Amicus Curiae Brief — Environmental Defense v. Duke Energy Corporation

will occur by comparing actual emissions prior to the change

with its projection of what annual emissions will be after the

change, but only if it reports to EPA on its post-project

emissions. 57 Fed. Reg. 32314, 32335 (July 21, 1992)(adding

40 C.F.R § 51.166(b)(21)(v)). This special test, (the

“actual-to-projected-actual test”) has no application in this case

because at the time most of the projects occurred, the rule

change was not incorporated into the North Carolina and South

Carolina SIPs. Furthermore, Duke Energy never reported on its

post-project emissions, so it could not benefit from the rule’s

provisions in any event.

Whether the “actual emissions” definition, 40 C.F.R §

51.166(b)(21), is interpreted as imposing an

“actual-to-potential” test, or an “actual-to-future-actual” test is,

for the purposes of this case, irrelevant.‘ Both tests compare

annual emissions before and after a project; the regulatory

language does not support an interpretation yielding an hourly

emissions test. See 40 C.F.R § 51.166(b)(21)(1i)(“[A]ctual

emissions . . . shall equal the average rate, in fons per year, at

which the unit actually emitted the pollutant . . . .”).

The Fourth Circuit, as mentioned above, never discussed

the actual language of the regulations, but the district court did,

finding that an exception contained within the definition of

“major modification,” 40 C.F.R § 51.166(b)(2)(iii)(f), (the

“increased hours” exclusion) imposes, despite the language set

forth above, the hourly emissions test. Pet. App. 72a. The

language focused upon by the district court is as follows:

(2)(i)*Major modification” means any physical change in

or change in the method of operation of a major stationary

* EPA was prepared to proceed in the case using the actual-to-

projected-actwal test. Pet. App. 58a, n. 17.

8

source that would result in a significant net emissions

increase of any pollutant subject to regulation under the

Act.

(ii) Any net emissions increase that is significant for

volatile organic compounds shall be considered significant

for ozone.

(iii) A physical change or change in the method of

operation shall not include:

(a) Routine maintenance, repair, and replacement;

(b) Use of an alternative fuel or raw material by reason

of any order under sections 2 (a) and (b) of the Energy

Supply and Environmental Coordination Act of 1974

(or any superseding legislation) or by reason of a

natural gas curtailment plan pursuant to the Federal

Power Act;

(c) Use of an alternative fuel by reason of an order or

rule under section 125 of the Act;

(d) Use of an alternative fuel at a steam generating unit

to the extent that the fuel is generated from municipal

solid waste;

(e) Use of an alternative fuel or raw material by a

stationary source ... ;

(f) An increase in the hours of operation or in the

production rate, unless such change would be

prohibited under any federally enforceable permit

condition which was established after January 6, 1975,

pursuant to 40 CFR 52.21 or under regulations

9

approved pursuant to 40 CFR Subpart I or 40 CFR

51.166.

40 C.F.R § 51.166(b)(2)(emphasis added). The district court

ruled that the “increased hours” exclusion required “that in

calculating post-project emissions, the EPA must hold the

pre-project and post-project hours and conditions of operation

constant.” Pet. App. 72a.

The cistrict court’s analysis was incorrect. As mentioned

above, the “modification” test has two elements. First, a source

must determine whether a physical or operational change will

occur. 40 C.F.R. 51.166(b)(2)(i). Second, if so, the source must

determine whether that change will result in a significant net

emissions increase. /d. By its explicit terms, the “increased

hours” exclusion applies at the first step of the analysis, not the

second step. Furthermore, the definition of “net emissions

increase,” 40 C.F.R. § 51.166(b)(3)(i), analyzes whether “a

particular physical change or change in the method of

operation” at a source has increased emissions. A project that

falls within the “increased hours” exclusion could never qualify

as the type of “change” that subsection (b)(3)(1) addresses. To

put it another way, if the “increased hours exclusion” applies to

a project, it would be unnecessary to go on and conduct the

“emissions increase” analysis because the activity in question

would have already been found exempt.

Thus the plain language of the regulations does not support

a conclusion that the “increased hours” exclusion affects the

calculation of a “net emissions increase.” As the court said in

United States v. Cinergy Corp., 384 F. Supp. 2d 1272, 1278

(S.D. Ind. 2005): “the plain meaning of the increased hours

exclusion is that an increase in hours or production rate are noi

a ‘physical change’ and thus cannot, alone, be a modification.

10

Increased hours and production rate are not excluded from the

definition of ‘modification’; that is, if a physical change results

in an increase in hours of operation that causes a net emissions

increase, a modification has occurred.”

Accordingly, what the Fourth Circuit should have done in

this case is determine, by carefully reading the regulations,

whether the district court’s interpretation of the regulations was

correct. Instead, the Fourth Circuit failed to “interpret” the

regulations at all. Instead, it examined whether the regulations

comported with its view of what the statute required, and that

type of review was reserved by Congress for the D.C. Circuit,

which upheld the regulations in the New York case, 413 F.3d 3.

c. ALLOWING A COLLATERAL ATTACK OF AN

ENVIRONMENTAL REGULATION IN THE

CONTEXT OF AN ENFORCEMENT ACTION

WOULD UNDERMINE THE ENFORCEMENT

SCHEME OF MANY ENVIRONMENTAL

STATUTES.

Allowing the type of collateral attack on the regulations

that occurred in this case would not only undermine the Clean

Air Act’s enforcement scheme, but similar restrictions on

judicial review established by Congress in many other

environmental statutes. Examples abound:

* Indeed, if the hours-of-operation exclusion were interpreted to

include increases in hours of operation that resulted from actual physical

modifications, it would lead to the following anomalous result: if a project

made physical changes to a source that increased the source’s capacity to

produce in any particular hour, but did not increase the source’s availability

to operate more hours, then that project would trigger PSD, but if the project

increased both capacity and availability, it would not.

1]

* (Clean Air Act. 42 U.S.C. § 7607(b)(1) provides in

pertinent part (emphasis added) that:

A petition for review of action of the Administrator in

promulgating any national primary or secondary

ambient air quality standard, any emission standard or

requirement under section 7412 of this title, any

standard of performance or requirement under section

7411 of this title, any standard under section 7521 of

this title (other than a standard required to be

prescribed under section 7521(b)(1) of this title), any

determination under section 7521(b)(5) of this title,

any control or prohibition under section 7545 of this

title, any standard under section 7571 of this title, any

rule issued under section 7413, 7419, or under section

7420 of this title, or any other nationally applicable

regulations promulgated, or final action taken, by the

Administrator under this chapter may be filed only in

the United States Court of Appeals for the District of

Columbia. ...

42 U.S.C. § 7607(b)(2) provides in pertinent part that:

Action of the Administrator with respect to which

review could have been obtained under paragraph (1)

shall not be subject to judicial review in civil or

criminal proceedings for enforcement. . . .

Applying these provisions, the Third Circuit, in the context

of acriminal proceeding for violations of asbestos removal

work practice standards, refused to entertain an argument

that the regulation was invalid. See United States v. Ho,

311 F 3d 589, 607 (Sth Cir. 2002), cert. denied 539 U.S.

914, 123 S. Ct. 2274 (2003). See aiso Getty Oil Co.

(Eastern Operations), Inc. v. Ruckelshaus, 467 F.2d 349,

12

359 (3rd Cir. 1972), cert. denied, 409 U.S. 1125 (1973)

(“Failure to utilize the section 307 proceeding forecloses

review in a civil or criminal proceeding for enforcement.”);

Commonwealth of Virginia v. United States, 74 F.3d 517,

525 (4th Cir. 1996)(“Because Congress wanted prompt and

conclusive review in air quality controversies, it channeled

(to the courts of appeals) all challenges, regardless of their

basis, of EPA rules and final actions.”); Madison Gas &

Electric v. U.S. E.P.A., 4 F.3d 529 (7th Cir. 1993)

(Challenge to national feature of acid rain program, such as

tradability of emission allowances, may be brought only in

Court of Appeals for the District of Columbia Circuit, even

if impact of program varied greatly across the country).

Clean Water Act. 33 U.S.C. § 1369(b)(2); see Longview

Fibre Co. v. Rasmussen, 980 F.2d 1307, 1313 (9th Cir.

1992)(“Reviewability under section 1369 carries a peculiar

sting.... If an EPA action is reviewable under section

1369(b)(1), then it “shall not be subject to judicial review

in any civil or criminal proceeding for enforcement.” 33

U.S.C. § 1369(b)(2).”); see also American Paper Inst.,

Inc. v. EPA, 882 F.2d 287, 288-89 (7th Cir. 1989)(“the

Clean Water Act bars review in enforcement proceedings

of actions that could have been reviewed earlier”); Natural

Resources Defense Council, Inc. v. Outboard Marine

Corp. 702 F. Supp. 690, 693 (N.D. Ill. 1988)(“Section

1369(b)(1)(F) permits review of an EPA action issuing or

denying a permit only in the Circuit Court of Appeais.

Section 1369(b)(2) then expressly bars review of an

EPA-issued or EPA-denied permit in any District Court

enforcement proceeding.”);

Comprehensive Environmental Response, Compensation,

and Liability Act (“CERCLA”), 42 U.S.C. § 9613(a); see

U.S. Ecology, Inc. v. Carlson, 638 F. Supp. 513, 518-19

13

(C.D. Ill. 1986)(challenge to a listing on the National

Priorities List can only be brought in the D.C. Circuit);

* Toxic Substances Control Act (“TSCA”), 15 U.S.C. §

2618(a); see Dow Chemical Co. v. Costle, 484 F. Supp.

101, 104 (D. Del. 1980)(court ruled it had no jurisdiction

because, although chemical company claimed it was

challenging interpretation and application of regulation

imposing a ban on manufacture, it was in fact challenging

validity of regulation itself);

* Resource Conservation and Recovery Act (“RCRA”), 42

U.S.C. § 6976(a)(2);

* Safe Drinking Water Act, 42 U.S.C. § 300j-7(a).

In statute after statute, Congress has consistently

established a sensible system for judicial review. Challenges to

regulations must be brought in the D.C. Circuit, and usually

within 90 days of promulgation. Enforcement actions are not

to be hindered by such challenges. The Fourth Circuit’s

decision upsets this carefully crafted system for the

administration of justice.

D. THE OUTCOME IN THIS CASE COULD HAVE

BROAD IMPLICATIONS ON THE AIR QUALITY

IN THE NATION’S NATIONAL PARKS.

The nation’s national parks are threatened by air pollution.

A report issued by the amici NPCA and OCE, along with

another organization, Appalachian Voices, details the damage

being caused throughout the park system by air pollution

focusing on Great Smoky Mountains National Park,

Shenandoah National Park, Mammoth Cave National Park,

Sequoia and Kings Canyon National Parks, and Acadia

14

National Park. See National Parks Conservation Ass’n, et. al,

“Code Red: America’s Five Most Polluted National Parks”

(September 2002).° This report focuses on three types of

impact: haze, ground level ozone, and acid precipitation. /d. at

1.

The nation’s parks are suffering these injuries even though

Congress sought to remedy the air pollution problem in parks

almost 30 years ago with the Clean Air Act Amendments of

1977. Pub. L. 95-95, 91 Stat. 685 (1977). This Act granted

special protections to National Parks. See 42 U.S.C. § 7472

(designating national parks over 6000 acres in size as Class |

areas) and 42 U.S.C. § 7475(d) (requiring additional measures

to insure that new and modified sources seeking permits under

the PSD program do not adversely impact Class | areas).

deed, the Act contains an entire program dedicated to

proving and protecting visibility in Class I areas. 42 U.S.C.

§§ 7491-92.

Twenty-nine years ago, Congress stated: “[the} visibility

problem is caused primarily by emission into the atmosphere of

sulfur dioxide, oxides of nitrogen and particulate matter,

especially fine particulate matter, from inadequate(ly]

controlled sources.” H.R. Rep. 294, 95" Cong. (1977), at 204,

1977 U.S.C.C.A.N. 1077, 1283 (1977). According to the

National Research Council, emissions of sulfur oxides from

electric utilities “alone are responsible for slightly more than

one-half of anthropogenic light extinction. This is because

sulfates are the predominant component of anthropogenic haze

in the East and electric utilities are the predominant emitter of

* Available at: http://www. t ion/

visitor_experience/code_red/codered.pdf (last visited March 5, 2005).

15

SO, (sulfur dioxide) in the East. National Research Council,

“Protecting Visibility in National Parks and Wilderness Areas”

(1993), at 216.

Although EPA has recently developed two rulemakings to

curb park-harming emissions from power plants, the Regional

Haze Rule, 64 Fed. Reg. 35714, (July 1, 1999) and 70 Fed. Reg.

39104 (Regional Haze Regulations and Guidelines for Best

Available Retrofit Technology (BART) Determinations), and

the Clean Air Interstate Rule (“CAIR”), 70 Fed. Reg. 25162

(May 12, 2005), those rules do not supersede the New Source

Review rules, and they do not take effect until 2015. See 70

Fed. Reg. 39145 (2005).

As Congress debated the 1977 Amendments to the Clean

Air Act, it believed that old, uncontrolled plants were being

phased out:

There are in the United States approximately 200 old

coal-fired power plants over 20 years of age. These plants

are moving into the second half of their useful service life.

They are operating at reduced capacity factors--some are

used on cyclical or peaking loads only and most operate at

less than 50 percent of their stated capacity. They are

typically among the most expensive units to operate on a

system. Most will be totally phased out of operation in the

next 5 to 20 years.

S. Rep. No. 127, 95" Cong. (1977), at 128 (Statement of

Senator Baker). Thus, as the D.C. Circuit noted in 1980:

Implementation of the statute’s definition of

“modification” will undoubtedly prove inconvenient and

costly to affected industries; but the clear language of the

statute unavoidably imposes these costs except for de

16

minimis increases. The statutory scheme intends to

“grandfather” existing industries; but the provisions

concerning modifications indicate that this is not to

constitute a perpetual immunity from all standards under

the PSD program. If these plants increase pollution, they

will generally need a permit. Exceptions to this rule will

occur when the increases are de minimis, and when the

increases are offset by contemporaneous decreases of

pollutants. .. .”

Alabama Power Co. v. Costle, 636 F.2d 323, 400 (D.C. Cir.

1980); see also Ohio Edison, 276 F. Supp. 2d at 850

(“Congress chose to ‘grandfather’ existing pollution sources

from the NSPS and NSR provisions at the time the statute was

enacted... . Congress did not, however, intend that such

existing sources be forever spared the burden and expense of

installing pollution control devices.”).

This case and others filed by the Department of Justice and

citizens seek to bring into compliance sources that have

attempted to evade New Source Review requirements on a

massive scale. In 1999, along with this case, the Department of

Justice filed actions against six other utility companies covering

17 power plants. U.S. Department of Justice, U.S. EPA, “U.S.

Sues Electric Utilities in Unprecedented Action to Enforce the

Clean Air Act,” press release, November 3, 1999.’ At that

time, EPA issued administrative orders and notices of violation

covering an additional 15 plants. Jd. EPA and the Department

of Justice estimated that the failure of the identified utilities to

comply with the New Source Review regulations had “resulted

in tens of millions of tons of sulfur dioxide, nitrogen oxides,

and particulate matter illegally emitted into the air.” /d.

” Available at: http://www.usdoj.gov/opa/pr/1999/November/

524enr.htm (last visited March 5, 2006).

17

Given the seriousness of the air pollution problems in the

national parks caused by power plants and other industrial

sources, and given the allegations by EPA and the Department

of Justice of violations of the New Source Review Regulations

by the utility sector, amici urge the Court to grant review of the

Fourth Circuit’s decision.

CONCLUSION

The petition for a writ of certiorari should be granted.

Respectfully submitted.

GEORGE E. Hays*

236 West Portal Avenue # 110

San Francisco, CA 94127

(415) 566-5414

MICHAEL COSTA

Our Children’s Earth Foundation

100 First Street, Suite 100-367

San Francisco, CA 94105

(415) 896-5289

*Counsel of Record

March 8, 2006

(2)

No. 05-848 |

IN THE

Supreme Court of the United States ~~

ENVIRONMENTAL DEFENSE, NORTH CAROLINA

SIERRA CLUB, and NORTH CAROLINA PUBLIC INTEREST

RESEARCH GROUP CITIZEN LOBBY/EDUCATION FUND,

Petitioners,

y

DUKE ENERGY CORPORATION,

Respondent.

ON PETITION FOR A WRIT OF CERTIORARI TO THE

UNitep STATES CouRT OF APPEALS FOR THE Fourtu CIRCUIT

BRIEF OF THE STATES OF NEw YorK, CALIFORNIA, CONNECTICUT,

DELAWARE, ILLINOIS, MAINE, MARYLAND, MASSACHUSETTS,

Minnesota, New Hampsuire, New Jersey, OKLAHOMA, AND

VERMONT, THE DistRICT OF COLUMBIA, AND THE COMMONWEALTH

OF PENNSYLVANIA DEPARTMENT OF ENVIRONMENTAL PROTECTION

AS Amict CURIAE IN SUPPORT OF THE PETITION

Peter H. LEHNER Eviot Spitzer

Chief, Environmental Attorney General of the

Protection Bureau State of New York

CaItLin J. HALLIGAN*

ROBERT ROSENTHAL Solicitor General

J. JarED SNYDER DANIEL SMIRLOCK

Assistant Attorneys General Deputy Solicitor General

120 Broadway

New York, NY 1027

(212) 416-8016

* Counsel of Record

Attorneys for Amici Curiae

(Additional Counsel Listed on Signature Pages)

199844 cr

COUNSEL PRESS

(M040) 274-3321 + (ROO) 359 O8S9

TABLE OF CONTENTS

TABLE OF CITED AUTHORITIES ..........-. ii

INTEREST OF THE AMICI CURIAE ........... l

SUMMARY OF ARGUMENT ............-205- 5

ARGUMENT ........-...0cceeececeeeceewes: 6

I. THE FOURTH CIRCUIT’S DECISION

CONFLICTS WITH DECISIONS OF

OTHER COURTS OF APPEALS AND OF

THIS COURT ON A MATTER OF PUBLIC

ter 6

A. The Fourth Circuit’s Decision Conflicts

With New York v. EPA, In Which the D.C.

Circuit Upheld the 1980 PSD Emissions

Test Effectively Invalidated by the Court

I i ale Fee ee Le oe ohne 6

B. The Fourth Circuit’s Decision Conflicts

With the Decisions of Several Other

Courts That Have Recognized The

Differences Between the Emissions Tests

under NSPS and PSD. .............. 7

C. The Fourth Circuit’s Decision 1s Contrary

to Chevron and Alabama Power, Which

Allow EPA to Interpret a Statutorily-

Defined CAA Term Differently in the

NSPS and NSR Regulations. ......... )

i

Contents

Page

ll. THE PETITION SHOULD BE GRANTED

TO PROMOTE THE INTERESTS IN

CERTAINTY AND UNIFORMITY

UNDERLYING CAA SECTION 307(b)(2).

il

TABLE OF CITEDAUTHORITIES

Page

CASES

ASARCO Inc. v. EPA,

> fe Bo le re ere 10, 12

Adamo Wrecking Co. v. United States,

TR Ry 1) ee ere 13

Alabama Power v. Costle,

636 F.2d 323 (D.C. Cir. 1979) ...........5,9, 11, 12

Alaska Department of Env. Conservation v. EPA,

Ee | TTT Tee ee ee |-2

Allegheny Energy Supply Co. LLC v. Spitzer,

No. 1:05cv04 (N.D.W.Va.) .........002 ee eee 4

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

jg i? Spt). re Se

New York v. EPA,

413 F.3d 3 (D.C. Cir. 2005)

reh'g and reh'g en banc denied,

a: oe UK Pere.

Pennsylvania v. Allegheny Energy Inc..

2005 U.S. Dist. LEXIS 28894 (W.D. Pa. 2005) .. 3

Puerto Rican Cement Co. v. EPA,

ie & of lo Se Sr Mp Fe

iv

Cited Authorities

Page

Rowan Cos. v. United States,

GOS UW. BUT CHOP 6c oc kccdccccccccuceacuce 12

United States v. American Electric

Power Serv. Corp. (“AEP”),

137 F. Supp. 2d 1060 (S.D. Ohio 2001) ........ 3

United States v. Cinergy Corp.,

384 F. Supp. 2d 1272 (S.D. Ind. 2005) ......... 3,8

United States v. Duke Energy,

411 F.3d 539 (4th Cir. 2005)

reh'g en hanc denied,

_F58 _ (Amm, 30, 2008) on ccc ccccccss 3

United States v. Ethyl Corp..,

761 F.2d 1153 (Sth Cir. 1985),

cert. denied sub nom.

Firestone Tire & Rubber Co. v. United States,

474 U.S. 1070 (1986) .. 2... ccc ccc ccc eeee 13

United States v. Ohio Edison Co..,

276 F. Supp. 2d 829 (S.D. Ohio 2003) ......... 8

Wisconsin Electric Power Co. v. Reilly (“WEPCo”),

893 F.2d 901 (7th Cir. 1990) .. 00000020200... 5,7,8

Vv

Cited Authorities

FEDERAL STATUTES

United States Code (“U.S.C.”)

33 U.S.C.

42 U.S.C.

42 U.S.C.

42 U.S.C.

42 U.S.C.

42 U.S.C.

42 U.S.C.

42 U.S.C.

42 U.S.C.

42 U.S.C.

42 U.S.C.

42 U.S.C.

42 U.S.C.

42 U.S.C.

Page

PEED evccctcvccccceveceesess 14

DB RPPEEED cccccccccccvccoescce 15

DEEPENED ncccccccevcesscoesees 15

DET icvucesebaceeesee se we 8

DEED scckeeessvvececessnces 10, 12

PD owedecdbeeererecns ce l

DU sbnddned<eveccesoecees |

DTS cbetdetsdesdnéeevecesess §

PP cicveheedhub nes eseuees |

PEED necbecccececoccoescens 9

DE é de denceekeev need es 1,4, 13,14

DEE scpededbesecvcetecces 12

DT vccceenssdcscecsdence Oe OS

DT scepebadderecscedeedess 15

vi

Cited Authorities

FEDERAL REGULATIONS

Code of Federal Regulations (“C.F.R.”)

40 C.F.R. § 52.21(b)(2) .. 2.0... ee eee ee

40 C.F.R. § 52.21(b)(2i) .. 2. eee ee

40 C.F.R. § 52.21(b)(3) 0.0.2.0... 0c eee eee

40 C.F.R. § 52.21(b)(3)i) 0. eee eee

40 C.F.R. § 52.21(b(21) 2... eee,

40 C.F.R. § 52.21(b 217i) 2.

40 C.F.R. § $2.21(b)(23) 2. ee

40 C.F.R. § $2.24(f)(5) .... 0... eee eee eee

40 C.F.R. § 52.24(f)(6) 22.2022.

40 C.F.R. §

40 C.F.R. § §2.

5

40 C.F.R.§ 60.14 202000000 oe ee ee.

40 C.F.R. § 60.14(b) 2.0... oo ee eee cee ee.

MISCELLANEOUS

45 Fed. Reg. 5,617 (Jan. 23, 1980) ...........

57 Fed. Reg. 32,314 (July 21, 1992) ....

70 Fed. Reg. 61,081 (Oct. 20, 2005) ....

70 Fed. Reg. 65,984 (November |, 2005)

_** © © ©

Page

10

14

INTEREST OF THE AMICI CURIAE*

This case presents two critical and related issues. The first

is whether the Fourth Circuit erred in ruling, contrary to the

decisions of this Court and the District of Columbia Circuit,

that the United States Environmental Protection Agency (“EPA”)

lacked authority to interpret the term “modification” in section

111(a)(4) of the Clean Air Act (“CAA” or “Act”), 42 U.S.C.

§ 7411(a)(4), differently under the regulations governing its New

Source Performance Standard (“NSPS”) and Prevention of

Significant Deterioration (“PSD”) programs in light of the

different purposes of the two programs.' The second is whether

the Fourth Circuit intruded upon the exclusive jurisdiction of

the D.C. Circuit under CAA § 307(b), 42 U.S.C. § 7607(b), by

using a CAA enforcement action to review the substantive

validity of EPA’s nationally-applicable CAA regulations,

25 years after those regulations were promulgated.

Because the States have primary responsibility for

administering and enforcing the CAA’s regulatory programs,

see Alaska Dept. of Env. Conservation v. EPA, 540 U.S. 461,

* All parties have consented to the Commonwealth of

Pennsylvania Department of Environmental Protection appearing as

amici on this brief and their consents are being filed herewith.

This brief was not authored in whole or in part by counsel for any party.

No person or entity other than the amici have made a monetary

contribution to the preparation or submission of this brief.

1. The PSD provisions of the CAA, 42 U.S.C. $§ 7470-92, cover

areas that have already attained the National Ambient Air Quality

Standards (“NAAQS”). Although only the PSD requirements are at issue

in this case, the Fourth Circuit's decision also applies to areas that have

not yet attained the NAAQS, subject to the Nonattainment New Source

Review (“NNSR”) provisions of the CAA, 42 U.S.C. § 7501-15. The

PSD and NNSR programs are together referred to as the New Source

Review (“NSR”) Program. The acronyms PSD and NSR are used

interchangeably throughout this brief.

2

470, 490 (2004), the decision below uniquely affects the interests

of amici States in four different ways. First, amici States have

an interest in ensuring that the CAA’s programs are used, as

Congress intended, in a manner that produces and maintains

clean air. As this Court has recognized, the PSD program is one

of the States’ most important tools for reducing air pollution

from both in-state and out-of-state sources. Alaska Dept. Of

Env. Conservation, 540 at 486 (purpose of PSD program “to

prevent significant deterioration of air quality in clean-air areas

within a State and in neighboring States”).

The decision below works a profound change in this area.

In the Fourth Circuit and wherever else the decision is applied,

sources of pollution will be able to undertake physical changes

that increase actual annual emissions without any scrutiny. A

plant whose modification enables it to operate more hours may

well substantially increase its total annual emissions, even if

the modification does not increase its hourly emission rate.”

2. The D.C. Circuit, using the facts in Puerto Rican Cement Co. v.

EPA, 889 F.2d 292 (1st Cir. 1989), has aptly illustrated this point:

In that case, a factory sought to ... replace old cement

kilns that operated 60% of the time with a new kiln that

would emit fewer pollutants per hour.... Under the

interpretation urged by industry petitions, [] the company

had not undergone an ‘increase’ in emissions — and thus

would not trigger NSR — since the new kiln would have a

lower hourly emissions rate than the old ones. Siding with

L-PA, the First Circuit agreed that the company had to obtain

an NSR permit to make the intended change [because of

the projected increase in actual annual emissions resulting

from the change].

New York v. EPA, 413 F.3d 3, 15 (D.C. Cir. 2005), reh'g and reh'g en

bane denied, — F.3d __ (Dec. 9, 2005). Like the kiln replacement in

Puerto Rican Cement, the rehabilitation projects at issue here were

(Cont'd)

3

Under the Fourth Circuit’s decision, such rehabilitation

projects need not comply with the NSR requirements. The

resulting emission increases will harm public health. For

example, power plant emissions of sulfur dioxide (SO,) and

nitrogen oxides (NO,), two of the pollutants at issue here,

lead to the formation of fine particulate matter (soot) and

ground level ozone (smog), which will kill tens of thousands

of Americans annually and sicken hundreds of thousands of

others. U.S. EPA, Proposed Rule to Implement the Fine

Particle Ambient Air Quality Standards, 70 Fed. Reg. 65,984,

66,006 col. 3 (November |, 2005).

Second, the Fourth Circuit’s decision will not only

hamper the States’ efforts to enforce the PSD requirements

by changing the substantive standard within that Circuit, but

will also cause delay and confusion elsewhere. For example,

several of the amici are currently enforcing the PSD

regulations against facilities located both within and outside

their borders whose pollution harms in-state air quality. See,

e.g., United States v. American Electric Power Serv. Corp.

(“AEP”), 137 F. Supp.2d 1060 (S.D. Ohio 2001) (eight states

and EPA filed claims concerning eight power plants); United

States v. Cinergy Corp., 384 F. Supp.2d 1272 (S.D. Ind. 2005)

(three states and EPA filed claims concerning six power

plants); Pennsylvania v. Allegheny Energy Inc., 2005 US Dist.

LEXIS 28894 (W.D. Pa. 2005) (five states alleging violations

at three power plants). Defendants in the AFP and Cinergy

(Cont'd)

intended to increase the future hours of operation of the plants, see

Petition at 9, resulting in increased annual emissions without increasing

the hourly emission rate. See United States v. Duke Energy, 411 F.3d

$39. 544 (4th Cir. 2005), reh'g en banc denied, F.3d _ (Aug. 30.

2005).

4

cases have sought dismissal of the claims at issue there based

on the Fourth Circuit’s interpretation of the PSD emissions test.

The decision below is therefore already acting as an impediment

to the reduction of air pollution within and between the States.

Third, proper application of the CAA’s provisions about

the timing of judicial review is essential to amici States because

of their role in administering the Act’s programs. The CAA’s —

judicial review provisions, including the 60-day limitations

period, 42 U.S.C. § 7607(b), ensure that the courts will have

determined the validity of any nationally applicable EPA

regulations before the States must adopt regulations to

implement them. The Fourth Circuit's decision, however,

exposes to judicial review long-standing EPA regulations on

which the States have based their clean air programs for decades.

Fourth, predictable and uniform application of the PSD

program, which is promoted by the provisions of the CAA that

confine review of the validity of EPA regulations to a single

court, is likewise important to amici States. The Fourth Circuit’s

ruling effectively invalidates EPA’s 1980 PSD regulations in

the Fourth Circuit and exposes States outside that circuit to

uncertainty about the regulations’ meaning in their own

jurisdictions. The decision has already led to forum-shopping,

as power plant owners filed an unprecedented preemptive

lawsuit in the Northern District of West Virginia, apparently in

order to use the decision in the present case to challenge alleged

violations at plants located in Pennsylvania. See Allegheny

Energy Supply Co. LLC v. Spitzer, No. 1:05cev04 (N.D.W.Va.)..

3. Allegheny Energy was filed after issuance of the district court

decision below, which was in turn affirmed by the Fourth Circuit

5

SUMMARY OF ARGUMENT

A grant of certiorari is warranted to review the Fourth

Circuit’s decision. First, its finding that EPA must use the

same test to identify emissions increases under both its NSPS

and PSD programs conflicts with decisions of other circuit

courts and of this Court on matters of great public importance.

In particular, the decision below is contrary to New York v.

EPA, 413 F.3d 3 (D.C. Cir. 2005), reh'g and reh'g en banc

denied, _ F.3d ___ (Dec. 9, 2005), in which the D.C. Circuit

upheld the same PSD emissions increase test. The court

rejected the view, adopted by the Fourth Circuit, that EPA

must interpret the statutory term “modification” for the PSD

regulations as it does the NSPS regulations, such that only a

project that increases a plant’s hourly rate of emissions

constitutes a “modification” subject to state permitting

procedures. /d. at 19-20, 39-40. The decision below likewise

conflicts with Wisconsin Electric Power Co. v. Reilly

(“WEPCo”), 893 F.2d 901 (7 Cir. 1990), and Puerto Rican

Cement Co. v. EPA, 889 F.2d 292 (1" Cir. 1989), which

recognized and gave effect to the differences between the

emissions increase methodologies under the NSPS and PSD

regulations. The Fourth Circuit’s holding that EPA must

construe a single CAA term identically in the regulations

governing two different programs is also directly contrary to

Chevron U.S.A. Inc. v. NRDC, 467 U.S. 837 (1984) and

Alabama Power vy. Costle, 636 F.2d 323 (D.C. Cir. 1979),

both of which held that EPA has the authority to construe

such a term differently in the NSR and NSPS regulations.

Second, the Fourth Circuit’s decision violates CAA

§ 307(b)(2), which gives the D.C. Circuit exclusive authority

to rule on the validity of EPA regulations promulgated under

the CAA. The court found that the NSPS and PSD regulations