Amicus Curiae Brief — Environmental Defense v. Duke Energy Corporation

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Ueiy | FILED

SEP 15 2006

IN THE

Supreme Court of the United States

ENVIRONMENTAL DEFENSE, ef al.,

Petitioners,

DUKE ENERGY CORPORATION , ef ai.,

Respondents.

On Writ of Certiorari to the

United States Court of Appeals

for the Fourth Circuit

BRIEF OF WASHINGTON LEGAL FOUNDATION

AS AMICUS CURIAE IN SUPPORT OF RESPONDENT

DUKE ENERGY CORPORATION

Daniel J. Popeo

Paul D. Kamenar

(Counsel of Record)

Washington Legal Foundation

2009 Massachusetts Ave., NW

Washington, DC 20036

(202) 588-0302

Date: September 15, 2006

WiILSON-EPES PRINTING CO., INC. — (202) 789-0096 — WasHINGTON, D.C. 20001

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TABLE OF CONTENTS

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INTERESTS OF AMICUS CURIAE ............

INTRODUCTION AND STATEMENT

Co fe eo ere eer ee ee

I. SECTION 307(B)(2) OF THE CLEAN AIR

ACT SHOULD NOT BE READ TO

PRECLUDE THE ADJUDICATION OF

DUKE ENERGY’S CHALLENGE TO

EPA’S NEWFOUND INTERPRETATION

OF THE 1960 PSD RULE ..........2-.

Il. *ONGRESS ENACTED SECTION 307(B)

WITH THE UNDERSTANDING THAT IT

HAD EXPANSIVE BUT NOT UNLIMITED

POWER TO CONTROL THE

JURISDICTION OF THE LOWER

EP ee ee ce

Tl. PRECLUDING DUKE ENERGY’S

CHALLENGE TO EPA’S LITIGATION

INTERPRETATION OF THE 1980 PSD

RULE WOULD FRUSTRATE

CONGRESS’S PURPOSES IN ENACTING

Sob tow oie 8 00 6 8 ew la bee

A. Precluding Review of EPA’s

Litigation Position Does Not

Serve Purposes of Uniformity ...... 12

B. Precluding Review of EPA’s

Litigation Position Does Not

Serve Purposes of

C. Precluding Review of EPA’s

Litigation Position Interpreting

the 1980 PSD Rule Would

Create Adverse Consequences

That Congress Did Not

CAS 5 6b ck eh ES Bie 6b ete eked SI ood 15

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TABLE OF AUTHORITIES

Page

Cases:

Battaglia v. Gen. Motors Corp.,

169 F.2d 254 (2d Cir. 1948) ............ 9

Gutierrez de Martinez v. Lamagno,

Fa ae SEE CE, bovis ba ee hee ob wd 8, 10

INS v. Nat’! Center for Immigrants’ Rights, Inc.,

PEED Wik Ch ees 8 er ee 6

Lockerty v. Phillips,

Ps ee ES, Ne iv 0 4 8 8% woe 9

Marbury v. Madison,

SOB. 4 Comme) 137 C1G03) ww ww ee 7

Plaut v. Spendthrift Farm, Inc.,

i coo ana ba a ay Ae be kee 9

Sheldon v. Sill,

_ 490U.S. (8 How.) 441 (1850) ........... 8

United States v. Klein,

80 U.S. (13 Wall.) 128 (1872) ........ 9,11

United States v. Duke Energy Corp.,

278 F.Supp. 2d 619 (M.D.N.C. 2003) ...... 5

Utah Power & Light Co. v. EPA,

ee ee es ee TED. ot ee ee 7

Wisconsin Elec. Power Co. v. Reilly,

893 F.2d 901 (7th Cir. 1990)..... EP ss e 5

Statutes, Legislative Materials, Regulations and Rules:

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37 Fed. Reg. 32,314 Guly 21, 199Z) ........06. 5

67 Fed. Reg. 80,186 (Dec. 31, 2002) ........... 5

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INTERESTS OF AMICUS CURIAE

The. Washington Legal Foundation (WLF) is a

national nonprofit public interest law and policy center

based in Washington, D.C., with supporters nationwide.’

WLF devotes substantial resources to defending and

promoting economic liberty, free enterprise principles, and

a limited and accountable government.

To that end, WLF has appeared before this and lower

federal courts in cases raising important constitutional and

statutory questions regarding the scope and lawfulness of an

agency’s regulatory and enforcement authority. See, e.g.,

United States v. Rapanos, 126 Sup. Ct. 2208 (2006);

Whitm-n v. Am. Trucking Assn’s, Inc., 531 U.S. 457 (2001);

FDA %Y%rown & Williamson Tobacco Corp., 529 U.S. 120

(2000). In addition, WLF’s Legal Studies Division

publishes legal policy papers on these topics and sponsors

related education programs and briefings.

This case raises important issues under the Clean Air

Act regarding the authority of the federal district courts to

adjudicate defenses to the Environmental Protecuon Agency

(EPA)’s enforcement actions, where, as here, the targeted

company is not challenging the validity of the underlying

rule, but the validity of the Agency’s interpretation and

application of the rule. WLF believes that as a matter of

law, fundamental fairness, and sound public policy, district

courts should not be precluded from adjudicating the merits

of these defenses.

' Pursuant to Supreme Court Rule 37.6, amicus states that no

counsel for any party authored this brief in whole or in part, and that

no person or entity, other than amicus and its counsel, made a

monetary contribution to the preparation or submission of this brief.

Letters of consent by the parties to the filing of this brief are on file

with the Office of the Clerk.

WLF’s brief will focus on this jurisdictional issue

and its broader implications, although amicus agrees with

Duke Energy Corporation ("Duke Energy”) that the lower

courts properly decided the merits in its favor.

INTRODUCTION AND STATEMENT OF THE CASE

In the interests of judicial economy, amicus adopts

the Statement of the Case as presented by Duke Energy. In

brief, in 1999, the Environmental Protection Agency (EPA)

launched an enforcement action against Duke Energy (as

well as many other utilities) in district court under the Clean

Air Act, claiming that its coal-fired power plants violated

the EPA’s 1980 Prevention of Significant Deterioration

(PSD) Rule. Petitioners Environmental Defense, ef ai.,

intervened.”

Duke Energy defended itself by arguing that the

EPA’s newfound litigation position interpreting the 1980

PSD Rule was contrary to the plain language of the statute,

the rule itself, and EPA’s contemporaneous interpretation of

the 1980 Rule. The district court agreed with Duke Energy,

the court of appeals affirmed, and this Court granted review.

Petitioners argue here that the lower courts were

precluded from adjudicating the merits of Duke Energy’s

defense because it allegedly constituted judicial review of

the 1980 PSD Rule itself, and that under Section 307(b)’s

judicial review provisions of the Clean Air Act, such review

lies exclusively with the U.S. Court of Appeals for the

. Though the United States is nominally a Respondent in this

Court, amicus’ reference to Petitioners in this brief should be

understood to include the United States and the EPA collectively

unless otherwise noted.

District of Columbia Circuit. See 42 U.S.C. § 7607(b)(1).

Petitioners alternatively argue that even if the lower

courts could adjudicate Duke Energy’s defense to the EPA’s

enforcement action, they wrongly decided the merits of the

case. As noted, amicus will focus its brief on the

jurisdictional question presented in this case.

SUMMARY OF ARGUMENT

When Congress enacted the judicial review

provisions of the Clean Air Act, it specified that certain

EPA final rules, air quality standards, and similar final

agency actions would be judicially reviewable only in the

U.S. Court of Appeals for the District of Columbia Circuit

upon a filing of a petition for review within 60 days after

the publication of the rule, regulation, standard, or other

final action in the Federal Register. See 42 U.S.7. §

7607(b). In doing so, Congress surely did not intend that a

regulated entity subject to a subsequent civil or criminal

enforcement action brought by the EPA to enforce one of its

rules in a district court would be precluded from raising as

a valid defense that the agency’s litigation position

misinterprets or misapplies its otherwise valid regulation.

Indeed, Congress made it clear in § 307(b)(2) that

only "action" by the EPA Administrator that could have

otherwise been subject to judicial review in the D.C. Circuit

under § 307(b)(1) (namely, final rules, standards, and similar

"final action") is not reviewable in civil or criminal

enforcement actions. Because the agency’s multiple and

shifting interpretations of a regulation in an enforcement

action is not final agency action, and thus, could not have

been raised by filing a petition for review, by necessary

implication, Congress did not foreclose the normal

adjudication of the issue cither in the district court or

subsequently on appeal.

In the instant case, Duke Energy is not challenging

the validity of the 1980 PSD Rule itself. Rather, both

courts below had jurisdiction to adjudicate Duke Energy’s

defense that the EPA’s litigation position as to the meaning

or interpretation of its 1980 PSD Rule was legally unsound.

To hold otherwise would unfairly bar Duke Energy from

interposing a valid defense to an agency enforcement action,

and raise serious constitutional questions regarding the

availability of judicial review by preventing courts from

carrying out their duty to say what the law is.

Finally, reading § 307(b) to preclude Duke Energy’s

defense to an enforcement action would not serve the overall

purpose and structure of the judicial review provisions of the

Clean Air Act -- uniformity and administrative efficiency.

It would instead allow the EPA to make ad hoc regulations

in the guise of enforcement actions to suit its needs. |

ARGUMENT

I. SECTION 307(8)(2) OF THE CLEAN AIR ACT

SHOULD NOT BE READ TO PRECLUDE THE

ADJUDICATION OF DUKE ENERGY’S

CHALLENGE TO EPA’S NEWFOUND

INTERPRETATION OF THE 1980 PSD RULE

Over the last 25 years, the EPA has at times

advanced several distinct interpretations of its 1980 PSD

Rule that were inconsistent with the meaning it adopted at

the time of the rule’s promulgation.’ In addition to its

shifting re-interpretations over time, EPA has also claimed

in a recent rulemaking that identical language in the 1980

PSD Rule is to be applied differently to electric utilities and

non-electric utilities.* Under this ad hoc interpretation of the

1980 PSD Rule, the single “major modification” definition

mandates an “actual-to-potential” test for all existing non-

electric utility sources, but only an “actual-to-projected-

actual” test for existing electric utility sources. Yet in 1992,

EPA disavowed the "actual-to-potential" interpretation. See

57 Fed. Reg. 32,314, 32,317 (July 21, 1992).

Petitioners argue nevertheless that the lower courts

lacked jurisdiction to adjudicate Duke Energy’s defense in

this civil enforcement action because § 307(b)(2) states that

“{a]ction 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 proceedir c+ for

enforcement.” 42 U.S.C. § 7607(b)(2). That argument

lacks merit and should be rejected. Otherwise, the EPA will

assert authority to reinterpret its regulations to suit its needs,

> Compare United States v. Duke Energy Corp., 278 F.Supp.

2d 619, 641 (M.D.N.C. 2003) (noting immediately after the

promulgation of the PSD regulations in 1980, EPA announced that

"the requirements of PSD would be implicated only by an increase in

the hourly rate of emissions") with Wisconsin Elec. Power Co. v.

Reilly, 893 F.2d 901, 915-17 (7th Cir. 1990) and United States Br. at

20 (claiming that “[tJhe only reasonable construction of the PSD

regulations is that a physical change that increases a source’s hours of

operation is a ‘modification.””).

* See 67 Fed. Reg. 80,186, 80,199 (Dec. 31, 2002). Yet the

Clean Air Act defines "construction" and “modification” the same for

all stationary sources and does not differentiate between electric and >

non-electric utilities. ;

and insulate any challenge to the lawfulness of its new

interpretation by bringing costly enforcement actions based

on its flawed interpretation.

Section 307(b\2) bars judicial review in an

enforcement action only with respect to "action" by the EPA

Administrator that "could have been obtained" in a prior

judicial review proceeding in the D.C. Circuit. Such pre-

enforcement challenges to EPA final rules, standards, or

regulations brought within the statutory 60-day period from

their publication in the Federal Register are necessarily

facial challenges. Cf. INS v. Nat’l Center for Immigrants’

Rights, Inc., 502 U.S. 183, 188 (1991) (“That the regulation

may be invalid in [some] cases . . . does not mean that the

regulation is facially invalid... .”). This is so because the

agency will rarely have applied the rule to a sufficient

number of situations as to have fully explicated the rule’s

meaning.

However, this does not affect the court’s duty to

determine the lawfulness of an agency’s multiple

interpretations of a regulation in the context of a specific

enforcement action. In such a case, there simply is no "final

action" taken that could be subject to "judicial review" under

§ 307(b)(1). Rather, the promulgated regulation remains

intact and can be applied in future cases even though a

district court can declare its application in a particular case

before it to be unlawful. Thus, when EPA interpreted the

1980 PSD Rule in such a way as to bring Duke Energy’s

projects into question, it opened the door for the company

to raise a defense that the EPA’s interpretation was wrong.

The plain language of § 307(b) does not prevent

district courts which otherwise have jurisdiction to hear a

dispute to “say what the law is,” i.e., to determine the.

proper interpretation of all statutes and regulations before

them. Even if the court in an appropriate case defers to the

agency when more than one meaning is possible, it is still

the court that is expoundingthe law. The legislative history

of § 307 further buttresses this proposition. According to

the Senate Committee Report, a regulated entity such as

Duke Energy "would not be precluded from seeking such

review at the time of enforcement insofar as the subject

matter applied to him alone." S. Rep. 91-1196, at 41

(1970). See also Utah Power & Light Co. v. EPA, 553 F.2d

215, 218 (D.C. Cir. 1977) (noting distinction between

challenge to regulation and challenge to agency application

or interpretation of regulation for purposes of seeking

judicial review).

Duke Energy’s argument that the 1980 PSD Rule’s

definition of “major modification” includes a “modificatior ~

within the meaning of the NSPS program is a legitimate

challenge to EPA’s interpretation or application of its 1980

PSD Rule, and therefore presents a question of law suitable

for resolution in an enforcement action brought by the

agency. It does not turn on the validity of the agency’s

reasoning in an administrative proceeding or the sufficiency

of any administrative record. As such, when the court

below determined that EPA’s litigation interpretation would

conflict with the Clean Air Act’s plain language and must be

rejected, the Fourth Circuit was operating well within its

authority to decide if the agency’s interpretation of its

regulation was legally sound and would be applied to this

caze.

* See Marbury v. Madison, 5 U.S. (1 Cranch) 137, 177 (1803).

fl. CONGRESS ENACTED SECTION 307(b) WITH

' THE UNDERSTANDING THAT IT HAD

EXPANSIVE BUT NOT UNLIMITED POWER

TO CONTROL THE JURISDICTION OF THE

LOWER FEDERAL COURTS

Section 307(b)’s language should not be read to

suggest that the courts below were precluded from reaching

the merits of Duke Energy’s defense. To do so would raise

a difficult constitutional question: Can Congress place

within the federal court’s jurisdiction responsibility to decide

a civil judicial enforcement action, but refuse to permit that

same court to determine whether the agency’s interpretation

of the dispositive regulation in the case is lawful? As a

matter of constitutional avoidance, this Court should

construe § 307(b), as it has in other contexts, to mean that

Congress did not intend "to place courts in [the] untenable

position” of entering judgment based on an unreviewable

executive action. See Gutierrez de Martinez v. Lamagno,

515 U.S. 417, 430 (1995).

Our constitutional structure gives Congress broad

authority under Article III to control the jurisdiction of both

the lower federal courts and the Supreme Court. As this

Court stated in Sheldon v. Sill, 49 U.S. (8 How.) 441, 448-

49 (1850):

Congress may withhold from any court of its

creation jurisdiction of any of the enumerated

controversies. Courts created by statute can

have no jurisdiction but such as the statute

confers. No one of them can assert a just

claim to jurisdiction exclusively conferred on

another, or withheld from all. The

Constitution has defined the limits of the

judicial power of the United States, but has

not prescribed how much of it shall be

exercised by the [lower federal court];

consequently, the statute which does

prescribed the limits of their jurisdiction,

cannot be in conflict with the Constitution,

unless it confers powers not enumerated

therein.

See also Lockerty v. Phillips, 319 U.S. 182, 187 (1943)

(“The Congressional power to ordain and establish inferior

courts includes the power of investing them with jurisdiction

either limited, concurrent, or exclusive, and of withholding

jurisdiction from them in the exact degrees and character

which to Congress may seem proper for the public good.’’)

(internal quotations omitted). |

But while Congress’s authority to control the

jurisdiction of the federal courts is broad, certain types of

restrictions on the exercise of the judicial power are so

antithetical to our constitutional structure that they will not

be permitted. For example, Congress cannot commandeer

the federal courts to exercise their judicial power in a way

that makes the courts nothing but a cipher for legislative

action. See United States v. Klein, 80 U.S. (13 Wall.) 128,

146 (1872) (refusing to permit Congress to “prescribe rules

of decision to the Judicial Department of the government in

cases pending before it”). Congress likewise cannot revise

the absolutely final judgment of an Article III tribunal. See

Plaut v. Spendthrift Farm, Inc., 514 U.S. 211 (1995). Some

courts have asserted that Congress may not prevent all

judicial tribunals from litigating constitutional claims. See

Battaglia v. Gen. Motors Corp., 169 F.2d 254, 257 (2d Cir.

1948) (“[W]hile Congress has the undoubted power to give,

withhold, and restrict the jurisdiction of courts other than the

Supreme Court, it must not so exercise that power as to

deprive any person of life, liberty, or property without due

process of law or to take private property without just

compensation.”).

Finally, judicial independence is threatened when

Congress vests a federal court with the jurisdiction and duty

to decide a particular type of case as it did here, but then

refuses to permit the court to review the Executive’s

determination of the key issue necessary to the proper

resolution of that case. This Court’s decision in Gutierrez

de Martinez v. Lamagno, 515 U.S. 417 (1995), is

particularly instructive on this point.

In Gutierrez, this Court considered the reviewability

of a determination by the Attorney General under the

Westfall Act that a government agent was acting within the

scope of his employment. When a federal employee is sued

for a negligent act, the Westfall Act permits the Attorney

General to certify that the employee was acting within the

scope of his employment at the time the claim arose. This

certification causes the United States to be substituted for

the employee as defendant in the suit. The action then

proceeds under the terms of the Federal Tort Claims Act,

which includes a limitation against waiving the United States

government’s sovereign immunity for torts occurring outside

the United States’ borders.

The facts in Gutierrez de Martinez concermed just

such a situation. In Gutierrez, a federal agent injured

several persons in a car accident in Colombia, and the

injured persons brought suit against the agent in federal

district court. The United States Attorney for that district

certified that the employee was acting within the scope of

his duties at the time of the crash, causing the United States

to be substituted as defendant. Upon. certification, the

district court determined that it lacked jurisdiction of the

action and dismissed the suit, rejecting plaintiff's arguments

that the certification was reviewable.

In holding that the Attorney General’s certification

was reviewable, the Court noted the “surreal” situation

presented by precluding judicial review. “The key question

presented—scope of employment—however contestable in

fact, would receive no judicial audience. The Court could

do no more, and no less, than convert the executive’s

scarcely disinterested decision into a court judgment.” Jd.

at 429. As a result, the Court stated that while Congress

may establish compensation schemes that operate without

judicial participation, it will not presume that Congress

intended “a court automatically to enter a judgment pursuant

to a decision the court has no authority to evaluate.” /d. at

430 (citing United States v. Klein, 80 U.S. (13 Wall.) 127°,

146 (1872)).

Accordingly, this Court should reject the Petitioners’

argument that § 307(b) should be read to preclude the

adjudication of Duke Energy’s defense in the courts below.

i. PRECLUDING DUKE ENERGY’S

CHALLENGE TO _ EPA’S LITIGATION

INTERPRETATION OF THE 1980 PSD RULE

WOULD FRUSTRATE CONGRESS’S

PURPOSES IN ENACTING § 307(B)

Congress imposes restrictions on judicial review

when compelling reasons exist for doing so. Here, Congress

designed § 307(b) to serve two compelling purposes. First,

it ensures that EPA final rules, standards, and similar final

action under the Clean Air Act are “uniformly applied and

interpreted.” S. Rep. 91-1196, at 40 (1970). Second, it

ensures that EPA regulations and other final actions are

“quickly reviewed by a single court intimately familiar with

administrative procedures.” Jd. Section 307(b) was never

intended to shield the agency from being challenged for its

unlawful and unjustified enforcement actions.

A. Precluding Review of EPA’s Litigation

Position Does Not Serve Purposes of

Uniformity

Congress enacted § 307(b) in part to ensure that

gency action is uniformly applied and interpreted. Where

the EPA provides multiple and inconsistent interpretations

of its rules, or applies identical statutory language differently

depending on the type of regulated entity or the area in

which it is located, this purpose is not served. EPA’s

enforcement action against Duke Energy is precisely such a

case.

Although not often acknowledged, Congress tacitly

assumes that when EPA and other administrative agencies

exercise their delegated power to fill the gaps in statutory

schemes that Congress left unfilled, the agency presumably

will make the necessary policy choices and create a coherent

and predictable regulatory scheme that explains to covered

entities their obligations and liability. This Court should not

permit the agency to promulgate regulations and then feel

free years later to apply differing interpretations of these

regulations without judicial review. Precluding the district

court and Fourth Circuit from reviewing EPA’s latest

interpretation of the 1980 PSD Rule would do just that,

thereby rewarding EPA for disregarding the plain language

of both the statute and the 1980 PSD Rule.

B. Precluding Review of EPA’s Litigation

Position Does Not Serve Purposes of

Expediency

Congress’s other purpose in enacting Clean Air Act

§ 307(b) was to ensure that EPA’s rules, standards, and final

action are quickly reviewed by a single court intimately

familiar with administrative procedures to settle any doubt

about the validity of those actions. These purposes,

however, are not served by precluding review of EPA’s

litigation interpretation of the 1980 PSD Rule.

As an initial matter, any argument suggesting

Congress’s preference for review in a court intimately

familiar with administrative procedure (such as the D.C.

Circuit) overreaches inasmuch as § 307(b)\(1) does not

discriminate among challenges thai should have been filed

in the D.C. Circuit and challenges that should have beer

filed in the regional circuits (which, presumably, are not as

“intimately” familiar with administrative procedures).

Here, it is the EPA, not Duke Energy, that has

impeded both the uniform and expeditious review of agency

action by abruptly changing its contemporaneous

interpretation of the 1980 PSD Rule many years later when

it launched unexpected and unfair enforcement actions

against Duke Energy and many other energy companies.

Moreover, adjudicating Duke Energy’s defense challenge

would not entail an examination of administrative procedural

defects, i.e., the sufficiency of the record, whether the

agency followed internal rules in the rulemaking process, or

adequately explained its reasons for departing from the rule,

all of which is the typical procedure that follows the filing

of a petition for review of an EPA rule or standard. Rather,

Duke Energy simply questions EPA’s litigation position in

light of the plain language of the statute and regulation.

Cc. Precluding Review of EPA’s Litigation

Position Interpreting the 1980 PSD Rule

Would Create Adverse Consequences That

Congress Did Not Intend

As discussed, precluding review of Duke Energy’s

challenge to EPA’s litigation interpretation of the 1980 PSD

Rule would not serve any of Congress’s intended purposes

in enacting the rule. Moreover, it would have negative

consequences for administrative and regulatory governance.

In providing for an effective forum for pre-enforcement

judicial review, Congress surely did not intend to induce the

regulate community to file preemptive legal challenges to

newly promulgated rules based upon how an agency might

interpret or apply those rules sometime in the future. Such

defensive petitions for review would needlessly proliferate

lest the regulated entities fear being confronted with an

enforcement action in which their defense would be

precluded by the crabbed reading of § 307(b) that Petitioners

advance. Indeed, a major purpose behind all statutes that

provide for judicial review -- the conservation of judicial

and litigation resources -- would not be served by adopting

EPA’s position.

The judicial review provisions of § 307(b) were

designed to provide expedited review of the validity of the

rule or final action in question, and to preclude their

subsequent challenge years later in an enforcement action.

But where, as here, the EPA has developed several

inconsistent interpretations over the years of the meaning of

its 1980 PSD Rule, Congress did not expect a regulated

entity to file petitions for review in the D.C. Circuit. Such

petitions would most assuredly be dismissed on the grounds

that there was no final action subject for review, or as

unripe. Rather, because Congress provided district courts

with the jurisdiction to adjudicate EPA enforcement actions,

review of EPA’s enforcement interpretation of the 1980

PSD Rule in those courts should not be precluded by §

307(b).

CONCLUSION

For the foregoing reasons, the judgment of the court

of appeals should be affirmed.

Respectfully submitted,

Daniel J. Popeo

Paul D. Kamenar

(Counsel of Record)

Washington Legal Foundation

2009 Massachusetts Ave., N.W.

Washington, D.C. 20036

(202) 588-0302

Date: September 15, 2006

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Ay FILED

No. 05-848 JUL 2 1 2006

SERRE OF EER

In The SUPREME COURT, U.S..

Supreme Court of the Gnited States

ENVIRONMENTAL DEFENSE, ET AL.,

Petitioners,

DUKE ENERGY CORP.,, ET AL.,

Respondents.

On Writ Of Certiorari

To The United States Court Of Appeals

For The Fourth Circuit

BRIEF OF CURRENT AND FORMER MEMBERS

OF CONGRESS HENRY A. WAXMAN, EDWARD J.

MARKEY, FRED ROONEY, ANDREW MAGUIRE,

RICHARD OTTINGER, ANTHONY J. MOFFETT,

AND WENDELL ANDERSON AS AMICUS CURIAE

SUPPORTING THE PETITIONER

DAVID ZARING

WASHINGTON AND LEE UNIVERSITY

SCHOOL OF LAW

Lewis Hall

Lexington, Virginia 24450

(540) 458-8301

STEPHANIE TAI

(Counsel of Record)

THE UNIVERSITY OF

WISCONSIN LAW SCHOOL

975 Bascom Mall

Madison, Wisconsin 53706

(608) 890-1236

COCKLE LAW BRIEF PRINTING CO (800) 225 6964

OR CALL COLLECT (402) 342-2831

TABLE OF CONTENTS

Page

INTEREST OF THE AMICI CURIAE........................... 1

Ica hininssclticacinsMinsicha sini: shtbpitiiphsnalaiesedenstedesiinninnd 2

NE schiciednslicistuarinidinisenititeaisiinidlinieisdnibiaisedepiintads 3

I. The Actual Annual Emissions Increase Test in

II.

III.

EPA’s PSD Regulations Gives Effect to Con-

gress’s Unambiguous Intent to Determine PSD

Applicability Based on the Actual Emissions

Increase Resulting from a Physical or Opera-

i csicisintiierescsidaclsanishitpaivithsiuitindinttiepedine

A. The Plain Statutory Language Defines

“Modification” in Terms of Whether a

Change Will Increase Actual Emissions.....

B. The Structure of the PSD Compliance Re-

quirements Further Demonstrates Con-

gress’s Intent to Regulate Actual Emissions

ND chet nctieciciticetaisaclasicueletibalionieincateassteaniiitehdes

C. The Overall Structure of the Statute Also

Emphasizes the Critical Role Of Actual

Emissions in the New Source Review

The Purpose of the PSD Amendments Would

Be Frustrated If the Act Is Interpreted to

Limit PSD Review to Those Changes that In-

crease a Facility’s Hourly Emissions Rate........

The Respondents’ Reading of “Modification”

Would Frustrate the Policies of the Clean Air

A. The Actual Annual Emissions Test in

EPA’s PSD Regulations is Needed to Effec-

tuate the Objective of the PSD Program....

TABLE OF CONTENTS - Continued

Page

B. The Purpose Of The Nonattainment New

Source Review Provisions Of The Statute

Would Also Be Thwarted If The Act Is In-

terpreted To Permit Measurement Of Pol-

lution Through An Hourly, Instead Of

Actual Annual Emissions Rate................... 18

C. The Fourth Circuit’s Rule Would Lengthen

the Lives of Old, High-Pollution Sources,

Contrary to Congress’s Intent .................... 21

I cc tdetsnccninsnsoncinitinsviniendatnatinapiaguodeiaonbin 26

ill

TABLE OF AUTHORITIES

7 Page

CASES:

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

Ta SEE sihiieeseninhipiinnguiihsusbuiseinisiniiinidasiaabuniilianededdis 4, 5, 21, 22

American Trucking Ass’n, Inc. v. ICC, 697 F.2d 1146

UN ao Laiaiclibababasniiciens 23

Barnhart v. Peabody Coal Co., 537 U.S. 149 (2003)......... 17

Chao v. Mallard Bay Drilling, 534 U.S. 235 (2002) ........... 9

Chevron, USA, Inc. v. Natural Res. Defense Council,

ee ie ed tictinen tastienah dndeienapnebeicadgtindetodenies 4,13

Citizens for Clean Air v. Envt'l. Prot. Agency, 959

PI TI I asic skcsnicpneesnapclivgdcababbeosoealon 18

Clean Air Implementation Project v. Envt'l. Prot.

Agency, 150 F.3d 1200 (D.C. Cir. 1998)... eee 13

Conroy v. Aniskoff, 507 U.S. 511 (1993)... eee 24

Ctr. for Energy & Econ. Dev. v. Envtl. Prot. Agency,

ee ee Oe se CD, BIG GD evens sacecisccsccnscssetncionssossvens 13

EDF Inc. v. EPA, 82 F.3d 451 (D.C. Cir. 1996)................. 14

Fed. Energy Admin. v. Algonquin SNG, Inc., 426

Se SPIE) sscksiithdaicsinna beiihbdniiaisdunbesdecigaiaakiadbdebine 23, 24

Gen'l Dynamics Land Sys. v. Cline, 540 U.S. 581

REA EARL AVES ENE Bart ahora RE ar DLA 9

George E. Warren Corp. v. U.S. Envt'l. Prot. Agency,

BED Fe Sie GEIS. Cie, BG esvvvcccnsecinssccosesovevscsvossososens 13

Harrison v. PPG Indus., 446 U.S. 578 (1980).........0..000.... 13

League of United Latin American Citizens v. Perry

___ §.Ct. ___, 2006 WL 1749637 (June 28, 2006) ......... 13

TABLE OF AUTHORITIES -— Continued

Page

Koons Buick Pontiac GMC v. Nigh, 543 U.S. 50

GUE wuisistiepscctecesaivsnivtncsilentineaieeadiadaiadaneiadimamiaidmidmeieaniaael 9

Motor & Equip. Mfrs. Ass’n v. Nichols, 142 F.3d 449

ES, GIR, TOD vetcncoicikisiccknnecosiniceclonsteleaseiiadbidiaiuaiabmaaiian 14

Nat'l Endowment for the Arts v. Finley, 524 U.S.

I CIEE vcasuriccicssnssistiadepeionseiendincitelipupdiaeniimnesslusicaiiial 24

Nat'l Res. Def. Council v. Browner, 57 F.3d 1122

CE. GING IPD cacssintick scvcccasdnchdectocesisals dhapabipicmaablacheicmtinl 14

Nat'l Wildlife Fed’n v. Browner, 237 F.3d 670 (D.C.

RNs IED wnsidicivesssinnnietcerciicminsbccepcassebithtedasuasiabemieiaaitie 13

New York v. Envtl. Prot. Agency (“New York I”), 413

Fe Bs CR Ce icncictnenscthntientohalbiveibttaateiicigties 4, 22

New York v. Envtl. Prot. Agency, 443 F.3d 880 (D.C.

CI BIG ccnsiceecsnciinccpudcenasitieiisesabuinddeliicemaasnceiaiautl 4,13

Pacific Gas & Elec. Co. v. Energy Res. Conservation

& Dev. Comm’n, 461 U.S. 190 (1983) .......... cece eeeeees 24

Pennsylvania v. Del. Valley Citizens’ Council for

Che BGP, SEB UT. Tae (CRG ei evcvsocscavtrecscdsnscssdsiesesesccies 13

Pub. Employees Ret. Sys. v. Betts, 492 U.S. 158

COIIOD ssitvsccsninicicuebiccintinabianbiedsiinisiiiipdlidapibsees: aiioen cn iia ieaaa 24

Raygor v. Regents of the Univ. of Minn., 534 U.S.

UI TED sesvecsscrcansesssckedbtesdeiesemeiencinniiedensadediaiaitiianiad 9

Ruckelshaus v. Sierra Club, 463 U.S. 680 (1983)............. 13

Stewart v. Abend, 495 U.S. 207 (1990)...............cccceeceeecee es 20

Southeast Shipyard Ass’n v. United States, 979 F.2d

SES GD. SIA GI stistorsescovasintseninvtetnonibiddieieana 23

Texas Mun. Power Agency v. EPA, 89 F.3d 858 (D.C.

GR: TED rcexncicncnspedceséecdvahahenniaisiighatainineiienideb ahh eaienaames 14

TABLE OF AUTHORITIES - Continued

Page

United States v. Duke Energy Corp., 411 F.3d 539

RET TE a ae ee ENN 2, 20

United States v. Navajo Nation, 537 U.S. 488 (2003)....... 17

U.S. Airways v. Barnett, 535 U.S. 391 (2002)................... 17

FEDERAL STATUTES, RULES, AND REGULATIONS:

EER TEAR CORE CE PTR a TN 19

ESE SEE SISA SSIS NS BOOED 4,5,17

SETS Se a a Oe OS OEE 17

ESS EE a a a On 12, 18

TI eR Ie 16

EEE eR OS 6

SEES cen ee ee aaa TeE 7

SETS REE ER Re Oe OPER 7

ESE a an Sana ac 9, 10

i ES TEES AS NN Te CET 16

I a dentable 16

EE a a ae ot eee 9, 10

Il 7

RES a ne a 16

I aistnilimniail 19

I eeenunlibe 19

SE I Sa 20

i li erectactcigttnenemtadognsens 20

TABLE OF AUTHORITIES -— Continued

Page

es Oe ED daicdins cctitteticreinictectniahiitabtnbiedial 8,17

re ae PD sicrrhctttrtetecicbicnsnenstitctaentocetiaminntinnn 21

A clad 21

ee I dictcicdiptcsihcentnpengticniiiniienincsnetepaaniial 6

Rg TSE TEA SAP AT RTE Ce 9,11

SE a) CUT ccccasecinncittcceceicnisctnntiinitiniintates 11

ae ae NE sic. seisinvincenstenicdsiasenaiteantbiinininl 11

GB UBD. FB FE ee ncccecsccescesssserseroscccecssceuscnsesions 11

ee Ci acailtie tricrtnnictsisictcindtnecnstiteritbbiinigipeniins 4

Se Oe Ce cnctccsestncscenerictesnnzevttinenescenes 4

40 C.F.R. § 51.166(bX3) (1987)...............ccceccccrcesseccecenesecers 4

40 C.F.R. § 51. 16G(ONBZ1) (19B7)...........ccccrrrerserserreeccccseseseees 4

es I ieletntrctcicicindtenwinisbitiiiichiatbtenkiic 4

45 Fed. Reg. 52,675, 52,714 (Aug. 7, 1980)..................... 4,6

LEGISLATIVE HISTORY:

196 Come, Bae. G. S717 (21GB) nc. csccscncnceccececesesescocsceseees 23

136 Cong. Rec. S. 16895 (1990).................ccccccecsrsecceesseenees 25

136 Cong. Rec. S. 17429 (1990)...................:cccsscsserseesseseees 24

FS SY Tl) ee nen re 21, 22

Be a ee I I OD ccncceccinccnssscmasocssnnsuintcmnininctinn 12,14

6 5 1. . ; ; CE 12, 15, 22

Vil

TABLE OF AUTHORITIES -— Continued

Page

OTHER:

Max Radin, A Short Way With Statutes, 56 Harv. L.

Se Se UTE nntuiicitiieidscqcncpuinkiesdindnieetniiiiinadiniiiinbdesbigtibacnl 24

Merriam-Webster’s Collegiate Dictionary (10th ed.

ERE SE See nme We Fee mE SO Nw aw ee 5,7

National Research Council, Interim Report of the

Committee on Changes in New Source Review

Programs for Statutory Sources of Air Pollutants,

tbl. 3-3(b) (Nat'l Academies Press 2005)................. 22, 23

Ronald H. Rosenberg, Cooperative Failure: An

Analysis Of Intergovernmental Relationships And

The Problem Of Air Quality Non-Attainment,

ae SS 8 nee 20

Shi-Ling Hsu, The Real Problem with New Source

Review, 26 Envt'. L. Rep. 10098 (2006)........................ 23

U.S. General Accounting Office, Emissions From

Older Electricity Generating Units (2002) ................... 23

INTEREST OF THE AMICI CURIAE'’

Amici, current and former members of Congress who

served on the committees that drafted the 1977 Clean Air

Act (“CAA”) Amendments establishing the Prevention of

Significant Deterioration (“PSD”) program, urge the Court

to rule in favor of Petitioners and reject the Fourth Cir-

cuit’s flawed reading of the statutory term “modification”

as it applies to the PSD program. The Fourth Circuit's

interpretation of that term would contravene Congress’s

intent as reflected in the statutory language and legisla-

tive history. As drafters, amici have a strong interest in

ensuring that the letter and intent of the statute are

interpreted correctly.

Henry A. Waxman serves as Congressman from

California’s 30th District, and has done so since 1974.

Edward J. Markey serves as Congressman from Massa-

chusetts’ 7th District, and has done so since 1976. Fred

Rooney served as Congressman from Pennsylvania's 11th

District from 1967 to 1978. Andrew Maguire served as

Congressman from New Jersey’s 7th District from 1974 to

1980. Richard Ottinger served as Congressman from New

York’s 26th District from 1965 to 1971, its 25th District

Congressman from 1975 to 1983, and its 20th District

Congressman from 1983 to 1985. Anthony J. Moffett

served as Congressman from Connecticut’s 6th District

from 1974 to 1982. Wendell Anderson served as Senator

from Minnesota from 1976 to 1978. Each of the amici were

* Amici state that no counsel for a party authored any part of this

brief, and no person or entity other than Amici or their counsel and

counsels’ employers made a monetary contribution to the preparation or

submission of this brief. The parties to the case have consented to the

filing of this brief.

on the Senate’s Environment and Public Works Committee

and the House of Representatives’ Interstate and Foreign

Commerce Committee, respectively, during the passage of

the Clean Air Act’s 1977 amendments.

INTRODUCTION

In this Clean Air Act (CAA) case, the Fourth Circuit

held that the Environmental Protection Agency’s (EPA)

“actual annual emissions” test for measuring emissions

increases under the “Prevention of Significant Deteriora-

tion” (PSD) program was unlawful because it was not

identical to the test EPA uses for its New Source Perform-

ance Program (NSPS). United States v. Duke Energy Corp.,

411 F.3d 539, 547 (4th Cir. 2005). Noting that the NSPS

regulations utilize a maximum hourly emissions rate test,

the Fourth Circuit concluded that EPA must also use this

test to determine whether PSD applies to plant renova-

tions such as those made to plants owned by Respondent

Duke Energy. See id. at 550 (“EPA promulgated NSPS

regulations that define the term ‘modification’ so that only

a project that increases a plant’s hourly rate of emissions

constitutes a ‘modification’.... EPA must, therefore,

interpret its PSD regulations defining ‘modification’

congruently”) (emphasis in original). Unlike the actual

annual emissions test supported by EPA, the Fourth

Circuit’s hourly test would ignore emission increases

caused by increased hours of operation made possible by

renovations. Thus, if this ruling is allowed to stand, air

pollution sources such as the aging coal-fired plants

managed by Respondent could undertake renovations that

increase the actual amount of emissions they produce

many times over without triggering PSD review. Such an

approach to PSD applicability would do little or nothing to

prevent significant deterioration of air quality — indeed, it

would practically assure such deterioration. Amici, as

legislators responsible for drafting the CAA Amendments

of 1977, recognize that such a result would be inconsistent

with the language and purpose of those provisions of the

statute, as well as the statute’s larger goal of controlling

air pollution, and thus ask the Court to reverse the Fourth

Circuit’s decision.

ARGUMENT

I. The Actual Annual Emissions Increase Test in

EPA’s PSD Regulations Gives Effect to Con-

gress’s Unambiguous Intent to Determine PSD

Applicability Based on the Actual Emissions

Increase Resulting from a Physical or Opera-

tional Change.

A. The Plain Statutory Language Defines “Modi-

fication” in Terms of Whether a Change

Will Increase Actual Emissions.

In crafting the CAA’s Prevention of Significant Dete-

rioration (PSD) requirements, Congress intended to guard

against those changes to a stationary source that would

increase the source’s actual annual emissions. Accordingly,

the interpretation offered by the industry respondents and

the Fourth Circuit, which relies upon stationary source

capacity — i.e., hourly emissions rates — rather than actual

annual emissions as required by EPA’s PSD regulations,”

contravenes Congress’s unambiguous intent. Cf. Chevron,

USA, Inc. v. Natural Res. Defense Council, 467 U.S. 837,

843 (1984) (rejecting even an agency interpretation when

it contravenes Congress’s unambiguous intent).

The CAA defines a regulated “modification” subject to

PSD review as any physical or operational change in a

stationary source which “increases the amount of any air

pollutant emitted by such source[.]” 42 U.S.C. §§ 7411(a),

7949(2(C) (emphasis added). This language unambigu-

ously demonstrates Congress’s intent for PSD applicability

to turn on whether a change will increase actual emis-

sions. See New York v. Envtl. Prot. Agency, 413 F.3d 3, 40

(D.C. Cir. 2005) (“New York I”) (“(T)he plain language of

the CAA indicates that Congress intended to apply NSR to

changes that increase actual emissions instead of potential

or allowable emissions.”); New York v. Envtl. Prot. Agency,

443 F.3d'880, 889 (D.C. Cir. 2006) (“To the extent industry

intervenors rely on the NSPS regime to reargue their

position that ‘modifications’ require an increase in maxi-

mum emission rates, that issue was resolved in New York

I.”); Alabama Power Co. v. Costle, 636 F.2d 323, 353 (D.C.

Cir. 1980) (“Plainly, the pollutants that sources ‘emit’ is a

reference to some measuré of actual emissions”) (emphasis

added); id. at 353 (rejecting an EPA interpretation of

“potential to emit” that would make “the actual emissions

* Compare the 1980 PSD Regulations, 45 Fed. Reg. 52,675, 52,714

(Aug. 7, 1980) (40 C.F.R. § 51.166(bX2), (3), (21) (1987) (measuring

“actual emissions” in terms of “tons per year”) with the NSPS regula-

tions referred to by the industry respondents, 40 C.F.R. § 60.14(b)

(1987) (targeting “emissions rates” as measured in kilograms per hour).

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.