Opposition Brief — Michigan v. Envtl. Prot. Agency, 135 S. Ct. 702 (2014) (No. 14-46)

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Nos. 14-46, 14-47 and 14-49 ‘—SERCEOF THE CLERK |

pe ________ _ ___________|________ ____

In the Supreme Court of the Anited States

—an

STATE OF MICHIGAN, ET AL., PETITIONERS

ENVIRONMENTAL PROTECTION AGENCY, ET AL.

UTILITY AIR REGULATORY GROUP, PETITIONER

ENVIRONMENTAL PROTECTION AGENCY, ET AL.

NATIONAL MINING ASSOCIATION, PETITIONER

Vv.

ENVIRONMENTAL PROTECTION AGENCY, ET AL.

ON PETITIONS FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

BRIEF FOR THE FEDERAL RESPONDENTS

IN OPPOSITION

DONALD B. VERRILLI, JR.

Solicitor General

Counsel of Record

SaM HIRSCH

AVI GARBOW Acting Assistant Attorney

General Counsel General

WENDY L. BLAKE ERIC G. HOSTETLER

PAUL R. VERSACE Attorney

an . _ Department of Justice

United States Environmental Washington, D.C. 20530-0001

Protection Agency SupremeCtBriefs@uasadoj.gov

Washington, D.C. 20460 (202) 514-2217

NC LAE SNe BNET

QUESTIONS PRESENTED

1. Whether the Environmental Protection Agency

(EPA) reasonably construed 42 U.S.C. 7412 as direct-

ing it to consider costs when establishing the appro-

priate level of any regulation of hazardous air pollu-

tant emissions from power plants, but not when decid-

ing whether to regulate those plants in the first place.

2. Whether the EPA reasonably concluded that its

decision to list power plants among the source catego-

ries to be regulated under 42 U.S.C. 7412(d) required

it to promulgate emission standards for all listed haz-

ardous air pollutants emitted by such plants.

(I)

TABLE OF CONTENTS

Page

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TABLE OF AUTHORITIES

Cases:

American Textile Mfrs. Inst., Inc. v. Donovan,

Se ee ME UIE cesssicaiisdieipanlaccalhoahiiiiieiataaecheidanimeiaien 17

Chevron U.S.A. Inc. v. NRDC, 467 U.S. 837

Ses iecaisineiecsiecaieaseniaesiesabicdeiitsdneieninsiiateliers ein 2, 14, 15, 17

EPA v. EME Homer City Generation, L.P.,

a a i ee CE cicasiericiaciciencinsitmntcnsiupsineniantsnepsitninoanvnieieons 17

EPA v. New Jersey, 555 U.S. 1162 (2009) ..........cccccccccsceecseeees 7

Entergy Corp. v. Riverkeeper, Inc., 556 U.S. 208

TUT saiissdtecasisiscsnisscesinslichaibdehgabitiniaaocensiiigiiniaiidiigidammendoantograaitcile 17

General Motors Corp. v. United States,

ee eh, Se IED sicitiniascisthiesticeneibibsnicterndaindeanistenascisscesieénmcsasbia 23

National Lime Ass'n v. EPA, 233 F.3d 625

Ss SG: I eictncicnebsiinigi sini ciiiebennitiiniiarianpitieniinnies 9, 15, 30

New Jersey v. EPA, 517 F.3d 574 (D.C. Cir. 2008),

cert. dismissed, 555 U.S. 1162, and cert. denied,

ae. ITI cstinehcbccrigsesiesisteticinetnissisinstenitepinpiteeenesoans 7,15

Union Elec. Co. v. EPA, 427 U.S. 246 (1976).............-0c0cc000 23

Utility Air Regulatory Grp. v. New Jersey,

Se i III cipnicicthacicitenctablcndtinitonsiiiaasieicaninalenbtanencienenbaasacs 7

Whitman v. American Trucking Ass’ns,

Rk Sg ee i Ce oars 14, 17, 22, 23, 24

(IIT)

Statutes, regulations and rule: Page

Clean Air Act Amendments of 1990,

Pub. L. No. 101-6549, 104 Stat. 2399.00 ececceeeees 2

ee ee ee I intniiceciacescsinevisinicentsiinevitiansicsaansiiies 32

A ee. SI ccitestipiierneniciaineieininisieieiatagaceiesistoiaeaitineasiaaiion 22

ee PI siiciinisnisiscctiinstuicatuncitusisinactiicbitaaicibaninn 17

a I ITE secur teniitiscincscneharneseeiscssiticesmnieinbpibianiieinitciainapesinieleleiiia 7

te SH iiccisicerceiiniisnicnssincsnliiinedsindencintabadsinsininiitimansiiamamians 7

Fs Ce inttiatratnestttcnntnitasrmenmnnnioniaaniimanaianieiniia passim

Oy ea EE Diisiennit ccieedsiisnitesnianninbesiphacisiunicincieiiadiaitis 3, 18

a i, Pe itech stinceasinbitelccicnilalasasiastiiadicssisiaiit 3

ee eis WTI sicctuntescasicinaceniidddnioanisnsnshihisteddeommnicusabouichdenaiibila 4

Re SP WII wiidiclieesectnscinnasnasdaseasicdicscendtesnicemmiaeist 3, 22, 27

ee Pe iicctciienincenniassvrnieiciatmnssabiinnitsinnusaenisiiaan 19

Oe ia PD tctiinibictenassascbeisinisidsimaanieananiieniinisininia 19

Ee ele: Pe ticintesenmnscthivcenicteneienstuiin 7, 14, 17, 18, 19, 29, 30

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Be es HE hiais dsieseliicsciisiscieiscadiniohitaratiigilubuenidtendcdaidaiia 18

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RRR Se SE EIR MP TEER ono SSEESEENE 17

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ies i iticsesticrcnchncsecrsanssostcneenssesitcsonanteneil 4,19

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Fe ae Pe iitesceceicnnnstesnenscicesuisiessoessmssniaunaidcsaisaiioa 3, 7

SB UR Fee rctrrssticecerrenenneniniiniens 3, 14, 20, 23, 24, 25

as: Se icietidinntscinomassocienecineataieuineielosisnasdenusiia 20, 24

eee a iicetiniiate tterccicnsciscscatiocaniecertnsatiecsiommcingnsiae 3

ae as ee ricennsirsieniiniensinlnnticncatiaannincipninninisien 4

Statutes, regulations and rule—Continued: Page

aeeas IID seeriieicciesinintncnineniniccilsititiidestonsivilinanbiti 23

Re ee er SR eo eT 8

eels, Si ehcheincabirrenosneitinnsitipniciinbicatninticata 22, 23

Oy es, I aiisacctinsicninsntnniernintmnasissiiiiianininsiinaiaiceniastisns 23

4 ak RR ae a eT 5

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Oe Pe rstciticcineecicehinetniensiensiicnntassnisiant 5, 22, 23

ails Fe eteretecetiricnvninnctninneiciensininsnciscicnnimmuiitaioass 5

Oe hs, PU iiititicieichcictaihisneisisininiostoniiacsnneninibcsaii 22, 23

Exec. Order No. 13,563, 3 C.F.R. 215 (2012) ...0.... eee eeeeeee 12

er. th ee itikieiasintitceresisclesdeuruinteniicacnctinetnlatemmssiteeiiasadicnasacinbiatibetl 4

Bs Marilee I sarecccbennsisenineoentniniasiiceennapanintesinsnenenicanaiennigaaigduae 7

Miscellaneous:

1 EPA’s Responses to Public Comments on EPA’s

National Emissions Standards for Hazardous Air

Pollutants from Coal- and Oil-Fired Electric Utility

Steam Generating Units (Dec. 2011), http://Awww.

epa.gov/ttn/atw/utility/mats_rtc_chapters

_foreword-1-2-3-4_121611.pdf (last visited Oct. 13,

STUDD cicinkitiaiiiesaiiihetineeneiniemtneesineiadennniaial 10, 25

65 Fed. Reg. (Dec. 20, 2000):

I ATT ssiniconiceactsansindtanaatiepilehashesiineantanintisheiaaniananaiseginiaemesdiiintal 5

iE ocipeicaldgsohaninicnpnioisintcmmandimenniainnniniaingiinmekantaiiens 5

hs TINT scicecisanaasatsseeansctasoseuasieiiesmaishiainalaicnirinlentsdentinenmiabnisainininisnds 6

Sia TTI wisliiciainnseieleniciianinntsnmeminbapieeasebisiieaiininbasiinneamatesnil 6

is SITE icieidbidinsonddaiieaiinaiitinasmacandisadnndatiahnandaninabaipesaiiemensiciosial 6

I, TI ‘esisotesemssinsenibcebdieinciiinsoapnesiotnsedinonssioainbreneditnenedutainieasaoinninte 5

70 Fed. Reg.:

i Se Ss Es TID cncanchssausesctemmenennsnatniasbiiensesiscsasaninss 7

D. ZB SOS (REY 1B, BOOB) ...-cercorccscccoccescecceeeceesescoss sineesibeniiin 7

Miscellaneous—Continued: Page

76 Fed. Reg. (May 3, 2011):

SIT ced aed dbcecnsgaieiinavidanedimiebaanadiiiiadicia 8

Sica cistiepebiailanisatelersienitidgnicensendnntnlinapdtinininidiiainbenisicinasesiens 9

i RIED ‘nntounnirsinestieneiydenadeetanaininsontianensaneniencceceaibienens 8

a STITT sionotsieipicesusddtbinhinistibvatanscteebasinansetncienneanaaesiainieniioniedtil 8

is SrpaTITn ilahiesseniiesetiidicoeepidesiaitnsecibaialahiinnaanationtblisaiaetlibie 9

aE cvtnvvnnienieninesenianornieiniineninnnsininmminmasenniieds 8

is TE siceisclliiaiiloeesdeceeiniaeiiasiiansinienedcinienneaininienininiatios 9, 23, 26

Se IIIT nesinscctsenainttncincatineiisshinedesdifitnsiiiendiiieiatiaanes 9

Ia UII aisha cn ceceacsnnacmeddenmemnniononieenathinnsnuiaisenasisauianiaiting 27

STE TITTIES cosercinscorscnciecivennietessiemesbiniiintibanosiuaissienpasiiniunilabii 9

ay STE sadiincitetsrcesesuninsicidihihaadantenniianteotanimentiiihiintiniatieatentoaiaiins 10

Sa IITians eesasid cadepainpioinbh osnealainbaisapoiemisioiasieananleduianin 32

I aN sie satenssedeicebesinpacnninomomichaiistesiaaiaaaibin 10

ITE ss cicscarsiciscknacsinocenisininianiiinaasaionsabnniadiiaeeliah 10

SI Ti csiteescecriatacelaceremeninnnemnmanicierssecunisoiiaeabiibaoamael 31

NIT iccisicrenesteictipscicpapieinsdeoemneemmnancitisieiceapesitansondiiensania 31, 32

77 Fed. Reg. (Feb. 16, 2012)

7D cabsenvienoinbespastslaebiinjedauinsetusiaiaineainadepninesiemsinisimesasaisinaitin 10

ISI TITIT oi stiesinasesesieiicebesciiaepeaieie siasienealenalisinbaseemitiesbaibiinae 12

Iisa sasts cneshuenatcinianicinabacseeignadeinmmasiteiiniasaeiaialiaii 12, 27

SSI cia cceaasiausienpeniinpasadeaieniemnensiadiesmneensdipaioia 11, 12, 13, 28

SFIT stieedensensilipstocmoctphirociiensnactanmniupnniiiababciiietel 4,11

i eee ae ncstnsenencencirnatsnenmensesnestisniasevctinavenstnenpanteinianewiatiinn 10

SSI ss ssinicesidtciiipabnesideianiinanae needed beiaeaninamnieaaoiietniaadeciambicensahigia 26

iF Ta iedcecinianeniisdcconeogeinhtnaumideioaiebememesasiennimamainnneitensiann 12, 28

I TIT citibienessseseiicrteneseniansbciinienicadnasininniecininncsanmeninaigiioviinniiaien 29

ET iaccseniencstatlDhacehiascniniepncsccaiuininsiscidilisapiihsieiacibaiaieitebiogs 10

Ta Seidiaetatsnaontabiininitiathrainiesisintdasmnennasscsiiiteuaibiitnisdavitnensinninind 31

Vil

Miscellaneous—Continued:

Page

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Sam, BEE II cccnecssvscscsssinesninssiistinnsanaiemenisaaaomnsiaaliaaaaae 11

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i, ee sscervasasiscesinisniininnicinsdiiabacamamaiiemasaailamal 12, 13, 28

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DD EIB nxncacccccrsessosccnnensssnentonnicnseniennnenninidentndsieniaiiscaiantaniiaal 28

9. DEG enncasvassacennsesinnnsvetnimininenisanpmianiesinneaiammanamianaan 12

U.S. EPA, Regulatory Impact Analysis for the

Final Mercury and Air Toxics Standards,

http:/www.epa.gov/mats/actions.htm]

(last visited Oct. 9, 2014)

In the Supreme Court of the Anited States

No. 14-46

STATE OF MICHIGAN, ET AL., PETITIONERS

Vv.

ENVIRONMENTAL PROTECTION AGENCY, ET AL.

No. 14-47

UTILITY AIR REGULATORY GROUP, PETITIONER

Vv.

ENVIRONMENTAL PROTECTION AGENCY, ET AL.

No. 14-49

NATIONAL MINING ASSOCIATION, PETITIONER

Vv.

ENVIRONMENTAL PROTECTION AGENCY, ET AL.

ON PETITIONS FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

BRIEF FOR THE FEDERAL RESPONDENTS

IN OPPOSITION

(1)

OPINIONS BELOW

The opinion of the court of appeals (Pet. App. la-

98a) is reported at 748 F.3d 1222.’ The final rule prom-

ulgated by the Environmental Protection Agency

(EPA) (excerpted at Pet. App. 196a-1160a) is pub-

lished at 77 Fed. Reg. 9304.

JURISDICTION

The judgment of the court of appeals (Pet. App.

99a-100a) was entered on April 15, 2014. The three

petitions for a writ of certiorari were filed on July 14,

2014. The jurisdiction of this Court is invoked under

28 U.S.C. 1254(1).

STATEMENT

This case involves the EPA’s determination that it

was “appropriate and necessary” to regulate power-

plant emissions under 42 U.S.C. 7412(n)(1)(A). The

EPA declined to consider costs when making that

determination, concluding that costs should instead be

considered when setting the appropriate standards for

hazardous air pollutant emissions from such plants

under Section 7412(d). The court of appeals upheld

the EPA’s interpretation of the statute as “clearly

permissible” under Chevron U.S.A. Inc. v. NRDC, 467

U.S. 837 (1984). Pet. App. 25a.

1. a. In the Clean Air Act Amendments of 1990,

Pub. L. No. 101-549, 104 Stat. 2399, Congress estab-

lished a list of more than 180 hazardous air pollutants.

It directed the EPA to review and revise that list

periodically to add other pollutants that present ad-

' Citations to “Pet. App.” are to the appendix to the petition for a

writ of certiorari filed by the National Mining Association (NMA)

in No. 14-49.

verse human health or environmental effects. 42

U.S.C. 7412(b).

Congress also directed the EPA to publish and oc-

casionally revise “a list of all categories and subcate-

gories of major sources” of the listed pollutants. 42

U.S.C. 7412(c)(1). A “major source” is any stationary

source or group of stationary sources at a single loca-

tion and under common control that emits or has the

potential to emit 10 tons per year or more of any sin-

gle hazardous air pollutant, or 25 tons per year or

more of any combination of hazardous air pollutants.

42 U.S.C. 7412(a)(1). The statute also requires the

EPA to list any category or subcategory of “area

sources” —defined to include al] stationary sources of

hazardous air pollution that are not “major sources”—

that the agency concludes “presents a threat of ad-

verse effects to human health or the environment

* * * warranting regulation under this section.”

42 U.S.C. 7412(a)(2), (c)(1) and (3).

The listing of a source category that includes major

sources triggers a statutory obligation for the EPA to

promulgate emission standards for all listed

hazardous air pollutants emitted by sources within

that category. 42 U.S.C. 7412(d)(1). Those standards

must “require the maximum degree of reduction in

emissions of * * * hazardous air pollutants” that the

EPA determines is achievable, taking into account

factors such as cost, energy requirements, and non-

air-quality health and environmental impacts. 42

U.S.C. 7412(d)(1) and (2). In general, for existing

sources, the “maximum degree of reduction in

emissions” must be at least as stringent as the

average emission limitation achieved by the best-

performing 12% of existing sources. 42 U.S.C.

7412(d)(3)(A); see 42 U.S.C. 7412(d)(3)(B) (requiring

the EPA to set standards that are at least as stringent

as the average emission limitations of the five best

performers for source categories including fewer than

30 sources). The EPA refers to the minimum

stringency standards as “floor” standards, and to

more stringent standards as “beyond-the-floor”

standards. See 77 Fed. Reg. at 9307. After the

enactment of the Clean Air Act Amendments of 1990,

the EPA promulgated Section 7412 emission

standards for scores of source categories, covering the

full range of industries in the United States. See 40

C.F.R. Pt. 63.

Section 7412 authorizes the EPA to delete particu-

lar source categories from the list, but only in narrow-

ly defined circumstances. Such delisting is permissi-

ble if the agency determines that emissions from no

source in the category (1) are likely to cause a lifetime

risk of cancer greater than one in a million to the

individual in the population who is most exposed to

those emissions, or (2) “exceed a level which is ade-

quate to protect public health with an ample margin of

safety and no adverse environmental effect will result

from emissions from any source.” 42 U.S.C.

7412(c)(9)(B)(i) and (ii). Section 7412 does not author-

ize the EPA to delete sources from the list based on

the agency’s view that the costs associated with regu-

lating hazardous air pollutant emissions from that

source exceed the benefits of doing so or are other-

wise too high.

b. This case involves one source category of air

pollutants—coal- and oil-fired “electric utility steam

generating units,” ie., power plants. See 42 U.S.C.

7412(a)(8). The Clean Air Act Amendments of 1990

impose a separate listing requirement that must be

satisfied before such plants may be regulated under

the provisions set forth above. See 42 U.S.C.

7412(n)(1)(A). Congress required the EPA to per-

form, within three years of the 1990 amendments to

the Clean Air Act, “a study of the hazards to public

health reasonably anticipated to occur as a result of

emissions” of listed hazardous air pollutants from

power plants, “after imposition of the requirements”

of the Clean Air Act. Jbid. Section 7412(n)(1)(A)

further provides that the EPA “shall regulate [power

plants] under [Section 7412] if [it] finds such regula-

tion is appropriate and necessary after considering

the results of the study.” Jbid.*

2. a. In December 2000, after completing the

study of power-plant emissions required by Section

7412(n)(1)(A), the EPA determined that regulation of

coal- and oil-fired power plants under Section 7412

was “appropriate and necessary.” 65 Fed. Reg.

79,823, 79,825 (Dec. 20, 2000). Based on that finding,

the EPA added coal- and oil-fired power plants to the

list of source categories to be regulated under Section

7412. Id. at 79,831.

® Section 7412(n)(1) also required two additional studies relating

to power plants: (1) an EPA study of the “health and environmen-

tal effects” of mercury emissions from power plants and other

sources, and of the “technologies which are available to control

[mercury] emissions, and the costs of such technologies,” to be

completed within four years, 42 U.S.C. 7412(n\1)(B); and (2) a

National Institute of Environmental Health Sciences study to

determine the threshold leve] of mercury exposure below which

adverse human health effects are not expected to occur, including

for “sensitive populations,” to be completed within three years, 42

U.S.C. 7412(n)(1)(C).

As part of its 2000 finding, the EPA determined

that power plants are the largest source of domestic

anthropogenic mercury emissions and that “(mJercury

is highly toxic, persistent, and bioaccumulates in food

chains.” 65 Fed. Reg. at 79,827. The EPA found that

mercury emitted by power plants falls into bodies of

water and then becomes concentrated in the bodies of

predatory fish, which absorb the methylmercury con-

tained by their food sources. When humans eat these

contaminated fish, they too are exposed. /bid. The

methylmercury from the fish poses especially great

risk to children born to women who were exposed to

relatively high levels of methylmercury during preg-

nancy. Ibid. The EPA explained that methylmercury

“readily passes * * * to the fetus and fetal brain,”

and that children exposed to methylmercury during

pregnancy have exhibited developmenta! neurological

abnormalities and delays. Jd. at 79,829. The agency

further estimated that approximately seven percent of

American women of childbearing age—millions of

women, in other words—were being exposed to

methylmercury in amounts that exceed a health-

protective level. [bid.

Although the EPA’s 2000 finding focused primarily

on the hazards posed by mercury emissions, the agen-

cy also found that the cancer-related risks posed by

several other metals emitted by power plants present-

ed a potential public health concern, and that acid gas

and dioxin emissions likewise warranted further eval-

uation. 65 Fed. Reg. at 79,827. The EPA also identi-

fied a number of available emission controls that are

effective at reducing power-plant mercury and other

hazardous air pollutant emissions and reducing public

health risks. /d. at 79,830.

b. In 2005, the EPA attempted to reverse the 2000

determination and to remove power plants from the

Section 7412(c) list. 70 Fed. Reg. 15,994 (Mar. 29,

2005) (2005 Delisting Rule). At that time, the EPA

concluded that it was instead appropriate to regulate

power-plant mercury emissions through an alternative

statutory authority, 42 U.S.C. 7411.4 The EPA prom-

ulgated Section 7411 standards of performance for

mercury emissions in a related rulemaking. 70 Fed.

Reg. 28,606 (May 18, 2005).

Numerous parties petitioned for judicial review of

the 2005 Delisting Rule and the accompanying Section

7411 mercury emission standards. The D.C. Circuit

granted the petitions and vacated both rules. New

Jersey v. EPA, 517 F.3d 574 (2008). The court held

that the 2005 Delisting Rule “violated the [Act’s] plain

text” by failing to comply with the delisting require-

ments set forth in 42 U.S.C. 7412(c)(9). 517 F.3d at

581-583. The government filed, but later moved to

dismiss, a petition for a writ of certiorari seeking

review of the D.C. Circuit’s decision. See EPA v. New

Jersey, 555 U.S. 1162 (2009) (No. 08-512) (petition

filed Oct. 17, 2008; motion to dismiss filed Feb. 6,

2009). This Court dismissed the government’s petition

under Sup. Ct. Rule 46, see ibid, and it denied an

industry group’s petition for a writ of certiorari, Utili-

ty Air Regulatory Grp. v. New Jersey, 555 U.S. 1169

(2009) (No. 08-352).

3. As a result of the D.C. Circuit’s ruling in New

Jersey, power plants remained on the Section 7412(c)

* Section 7411 authorizes the EPA to establish “standards of

performance” for sources of air pollution, but that authority does

not extend to hazardous air pollutants that are listed and regulated

under Section 7412. 42 U.S.C. 7411(d\1).

list pursuant to the EPA's 2000 listing decision. The

agency therefore was subject to a nondiscretionary

duty to promulgate Section 7412(d) emission stand-

ards for all hazardous air pollutants emitted by power

plants. See 42 U.S.C. 7412(c)(5) and (e) (requiring the

EPA to promulgate emission standards for hazardous

air pollutants emitted by listed source categories no

later than November 15, 1999, or within two years of

listing, whichever is later).

The EPA subsequently solicited public comments

on a proposed rule implementing that statutory com-

mand. See 76 Fed. Reg. 24,976 (May 3, 2011) (2011

Proposed Rule). As part of the proposed rule, the

EPA clarified its interpretation of Section

7412(n)(1)(A)’s directive to regulate power plants “if

[the EPA] finds such regulation is appropriate and

necessary.” See id. at 24,986-24,993.

The agency began by noting that Section

7412(n)(1)(A) itself “provides no clear standard to

govern EPA’s analysis,” and that the broad phrase

“appropriate and necessary” therefore “convey(s]

considerable discretion to the [EPA] in determining

what is appropriate and necessary in a given context.”

76 Fed. Reg. at 24,987. The agency explained that

regulation of power plants under Section 7412(n)(1)(A)

is “appropriate” if (1) hazardous air pollutant emis-

sions from those plants pose a hazard to either public

health or the environment and (2) controls are availa-

ble to reduce such emissions. /d. at 24,988-24,989.

The EPA also stated that the best interpretation of

the term “appropriate” is that it does “not allow for

the consideration of costs in determining whether

hazards to public health or the environment are rea-

sonably anticipated to occur based on {power plant]

emissions.” Id. at 24,989. The EPA further explained

that nothing in Section 7412(n)(1)(A) requires the

agency to consider costs as part of the source-

category listing decision. The EPA also noted that

Congress had not allowed the agency to consider costs

when listing other source categories for regulation or

when evaluating whether any source should be delist-

ed. [bid.

The EPA further explained that it may find regula-

tion to be “appropriate” based “on a finding that any

single [hazardous air pollutant) emitted from [power

plants] poses a hazard to public health or the envi-

ronment.” 76 Fed. Reg. at 24,988. It noted that Sec-

tion 7412 does not mandate separate “appropriate and

necessary” findings for each individual pollutant, and

that Section 7412 requires the EPA to promulgate

standards for all hazardous air pollutants emitted by

all of the other listed source categories subject to

regulation. /d. at 24,989 (citing National Lime Ass'n

v. EPA, 233 F.3d 625, 633 (D.C. Cir. 2000)). The EPA

also explained that regulation of power plants is “nec-

essary” under Section 7412(n)(1)(A) if public health or

environmental hazards posed by power-plant emis-

sions will not be addressed through the implementa-

tion of other Clean Air Act requirements. /d. at

24,990-24,992.

Finally, the EPA reaffirmed its initial December

2000 “appropriate and necessary” finding and listing

decision, and it cited additional new robust technical

analyses concerning the health and environmental

hazards posed by power-plant hazardous air pollutant

emissions. 76 Fed. Reg. at 24,986, 24,993-25,020.

Those new analyses included, inter alia, a national-

scale mercury risk assessment and a set of 16 case

studies of inhalation risks associated with non-

mercury pollutants. /d. at 25,007-25,012. The EPA

also noted its finding that power plants are responsi-

ble for approximately 50% of anthropogenic domestic

mercury emissions, 82% of hydrogen chloride (an acid

gas) emissions, 62% of hydrogen fluoride (another acid

gas) emissions, 83% of selenium emissions, 62% of

arsenic emissions, and significant quantities of several

other hazardous air pollutant emissions. /d. at 25,002,

25,005-25,006.

4. In February 2012, the EPA issued a final rule

promulgating emission standards for power plants. 77

Fed. Reg. 9304 (Feb. 16, 2012) (2012 Final Rule). The

preamble to the rule addressed comments on the

agency's interpretation of Section 7412(n)(1)(A)’s

“appropriate and necessary” standard. The preamble

explained that costs do “not have to be read into the

definition of ‘appropriate,’” and that “it is reasonable

to assess whether to list [power plants] * * * with-

out considering costs.” /d. at 9326-9327.‘ EPA also

reaffirmed its initial December 2000 “appropriate and

necessary” finding and listing decision, as well as the

additional analyses of the health and environmental

hazards posed by power-plant hazardous air pollutant

emissions that the agency had diseussed in the 2011

Proposed Rule. /d. at 9310-9364.

In promulgating the 2012 Final Rule, the EPA ul-

timately concluded that it was “appropriate” to regu-

* See also 1 EPA’s Responses to Public Comments on EPA's Na-

tional Emissions Standards for Hazardous Air Pollutants from Coal-

and Oil-Fired Electric Utility Steam Generating Units 29 (Dec.

2011) (EPA Responses to Comments), http://www.epa.gov/ttn/atw/

utility/mats rte chapters foreword-1-2-34 121611.pdf (last visited

Oct. 13, 2014).

late coal- and oil-fined power plants under Section

7412 because, inter alia: (1) such plants remain by far

the largest domestic source of mercury as well as of

many other listed hazardous air pollutants; (2) mercu-

ry and other emitted pollutants (including non-

mercury metals and acid gases) pose hazards to public

health and the environment; and (3) effective controls

remain available to reduce emissions. 77 Fed. Reg. at

9362-9363, 9366 (noting that various findings provided

independent bases for regulation). The agency sepa-

rately reaffirmed that it was “necessary” to regulate

power-plant hazardous air pollutant emissions for

various reasons, including the EPA’s conclusion that

the identified hazards to public health will not be

addressed through the implementation of other Clean

Air Act requirements pertaining to power plants. /d.

at 9363.°

Applying the methodology prescribed by Congress

in Section 7412(d), the EPA then promulgated emis-

sion standards for listed hazardous pollutants emitted

by power plants. 77 Fed. Reg. at 9366-9376. The EPA

explained that those standards can be met with proven

and available technologies. [bid.; see id. at 9307. The

agency also noted that the standards would dramati-

cally reduce power-plant emissions of mercury and

other hazardous air pollutants and would result in

extraordinary public health benefits. Jd. at 9306.

In promulgating the 2012 Final Rule, the EPA also

issued a Regulatory Impact Analysis (RIA) estimating

the costs and benefits of the new power-plant emission

° The 2012 Final Rule also denied an administrative petition

requesting that the EPA delist coal-fired power plants under

Section 7412(c)(9). 77 Fed. Reg. at 9364-9366 (concluding that

neither of Section 7412(c\9)(B)’s conditions had been satisfied).

standards pursuant to Executive Order No. 13,563,

3 C.F.R. 215 (2012). 77 Fed. Reg. at 9305-9306, 9426-

9432. That analysis projected that the standards, once

fully implemented in 2016, would yield total annual

monetized benefits of between $37 billion and $90

billion (measured in 2007 dollars), as compared to

annual costs of $9.6 billion. Jd. at 9305-9306. Those

quantifiable benefits include the prevention of up to

11,000 premature deaths each year and the prevention

of IQ loss to children whose mothers consume non-

commercial freshwater fish caught by recreational

anglers in modeled watersheds during pregnancy. /d.

at 9306, 9366, 9427-9428, 9445.°

The EPA made clear, however, that the RIA played

no role in its finding that regulating power plants

was “appropriate and necessary” under Section

7412(n)(1)(A). See 77 Fed. Reg. at 9323. It also em-

phasized that many of the direct health and environ-

mental benefits from reducing emissions from hazard-

ous air pollutants cannot be fully quantified. Jd. at

9306, 9323, 9426-9432. For example, the EPA noted

that it could not measure the benefits that would flow

from (1) reducing adverse effects on brain develop-

ment and memory functions (apart from the IQ loss

* The EPA explained that the rule would reduce emissions of

mercury and other listed hazardous air pollutants, and that the

technology necessary to reduce those emissions would also reduce

emissions of particulate matter (specifically PM,,) and sulfur

dioxide (a precursor to PM,,), which are not listed hazardous air

pollutants but are regulated surrogates under the final rule. 77

Fed. Reg. at 9305. The agency further explained that the “great

majority” of the quantifiable benefits are “attributable to co-

benefits from reductions in PM,,-related mortality.” Ibid The

EPA emphasized, however, that those co-benefits did not form the

basis of its “appropriate and necessary” finding. /d. at 9323.

noted above); (2) reducing IQ loss in children whose

mothers consume commercial or saltwater fish during

pregnancy; (3) reducing IQ loss in children exposed to

pollutants after birth; and (4) other health and envi-

ronmental benefits associated with reductions to the

incidence of cancer and of acidification of water bod-

ies. Ibid; see U.S. EPA, Regulatory Impact Analysis

for the Final Mercury and Air Toxics Standards 4-71,

http://www.epa.gov/mats/actions.htm!] (last visited Oct.

9, 2014) (explaining obstacles to quantifying benefits

in greater detail). The EPA ultimately concluded

that, “[u}Jpon considering these limitations and uncer-

tainties, it remains clear that the benefits of this rule

* * * are substantial and far outweigh the costs.” 77

Fed. Reg. at 9306.

4. Petitioners—including several] States and vari-

ous industry groups—filed consolidated petitions for

judicial review of the 2012 Final Rule in the D.C. Cir-

cuit. Other power producers and other States inter-

vened in support of the final rule. As relevant here,

petitioners challenged the EPA’s interpretation and

application of Section 7412(n)(1)(A)’s “appropriate and

necessary” requirement, arguing that it was unrea-

sonable for the agency (1) to decline to consider the

costs of regulation when deciding whether to list pow-

er plants, and (2) to regulate all hazardous air pollu-

tants emitted by power plants without making sepa-

rate and independent “appropriate and necessary”

determinations for each one. Petitioner also chal-

lenged numerous other aspects of the 2012 Final Rule,

including the EPA’s factual findings with respect to

the harmful effects of exposure to mercury and other

pollutants.

a. The court of appeals upheld the EPA's “appro-

priate and necessary” finding and listing of power

plants. Pet. App. 18a-43a. Applying the familiar two-

part test set forth in Chevron, 467 U.S. at 842-843, the

court first concluded that the statute “does not evince

unambiguous congressional intent on the specific issue

of whether EPA was required to consider costs in

making its ‘appropriate and necessary’ determination

under (Section 4212(n)(1)(A)].” Pet. App. 25a. It then

upheld the EPA’s interpretation as “clearly permissi-

ble,” stating that the agency had “reasonably conclud-

ed it need not consider costs in making its ‘appropri-

ate and necessary’ determination under [Section

7412(n)(1)(A)}.” Jd. at 25a, 33a. The court of appeals

relied in part on Whitman v. American Trucking

Ass'ns, 531 U.S. 457 (2001), in which this Court high-

lighted its longstanding “refus[al] to find implicit in

ambiguous sections of the [Clean Air Act] an authori-

zation to consider costs that has elsewhere, and so

often, been expressly granted.” Jd. at 467; see Pet.

App. 25a-26a; see also id. at 31a n.2 (citing other cases

in which this Court has refused to require agencies to

consider costs when making regulatory decisions).

The court of appeals also noted that Congress (1) has

required regulation of other sources of pollution with-

out consideration of cost; (2) has not permitted the

EPA to consider costs when deciding whether to delist

a source category; and (3) has authorized the EPA to

take account of costs when setting the level of regula-

tion of power-plant emissions. /d. at 27a-29a, 31a; see

also 42 U.S.C. 7412(c) and (d)(2).

The court of appeals unanimously rejected peti-

tioners’ argument that Section 7412(n)(1)(A) requires

the EPA to make a separate “appropriate and neces-

sary” determination for each of the nearly 200 listed

hazardous air pollutants. Pet. App. 38a-40a. The

court therefore upheld the agency’s decision to treat

power plants like other listed major pollution sources,

as to which the EPA must promulgate emissions

standards for all pollutants. Jd. at 39a. In doing so,

the court rejected “(t]he notion that EPA must ‘pick

and choose’ among [such pollutants] in order to regu-

late only those substances it deems most harmful.”

Ibid. (citing National Lime Ass’n, 233 F.3d at 633-

634, and New Jersey, 517 F.3d at 582).

The court of appeals unanimously rejected al! other

aspects of petitioners’ challenges to the 2012 Final

Rule. Pet. App. 16a-22a, 33a-38a, 40a-54a. Most no-

tably, it concluded that “EPA’s ‘appropriate and nec-

essary determination in 2000, and its reaffirmation of

that determination in 2012, are amply supported by

EPA’s findings regarding the health effects of mercu-

ry exposure.” /d. at 40a-41la.

b. Judge Kavanaugh concurred in part and dis-

sented in part. Pet. App. 68a-98a. Judge Kavanaugh

joined all aspects of the panel’s per curiam opinion,

except that he agreed with petitioners that the EPA

must consider the costs associated with regulating

power plants in order to determine whether such reg-

ulation is “appropriate” under Section 7412(n)(1)(A).

ARGUMENT

The court of appeals correctly upheld the EPA’s in-

terpretation of Section 7412 and its determination that

regulation of power plants is “appropriate and neces-

sary.” Three sets of petitioners now challenge that

court’s conclusion that the agency’s construction of

the statute was “clearly permissible” under Chevron

U.S.A. Inc. v. NRDC, 467 U.S. 837 (1984). Pet. App.

25a. That challenge lacks merit.

The EPA reasonably construed Section 7412 as di-

recting it to consider compliance costs when establish-

ing the appropriate level of any power-plant regula-

tion, but not when deciding whether to regulate those

plants under Section 7412 at all. The EPA also rea-

sonably determined that, because it is “appropriate

and necessary” to regulate power plants generally, the

agency was required to establish emissions standards

for all listed hazardous air pollutants. Petitioners

cannot show that the decision below misapplies Chev-

ron or conflicts with any decision of this Court or of

any other court of appeals. Further review is not

warranted.

1. The court of appeals correctly applied Chevron

and concluded that the EPA had reasonably declined

to consider costs when deciding whether it was “ap-

propriate and necessary” to regulate power-plant

emissions under Section 7412(n)(1)(A). There is no

merit to petitioners’ argument that the statute unam-

biguously requires the agency to consider costs when

making that determination.

a. The Clean Air Act requires the EPA to study

the health effects of power-plant emissions and to

regulate power plants if it “finds such regulation is

appropriate and necessary after considering the re-

sults of the study.” 42 U.S.C. 7412(n)(1)(A) (emphasis

added). The statute does not define the broad terms

“appropriate” and “necessary,” nor does it otherwise

explicitly address whether costs are a valid considera-

tion for the EPA to take into account when deciding

whether to list power plants for regulation under

Section 7412. This Court has made clear that statuto-

ry silence with respect to costs will sometimes—but

not always—prohibit the agency from taking costs

into account when deciding whether or how to make a

regulatory determination.’

In these circumstances, the court of appeals cor-

rectly held, under Chevron Step One, that Section

7412(n)(1)(A) does not unambiguously speak to wheth-

er the EPA must consider costs when deciding wheth-

er to regulate power plants. Pet. App. 25a. The court

therefore correctly concluded that the EPA’s inter-

pretation must be upheld, under Chevron Step Two, if

it “is based on a permissible construction of the stat-

ute.” 467 U.S. at 843; see Pet. App. 18a, 25a, 32a-33a.

b. The court of appeals correctly upheld the EPA’s

interpretation of Section 7412(n)(1)(A) at Chevron

Step Two. Section 7412 requires the agency to make

two basic determinations when regulating the sources

of hazardous air pollutants. First, the agency must

decide whether any particular source category should

appear on the list of source categories subject to regu-

lation. See 42 U.S.C. 7412(c). Second, the EPA must

promulgate specific emissions standards for any cate-

" See, eg., EPA v. EME Homer City Generation, L.P., 134 S. Ct.

1584, 1603, 1606-1607 (2014) (authorizing the EPA to consider

costs when allocating emission contributions among upwind States

under 42 U.S.C. 741 aX2XDXi)); Entergy Co~p. v. Riverkeeper.

Inc., 556 U.S. 208, 223 (2009) (“[Sjometimes statutory silence,

when viewed in context, is best interpreted as limiting agency

discretion.”); Whitman v. American Trucking Ass’ns, 531 U.S.

457, 467 (2001) (prohibiting the EPA from considering costs when

setting national ambient air quality standards); American Textile

Mfrs. Inst., Inc. v. Donovan, 452 U.S. 490, 510-512 (1981) (holding

that the Department of Labor was not required to engage in cost-

benefit analysis when setting health and safety standards in ab-

sence of statutory command).

gories appearing on that list. See 42 U.S.C. 7412(d).

The EPA reasonably concluded that, with respect to

power plants as with respect to all other sources of

pollution, the costs of regulation are relevant only to

the second determination.

i. Section 7412(c) generally deprives the EPA of

any discretion to consider costs when deciding wheth-

er to include a source category on the list of those

subject to regulation. That provision requires the

agency to list and regulate (1) all “major” sources of

pollution, defined as those sources emitting more than

10 tons of a single hazardous air pollutant (or 25 tons

of any combination of such pollutants) per year, 42

U.S.C. 7412(a)(1), and (2) any “area” sources of pollu-

tion that the EPA determines are dangerous “to hu-

man health or the environment.” 42 U.S.C. 7412(c)(1),

(2) and (3). Those statutory directives are mandatory

and do not authorize the EPA to consider the compli-

ance costs associated with regulating either type of

source when making the initial listing decision.”

Section 7412(c)(9) authorizes the EPA to delete any

major or area source category from the list in certain

specified circumstances. As with the provisions estab-

lishing the general criteria the EPA must use when

listing such categories, Section 7412(c)(9) does not

authorize the agency to consider costs when making

such deletions. Rather, the EPA is authorized to

* See 42 U.S.C. 7412(c)(1) (declaring that the EPA “shall publish

* * * a list of all categories and subcategories of major

sources); 42 U.S.C. 7412(c)(3) (declaring that the EPA “shall list

* * * each category or subcategory of area sources which [the

EPA] finds presents a threat of adverse effects to human health or

the environment * * * warranting regulation under this sec-

tion”).

delete a category from the list in two limited situa-

tions.

First, the EPA may delete a source category if

(1) the “sole reason” for initially including the catego-

ry on the list was its emission of a “unique chemical

substance,” and (2) that substance is subsequently

deleted from the separate list of hazardous air pollu-

tants because the EPA concludes that it will not cause

adverse effects to human “health” or the “environ-

mentf].” 42 U.S.C. 7412(c)(9)(A) (cross-referencing 42

U.S.C. 7412(b)(3)(C) and (D)).

Second, the EPA may delete a source category if

two other conditions are both satisfied. To the extent

that sources within the category emit pollutants that

may cause cancer in humans, the EPA must determine

that “no source in the category (or group of sources in

the case of area sources) emits such hazardous air

pollutants in quantities which may cause a lifetime

risk of cancer greater than one in a million to the indi-

vidua! in the population who is most exposed to emis-

sions of such pollutants.” 42 U.S.C. 7412(c)(9)(B)(i).

In addition, to the extent that sources within the cate-

gory emit pollutants that result in adverse health

effects other than cancer, or in adverse environmental

effects, the EPA must determine that “emissions from

no source in the category or subcategory (or group of

sources in the case of area sources) exceed a level

which is adequate to protect public health with an

ample margin of safety and no adverse environmental

effect will result from [such] emissions.” 42 U.S.C.

7412(c)(9)(B)(ii).

Although Section 7412(c) does not call for the EPA

to consider costs when deciding whether to list or

delist source categories, the statute does require the

agency to consider costs when deciding whether to set

the proper level of permissible emissions beyond the

minimum level required by Section 7412(d)(3). Thus,

Section 7412(d)(2) states that the EPA must promul-

gate emission standards that

require the maximum degree of reduction in emis-

sions of the hazardous air pollutants subject to this

section (including a prohibition on such emissions,

where achievable) that the [EPA], taking into con-

sideration the cost of achieving such emission re-

duction, and any non-air quality health and envi-

ronmental impacts and energy requirements, de-

termines is achievable for new or existing sources.

42 U.S.C. 7412(d)(2) (emphasis added).

ii. Congress instructed the EPA to regulate power

plants if the agency concludes that such regulation is

“appropriate and necessary” after considering a study

of the health dangers posed by power-plant emissions

after imposition of the other requirements of the Clean

Air Act Amendments of 1990. 42 U.S.C. 7412(n)(1)A).

In light of the broader statutory scheme discussed

above, the EPA interpreted that “appropriate and

necessary” standard not to require any consideration

of costs when making the initial decision whether to

include power plants on the list of source categories

subject to regulation.

The EPA’s decision was reasonable, and the court

of appeals correctly upheld it at Chevron Step Two.

As explained above, Congress made cost irrelevant to

the initial listing decision for other source categories,

and nothing about Section 7412(n)(1)(A) requires a

different result with respect to power plants. Alt-

hough Congress gave the EPA broad discretion to

decide whether regulation of power plants is “appro-

priate and necessary,” the agency in making that

determination reasonably looked to the process that

Congress had established for listing other source

categories.

In determining the range of factors bearing on the

initial listing decision, the EPA also reasonably con-

sidered the criteria that Congress had established for

deleting source categories from the list. After all,

those criteria govern the deletion of “any source cate-

gory”—including power plants—from those subject to

regulation. 42 U.S.C. 7412(c)(9)(B) (emphasis added).

The EPA appropriately concluded that Congress

would not have intended it to consider a factor when

initially listing power plants that it could not subse-

quently consider when deciding whether to delist such

plants. Petitioners’ contrary interpretation would

produce a strange and asymmetric scheme, under

which the EPA could consider expected costs at the

outset in deciding whether power plants should be

placed on the list, but could not revisit an initial listing

decision if the costs of regulation turned out to be

higher than anticipated. The EPA reasonably deter-

mined that the same sorts of considerations should

govern both the listing and delisting of power plants

under Section 7412(c)(9) and (n)(1)(A).

To be sure, Congress required the EPA to follow a

separate procedure—unlike the one generally appli-

cable to other hazardous air pollution sources—when

deciding whether to include power plants on the list of

sources subject to regulation. But Congress’s decision

to require the EPA to make the “appropriate and

necessary” determination after considering a study of

the effects of power-plant hazardous air pollutant

emissions on public health does not imply that it also

wanted the EPA to consider costs when deciding

whether to regulate such plants. If anything, it sug-

gests the opposite, since the study mandated by Sec-

tion 7412(n)(1)(A)—unlike the studies required by

other provisions of Section 7412—does not itself re-

quire the EPA to consider the costs of regulation in

any way.”

iii, As the court of appeals correctly explained, this

Court’s analysis in Whitman v. Americes Trucking

Ass’ns, 531 U.S. 457 (2001), supports the EPA’s deci-

sion not to consider costs in determining whether to

list power plants under Section 7412(n)(1)(A). See

Pet. App. 25a. The Court in Whitman held that the

EPA is prohibited from considering implementation

costs when setting national ambient air quality stand-

ards (NAAQS) under 42 U.S.C. 7409(b). 531 U.S. at

464-471. In reaching that conclusion, the Court noted

that Congress had expressly required or permitted

* See 42 U.S.C. 7412(n)(1)(A) (identifying focus of study as “the

hazards to public health reasonably anticipated to occur as a result

of emissions by [power plants] of pollutants listed under [Section

7412(b)] after imposition of the requirements of this chapter”); see

also 42 U.S.C. 7412(f)(1)(B) (requiring the EPA to report to Con-

gress on “the public health significance of [the risks of pollution

even after implementation of the Clean Air Act Amendments of

1990] and the technologically and commercially available methods

and costs of reducing such risks”) (emphasis added), (n)(1)(B)

(requiring the EPA to conduct a study of mercury emissions from

power plants and other sources and to “consider the rate and mass

of such emissions, technologies which are available to contro! such

emissions, and the costs of such technologies”) (emphasis added)

and (s2) (requiring the EPA to report to Congress “information

with respect to compliance with [emissions standards established

under Section 7412] including the costs of compliance experienced

by sources in various categories and subcategories”) (emphasis

added).

the agency to consider costs when making various

other decisions relating to its regulation of air quality,

and it highlighted its own prior “refus{al] to find im-

plicit in ambiguous sections of the [Clean Air Act] an

authorization to consider costs that has elsewhere,

and so often, been expressly granted.” /d. at 467

(citing General Motors Corp. v. United States, 496

U.S. 530, 538 (1990) and Union Elec. Co. v. EPA, 427

U.S. 246, 257 & n.5 (1976)).

Here, as with the NAAQS at issue in Whitman,

Congress directed the EPA to consider regulatory

costs when taking various specified actions under

Section 7412, but it did not mention costs when estab-

lishing the “appropriate and necessary” standard."

The EPA reasonably concluded that, if Congress had

intended to require the agency to consider costs in

this specific context, it would have enacted an explicit

statutory directive to that effect. See 2011 Proposed

Rule, 76 Fed. Reg. at 24,989.

c. Petitioners’ primary criticism of the EPA’s deci-

sion not to consider costs under Section 7412(n)(1)(A)

rests on their assertions that (1) the statutory term

“appropriate” is facially broad and does not itself

preclude consideration of costs, and (2) it is generally

reasonable for agencies to consider costs when making

regulatory decisions. See, e.g., 14-46 Pet. 16-18; 14-47

Pet. 23-24; 14-49 Pet. 17-19; see also Pet. App. 73a-77a

ards generally), (d)(8)(A)(i) (same with respect to coke oven batter-

ies), (f)(1)(B) (report to Congress on need for further legislation on

air pollution), (fX2)(A) (establishing additional emission stand-

ards), (nX1B) (study of mercury emissions), (8X2) (report to

Congress on compliance with EPA standards under Clean Air

Act).

(Kavanaugh, J. dissenting) (making same points). But

even assuming those propositions are correct as a

general matter, Congress may instruct the EPA as to

whether and how to consider costs in any particular

circumstance. See Whitman, 531 U.S. at 466.

Here, Congress (1) prohibited the EPA from con-

sidering costs when deciding whether to list source

categories other than power plants; (2) prohibited the

EPA from delisting any source category—including

power plants—based on its assessment of costs; and

(3) directed EPA to consider costs with respect to

other specified actions under Section 7412. See pp. 17-

23, supra. In this context, the agency reasonably

concluded that Congress did not intend to require

consideration of costs as part of the determination

whether to regulate power plants under Section

7412(n)(1)(A).

It also bears emphasis that, pursuant to Congress’s

express directive, the EPA did consider costs when

setting the actual emission standards for power plants

under 42 U.S.C. 7412(d). Section 7412(d)(2) directs

that such emission standards “require the maximum

degree of reduction in emissions of the hazardous air

pollutants subject to this section * * * that the

[EPA], taking into consideration the cost of achieving

such emission reduction, and any non-air quality

health and environmental impacts and energy require-

ments, determines is achievable.” 42 U.S.C. 7412(d)(2)

(emphasis added). Congress further specified that

“(t]he maximum degree of reduction in emissions that

is deemed achievable * * * shall not be less strin-

gent” than certain minimum levels of control that have

already been achieved by similar sources in the same

category or subcategory. 42 U.S.C. 7412(d)(3). Those

minimum standards themselves indirectly reflect the

costs of regulation, insofar as they turn on the emis-

sion standards that have already been achieved by

comparable sources of pollution, presumably in a cost-

effective manner. See Pet. App. 27a, 30a.

Thus, far from requiring the EPA to ignore costs

entirely when regulating power plants, Congress

instead channeled cost considerations into the second

stage of the process, at which the agency determines

the extent of such regulation. See 42 U.S.C.

7412(d)(2). EPA’s interpretation of Section 7412 to

treat costs as a relevant factor only at this latter stage

was both appropriate and consistent with petitioners’

observation that Congress is typically sensitive to

costs when imposing new regulations.”

d. The state petitioners also argue that the EPA’s

interpretation of Section 7412(n)(1)(A)’s term “appro-

priate,” under which sources within a particular cate-

gory may be regulated whenever the agency identifies

a threat to public health or the environment, fails to

give that term any independent meaning. 14-46 Pet.

13-15. Petitioners observe that the agency is required

to make its “appropriate and necessary” determina-

tion after considering the results of a required study

of the hazards to public health posed by power-plant

pollution. 7d. at 14. Petitioners assert that this se-

'! Petitioners in No. 14-49 argue that the Section 7412(n)(1)(A)

study requires the EPA to consider costs insofar as the statute

directs the agency to address “alternative contro] strategies for

emissions which may warrant regulation.” 14-49 Pet. 19. That is

not correct. Section 7412(n)(1A) does not require the study to

consider the costs of alternative control strategies, but merely to

describe available and effective contro] technologies. See 1 EPA

Responses to Comments 40.

quencing requires the EPA to “exercise its judgment

and consider various factors, including costs,” above

and beyond the health hazards identified by the study.

Ibid.

That argument fails for at least two independent

reasons. First, as the court of appeals explained, the

EPA “did not focus exclusively on health hazards in

considering whether regulation would be ‘appropri-

ate,’” but also considered “‘the availability of controls

to address [hazardous air pollutant] emissions from

[power plants].’” Pet. App. 28a (quoting 2011 Pro-

posed Rule, 76 Fed. Reg. at 24,989, and citing 2012

Final Rule, 77 Fed. Reg. at 9311). Petitioners are

therefore incorrect in asserting that the agency found

regulation of power-plant emissions to be “appropri-

ate” based solely on the study of health hazards re-

quired by Section 7412(n)(1)(A).

Second, as the court of appeals also recognized, the

EPA’s interpretation of the statute still required the

agency “to apply its judgment in evaluating the re-

sults of the [Section 7412(n)(1)(A)] study.” Pet. App.

28a. At the time Congress required that study, it was

unclear whether the EPA would ultimately conclude

that power-plant emissions can reasonably be antici-

pated to cause hazards to public health. Indeed, peti-

tioners themselves disputed below that any such haz-

ards exist. See id. at 40a-42a, 48a. The EPA there-

fore correctly interpreted Section 7412(n)(1)(A) to

require it to evaluate the study’s particular findings

and then determine whether regulation was appropri-

ate.”

‘ The state petitioners are also incorrect in implying (14-46 Pet.

15) that the EPA failed to evaluate the “severity” of health effects

as part of its hazard analysis. In fact, the EPA did consider the

e. Petitioners rely heavily on the regulatory impact

analysis prepared by EPA. They assert that the

agency itself believes that the costs associated with

regulation of power-plant emissions “outweigh bene-

fits by almost two thousand to one.” 14-49 Pet. i; see

id. at 2 (asserting that “EPA projected that these

regulations will inflict $9.6 billion in costs on the

American people annually, but will create only $4-6

million in annual benefit in reduced [hazardous air

pollutant] emissions”); 14-46 Pet. 12 (making same

assertion); 14-47 Pet. 3 (same).

Petitioners’ statements reflect a serious misunder-

standing of the EPA’s cost-benefit analysis. As the

EPA explained in promulgating the 2012 Final Rule,

the agency actually concluded that the rule will yield

overall annual monetized benefits of between $37

billion and $90 billion (measured in 2007 dollars),

while generating annual cosis of $9.6 billion. 77 Fed.

Reg. at 9305-9306. That analysis includes the EPA’s

estimate of the co-benefits associated with reducing

emissions of particulate matter and sulfur dioxide,

along with a partial estimate of the direct benefits

associated with reducing emissions of hazardous air

pollutants listed under Section 7412(b). /bid.

The EPA has also stated that it is impossible to

quantify the full benefits directly associated with the

rule’s reduction of Section 7412(b) pollutants. See

severity of health effects. See, e.g., 2011 Proposed Rule, 76 Fed.

Reg. at 24,992 (considering “the nature and severity of the health

effects associated with exposure,” the agency’s “degree of confi-

dence in [its] knowledge of these health effects,” and “the magni-

tude and breadth of the exposures and risks posed by [hazardous

air pollutant] emissions”); see also Pet. App. 40a-42a (rejecting

petitioners’ challenge to the EPA’s application of those factors).

2012 Final Rule, 77 Fed. Reg. at 9306, 9323, 9426-

9432. Although the EPA estimated that the rule

would yield $4 million to $6 million in such benefits as

a result of certain specific reductions in 1Q loss, the

agency explained that “these calculated benefits [from

reductions in IQ loss] are a small subset of the bene-

fits of reducing [mercury] emissions” under the 2012

Final Rule. Jd. at 9428 (emphasis added). The EPA

also stated that, despite the “limitations and uncer-

tainties” associated with the calculations, “it remains

clear that the benefits of this rule * * * are sub-

stantial and far outweigh the costs.” Id. at 9306 (em-

phasis added). Petitioners’ arguments conflate the

EPA’s estimate of one small component of the direct

benefits associated with the rule with the agency’s

assessment of the rule’s (much larger) total benefits.

When properly understood, the EPA’s cost-benefit

analysis directly undermines petitioners’ case for

further review. Although the EPA did not rely on

that analysis when it made the finding that petitioners

challenge, the analysis reflects the agency’s consid-

ered judgment that the overall benefits of subjecting

power plants to regulation under Section 7412 far

outweigh the overall costs—to the tune of many tens

of billions of dollars. Thus, even if the EPA were

required to consider costs in making its “appropriate

and necessary” determination, as petitioners argue,

there is no reason to expect that it would reach a dif-

ferent conclusion and decline to regulate power plants.

In these circumstances—where even a decision favor-

able to petitioners is unlikely to make any practical

difference—this Court’s intervention is especially

unwarranted.

2. Petitioners also criticize the EPA’s decision to

regulate power-plant acid gas emissions (such as hy-

drogen chloride and hydrogen fluoride). 14-49 Pet.

22-28; see also 14-47 Pet. 19, 24-27. They argue that

(1) the EPA erred in concluding that, once it decided

to regulate power-plant emissions under Section

7412(n)(1)(A), it was required to regulate all hazard-

ous air pollutants; and (2) the EPA lacked sufficient

evidence to conclude that such emissions pose any

threat to public health or the environment. 14-49 Pet.

22-28 (advancing both arguments); see also 14-47 Pet.

19, 24-27 (advancing first argument). The court of

appeals correctly (and unanimously) rejected both of

those contentions. Pet. App. 38a-44a.

a. After the EPA initially determined that power

plants must be listed as a source category pursuant to

Section 7412(c), the agency reasonably interpreted

Section 7412(n)(1)(A) to require the promulgation of

emission standards for all listed hazardous air pollu-

tants, including acid gases, that power plants emit.

See 77 Fed. Reg. at 9326; Pet. App. 38a-40a. As the

court of appeals recognized, Section 7412(n)(1)(A)

governs only the EPA’s initial determination whether

to list power plants as a source category to be regu-

lated. Pet. App. 39a. Once listed, however, such facil-

ities are properly treated like other listed source

categories and therefore are subject to all of the re-

quirements of Section 7412. Jbid. Petitioners do not

challenge the court of appeals’ unanimous conclusion

that “EPA’s ‘appropriate and necessary’ determina-

tion in 2000, and its reaffirmation of that determina-

tion in 2012, are amply supported by EPA’s findings

regarding the health effects of mercury exposure.”

Id. at 40a-41a.

Petitioners in No. 14-49 argue (Pet. 27) that

“regulation under Section 7412(n)(1)(A) is pollutant-

specific.” They suggest (ibid.) that the EPA was

obligated to make dozens of separate “appropriate and

necessary” findings corresponding to each of the

listed hazardous air pollutants that power plants emit.

The statutory text does not support that proposition.

Section 7412(n)(1)(A) directs the EPA to “regulate

electric utility steam generating units [te., the

statutorily-defined source category of power plants]

under this section, if [the agency] finds such

regulation is appropriate and necessary.” 42 U.S.C.

7412(n)(1)(A). Under the plain terms of the statute,

the required determination concerns whether regula-

tion of a particular source category “is appropriate

and necessary,” not whether regulation of particular

types of emissions satisfies that standard. See Pet.

App. 39a.

It is also significant that, if the EPA finds regula-

tion of power plants to be “appropriate and neces-

sary,” Section 7412(n)(1)(A) directs the agency to

regulate power plants “under this section”—ie., un-

der Section 7412. Section 7412(d) sets forth the pro-

cedures for setting emission standards under Section

7412. It unambiguously requires the EPA to promul-

gate such standards for each listed hazardous pollu-

tant emitted by sources within any listed category

that includes major sources. See generally National

Lime Ass'n v. EPA, 233 F.3d 625, 633-634 (D.C. Cir.

2000). Once the EPA decided to list power plants as a

source category of hazardous air pollutants under

Section 7412(c), Section 7412(d) required the agency

to regulate power-plant emissions of all such pollu-

tants, including acid gases. See generally 77 Fed.

Reg. at 9330.

b. Even if a pollutant-by-pollutant approach were

required as petitioners assert, the EPA's decision to

regulate acid gas emissions was justified by its find-

ings concerning their harmful environmental effects.

See 76 Fed. Reg. at 25,013, 25,016. Petitioners in No.

14-49 challenge (Pet. 22-25) the agency’s factual find-

ings concerning the dangers of acid gas emissions.

That challenge, however, is outside the scope of its

question presented in their petition, which asks only

whether the EPA may decline to consider costs when

making the Section 7412(n)(1)(A) “appropriate and

necessary” determination. See 14-49 Pet. i.

In any event, the EPA’s findings concerning the

adverse environmental impacts of acid gas emissions

are amply supported by the record. See 76 Fed. Reg.

at 25,013, 25,016. Published scientific research

demonstrates that power-plant acid gas emissions can

exacerbate acidification effects already being experi-

enced in sensitive ecosystems. /d. at 25,013 & n.127.

In issuing the 2011 Proposed Rule, the EPA noted

that it “remains concerned about the potential for acid

gas emissions to add to already high atmospheric

levels of other chronic respiratory toxicants and to

environmental loading and degradation due to acidifi-

cation.” Jd. at 25,016. The agency concluded that it

was “appropriate” to regulate acid gases because they

“are known to contribute to chronic non-cancer toxici-

ty and environmental degradation.” Jbid. As the

court of appeals correctly explained, the EPA had no

obligation to quantify the precise contribution of

power-plant acid gas emissions to ecosystem acidifica-

tion before finding an environmental hazard. See Pet.

App. 4la (holding that the “EPA is not obligated to

conclusively resolve every scientific uncertainty be-

fore it issues regulation”).

Petitioners in No. 14-49 disagree (Pet. 23-25) with

the EPA’s assessment of the harms posed by acid

gases, and they assert that the agency should have

separately analyzed the role of power-plant emissions

of acid gases in causing those effects. But there is no

reason for this Court to second-guess the EPA’s ex-

pert judgment on this narrow, factbound issue. The

EPA’s discussion of acid gases pointedly noted, more-

over, that power plants “emit over half of the nation-

wide emissions of HC] and HF,” which are two of the

most significant acid gases. 76 Fed. Reg. at 25,016.

The EPA therefore had good reason to believe that

reducing such power-plant emissions would mitigate

the harms caused by acid gases generally.”

3. As explained above, the court of appeals correct-

ly upheld the EPA’s interpretation of Section 7412, as

'* Petitioners in No. 14-47 also suggest (Pet. 24-25) that EPA

should not have regulated acid gas emissions under Section 7412

because any environmental harms posed by such gases are ade-

quately addressed by Title IV of the Clean Air Act Amendments of

1990, 104 Stat. 2584, which directly regulates certain pollutants

responsible for acid rain. The court of appeals correctly concluded

that petitioner » had forfeited that argument by failing to raise it

before the EPA or in their opening brief in that court. Pet. App.

47a. In any event, petitioners ignore the facts that (1) neither

hydrogen chloride nor hydrogen fluoride is regulated under the

Title IV trading program; (2) many sensitive ecosystems across

the country are still experiencing harmful acidification notwith-

standing Title [V, see 2011 Proposed Rule, 76 Fed. Reg. at 25,016;

and (3) power plants are still responsible for the vast majority of

anthropogenic hydrogen chloride and hydrogen fluoride emissions

in the United States, even after implementation of the Title IV acid

rain program, id. at 25,005.

well as the agency’s conclusion that it is “appropriate

and necessary” to regulate power plants. The court

based its ruling on a straightforward, routine, and

case-specific application of Chevron principles. The

court’s decision upholding the EPA’s interpretation of

Section 7412(n)(1)(A) is both correct and unlikely to

have broader legal implications.

Petitioners offer no plausible basis for concluding

that the practical impact of the regulation, standing

alone, is so extreme as to provide a sufficient justifica-

tion for this Court’s review. Nor do they contend that

the court of appeals’ decision misapplied established

administrative law principles or will affect the out-

come of any future case. Further review is not war-

ranted.

CONCLUSION

The petitions for writs of certiorari should be de-

nied.

Respectfully submitted.

DONALD B. VERRILLI, JR.

Avi GARBOW Solicitor General

General Counsel SaM HIRSCH

WENDY L. BLAKE Acting Assistant Attorney

PAUL R. VERSACE General

Attorneys ErRIc G. HOSTETLER

United States Environmental Attorney

Protection Agency

OCTOBER 2014

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.