# Respondents Brief — Util. Air Regulatory Grp. v. Envtl. Prot. Agency, 135 S. Ct. 702 (2014) (No. 14-47)

> Briefs, arguments, decisions, and more.

URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385016_0332%3A14

## Record

- **Collection:** Supreme Court brief
- **Document type:** Respondents Brief
- **Published:** January 1, 2014

## Text

Nos. 14-46, 14-47 and 14-49

—— --— —

Dis METS VAL, ws
Fir

FEB 25 2015

‘Flee

Bn the Supreme Court of the United States

STATE OF MICHIGAN, ET AL., PETITIONERS

ENVIRONMENTAL PROTECTION AGENCY, ET AL.

UTILITY AIR REGULATORY GROU P, PETITIONER

‘ENVIRONMENTAL PROTECTION AGENCY, ET AL.

NATIONAL MINING ASSOCIATION, PETITIONER

ENVIRONMENTAL PROTECTION AGENCY, ET AL.

ON WRITS OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE DISTRICT OF COLUMBIA CIRCUIT

BRIEF FOR THE FEDERAL RESPONDENTS

AVI 8. GARBOW

« General Counse!
BONJA L. RODMAN
Paut oeenee

mitted States E tal
nvironmen

Sind Sta ton Agency

= Washington, D.C. 20460

DONALD B. VERRILLI, JR.
Solicitor General
Counsel of Record
JOHN C. CRUDEN
Assistant Attorney General
MALCOLM L. STEWART
Deputy Solicitor General
ROMAN MARTINEZ
Assistant to the Solicitor
General

= G. HOSTETLER
Department of Justice
Washington, D.C. 20530-0001
SupremeCtBriefa@ usdoj. gov
(202) 514-2217

QUESTION PRESENTED

Whether the Environmental Protection Agency un-
reasonably refused to consider costs in determining
whether it is appropriate to regulate hazardous air
pollutants emitted by electric utilities.

(I)

TABLE OF CONTENTS

Page
CE I erccctsicercececsnesscntureencsctiitininntinesineattseisinmnanammnnestanas l
TT a sce arepcuniednemnienenacenadioatiniseunsimilenisaesnmabapail 2
nen csssissesceticiuasiesienoeicderiiipmcesintoasiignanigueeniocssineanigtl 2
| __ ESRERETAE SSE Par Raves nsoon ven te eseeteite Mer ORE TIO 2
I IIIIIIID oss dccscienncenssetuinnenersasotinennsanishidecieminienstsdeinnens 17
Argument:
EPA reasonably declined to consider costs when listing
power plants for regulation under Section 7412 .................. 21

A. Under Section 7412(n)1)(A), EPA has substantial
discretion to determine whether it is “appropriate”
to list power plants as a source category subject to
ET CIID ns icxnconsssanstnnnnpetnmeninnnenneideamnaniie 21
B. The text, structure, and history of the CAA establish
that EPA’s interpretation of Section 7412(n){1)(A) is
SE nentotsetianenecipainmtidninaiatiininen 23
1. EPA’s interpretation of Section 7412(n)(1)(A)
is consistent with the criteria for listing all other
sources of hazardous air pollutants under Section

2. EPA’s interpretation is consistent with the
NESHAP delisting criteria that apply to power
plants and all other stationary sources .................... 32

3. Congress’s express references to costs in other
CAA provisions support EPA’s interpretation of
Ss I ircsntnceiicceniietepniiinissinnnsaiiiabnemmceniacnitaas 35

4. EPA’s approach to power-plant regulation under
the NESHAP program is consistent with the
structure of the CAA’s other multistage regula-

QO PRR coc ececsecesseseenscsssemssnsmnmnenncerntanemesevene 38
C. Petitioners’ arguments fail to establish that Section
7412(n)(1)A) unambiguously requires EPA to con-

Ny thas cicsininnsteesecliedesuannicsnisumtasiantcnaibadaliied cseciscaiidenpuiiaisont 40

(11)

IV

Table of Contents—Continued: Page

1. The word “appropriate” does not unambiguously
require EPA to consider costs when deciding
ee i icinctittcenieicitittantinintcinnimmnis 40

2. Section 7412(n)(1)(B)’s express reference to
costs does not support petitioners’ interpreta-
tion of Section 7412(m)(1)(A) .........scccsccesscreeeeeceeereeseees 47

3. Neither this Court’s precedents nor the D.C.
Circuit’s NRDC decision supports petitioners’
theory that silence requires agencies to consider

4. Whether or not Section 7412(n)(1)(A) is a “re-
sidual risk” provision is irrelevant to whether
EPA must consider Costs............c..sccssssssssscessseseeseenees 51
5. Petitioners’ objections to other aspects of the
2012 Final Rule are outside the scope of the
I BI eicttctntnieirsiitiiisaniinintinncinimnmnin 52
D. In the RIA that accompanied the 2012 Final Rule,
EPA reasonably concluded that the benefits asso-

ciated with the rule will greatly exceed its costs ........... 53
I a ciiscsestinssiissirisiisniiicsinsiceiieeseiaiiaeahbiclinisteaniueiaepneepisiaiicieiiitenes 58
Appendix — Statutory provisions .................ccccsccecscssesseeeseeeeees la

TABLE OF AUTHORITIES
Cases:

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

ees IED cckinicersestiieittiiectnnsiccniecsiasineis 23, 37, 38, 49, 51
Chevron U.S.A. Inc. v. NRDC, 467 U.S. 837

SETI Un seissrntscechasiceinsieheiecaiieaesabibehioniedia 3, 17, 21, 23
EPA v. EME Homer City Generation, L.P.,

A EE 21, 23, 48, 49, 50
EPA v. New Jersey, 555 U.S. 1162 (2009) 0.0.0... ccccceceeeeeees 10

Entergy Corp. v. Riverkeeper, Inc., 556 U.S. 208
IED sacsich checsedislatveseeideanibasbubaisniataseieadiapuniaealacenniiaaliin 19, 20, 23, 49, 54

Cases—Continued: Page

FDA v. Brown & Williamson Tobacco Corp.,

ree Be E wriccievtessenenceniinseccncunineimnnatinnipasetisiatitaniiin 23, 26
General Motors Corp. v. United States, 496 U.S. 530

SETI aschcb nescsihinabonsigandsnnennnaiinaenieaeieidinulenmamuiianiminintinianinismesinas 37
Massachusetts v. EPA, 549 U.S. 497 (2007) .000.......ccccccceseeees 39
Mims v. Arrow Fin. Servs., LLC, 132 S. Ct. 740

II sasiccntitiarsieuasdngieeagnatinaindabanmaleptiamseiiennpnaasatencainiiapiidasibiiena 29
NRDC v. EPA, 824 F 2d 1146 (D.C. Cir.

STITT iacscisiedoensasidatintstsantullbensitiniateatalnedialediaiteinasammbioen 7, 20, 50, 51, 52
National Lime Ass'n v. EPA, 233 F.3d 625

eae as Sat eiecescobiicabdienbdasienhiceiaiesiainesionentinsiencdiodapnientninmnessniiancte 12

New Jersey v. EPA, 517 F.3d 574 (D.C. Cir. 2008),
cert. dismissed, 555 U.S. 1162, and cert. denied,

Se es IN I i iichanhcitatsinisstatiiiceniblesresbisabcsinianaslabe 4, 10, 32
Sossamon v. Texas, 131 S. Ct. 1651 (2011) ..................... 22, 41
Union Elec. Co. v. EPA, 427 U.S. 246 (1976)...0.....ccccccceeseeess 37
Utility Air Regulatory Grp. v. New Jersey,

es Se EY esiasesincuisinlistiuniihencdiisciieniniesiuisiiaiinidiaiesineetnieciemes 10
Vermont Yankee Nuclear Power Corp. v. NRDC,

Se TIT ciinice\citiesbenbinsbcneainisisitnnaesciindaishatlamesdcipaamcnaibaatbet 43
West v. Gibson, 527 U.S. 212 (1999) ............ccccccsesccessoccsrcncsers 20
Whitman v. American Trucking Ass’ns, 531 U.S. 457

EE ES I ROA Rate ae Pa 16, 18, 23, 36, 37

Statutes, regulations and rule:
Clean Air Act, 42 U.S.C. 7401 ef 869. ..........00..cccccecsccseccessessovess 2
es, IIIT ic cciiciciecehicelseiclaniscicaenitiiniaia as dtndaiiaiia 3, 32
ae ee I iciicintiiactinsdtassansncibeestsisabisisissdciinotsitaabiaatabiateilagibai 42
de IIE vshiiatk coddcneseintnicdtanaaetlaatiipnntcietisalienddaiatel 35
es Se edhisieiasinsitciesbiieteccintinonsiniaensssisteninalinatanead 35
Ee jn ENE en ene 35

VI

Statutes, regulations and rule—Continued: Page
ESR Cee ree ere ema EE 35
A, FED ncscccnstinrnsitaeincntsisinntnastanneneas 35
a ei NU iceciiniestinsithviehscihsiiiesiea get 35
ae ie PD inisinsesisitssistinssiiialeindncsicisihcninsibeucigipasimeictiganse 35
ey WED peicdeitsninsisccistsscanissiibatinibinigieiicacintasidiaaasedions 35
Is RDS. CINE sissiissiictisceatilnietceasaliieicietcitbaasiiaen 35
Re atts CI wcities iiae 42
SE ass CURIE sircissieictelesitinieiuileidiepepeliinnaeiiintersatiuisosabbetin 42
Ee ee os, Se 38
ates iteerisenlacintacssntiriocvctsacleacarinainicteuniitoiinieda 42
es I ctisscniciescnisssstinieiisetcisadiyiiicnssiniaiacdnen 42
ee ee itciccinciciiocctilaiei:sieihnasnpiieseeccacetansaninanien 42
a ee crccnrcciniciticenetctatinntentanseniiimanteten 42
le HITT senitcniinntinistnoncsdisidiopcivnieonenicninadtiatasatede 3,4
es I ensicicctnctecstanistsnestinincnesinsinniniimtstitttectapuindin’ 3, 38, la
Bae TI ici tescccsicssiecenidiocatbieseresecenabnsesincuitiiihelinnedagesteead 35
Se le SINT sssbsinccessnccmneninsnsteceriiigganinindectniatmiisamn 8
ee ae SE iiaidiaseniesinstntunsanientantorineiimmenennnesamiindt 38, 2a
ee ciersinctinicciieniveipinensinaineeniaininiaiinndieaniatabie 3, 2a
Se a inchctcssnirnsccnitcisnsnmminintiiesmeninaninina 3, 36, 3a
ae es ND cecvintencssineninaianenininincnistinisninisitia 36, 37, 3a
A Sa HED viiicnnscsscincitenscaitesecnsianintindahinnnisiiniandia’ 3, 42, 4a
ee Ds, artis iit ittinatenichieiisieidledteislaiinligiiteeadiabiiidies 3, 38
Se i aii clalleniciiiisabisiatiaiiebniniapoelasusibtaehdaanuntbisiousah 6a
ae re Pict ciiiinticihisaiieeteusiitiiaess 23, 7a
I I carte ce acl acer hal tee 3, 10
aa, nl 15a
ee a SUID sincera i ticcelscsstdnsdsnncienuenininsasniinbictienicetas 35, 39
eee Se iraesic bataanetiinsientisiinaicatisiitapetnctomeiands 3

EE ae PU eR irerccicncintnitisseiarnteninaibinnniicisivuiiaiainsomants 39

Vil

Statutes, regulations and rule—Continued: Page
ee: ia siicessssetieceniepaintiseieibisnaaniennetn 39, 42
a cee cicdidanhndtiniclestaepsieetbaeaieiineatal 35
Se i rcincsammetienslinidaniaielibinammeniie 35
NN TT in ctinscaecnsineiadilininiendginisssbenaiianesantodens 35
A I i occirnicicaiets di sealitainlietininisianinacia 35
anna passim, 21a
Oe Ns I ibncias ic ciacicecietiinatiasinisibansnanieesion 5, 24, 21a
leila 5, 21a
On 7, 23a
ee ite: Pe ccciniiscianesieanesninineinniecesis 4, 27, 42, 51, 55, 24a
42 U.S.C. 7412(b)(1) (Supp. IT 1990)................cccscssseeeseees 4
Pe SM eee 50
Se is I iriiischidisindsinenininincaiaetnaneninmensccinns 42, 43, 3la
es a csasersariniceiesininandinnnnes 42, 33a
Po Rs Ee aR 33, 33a
3 | A REE eee Re ere 33, 33a
ee as WI cceetneiiibitiinntiininnsanii 3, 10, 16, 17, 24, 30, 35a
I 5, 25, 42, 35a
es Se iiinhittstisstiaisinininisisiinitinatieinttiadiaaia 5, 25, 35a
es Me aiecinciieicsasinsipensniieaiieiiaiaielniiibctieaoacta 10, 36a
gE See 10, 18, 32, 33, 38a
gf) SERRE Ose enn es 33, 38a
Se ee I srecsiecsisinsisknaisiehisiisininsbeiimuncienenentann 32, 38a
42 U.S.C. T4IZBlEKONKBNA) ....200.-000eecceecseesesesscees 6, 33, 34, 38a
er II cistisvssnseensnsensesssocctiammsions 6, 33, 39a
ae ee Pe ecsinitinesewinrennnsncsssiensescnnentinsinte’ passim, 39a
I csi aaeeteinliseesticcasinaceninnaaiaaialil 5, 39a
Se SII iisisscitncticeninecusiescbanteiomeneel passim, 40a
Se ks PID tiiettninstcestsencsnsciia 6, 25, 26, 45, 54, 41a
ee a I ici ac irereciaatia tect lead 6, 41a

VIIl

Statutes, regulations and rule—Continued: Page
GB UC.. FER cevcsccssevccncnsnisttisnssicseiiitiaiaess 6, 13, 42a
GD BABI, FORE ccrcccsecccsistctniecccsesisiibisiiahti macula 5, 42a
4B U.S.C. TAIBLEB WAN) «2000nceccsesccasccssscsceccnoscosovessess 35, 48a
4B UBC. FETRIGNBND nccoccosessocsssscesssecnesscessscesesens 35, 44a
GB ERE, FE certectiecitccasniitenscecsitiaiisaicimpbeenm 5, 10, 46a
Ge BRK. FER ectiseecnccererinensicertiietetgiae es 30, 47a
GD UALS. FRR wcecssccrcsceecesvcminimsiitiads 30, 48a
GB UREA), THe Patecewnsintiictetciianeninantidaiaicaane 20, 51, 52, 48a
OB DBL. FER Fe actsoreccnnsccsintisitateinduanmamialigiiate 35, 49a
4B WEEKS. FER ete werncresnmeniesinipncnitigaaeante 7, 20, 49a
4 WU BKS. FRR Pee Decercsccenccctocsetsiiinsiittiaamatas 7, 34, 35, 49a
REE eg | RE IR nm AS. 7, Wa
BD UA. Fe acccecsrsvinsesiincinissiicienteiuninieiaenenn 51
4B UIA, FED ceccecscscccsndastssinsinsnncriniamisamaaemena 52a
ge eet | passim, 52a
43 U.C. FORBID) naccocccesenscscsensscssscns 20, 35, 47, 48, 53a
BU BEL. Fee ieccicinentniiimmmuimaminne 35, 58a
GB GAS, PE censsenssarceniniessittiisiaemmaa 35, 58a
4B UBC. FED cecccccensstisstissstncintsiintamseemaceee 35
4B UA. FED crecscnecsnscsinsnissisiitennatininannpniaiaeae 35
OB UEC. FE cnecestccteresierscestsininnniinammmnne 35
GD UTA. PROD ccecesinsssniescsciscnniabisnmniagmiamaaianiane 35
GB URE. FE sscvicccnsicscsiasisisibinaiisaaimmaneti cone 42
Ge BLL. Fier cccesasesitocssinssinteniinsanammpiipiaiipdincamrene 42
AB UES. FE cecsrsscisninsssnistissisisdaamamameanaeaaee 35
GB UA. FEED ectnisniinitsscintapeiapsictmmenmpeicane 35
OB UAL, FE crsesteretinisisinsineimonmmsmaieanioena 35
4B DEBE... THD ceetctnscssnnsitstemtiguamiaeiecee 42
GB URS, Fre eresinistinintvtssteionninmemaiagiiaiene 42

4B UBS. TRIO ceenesericscssaviinemnnniennseeininiaaamaaniad 35

IX

Statutes, regulations and rule—Continued: Page
42 U.S.C. T611D(eM2SK BV) .......--.eccceceeseeserenrreseernrnsenrenees 35
Se es Sen G YD cxcescecssscscessaceserssssnsczsnecencteecesces 35
ree ecnpnemenenemmbanneenaseenemnnenen 35
rc 35
EE 59a
ET 3
| Ee 3, 59a
eee 39, 59a
es SNEED ccienssncnecnencnscesvecsescsczcnnssnesneneee 35, 39, 59a
42 U.S.C. TEZ1(a SMAI) ........0-0cecererseressercersrecsesenenee 35, 59a
I ID ss scicnennseanesnennssuenenenenntnasesnnasante 35
ee 35
i 35
eee 35
ee 35
ae, Se ccconcenedncscnsseessesssesecncnenencesnsenenses 35
ee 35
en 35
a 35
a 35
a 42
I 42
ce 35
A 35
a 35
or cersceerenesensscenneenneennsneneenenveee 35
42 U.S.C. TEAHOM2Z)(B)UV).....---cecererreesereerersereseeesensenens 35
ee 35
ricer cnrienierceeensenneineeienannsinamnenuates 3

ED sisi crreesiensssenneneinivnerenetanenenneetcennnennteens 35

X

Statutes, regulations and rule—Continued: Page
en aerials crpeinaiieetateteeeete eras 35
es Pe ccrsceereicssteacnssittoninincateestaentatytniestsintienempessmnnestal 35
I is Ce rcceniteicsnteecnrsicansnaitetcinaaniastetesiansenans 35
ae es HRI cicterrcsiccisssssinnsiinsssethederntanininainnninseiameinnats 35
ie CE caniceniiitesscasesienecnmiecienniamiamunattionsentsadesia 42
es ee ictecensetesittcntrssivasesrinienitscensitiacstashiaseinattiasiectaienianeiind 35
Ss TI icici ncorcieisarinstontinertenepntemenansemenuats 35
a ID censoccecsicctiteeerticrmatemssasiasiomnibtannmanaatia’ 35
Ge TE Ce ceteneirentnentnmenimniiammeneinnionl 35
es Ce eecccdctcecsontesntrantesicinentnnennnntiamentineme 42
eis I ceccenatiidssiicncciaietiineatihatiieeptaineniuenmunpenindel 35
is, Ce ciniscinticsdincsnshsantiachitdeanesbepanssinaieemaiempsionicdameaniaal 35
es, Te statistic circ coecenccnasheiesemepepsnanaimmanaine 35
ER ee ae 35
Se es i ccisinninssintinitinerreisternincgipereisnainieestaniatentantaties 35
Ee a Ce ieaainsintsittnstnecianintintantareatnniaineatiaeneniin —
Ce es Ce ricieciceticiniaeaieiel apa aaseaeieertiapieaientecacirnteales 35
a i iteneaiessttenaniatiisabiitcteablensanistpeiadtaiaieteiduetanie 35
a, i ccrierrtes iesncssietinssistecniieieieshatiaatesintaasihastdntsesaninibiaal s
es Se crecccsenteaniicstintientienstintaptteatinieaiinisteniieaiie 35
ks Pe ircierennntccncniinnmnemencdinmuimnntias 35

Clean Air Act Amendments of 1990, Pub. L. No.
101-549, 104 Stat. 2399:

Wty GE, BO SRR, BG GRR. GIG cccccsecensnssasereemepnsseresenssmeensonns 4

Clean Air Amendments of 1970, Pub. L. No. 91-604,
84 Stat. 1676:

Bo Ee eee nee 4
Or, 4
Clean Water Act, 33 U.S.C. 1251 et 869. .............cccccceseeoes 49, 54

GB DKS. BRI TID ccercsereserrasssennscecsernsnnsneesncsesnnesnmnennemnents 22

XI

Regulations and rule—Continued: Page
Exec. Order No. 12,866, 3 C.F.R. 639 (1994) .................. 14, 56
Exec. Order No. 13,563, 3 C.F.R. 215 (2012) ..........cccceeee sees 14
i Bie icttacceccmnannnintininnsnctiinntipseninniniimmemameas 8
i Te Tl Oe cqeeenenpesenterenseseniecemiinsctonstnnatvanseimsinntiieaian 10

Miscellaneous:

Envtl. Protection Agency, Regulatory /mpact
Analysis for the Final Mercury and Air Toxics

I ecrerensetesecretctntmeesinememneninnmnsmenenen 55
54 Fed. Reg. 38,044 (Sept. 14, 1989) ...........ccccccccccecceecnnennnnes 7
65 Fed. Reg. (Dec. 20, 2000):

Sh, TPO EED crccnsznsuniersnsemnnsqesnenenenquenasinenmnmnanemenanmnanin 8
I, HE cntnentenetinsenemsintiieinenianioapionpenieaianeiangeieinnpenrcaninnnmnanat SS)
1 FR evicxnvseestesetedenioniteneniisiensenntnnnonanemsenmneneesneenneumaneenenelanentnt: 9
i FD ecesasesnansenecseensmtoseesnscusmsasenmeunsrsimeammnnscnmnninsinn 8,9
ee 46
i Fa asestectensetenradharnernensincssputesinesinsiinbeniotallastateimsteanessesinnntaainstd 8, 9, 46
70 Fed. Reg.:
ic ts SE I ceretecceniecnartenmnasecansanicantenmtasamonets 10
OE III creinscomisexinonetiomeuiateneciniensnionentestionses 10
76 Fed. Reg. (May 3, 2011):
EE acnattscnseensriosaantconnessincninenniniendinnmanimneananteiatastencaeete 11
is nceerengeineeenenenenmmnniepennnennansemceeneemmnaninsemesnenminnintiets ll
SD TR ND cenneecnimensencncinemeninmntenemnmnenenmatns 11
i IEE ecicisisesensenrsmowminennesmncnsienanictaameninentenaseeanianetiian 11
ee 12, 47
SD, PD cncnreesecsvennenmeennntememunnnnmenneenmmnattion 11, 45
ee iicetineiereicchinieniaetnidsiaseeaianngainieaninotiite 11, 12, 32, 34, 46
i, SD tencricientenicursmnivensinncnaunniivaniininnainiantiniats 47
a 47

XII

Miscellaneous—Continued: Page
ii TET idiibinieltigninsiseprmmnennddduieiennemetitenninianamnneate 46, 47
I cnerssrinicidinnninsimienentinetajuibgteendemainas 11

77 Fed. Reg. (Feb. 16, 2012)
ih: Ti licnrastirestenmseneenmniopenseninatseniennimininsiineanidianmnntennauiintitin 12
ee En ER ee 14
SE ee en 2, 14, 20, 43, 55
dT os soncnecsencnmesaseameienecieceliampieanindsaniesasameesttibien 13, 14, 15, 53
1 RIES eeesrenesenserstemmeeessernsmmsemesnnnenimemannminenelinin 6, 13
Sis TE ineeitineieiemnnenemsnnenvnspeneestatinnnninimnnanmiennniunnnintatnies 57
SE iciesscsernesnsvsemenierennahiansnninnenansteneminimmmontnmans 47
SN, FE a elcrnsccenssconsniiannnsnentaveniscinninasenansbniigpemnimininnsnin 13
EN 46
CS ET ticomcucessnprorennsemniccunintnnitigianveiatinenmuimvtietitit 12
TE irapteassenpeanenpsneimenpinasierpenenisienmnanniueipianimenniassnin 14,15
is TET sinetiniibienianciamenenastncnentincmnnencenitaenieisinnendngibeninnannieniai 12
I iranencaseenisinstnineghnnienapniainnninimicainmeiidiei 13
ITI curbs dpeeieanrtobaiecenitanapdlaesitaasattaiaiadtisai 13, 15, 47
0, i nietannnierenentnnannssinuenscememnnnmmmimemninannanaiiiin 13
i, ee ceecseernnscenenaeninnnionsnnntsieniesinmeetemmeianienaninineneatin 13
Oo Re ieterdeniecmnssvavsaspecssemmnnctesessensenmetenesiinnaniennmeinnmaniats 13
i ientscnnsicaisennnivaieicicninnneneinipannenisienatecsinpnnpelacintuniats 13
i Ti ciienieiithesieennenernnienncernnreneanenstnnepreneieniennnceninenemensenenieiita 57
a 13
Se iesessicieerctanntecicsnineenimnerenenmminnnianiananinnt 14, 15
i Ti cihieenaspneniinenenaianstignuenmnmesennaeinnnnitnninmetants 55, 57
A cesnnictncseinnmsiciominnanteamativemaninascastasmmummcmmennencemmianainiti 14

78 Fed. Reg. 10,020-10,021 (Feb. 12, 2013) ...............cccccceoeee 54

79 Fed. Reg. (Oct. 6, 2014):
i, Ga IES seneceertncstnasesecncnnmmcssniciennmunianiteneisnnaeisansomninians 54

XIII

Miscellaneous—Continued: Page

HLR. Rep. No. 490, 101st Cong., 2d Sess. (1990) ...........-.- 1
Michael A. Livermore & Richard L. Revesz,

Rethinking Health-Based Environmental

Standards, 89 N.Y.U. L. Rev. 1184 (2014) .............-.ccccee 56
Nat’ Ctr. for Envtl. Econ., Office of Policy,

Envtl. Protection Agency, Guidelines for Preparing

Economic Analyses (2014), http//yosemite. epa.gov/

ee/epa/eerm.nsf/vwAN/EE-0568-50.pdf/ $file/

EE-0668-50. pdf .......cscecssssoscsceceserssssserssnsnessnssssnessncssssscnsersnssees 56
Office of Mgmt. & Budget, OMB Circular A-4 (2003),

http://www.whitehouse.gov/sites/default/files/

omb/assets/omb/circulars/a004/a-4. pdf...........--..----e0eceeees 56
Samuel J. Rascoff & Richard L. Revesz,

The Biases of Risk Tradeoff Analysis: Towards

Parity in Environmental and Health-and-Safety

Regulation, 69 U. Chi. L. Rev. 1763 (2002).........-----0-s+00 56
S. Rep. No. 228, 10ist Cong., 1st Sess. (1989)............ 4, 26, 57
Staff of the Senate Comm. on Environment and

Public Works, 103d Cong., Ist Sess., 1 A Legislative

History of the Clean Air Act Amendments of 1990

(Comm. Print 1993) .............c--c.esscsssssesecesseerenssorenssoressensess 8, 28
Cass R. Sunstein, Cost-Benefit Default Principles,
99 Mich. L. Rev. 1651 (2001) ..........c-c-ccenceseereeeneensneersnnennnens 39

Cass R. Sunstein, Essay, The Real World of Cost-
Benefit Analysis: Thirty-Siz Questions
(and Almost as Many Answers), 114 Colum.

BO ee 56
The New Oxford American Dictionary (2d ed.
DIOG) ....00ccecccecsesccesessseneseccscensseccsecnosonsessovenessssasesscsssonssssosees 22, 41

In the Supreme Court of the Anited States

No. 14-46
STATE OF MICHIGAN, ET AL., PETITIONERS
vz.

ENVIRONMENTAL PROTECTION AGENCY, ET AL.

No. 14-47
UTILITY AIR REGULATORY GROUP, PETITIONER

vz.
ENVIRONMENTAL PROTECTION AGENCY, ET AL.

No. 14-49
NATIONAL MINING ASSOCIATION, PETITIONER
v.

ENVIRONMENTAL PROTECTION AGENCY, ET AL.

ON WRITS OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE DISTRICT OF COLUMBIA CIRCUIT

BRIEF FOR THE FEDERAL RESPONDENTS

OPINIONS BELOW

The opinion of the court of appeals (Pet. App. la-
98a) is reported at 748 F.3d 1222.’ The final rule
promulgated by the Environmenta] Protection Agency

' Citations to Pet. App. are to the appendix to the petition for a
writ of certiorari filed by the National Mining Association in No.
14-49.

(1)

2

(Pet. App. 196a-1160a) is published in 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 writs of certiorari were filed on July 14,
2014. Those petitions were granted on November 25,
2014, limited to the following question: “Whether the
Environmental Protection Agency unreasonably re-
fused to consider costs in determining whether it is
appropriate to regulate hazardous air pollutants emit-
ted by electric utilities.” The jurisdiction of this Court
rests on 28 U.S.C. 1254(1).

STATUTES INVOLVED

Pertinent provisions of the Clean Air Act, 42 U.S.C.
7401 et seg., are reprinted in the appendix to this
brief. App., infra, la-60a.

STATEMENT

This case involves the determination of the Envi-
ronmental Protection Agency (EPA) that it is “appro-
priate and necessary” to regulate emissions of haz-
ardous air pollutants from coal- and oil-fired power
plants under the Clean Air Act (CAA or Act),
42 U.S.C. 7412(n)(1)(A). EPA concluded that costs are
not relevant to the decision whether to regulate such
emissions, but that costs should instead be taken into
account when setting emission standards under
42 U.S.C. 7412(d). When EPA promulgated those
standards, it issued a Regulatory Impact Analysis
(RIA) estimating that the total quantifiable benefits of
those standards would exceed their total costs by
between $27 billion and $80 billion (measured in 2007
dollars) each year. 77 Fed. Reg. 9305-9306 (Feb. 16,

3

2012) (2012 Final Rule). The court of appeals upheld
EPA’s decision not to consider costs when making the
threshold listing decision as “clearly permissible”
under Chevron U.S.A. Inc. v. NRDC, 467 U.S. 837
(1984). Pet. App. 25a.

1. a. The CAA’s core purpose is “to protect and
enhance the quality of the Nation’s air resources so as
to promote the public health and welfare and the pro-
ductive capacity of its population.” 42 U.S.C
7401(b)(1). To that end, the Act establishes a compre-
hensive set of regulatory programs to control air pol-
lution from both stationary and mobile sources. Such
programs include the National Ambient Air Quality
Standards (NAAQS) program, see 42 U.S.C. 7408-
7410; the New Source Performance Standards (NSPS)
program, see 42 U.S.C. 7411; the National Emissions
Standards for Hazardous Air Pollutants (NESHAP)
program, see 42 U.S.C. 7412; and the Motor Vehicle
Emission and Fuel Standards program, see 42 U.S.C.
7521-7544, 7547-7554.

For each of those programs, the Act establishes a
multistage regulatory process in which first EPA
makes a determination about the dangers posed to
public health or welfare by certain types of pollution,
and then EPA or the States promulgate emission
standards that sources must meet to address those
dangers. See 42 U.S.C. 7408(a), 7409(a), (b) and
(d)(1), 7410, 7411(b), 7412(c) and (d), 7521(a). EPA
does not consider costs when assessing the dangers at
the first stage, but it does consider costs, in accord-
ance with the relevant provisions, when setting stand-
ards at the second stage. See tbid.

b. This case involves the NESHAP program, under
which EPA regulates stationary-source emissions of

4

more than 180 “hazardous air pollutants” specifically
identified in 42 U.S.C. 7412(b). Such pollutants cause
serious health impacts, such as cancer, neurological
disorders, reproductive dysfunctions, and death.
H.R. Rep. No. 490, 101st Cong., 2d Sess. 315 (1990)
(1990 House Report).”

As originally established in 1970, the NESHAP
program required EPA to generate the list of hazard-
ous air pollutants and to establish health-based emis-
sion standards for each one. Clean Air Amendments
of 1970, Pub. L. No. 91-604, § 112(b)(1)(A) and (B),
84 Stat. 1685. By 1990, however, EPA had set stand-
ards for only seven pollutants, and those standards
applied only to a handful of source categories. New
Jersey v. EPA, 517 F.3d 574, 578 (D.C. Cir. 2008),
cert. dismissed, 555 U.S. 1162, and, cert. denied, 555
U.S. 1169 (2009); 1990 House Report 322; S. Rep. No.
228, 101st Cong., 1st Sess. 131 (1989) (1989 Senate
Report).

Frustrated by the slow pace of regulation, Con-
gress completely overhauled the NESHAP program
in the Clean Air Act Amendments of 1990 (1990
Amendments), Pub. L. No. 101-549, Tit. III, § 301,
104 Stat. 2531. In doing so, Congress eliminated much
of EPA’s discretion under the original statute.

First, the 1990 Amendments included a list of more
than 180 hazardous air pollutants to be regulated.
42 U.S.C. 7412(b)(1) (Supp. II 1990). Congress also
directed EPA to publish and revise “a list of all cate-

2 The CAA distinguishes hazardous air pollutants from “criteria
air pollutants”—ozone, particulate matter, nitrogen oxides, sulfur
dioxide, lead, and carbon monoxide—which are regulated under

the NAAQS program. 1990 House Report 196, 315; see 42 U.S.C.
7408-7410.

D

gories and subcategories of major sources” of the
listed pollutants. 42 U.S.C. 7412(ce)(1). A “major
source” is any stationary source or group of stationary
sources at a single location and under common control
that emits or has the potential to emit ten tons per
year or more of any single hazardous air pollutant, or
25 tons per year or more of any combination of haz-
ardous air pollutants. 42 U.S.C. 7412(a)(1). The 1990
Amendments also required EPA to list any category
or subcategory of “area sources”—defined to include
stationary sources of hazardous air pollution that are
not “major source[s]”—that the agency concludes
“presents a threat of adverse effects to human health
or the environment * * * warranting regulation
under this section.” 42 U.S.C. 7412(a)(2), (c)(1) and
(3).

EPA's decision to list a source category imposes no
direct obligation on any regulated entity and is not
“final agency action” subject to judicial review.
42 U.S.C. 7412(e). The listing decision does, however,
require EPA to promulgate emission standards for
listed hazardous air pollutants emitted by sources
within that category. 42 U.S.C. 7412(d)(1). Those
standards generally must “require the maximum de-
gree of reduction in emissions of the [listed] hazard-
ous air pollutants * * * that [EPA] * * * deter-
mines is achievable for new or existing sources in the
category or subcategory to which such emission
standard applies.” 42 U.S.C. 7412(d)(2); see 42 U.S.C.
7412(d)(5) (authorizing alternative standard for area
sources).

Congress prescribed a specific methodology for
identifying the “maximum degree of reduction” that is
“achievable” by sources within a particular category.

6

42 U.S.C. 7412(d)(3). In general, for existing plants,
the emission standard “shall not be less stringent, and
may be more stringent than” the average emission
limitation that is already being 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
EPA to set standards that are at least as stringent as
the average emission limitations of the five best
performers for source categories with fewer than 30
sources). The practical effect of that requirement is to
create an irrebuttable presumption that a particular
degree of emission reduction is “achievable” by
sources within a category if it is actually being
achieved by a significant percentage of such sources.
In determining whether more stringent standards
should be imposed on sources within a particular
category—i.e., whether greater emission reductions
are “achievable” by such sources—EPA must consider
such factors as cost, energy requirements, and other
health and environmental impacts. 42 U.S.C.
7412(d)(2). EPA refers to standards set at the mini-
mally stringent level as “floor” standards, and to more
stringent standards as “beyond-the-floor” standards.
77 Fed. Reg. at 9307.

Section 7412 authorizes EPA to delete particular
source categories from the list in specified circum-
stances. See 42 U.S.C. 7412(c)(9)(B)(i) and (ii). Sec-
tion 7412 does not authorize EPA to consider the costs
of complying with the Section 7412(d) emission stand-
ards in determining whether to delist a particular
source category.°

* The 1990 Amendments also require EPA to review Section
7412(d) standards within eight years after they are promulgated to
ensure that they are sufficient to protect public health with an

7

e. This case involves one source category of haz-
ardous air pollutants—coal- and oil-fired “electric
utility steam generating unit[s],” ie., power plants.
42 US.C. 7412(aX(8). The 1990 Amendments estab-
lished a special procedure that EPA must follow be-
fore deciding whether to list power plants for regula-
tion under the NESHAP program. If EPA deter-
mines that power plants should be listed, however, it
must set emission standards in accordance with the
same statutory provisions that apply to other listed
source categories. See 42 U.S.C. 7412(n)(1)(A) (stat-
ing that EPA “shall regulate [power plants] under
[Section 7412], if [EPA] finds such regulation is ap-
propriate and necessary”); Pet. App. 36a-38a.

Congress required EPA to perform, within three
years of the 1990 Amendments, “a study of the haz-
ards to public health reasonably anticipated to occur
as a result of emissions” of listed hazardous air pol-
lutants from power plants “after imposition of the
requirements” set forth elsewhere in the Act. 42
U.S.C. 7412(n)(1)(A). That provision reflects the fact
that Title IV of the Act established a new program to
control power-plant emissions of two “criteria
pollutants”—sulfur dioxide and nitrogen oxide—that

ample margin of safety. 42 U.S.C. 7412(f2). That “residual risk”
review tracks the two-step process that was in place before the
1990 Amendments were enacted. See 42 U.S.C. 7412(fK2B)
(preserving EPA interpretation set forth in 54 Fed. Reg. 38,044
(Sept. 14, 1989)); NRDC v. EPA, 824 F.2d 1146, 1164-1166 (D.C.
Cir. 1987) (en banc). Under that residual-risk review, EPA first
evaluates health factors alone and determines the “safe[]” level of
risk. 42 U.S.C. 7412(fX2A). EPA then determines whether more
stringent standards are necessary to protect public health with an
“ample margin of safety,” taking into account costs and other
relevant factors. /bid.

8

contribute to the phenomenon of acid rain. 42 U.S.C.
7408(f)(1)(A); see 42 U.S.C. 7651-7651f. Congress
understood that the controls used to meet the new
acid-rain requirements and other requirements of the
Act could have the ancillary benefit of reducing
hazardous-air-pollutant emissions from power plants.
See Staff of the Senate Comm. on Environment and
Public Works, 103d Cong., 1st Sess., 1 A Legislative
History of the Clean Air Act Amendments of 1990
1416 (Comm. Print 1993) (1990 CAA Legislative
History); Nat'l Mining Ass’n (NMA) Br. 5-8; Util. Air
Regulatory Grp. (UARG) Br. 9-10. Because the
hazardous-air-pollutant reductions associated with
implementation of the other CAA programs were not
yet known, Congress concluded that EPA should
study the risks remaining after implementation of
those programs before deciding whether to list power
plants for regulation under the NESHAP program.
See 42 U.S.C. 7412(n)(1)(A).

2. a. After the 1990 Amendments became law,
EPA listed, and promulgated Section 7412 emission
standards for, scores of source categories, cover-
ing virtually the full range of American industry.
See 40 C.F.R. Pt. 63. In 1998, EPA completed the
statutorily-required study of the health effects of
power-plant emissions. 65 Fed. Reg. 79,825-79,826
(Dec. 20, 2000).

In December 2000, EPA determined that regula-
tion of coal- and oil-fired power plants under Section
7412 was “appropriate and necessary.” 65 Fed. Reg.
at 79,830. EPA therefore added such power plants to
the list of source categories to be regulated under
Section 7412. Jd. at 79,831. EPA also determined that
it was “not appropriate or necessary” to regulate

9

natural-gas-fired power plants, and it accordingly
chose not to list those plants. /bid.

As part of its 2000 determination, EPA found that
coal- and oil-fired power plants are the largest source
of domestic anthropogenic mercury emissions, and
that “[mJercury is highly toxic, persistent, and bioac-
cumulates in food chains.” 65 Fed. Reg. at 79,827.
EPA found that mercury emitted by power plants falls
into water bocies and then becomes concentrated in
the bodies of predatory fish, which absorb the methy]-
mercury contained by their food sources. When hu-
mans eat those contaminated fish, they too are ex-
posed. The methylmercury from the fish poses an
especially great risk to children born to women ex-
posed to high levels of methylmercury during preg-
nancy. J/bid. EPA explained that methylmercury
“readily passes * * * to the fetus and fetal brain,”
and that children exposed to methylmercury during
pregnancy have exhibited developmental neurological
abnormalities and delays. Jd. at 79,829. EPA esti-
mated that approximately seven percent of American
women of childbearing age—.e., millions of women—
were being exposed to methylmercury in amounts that
exceed a health-protective level. bid.

Although EPA’s 2000 finding focused primarily on
the hazards posed by mercury emissions, the agency
also found that the cancer-related risks posed by oth-
er metals emitted by power plants presented a poten-
tial public-health concern, and that acid-gas and dioxin
emissions likewise warranted further evaluation.
65 Fed. Reg. at 79,827. EPA also identified a number
of available emission controls that are effective at

reducing emissions of mercury and other hazardous
air pollutants. /d. at 79,830.

10

b. As a result of the 2000 listing decision, EPA was
required to promulgate Section 7412(d) emission
standards for all hazardous air pollutants emitted by
power plants within two years. See 42 U.S.C.
7412(c)(5) and (e). EPA did not meet that deadline.
In 2005, EPA attempted to reverse the 2000 determi-
nation, to remove power plants from the Section
7412(c) list, and instead to regulate power-plant mer-
cury emissions under the NSPS program, 42 U.S.C.
7411. 70 Fed. Reg. 16,004 (Mar. 29, 2005) (2005
Delisting Rule). In a related rulemaking, EPA prom-
ulgated Section 7411 standards of performance for
mercury emissions. 70 Fed. Reg. 28,606 (May 18,
2005).

Numerous parties petitioned for judicial review of
the 2005 Delisting Rule and the accompanying Section
7411 standards. The D.C. Circuit granted the peti-
tions and vacated both rules. New Jersey, 517 F.3d at
583. The court held that the 2005 Delisting Rule “vio-
lated the [Act’s] plain text” by failing to comply with
the delisting requirements set forth in 42 U.S.C.
7412(c)(9). New Jersey, 517 F.3d at 582. The govern-
ment 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; mot. to
dismiss filed Feb. 6, 2009). This Court dismissed the
government’s petition under Sup. Ct. R. 46, New Jer-
sey 555 U.S. at 1162, and it denied an industry group’s
petition for a writ of certiorari, Utility 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, power
plants remained on the Section 7412(c) list pursuant to
EPA’s 2000 listing decision. In 2011, EPA solicited

1]

public comments on a proposed rule establishing
emission standards for listed hazardous air pollutants
emitted by such plants. 76 Fed. Reg. 24,976 (May 3,
2011) (2011 Proposed Rule). EPA proposed to reaf-
firm its 2000 “appropriate and necessary” deter-
mination and listing decision. /d. at 24,993-25,020. It
also relied on robust new technical analyses confirm-
ing the health and environmental hazards posed by
power-plant emissions of hazardous air pollutants. /d.
at 24,986, 24,993-25,020.

The preamble to the 2011 Proposed Rule also set
forth EPA’s proposed interpretation of Section
7412(n)(1)(A)’s directive to regulate power plants “if
[EPA] finds such regulation is appropriate and neces-
sary.” 76 Fed. Reg. at 24,986 (emphasis omitted); see
id. at 24,986-24,993. EPA observed that Section
7412(n)(1)(A) “provides no clear standard to govern
EPA’s analysis,” and that the broad phrase “appropri-
ate and necessary” therefore “convey[s] considerable
discretion to [EPA] in determining what is appropri-
ate and necessary in a given context.” Jd. at 24,987.

EPA then proposed that it is “appropriate” to regu-
late power plants under Section 7412(n)(1)(A) if, at the
time of the finding, (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. 76 Fed. Reg. at 24,988-
24,989. EPA also stated that, although the term “ap-
propriate” is ambiguous, it is best interpreted in the
present statutory context not “[to] allow for the con-
sideration of costs in assessing whether hazards to
public health or the environment are reasonably antic-
ipated to occur based on [power-plant] emissions.” /d.
at 24,989. EPA observed that its approach was “con-

12

sistent with the overall structure of the CAA,” and
that Congress had not allowed the agency to consider
costs when listing any other source category for regu-
lation or when evaluating whether any source catego-
ry should be delisted. Ibid.

EPA further proposed that it may find regulation
to be “appropriate” based “on a finding that any single
{hazardous air pollutant] emitted from [power plants]
poset a hazard to public health or the environment.”
76 Fed. Reg. at 24,988. It noted that Section 7412
does not mandate distinct “appropriate and neces-
sary” findings for each individual pollutant, and that
EPA must promulgate standards for all hazardous air
pollutants emitted by major-source categories subject
to regulation. Jd. at 24,989 (citing National Lime
Ass'n v. EPA, 233 F.3d 625, 633 (D.C. Cir. 2000)).
EPA also proposed that regulation of power plants is
“necessary” under Section 7412(n)(1)(A) if public-
health or environmenta) hazards posed by power-plant
emissions will not be addressed through the imple-
mentation of other CAA requirements. /d. at 24,990-
24,992.

4. In February 2012, EPA issued a final rule
promulgating emission standards for power plants.
77 Fed. Reg. at 9304.

a. The preamble to the final rule set forth EPA’s
final interpretation of Section 7412(n)(1)(A)’s “appro-
priate and necessary” standard. 77 Fed. Reg. at 9320-
9329. 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] * * * without considering costs.” /d. at 9327.

b. The preamble also reaffirmed EPA’s December
2000 “appropriate and necessary” finding and listing

13

decision, as well as the additional analyses of the
health and environmental hazards posed by power-
plant hazardous-air-pollutant emissions that the agen-
cy had discussed when it issued the 2011 Proposed
Rule. 77 Fed. Reg. at 9310-9364. EPA ultimately
found it “appropriate” to regulate coal- and oil-fired
power plants under Section 7412 because, inter alia:
(1) such plants remain by far the largest domestic
source of mercury emissions and of many other listed
hazardous air pollutants; (2) mercury and other emit-
ted pollutants pose hazards to public health and the
environment; and (3) effective controls remain availa-
ble to reduce emissions. /d. at 9362-9363, 9366 (noting
that various findings provided independent bases for
regulation). EPA separately reaffirmed that it is
“necessary” to regulate power-plant emissions be-
cause, inter alia, implementation of other CAA re-
quirements would not eliminate the identified hazards
to public health. /d. at 9363.

c. Pursuant to Section 7412(d), the 2012 Final Rule
established emission standards for listed hazardous
pollutants emitted by power plants. 77 Fed. Reg. at
9366-9376. EPA explained that those standards could
be met—and, in fact, were in many cases already
being met—by existing power plants using proven and
available control technologies. /d. at 9307, 9366-9376.
With respect to almost every pollutant, EPA set the
emission standard at the least stringent “floor” level
allowed by Congress. /d. at 9367 (Tbl. 3), 9369; see
42 U.S.C. 7412(d)(3)(B). EPA noted that those stand-
ards would dramatically reduce power-plant emissions

of mercury and other pollutants. 77 Fed. Reg. at 9306,
9424-9425.

14

d. In accordance with Executive Orders 12,866 and
13,563, EPA also issued an RIA that estimated the
costs and benefits of the new power-plant emission
standards. 77 Fed. Reg. at 9305-9306, 9426-9432;
4 J.A. 904-956 (RIA excerpts). That analysis project-
ed that the standards, once fully implemented in 2016,
would yield annual monetized benefits of between $37
billion and $90 billion (measured in 2007 dollars), as
compared to annual costs of $9.6 billion. 77 Fed. Reg.
at 9305-9306.

The RIA explained that the rule would achieve sig-
nificant reductions of emissions of mercury and other
listed hazardous air pollutants, and that the technolo-
gies used to reduce those emissions would also have
the significant ancillary benefit of reducing emissions
of two criteria pollutants—particulate matter (specifi-
cally PM,,) and sulfur dioxide (a precursor to PM,,).
77 Fed. Reg. at 9305; 4 J.A. 954-955. Although those
criteria pollutants are not listed as hazardous air
pollutants, they are directly regulated by the final rule
as surrogates for listed hazardous air pollutants. See
77 Fed. Reg. at 9305. EPA explained that the “great
majority” of the quantifiable benefits identified in the
RIA are “attributable to co-benefits from reductions
in PM,,-related mortality.” /bid. Those quantifiable
benefits include the prevention of up to 11,000 prema-
ture deaths each year. Jd. at 9306, 9445; see id. at
9426-9432.

EPA made clear 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 explained that only one
of the direct health and environmental benefits from
reducing emissions from hazardous air pollutants

15

could even be partially quantified. /d. at 9306, 9323,
9363, 9426-9432; see 4 J.A. 905, 918, 921-922, 940-953. *
EPA ultimately concluded, however, that, “[u]pon con-
sidering these limitations and uncertainties, it re-
mains clear that the benefits of this rule * * * are
substantial and far outweigh the costs.” 77 Fed. Reg.
at 9306.

4. Petitioners filed consolidated petitions for judi-
cial review of the 2012 Final Rule in the D.C. Circuit.
Other power producers and other States intervened in
support of the rule. As relevant here, petitioners
argued that EPA must consider costs when determin-
ing whether regulation of power plants is “appropri-
ate” under Section 7412(n)(1)(A). Pet. C.A. Br. 41; see
Pet. App. 24a-25a. Petitioners also challenged numer-
ous other aspects of the 2012 Final Rule, including
EPA’s factual) findings with respect to the harmful
effects of exposure to mercury, acid gases, and other
pollutants. Pet. C.A. Br. 48-55.

a. The court of appeals upheld EPA’s “appropriate
and necessary” finding and its accompanying decision
to list power plants. Pet. App. 16a-54a. The court
explained that the Act “does not evince unambiguous
congressional intent on the specific issue of whether

* The RIA explained that there are “daunting” obstacles to suc-
cessfully quantifying, in monetary terms, the direct public-health
benefits from reducing emissions of hazardous air pollutants.
4 J.A. 951. Those obstacles include (1) gaps in toxicological data;
(2) uncertainties in extrapolating results from high-dose animal
experiments to estimate human effects at lower doses; (3) limited
ambient and personal exposure monitoring data; (4) difficulties in
tracking diseases, such as cancer, that have long latency periods;
and (5) insufficient economic research to support the valuation of
the health impacts often associated with exposure to individual air
toxics. /bid.

16

EPA was required to consiier costs in making its
‘appropriate and necessary’ determination under
[Section 7412(n)(1)(A)].” Jd. at 25a. It found EPA’s
interpretation to be “clearly permissible” under Chev-
ron, 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 highlighted its longstanding “re-
fus[al] to find implicit in ambiguous sections of the
[CAA] an authorization to consider costs that has
elsewhere, and so often, been expressly granted.” /d.
at 467; see Pet. App. 25a-26a; see also id. at 31a n.2.
The court of appeals also noted that Congress (1) has
required EPA to regulate other sources of pollution
without considering cost; (2) has not allowed EPA to
consider costs when deciding whether to delist a
source category under the NESHAP program; and
(3) has required EPA to take account of costs when
setting the level of regulation of power-plant hazard-
ous-air-pollutant emissions. See id. at 27a-29a, 31a;
see also 42 U.S.C. 7412(c) and (d)(2). The court unan-
imously rejected all other aspects of petitioners’ chal-
lenges to the 2012 Final Rule. Pet. App. 16a-22a, 33a-
54a.

b. Judge Kavanaugh concurred in part and dis-
sented in part. Pet. App. 68a-98a. Judge Kavanaugh
agreed with petitioners that, in order to determine
whether it is “appropriate” to list power plants for
regulation under the NESHAP program, EPA must
consider the costs associated with such regulation. /d.

17

at 73a-84a. Judge Kavanaugh joined all other aspects
of the panel’s per curiam opinion.

SUMMARY OF ARGUMENT

EPA properly declined to consider costs in decid-
ing that it was “appropriate and necessary” to list
power plants for regulation under the NESHAP pro-
gram. 42 U.S.C. 7412(n)(1)(A). With respect to all
other source categories, the CAA unambiguously
directs EPA to consider costs only in setting the
proper level of regulation, not in making the threshold
determination whether a particular source category
should be listed. Petitioners have identified no textual
or practical justification for requiring a different ap-
proach to the listing and subsequent regulation of
power plants. Because EPA’s interpretation comports
with the Act’s text, structure, and purposes, the court
of appeals correctly upheld the agency’s decision un-
der Chevron U.S.A. Inc. v. NRDC, 467 U.S. 837
(1984).

A. In the 1990 Amendments, Congress directed
EPA to conduct a study of the health hazards posed
by the emission of hazardous air pollutants from pow-
er plants. 42 U.S.C. 7412(n)(1)(A). It instructed EPA
to regulate such emissions under Section 7412 if the
agency concluded that doing so was “appropriate and
necessary after considering the results of the study.”
Ibid. That open-ended phrasing gives EPA discretion
to interpret Section 7412(n)(1)(A) in accordance with
Section 7412’s broader text, structure, and purposes.

B. EPA’s approach to the listing of power plants
for NESHAP regulation is consistent with the CAA
provision that governs the listing of other stationary-
source categories. See 42 U.S.C. 7412(c). That provi-
sion requires EPA to list sources based on either the

18

volume of their hazardous-air-pollutant emissions
(major sources) or the risks posed by such emissions
to health or the environment (area sources). Thus,
with respect to all other stationary sources of hazard-
ous air pollutants, EPA’s decision whether to list a
particular source category must be made without
regard to cost. Petitioners rely heavily on Congress’s
enactment of a separate provision that is specific
to the listing of power plants. See 42 U.S.C.
7412(n)(1)(A). But neither the text of that provision,
nor Congress’s reasons for enacting it, suggest that
Congress wished to encourage (much less to require)
EPA to consider costs in making the threshold listing
decision.

The reasonableness of EPA’s approach is rein-
forced by the statutory provision that governs EPA’s
delisting of previously listed source categories. See
42 U.S.C. 7412(c)(9). Under that provision, which
applies equally to power plants and all other station-
ary sources, costs are irrelevant to EPA’s determina-
tion whether a particular source category should be
delisted. EPA reasonably concluded that, if costs are
not relevant to the delisting decision, they should also
be irrelevant when the agency decides whether to
include power plants on the list in the first place.

Other textual and structural aspects of the CAA
confirm the reasonableness of EPA’s conclusion that
costs are irrelevant to the listing determination.
Although the Act directs EPA to take account of costs
when making many other regulatory decisions,
Section 7412(n)(1)(A) imposes no such requirement.
Cf. Whitman v. American Trucking Ass’ns, 531 U.S.
457, 467-468, 471 (2001). EPA’s interpretation of
Section 7412(n)(1)(A) is also consistent with various

19

other CAA regulatory programs involving multistage
decisionmaking in which (1) EPA makes a threshold
decision to regulate based exclusively on health and
environmental factors, and (2) EPA or the States then
consider costs (among other relevant factors) in
choosing the proper level of regulation. The CAA’s
repeated use of that approach refutes petitioners’
contention that it is inherently irrational, and/or pre-
sumptively inconsistent with Congress’s intent, to
ignore costs in making the threshold decision whether
to regulate.

C. Petitioners’ contrary arguments lack merit.
First, they emphasize the breadth of the term “appro-
priate,” as well as the common sense point that it is
often reasonable to consider costs in determining
whether particular regulatory burdens should be
imposed. But petitioners fail to acknowledge the basic
congruence between EPA’s approach to power-plant
regulation under the NESHAP program—which
treats costs as relevant only to the formulation of
specific emission standards, not to the threshold list-
ing decision—and the approach that Congress man-
dated for all other source categories. In attacking
EPA’s interpretation of Section 7412(n)(1)(A) as “ut-
ter{ly] irrational[],” NMA Br. 19, petitioners impugn
the very cost-blind listing methodology that Congress
unambiguously mandated for all other types of sta-
tionary sources.

Petitioners also lean heavily on mischaracteriza-
tions of relevant precedent. For example, they cite
decisions like Entergy Corp. v. Riverkeeper, Inc., 556
U.S. 208 (2009), to support their argument that EPA
must consider costs when making regulatory deci-
sions. In fact, those decisions show that statutory

20

silence with respect to costs is typically “meant to
convey nothing more than a refusal to tie the agency’s
hands as to whether cost-benefit analysis should be
used, and if so to what degree.” Jd. at 222. Petition-
ers also invoke the D.C. Circuit’s decision in NRDC v.
EPA, 824 F.2d 1146 (1987) (en banc). They fail, how-
ever, to acknowledge the court of appeals’ statement
in that case that EPA could reasonably have inter-
preted the statute at issue to prohibit the considera-
tion of costs. See id. at 1165-1166 & n.11.

Petitioners’ other arguments are equally unavail-
ing. They highlight 42 U.S.C. 7412(n)(1)(B), which
requires EPA to conduct a study of mercury emissions
and the costs of reducing them. But Congress did not
require EPA to consider the Section 7412(n)(1)(B)
study when deciding whether to regulate power
plants, and the study Congress did make relevant was
not required to consider costs. See 42 U.S.C.
7412(n)(1)(A). Petitioners’ proffered analogy between
Section 7412(n)(1)(A) and Section 7412(f) likewise
does not support their argument, since Section
7412(f)(2) forbids EPA from considering costs when
making the threshold determination whether addi-
tional regulation is warranted.

D. Petitioners rely heavily on EPA’s analysis of the
costs and benefits of the 2012 Final Rule. But the
RIA simply confirms that EPA’s ultimate decision to
regulate power plants would be reasonable even if the
agency were required to take costs into account using
a cost-benefit test. The RIA reflects EPA’s judgment
that the rule’s quantifiable benefits will exceed its
costs by between $27 billion and $80 billion each year.
77 Fed. Reg. at 9305-9306. In attacking that conclu-
sion, petitioners argue that EPA must both (1) consid-

21

er all of the costs that NESHAP regulation of power
plants entails and (2) ignore most of the rule’s bene-
fits. That result-oriented theory is inconsistent with
the basic logic of petitioners’ principal statutory ar-
gument, and it defies common sense.

ARGUMENT

EPA REASONABLY DECLINED TO CONSIDER COSTS
WHEN LISTING POWER PLANTS FOR REGULATION
UNDER SECTION 7412

Under Chevron U.S.A. Inc. v. NRDC, 467 U.S. 837
(1984), this Court must uphold EPA’s interpretation of
Section 7412(n)(1)(A) unless that provision unambigu-
ously requires the agency to consider costs when
deciding whether it is “appropriate” to regulate power
plants under the NESHAP program. See id. at 842-
844; see also EPA v. EME Homer City Generation,
L.P., 134 S. Ct. 1584, 1603 (2014) (noting that the
Court “routinely accord[s] dispositive effect to an
agency’s reasonable interpretation of ambiguous stat-
utory language”). The text, structure, context, and
history of Section 7412(n)(1)(A) support EPA’s deci-
sion to consider costs only in setting the proper level
of NESHAP regulation, not in making the threshold
listing determination.

A. Under Section 7412(n)(1)(A), EPA Has Substantial

Discretion To Determine Whether It Is “Appropriate”

To List Power Plants As A Source Category Subject To
NESHAP Regulation

Section 7412(n)(1)(A) requires EPA to “perform a
study of the hazards to public health” that are “rea-
sonably anticipated to occur” as a result of power-
plant hazardous-air-pollutant emissions after imposi-
tion of other CAA requirements. The provision fur-

22

ther directs the agency to regulate power plants if it
“finds such regulation is appropriate and necessary
after considering the results of the study.” 42 U.S.C.
7412(n)(1)(A) (emphasis added). The central issue in
this case concerns the meaning of the word “appropri-
ate” in that provision.

Standard dictionaries define “appropriate” in broad
terms, to mean “specially suitable,” “fit,” or “proper,”
Webster’s Third New International Dictionary 106
(1993) (capitalization omitted), or “suitable or proper
in the circumstances,” The New Oxford American
Dictionary 76 (2d ed. 2005). As those definitions
make clear, the application of any “appropriate[ness]”
requirement depends on the particular context in
which the term appears. This Court has likewise
recognized that “the word ‘appropriate’ is inherently
context-dependent,” holding that the phrase “[a]ppro-
priate relief” in 42 U.S.C. 2000cc-2(a) is “open-ended
and ambiguous about what types of relief it includes.”
Sossamon v. Texas, 131 S. Ct. 1651, 1659 (2011); see
West v. Gibson, 527 U.S. 212, 217-218 (1999) (holding
that the term “appropriate” is flexible and depends on
statutory context).

Section 7412(n)(1)(A) does not explicitly address
whether EPA must or should consider costs in decid-
ing whether it is “appropriate” to regulate power
plants under the NESHAP program. Neither the
broad statutory term “appropriate,” nor Congress’s
failure expressly to forbid consideration of costs, sug-
gests that costs must be considered. This Court has
never held that statutory silence is a basis for requir-
ing agencies to consider costs. Rather, the determi-
nation whether costs are germane to a particular
agency decision ultimately depends on the details of

23

the particular statutory scheme at issue and the agen-
cy’s views of how to resolve any ambiguity.°

Under Chevron, agencies have discretion to inter-
pret open-ended and ambiguous statutory terms, and
courts must give those interpretations dispositive
effect so long as they are reasonable. 467 U.S. at 842-
844; EME Homer City, 134 S. Ct. at 1603. By declin-
ing to set forth an exclusive list of factors relevant to
the decision whether to list power plants as a
NESHAP source category, Congress implicitly au-
thorized EPA to determine the “appropriate[ness]” of
such listing in light of the CAA’s text, structure, histo-
ry, and purposes. As explained below and by the court

of appeals, EPA properly exercised that interpretive
authority here.

B. The Text, Structure, And History Of The CAA
Establish That EPA’s Interpretation Of Section
7412(n)(1)(A) Is Reasonable

A “fundamental canon of statutory construction” is
that “the words of a statute must be read in their
context and with a view to their place in the overall
statutory scheme.” FDA v. Brown & Williamson

5 See Entergy Corp. v. Riverkeeper, Inc., 556 U.S. 208, 223
(2009) (“{S]ometimes statutory silence, when viewed in context, is
best interpreted as limiting agency discretion.”); see also, ¢.g.,
EME Homer City, 134 S. Ct. at 1603, 1606-1607 (permitting EPA
to consider costs when allocating emission contributions among
upwind States under 42 U.S.C. 7410(aX2)(D)(i)); Whitman v.
American Trucking Ass’ns, 531 U.S. 457, 467-468, 471 (2001)
(holding that EPA may not consider costs when setting NAAQS);
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 in absence of statutory com-
mand).

24

Tobacco Corp., 529 U.S. 120, 133 (2000) (citation omit-
ted). Consistent with that interpretive canon, EPA
construed Section 7412(n)(1)(A) in a way that best
harmonizes regulation of power-plant emissions with
the rules that govern other source categories. The
court of appeals correctly upheld EPA’s interpretation
as “clearly permissible.” Pet. App. 25a; see id. at 18a,
32a-33a.

1. EPA’s interpretation of Section 7412(n)(1)(A) is
consistent with the criteria for listing all other

sources of hazardous air pollutants under Section
7412

Section 7412 requires EPA to make two basic de-
terminations when regulating stationary sources of
hazardous air pollutants. First, EPA must decide
whether any particular source category should appear
on the list of categories subject to regulation.
42 U.S.C. 7412(c). Second, the agency must promul-
gate emission standards for any categories appearing
on that list. 42 U.S.C. 7412(d). With respect to all
source categories other than power plants, the ex-
pected costs are relevant to EPA’s choice of specific
emission standards, but not to the threshold listing
decision. EPA acted reasonably in applying the same
approach to NESHAP regulation of power-plant emis-
sions.

a. Section 7412(c) generally precludes EPA from
considering costs when deciding whether to list par-
ticular source categories for NESHAP regulation.
Section 7412(c) requires the agency to list and regu-
late (1) all “major” sources of pollution, defined as
those sources emitting more than ten 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

25

(c)(1); and (2) any “area” sources of pollution that
EPA determines present “a threat of adverse effects
to human health or the environment,” 42 U.S.C.
7412(c)(1) and (3). Those statutory directives do not
authorize EPA to consider the costs associated with
regulating either type of source when making the
initial listing decision. Rather, they reflect Congress’s
determinations that major sources pose an inherent
risk warranting regulation; that area sources should
be listed based on EPA’s judgment of the threat posed
by their emissions; and that the risk alone is a suffi-
cient justification for listing under the NESHAP pro-
gram.

The CAA directs EPA to consider the anticipated
costs only in devising the specific emission standard
that will apply to sources within a listed category.
Each major source emission standard must “require
the maximum degree of reduction in emissions” that
EPA “determines is achievable” for sources within the
relevant category. 42 U.S.C. 7412(d)(2). For existing
sources, the Act requires EPA to promulgate stand-
ards at least as stringent as a statutorily-defined
“floor,” defined by reference to the emission reduc-
tions actually achieved by the best-performing sources
within the category. 42 U.S.C. 7412(d)(3); see pp. 5-6,
supra. That requirement reflects an apparent con-
gressional judgment that, if a particular level of emis-
sion reduction has actually been accomplished by a
significant percentage of comparable sources, it is
ipso facto “achievable.”

In identifying the minimum level of stringency that
the statute requires, EPA does not explicitly consider
costs. But the method by which the floor is calculated
ensures that the minimum standard is “achievable” in

26

the sense of economically feasible for at least a signifi-
cant number of sources. See Pet. App. 27a, 29a-30a;
cf. 1989 Senate Report 168-169 (noting that “[c]Jost
considerations are reflected in the selection of emis-
sions limitations which have been achieved in prac-
tice”). The possibility remains, however, that particu-
lar sources may find achievement of the minimum
standards prohibitively expensive; and the Act does
not allow EPA to treat that possibility as a ground for
promulgating emission standards less stringent than
the statutory floor. EPA must explicitly consider
costs (along with other factors) when it decides
whether to impose emission standards that are more
stringent than the minimum level required by Section
7412(d)(3).

b. EPA’s interpretation of Section 7412(n)(1)(A)
renders Section 7412 a “symmetrical and coherent
regulatory scheme,” Brown & Williamson, 529 U.S. at
133, under which anticipated costs are considered at
the same stage of the regulatory process for power
plants as for other stationary sources. For stationary
sources other than power plants, EPA’s NESHAP
listing decision turns either on an explicit agency
finding of potential harm (for area sources) or on
sources’ emission of hazardous air pollutants in quan-
tities above a statutory threshold (for major sources).
The agency reasonably construed the Section
7412(n)(1)(A) term “appropriate” to turn on a compa-
rable harm-based inquiry. Although the specific trig-
gers for regulation differ slightly depending on wheth-
er the source at issue is a major source, area source,
or power plant, see pp. 5, 24-25, supra, the basic crite-
ria shaping EPA’s threshold decision to regulate focus
on the potential for harm and exclude consideration of

27

cost. EPA’s interpretation likewise ensures that,
when costs are taken into account in fashioning specif-
ic emission standards, they are considered in the same
manner for power plants as for other stationary
sources.

c. EPA’s decision to harmonize the treatment of
power plants and other stationary sources with re-
spect to costs is plainly reasonable. Although Con-
gress enacted a special listing provision that applies
only to power plants, neither the text of Section
7412(n)(1)(A) nor Congress’s reasons for enacting it
suggest that EPA must consider costs when making
the threshold listing determination. Rather, Congress
established the special requirements of Section
7412(n)(1)(A) to reflect the unique—and at that point
still undetermined—impact that the Title IV acid-rain
program and other CAA requirements would have on
power-plant emissions of hazardous air pollutants.
See pp. 7-8, supra.

The text of Section 7412(n)(1)(A) supports that in-
terpretation. Section 7412(n)(1)(A) departs from the
scheme governing other source categories only by
requiring EPA (1) to conduct a study “of 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 th{e] [CAA]J”; and (2) to regulate
power plants “under this section, if [EPA] finds such
regulation is appropriate and necessary after consid-
ering the results of the study.” 42 U.S.C.
7412(n)(1)(A) (emphases added).

Section 7412(n)(1)(A) thus requires EPA to conduct
a new study of the risks created by power-plant emis-
sions of hazardous air pollutants, and to consider that

28

study in making its listing decision, rather than simply
basing the decision on whatever information was al-
ready available.* Section 7412(n)(1)(A) further pro-
vides that, in assessing such risks, the study should
take into account any emission reductions that other
CAA provisions could reasonably be anticipated to
produce. The 1990 Amendments thus imposed a de-
gree of structure on the agency’s assessment of poten-
tial harms. None of those requirements suggests,
however, that Congress intended the agency to depart
from the basic harm-based approach to listing deci-
sions that the Act mandates with respect to all other
source categories.’

®° The State petitioners (Br. 33-34) argue that the Section
7412(n)(1A) study requires EPA to consider costs insofar as it
directs the agency to address “alternative control strategies for
emissions which may warrant regulation.” That is not correct.
Section 7412(n)(1)(A) does not require the study to consider the
costs of alternative control strategies, but merely to identify and
describe available and effective control technologies. See 4 J.A.
850

’ The State petitioners argue (Br. 29-30) that the legislative
history of Section 7412(n)(1A) evidences Congress’s intent that
EPA must consider costs when deciding whether regulation of
power plants is “appropriate.” But the only support they cite for
that proposition is Representative Oxley’s general statement that
a purpose of that provision was to “avoid[] the imposition of exces-
sive and unnecessary costs on residential, industrial, and commer-
cial consumers of electricity.” States Br. 30 (emphasis omitted)
(quoting 1 1990 CAA Legislative History 1417); see Pet. App. 8la
(Kavanaugh, J., concurring in part and dissenting in part) (relying
on same statement). Representative Oxley’s statement does not
specifically indicate that EPA must consider costs when determin-
ing whether NESHAP regulation of power plants is “appropriate.”
See 1 1990 CAA Legislative History 1416-1417. Rather, it is
consistent with the view that Section 7412(n\1)(A) avoids unneces-
sary costs by allowing EPA to regulate power plants only after

29

d. Three other points deserve emphasis. First, pe-
titioners make no effort to demonstrate that listing
power plants for NESHAP regulation without consid-
eration of costs creates a greater danger of overregu-
lation, or is otherwise more objectionable from a poli-
cy standpoint, than a similar cost-blind listing decision
for any other source category. Rather, petitioners
suggest that a threshold decision to regulate without
consideration of costs is an inherently unreasonable
practice that Congress could not plausibly be thought
to have countenanced. See, eg., States Br. 24
(“[WJhen deciding whether it is appropriate to impose
regulation, a reasonable person would consider both
the pros and cons—in other words, the benefits and
costs—of regulation.”). The dissenting judge below
articulated the putatively applicable principle in simi-
larly general terms, stating that, “as a matter of com-
mon sense, common parlance, and common practice,
determining whether it is ‘appropriate’ to regulate
requires consideration of costs.” Pet. App. 74a (Ka-
vanaugh, J., concurring in part and dissenting in part).
That view is flatly inconsistent with the basic struc-
ture of the NESHAP program and its treatment of
other source categories.

Second, Section 7412(n)(1)(A) does not authorize
EPA to apply to power plants whatever specific emis-
sion standards the agency deems “appropriate and
necessary.” Rather, it authorizes EPA to determine

conducting the required study and finding that power-plant emis-
sions will continue to pose public-health hazards even after imposi-
tion of other CAA requirements. See Pet. App. 25a & n.1. In any
event, “the views of a single legislator, even a bill’s sponsor, are
not controlling.” Mims v. Arrow Fin. Servs., LLC, 132 S. Ct. 740,
752 (2012).

30

whether it is “appropriate and necessary” to regulate
power plants “under this section,” i.e., under Section
7412. 42 U.S.C. 7412(n)(1)(A). As the court below
unanimously recognized, once EPA decided that pow-
er plants should be listed for regulation as a NESHAP
source category, the agency was required to devise
emission standards in accordance with the generally-
applicable methodology, see 42 U.S.C. 7412(d), that
governs other listed source categories, see Pet. App.
36a-38a. That fact reinforces the propriety of EPA’s
decision to apply listing criteria that preserve the
integrity of the overall statutory scheme.’

Third (and more generally), when Congress enacts
a comprehensive regulatory scheme, and directs an
agency to devise an “appropriate” response to some
interstitial problem, the agency would not be expected

* Notably, Section 7412 contemplates a two-step process in which
EPA first places power plants on the list of source categories
established by Section 7412(c), and then promulgates specific stan-
dards for hazardous air pollutants emitted by such plants in ac-
cordance with Section 7412(d). See Pet. App. 36a-38a. Congress
thus plainly envisioned that EPA would set the standards (at the
second step) well after making the threshold listing determination
(at the first step). See 42 U.S.C. 7412(e)(3) and (4). But Congress
would not have expected EPA to consider—at the listing stage—
the cost of complying with emission standards that had not yet
been formulated. Here, of course, the idiosyncratic procedural
history resulted in EPA making its initial “appropriate and neces-
sary” finding in 2000, and then reaffirming that finding in 2012 at
the same time that it promulgated power-plant emission stand-
ards. But there is no reason to believe that when Congress en-
acted the 1990 Amendments, it expected EPA to consider the
threshold listing determination twice. EPA’s view that Section
7412(n1)A) does not require consideration of costs as the thresh-
old listing stage is consistent with Congress’s understanding of
how the statutory scheme would operate.

31

to approach the matter as though it were writing on a
blank slate. Nor would it be usual for the agency to
base its interstitial decision on the perceived unwis-
dom of general congressional policy choices reflected
in the statute. Rather, the agency would be expected
to make interstitial choices that are logically con-
sistent with, and promote the effective implementa-
tion of, the larger congressional design. In making
the listing decision at issue here, it therefore would
have been inappropriate for EPA either to ignore or
to second-guess Congress’s determination that con-
sideration of costs under the NESHAP program
should be deferred until the emission-standard-setting
stage. EPA articulated a fully adequate rationale for
its listing decision by explaining that (1) Congress’s
general approach of deferring cost consideration in
that manner is an integral feature of the statutory
scheme, and (2) no sound textual or practical reason
had been identified to treat power plants differently.
e. In determining whether costs are relevant to the
listing decision for power plants under Section
7412(n)(1)(A), EPA thus faced a simple choice. The
agency could either interpret that provision to har-
monize with the criteria that govern analogous
NESHAP listing determinations for other stationary
sources, or it could conclude that Congress intended
to depart from those criteria—without saying so ex-
plicitly, and despite the fact that doing so could poten-
tially leave a major source of hazardous air pollution
outside the NESHAP program. EPA’s choice of the
former approach reflects the more natural reading of
the statutory text, and it advances the CAA’s core
goal of “protect{ing] and enhanc{ing] the quality of the
Nation’s air resources so as to promote the public

32

health and welfare.” 42 U.S.C. 7401(b)(1). In any
event, it is farfetched to suppose that, by directing
EPA to determine whether NESHAP regulation of
power plants is “appropriate,” Congress required the
agency to use listing criteria fundamentally different
from those that Congress had mandated for all other
stationary-source categories. See pp. 40-45, infra.

2. EPA’s interpretation is consistent with the
NESHAP delisting criteria that apply to power
plants and all other stationary sources

EPA’s interpretation of Section 7412(n)(1)(A) is al-
so consistent with 42 U.S.C. 7412(c)(9)(B), which em-
powers EPA to delist power plants and other station-
ary sources in specified circumstances. That provision
makes clear that Congress intended such sources to
remain subject to regulation under Section 7412 so
long as they continue to pose dangers to public health
or the environment, regardless of the costs of comply-
ing with such regulation. Section 7412(c)(9) illumi-
nates Congress’s understanding of when regulation of
power plants is appropriate, and EPA reasonably
relied on that provision when interpreting Section
7412(n)(1)(A). See Pet. App. 31a.

a. Section 7412(c)(9)(B) sets forth criteria under
which EPA may remove “any source category”—
including power plants—from the list of categories
subject to regulation. See New Jersey v. EPA, 517
F.3d 574, 582 (D.C. Cir. 2008), cert. dismissed, 555
U.S. 1162, and, cert. denied, 555 U.S. 1169 (2009).
Like the provisions that establish the general criteria
governing EPA’s initial listing decisions, Section
7412(c)(9) does not authorize consideration of costs as
a basis for delisting. 76 Fed. Reg. at 24,989. Rather,
EPA is authorized to delete a source category from

33

the list in two limited situations, both of which relate
exclusively to health and welfare considerations.

First, EPA may delist a source category if (1) the
“sole reason” for initially including the category on
the list was its emission of a “unique chemical sub-
stance,” and (2) that substance is subsequently delet-
ed from the separate list of hazardous air pollutants
because EPA concludes that it will not cause adverse
effects to human “health” or the “environment{].”
42 U.S.C. 7412(c)9)(A) (cross-referencing 42 U.S.C.
7412(b)(3)(C) and (D)).

Second, EPA may delist a source category if two
other conditions are both satisfied. To the extent that
sources within the category emit pollutants thit may
cause cancer in humans, 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 one million to the
individual in the population who is most exposed to
emissions of such pollutants.

42 U.S.C. 7412(c)(9)(B)G). In addition, if sources with-
in the category emit pollutants that result in adverse
health effects other than cancer, or in adverse envi-
ronmental effects, EPA must determine that “emis-
sions from no source in the category or subcategory
concerned (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).

b. EPA reasonably relied on Section 7412(c)(9)’s
delisting criteria when declining to consider costs as
part of the decision to add power plants to that list.

34

See 76 Fed. Reg. at 24,989; Pet. App. 3la. The deci-
sions to list or delist a stationary source are two sides
of the same coin: Both address the same fundamental
issue Of whether a source category will appear on the
Section 7412 list and therefore be subject to regula-
tion. EPA reasonably concluded that, since the CAA
unambiguously precludes consideration of costs as a
basis for delisting, Congress did not likely intend for
costs to be considered at the initial listing stage ei-
ther. A contrary approach would produce a strange
and asymmetric scheme, under which 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 change or turn out to be much higher
than anticipated.

The delisting criteria also make clear that Con-
gress intended the NESHAP program to protect
those individuals most exposed and most sensitive to
the harms caused by hazardous air pollutants. Section
7412(c)(9)(B)(i) forbids EPA to delist a source that
may cause a lifetime risk of cancer “greater than one
in one million to the individual in the population who
is most exposed to emissions of such pollutants.”
42 U.S.C. 7412(c)(9)(B)(i) (emphasis added). That
provision reflects Congress’s intent to protect the
most vulnerable members of the population, regard-
less of the costs. It thereby undermines petitioners’
conclusory assertion (States Br. 24) that, for a regula-
tion to be “reasonable” under the CAA, it must be
based on an assessment of both costs and benefits.°

* Other provisions of Section 7412 likewise evince Congress's
concern for the most vulnerable. See 42 U.S.C. 7412(f2\A)
(requiring regulation to address cancer risks “to the individual

35

3. Congresas’s express references to costs in other CAA

provisions support EPA’s interpretation of Section
7412(n)(I)(A)

As explained above, Congress unambiguously re-
quired EPA to consider costs at the second stage of
the regulatory process, when EPA calculates the
proper level of regulation under Section 7412(d)(2).
See p. 6, supra. Congress also directed EPA to con-
sider costs when implementing dozens of other CAA
provisions. ° Those statutory directives support
EPA’s decision not to consider costs in determining
whether power plants should be regulated under the
NESHAP program. 42 U.S.C. 7412(n)(1)(A).

most exposed to emissions from a source”), (n)(1XC) (requiring
study of health effects of mercury, with special focus on “consump-
tion by sensitive populations”).

'° For other provisions in Section 7412 requiring EPA to consid-
er costs, see 42 U.S.C. 7412(d)2) (setting level of emission stand-
ards generally), (8A)(i), (B)(i) (same with respect to coke oven
batteries), (f (1)(B) (report to Congress on need for further legis-
lation on air pollution), (2)(A) (establishing additional emission
standards), (nX1)(B) (study of mercury emissions) and (s)(2)
(report to Congress on compliance with EPA standards under the
CAA).

For provisions elsewhere in the CAA that require EPA to con-
sider costs in various ways, see 42 U.S.C. 7403(eX6), (g)(1), (iX1),
(3) and Q\3)(BXiii), 7404(aX1), (2), (4) and (b)(1), 7408(b)(1),
7411(a)(1), (gX4XB), (h)(1), (2) and G)1)(A)(ii), 7419(b)(3) and
(dX(2), 7425(b), 742% aX2), 747H3), 7491(g)1) and (2), 7509%d)(2),
7511 b(eX2BXiv), (v), (f)(1)(A) and (B), 7521(a)(2), (3 Ai), (BX),
(D), (bX1XC), (i2)(AMD, (ii), (3)(AXiii), (B)(iii), (C)iii), (k) and
(D(2), 7545(c)(2)(B), (kX 1)(A), (3)(B)(i), (ii), (02)(B)ii)(V) and
(4XC), 7547(a)(3)-(5) and (b), 7554(a), (bX2) and (3), 7571(b),
7586(a)(4), 7689(e)(2), 7590(a), 7612(a), (c) and (d)(1), 7617(c)(1), (4)
and (g), 7628(a) and (b), 7651c(f2)(B), 7651f(b)(2).

36

a. In determining that costs were irrelevant to the
decision whether to list power plants for NESHAP
regulation, EPA principally relied on the fact that the
CAA unambiguously precludes consideration of costs
in making closely analogous decisions—i.e., the
decision whether to list other source categories, and
the decision whether to delist a previously listed
category—under the NESHAP program. EPA
reasonably .concluded that, if Congress had wanted
the agency to apply fundamentally different criteria in
deciding whether to list power plants, it would have
explicitly mandated that approach. Petitioners
suggest (e.g., States Br. 23-24) that an express
statutory reference to costs was unnecessary because
Section 7412(n)(1)(A) requires EPA to determine
whether listing of power plants is “appropriate,” and
consideration of costs is an inherent component of any
“appropriate” decision to regulate. Section 7412(d)(2)
and the other provisions cited above refute that line of
argument by showing that, when Congress intended
to require EPA to consider costs in implementing the
NESHAP program, Congress expressed that intent in
clear and specific ways.

b. This Court’s decision in Whitman v. American
Trucking Ass’ns, 531 U.S. 457 (2001), supports EPA’s
conclusion. There, the Court agreed with EPA that
costs are irrelevant when establishing air quality
standards under 42 U.S.C. 7409(b), as part of the
NAAQS program. 531 U.S. at 467. The Court noted
that Section 7409(b)(1) requires EPA to set standards
under that program at the level “requisite to protect
the public health,” allowing an “adequate margin of
safety.” Jd. at 465 (citation omitted). The Court con-
trasted that language with various other CAA provi-

37

sions that specifically directed EPA to consider costs.
Id. at 467-468 (citing General Motors Corp. v. United
States, 496 U.S. 530, 538, 541 (1990); Union Elec. Co.
v. EPA, 427 U.S. 246, 257 & n.5 (1976)).

In agreeing with EPA that costs are irrelevant
when setting NAAQS, the Court made two points that
are directly relevant here. First, the Court empha-
sized its refusal “to find implicit in ambiguous sections
of the CAA an authorization to consider costs that has
elsewhere, and so often, been expressly granted.”
American Trucking, 531 U.S. at 467-468. Second, the
Court emphasized that Congress’s silence with re-
spect to costs was especially telling in light of Section
7409(b)(1)’s express emphasis on health hazards. The
Court explained that, even if EPA may consider fac-
tors other than health when setting NAAQS, the
agency may not consider costs. /d. at 469. It noted
that cost “is both so indirectly related to public health
and so full of potential for canceling the conclusions
drawn from direct health effects that it would surely
have been expressly mentioned * * * had Con-
gress meant it to be considered.” /bid.

Both of those observations support EPA’s decision
here. Congress’s failure to direct EPA to consider
costs in Section 7412(n)(1)(A) is especially significant
in light of the CAA’s numerous express references to
costs. And costs are far removed both from the crite-
ria that EPA considers in determining whether other
source categories should be listed, and from the only
criterion (potential “hazards to public health”) that
Section 7412(n)(1)(A) specifically directs the agency to
consider in deciding whether to list power plants. In
these circumstances, EPA reasonably relied on Amer-
ican Trucking in concluding that Congress did not

38

intend the agency to consider costs under Section
7412(n)(1)(A).

4. EPA's approach te power-plant regulation under
the NESHAP program is consistent with the struc-
ture of the CAA’s other multistage regulatory pro-
grams

In addition to Section 7412 (see pp. 4-6, supra), the
CAA establishes several other regulatory programs
involving multistage decisionmaking in which EPA
(1) makes a threshold decision to regulate based ex-
clusively on health and environmental factors, and
(2) considers costs (among other relevant factors)
when choosing the proper level of regulation. EPA
reasonably construed Section 7412(n)(1)(A) to estab-
lish that same approach here.

The NAAQS program for controlling criteria pollu-
tants involves a multistage process in which EPA does
not consider costs for purposes of two key threshold
decisions. Under that program, EPA first decides
whether emissions of a criteria pollutant “may reason-
ably be anticipated to endanger public health or wel-
fare.” 42 U.S.C. 7408(a). If EPA makes such an en-
dangerment finding, it must establish NAAQS for that
pollutant which are “requisite to protect the public
health and * * * welfare,” again without any consid-
eration of potential regulatory costs. 42 U.S.C. 7409;
American Trucking, 531 U.S. at 471 n.3. States may
consider costs, however, when they later craft plans
containing actual controls to achieve the air quality
standards. 42 U.S.C. 7407(a), 7410; American Truck-
ing, 531 U.S. at 470.

The NSPS program for stationary sources estab-
lishes a multistage process that is even more closely
analogous to the NESHAP program at issue here.

39

Under the NSPS program, EPA must first publish a
list of categories of stationary sources that “cause[],
or contribute[] significantly to, air pollution which
may reasonably be anticipated to endanger public
health or welfare,” without any consideration of costs.
42 U.S.C. 7411(b)(1)(A). If EPA concludes that emis-
sions from a particular source category are danger-
ous, that finding triggers a nondiscretionary duty to
promulgate emission standards for new sources within
the category, applying the “best system of emission
reduction.” 42 U.S.C. 7411(a)(1); see 42 U.S.C.
7411(b)(1)(B). The statute directs EPA to “tak[e] into
account the cost of achieving such reduction” when
identifying that “best system.” 42 U.S.C. 7411(a)(1).

Similarly, the Motor Vehicle Emission and Fuel
Standards program requires EPA first to determine,
without considering potential costs, whether certain
motor-vehicle emissions “cause, or contribute to, air
pollution which may reasonably be anticipated to
endanger public health or welfare.” 42 U.S.C.
7521(a)(1). If EPA concludes that such dangers exist,
it must promulgate standards for emissions from that
class of engines, and it may consider costs when fash-
ioning those standards. 42 U.S.C. 7521(a)(2); see
Massachusetts v. EPA, 549 U.S. 497, 533 (2007).

Those programs reflect Congress’s view that chan-
neling cost considerations to the later stage of a multi-
stage regulatory process is a sensible way to achieve
the CAA’s purposes. Prominent academic commenta-
tors agree that agencies act reasonably when
they take account of costs in accordance with a multi-
stage process. See, eg., Cass R. Sunstein, Cost-
Benefit Default Principles, 99 Mich. L. Rev. 1651,
1695-1696 (2001). EPA permissibly construed Section

40

7412(n)(1)(A) to mandate the same regulatory ap-

proach that Congress repeatedly embraced through-
out the CAA.

C. Petitioners’ Arguments Fail To Establish That Sec-
tion 7412(m)(1)(A) Unambiguously Requires EPA To
Consider Costs

Under Chevron, petitioners can prevail only by
showing that EPA’s interpretation of the statute is
unreasonable. Petitioners thus must establish that
Section 7412(n)(1)(A) unambiguously compels EPA to
consider costs when determining whether NESHAP
regulation of power plants is “appropriate.” Petition-
ers have not satisfied that standard.

1. The word “appropriate” does not unambiguously
require EPA to consider costs when deciding
whether to regulate

Petitioners argue (NMA Br. 18-23; UARG Br. 25-
36) that Section 7412(n)(1)(A)’s use of a facially broad
term (“appropriate”), coupled with statutory silence
with respect to costs, necessarily requires EPA to
consider costs when deciding whether to list power
plants for regulation. They also assert (States Br. 33-
37) that EPA’s interpretation renders that term su-
perfluous. Neither contention has merit.

a. Petitioners argue that Congress’s use of the
word “appropriate” to guide a regulatory decision
necessarily requires agencies to consider costs when
making that decision. See, e.g., NMA Br. 19-23;
States Br. 23-24; UARG Br. 25-29, 36-40. Petitioners
assert that, under the ordinary meaning of the term
“appropriate,” EPA must take into account the sur-
rounding “circumstances” in order to determine
whether regulation is “suitable or proper.” States Br.

41

23 (emphasis omitted); UARG Br. 25 (both quoting
The New Ozford American Dictionary at 76). They
further contend (States Br. 24) that, in light of the
“common meaning” of “appropriate,” it is clear that
(1) “Congress wanted EPA to consider the circum-
stances that would normally inform the decision
whether or not to regulate,” and (2) “when deciding
whether it is appropriate to impose regulation, a rea-
sonable person would consider both the pros and
cons—in other words, the benefits and costs—of regu-
lation.”

Petitioners are correct that “appropriateness” in-
quiries are “inherently context-dependent,” Sossa-
mon, 131 S. Ct. at 1659, and that particular conduct
may be “appropriate” in some circumstances but in-
appropriate in others. But petitioners ignore the most
salient contextual evidence of Congress’s intent with
respect to the specific question presented here. As
explained above, the CAA precludes EPA from con-
sidering costs in deciding whether any other type of
stationary source should be listed for NESHAP regu-
lation. The Congress that enacted the 1990 Amend-
ments presumably believed that the basic Section 7412
framework, under which costs are not considered in
listing major or area sources, but are instead taken
into account in determining the stringency of regula-
tion, was an “appropriate” means of regulating those
stationary sources. Congress’s use of that term in
Section 7412(n)(1)(A) therefore provides no colorable
basis for inferring that Congress intended to preclude
EPA from applying the same approach to power
plants.

b. Other CAA provisions further undermine peti-
tioners’ contention that consideration of costs is an

42

essential prerequisite to an “appropriate” decision to
regulate. At least 19 different CAA provisions author-
ize EPA to take some form of action based on its de-
termination that doing so is “appropriate.”’' Under
many of those provisions, costs are clearly irrelevant
to the agency’s analysis. For example, it is not plausi-
ble that Congress intended EPA to consider costs
when deciding whether it is “appropriate” (1) to invite
the participation of “the Under Secretary of Com-
merce for Oceans and Atmosphere, the Director of the
Fish and Wildlife Service, [or] the Secretary of Agri-
culture” when conducting a study of pollution damage
to ecosystems, 42 U.S.C. 7403(e); or (2) to receive
assurances that a state or local air pollution control
agency has provided for adequate representation of
“international” interests in the air quality control
region before providing a grant to the agency,
42 U.S.C. 7405(a)(2).

Similarly, when Congress instructed EPA to re-
vise, “where appropriate,” the list of hazardous air
pollutants set forth in Section 7412(b), it plainly did
not want the potential for high costs to bar the agency
from adding pollutants that present “a threat of ad-
verse human health effects * * * or adverse envi-
ronmental effects.” 42 U.S.C. 7412(b)(2). A neighbor-
ing provision states that EPA “shall” grant a petition
to list a pollutant if the petitioner can show that the
pollutant will cause “adverse effects to human health
or adverse environmental effects.” 42 U.S.C.
7412(b)(3)(B). The CAA thus treats costs as irrele-

" See, eg., 42 U.S.C. 7403(e), 7405(aX(2) and (3), 7407(c),
(dX3)(A), (C) and (4)(AXii), 740% d)(1), 7411(b)(1)(B), 7412(b)(2)
and (c)(1), 742%c)(1) and (2), 7502(aX2) and (d), 7525(a)(1) and
(4B), 7571(aX(3), 7601(d)(2).

43

vant to EPA’s decision whether to list additional haz-
ardous pollutants, despite Congress’s use of the word
“appropriate” in Section 7412(b)(2).”

c. Petitioners argue (e.g., NMA Br. 19) that EPA’s
approach is irrational because it creates the theoreti-
cal possibility of power-plant regulation whose costs
dramatically exceed its benefits... Because EPA must
consider costs before promulgating an emission
standard that is more stringent than the statutory
floor (see pp. 6, 25-26, supra), the agency’s failure to
consider costs at the listing stage could produce that
outcome only if the floor standard itself entailed costs

2 Qutside the CAA, a quick Westlaw search reveals literally
hundreds of statutory provisions that condition agency action on a
finding that the action is either “appropriate and necessary” or
“necessary and appropriate.” Interpreting such language to
require agencies to consider costs in every such circumstance—
regardless of context—would destabilize longstanding administra-
tive practice and impose new and burdensome constraints on
agency decisionmaking that Congress surely did not intend. Cf.
Vermont Yankee Nuclear Power Corp. v. NRDC, 435 U.S. 519,
543-548 (1978) (forbidding courts from requiring agencies to follow
procedures beyond those mandated by statute).

'S The NMA’s hypothetical bears no relation to this case, in
which EPA concluded that the total quantifiable benefits of regula-
tion outweigh the total costs by between $27 billion and $80 billion
(measured in 2007 dollars) each year. 77 Fed. Reg. at 9305-9306;
see pp. 14-15, supra. There is likewise no danger that the hypo-
thetical might arise in the future, because EPA’s decision to list
power plants under Section 7412(n)(1)(A) was a one-time judgment
that will never again be repeated. And while EPA may some day
be asked to determine whether power plants should be delisted as
a NESHAP source category, consideration of costs would play no
role in that determination. See pp. 32-34, supra.

44

that greatly exceeded its benefits.’ But to the extent
there is a realistic danger that costs will exceed bene-
fits, it exists equally with respect to all other catego-
ries of major sources, which are listed without regard
to cost and (once listed) are subject to the same statu-
tory floor. The premise underlying petitioners’
argument—i.e., that Congress could not have intended
for EPA to list power plants based on criteria that
create any risk that costs will exceed benefits—is thus
directly at odds with the regime that Congress enact-
ed for all other stationary sources.

If Congress had viewed the avoidance of such a
result as a paramount objective, it could have declined
to establish any minimally stringent emission stand-
ard (i.e., floor), and instead could have granted EPA
plenary authority to craft whatever emission stand-
ards the agency deemed appropriate, based on any
and all relevant factors including costs. That ap-
proach would have eliminated any concern about
NMA’s hypothetical, and it would have eliminated any
serious argument that EPA must consider costs when
deciding whether to list power plants under Section
7412(n)(1)(A). But Congress did not take that ap-
proach.

Instead, Congress made the policy judgments that
(1) all major stationary sources within each listed

'‘* Judge Kavanaugh’s dissent specifically focused on that possi-
bility, observing that, “once EPA determines that it is appropriate
to regulate electric utilities under the [NESHAP] program, costs
are not relevant at the first, ‘setting the floor’ stage of the
[emission-standard-setting process]. And meeting that floor will
be prohibitively expensive, particularly for many coal-fired electric
utilities, regardless of whether EPA decides to go further and set a
“‘beyond-the-floor’ standard.” Pet. App. 79a.

45

category should be required to achieve “the maximum
degree of reduction in emissions” that EPA deter-
mines to be “achievable,” 42 U.S.C. 7412(d)(2); and
(2) EPA’s emission standards should “not be less
stringent than” the emission limitation actually
achieved by the best-performing sources, 42 U.S.C.
7412(d)(3). Congress evidently regarded category-
wide achievement of the emission reductions already
achieved by the best-performing sources as a more
important policy objective than avoidance of any pos-
sibility that costs would exceed benefits. That con-
gressional policy choice is an integral feature of the
statutory design, not an obstacle to be circumvented.
If Congress had viewed the hypothetical possibility of
excessive costs as acceptable for other source catego-
ries, but unacceptable for power plants, it could have
exempted power plants from the “floor” emission
standards mandated by Section 7412(d). As explained
above, however, the CAA makes clear that, if EPA
lists power plants for NESHAP regulation pursuant
to Section 7412(n)(1)(A), those facilities will be subject
to the same standard-setting provisions that govern
stationary sources within all other listed categories.
See pp. 29-30, supra.

d. The State petitioners assert (Br. 22-23, 33-37)
that EPA's interpretation of “appropriate” fails to
give that term any independent meaning. That is
incorrect. Under EPA’s interpretation, it is “appro-
priate” to regulate power plants under Section
7412(n)(1)(A) if, at the time the finding is made,
(1) hazardous-air-pollutant emissions from _ those
plants pose a hazard to either public health or the
environment; and (2) controls are available to reduce
such emissions. 76 Fed. Reg. at 24,988-24,989. Both

46

of those requirements give meaningful content to the
statutory text.

First, as the court of appeals recognized, EPA’s in-
terpretation ensures that the agency will not only
conduct the study mandated by Section 7412(n)(1)(A),
but also “apply its judgment in evaluating the results
of th[at] study” to determine whether health or envi-
ronmental hazards exist. Pet. App. 28a. At the time
Congress enacted Section 7412(n)(1)(A), it was unclear
whether EPA would ultimately conclude that power-
plant emissions can reasonably be anticipated to cause
hazards to public health.” EPA’s interpretation of the
term “appropriate” ensures that the agency exercises
judgment in assessing those hazards.”

Second, as the court of appeals also explained, EPA
“did not focus exclusively on health hazards in consid-
ering whether regulation would be ‘appropriate,’”
but also considered “the availability of controls to
address [hazardous-air-pollutant] emissions from
[power plants}.” Pet. App. 28a (quoting 76 Fed. Reg.
at 24,989; citing 77 Fed. Reg. at 9311). Although the
State petitioners assert (Br. 36) that the availability of
controls was “immaterial” to EPA’s final determina-
tion to regulate power plants, they ignore EPA’s un-
ambiguous statement to the contrary in the preamble

' Indeed, EPA eventually found that it was not “appropriate or
necessary” to regulate emissions from natural-gas-fired plants
because of the “negligible” dangers posed by such emissions.
65 Fed. Reg. at 79,831. And petitioners themselves disputed be-
low that any such health or environment hazards exist with respect
to power-plant emissions. See Pet. App. 40a-42a, 48a.

‘© Contrary to the State petitioners’ contention (Br. 34-35), EPA
evaluated the “severity” of anticipated health effects as part of its
hazard analysis. See, e.g., 76 Fed. Reg. at 24,992; 65 Fed. Reg. at
79,830-79,831; see also, e.g., Pet. App. 40a-42a.

47

to the 2012 Final Rule. See 77 Fed. Reg. at 9363
(“The availability of controls to reduce [hazardous-air-
pollutant] emissions from [power plants] only further
supports the appropriate finding.”).

Finally, the State petitioners are wrong in contend-
ing (Br. 34-36) that EPA’s interpretation of “appro-
priate” entirely overlaps with its interpretation of
“necessary.” Although both terms require an inquiry
into the health dangers posed by power-plant emis-
sions, the “appropriate” prong of the inquiry considers
those dangers as they exist “at the time” the finding is
made, whereas the “necessary” prong considers how
those dangers will be affected by the imposition of the
Title IV acid-rain program and other CAA require-
ments. 76 Fed. Reg. at 24,988; see id. at 24,990,
24,992. And, unlike the “appropriate” prong, the “nec-
essary” prong does not involve any analysis of the
availability of controls to address power-plant emis-
sions. See 77 Fed. Reg. at 9310-9311; 76 Fed. Reg. at
24,989-24,990.

2. Section 7412(n)(1)(B)’s express reference to costs

does not support petitioners’ interpretation of Sec-
tion 7412(n)(1)(A)

Congress instructed EPA, in making its power-
plant listing determination, to consider the study
of potential public-health hazards that was mandated
by Section 7412(n)(1)(A). Separately, in Section
7412(n)(1)(B), Congress also required EPA to conduct
a different study into various issues relating specifi-
cally to mercury emissions from power plants and
other sources, including “the costs of * * * technol-
ogies” that might be used to control such emissions.
42 U.S.C. 7412(n)(1)(B). The State petitioners argue
(Br. 24, 42-43) that this latter requirement “confirms”

4x

Congress’s expectation that EPA would consider costs
when determining whether regulation is “appropriate”
under Section 7412(n)(1)(A). Petitioners are mistak-
en.
By its terms, Section 7412(n)(1)(A) required EPA
to consider the study mandated by that provision, not
the separate study referenced in _ Section
7412(n)(1)(B), when making the listing determination.
The State petitioners imply (Br. 24-25) that the Sec-
tion 7412(n)(1)(B) study would be pointless if EPA
treated costs as irrelevant to the power-plant listing
decision. But the Section 7412(n)(1)(B) study was not
limited to either power plants or costs. In any event,
the study can still inform EPA’s application of the
NESHAP program to mercury emissions from power
plants and other sources, because EPA recognizes
(and the CAA clearly directs) that cost is relevant at
the second stage of the regulatory process, when EPA
sets the proper emission standard. See p. 6, supra.

3. Neither this Court’s precedents nor the D.C. Cir-
cuit’s NRDC decision supports petitioners’ theory
that silence necessarily requires agencies to con-
sider costs

Petitioners cite various decisions of this Court and
the D.C. Circuit to support their argument that Sec-
tion 7412(n)(1)(A)’s silence with respect to costs un-
ambiguously requires EPA to consider such costs in
deciding whether to list power plants for NESHAP
regulation. Petitioners’ reliance on those decisions is
misplaced.

a. In arguing that EPA must consider costs when
deciding whether to impose regulation, petitioners
invoke EME Homer City and Entergy Corp. v. River-
keeper, Inc., 556 U.S. 208 (2009). NMA Br. 37; States

49

Br. 30-31; UARG Br. 31, 37. In both of those cases,
however, the Court simply upheld EPA’s conclusion
that the particular statutory provisions at issue al-
lowed the agency to consider costs. See EME Homer
City, 134 S. Ct. at 1607 (holding that EPA could
choose to consider costs when allocating responsibility
for cross-state air pollution among contributing
States); Entergy, 556 U.S. at 217-226 (holding that
EPA could choose to utilize cost-benefit analysis in
establishing regulation under the Clean Water Act).
Neither case involved a situation where EPA had
concluded that a statutory provision that was silent
with respect to costs was best construed to prohibit
consideration of costs. This Court’s only precedent
addressing that scenario is American Trucking, 531
U.S. at 467-471, in which the Court agreed with EPA
that costs could not be considered under the relevant
CAA provision.

Far from supporting the claim that statutory si-
lence necessarily requires EPA to consider costs, the
decisions on which petitioners rely stand for the very
different proposition that silence counsels deference
to the agency. In Entergy, the Court declared that
the statutory “silence” in that case was “meant to
convey nothing more than a refusal to tie the agency’s
hands as to whether cost-benefit analysis should be
used, and if so to what degree.” 556 U.S. at 222. And
in EME Homer City, the Court noted that the statute
was silent with respect to costs. 134 S. Ct. at 1604.
The Court then identified several potential interpreta-
tions of the statute (some of which did not require
consideration of costs) and held that “{uJnder Chevron
we read Congress’ silence as a delegation of authority
to EPA to select from among reasonable options.”

50

Ibid. The Court should apply similarly deferential
review here.

b. The State petitioners also heavily rely (Br. 27-
32) on the D.C. Circuit’s unanimous decision in NRDC
v. EPA, 824 F.2d 1146 (1987) (en banc). Petitioners
read (States Br. 29) that decision to hold that “Con-
gress would have to clearly express an intent * * *
to preclude EPA from considering costs if it wanted
that outcome.” They argue (id. at 29-30) that Con-
gress was presumably aware of NRDC when it enact-
ed the 1990 Amendments, and that Section
7412(n)(1)(A)’s silence with respect to costs therefore
“shows that Congress intended EPA to consider costs
under [that provision] when deciding whether it is
appropriate to regulate.”

In NRDC, the court of appeals interpreted the
pre-1990 version of Section 7412(b)(1)(B), which re-
quired EPA to set emission standards for hazardous
air pollutants “at the level which in [EPA’s] judgment
provides an ample margin of safety to protect the
public health.” 42 U.S.C. 7412(b)(1)(B) (1982); see
NRDC, 824 F.2d at 1147. The court first held that the
statute required EPA to make an initial determination
of what level of emissions is “safe,” which the court
described as the level necessary to achieve an “ac-
ceptable” risk to health. /d. at 1164-1165. The court
emphasized that EPA “cannot under any circumstanc-
es consider cost and technological feasibility at this
stage of the analysis.” /d. at 1165.

The NRDC court then held that EPA could impose
more stringent standards in order to provide an “am-
ple margin” of safety, and that it could choose to con-
sider costs and feasibility at this second stage of the
analysis. 824 F.2d at 1165-1166. The court empha-

51

sized that its holding did not “bind [EPA] to any spe-
cific method of determining what is ‘safe’ or what
constitutes an ‘ample margin,” and it acknowledged
that EPA could adopt a different mode of analysis
under which cost would not be considered. /d. at
1165-1166 & n.11.

The State petitioners misread NRDC in two signif-
icant ways. First, they ignore the D.C. Circuit’s con-
clusion that costs are irrelevant to the agency’s
threshold determination of what level of emissions is
“safe.” NRDC, 824 F.2d at 1164-1165; see 1990 House
Report 322. Second, they ignore the court’s recogni-
tion that EPA could lawfully have interpreted the pre-
1990 Section 7412(b) to prohibit the consideration of
costs altogether, even when determining what consti-
tutes an “ample margin” of safety. NRDC, 824 F.2d at
1165 n.11. Neither of those statements is compatible
with petitioners’ description of NRDC (States Br. 27,
29) as holding that EPA may ignore costs only if the
relevant statute says so expressly. Cf. American
Trucking, 531 U.S. at 467-469 (holding that statutory
silence can bar EPA from considering costs).

4. Whether or not Section 7412(n)(1)(A) is a “residual

risk” provision is irrelevant to whether EPA must
consider costs

UARG asserts (Br. 30-35) that Section
7412(n)(1)(A) is a “residual risk” provision analogous
to 42 U.S.C. 7412(f) and 7412(m). See note 3, supra.
Those provisions address situations in which EPA
must determine whether entities that are already
regulated under Section 7412 should be subject to
additional regulation in order to further protect public
health or the environment. UARG reasons that, be-
cause EPA may consider costs in implementing those

52

other provisions, it must also consider costs under
Section 7412(n)(1)(A).

That argument is a non sequitur. The fact that a
particular CAA provision requires EPA to take ac-
count of existing regulatory requirements when decid-
ing whether to impose further regulation has no bear-
ing on whether or how the agency should consider
costs in making that decision.

Indeed, the statutory analogue on which UARG
primarily relies refutes its contention that any “resid-
ual risk” provision necessarily permits EPA to consid-
er costs when deciding whether to impose further
regulation. As UARG acknowledges (Br. 30), Section
7412(f) incorporates the same “ample margin of safe-
ty” standard that the D.C. Circuit considered in its
1987 NRDC decision. But that standard prohibits
EPA from considering costs when determining the
“safe” level of emissions at the first stage of the anal-
ysis. NRDC, 824 F.2d at 1164-1166; pp. 50-51, supra.
EPA may consider such costs only when deciding
whether to adopt a more stringent emission standard
that provides an additional margin of safety. /bid.
Thus, to the extent that Section 7412(f) is relevant
here at all, it supports EPA’s conclusion that the costs
associated with power-plant emission standards under
the NESHAP program are properly considered only
when the agency decides how stringent those stand-
ards will be, not when it decides whether power plants
will be regulated under the program at all.

5. Petitioners’ objections to other aspects of the 2012
Final Rule are outside the scope of the question
presented

NMA and UARG both challenge (NMA Br. 42-44;
UARG Br. 40-43) EPA’s determination that, once it

53

decided to regulate power-plant emissions under Sec-
tion 7412(n)(1)(A), it was required to set emission
standards for all hazardous air pollutants. NMA also
challenges (Br. 37-42) the factual basis of EPA’s con-
clusion that acid-gas emissions from power plants
pose hazards to public health and the environment.
Those legal arguments are not fairly encompassed
within the question on which this Court granted certi-
orari, and they should not be considered. In any
event, both arguments lack merit and were correctly
(and unanimously) rejected by the court of appeals.
See Pet. App. 38a-44a; Gov’t Br. in Opp. 29-32.

D. In The RIA That Accompanied The 2012 Final Rule,
EPA Reasonably Concluded That The Benefits Asso-
ciated With The Rule Will Greatly Exceed Its Costs

Throughout their briefs, petitioners repeatedly in-
voke the RIA in an effort to show that the 2012 Fina!
Rule will impose costs that far exceed its benefits to
society. Those arguments reflect a fundamental mis-
understanding of the RIA. In fact, the RIA reflects
EPA’s considered judgment, based on the same sort of
cost-benefit analysis that petitioners appear to em-
brace, that the benefits of the rule “are substantial
and far outweigh the costs.” 77 Fed. Reg. at 9306.
Although EPA did not rely on the RIA when deciding
to regulate power plants under Section 7412(n)(1)(A),
the RIA further refutes petitioners’ contention that
EPA’s refusal to consider costs at the listing stage led
the agency to adopt irrational power-plant regulation.

1. For the reasons explained above, EPA reasona-
bly declined to consider costs when deciding that
regulation of power plants is “appropriate” under
Section 7412(n)(1)(A). Even if EPA had considered
costs, it would not necessarily have adopted either the

54

approach set forth in the RIA or a more rigid form of
cost-benefit analysis that petitioners at times appear
to advocate. This Court has recognized that there are
a variety of different reasonable methods by which an
agency may consider costs in making regulatory deci-
sions.’ The question presented in this case does not
directly implicate the choice between potential meth-
ods of considering costs in circumstances where such
consideration is required by statute or an agency
deems it to be appropriate.

2. The RIA estimated that the 2012 Final Rule
would produce annual quantifiable benefits of between
$37 billion and $90 billion (measured in 2007 dollars),
as compared to estimated annual costs of $9.6 billion.

In Entergy, for example, the Court identified at least three
“plausible” ways in which EPA could consider costs when applying
a “best technology available” standard within the Clean Water Act.
556 U.S. at 217-218. Those included (1) determining whether the
standards’ costs can be reasonably borne by the regulated indus-
try; (2) identifying the technology that most efficiently produces
some degree of environmental benefit; and (3) comparing the costs
and benefits of various approaches. /d at 218. In setting emis-
sion standards for hazardous air pollutants, EPA has often consid-
ered the cost-effectiveness of controls when determining whether
to set standards at a level beyond the minimally stringent level
required by 42 U.S.C. 7412(d)(3). See, e.g., 79 Fed. Reg. 60,262-
60,263, 60,272-60,273 (Oct. 6, 2014); 78 Fed. Reg. 10,020-10,021
(Feb. 12, 2013). Under that approach, EPA evaluates the costs per
unit of pollutant emissions reduced or prevented ana compares
that to costs per unit incurred by other industries reducing the
same pollutant. If Section 7412(n1\A) were construed to require
consideration of costs at the listing stage of EPA’s regulatory
process, the agency would have substantial discretion to determine
how cost considerations should be taken into account. See, ¢.9.,
Pet. App 77a (Kavanaugh, J., concurring in part and dissenting in
part) (acknowledging agency discretion as to methodology).

55

77 Fed. Reg. at 9305-9306. As EPA explained, imple-
mentation of the emission standards included in the
rule “is expected, based purely on economic efficiency
criteria, to provide society with a significant net gain
in social welfare, even given the limited set of health
and environmental effects we were able to quantify.”
EPA, Regulatory Impact Analysis for the Final Mer-
cury and Air Toxics Standards 8-1 (2011). Thus, even
if Section 7412(n)(1)(A) required EPA to consider
costs in deciding whether to list power plants for
NESHAP regulation, the analysis contained in the
RIA would have provided a fully sufficient basis for
concluding that such regulation was “appropriate.”

3. Petitioners describe (NMA Br. 1, 18-19; States
Br. 4, 32, 46-47; UARG Br. 3, 23, 42-43) the RIA as
demonstrating that the costs of regulating power
plants substantially outweigh the benefits. Petition-
ers focus narrowly on the quantifiable benefits direct-
ly associated with the rule’s reduction of Section
7412(b) pollutants, which the RIA estimates at $4
million to $6 million each year. As EPA explained,
however, “these calculated benefits are a small subset
of the benefits of reducing [mercury] emissions” un-
der the 2012 Final Rule. 77 Fed. Reg. at 9428; see pp.
14-15, supra (noting RIA’s conclusion that virtually all
of the direct benefits from reducing emissions of haz-
ardous air pollutants are unquantifiable); see also 4
J.A. 914-923 (listing dozens of examples of unquanti-
fied benefits). Petitioners offer no reason to suppose
that EPA would or should have simply ignored the
unquantified benefits if the agency had viewed costs
as relevant to the power-plant listing decision.

Petitioners also dismiss (NMA Br. 41-42; States Br.
47-48), as irrelevant to the listing decision, the tens of

56

billions of dollars in ancillary benefits that the 2012
Final Rule will achieve by reducing emissions of par-
ticulate matter and sulfur dioxide. But considering
such co-benefits is an accepted practice in cost-benefit
analysis, the whole purpose of which is to measure the
net impact that a regulation will have on social wel-
fare.* Considering the co-benefits is also consistent
with petitioners’ basic theory of this case, which is
that “when deciding whether it is appropriate to im-
pose regulation, a reasonable person would consider
both the pros and cons—in other words, the benefits
and costs—of regulation.” States Br. 24.

Indeed, Section 7412(n)(1)(A) itself reflects
Congress’s judgment that co-benefits are a valid basis

’ See, e.g., Exec. Order No. 12,866, 3 C.F.R. 639 (1994) (direct-
ing EPA to assess “all costs and benefits of available regulatory
alternatives”); Nat’] Ctr. for Envtl. Econ., Office of Policy, EPA,
Guidelines for Preparing Economic Analyses, 11-2 (2014),
http-//yosemite.epa.gov/ee/epa/eerm.nsf/vwAN/E E-0568-50.pdf/Sfi-
le/EE-0568-50.pdf (requiring consideration of “ancillary (or co-)
benefits and costs”); Office of Mgmt. & Budget, OMB Circular
A-4 26 (2003), http-//www.whitehouse.gov/sites/default/files/omb/
assets/omb/circulars/a004/a-4.pdf (instructing agencies to “look
beyond the direct benefits and direct costs of your rulemaking and
consider any important ancillary benefits,” specifically including
any “favorable impact of the rule that is typically unrelated or
secondary to the statutory purpose of the rulemaking”); see also,
e.g., Michael A. Livermore & Richard L. Revesz, Rethinking
Health-Based Environmental Standards, 89 N.Y.U. L. Rev. 1184,
1250-1251 (2014) (endorsing consideration of ancillary benefits);
Samuel J. Rascoff & Richard L. Revesz, The Biases of Risk
Tradeoff Analysis: Towards Parity in Environmental and
Health-and-Safety Regulation, 69 U. Chi. L. Rev. 1763, 1823-1824,
1831-1833 (2002) (same); Cass R. Sunstein, Essay, The Real World
of Cost-Benefit Analysis: Thirty-Six Questions (and Almost as
Many Answers), 114 Colum. L. Rev. 167, 190 (2014) (same).

57

for making regulatory decisions under the CAA.
Section 7412(n)(1)(A) requires EPA to evaluate how
the Act’s other provisions—+.e., provisions designed to
limit emissions of pollutants other than the hazard-
ous air pollutants at which the NESHAP program
is directed—will impact power-plant emissions of
hazardous air pollutants listed in Section 7412(b).
42 U.S.C. 7412(n)(1)(A). In other words, Section
7412(n)(1)(A) requires EPA to consider the co-benefits
of the Act’s other regulatory programs. There is no
sound reason to construe the same provision as
prohibiting agency consideration of the co-benefits
associated with regulation authorized by Section
7412(n)(1)(A) itself.’

Even apart from the co-benefits, power plants are
responsible for approximately 50% of total anthropo-
genic mercury emissions and 82% of total anthropo-
genic hydrogen chloride (a listed hazardous acid gas)
emissions in the United States. 77 Fed. Reg. at 9310.
The 2012 Final Rule will reduce emissions of those
pollutants from coal-fired plants by approximately
75% and 88%, respectively. Jd. at 9424. It is not pos-
sible to quantify, in monetary terms, many of the
benefits to be achieved frorn reducing such emissions.
See, e.g., id. at 9428; 4 J.A. 940-944. But petitioners
are wrong to imply that no such benefits exist.

4. Petitioners’ challenge to the 2012 Final Rule is
ultimately self-contradictory. To prevail in this Court,
petitioners must establish that Section 7412(n)(1)(A)
required EPA to fully consider, at the listing stage,

'® The CAA’s legislative history also reflects Congress’s expecta-
tion that EPA would consider co-benefits when setting standards
for hazardous pollutants for area sources. See 1989 Senate Report
172.

58

the costs and benefits of regulating power plants un-
der the NESHAP program. But their argument that
the 2012 Final Rule is substantively irrational, and
that an “appropriate” consideration of costs would
have produced a different result, depends on their
view that EPA must ignore a huge portion of the ben-
efits that the rule is likely to produce. Those argu-
ments are not compatible with one another.

In light of Section 7412(n)(1)(A)’s text and purpos-
es, and of the larger statutory context in which that
provision appears, EPA reasonably concluded that
Congress did not intend the agency to consider costs
when deciding whether to list power plants for
NESHAP

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385016_0332%3A14. Public record. Not legal advice.
