# Amicus Curiae Brief — Environmental Defense v. Duke Energy Corporation

> Briefs, arguments, decisions, and more.

URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385016_0237%3A43

## Record

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

## Text

Ueiy | FILED

SEP 15 2006
IN THE
Supreme Court of the United States

ENVIRONMENTAL DEFENSE, ef al.,
Petitioners,
V.

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

i’ 3 me
ot tate ped HUM

& ee
ant

then Po all S tea ae
A! oa
bi A re ,

fi

Ee.

a
%

Fon ae
ee as .
tee Teh se “ene n
Prt Senne oe ad
Readies oot ae

F gates ae

+e.

ah

- tiaiKa %

4

d : i a te ‘ Pag . 4 ‘eee ; F
gl: : , a -. ; * presets
« x ¥ - Z
wet PS .
ayn AL,

- Le ‘a SER SOR ees

pe bbe bdo ‘ Ss te ade ei ’ beta YF bp ae pde yt
nd Teak. ip Pala anes ee eel lll wena io Persp “ = eS ph ser gees

% ae aa ‘ . 4

Re ol se AP :

‘ + Fa yt oy Pe ye be opal A » et eM. v
a a aa ie ei Ti

-

4

Jy ey

i ©
Pr

Play

oe Y ie : — : ‘ rary : + 42 , b> ~
Hig, - ~ 28 : , bar Oe : >.

any

at te
8 DOS me renee &

. oe

a!
*

is
“"-

ee
‘ ‘ % = .

TABLE OF CONTENTS

py Ge Pie ot os ee ae eer eae
\
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

ii

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

ili

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:
Es ote bs ow eae ae eee passim
ras ae PEED o. .'a.'e 6. oe 4 ee 6% eee 3, 4, 13
ee SR oR ee a ee ee er 3, 4, 5, 6
i eae cl A ee wo 6 ner Soe passim
ee SS: ha wo by cet Sw cel 12
37 Fed. Reg. 32,314 Guly 21, 199Z) ........06. 5

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

oeeu.t
oie “~ rast Bs

Ree Sk ;
ib Scie A : ; ” * ma >
Se ee wa) Hs Aiea ts ok: Cees RY sxe sa
PRs MIRE sam Shee saws: ike tie ys Tay
tres $ . -_e . ‘ t : “ Phe ioe , ae = 7 ited’ . ay A : ; ‘
PERE ee sack
fades Weal Tad yt is Moe nae POT = P
Psy SARS eae ea ree ee ee ' ‘ | = ka : b a% :
ae at ~ et aks tas \ : ; nt Ke) “utd o ,, cm ‘i .
Serene ; athe reg mati : ora { rm , ; it
resithie ‘ eee an j y ye pitas teat iaurihecela se Lats ww : naa, net eek | gs P Re ee os Ft a j zine
ee ; , Fach nk Goan de ae - Js *. ‘ Padi ney wear ot ore ‘a jase m=
) cb oes pen Saal, ¢ $e "EMSS « i ~~ avy a4 . os” > ia, *
ee rar a pager ai ~. ‘gee kiee Gi Kiana ey + yhed > 4a a oe oH Be 2 cS s : 5 ts = : =
Ks ‘ x A “ = % . | ; : ; : : : |
An oes ates Ae ‘g- iors rg , G9 Foe I RE EE SEIS TES
Pte

»

AES

en

*

E>

7

ge ee oy
s ty
eats eer Pre-2y9 *
. &
Pun®
>
ine

_

Na SCN

4 wee ete

= Pet ‘v ‘
a ee a ee

“
‘ Sat

Ly * , tae , :

.

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.

2

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.

3
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

4

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

5

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. ;

6

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

7

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

9

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

10

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

11

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

12

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.

13

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

14

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

15

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

PES wf via “the
ain, aaa ps =
xy a + R pEr io PS ¢

sh ait ert q > ;

¥o

eed : : srr

Figur . :
7 ne cpa otha Siete
ph a te 4 Fees AS Sigs HES tok eal, Hee AE rien
. ek gtr 4 Sates et ie at ee hee Bai wigs, “i, oo et eager Piset ue bd. Desai
EMRE BE ae hOB Y 0 SE oe Bint aS opr E Re ERB BSCR. « ee Seu
erie hae “> wie bay ay 4 eer ~~ oy wa PURE He we were eh th, CNP tages! “> wz epee! a an ey ie
eas he OE Ds eae all ify ko ie oe ewe Tah rag eeickrsy oe pork we et bt Te a td
? ity ers | ee baer = fines an ya ace i Rin Ply et Jintao" ey yim
Se ch A aad } a 4 pti 38 nee pRincng Hts Cael aes coe
en are ® meal ae ial oY ae Sie ae Ne Y i ae pres as len — we bree pe : ,. 5 +e ye
ee ap 2h: ..* PAS > ig: “4 4.5 A og tale alto! artes aid |” wate
ni erin mim \ ae = Ts a ne

ieee >

ete io aoe a

ide aa ae OGE a Ln |
< 2 ‘ a en Be Oe es, A 9 eee,

+
erie site re - ‘ 7a:

Gee etc
ee re] ‘ «ok epic 4 * :
2 oe £ aia

hang! 3 oe Cope Oey

he eon

« ; ¥ ‘
dois ae Be *

Ae
~< ae mw Lit <<

\U

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,

V.

DUKE ENERGY CORP.,, ET AL.,
Respondents.

e

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

S

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....

11

17

17

il

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

iv

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
BR, © FET oniceccsccescrsecercescecesncoscscveececsenssecsovesseccsons 12
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

vi

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

1

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.

2

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.

e

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

4

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).

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385016_0237%3A43. Public record. Not legal advice.