Amicus Curiae Brief — Massachusetts v. American Trucking Assns.

CROnOne

Nos. 99-1257, 99-1263, 99-1265 and 99-1426

IN THE

Supreme Court of the Unite

Supreme Court, US.

FILED

CAROL M. BROWNER, ADMINISTRATOR OF HR 14 5000

ENVIRONMENTAL PROTECTION AGENGY, et d.,

Petitioners,

CLERK

AMERICAN TRUCKING ASSOCIATIONS, Inc, etal,

Respondents.

V.

AMERICAN LUNG ASSOCIATION,

. Petitioners,

AMERICAN TRUCKING ASSOCIATIONS, INC., ef al.,

Respondents.

(Case Captions Continued on Inside Cover)

On Petitions for Writ of Certiorari to the

United States Court of Appeals

for the District of Columbia Circuit

BRIEF OF AMICUS CURIAE MERCATUS CENTER AT

GEORGE MASON UNIVERSITY IN OPPOSITION TO

PETITIONS FOR WRIT OF CERTIORARI AND

IN SUPPORT OF THE CONDITIONAL

CROSS-PETITION FOR WRIT OF CERTIORARI

ERNEST GELLHORN

Counsel of Record

ANN G. WEYMOUTH

Suite 100

2907 Normanstone Lane, N.W.

Washington, D.C. 20008-2725

March 14, 2000 (202) 319-7104

Wits0on-Eras Printing Co., Inc. - (202) 789-0096 - WASHINGTON, D.C. 20001

MASSACHUSETTS AND NEw JERSEY,

y Petitioners,

AMERICAN TRUCKING ASSOCIATIONS, INC., ef al.,

Respondents.

AMERICAN TRUCKING ASSOCIATIONS, INC., ef al.,

Cross-Petitioners,

v.

CAROL M. BROWNER, ADMINISTRATOR OF THE

ENVIRONMENTAL PROTECTION AGENCY, et al.,

Cross-Respondents.

I.

TABLE OF CONTENTS

INTRODUCTION AND BACKGROUND ...........

II. EPA’S OZONE AND PM,,, RULES ARE

III,

LIKELY TO HARM PUBLIC HEALTH BE-

CAUSE THEY IGNORE TRADE-OFFS AND

OTHER HEALTH EFFECTS ..............000000000.....

REQUIRING EPA TO IDENTIFY “INTELLI-

GIBLE PRINCIPLES” DERIVED FROM THE

CLEAN AIR ACT IS CONSISTENT WITH

ESTABLISHED PRECEDENTS ......._................

A. Under the Nondelegation Doctrine, Congres-

sional Legislation Must Be Interpreted, If

Possible, as Providing Guidance for Meas-

uring the Limits and Lawfulness of Agency

ee iniiietihintsciitiniiaiahinsiliaemiiskntetiibeaisiiniaspsaceueinbdibelindsn

B. The Clean Air Act Could Satisfy the Non-

delegation Doctrine If It Were Interpreted

as Implying Limits on EPA’s Authority to

IIE PAID i: scntsenneniatnninuelenaabatenens

C. Requiring the EPA to Identify the Ranking

Criter‘a for Determining the Level of Non-

threshold Pollutants Is Consistent with

REVIEW OF LEGISLATIVE RULES UNDER

THE “ARBITRARY AND CAPRICIOUS”

TEST OF THE APA IS NO SUBSTITUTE

FOR THE NONDELEGATION DOCTRINE...

SII seesunaiasiinstibsnnspstancacsonsneateensnessnentcennsattaisiianiaien

12

14

17

ii

: TABLE OF AUTHORITIES

Cases : 2 rr Page

A.L.A. Schechter Poultry Corp. v. United States,

I RR eens Be an 8

Amalgamated Meat Cuttere & Butcher Workmen

of N.A. v. Connally, 387 F. Supp. 787 (D.D.C.

1971) 11

Bennett v. Spear, 520 U.S. 154 (1997) —................ 2

Burlington Truck Lines, Inc. v. United States, 371

U.S. 156 (1962) 12

Buttfield v. Stranahan, 192 U.S. 470 (1904) __........ 9

Chevron v. NRDC, 467 U.S. 887 (1984) —............... 15, 16

Clinton v. City of New York, 524 U.S. 417 (1998).. 9

Fahey v. Mallonee, 382 U.S. 245 (1947)................. 11

Hoctor v. USDA, 82 F.3d 165 (7th Cir. 1996) ........ 15

Industrial Union Dep’t v. American Petroleum

Institute, 448 U.S. 607 (1980) -............................ 11, 13

J.W. Hampton, Jr. & Co. v. United States, 276 U.S.

$94 (1928) ....... 9

Kent v. Dulles, 357 U.S. 116 (1958) —.....-..... 11

Lead Indus. Assn. v. EPA, 647 F.2d 1180 (D.C.

Cir. 1980) 4,7

Lichter v. United States, 334 U.S. 742 (1948) ........ 11

Mistretta v. United States, 488 U.S. 361 (1989)... 9,11

Motor Vehicle Mfrs. Assn. v. State Farm Mutual

Automobile Ins. Co., 463 U.S. 29 (1988) ........... 16

National Cable Television Assn. v. United States,

415 U.S. 886 (1974) ... ie 11

Skinner v. Mid-America Pipeline Co., 490 U.S. 212

| a 11

South Dakota v. United States Dep’t of Interior,

69 F.3d 878 (8th Cir. 1995), vacated & re-

manded on change in petitioner’s position, 519 —

*§ SS © Res 9

Touby v. United States, 500 U.S. 160 (1991) -...... a 10

Yakus v. United States, 321 U.S. 414 (1944)........ 11

Zemel v. Rusk, 381 U.S. 1 (1965) . dU

Statutes :

5 U.S.C. § 706(2) (A) - ue 16

26 U.S.C. § 501 (c) (3) 1

iti

TABLE OF AUTHORITIES—Continued

Clean Air Act § 109(b) (1), 42 U.S.C. § 7409(b)

(1)

Clean Air Act § 307(d), 42 U.S.C. § 7607 (d).......-

Miscellaneous :

U.S. Constitution, Art. I. §§1, 8...........

EPA Ozone Rule, 62 Fed. Reg. 38,855 (July 18,

1997) ......

Regulatory Impact Analysis (July 16, 1997) Ozone

JA 2924, 2934

CASAC Letter to Carol Browner re: Ozone (No-

vember 80, 1995) Ozone JA 238 ....................02-2000-

CASAC Letter to Carol Browner re: Particulate

Matter (June 18, 1996) PM JA 3162...................

Susan E. Dudley & Wendy L. Gramm, EPA’s Pro-

posed Ozone Standard May Harm Public Health

and Welfare, 17 Int'l J. of Risk Analysis 403

(August 1997) .......

EPA, Calculations of the Impact of Tropospheric

Ozone Changes on UV-B Flux and Potential

Skin Cancers (Draft) (September 1994)

(Cupitt, Larry T.) Ozone JA 3089 .......................

Randall Lutter, John F. Morrall, III, W. Kip

Viscusi, The Cost-Per-Life-Saved Cutoff for

Safety-Enhancing Regulations, 37 Economic In-

quiry 599 (October 1999) ............

RSP Comments in EPA Ozone/PM Rulemaking

(submitted March 12, 1997 (www.gmu.edu/mer-

catus/)

Statement of Marvin Frazier, DOE Office of

Health & Environmental Research, Before

CASAC (March 21, 1995) Ozone JA 258-59........

Stephen Breyer, Breaking the Vicious Circle: To-

ward Effective Risk Regulation 23 (1993)........

P. Strauss, T. Rakoff, R. Schotland & C. Farina,

Cases and Comments on Administrative Law

92 (9th ed. 1995)

Webster’s New World Dictionary 21 (College Edi-

a io calnsiinlinamehenbabuniensnuon

BRIEF OF AMICUS CURIAE MERCATUS CENTER AT

GEORGE MASON UNIVERSITY IN OPPOSITION TO

PETITIONS FOR WRIT OF CERTIORARI AND

IN SUPPORT OF THE CONDITIONAL

CROSS-PETITION FOR WRIT OF CERTIORARI

INTEREST OF AMICUS CURIAE

The Mercatus Center at George Mason University is a

nonprofit research and educational institution, as defined

by the Code of the Internal Revenue Service, 26 U.S.C.

§ 501(c) (3), whose Regulatory Studies Program (“RSP”)

is dedicated to advancing knowledge of administrative reg-

ulations and their impact on society.* RSP submitted

comments to the Environmental Protection Agency on the

proposed national ambient air quality standards for ozone

and particulate matter that are the subject of the Petitions

herein. Its comments focused on the inadequacy of the

scientific foundation of the proposed standards and on the

disproportionate risks they would impose on the general

population, both because ozone provides direct health ben-

efits that should be considered, and because the extraordi-

nary cost of achieving the standards would adversely

affect public health.

The consent of the parties to the filing of this amicus

curiae brief has been obtained and is filed with the Clerk

of the Court.

ARGUMENT

I. INTRODUCTION AND BACKGROUND

The central issue in the petitions for a writ of certiorari

filed separately by the Environmental Protection Agency

* Pursuant to Supreme Court Rule 37.6, amicus curiae states

that no counsel for a party authored this brief in whole or in part,

and no persons other than the amicus curiae, its members, or its

counsel, made a monetary contribution to the preparation or sub-

mission of this brief.

2

(“EPA”), the American Lung Association (“ALA”), and

Massachusetts and New Jersey (“States”) is whether the

court of appeals properly interpreted the nondelegation

doctrine when it reversed and remanded the National

Ambient Air Quality Standards (“NAAQS”) for ozone

and particulate matter because EPA’s interpretation of

Section 109 of the Clean Air Act (“CAA”) stated no

“intelligible principle” on which the levels were based.

Petitioners rely primarily on three contentions to justify

review. First, they argue that as a matter of public policy,

the ozone and particulate matter rules are fundamentally

sound and of “immense practical importance to the health

of the American public.” EPA Pet. 9; see State Pet. 26-

28; ALA Pet. 15-17. Second, they assert that the lower

“court’s decision represents a radical departure from set-

tled law respecting the nondelegation doctrine.” EPA

Pet. 9; see id. 11-19. Third, they charge that the lower

court’s ruling would improperly “expand the role of courts

in reviewing agency action.” Id. 9.1

None of Petitioners’ arguments is meritorious. First,

the EPA rules will not improve public health. They are

1We do not address the issue raised by EPA but not by other

petitioners, namely, whether EPA had taken final action and, thus,

whether the Subpart 2 plementation issues were ripe for review.

EPA Pet. 19-21. Contrary to the EPA petition, we believe it is clear

beyond reasonable argument that the EPA’s action here—“‘two

final EPA rules establishing revised National Ambient Air Quality

Standards (NAAQS) for particulate matter and ozone,” EPA Pet.

2 (emphasis added)—“alters the legal regime to which the action

agency is subject.” Bennett v. Spear, 520 U.S. 154, 169 (1997)

(biological opinion isued by Fish & Wildlife Service under Endan-

gered Species Act constitutes final agency action). The EPA rule-

making “implicate[s] the viability of massive regulatory programs

which rely upon both the validity and enforceability of the revised

ozone and PM NAAQS.” State Pet. 26. The EPA petitioners dis-

pute the application of the finality/ripeness tests but identify no

conflict among the circuits on this issue or confusion in the criteria

to be applied.

3

based on highly uncertain evidence and ignore important

countervailing health considerations.

Second, the lower court did not misunderstand the non-

delegation doctrine. It applied the doctrine in a tradi-

tional and reasonable fashion, focusing on the absence of

any intelligible standard in the agency’s interpretation of

the CAA and identifying how the agency might construe

the statute to save it from being found invalid.

Third, the appeals court did not apply the nondelega-

tion doctrine to reverse a Congressional delegation to the

EPA, nor did it, itself, reinterpret the statute to conform

to its views of the constitutional norm. Instead, it took

a far less intrusive approach, consistent with this Court’s

decision in Chevron, of remanding the matter to the

agency for EPA to interpret the CAA consistent with the

“intelligible principles” requirement of the nondelegation

doctrine.

Under the Clean Air Act, EPA is to set NAAQS at

levels “requisite to protect the public health” with an “ade-

quate margin of safety.” CAA § 109(b)(1), 42 U.S.C.

§ 7409(b)(1). In the case of ozone and particulate mat-

ter (“PM”), EPA’s evidence suggests that there is no

threshold below which either pollutant would not pose

health threats. However, EPA failed to identify specific

standards or measurable factors consistent with the CAA

as the basis for the NAAQS levels it selected. It inter-

preted the CAA as allowing it to choose any point along

a “linear nonthreshold” ? continuum and to claim that the

2 The linear, nonthreshold dose-response model that EPA uses in

its analysis relates the predicted change in health effects to a

change in the concentration of PM or ozone. Unlike other chemicals

regulated by EPA under this section of the CAA, EPA has no

scientific evidence of a threshold concentration below which PM or

ozone will not have health effects. This is the nonthreshold aspect

of the model. The linear aspect of the model assumes that regard-

4

selected point provides an adequate margin of safety—

without regard to whether that margin could be satisfied

at a less stringent level.

Because the linear nonthreshold model attributes health

benefits to each further reduction in ozone and PM, no

matter how clean the air already may be, and without

regard to the overall effect on public health, EPA’s inter-

pretation of the CAA would allow it to set the level for

each at zero. It relies upon “policy judgments” to justify

its selected standards. Thus, any level chosen by EPA—

“any point between zero and a hair below the concentra-

tions yielding London’s Killer Fog,” Pet. App. 13a—is

automatically permissible under the agency’s reading of

the CAA because, according to EPA, the statute imposes

no limits on its policy judgment.

The basic fault in EPA’s misguided interpretation of

the CAA, and thus of its NAAQS rules, derives from the

D.C. Circuit’s decision in Lead Indus. Assn. v. EPA,

647 F.2d 1130 (D.C. Cir. 1980), holding that § 109 of

the CAA prohibits the consideration of “any factor other

than ‘health effects relating to pollutants in the air’” in

setting NAAQS levels. See Pet. App. 15a. This reading

of the CAA is not supported by the text, structure, con-

text or legis'ative history of the Act, see ATA Cross-Pet.

14-15, or by rational policy analysis. Protecting public

health necessarily involves consideration of a broad range

of factors, including trade-offs between different health

effects and the costs of implementing a standard, because

large costs themselves can have negative public health

consequences.

less of the overall concentration of ozone or PM to which an in-

dividual is exposed, a one unit change in that concentration will

have the same marginal effect.

5

II. EPA’S OZONE AND PM,,, RULES ARE LIKELY TO

HARM PUBLIC HEALTH BECAUSE THEY IG-

NORE TRADE-OFFS AND OTHER HEALTH EF-

FECTS

EPA’s revised NAAQS would reduce the allowed level

of ground-level ozone by about 10 percent and regulate

very fine particles (PM:.;) for the first time. It argued

that these revisions were necessary to protect the public

from respiratory health effects, especially asthma. Con-

trary to EPA’s assertions that these rules would make a

significant contribution to public health, the standards

have little scientific merit, were not endorsed by EPA’s

own scientific advisors, and were based on unduly narrow

health considerations. EPA has presented no evidence

that the new standards are achievable, and even if they

were, EPA cannot demonstrate that they are likely to be

more protective of public health than current NAAQS

levels. In fact, the opposite is true.

For the ozone standard, EPA’s Clean Air Scientific Ad-

visory Committee (“CASAC”), a legislatively-established

body of independent experts which provides advice to

EPA on scientific and engineering issues, concluded that

“there is no ‘bright line’ which distinguishes any of the

proposed standards (either the level or the number of

allowable exceedances) as being significantly more protec-

tive of public health.” CASAC Letter to Carol Browner

re: Ozone (November 30, 1995) Ozone JA 238. More-

over, the majority of members on the panel who ex-

pressed an opinion preferred a level less stringent than

that proposed by EPA. Id.

Similarly for the PM standard, CASAC could find no

consensus for selecting “the level, averaging time, or form

of a PM:.s NAAQS.” CASAC Letter to Carol Browner

re: Particulate Matter (June 13, 1996) PM JA 3162.

Only 2 of the 21 scientists on CASAC were willing to

6

endorse a general range as stringent as the range adopted

in EPA’s PM:.s standard. Id. 3165.

EPA ignored other important information relevant to

public health in setting the ozone and PM levels. For

example, it acknowledged that, due to ozone’s screening

effect on harmful ultraviolet-B radiation, the reduction in

ozone levels mandated by the NAAQS will increase malig-

nant and nonmelanoma skin cancers and cataracts. EPA,

Calculations of the Impact of Tropospheric Ozone

Changes on UV-B Flux and Potential Skin Cancers (Draft)

(September 1994) (Cupitt, Larry T.) Ozone JA 3089-

3104. Nonetheless, EPA ignored these data in setting the

ozone standard. In uncontradicted evidence submitted to

EPA, the Department of Energy projected that a 10 ppb re-

duction in ozone concentrations, as required by the ozone

rule herein, would result in 25 to 50 new melanoma-

caused fatalaties, 130-260 incidences of cutaneous mel-

anoma, 2,000-11,000 new cases of nonmelanoma skin

cancer, and 13,000 to 28,000 incidences of cataracts each

year. Statement of Marvin Frazier, DOE Office of Health

& Environmental Research, Before CASAC (March 21,

1995) Ozone JA 258-59. These negative health effects

of the ozone standard dwarf EPA’s projected positive

health effects, which do not include any reduction in

deaths. See Susan E. Dudley & Wendy L. Gramm, EPA’s

Proposed Ozone Standard May Harm Public Health and

Welfare, 17 Int'l J. of Risk Analysis 403 (August 1997).

EPA itself concedes that the costs of the new ozone

regulation will far exceed its benefits, but asserts that

under Lead Industries the agency may not consider imple-

mentation costs when setting NAAQS. EPA Ozone Rule,

62 Fed. Reg. 38,855, 38878 (July 18, 1997); Regula-

tory Impact Analysis, Ozone JA 2924, 2934 (July 16,

1997). Yet mounting research shows that regulatory costs

do affect public health because such costs represent fore-

7

gone opportunities to improve health and safety—e.g.,

disease prevention, better diets and improved sewage

treatment. See, e.g., Stephen Breyer, Breaking the Vicious

Circle: Toward Effective Risk Regulation. 23 (1993)

(“deprivation of real income itself has adverse health

effects, in the form of poorer diet, [and] more heart at-

tacks”). Studies linking income and mortality find that

every $15 million decline in incomes results in one statis-

tical death. Randall Lutter, John F. Morrall, III, W. Kip

Viscusi, The Cost-Per-Life-Saved Cutoff for Safety-En-

hancing Regulations, 37 Economic Inquiry 599 (October

1999). Applying this analytical framework to the ozone

and PM rules herein, the Mercatus Center’s Regulatory

Studies Program estimates that full compliance could ex-

ceed $100 billion per year and increase mortality by over

6,500 deaths per year (not including the increase in

melanoma deaths from UV-B exposure). See RSP Com-

ments in EPA Ozone/PM Rulemaking (submitted March

12, 1997) (available at www.gmu.edu/mercatus/).

This disregard for the “wealth-health” effect is a direct

result of the D.C. Circuit decision in Lead Industries

barring consideration of costs because the CAA “makes

no mention of such factors.” 647 F.2d at 1149 n.37.

Both EPA and the lower court interpreted Lead Indus-

tries as limiting the NAAQS rulemaking to direct health

effects and as not permitting consideration of the costs

and their relationship to benefits imposed by the rule and

of whether the costs imposed by the rule will result in

a net reduction in human health or a net increase in

lives lost. ATA Cross Pet. 6. However, as the ATA

Cross Petition shows, the ruling in Lead Industries is

based on an erroneous reading of the CAA, has been

extended improperly! beyond its basis, is contrary to the

principles and rationale of this Court’s ruling in Benzene

(discussed infra pp. 13-14), and should be reconsidered

as urged by Respondents below. ATA Cross Pet. 14-18.

III. REQUIRING EPA TO IDENTIFY “INTELLIGIBLE

PRINCIPLES” DERIVED FROM THE CLEAN AIR

ACT IS CONSISTENT WITH ESTABLISHED PRE-

CEDENTS

This case does not require application of the nondelega-

tion doctrine to overturn the CAA or otherwise to inter-

fere with broad legislative delegations of administrative

authority. It also does not require that the doctrine be

revised before being applied as a prophylactic canon of

construction. Finally, the Court need not consider whether

the CAA’s defining terms—that the NAAQS standards

must “protect the public health” with an “adequate margin

of safety,” CAA § 109(b)(1)—are unconstitutionally un-

confined and therefore should be overturned.

Rather, the issue here is a narrow one. The court

below limited its ruling and held only that it is the

agency’s responsibility to interpret the statute, if possible,

in a manner that is consistent with the principles of the

nondelegation rule. What the court said is that EPA is

not free to read the CAA terms as setting virtually no

definable limits on the agency’s authority when setting

NAAQS for ozone and PM, while ignoring a more spe-

cific construction that could provide a principled basis

for the agency’s rules.

We believe that the analysis applied by the court be-

low is correct and consistent with numerous cases decided

since 1935 and 1936 when the doctrine was last applied

by this Court to directly invalidate a Congressional enact-

ment. Administrative agencies are obliged to interpret

their authority to avoid unchanneled delegations of dis-

cretion to the agency. To rule otherwise is to raise the

specter of “delegation[s] running riot,” A.L.A. Schechter

Poultry Corp. v. United States, 295 U.S. 495, 553 (1935)

(Cardozo, J., concurring), and to disregard the first oper-

ative sentence of the Constitution that “[aJll legislative

9

Powers herein granted shall be vested in a Congress of

the United States.” U.S. Constitution, Art. I, § 1; see

also id. Art. I, § 8.

A. Under the Nondelegation Doctrine, Congressional

Legislation Must Be Interpreted, If Possible, as

Providing Guidance for Measuring the Limits and

Lawfulness of Agency Action

The core requirement of the nondelegation doctrine is

undisputed by Petitioners. EPA Pet. 13. It establishes

that legislative authority delegated by Congress to the

executive must state “intelligible principles,” Buttfield y.

Stranahan, 192 U.S. 470, 496 (1904), by which the

agency is given a “primary standard” to guide its action.

J.W. Hampton, Jr. & Co. v. United States, 276 U.S. 394,

409 (1928); see Clinton v. City of New York, 524 US.

417, 484-96 (1998) (Breyer, J., dissenting). It is satis-

fied where “Congress clearly delineates the general pol-

icy, the public agency which is to apply it, and the boun-

daries of this delegated authority.” Mistretta v. United

States, 488 U.S. 361, 372-73 (1989) (quoting American

Power & Light Co. v. SEC, 329 U.S. 90, 105 (1946)).

That the nondelegation doctrine is rarely applied to

invalidate legislation does not mean that it has been

abandoned or that it is without continuing substantial

influence. See South Dakota v. United States Dep’t of

Interior, 69 F.3d 878 (8th Cir. 1995) (invalidating In-

dian Reorganization Act authorizing Interior Secretary to

acquire lands in trust for tribes because Act provided no

“intelligible principles” for determining when that author-

ity could be exercised), vacated & remanded on change in

petitioner's position, 519 U.S. 919, 920-23 (1996). It

has an “important and continuing ‘shadow’ impact” on

the reading and review of legislative delegations. P.

10

Strauss, T. Rakoff, R. Schotland & C. Farina, Cases and

Comments on Administrative Law 92 (9th ed. 1995).

For example, in Touby v. United States, 500 U.S. 160

(1991), the Attorney General’s broad discretion to tem-

porarily add or remove psychoactive drugs from the

“schedules” of prohibited or regulated controlled substances

was upheld. In upholding this authority, however, the

Court relied heavily on two concessions by the Govern-

ment which more narrowly confined the Attorney Gen-

eral’s discretion. First, it acknowledged that a drug could

not be added to Schedule I (the most harmful category)

without first being subject to additional testing. Second,

the provision freeing temporary scheduling orders from

judicial review did not preclude a defendant facing crim-

inal charges from asserting a challenge to the temporary

scheduling order as a defense to the prosecution. See id.

170 (Marshall, J., concurring).

Thus, the nondelegation doctrine does not mean that

Coazress cannot delegate broadly or allow executive agen-

cies substantial discretion. And there are numerous ex-

amples, which Pei.tioners trumpet, EPA Pet. 12 n.5, of

facially open-ended statutory “standards” that delegate to

an agency the power to determine what are “excessive

profits,” “fair and equitable” prices, “just and reasonable

rates,” and “unfair methods of competition” which have

been upheld. But in every case, the Court has identified

specific limits or compelling constitutional reasons justify-

ing the delegation before upholding the statute or rule.

What Petitioners fail to recognize is that these open-

ended statutory standards have been upheld only after

finding an exceptional circumstance (e.g., relying on the

President’s extensive war powers or authority to conduct

foreign affairs) justifying the delegation or because the

executive discretion was bounded by precedent, recognized

principles implicit in the statute, or other similar restric-

11

tions. For example, Yakus v. United States, 321 U.S.

414 (1944) and Lichter v. United States, 334 U.S. 742

(1948) are emergency wartime measures where “broad

discretion . . . may be essential.” Id. 779. Fahey v. Mal-

lonee, 332 U.S. 245, 249-53 (1947) upheld broad

powers to oversee banking because a long history of such

regulation had established specific common law standards

which guided the regulators. And Amalgamated Meat

Cutters & Butcher Workmen of N.A. v. Connally, 337

F. Supp. 737 (D.D.C. 1971) (Leventhal, J.) upheld non-

wartime wage and price controls only after finding that

the administrative authority was confined by price control

precedents and after incorporating other restrictions in-

cluding APA procedures and opportunities for judicial

review in the regulatory program.

There also are even more cases where administrative

action was upheld only after the Court “reinterpreted” the

statute to find an implied condition limiting the facial

agency authority. E.g., Industrial Union Dep’t v. Ameri-

can Petroleum Institute, 448 U.S. 607 (1980) (Ben-

zene); National Cable Television Assn. v. United States,

415 U.S. 336, 342-43 (1974) (narrowing basis for FCC

to set cable television fees); Zemel v. Rusk, 381 U.S. 1

(1965) (reading areas of restrictions on passports as

limited by “prior administrative practice”); Kent v.

Dulles, 357 U.S. 116 (1958) (reading passport au-

thority narrowly to deny Secretary of State power to

refuse a passport on grounds of political belief). The

typical application of the nondelegation doctrine, in

fact, is by “giving narrow constructions to statutory

delegations that might otherwise be thought to be

unconstitutional.” Mistretta v. United States, supra at

374 n.7; see also Skinner v. Mid-America Pipeline Co.,

490 U.S. 212, 222-23 (1989).-

12

B. The Clean Air Act Could Satisfy the Nondelegation

Doctrine If It Were Interpreted as Implying Limits

on EPA’s Authority to Set NAAQS Levels

The lower court here similarly found EPA’s interpreta-

tion of the CAA inadequate because the agency had

failed to find any limit on its authority to select the levels

at which the ozone and PM standards were to be set. The

D.C. Circuit held that § 109 and related sections of the

Act must be construed to provide an “intelligible princi-

ple” that guides the exercise of agency discretion. Finding

that EPA had failed to define such a standard in the

CAA, the court remanded the rules for “EPA to develop

a construction of the act that satisfies this constitutional

requirement.” Pet. App. 4a.

The Government’s Petition now claims to have found

a standard in EPA’s interpretation of the CAA because

the Act “requires EPA to develop the [limiting substan-

tive] ‘criteria’” in accordance with established rulemaking

and judicial review procedures in § 307(d), 42 U.S.C.

§ 7607(d), and as derived from the Act’s legislative his-

tory which references “adverse effects.” EPA Pet. 13-15

& n.8. However, this description of EPA’s approach has

no support in the record and is inconsistent with EPA’s

position below. This contrived effort to seek shelter under

the Benzene ruling fails because the term “adverse” tells us

nothing about the degree of harm which must be found.

To say that something must be “unfavorable” or “harm-

ful” * does not tell us how harmful, or that the harm must

be substantial or significant. In any case, EPA’s rule

cannot be upheld on a view not adopted by EPA but

advanced for the first time by counsel before this Court.

Burlington Truck Lines, Inc. v. United States, 371 US.

156, 168-69 (1962) (“The courts may not accept appel-

3 Webster's New World Dictionary 21 (College Edition 1964)

(defining “adverse” as something “unfavorable, harmful”).

- emcacnamatmasasaamaeatuamaiamuaicasaniesd aia

13

late counsel’s post hoc rationalizations for agency action;

Chenery requires that an agency’s discretionary order be

upheld, if at all, on the same basis articulated by the

agency itself.”).

The situation here is closely analogous to Industrial

Union Dep’t v. American Petroleum Institute, 448 U.S.

607 (1980) (plurality opinion) (Benzene), where this

Court reversed an OSHA rule issued by the Secretary of

Labor that would have imposed stringent measures to

minimize worker exposure to benzene, a cancer-causing

chemical. According to the Court plurality, the rule

could not be justified by the statutory terms requiring

employers to protect their workers “to the extent feasible”

from harm due to toxic substances because feasibility was

not, at least on its face, a sufficiently limiting require-

ment. However, after reviewing the organic act, its terms

and context, the plurality determined that the “feasibility”

requirement was adequate because it required the Secre-

tary to make a finding that the preexisting situation cre-

ated a “significant risk” (which the OSHA rule could then

alleviate). With that addition, the impermissibly stand-

ardless facial authority was held to satisfy the nondelega-

tion doctrine. That is, the plurality narrowed the feasi-

bility standard in the statute by interpreting it as includ-

ing a significant risk test. It then remanded the matter

to the agency for reconsideration of the rule under the

revised interpretation of its statutory authority. As here,

4 The Benzene plurality became a majority with the vote of then-

Justice Rehnquist who would have invalidated the statute as an

impermissible delegation. He found the statute’s “to the extent

feasible” standard a “mirage” and unconstitutional because Con-

gress had delegated to the Secretary the “fundamental” policy deci-

sion of “where on the continuum of relative safety [the Secretary]

should draw his line.” 448 U.S. at 675, 681, 687-88. Under its

interpretation of § 109 of the CAA, EPA claims the same discretion

here.

‘14

however, the facially open-ended grant of authority to the

agency was not upheld and the agency was afforded the

opportunity to apply the corrected standard in developing

its rule.

The lower court similarly remanded the rule to the

agency for revision in accordance with a standard con-

sistent with the nondelegation doctrine. However, it

took a less intrusive path than that outlined in Ben-

zene. It found only that, as applied, EPA’s interpre-

tation of CAA § 109 allows it untrammeled discretion

that would, if not corrected, violate the nondelegation

doctrine. But the court did not interpret the statute itself

or tell the agency what the criteria must be under its

terms. It merely held that, as interpreted by EPA, § 109

sets no limit on the agency’s authority, and that under this

view any level identified in the NAAQS would satisfy the

CAA. Under the Benzene precedent, the reviewing court

could have examined the statute for itself, determined its

meaning (at least if it found that the intent of Congress

was clear, see pp. 14-16 infra), and directed the agency to

revise the rule in accordance with this interpretation (i.e.,

in a way that properly applied the reinterpreted “protect

public health” with an “adequate margin of safety” test).

Instead, the court below took the more limited step of

remanding the matter to EPA with the direction that the

agency reinterpret § 109 consistent with the nondelegation

doctrine (if possible) and that under this revised under-

standing it identify a more specific foundation for setting

the ozone and PM NAAQS.

C. Requiring the EPA to Identify the Ranking Criteria

for Determining the Level of Nonthreshold Pol-

lutants Is Consistent with Chevron

The ruling below that EPA, rather than the reviewing

court, should determine the meaning of § 109 consistent

“HS

‘with the nondelegation doctrine, is also required by recog-

nized standards for judicial review of agency action.

Under Chevron v. NRDC, 467 U.S. 837, 842-44 (1984),

courts are to defer to reasonable agency interpretations

of statutes that do not clearly reveal Congress’ intent on

the precise issue in question. Just as EPA was allowed

in Chevron to determine whether Congress meant EPA’s

regulation of “stationary sources” of pollution to be meas-

ured solely by each individual source or on a plant-wide

basis, here it is for EPA to interpret the meaning of § 109

and to identify criteria consistent with Congress’ intent.

The identification of the numerical equivalent or degree

of an “adequate margin of safety” for nonthreshold pol-

lutants is essentially a legislative task consistent with

EPA’s authority to issue legislative rules such as NAAQS

standards. Thus, it is particularly appropriate that the

agency be directed to fill in the meaning of this statutory

standard through legislative rulemaking. See Hoctor v.

USDA, 82 F.3d 165 (7th Cir. 1996) (Posner, C.J.) (nu-

merical requirements are inherently “arbitrary” and in-

volve legislative judgments which agencies are better posi-

tioned than courts to make). EPA’s interpretation shall

be upheld if reasonable, including therein that as inter-

preted the statute satisfies the nondelegation doctrine.

Enforcement of the nondelegation doctrine, to require

that the NAAQS levels be consistent with Congress’ stated

purpose of protecting the public health with an adequate

margin of safety, is consistent with sound policy. Not

only are agencies quasi-legislative bodies and accountable

to the people through the President’s authority over them,

but also EPA is the body best positioned to determine

what Congress intended when it approved the provisions

of § 109. 467 U.S. at 865-66. In addition, under Chev-

ron, the agency interpretation is not “carved in stone” and

can be modified as necessary to meet changing circum-

16

stances. It has greater flexibility and can move more

quickly to revise the interpretation of the underlying cri-

teria when change is required. And as long as that change

is plausible and justified by reasons for the change, it

will not be disturbed on judicial review. Id. at 863-64.

IV. REVIEW OF LEGISLATIVE RULES UNDER THE

“ARBITRARY AND CAPRICIOUS” TEST OF THE

APA IS NO SUBSTITUTE FOR THE NONDELEGA-

TION DOCTRINE

Finally, review of agency action under the “arbitrary

and capricious” test under the Administrative Procedure

Act, 5 U.S.C. § 706(2)(A), is no substitute for applica-

tion of the nondelegation doctrine to control standardless

discretion. The nondelegation doctrine, as applied by the

court of appeals, requires that EPA determine Congress’

intent when it prescribes NAAQS to protect the public

health with an adequate margin of safety. As long as

EPA’s interpretation of the Congressional intent confines

administrative discretion within understandable bounds,

it will not be disturbed by the nondelegation doctrine on

review. And as long as that interpretation by EPA is

reasonable—i.e., a permissible and reasonable interpreta-

tion of § 109— it will be upheld under Chevron.

On the other hand, application of the arbitrary and

capricious test under § 706(2)(A) of the APA requires

that the particular NAAQS levels selected by EPA must

reflect a reasoned decision. That is, the facts must be

supported by sufficient evidence before the agency, and

the inferences drawn from them as well as the policy

rationale and ultimate conclusions must be adequately

explained and justified. Motor Vehicle Mfrs. Assn. v.

State Farm Mutual Automobile Ins. Co., 463 U.S. 29,

43 (1983).

ee

17

The nondelegation doctrine looks to the interpretation

given the Congressional statute and asks whether the au-

thorized administrative action is confined by intelligible

standards. By contrast, the arbitrary and capricious test

does not look at the statutory authority and its definite-

ness. Rather, it examines the administrative action itself

and asks whether the rule is the product of reasoned

decision making. Thus, the two requirements complement

each other; but one is not a substitute for the other.

CONCLUSION

For the foregoing reasons, the petitions for a writ of

certiorari should be denied and, alternatively, the cross-

petition for a writ of certiorari should be granted.

Respectfully submitted,

ERNEST GELLHORN

Counsel of Record

ANN G. WEYMOUTH

Suite 100

2907 Normanstone Lane, N.W.

Washington, D.C. 20008-2725

March 14, 2000 (202) 319-7104

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