Respondents Brief — Environmental Protection Agency v. New York, 127 S. Ct. 2127 (2007) (No. 06-736)

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No. 06-736

IN THE

Supreme Court of the Gnited States

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY.

Petitioner.

i

STATE OF NEW YORK. ET AL..

Respondents.

On Petition for Writ of Certiorari to the

United States Court of Appeals

for the District of Columbia Circuit

THE UTILITY AIR REGULATORY

GROUP’S RESPONSE IN SUPPORT OF

PETITION FOR A WRIT OF CERTIORARI

HENRY Vo NICKEI

F. WILLIAM BROWNEL |

(Counsel of Record)

DAVID S. HARLOW

HtENTON & WILLIAMS LLP

1900 K Street. NW.

Washington. D.C. 20006

(202) 955-1500

WiLSON-EPES PRINTING CO , INC. = (202) 789-0096 -— WASHINGTON D C 20001

DISCLOSURE STATEMENT

The Utility Air Regulatory Group (“UARG”) is a nom

profit, unincorporated organization of individual electric utili-

ties and national trade associations. UUARG has no out-

standing shares or debt securities in the hands of the public

and does not have any parent, subsidiary or affiliate that has

issued shares or debt securities to the public.

RESPONSE IN SUPPORT OF

PETITION FOR A WRIT OF CERTIORARI

Pursuant to Supreme Court Rule 12.6, the Utility Aur

Regulatory Group (“UARG”), an intervenor-respondent be-

low, respectfully submits this response in support of the pet

tion for a writ of certiorari of the United States Environmental

Protection Agency (“EPA”) in EPA v. State of New York, No.

06-736. EPA seeks review of the decision of the United

States Court of Appeals for the District of Columbia Circuit in

New York v. EPA, 443 F.3d 880 (D.C. Cir. 2006) (“New York

IT’), This response is being submitted within 20 days of

EPA’s petition having been docketed on November 27, 2006.

REASONS FOR SUPPORTING EPA’S PETITION

On November 27, 2006, UARG filed a petition for a writ of

certiorari seeking review of New York IJ on much the same

terms as EPA. See UARG vy. State of New York, No. 06-750

(docketed November 29, 2006). In its petition, EPA questions

whether the D.C. Circuit “erred in invalidating” the Equip-

ment Replacement Provision (“ERP”) rule on the “ground that

the phrase ‘any physical change’ in the definition of ‘modifi-

cation’ in” Clean Air Act (“CAA”) § 111(a)(4) “unambigu-

ously requires EPA to adopt the broadest meaning of the

phrase.” EPA Petition at (I). For its part, UARG questions

whether the court’s “reliance on a fragment of the 40-word

statutory definition of ‘modification’ to find a clear expression

of congressional intent” conflicts with this Court’s Chevron

decision. UARG Petition at i.

In support of certiorari on this issue, EPA observes that, in

striking down the ERP rule, the D.C. Circuit has “announced a

sweeping rule of construction” that would “operate to deprive

administrative agencies of discretion to construe ambiguous

statutory terms whenever those terms are preceded by the

word ‘any’.” EPA Petition at 9. This holding, EPA points

out, “is inconsistent” with this Court’s “repeated admonitions

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that statutes must be construed in context and as a whole,” as

well as with this Court’s decision in Chevron. Id. at 9-10. As

EPA notes, Chevron “involved the same statute and the same

definitional section at issue here.” Jd. at 14.' |

UARG agrees, noting in its petition that under the “new

formulation of Chevron” presented in New York II, “specific

meaning is given to fragments of statutory language in order

to find an unambiguous congressional ‘intent’” that could not

be found if “traditional canons of statutory construction were

applied to the statutory provision as a whole.” UARG Pett

tion at 3. Excising three words — i.e., “any physical change” —

_from the statutory definition, UARG continues, runs afoul of

the well-settled principle that a reviewing court “should not

confine itself to examining a particular statutory provision in

isolation.” Jd. at 14-15, quoting FDA v. Brown & Williamson

Tobacco Corp., 529 U.S. 120, 132 (2000). For these reasons,

UARG supports granting EPA’s petition, to address the con

flict between New York II and this Court’s decision in

Chevron.

UARG’s petition also presents a second question: whether

EPA “has discretion under the CAA to adopt a rule that ex

cludes” from . . . NSR a “subset of projects” that are not

“modifications” under the New Source Performance Stan

dards (“NSPS”) program, as that term “modification” has

been “defined and used under the CAA for the past 35 years.”

UARG Petition at i EPA’s petition encompasses and pro-

vides compelling support for granting certiorari to address this

issue as well.

First, EPA points out that New York I/ conflicts with the

established presumption that “Congress . . . legislate[s] with

awareness of prior administrative regulations,”-and that when

' See also UARG Petition at 20 (noting this Court’s explanation of

“modification” and “major modification” as distinct concepts: under the

New Source Revie w (“NSR”) rules, a source “may . . . modify one piece

of equipment without meeting [NSR] . . . if the alteration will not increase

total emissions from the plant,” i.e., if it is not a “major modification.”).

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Congress “elects to use statutory language that has already

been given an interpretive gloss by the administering agency,”

it should “ordinarily be presumed to intend to allow the

agency to continue to employ that regulatory gloss.” EPA

Petition at 16, citing TWA v. Hardison, 432 U.S. 63, 76 n.11

(1977); Young v. Community Nutrition Inst., 476 U.S. 974,

983 (1986). This “inference of congressional approval is fully

applicable here,” EPA continues, given that, when “Congress

enacted the statutory NSR program in 1977,” and “cross-ref-

erenc[ed] the pre-existing NSPS statutory definition of ‘mod+

fication,” Congress “acted in a context in which EPA had

already nterpreted that key provision.” /d EPA faults the

D.C. Circuit for “disregard[ing] the fact” that Congress had

accepted this “prior [NSPS] regulatory construction[]” of the

term “modification.” /d. at 19. Indeed, as UARG observes, it

would be a “particularly odd approach to statutory interpreta-

tion to conclude that, by defining ‘modification’ for NSR to

mean ‘modification’ as defined in NSPS,” Congress “intended

to preclude EPA from implementing CAA § 111(a)(4) for

NSR the same way it had always mplemented that provision

for NSPS.” UARG Petition at 17 (emphasis in original).

Moreover, as EPA explained in its petition, “[t]he regula-

tions that EPA promulgated in 1974 to implement the original

regulatory” Prevention of Significant Deterioration (“PSD”)

program “defined ‘modification’ [in 40 C.F.R. § 52.01(d)] in

largely the same way as it was defined for the existing NSPS.”

EPA Petition at 4; see also UARG Petition at 6-8. Both EPA

and UARG point out that, in the 1977 CAA Amendments,

Congress specifically provided that the definition of “modifi-

cation” established under the 1974 PSD program would “con

tinue[] to govern the application of new statutory NSR pro-

grams without the need for further rulemaking.” UARG Pett

tion at 9, citing CAA § 168(a); EPA Petition at 19 (“Congress

specifically demonstrated [in CAA § 168(a)] its awareness

and approval of the prior regulations . . . by mandating that

most of the pre-existing regulations ‘shall remain in effect’

until implementation plans” were adopted.). UARG agrees

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with EPA that, “at the very least,” this establishes that ex-

cluding from NSR projects that are not NSPS modifications is

““a defensible construction’ of the Act.” EPA Petition at 19.

Finally, UARG agrees with EPA that granting certiorari in

this case is important to the proper administration of one of

the most important regulatory programs in this country. As

EPA explains, the D.C. Circuit’s bold (and erroneous) new

approach to statutory construction in New York I/ “threatens to

put EPA into a regulatory straightjacket that Congress did not

intend,” with “few if any options to tailor the program to

changing conditions and policies” in order to “achieve envi-

ronmental benefits.” EPA Petition at 21. If not reversed,

EPA continues, New York IT will impede its “ability to address

those problems in the future.” Jd. at 23; see also UARG Pett

tion at 19. That both the regulator and the regulated commu-

nity agree as to the importance of the case underscores the

need for this Court to exercise its supervisory power.

CONCLUSION

The petition for writ of certiorari should be granted.

Respectfully submitted,

HENRY V. NICKEL

F. WILLIAM BROWNELL

(Counsel of Record)

DAVID S. HARLOW

HUNTON & WILLIAMS LLP

1900 K Street, N.W.

Washington, D.C. 20006

(202) 955-1500

Counsel for the Utility Air

Regulatory Group

December 18, 2006