Reply Brief — American Lung Ass'n v. Environmental Protection Agency

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NO. 58-1929 " OFEICE OF THE OLERM |

In The

Supreme Court of the United States

AMERICAN LUNG ASSOCIATION, et al.,

Petitioners,

ENVIRONMENTAL PROTECTION AGENCY

and Carol M. Browner, Administrator,

United States Environmental Protection Agency,

Respondents.

On Petition For A Writ Of Certiorari

To The United States Court Of Appeals

District Of Columbia Circuit

S

REPLY BRIEF

*

Rosert E. YUHNKE

Counsel of Record

Attorney for Petitioners

1405 Arapahoe Avenue

Boulder, CO 80302

(303) 440-4901

COCKLE LAW BRIEF PRINTING CO,, (800) 225-6964

OR CALL COLLECT (402) 342-2831

a ee ee

TABLE OF CONTENTS

Page

1. EPA’s Decision Was Remanded Because It Is Arbi-

er Se I ono 5.5 65-54 055 400k ese cones 1

2. Litigation Winning Remand of Arbitrary and

Capricious Decision Achieves “Some Success”... 4

3. Denying Fees For Remand of an Arbitrary and

Capricious Decision Creates a Conflict With Deci-

sions of Four Courts of Appeals ............... 7

4. ALA Also Satisfies “Prevailing Party” Tests .... 7

EEE PR Pe ee be see ee 10

TABLE OF AUTHORITIES

Page

Cases:

Allentown Mack Sales & Service, Inc. v. NLRB, 522

US. 359 (1996) . oc cvvcanevens ys en eee eee 3

Dickson v. Secretary of Defense, 68 F.3d 1396

(D.C Cir. 1998) 2. c20> secon 3

Maher v. Gagne, 448 U.S. 122 (1980) ..... 22.0. s css 8, 9

Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto.

ins., 435 US. 2 (3998) 4405053 Pe ee See

NRDC v. EPA, 484 F.2d 1331 (1st Cir. 1973) ........ 5, 6

Ruckelshaus v. Sierra Club, 463 U.S. 680 (1983) ......5, 6

Shaiala v. Schaefer, 5309 U.S. 292 (IGB4) 6. cbse cesuesees 7

Texas State Teachers Assn. v. Garland Independent

School District, 489 U.S. 782 (1989) ..............66. 7

STATUTES:

Clean Air Act, 42 U.S.C. § 7401 ef seq.:

& TiXs), 42 USC. & FO ie ee 8

§ SO/(G), 42 U.S.C. | FOR Ss vigss eae 3

S 7h), 4 USA. § 7 505e0ee a

Federal Register:

OS Fed. Rem. DA IGe nck devisees ete ee 8

LEGISLATIVE MATERIALS:

H.R. Rep. No. 95-294, 95th Cong., Ist Sess. 337

ts Damen rin an OA ena Foy uy eal): 6

1

AMERICAN LUNG ASSOCIATION’S REPLY TO

ENVIRONMENTAL PROTECTION AGENCY’S

OPPOSITION TO CERTIORARI

1. EPA’s Decision Was Remanded Because It Is Arbi-

trary and Capricious.

Petitioners have demonstrated that the denial of costs

and attorneys’ fees in ALA v. EPA “because ‘the agency

may be able to justify its position with a simple response

containing no reformation of the challenged portion of

the rules’ ”, Pet. App. 3, is in conflict with the Ruckelshaus

and Shalala decisions of this Court and the decisions of

four courts of appeals granting fees in cases where

agency decisions were remanded on grounds that would

allow the agency to re-adopt the challenged portion of

the rules. While the government necessarily acknowl-

edges that the ALA Court found “the Administrator had

not adequately explained her decision, and remand[ed]

the case to permit her ‘to explain her conclusions more

fully’,” Opp. at 3, EPA attempts to avoid the conflicts

with these cases by arguing that the decision below did

not expressly “find that EPA’s decision was unreasonable,

arbitrary, or capricious.” Opp. at 7. EPA argues that since

the Court did not expressly declare EPA’s decision to be

arbitrary and capricious, then this Court should reject the

petition because ALA won nothing of substance and can-

not be eligible for an award of costs and fees.

The government's argument is nothing more than a

red herring, placing form over substance, because it

ignores the fundamental tenet of administrative law that

whenever “the agency has failed to offer the rational

connection between facts and judgment,” its decision

fails to “pass muster under the arbitrary and capricious

standard.” Motor Vehicle Mfrs. Ass'n v. State Farm Mut.

Auto. Ins., 463 U.S. 29, 56 (1983). The Court of Appeals

unquestionably remanded EPA’s decision because the

Agency failed to explain why “SO2 bursts do not amount

to a ‘public health’ problem within the meaning of the

Act,” and neglected its “heaviest of obligations to explain

2

and expose every step of its reasoning.” ALA v. EPA, 134

F.3d at 392 [Pet. App. 15]. Identifying fundamental con-

tradictions between the factual evidence of harm to the

health of asthmatics and EPA’s conclusion that these

effects are not a public health problem, Pet. App. 14, the

Court concluded “[w]ithout answers to these questions,

the Administrator cannot fulfill her responsibility under

the Clean Air Act to establish NAAQS ‘requisite to pro-

tect the public health’.” Citing Motor Vehicle Manufac-

turers, the Court reiterated “we have always required the

Administrator to ‘cogently explain why [she] has exer-

cised [her] discretion in a given manner.’ ” Pet. App. 15.

“Given the gaps in the Final Decision’s reasoning, we

must remand this case to permit the Administrator to

explain her conclusions more fully.” Pet. App. 16.

Ultimately, the Court did not decide the central legal

issue presented by ALA - that EPA may not lawfully

decline to protect asthmatics from known adverse health

effects caused by exposure to ambient concentrations of

SO2 - but not because the Court found any fault with

petitioners’ argument. The Court explained that it would

defer the central legal issue ALA raised “[s]ince in this

case the Administrator has failed adequately to explain

her conclusion that no public health threat exists, we can

leave the issue of the scope of her authority for another

day.” Pet. App. 17. The Court nonetheless went out of its

way to remind the Agency that “although our cases make

clear that the Administrator has broad discretion to estab-

lish an ‘adequate margin of safety’ above and beyond

what scientific certainty prescribes . . . , they do not

necessarily establish the converse proposition — that the

Administrator may decline to establish a margin of safety

in the face of documented adverse health effects.” Pet.

App. 16-17.

At no point did the Court reject ALA’s central legal

arguments. The Court did, however, find EPA’s decision

to be fundamentally flawed because it failed to satisfy

one of the most basic tests of reasoned decisionmaking -

the obligation to “articulate a satisfactory explanation for

3

its action including a ‘rational connection between the

facts found and the choice made.’ ” Motor Vehicle Mfrs.

Ass'n v. State Farm Mut. Auto. Ins., 463 U.S. at 43, citing”

Burlington Truck Lines v. United States, 371 U.S. 156, 168

(1962).

EPA cannot avoid the arbitrary and capricious nature

of its decision or the significance of a court order remand-

ing that decision simply because the ALA Court did not

expressly declare EPA’s decision to be arbitrary and

capricious. Certainly, a consistent line of prior decisions

by this Court and the D.C. Circuit leaves no doubt that

the basis for remand in this case - the Administrator’s

failure to adequately explain her decision - is arbitrary

and capricious without the Court having to use these

magic words in every case.

This Court has recently reaffirmed that the Adminis-

trative Procedure Act’s scheme for “reasoned decision-

making” requires “[n]ot only [that] an agency’s decreed

result be within the scope of its lawful authority, but the

process by which it reaches that result must be logical

and rational. Courts enforce this principle with regularity

when they set aside agency regulations which, though

well within the agencies’ scope of authority, are not sup-

ported by the reasons that the agencies adduce.” Allen-

town Mack Sales & Service, Inc. v. NLRB, 522 U.S. 359, 374

(1998). The decisionmaking scheme enacted for setting

NAAQS under the Clean Air Act is no different. It too

allows a court to reverse “any action of the Adminis-

trator . . . found to be (A) arbitrary, capricious, an abuse

of discretion, or otherwise not in accordance with law.”

42 U.S.C. § 7607(d)(9).

Similarly, the D.C. Circuit has frequently held that an

agency’s failure to adequately explain its decision is arbi-

trary and capricious. “ ‘The requirement that agency

action not be arbitrary and capricious includes a require-

ment that the agency adequately explain its result.’ Public

Citizen, Inc. v. FAA, 988 F.2d 186, 197 (D.C.Cir. 1993);

Federal Election Comm'n v. Rose, 806 F.2d 1081, 1088 (D.C.

Cir. 1986).” Dickson v. Secretary of Defense, 68 F.3d 1396

4

(D.C.Cir. 1995). Thus it is clear that the ALA court’s

remand of EPA’s decision not to revise the NAAQS is

based on a deficiency in agency decisionmaking that is

arbitrary and capricious. This deficiency is not a minor

flaw of little consequence.

2. Litigation Winning Remand of Arbitrary and Capri-

cious Decision Achieves “Some Success”

The fundamental issue in this case is whether it is

appropriate to deny costs and fees in cases where the

agency decision is remanded because it fails the duty to

adequately explain the result (or any other test of arbi-

trary and capricious decisionmaking), but can theo-

retically be remedied by the agency on remand without

necessarily changing the result.

The Court of Appeals denied ALA’s motion for a

determination of eligibility for an award of costs and fees

on the ground that petitioners had not achieved “ ‘a

modicum of success of the merits’ because ‘[t]he agency

may be able to justify its position with a simple response

containing no reformulation of the challenged portion of

the rules.’ ” Pet. App. 2-3. The implication of this decision

is that winning a remand of an arbitrary and capricious

agency action, no matter how serious the error by the

agency as long as it is not an error of law that prohibits

the agency from re-adopting its initial result on remand,

may not satisfy the modicum of success test for determin-

ing that fees and costs are appropriate.

The remand of most arbitrary and capricious deci-

sions — such as failure to explain, failure to provide

adequate notice in the proposal of the final outcome,

failure to consider relevant factors, failure to respond to

significant comments, failure to consider all relevant

aspects of the problem - almost always allow the agency

to re-adopt the remanded position once the error in deci-

sionmaking is remedied. The necessary implication of the

position argued by the government, and adopted by the

Court below, is that such decisions be treated as not

5

satisfying this Court’s “some success” test in Ruckelshaus

v. Sierra Club, 463 U.S. 680 (1983), for determining when

fees are “appropriate” under § 307(f), or as mere pro-

cedural victories. But such a result is clearly at odds with

the rationale underlying the decision in Ruckelshaus.

This Court concluded that Congress chose the phrase

“whenever .. . appropriate” to “expand the class of

parties eligible for fee awards from prevailing parties to

partially prevailing parties - parties achieving some suc-

cess, even if not major success. Put differently, by enact-

ing § 307(f), Congress intended to eliminate both the

restrictive readings of ‘prevailing party’ adopted in some

of the cases cited above and the necessity for case-by-case

scrutiny by federal courts into whether plaintiffs pre-

vailed ‘essentially’ on ‘central issues’.” Id., 688.

This Court’s decision rested in part on an analysis of

the decision in NRDC v. EPA, 484 F.2d 1331 (1st Cir. 1973)

cited by the House committee in its 1977 report explain-

ing the basis for the language that became § 307(f). In

NRDC, the court of appeals granted fees for success on

claims challenging EPA’s approval under the Clean Air

Act of state implementation plans that included, inter alia,

a claim challenging EPA’s determination that the State

has “adequate personnel, funding and authority to carry

out [its] implementation plan.” NRDC v. EPA, 478 F.2d

875, 890-891 (1st Cir. 1973). In response to that claim, the

court determined it lacked the information needed to

determine whether the Administrator had made “a rea-

soned judgment,” and “direct[ed] the Administrator to

provide us with a detailed statement of his rationale for

concluding . . . that Massachusetts . . . will have adequate

personnel, funding and authority... . ” Id., 891. In all

relevant respects, the First Circuit’s decision on that claim

is similar to the ALA court’s remand for further explana-

tion by the Administrator at issue here.

But unlike the decision here, the First Circuit granted

fees for this claim as well as other claims in that case.

That outcome is particularly relevant here because the

House committee relied upon the First Circuit decision to

6

explain that it “did not intend that the court’s discretion

to award fees should be restricted to cases in which the

party seeking fees was the ‘prevailing party.’ In fact, such

an amendment was expressly rejected by the committee,

largely on the grounds set forth in NRDC v. EPA, 484 F.2d

1331, 1388 [sic] (1st Cir.1973).” H.R. Rep. No. 95-294, 95th

Cong., Ist Sess. 337 (1977). This Court, in turn, relied

upon the NRDC decision to assess the intent of Congress,

and to conclude “that adoption of the ‘when appropriate’

standard was intended to permit awards of fees to all

partially prevailing parties. After all, this was just what

the facts were in NRDC v. EPA.” Ruckelshaus at 691. Since

the First Circuit’s decision awarding fees for a remand to

EPA for further explanation in NRDC was included in

what Congress intended be treated as “appropriate” for

an award of fees when it enacted § 307(f), and was

included within what this Court understood to be a “par-

tially prevailing” party in Ruckelshaus, then the decision

below denying fees for similar relief is clearly in conflict

with the case law of this Court.

Resolving this conflict is essential if the fee-shifting

provision of § 307(f) is to achieve Congress’s purpose “to

encourage litigation which will assure proper implemen-

tation and administration of the act or otherwise serve

the public interest.” H.R. Rep., 337. Proper implementa-

tion and administration of the Act clearly requires deci-

sions that are adequately explained and not arbitrary and

capricious. To the extent Congress has provided for

the reversal of arbitrary and capricious decisions in

§ 307(d)(9), it has expressed an intent that decisions that

are arbitrary and capricious because they are not sup-

ported by a rational connection between the facts found

and the action taken should not be affirmed. ALA’s suc-

cess in winning a remand of EPA’s decision on this

ground must necessarily serve the proper implementation

and administration of the Act. A decision that serves the

proper implementation and administration of the Act,

must also have achieved “some success” and therefore be

eligible for an award under § 307(f).

7

3. Denying Fees For Remand of an Arbitrary and

Capricious Decision Creates a Conflict With Deci-

sions of Four Courts of Appeals.

The denial of costs and fees in this case also creates a

conflict with the decisions of the four courts of appeals

that have authorized fees under the “whenever . . . appro-

priate” test in cases where agency action has been

remanded on arbitrary and capricious grounds (see Pet.

19-22) precisely because the EPA decision remanded in

ALA could not pass muster under the arbitrary and capri-

cious standard. The remand in ALA is indistinguishable

from these Fourth, Fifth, Ninth and District of Columbia

circuit decisions where fees were awarded after agency

decisions were remanded because they failed similar or

other tests of arbitrary and capricious decisionmaking.

These conflicts need to be resolved by this Court.

4. ALA Also Satisfies “Prevailing Party” Tests.

Although this Court has made clear under the CAA

that the measure of success sufficient to satisfy the

threshold requirement for an award of fees under § 307(f)

need not achieve the degree of success required to satisfy

the “prevailing party” test, ALA also has achieved suc-

cess sufficient to satisfy this Court's criteria for a prevail-

ing party. In Texas State Teachers Assn. v. Garland

Independent School District, 489 U.S. 782, 791-792 (1989)

and Shalala v. Schaefer, 509 U.S. 292, 301 (1994), the Court

concluded prevailing party “status [is] obtained ‘if the

plaintiff has succeeded on any significant issue in litiga-

tion which achieve[d] some of the benefit . . . sought in

bringing suit.’ ”

EPA argues that this prevailing party test! has not

been satisfied because “[a]t bottom, the court of appeals’

1 EPA offers no authority for the contention implied by its

reliance on cases construing prevailing party statutes, i.e., the

Civil Rights Act, 42 U.S.C. § 1988 and the Equal Access to Justice

Act, 28 U.S.C. § 2412(d)(1)(B), that such cases prescribing

; |

8

decision does not provide petitioners with any of the

benefit they sought in bringing suit since EPA is not

required to reconsider or modify the substance of its

decision.” Opp. at 7. Assuming, arguendo, that prevailing

party tests might be relevant to satisfying the less restric-

tive “whenever appropriate” test in § 307(f), clearly ALA

has achieved results that include some of the relief sought

in bringing suit.

First, the relief obtained from the litigation includes

both the remand ordered by the Court and the post-

decision commitment by EPA to conduct a rulemaking on

remand and to make a final decision no later than Decem-

ber 2000. In a Settlement Agreement between petitioners

and EPA, that was finalized following publication by EPA

of notice announcing the terms of the Agreement and

inviting comment pursuant to § 113(g) of the CAA, 42

U.S.C. § 7413(g), EPA agreed “to undertake a remand

proceeding in accordance with the time lines for action on

the remand and for solicitation of comment set forth in

[the Federal Register Notice published at 63 Fed. Reg.

24,782-784].” The Notice announced EPA’s agreement that

“EPA will propose its response to the SO2 NAAQS

remand for public comment in the summer of 1999 and

take final action no later than December 2000.” Id.,

24,783/1.

Under the precedent of this Court, the relief obtained

directly from EPA in lieu of further litigation to compel a

rulemaking under judicially prescribed deadlines is rele-

vant to determining whether ALA is a prevailing party.

“The fact that respondent prevailed through a settlement

rather than through litigation does not weaken her claim

to fees.” Maher v. Gagne, 448 U.S. 122, 129 (1980). The

Court even noted that the legislative history of § 1988, a

prevailing party tests are relevant to a fee claim under the less

restrictive “whenever appropriate” test of the CAA.

ER

9

prevailing party statute, “expressly stated that ‘for pur-

poses of the award of counsel fees, parties may be consid-

ered to have prevailed . . . without formally obtaining

relief.’ ” Id.

| The total package of relief, including the judicial

remand which requires further action by the Administra-

tor to remedy her failure to adequately explain her deci-

sion, and the Settlement Agreement which defines that

action to include a new rulemaking by a date certain,

obtained a significant portion of the relief ALA sought. If

ALA had won all the relief it sought, it would have won a

remand as part of a decision declaring unlawful EPA's

failure to extend the protection of air quality standards

for sulfur oxides to prevent its adverse effects on asth-

matics’ health. ALA nonetheless achieved a major portion

of its purpose for bringing suit by winning a remand with

instructions for the Administrator to resolve the funda-

mental conflict between her findings that “repeated

occurrences of exposure to such effects should be

regarded as significant from a public health standpoint,”

Pet. App. 10, and “it is clear that 5-minute SO2 ambient

concentration peaks pose a health threat to sensitive

exposed populations,” id., with her final decision “that a

new national standard was unnecessary.” Pet. App. 8-9.

That remand clearly provided the necessary predicate for

EPA’s commitment to conduct a new rulemaking, which

EPA would never have agreed to if its decision had been

affirmed by the Court and become settled Agency prece-

dent. Equally important, ALA suffered no loss with

regard to any of its legal claims that the Court deferred to

another day.

As a result of this litigation, EPA is now required to

reconsider its decision in a new rulemaking with instruc-

tions to resolve the conflict between the evidence EPA

found of health effects to asthmatics caused by SO2

bursts and the statutory obligation to protect public

health with an adequate margin of safety. This, indeed,

changes the legal relationship between ALA and EPA,

and accomplishes more than simply giving ALA another

10

chance to persuade that protection for asthmatics is

required. It also requires EPA to remedy an arbitrary and

capricious decision that failed to provide a rational con-

nection between the facts found and the action taken.

This result satisfies the traditional tests for establishing

prevailing party status, and a fortiori, is a result that

satisfies the less restrictive test for an award of fees and

costs under § 307(f).

CONCLUSION

The conflicts between the denial of fees and costs in

this case and the decisions of this Court governing eligi-

bility for fees under § 307(f) as well as eligibility for fees

under prevailing party statutes, and the conflicts with

decisions granting fees in similar remand situations in

four circuits should.be resolved by this Court to ensure

the effective implementation and administration of the

environmental statutes of the Nation.

Respectfully submitted,

Rosert E. YUHNKE

Counsel of Record for Petitioners

1405 Arapahoe Avenue

Boulder, CO 80302

(303) 499-0425