# Reply Brief — Environmental Defense v. Duke Energy Corporation

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URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385016_0237%3A16

## Record

- **Collection:** Supreme Court brief
- **Document type:** Reply Brief
- **Published:** January 1, 2007
- **Citation:** 549 U.S. 561

## Text

Qo G4) , a

No. 05-848 OcT 19 2006
In The
Supreme Court of the United States

ENVIRONMENTAL DEFENSE, et al.,

Petitioners,
Vv.

DUKE ENERGY CORPORATION, et al.,
Respondents.

.

On Writ Of Certiorari To The
United States Court Of Appeals
For The Fourth Circuit

S

REPLY BRIEF OF PETITIONERS

+
JEFFREY M. GLEASON SEAN H. DONAHUE
J. BLANDING HOLMAN, [IV Counsel of Record
CALEB JAFFE 2000 L St., NW
SOUTHERN ENVIRONMENTAL Suite 808

LAW CENTER Washington, D.C. 20036
200 W. Franklin (202) 466-2234

Suite 330

- DAVID T. GOLDBERG
Chapel Hill, N.C. 27516

New York, N.Y. 10011
VICKIE PATTON (212) 334-8813
ENVIRONMENTAL DEFENSE

2334 North Broadway

Boulder, Colorado 80304

(303) 447-7215

Counsel for Petitioners

TABLE OF CONTENTS

TABLE OF AUTHORITIES ..............0ccscccsosssossssceeseserssesnerse li
UTI BIIIS crccccscccesessseseseseresesesoencensensecsvesenscceseuesavarense l

I. DUKE COULD HAVE OBTAINED D.C.
CIRCUIT REVIEW OF ANY CLAIM THAT
EPA HAD TO USE AN HOURLY RATE
FERS PRI BI cecececcennnsecensscnssenconassnanetmnnanenenssesessoonsnnes 2

II. DUKE’S NEW READING OF THE
REGULATIONS IS OBVIOUSLY WRONG............... 9

Ill. THE ACT DOES NOT REQUIRE USE OF AN

HOURLY RATE MEASURE FOR PSD
EMISSIONS “INCREASES” ........0..-...cccercssescccseseeeses 14

CIITA AIIDS cxcccnssesccsensesecnssqenvnensessnonssesosesnseonssnneenssonsenant 20

TABLE OF AUTHORITIES

CASES

Aetna Health Inc. v. Davila, 542 U.S. 200 (2004).........0...... 9
Alabama Power v. EPA, 636 F.2d 323 (1979).........000+ passim
Baldwin v. Reese, 541 U.S. 27 (2004) ........cceccseseeesesseerenenees 9
Bragdon v. Abbott, 524 U.S. 624 (1998) .......ccccccceseeseeeeeees 15
Brown v. Gardner, 513 U.S. 115 (1994) ......cccccescesesseseeseeeees 15
General Dynamics Land Sys., Inc. v. Cline, 540 U.S.

Se a isecsniisnsieciatiignaithinhiinnieriinaiiaiaantintinnpatapatinanvent 18
Harrison v. PPG Industries, Inc., 446 U.S. 578 (1980) ......... 8
Hawaiian Elec. Co. v. EPA, 723 F.2d 1440 (9th Cir.

SE cvcinisonsraneneistnntnmnbncnionntaisapitinaineneninre 8
Helvering v. Wilshire Oil Co., 308 U.S. 90 (1939)........00:000 16
IBP v. Alvarez, 126 S.Ct. 514 (2005)...........cscccsecceseeeeseeeseeess 17
Johnson v. United States, 529 U.S. 694 (2000) .............:0000- 15
Lorillard v. Pons, 43 U.S. 575 (1978) .....:.cccccsseesseeeees 6,7, 15
National Muffler Dealers Ass'n, Inc. v. United States,

BEB, Sie Ci i wintrcercenspesisinenseiimnimenimmneiiamitatiin 16
New York v. EPA, 413 F.3d 3 (D.C. Cir. 2005)............ passim

il

New York v. EPA, 431.F.3d 301 (D.C. Cir. 2005)............ 7, 15
New York v. EPA, 443 F.3d 880 (D.C. Cir. 2006)

SOR TRIN AE Wis rshcsindateciniicinsdanitiasteehsiiesbiaildenabaananialpealai 7, 15
Office of Personnel Management v. Richmond, 496

U.S. 414 (1990)... eticcitachabinanlaitonaitnabiadienaiiee 8
Potomac Elec. Power Co. v. EPA, 650 F.2d 509 (4th

ne TNT iesiicinciiiactinincndaedcedebeibhatbeiattipihctaadbinaodaasedectiaiiae 8
Puerto Rican Cement v. EPA, 889 F.2d 292 (1st Cir.

RIES EES ees ee Re CSE passim
Robinson v. Shell Oil Co., 519 U.S. 337 (1997) ......ccccseeseeeee 18
Steiner v. Mitchell, 350 U.S. 247 (1956) ..........ccccsceeseeseeneeeee 17
United States v. Calamaro, 354 U.S. 351 (1957) ...........:00006 15
United States v. Cinergy, 458 F.3d 705 (2006) ............ passim
Whitman v. Am. Trucking Ass'n, 531 U.S. 457 (2001)........... 3
Wis. Elec. Power Co. v. Reilly, 893 F.2d 901 (7th Cir.

ea ditinretincsncnesiiuchiteiionaibbcshnsiionietbiniciicimahipteipiemiiinediitaaeia passim
STATUTES
NUNN ah MN ciscstaicsessiceihiceiesciileitaatinchadidibiahddindedbaati 17
eas Al scastinspcivaiannttchinietsicaushdeiiaiaitabadiieniennpbbuanati 17
Clean Air Act 42 U.S.C. 7401 ef S09. .0......cccccscscseseeees passim

Sa ine CU cbncstieiciiteinincnendicicibaeiiibesinateibiineaes 12, 15, 18

iii

I el 18

Oe Sle PO COE OR inritcescitinctepcnnscsicnssansccininnavtnis 16
ee ees Pe icicaniatenininsnisintndnsbpsusiaesiichdinittiniimippidiniges 16
42 U.S.C. 7419(d)(5) (superseded)...........:ccccccceseeseeeeeees 16
ae FUN icisiesnteenssnidigstisneentetotesiteimcitieadicieiiitundi 18
ns Se csichiniincssinthniinctcipisntnininaiinnaisieipsicistinninigetdl 16
Sa ad SUIT ieciainrtnichcighticiptibgteithtsindenssnisinnenintndgadein 16
A anti IUD teiscintncnestpisesiisiniannancinitetlibeainnienpescies 18, 19
ne SITE cccnrsecichthlintetytavitehiinnnescinnnnisectieninianea 18
Fa ay SET intenetncitianininiocamainnnnisisneninandindinanegele 18
Oe ise i chipertensiciccncicntenintandcitanastnmncnicnnensesivcdsentttietens 16
as Se Ricsccictnsninintetniieninnapstniiediabubanadseiinnats 18
ie es SE ceaccccnanientiiemsensensininenitntinibrsiasedicinastitaita 18
Fe a HERE vcicesstincicteninnscsaniniananmnineneptesecnebennsneininien 18
eae Se ccierncesiccstnechichunsctsntnsincsiscinnticinonatansianstduiniti 18
ee FR sicdncinicsinsirnsntnnncssndsesetentuinne 16
PF aes ST ictinsccohseniiinininsdentanttinneedvonnsidaninnninennibeiita 19
Say PE hacresciincniectniectenninptinigticcncimiminissencvensnvutipiatens 2
ee Pe iienticedcntintagiicnedaletiiniiarecvaticamenteasin passim
I Reais PN ciiceccntitacecnccsnteintiansnnnenoseimnnenonenstianei 8
ns: HEE cinsinincansciinpincbintinsciciesniesdinsnnneenpsnensincti 3, 20
es PED ctiteransciincidcinnnitisictavecnernainitanttninenntante 19
is CIE ncccticcitaictentantspnrisiinadcsinnnnimantieveinisecstant 19
Pies NII iccissitiscinscnonpincabpininsiniimnieinssoeishasniinisenisieinies 15

iV

REGULATIONS

40 C.F.R. (1987):
OD Fe Be UID ccnccccvenciccesnenisianerastisiicitsasinaiiniaan 4
I PRD scccicnvtivsintsscsininaiesibsiapnitaiaiboaiinsattialitiied passim
EE FEU sccinsccininntovepiniepasntinicciineniditcnteianimiaiaaae 12
I Fa ee acivscssntcnnesssintitineiiibieiteaiiiiisinianbaaiel passim
FE ND icsnitencivicssiiniaieriiiatsicinainidaebiaiiieanidl 9
ONTO FE DET vcccinscsccscsessstnssetnnssntalinisncteiio passim
PR Fo DED escnccencersnsnenscicccsnttamnsetmnanninnsiaiaeigl 4
Section 31.166(O 2G NG) ........ersccccoccceressvseresssorseesoseees 20
Section 51.166(b)(2)(iii)(D)-(€).......ccsecseseesesesesesseneereneeees 19
Section 51.166(b)(2)(i1i)(f) ..........cecscceseereseeeseseeeeeeees 13, 19
ORIN Be te chcnteisssscepcsntmenenttinanieatiumsnniaiai passim
AIR FERED sivisintciiscsiintnmcitasiniltiarsineimiiiaman ial 4
OSE Sh. TOG accnccccstensccncnscmvssenassiniuetiiiia 11,14
I FS BR ccncessiesinstatitiiitaistidiabiiniaiaiainid 1]
AD Fee ciccicecnisnincinistsitascaiideiinidaliiheieedieniaan 12
REI FE. A accicsestcncsnssslsssseniitiiteastiiecibeageiliaiaaadldl 4
ama SE SOG ccscnccsncnvtsiiitaiitleuseianiaiasipendiidideal =
Ef, TIT NAS 4
ED FE Be scisnstensccnititinitstbineibiiniassediatin! 3,4, 12
nea FE AGRI occocisiticieentisninicialassainastiaats passim
ERE RMT RE BM nS ar 19

Sec cncirscecsssnnssnnscnonecnennsenensnentstannete 13
EE Ser ee eRe 10
TET ciintisictininsninitiitsininicibinpniennienteiniiataeneinend 4
hierniana inndindnpanmentinsretitnatatin passim
EES ee 9
| ES ENS ae ae eT 4, 15,17
NT ieeicierireistetihahantneitaieceiaiapetnacinttagemesnemnante 15
EE 16
LEGISLATIVE MATERIALS
Pub. L. No. 95-95, § 109(f), 91 Stat. 685 (1977)... 16
Pub. L. No. 95-95, § 129(a)(1), 91 Stat. 685 (1977)............. 16
Pub. L. No. 95-95, § 223, 91 Stat. at 764 ooo... ccccececeeseeeeenes 16
nL re ia csiciicineneenlindenibiencennninnsioonanianl 16
H.R. Rep. No. 95-297 (1977)..........ccccceeseee: sinilietencteiiiitcnni 17
ADMINISTRATIVE MATERIALS
38 Fed. Reg. 18986 (July 16, 1973) ...........cccccccceseceeseeeeeeeeees 13
39 Fed. Reg. 36946 (Oct. 15, 1974) .......cccccccecceeseeeeenenes 13, 16
5D Fed. Raw, 42510 (Das. S, 1974)......e.ecceccersscssssessessessececee 13
41 Fed. Reg. $5524 (Dec. 21, 1976) ..............ccscssesceseeseeeeees 15
42 Fed. Reg. 57459 (Nov. 3, 1977) ..n...ccccecsecseeeeceneenees 10, 16
44 Fed. Reg. 51924 (Sept. 5, 1979) ......ccccccccccesseseeeeeennees 9,10

45 Fed. Reg. 52676 (Aug. 7, 1980) .........ccccccceescesseeeees passim

48 Fed. Reg. 38742 (August 23, 1983) ...........ccccccscseceseeeeenens 11
57 Fed. Reg. 32314 (July 21, 1992)... aia 7,14
61 Fed. Reg. 38249 (July 23, 1996)..........cccccceeseeseeseeeeeeeenes 5
67 Fed. Reg. 80186 (Dec. 31, 2002)..............rcccecccsessesscsssoress 6
70 Fed. Reg. 61081 (Oct. 20, 2005)..........ccccccceseeeeeeeeees 6, 19

vil

INTRODUCTION

Making no effort to defend the Fourth Circuit’s reasoning,
Duke seeks to defend its result by urging that EPA’s 1980
PSD regulations “compel the conclusion that a PSD ‘major
modification’ first requires an NSPS ‘modification’ — a
change that causes an increase in a unit’s hourly emissions
rate.” Br. 33. Duke advances this theory both as a purported
basis to avoid Section 307(b), and a substantive argument that
the agency’s reading of its rules is impermissible.

This makes for painful reading: In fact, the 1980
regulations and their preamble make no mention whatsoever
of the NSPS maximum hourly rate test Duke now asserts to
be a prerequisite for every PSD “major modification.”
Instead, they set forth in considerable detail a PSD
applicability test triggered by increases in “actual” emissions
measured in “tons per year,” regardless of whether the same
project would satisfy the NSPS regulatory test. Duke not
only “could have” challenged these patent features of the PSD
rules, it did: Duke was party to D.C. Circuit proceedings that
began with Duke and others (in 1982) importuning EPA to
add an hourly-rate increase requirement to the PSD
regulations, and ended with the court rejecting Duke’s
arguments that the Act mandates an hourly rate test for PSD.
New York v. EPA, 413 F.3d 3 (D.C. Cir. 2005). Duke’s
identical statutory arguments here are “not subject to review”
in this “enforcement action,” 42 U.S.C. 7607(b). (They are
also meritless.)

Duke’s merits brief unveils a deus ex machina — two

“general” regulatory provisions now said to import an hourly
rate increase requirement into PSD. See Br. 28 (1980 “rules
as promulgated clearly provided that a PSD ‘major
modification’ first requires an NSPS ‘modification.””) (citing
40 C.F.R. 51.100, 52.01(d)). As with many 13th-hour
arguments, it was for good reason Duke did not cite either
provision in its 10]-page brief below (or its opposition to
certiorari). Neither even arguably “provides” — “clearly” or

otherwise — that an NSPS hourly rate increase is a prerequisite
for PSD applicability.

I. DUKE COULD HAVE OBTAINED D.C. CIRCUIT
REVIEW OF ANY CLAIM THAT EPA HAD TO
USE AN HOURLY RATE TEST FOR PSD
As our opening brief explained, the Fourth Circuit’s

decision represents a flagrant violation of Section 307(b), the

provision allocating judicial authority over CAA rulemakings.

Although Duke protests (Br. 29) that this provision does not

disable a court in an enforcement proceeding from rejecting

EPA’s interpretation of a regulation, that is not what

happened below: the Fourth Circuit did not interpret the

regulations, deeming their text “largely irrelevant.” Pet. App.
llan.3. Its decision rested on a statutory ruling that vitiated
nationally applicable rules. As we explained, the vice of that
conclusion (beyond being wrong about the CAA’s substance)

is not simply that the question was statutory, but that it was a

statutory objection that could have been — and was, in fact —

presented to the D.C. Circuit. Making no effort to defend the

Fourth Circuit’s overstep, Duke even denigrates critiques of

the court’s reasoning as attacks on a “straw man” that does

not reflect “Duke’s position.” Br. 31.

Duke calls EPA’s view that the 1980 PSD regulations do
not require an increase in hourly rates an “enforcement
interpretation” (Br. 25) that Duke “could not have
challenged” (Br. 28) in the D.C. Circuit.’ But a glance at the

' It is not true that the United States raised Section 307(b) “[o]nly after the
Fourth Circuit signaled in a supplemental briefing order that it was not
accepting EPA's position{.]” Duke Br. 26-27. Its opening brief (US CA4
Br. 23) pointed to the D.C. Circuit's “exclusive jurisdiction,” and when, at
oral argument, the panel questioned the regulations’ consonance with the
CAA, counse! for the United States observed that “reject{ing] portions of
the PSD regulations” was “something only the D.C. Circuit has
jurisdiction to do” under “Section 7607” of the CAA. CA4 Arg. Tr. 15.
When one judge responded, “[t}his would not be that. This would be
statutory — this is Congress telling us that the definition must be the
same,” counsel explained that “the proper vehicle for making that claim

plain language of the regulations reveals the utter
insubstantiality of this plea. The 1980 PSD regulations
contain no requirement that there be an increase in a source’s
hourly rate for PSD to apply. To the contrary, they direct, in
specific and technical detail, that emissions be measured in
“tons per year” of “actual” emissions, 40 C.F.R. 51.166(b)(3),
(21). EPA’s adoption of this “actual, annual” emissions
increase test in 1980 was “action” “of which review could
have been obtained” in the D.C. Circuit. See 42 U.S.C.
7607(b), (d). As the Seventh Circuit recently explained in
rejecting a challenge to the 1980 PSD regulations advanced
by Duke’s affiliate:

Cinergy’s principal argument * * * is that Congress
required that the regulation define “modification” as a
change in the hourly emission rate. Since the [1980 PSD]
regulation does not define it so, this seems an attack on the
validity of the regulation rather than an argument about its
meaning, and [pursuant to CAA Section 307(b)] issues of
validity * * * are beyond the jurisdiction of a regional
circuit to resolve.

United States v. Cinergy, 458 F.3d 705, 709 (2006). That it
is necessary here, as in Cinergy, to look preliminarily at the
regulations to see whether a party’s claim “could have been
obtained” in the D.C. Circuit, is not, as Duke seeks to argue
(Br. 30-31), reason to ignore Section 307(b) and proceed to
the merits of challenges that could have been (and here,
were) presented to that court.

Here, Duke could not have been lulled by the regulatory
text. A requirement that no project can trigger PSD unless it
first triggers the NSPS regulatory test would have been an
enormously important feature of the 1980 rules. Yet the
comprehensive regulatory text and preamble contain not even

would be in a challenge to the regulations which supposedly violated that
statutory mandate.” /d. The court ordered supplemental briefing on the
statutory issue three months later. See JA 9; Pet. App. 21a.

a “mousehole” for such a brontosaurian proviso. Whitman vy.
Am. Trucking Ass'n, 531 U.S. 457, 468 (2001). The PSD
rules provide elaborate and specific instructions on how to
determine whether a physical or operational change has
caused a PSD-triggering emissions increase. 40 C.F.R.
51.166(bX(3), (21) (1987). See Petr. Br. 10-11. When, in
those regulations, EPA intended to reference NSPS standards,
it did so in clear terms.? The PSD rules make no mention of
the detailed regulatory test for NSPS modifications in 40
C.F.R. 60.14(b). Unsurprisingly, the four appellate panels to
have examined the 1980 regulations’ text, cf. Pet. App. Ila
n.3, have readily concluded that the test for PSD applicability
— turning on increases in actual, annual emissions — differs
“fundamentally” from the NSPS hourly rate test.’

The 1980 preamble highlighted that EPA had
“change[d]” the PSD applicability standards set out in the
1979 proposed rule, 45 Fed. Reg. 52676, 52680 (Aug. 7,
1980), based on the D.C. Circuit’s reading of the statute in
Alabama Power v. EPA, 636 F.2d 323, 399-400 (1979), and
EPA’s own scrutiny of the “language of the statutory
definition,” which embraces “any” physical or operational
“change” that “increases the amount of any air pollutant
emitted by such source.” 45 Fed. Reg. at 52700 (emphasis
EPA’s). The 1980 PSD rules, in turn, define a “major
modification” as a (1) “physical change in or change in

? See, e.g., 40 C.F.R. 51.166(b)(12) (BACT under PSD must comply with
“any applicable standard under 40 C.F.R. 60 and 61”); 40 C.F.R.
51.166(b)(16)(i) (“allowable emissions” for PSD must be at least as
stringent as “standards as set forth in 40 CFR Parts 60 and 61”); see also

id. 51.166(b)(17), 51.166()\(1), 51.18G)(1 Xxvii).

> Wis. Elec. Power Co. v. Reilly, 893 F.2d 901, 913, 915 (7th Cir. 1990)
(“WEPCo.”) (NSPS and PSD rules measure emissions increases in
“fundamentally distinct manner,” namely, hourly rates versus actual,
annual emissions). See Cinergy, 458 F.3d at 708 (“the natural reading of
the regulation is that any physical change or change in operating methods
that increases annua! emissions is covered”); New York, 413 F.3d at 18;
Puerto Rican Cement v. EPA, 889 F.2d 292, 297 (1st Cir. 1989).

method of operation” at a source (2) that “results in a
significant net emissions increase,” 40 C.F.R. 51. i66(b)(2)(1),
‘ and define those constituent phrases in actual annual terms,
id. at (b)(3)(i) (net emissions increase defined as “actual
emissions”), (b)(21)(i) (“actual emissions” from unit specified
as “rate” in “tons per year”).

The 1980 preamble is likewise bereft of any support for
Duke’s assertion that “a PSD ‘major modification’ first
requires an NSPS ‘modification.”” Br. 28 (citing 40 C.F.R.
51.100, 52.01(d), neither of which, 2s explained below,
“provided” anything of the kind). To the contrary, the
preamble explains that, once a physical or operational change
is identified, “[t]he first step in determining whether a ‘net
emissions increase’ would occur is to determine whether the
physical or operational change in question would itself result
in an increase in ‘actual emissions.’”” 45 Fed. Reg. at 52698;
see id. at 52705 (EPA examples discussed in U.S. Br. 23).
The actual emissions “rate,” as explained, is expressed in
“tons per year.” 40 C.F.R. 51.166(0)(21)(i).

In 1982, a group of D.C. Circuit petitioners, including
Duke, see Petr. Br. 12-13; U.S. Br. 8, 32-33, entered into a
settlement whereby EPA agreed to propose for comment a
change in the 1980 regulations’ definition of “major
modification,” removing the references to “actual” emissions
“wherever it occurs in paragraph (b)(3)” (the definition of
“net emissions increase,” now 40 C.F.R. 51.166(b)(3)), and to
add new regulatory language expressly providing that PSD
would not apply absent an increase in hourly emissions rates.
See Petr. Br. 13. Settlement Agreement, D.C. Cir. No. 79-
1112, Exh. B, Sec. A, § 1 (1982). This change would have
made an increase in hourly emissions rates a sine qua non for
PSD applicability - just what Duke now argues, without
colorable textual basis, the 1980 regulations themsclves
already did. See, e.g., Duke Br. 33.‘

* See 61 Fed. Reg. 38249, 38269 (July 23, 1996) (proposed language
would have “eliminate[d] a source's level of operations as a factor when

Duke actually obtained D.C. Circuit review of the
“divergence” between the 1980 PSD regulations from the
NSPS regulatory test, and the D.C. Circuit rejected its
arguments. See New York, 413 F.3d at 20.° Attempting to
downplay that review, Duke asserts that New York
“principally involved a challenge to the 2002 rules,” and that
the D.C. Circuit merely disagreed “that Congress adopted
NSPS rules wholesale into PSD.” Br. 32 (citing 413 F.3d at
19-20) (emphasis added). But the court rejected Duke’s
challenge to the “1980 and 2002 rules,” specifically, the
claim “that modification must have the same regulatory

determining whether a proposed change will result in an increase” and to
require regulators to “completely disregard{]” post-change utilization).
See also 67 Fed. Reg. 80186, 80205 (Dec. 31, 2902); 70 Fed. Reg. 61081,
61098 (Oct. 20, 2005) (referring to settlement test as “NSPS-like”). Duke
ignores the settlement's terms, failing even to note (Br. 11) it was a party.
Duke does, however, try to explain away — as having “nothing to do with
Duke's position here” (Br. 11) - the D.C. Circuit brief filed in February
1981 by General Motors er al. (Petr. Br. 12), which complained that,
under EPA's 1980 rules, PSD could apply “even though the source's net
capacity to emit remains constant or declines.” Br. Ind. Pet’rs On Actual
Emissions 5-6 (No. 79-1112; filed Feb. 12, 1981) (“GM Brief”) (emphasis
added). Yet Duke's central position is that PSD should only apply where
there is an increase in “basic emissions capacity” (Duke Br. 2), or a
facility's “design emitting capacity” (Duke Br. Opp’n 4). Seeking to blur
the incompatibility between this position and the D.C. Circuit's rulings
that PSD turns on increases in “actual” emissions, e.g., New York, 413
F.3d at 38-40, Duke unveils an oxymoronic new phrase, “actual emissions
capacity.” Br. 22, 32 n.13; see also Br. 5 (“actual emissions capabilities”).
We have requested leave under Rule 32.3 to lodge the settlement
agreement and GM Brief with the Clerk.

* Duke’s arguments here are eerily similar to those made before the D.C.
Circuit. Compare, e.g., Joint Reply Br. Ind. Pet'rs 6 (No. 02-1387; filed
Sept. 20, 2004) (“in adopting the NSPS and 1974 PSD meaning and usage
of modification into NSR, Congress selectively modified certain of the
rules while adopting others (including the well-established definition of
‘modification’) without change. Such selectivity is strong evidence of
Congress's intent to incorporate in the statute those regulatory provisions
that it did not specifically change. Cf. Lorillard v. Pons, 43 U.S. 575, 582
(1978)") with Duke Br. 44.

meaning for NSR as prevailed for NSPS in 1977.” 413 F.3d
at 19-20.° As the D.C. Circuit itself has explained, New York
“rejected industry's eontention that Congress ratified the
[NSPS] regulations on ‘modification’ in the 1977
amendments * * * * [and] their position that ‘modifications’
require an increase in maximum emissions rates[.]" New
York v. EPA, 443 F.3d 880, 889 (D.C. Cir. 2006) (New York
Il) (citing 413 F.3d at 19-20, 40 and 431 F.3d 801, 802-863
(2005) (Williams, J., conc. den. reh’g. en banc)). No party
petitioned for certiorari in New York, though the time to file
elapsed months after the petition in this case was filed.

Nor can Duke escape from New York by pointing to (Br.
32-33) the D.C. Circuit’s refusal to address, as unmpe,
industry's challenge to an “allegedly new interpretation of the
1980 rule contained in the preamble to the 2002 rule,” 413
F.3d at 20. See also id. at 21 (noting that preamble language
“appears to be — as EPA claims ~- no more than a short-hand
reference to the 1980 rule, not a formal interpretation”).’ The

* Duke and other petitioners also urged that the 1980 final rule should be
vacated as an impermissible departure from the 1979 proposal, which they
read to restrict PSD to changes that increased units’ capacity to emit.
Joint Br. Ind. Pet'rs 35-37 (D.C. Cir. No. 02-1387; filed May 11, 2004).

” Duke's repeated assertions before this Court that EPA's position is an
“enforcement interpretation” (¢.g., Br. 22, 24, 25, 27, 33, 41, 46) — ansing
from an “abrupt reversal of position” by EPA occurring “in November
1999” (Br. 16) — are inconsistent with its own D.C. Circuit submissions:
“Beginning in the late 1980s, EPA, without even acknowledging its
contemporaneous interpretation of the 1980 NSR rules, attempted to
rewrite the rules by reinterpreting them as having repealed the first step of
the emissions increase test-—i.e., the requirement that there be NSPS
modification activity.” Joint Br. Ind. Pet’rs 16 (D.C. Cir. No. 02-1387;
filed May 11, 2004) (emphasis added); see New York, 413 F.3d at 15
(discussing WEPCo., Puerto Rican Cement, and 1992 preamble, 57 Fed.
Reg. 32314, 32328 (July 21, 1992)). Similarly, the record reflects that
since at least 1990, Duke and the Unlity Air Resources Group (of which
Duke is a member and with whom it shares counsel) have known that
increased hours of operation, or “utilization,” could trigger PSD even if
hourly rates do not increase. JA 243, 272, 276, 380, 496.

D.C. Circuit did not regard as unripe challenges to the 1980
regulations themselves — including their “divergence” (id. at
20) from the NSPS hourly rate regulation; it rejected those
challenges on the merits, id. at 18-20. If there were others the
D.C. Circuit did “not resolve” (Duke Br. 32), it was because
Duke did not present them, see 413 F.3d at 20. Any CAA or
APA-style challenge to the 1980 regulations’ patent failure to
impose an NSPS-like hourly rate “trigger” for PSD would
have been cognizable by petition for review immediately
upon promulgation, and is barred in an enforcement action.
42 U.S.C. 7607(b)(2). If “fundamental fairness” (Duke Br.
29) speaks to these circumstances, it calls for enforcement of
that limitation, which governs, and protects, the large range of
interests affected by CAA rulemakings. See, e.g., Br. of
Amici Curiae New Jersey et al. 5-20; Br. of Amici Curiae
STAPPA et al. 15-18; Br. of Former EPA Admin'rs 1-13.*

* Duke’s narrative of regulator acquiescence rings decidedly hollow. That
a letter from Duke claiming its units would be in “extended cold
shutdown” with “minimal expenditures” (JA 187), prompted agreement
from state environmental officials that PSD did not apply (Duke Br. 18), is
meaningless given the projects actually Duke undertook — work more
accurately explained to utility regulators from whom Duke sought
increased rates. See Petr. Br. 19-20 (quoting Duke's statements of need
for “total rehabilitation” of “geriatric” units “too dangerous to operate”
and otherwise due to be “retired and scrapped”). Also unavailing are
routine field inspection reports (Duke Br. 18): A state inspector explained
that PSD “determinations are not made in the field” (JA 363) and require
testing and analysis such that “just from the inspection and looking at the
boiler, you couldn’t say it is subject to PSD or not.” JA 347. See also JA
313, 323, 333. Despite the scale of Duke’s Plant Modernization Program,
it never sought an applicability determination from EPA. Cf. Harrison v.
PPG Industries, Inc., 446 U.S. 578 (1980); WEPCo, 893 F.2d at 913;
Puerto Rican Cement, 889 F.2d at 297-298; Potomac Elec. Power Co. v.
EPA, 650 F.2d 509 (4th Cir. 1981); Hawaiian Elec. Co. v. EPA, 723 F.2d
1440 (9th Cir. 1984). To the extent claims of agency acquiescence or
prejudicial delay in initiating enforcement could have any legal relevance
here, they would not bear on the validity of the EPA’s regulations or
interpretation, but on affirmative defenses such as estoppel or laches—
defenses Duke asserted below. But see Office of Personnel Management
v. Richmond, 496 U.S. 414, 419-24 (1990).

Il. DUKE’S NEW READING OF THE REGULATIONS

IS OBVIOUSLY WRONG

Duke contends “that an NSPS ‘modification’ is required
before a [PSD] ‘major modification’ analysis can occur,” so
that PSD cannot apply unless “an increase in a unit’s
maximum achievable hourly emissions rate occurs.” Br. 32
(citing 40 C.F.R. 60.14, the NSPS regulation). Although the
PSD regulations’ highly specific instructions on how to
measure emissions “increases” for PSD purposes say nothing
of an hourly rate “trigger,” Duke claims it materializes by
operation of two “general” regulatory provisions, which are
said to make satisfaction of the NSPS hourly rate increase test
a prerequisite for any PSD “major modification.” See Duke
Br. 2, 10, 28, 32, 34 (citing 40 C.F.R. 51.100, 52.01(d)).

Duke did not present this account of the regulations in its
briefs in the Fourth Circuit or its opposition to certioran. In
neither place did Duke cite either of the regulatory provisions
now assigned the monumental role of importing the NSPS
hourly rate standard into the PSD regime.” To the contrary,
its opposition (correctly) referred to “major modification,” 40
C.F.R. 51.166(b\(2), as “the definition of ‘modification’ for
PSD.” Duke Cert. Opp. 7-8. See Baldwin v. Reese, 541 U.S.
27, 34 (2004) (waiver under Sup. Ct. Rule 15.2); Aetma
Health Inc. v. Davila, 542 U.S. 200, 212 n.2 (2004) (same).

This late-breaking regulatory argument is, in any event,
completely disconnected from the 1980 PSD regulations,
which nowhere incorporate — as the “tigger” (see Duke Br.
32) for a PSD modification, or for any other purpose — the
NSPS regulations’ hourly rate provisions in Part 60.14.
Rather, the definition of “major modification” in 40 C.F.R.
51.166(b) sets forth a free-standing and complete standard for
judging whether activity is subject to PSD, and the

? In Cinergy, unlike this case, the appellant did argue that a PSD “major
modification” must, by operation of 40 C.F.R. 52.01(d), first constitute a
NSPS “modification” — this was among the arguments the Seventh Circuit
dismissed as “makeweights.” Cinergy, 458 F.3d at 711. See Duke Br. 19.

regulations carefully define each of the terms used therein.
The definition prescribes what a PSD “‘[m]ajor modification’
means,” id. 51.166(b)(2)(i) (emphasis added); activities that
satisfy the criteria therein are subject to PSD, id. 51.166(i)(1).

The term “major modification” was introduced in the
1977 PSD regulations to correspond to the PSD regulatory
term “major source,” and EPA’s initial regulations required
that emissions increases from a change be large enough
independently to reach the statutory thresholds for “major
emitting sources.” See 42 Fed. Reg. 57459, 57480 (Nov. 3,
1977). After Alabama Power disapproved this “regulatory
definition of modification,” 636 F.2d at 399, EPA retained
“major modification” as the PSD implementation of the CAA
term “modification” in the revised rules. See, e.g., 45 Fed.
Rey. at 52704 (providing examples of “the way in which the
definition of modification works’) (emphasis added); id. at
52705 (examples of changes that “qualify as
modifications”). '°

The 1980 regulations define “major modification” in
high-resolution detail, leaving no room for Duke’s subliminal
NSPS trigger. According to Duke, before a “major
modification” can occur, “first” a “unit's” hourly rate must
increase. Br. 33. But the 1980 regulations explicitly define
“actual emissions” at the “unit” level in “tons per year,” 40
C.F.R. 51.166(b)(21)(i); see 45 Fed. Reg. at 52698 (“the first
step” is to “determine whether the physical or operational
change in-question would itself” increase annual emissions).
At the next stage, the regulator must sum “any increase in
actual emissions from a particular physical change” with “any
other increases and decreases in actual emissions at the
source.” 40 C.F.R. 51.166(b)(3)i)(a), (b) (emphases added).

'° EPA did not use Duke’s allegedly NSPS-referring definitional structure
for PSD prior to 1980, either. See, e.g., 44 Fed. Reg. 51924, 51948 (Sept.
5, 1979) (proposed regulations, describing “major modification” as “the
definition of ‘modification’ * * * when used in the Act in reference to a
major stationary source”).

10

Thus, a change that causes a significant increase in a unit's
actual, annual emissions qualifies as a “major modification”
even if there is no decrease to be “netted” against it, and even
if there is no increase in hourly rates. An NSPS
“modification” is nowhere made an interceding “first step”
for PSD applicability.''

Duke’s account is also inconsistent with the 1980
preamble’s explanation of why the “actual emissions”
standard supplanted the “potential emissions rate” test
proposed in 1979. Both the Alabama Power court, and EPA
itself, emphasized the broad statutory definition of
“modification” — and its interplay with the express statutory
requirements for PSD - in concluding that PSD must capture
“actual” emissions increases. See 636 F.2d at 400; 45 Fed.
Reg. at 52700; see also id. at 52718 (“Use of actual emissions
for increment consumption is consistent with using an actual
emissions baseline for defining a major modification.”); id.
(linking choice of “actual emissions” to effort to “reflect
actual air quality” in area).

Against the precision of the 1980 regulations, the two
“general” provisions Duke cites as the basis for its argument
that the PSD regulations incorporate the NSPS hourly rate
test, 40 C.F.R. 51.100 and 52.01(d), do very little. Section
51.100 provides that “[a)]s used in this Part, all terms not
defined herein will have the meaning given them in the Act.”
This provision applies only to undefined terms, and the
specific and detailed “major modification” definition in
51.166(b)(2)(i) is the regulatory definition of the statutory

'' The January 1981 Reich memorandum (cited in Duke Br. 11-12, 28)
makes this very point. Reich explained that the “first” step in the PSD
inquiry is “to determine if there will be a significant net emissions
increase from the modification itself” with the emissions “rates” expressed
as tons per year. JA 36. Reich noted that this understanding would be
published in the Federal Register (JA 36), and it was: 48 Fed. Reg. 38742,
38746 (Aug. 23, 1983) (“first step” is to sum emissions from change at
unit); see id. n.14 (“tpy” emissions at all steps, including for units).

1]

term “modification” for PSD purposes — as has been
recognized by EPA, supra, p. 10; by courts both before and
after the 1980 rulemaking, see Alabama Power, 636 F.2d at
399: New York, 413 F.3d at 20; and (until its merits brief) by
Duke itself, see Duke Cert. Opp. 7-8. Ever since the term
“major modification” was introduced for PSD in 1977, EPA
has invariably treated it as the operative NSR regulatory
definition of the statutory term “modification,” and there 1s no
sign, anywhere, that EPA understood or intended that detailed
regulatory definition to be dramatically qualified by Section
51.100’s bare reference to the statute. '”

Equally unavailing is Duke’s reliance on Section
§2.01(d), which, uncited in the Fourth Circuit or in Duke’s
opposition to our petition, now rates a “passim,” Duke Br. x.
Promulgated for the 1974 administrative PSD program,
Section 52.01(d) provides that “the phrases modification or
modified source mean any physical change in, or change in
the method of operation of, a stationary source which
increases the emission rate of any pollutant * * * *” Section
§2.01(d) applies only to “this part” - Part 52 - and, as Duke
has recognized, this case is governed by Part 51, establishing
the PSD requirements for state plans. See Duke Cert. Opp. 7
n.15 (state rules “are identical to the federal 1980 PSD rules,
40 C.F.R. § 51.166 (1987)”). The Part 51 regulations instruct
that “All state plans shall use the following definitions for
purposes of this section,” and that states may use different
definitions only if they are “at least as stringent, in all respects
as the corresponding definitions below.” 40 C.F.R. 51.166(b)

2 Even if it applied, 40 C.F.R. 51.100 would get Duke nowhere. Inserting
the CAA 111(a)(4) language into the regulatory definition of “major
modification,” would still predicate PSD applicability (albeit in oddly
prolix fashion) on a “net emission increase,” measured in “tons per year”
of “actual emissions.” See 40 C.F.R. 51.166(bX3), (6)(21). Nor
(obviously) does the inclusive definition of “construction” in the PSD
regulations, id. 51.166(b\8) (cited in Duke Br. 23, 33, 35, but also not
cited below) establish an hourly rate-increase precondition for PSD.

12

(emphasis added). "”

In any event, by its terms, Section 52.01(d) does not
purport to mandate the use of the NSPS (or any other) “hourly
rate” test. An “emission rate” can be measured in hourly,
daily, annual, or other terms ~ and the 1980 regulations
explicitly measure emissions “rates” in “tons per year.” See
40 C.F.R. 51.166(b)(21)(i); (b(23)(i); see also 38 Fed. Reg.
18986, 18996 (July 16, 1973) (proposed PSD rules describing
“rate” in “annual * * * tons” of pollution) (emphasis
added).'* The reference to “rate” in Section 52.01(d) does
not vary the specific and detailed methodology for identifying
PSD emissions increases set forth in 40 C.F.R. 51.166(b).

Duke also invokes the limited exclusion for “[a]n increase
in the hours of operation or in the production rate.” 40 C.F.R.
51.166(b)(2)(iiif). But, as its plain language makes clear,
this provision addresses what constitutes a “physical change”
or “change in the method of operation,” not how emissions
from such a change should be measured. See, e.g., Petr. Br.
36-37; 45 Fed. Reg. at 52704; WEPCo., 893 F.2d at 916 n.11;
Puerto Rican Cement, 889 F.2d at 298; 45 Fed. Reg. at 52698
(under regulations, physical and operational “changes” “do
not encompass certain specific types of events”). When such
a “change” is present — in an extensive plant “modernization,”
for example — the regulations require that “[a}ny increase in

> Alabama Power specifically described Section 52.01(d) as having been
“superseded,” 636 F.2d at 348 n.24, and EPA never referenced it in the
1980 preamble. See 45 Fed. Reg. 52686 (1980 regulations would in time
“displace the old” Part 52 regulations “entirely”). It is quite implausible
that EPA - crafting new regulations in direct response to Alabama Power
~ would have silently assigned this provision an enormously important
role in determining PSD coverage.

'* When EPA first promulgated Section 52.01(d) in 1974, the NSPS
regulations did not provide for an hourly rate test. See 39 Fed. Reg.
42,510, 42,513 (Dec. 5, 1974) (explaining in the PSD rule preamble that
the Administrator was stil] evaluating how to define “modification” for
NSPS purposes); 39 Fed. Reg. 36946, 36947 (Oct. 15, 1974) (soliciting
comment on the unit of measurement for emissions increases under NSPS,
and including “year{ly]” increases as an option).

13

actual emissions from a particular physical change or change
in the method of operation” be counted, in “tons pér year.”
40 C.F.R. 51.166(b)(3)(i)(@), (621d).

Duke pleads that “changes in hours operation, standing
alone, are not changes in the ‘method of operation,”” so “the
‘hours of operation’ exclusion must do more.” Br. 39-40.
But this overlooks the breadth of the statutory definition,
which could be read to include stand-alone increases in
utilization, as EPA as expressly noted in 1980, 45 Fed. Reg.
at 52705 (“The increase in hours of operation is a change in
the method of operation.”). See 57 Fed. Reg. at 32316
(because statutory definition could “encompass the most
mundane activities,” agency has defined “modification”. to
“include common-sense exclusions from the ‘physical or
operational change’ component of the definition”). The
exemption — also part of 1992 and 2002 PSD rules that even
Duke does not claim to employ an hourly rate test —- confines
coverage in an important way, but by its plain terms does not
preclude consideration of emissions increases resulting from
physical or operational changes.

Il. THE ACT DOES NOT REQUIRE USE OF
AN HOURLY RATE MEASURE FOR PSD
EMISSIONS “INCREASES”

Duke’s brief (Br. 42-47) mingles two separate statutory
arguments: that Congress ratified some specific pre-existing
NSPS or administrative PSD regulations in the 1977 PSD
enactment (the argument rejected on its merits in New York),
or that it commanded that the statutory term “modification”
be implemented by identical regulations in both NSPS and
PSD (the argument accepted by the Fourth Circuit in this
case, but found to have been waived in New York). The two
arguments, inconsistent with one another (see Pet. App. 18a),
are alike in two respects: they are both jurisdictionally
improper challenges to the regulations EPA actually adopted,
and they are both, in any event, meritless.

The statute does not support Duke's argument (Br. 42-44)

14

that the 1977 PSD enactment’s use of the Section 111(a)
statutory definition of “modification” constituted a command
that EPA must use a regulatory standard from the 1975 NSPS
regulation. Nowhere does the 1977 PSD enactment purport to
incorporate any prior regulation concerning how to measure
emissions increases. See New York, 413 F.3d at 18-20;
Cinergy, 458 F.3d at 710.

The 1975 NSPS regulations contained “different” and
“possibly inconsistent” definitions of “modification,” only
one of which contained the hourly rate standard. New York,
413 F.3d at 19 (citing 40 C.F.R. 60.2(h), 60.14(b)); see id. at
12 (“{iJn its various permutations, this regulatory framework
had not been long in place when” Congress enacted the 1977
legislation). The regulations in place under the 1974
administrative PSD program contained other definitions,
lacking any reference to hourly rates, 40 C.F.R. 52.01(d),
while the non-attainment NSR program contained yet a
different test. See New York, 431 F.3d 801, 802 (Williams, J.,
conc. den. reh’g en banc) (discussing “potential allowable
emissions” test at 41 Fed. Reg. 55524, 55528 (Dec. 21,
1976)). There is no evidence Congress was aware of any of
these regulatory definitions (none of them judicially
reviewed), let alone that it intended to entrench any of them
as statutory requirements. See Brown v. Gardner, 513 U.S.
115, 121 (1994) (citing United States v. Calamaro, 354 U.S.
351, 359 (1957)); Johnson v. United States, 529 U.S. 694, 726
(2000) (Scalia, J., dissenting); cf. Bragdon v. Abbott, 524 U.S.
624, 631-32 (1998) (finding regulatory ratification where
Congress not only was aware of but expressly referred to and
incorporated regulations) (citing 42 U.S.C. 12201(a)).

Congress, in 1977, did adopt other pre-existing
regulations as statutory requirements. It amended the
definition of “modification” in CAA Section 111(a) by adding
a new legislative exemption for coal-conversion projects
approved under Section 119(d) of the Act, one that tracked a

15

pre-existing 1975 NSPS regulatory exemption.’ And
“elsewhere” in the amendments, Congress “incorporate[d]
regulatory provisions expressly by reference.” New York, 413
F.3d at 19 (citing Pub. L. No. 95-95, § 129(a)(1), 91 Stat. 685,
745 (1977); 42 U.S.C. § 7502 note); see also Pub. L. No. 95-
95, § 223, 91 Stat. at 764 (adding since-superseded CAA §
211(g)(3), 42 U.S.C. 7545(g)(3) (1978), referring to specific
EPA regulations concerning fuel additives). When Congress
wished to incorporate existing EPA regulations in the 1977
legislation, it knew how to do so.

Section 168 of the Act (cited in Duke Br. 44) provides
that pre-1977 PSD regulations “shall remain in effect” “[u)ntil
such time as an applicable implementation plan is in effect for
any area” that complies with new statutory PSD provisions,
and would continue to govern projects commenced between
July 1, 1975 and August 7, 1977. 42 U.S.C. 7478(a), (b). It
manifestly expresses an intent to phase out the preexisting
regulations, not capture them in statutory amber. See
Alabama Power, 636 F.2d at 363; 42 Fed. Reg. at 57459,
$7471 (discussing “comprehensive changes” to regulations
required by 1977 statute’s “comprehensive new
requirements”). There is no evidence that Congress, outside
the narrow provisions just discussed, intended for pre-1977
regulations to constrain EPA’s rulemaking authority. See
National Muffler Dealers Ass'n, Inc. v. United States, 440
U.S. 472, 485-86 (1979) (citing Helvering v. Wilshire Oil Co.,
308 U.S. 90, 101 (1939))."*

1S See Pub. L. No. 95-95, § 109(f), 91 Stat. 685, 703 (1977), codified at 42
U.S.C. 7411(aX8) (a “conversion to coal,” under CAA § 119(d)(5) “shall
not be deemed to be a modification for purposes of paragraphs (2) and (4)
of this subsection.”). See 40 C.F.R. 60.14(e)(4) (1975) (NSPS regulation
exempting “conversion to coal” under § 119(d)(5)); 39 Fed. Reg. 36946,
36948 (Oct. 15, 1974).

'* Duke quotes (Br. 46) the House Report for the proposition that “existing
sources * * * and their emissions’ [sic] capacity are “grandfathered.”
H.R. Rep. No. 95-294, at 144 (1977), but fails to mention that Congress
rejected the House bill’s approach, which premised PSD “baseline

16

Nor is there any merit to Duke’s other account of what
the Act is supposed to have unambiguously provided —
Duke’s passing nod (Br. 43) to the Fourth Circuit’s Rowan-
based theory that Congress intended that regulations
implementing the term “modification” for NSPS and NSR
must be the same. Duke’s own commitment to this theory is
weak indeed, for it advocates an NSR “modification” test
substantially different from the NSPS test. Duke fails to
explain why Congress would impose as an unyielding
statutory requirement one particular feature of the regulatory
test for NSPS modifications - the hourly rate test enunciated
at 40 C.F.R. 60.14(b) — while simultaneously allowing large
departures with respect to others, including minimum
significance thresholds and netting, or why, if the mandate is
regulatory sameness, the NSPS test should be preferred over
an NSR test that is far more consonant with the statutory text,
see New York, 413 F.3d at 38-40; 45 Fed. Reg. at 52700.

Contrary to Duke’s argument (Br. 43), JBP v. Alvarez,
126 S.Ct. 514 (2005), does not make the “presumption of
uniform usage irrebut[t]able” here. That decision construed
the term “principal activity or activities” as interpreted by
Steiner v. Mitchell, 350 U.S. 247 (1956), and as employed in
two contiguous subsections of the Portal-to-Portal Act,
covering worker travel “to and from * * * the principal
activity or activities,” and activities before and after “said
principal activity or activities,” 29 U.S.C. 254(a)(1), (2)
(emphasis added). Because the second reference to “said”
activities was “an explicit reference to the use of the identical
term” earlier in this statute, the Court found “no plausible
argument” for diverging interpretations. 126 S.Ct. at 524-25.
Here, rather than simultaneously-enacted statutory
subsections sharing a single “said” term, the Court encounters
separate statutory programs enacted years apart using a

general term with component phrases (“source,” “increase,”

concentration” on “plant capacity in existence.” H.R. Rep. No. 95-297
(1977) (§ 160(c)2EXi)). See Alabama Power, 636 F.2d at 380-81.

17

“amount,” “emitted”) that must themselves be defined to
mesh with the distinct regulatory programs. See Robinson v.
Shell Oil Co., 519 U.S. 337, 343 (1997); Cinergy, 458 F.3d at
710 (noting that NSPS and NSR definitions were enacted “by
different Congresses for different purposes”). "”

Finally, the language of the statutory definition -
relegated to a cameo role in Duke’s script — is inconsistent
with the regulatory approach Duke claims it to command.
See New York, 413 F.3d at 38-40.'* Congress did not speak
of increases in “rate” let alone “hourly” rate), “designed
emitting capacity” (Duke CA4 Br. 8), “fundamental ability to
emit pollutants” (Duke Br. 24), or “actual capacity” (Duke Br.
22, 32 n.13, 36). Congress, instead, targeted increases in the
“amount” of pollutants “emitted.” 42 U.S.C. 7479(2\C),
7411(a). See id. 7475(b), 7479(1) (denominating emissions
for the PSD program in “tons per year’’).

Duke dismisses arguments based on the text and structure
of the Act by treating the term “purposes” as an epithet (Br.
47-50). As Robinson illustrates, however, no rule of statutory
construction prevents a court or an agency from construing a
term in light of the role it (and the provision in which it
appears) plays in the overall statutory scheme. Moreover,
neither our argument nor EPA's longstanding interpretation

'’ Duke's assertion (Br. 43) that Congress explicitly defined PSD
modification as “used” in NSPS is incorrect. The term appears in the PSD
provision as follows: “construction when used in connection with any
source or facility includes modification,” 42 U.S.C. 7479(2\C). Far from
mandating identity, that usage invokes the fundamentally distinct
“sources” to which the programs apply. See also Petr. Br. 45-48
(summarizing substantive differences between NSPS and NSR programs).
See General Dynamics Land Sys., Inc. v. Cline, 540 U.S. 581, 595 (2004)
(meaning of same term may vary depending on the “‘connection in which
the words are used’”) (citation omitted).

'S The 1990 Amendments to the NNSR program, which also employs the
Section 111(a)(4) definition, 42 U.S.C. 7501(4), built upon EPA's NSR
regulatory definition, using annual pollutant thresholds, id. 751 1a(c), (d),
751 1a(e), and “actual emissions,” id. 7503(c)(1). Petr. Br. 15-16, 40.

18

of the statute and regulations privileges the CAA’s “remedial
purpose” over all others. On the contrary, it also serves the
different purpose of enabling economic growth: Because the
increases in actual emissions that Duke claims must be
ignored at the permitting stage indisputably do consume
available “increment,” allowing projects like Duke's to
proceed without emissions controls crowds out construction
of new, more efficient projects. See, e.g., Petr. Br. 40-41; Br.
of States of New York, et al. 26-28.

Seeking to rescue arguments unmoored to statutory or
regulatory text, Duke and its amici suggest that transplanting
the NSPS hourly rate test into PSD is necessary to avoid
undue burdens for industry, and request a cropping of NSR in
light of later legislative developments (but see, e.g., Br. of
Amicus Curiae STAPPA ef al., at 8-12). At best, such
contentions would be grist for EPA rulemaking procedures,
not an enforcement action, See 42 U.S.C. 7607(b), (d)(1),
(e).'* But they also disregard the numerous exemptions built
into the Act and rules. The statute exempts sources emitting
less than “major” pollution thresholds entirely, id. 7479(1),
and contains a partial exemption for modifications involving
less that 50 tons per year of pollution, id. 7574(b). EPA's
regulations, in turn, exempt individual projects not only
through source-wide netting and de minimis thresholds, but
also through exemptions for multiple alternative fuel and
repowering projects, id. 51.166(b)(2)(iii)(b)-(e), and stand-
alone increases in hours of operation or production rate, id.
51.166(b)(2)(i1i)(/). And, contrary to assertions that stretch
beyond hyperbole, the rules exempt routine maintenance,
repair, and replacement. /d. 51.166(b)(2)iii(a).-” See 45

'* Petitioners oppose EPA's October 20, 2005 rulemaking proposal, 70
Fed. Reg. 61081. But Duke's efforts to capitalize on that ininative (Br.
21-22) weaken its position in this case, since EPA’s notice recogmzes that
the proposal is a significant departure, requiring changes to regulatory text
in effect since 1980, see, e.g., 70 Fed. Reg. at 61088-89.

*® See, e.g., Br. of Alabama, ef al. 17 (“nearly every physical change made

19

Fed. Reg. at 52726 (“adequate exemptions have been
provided in today’s regulations and no further ones are
authorized under the Act”). But neither Act nor regulations
provide for the exemption Duke seeks here — “perpetual
immunity,” Alabama Power, 636 F.2d at 400, for old sources
undergoing renovations that increase the amount of pollution
actually emitted by thousands of tons per year.

As Judge Posner explained in Cinergy, the rule sought by
Duke here, “besides not conforming well to the language of
the regulation,” would encourage investment choices made
only to “elude the permit requirement,” “distort the choice
between rebuilding an old plant and replacing it with a new
one,” and open “a loophole that would allow pollution to soar
unregulated.” 458 F.3d at 709, 711. See Br. of Amici Curiae
STAPPA et al. 7-16; Br. of States of New York, et al. 22-29;
Br. of Former Administrators Browner and Train 21-24. It
would undermine an entire statutory structure predicated in
every particular (see Petr. Br. 39-42) on a realistic accounting
of increases in the “amount * * * emitted” by major sources
of pollution. Duke’s policy arguments are misguided, and
provide no basis to ignore the statutory allocation of judicial
authority in CAA implementation, 42 U.S.C. 7607(b), (d), (e).

CONCLUSION
The judgment of the court of appeals should be reversed.

Respectfully submitted.

to every component of every sub-part unit will tngger application of new
NSR/PSD requirements”) (emphases original). Duke's massive
renovation of “geriatric” units (JA 201), see Pet. Br. at 19-20 & nn.12-14,
serves as a real-world corrective. Despite the scope and cost of its
projects, below Duke invoked the regulatory exemption for “routine
maintenance,” an issue that would be taken up on remand. See Pet. App.
7a-8a n.2.

JEFFREY M. GLEASON

J. BLANDING HOLMAN, IV

CALEB JAFFE

Southern Environmental
Law Center

200 W. Franklin Suite 330

Chapel Hill, N.C. 27516

(434) 967-1450

VICKIE PATTON
Environmental Defense
2334 North Broadway
Boulder, Colorado 80304
(303) 447-7215

SEAN H. DONAHUE
Counsel of Record

2000 L St., NW

Suite 808

Washington, D.C. 20036

(202) 466-2234

DAVID T. GOLDBERG

99 Hudson St., 8th Floor
New York, N.Y. 10013
(212) 334-8813

Counsel for Petitioners

OCTOBER 2006

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385016_0237%3A16. Public record. Not legal advice.