Based Environmental Standards in the Age of Cost-Benefit Analysis, 2

B.U.J. Sci. & Tech. L. 11 (1996) (page references not available).

® The NOx SIP mule is closely related to the ozone rule being

considered here. Ozone is formed by the chemical and physical reaction of

NOx and volatile organic compounds ("VOCs"). Therefore, EPA's rule to

reduce NOx emissions is a means to reduce ambient ozone concentrations.

See, generally, Finding of Significant Contribution and Rulemaking for

certain states in the Ozone Transport Assessment Group Region for

Purposes of Reducing Regional Transport of Ozone, 63 Fed. Reg. 57,356

(Oct. 27, 1998) (EPA final rule to require states to prohibit specific amounts

of NOx emissions).

-10-

In the NOx SIP Rule, EPA did not on the face of the

rulemaking, include in its calculus the cost/benefit analysis of

the standard it adopted. Rather, it buried the cost/benefit

consideration in a threshold determination of what would be an

acceptable level of control. See, generally, 63 Fed. Reg.

57356, 57376 (Oct. 27, 1998). There, EPA construed § 110 of

the CAA, to determine to what extent some upwind states

contribute NOx emissions to other states, causing those

downwind states to be in violation of the NAAQS for ozone.

EPA did not define what level of NOx emissions contributed

to other states that it would consider unacceptable and

constitute a CAA violation. Rather, EPA spent months

(effectively years) gathering data about NOx emissions from

various sources and the cost to each source type to reduce

those emissions to a range of levels. Based on that data, EPA

calculated the average cost per source type to reduce emissions

to a range of levels. Then EPA chose an average cost of

$2,000 a ton that it determined to be “cost-effective”. The

level of emissions reductions achievable at that average cost

became - de facto - the maximum level of NOx that a source

could emit without violating the CAA. Thus, EPA used this

byzantine construct, built on a cost analysis, to define what

interstate ozone-forming NOx emissions are allowable under

the NAAQS.

As the D.C. Circuit observed in Michigan v. EPA, "the

ultimate line of ‘significance,’ [for purposes of determining a

‘significant contributor’ under 42 U.S.C. § 7410(a)(2)(D)(i)(1)]

whether measured in the volume of NOx emitted or arriving in

nonattainment areas, would vary from state to state depending

on variations in cutback costs." Michigan, 2000 U.S. App

LEXIS 3209, at *26. The ultimate effect of this use of cost by

the Agency was, as the D.C. Circuit explained, “that, after

reduction of all that could be cost-effectively eliminated, any

-ll-

remaining ‘contribution' would not be _ considered

‘significant’..." Jd. at *33. In recognizing that cost was

necessarily integral to the Agency's decision-making, the D.C.

Circuit rejected challenges to the Agency's consideration of

costs. The Court reasoned:

Petitioners conspicuously fail to describe the

intellectual process by which EPA would

determine "significance" if it may consider only

health. EPA has determined that ozone has

some adverse health effects - however slight - at

every level. Without consideration of cost it is

hard to see why any ozone-creating emissions

should not be regarded as fatally "significant"

under § 110(a)(2)(D)(i)(1).

Id. at *35 (citation omitted).

The Court bolstered this conclusion by reference to

other precedents in which it had construed similar language to

permit consideration of cost, and commented that "[t}hese

Cases are unexceptional in their general view that preclusion

of cost consideration requires a rather express congressional

direction.” Jd. at *38. The commonality among these cases

as described by the D.C. Circuit was "[a] mandate directed to

some environmental benefit [that] is phrased in general

quantitative terms (‘ample margin of safety,’ ‘substantial

restoration,’ and 'major'), and contains not a word alluding to

non-health tradeoffs; in each case we found that in making

judgments of degree the agency was free to consider the costs

of demanding higher levels of environmental benefit." /d. at

*39. Implicit in the interpretive principle extracted by the

Court that costs may be considered unless expressly precluded

is the recognition that costs are integral to environmental

-12-

policymaking as a practical matter, and that the courts will not

therefore lightly interpret a statute to reflect congressional

intent to preclude consideration of costs.

The point here can be simply stated: costs and benefits

must eventually be considered in setting air quality standards.

The NOx SIP Rule demonstrates that EPA does now consider

costs and benefits. The present NAAQS as interpreted by the

DC Circuit in Lead Industries disallows cost consideration at

the early stage of setting the standards. This opens the door for

even broader discretion by the Agency, which must eventually

confront the cost/benefit issue, to find another point in the

regulatory process to consider costs. In the NOx Rule, that

point was transferred to the point of defining the maximum

amount of NOx a source type in one state can emit into another

state without violating the CAA. Cost/benefit analysis in

Michigan clearly drove the "health" decision for allowable

levels of ozone emissions that may be transported state-to-

state. That approach was fully embraced by the DC Circuit in

Michigan v. EPA.

A similar result can be seen in the D.C. Circuit's

decision in Natural Resources Defense Council v. EPA, 824

F.2d 1146 (D.C. Cir. 1987). In NRDC, the D.C. Circuit was

construing § 112 of the Act, 42 U.S.C. § 7412, which

provides in relevant part that the Agency must set the

emissions standard under § 112 “at the level which in his

judgment provides an ample margin of safety to protect the

public health.” In NRDC, the EPA stated its interpretation of

its duty under § 112 as “requir[ing] emissions reductions to the

lowest level achievable by use of the best available control

technology in cases involving non-threshoid pollutants, where

complete emission prohibition would result in widespread

industry closure and EPA has determined that the cost of such

*

closure would be grossly disproportionate to the benefits of

removing the risk..." Jd. at 1148 (quoting 52 Fed. Reg.

59,532, 59,534 (1975)). The Court held that EPA's

determination of what is "safe" must be based solely on health

risks, but that cost and technological feasibility could be

considered later in determining what constitutes an "ample

margin" of safety. Jd. at 1165. The "two-step" analysis

performed by the Court in NRDC again reflects the reality that

where cost considerations are precluded at one level of the

rulemaking process, they will appear at another stage of the

regulatory process.

Therefore, to say that cost/benefit considerations are

disallowed when setting NAAQS is to ignore the realities of

CAA implementation. In the case of ozone, even if cost were

not considered when revising the ozone NAAQS as a threshold

matter, cost played a pivotal role later when EPA set

acceptable levels of NOx emissions that are allegedly

transported into other states. While the ozone NAAQS and the

ozone transport questions in the NOx SIP rule may appear

unrelated, they are actually closely related. The NAAQS Rule

under consideration in the present case identifies an ozone

emission limit for source types, beyond which point emissions

violate the NAAQS. The NOx SIP Rule identifies an ozone

emission limit for source types statewide, beyond which point

emissions are presumed to be transported and “contribute

significantly" to other states’ violation of NAAQS. CAA

§ 110(a)(2)(D), 42 U.S.C. § 7410(a)(2)(D); see generally,

Michigan v. EPA, supra. Taken to their practical ends,

whether promulgated under § 108 or § 110(a)(2)(D), each

ozone rule establishes an emissions limit that requires

stationary sources to change operations or retrofit facilities

with control equipment to meet the new standards. Costs are

incurred, either way.

-14-

Delaying cost evaluation in this fashion results in an

overly broad grant of discretion to the agency. First, the

agency selects the point at which costs are considered, which

allows the Agency to "game" the system. The Agency can

choose points on the economic curve to suit its purpose,

irrespective of actual impacts. Second, the Agency may

transmute cost into something other than it is, dealing with it

inconspicuously. In NOx SIP rule, EPA buried cost beneath

a complex construct, with a defined level of alleged interstate

emissions serving as the pretext for requiring cost-driven

emission reductions. The D.C. Circuit upheld EPA's use of

"cost-effective reductions" to define "significant contribution."

Amicus does not challenge that finding here, but merely

highlights the fact that costs were the fulcrum for identifying

the allowable statewide ozone-forming NOx emissions level in

that case. —

The regulatory cost of NAAQS must be -- and is --

eventually confronted. As demonstrated in NOx SIP, cost

consideration may be deferred for a later regulatory moment

and obscured in a fashion that does not shine a spotlight on

cost as a factor in a health-based standard.

EPA has reluctantly come to learn what the regulated

community has always known: cost and technological

feasibility are factors in determining what level of regulatory

control can reasonably be demanded by society. Amicus

believes the Clean Air Act is better interpreted if this

consideration of those factors occurs in an open and honest

environment, and not when held hostage to inscrutable risk

assessment or regulatory hijinks.

CONCLUSION

For all the foregoing reasons, this Court should reverse

the lower court judgment that NAAQS revisions under § 109

of the CAA must be made without consideration of costs and

other impacts.

Counsel of Record

ScoTT H. SEGAL

SHANNON H. RATLIFF, II

LIsA M. JAEGER

BRACEWELL & PATTERSON, L.L.P.

2000 K Street, N.W., Suite 500

Washington, D.C. 20006-1872

(202) 828-5800

Counsel for Amicus Curiae

American Boiler Manufacturers Ass'n

Dated: July 21, 2000

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