Opposition Brief — Utility Air Regulatory Group v. New York (No. 06-750)
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Nos. 06-736, 06-750 FOERSTER ee
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IN THE JAN 24 200%
Supreme Court of the United Ptates
eR ele Rane
UNITED STATES ENVIRONMENTAL
PROTECTION AGENCY,
Petitioner,
v.
STATE OF NEW YORK, et al.,
Respondents.
UTILITY AIR REGULATORY GROUP,
Petitioner,
v.
STATE OF NEW YORK, et ai.,
Respondents.
On PETITIONS FOR Waits OF CERTIORARI TO THE
UniTeED STATES COuRT OF APPEALS FOR THE
District OF COLUMBIA CIRCUIT
BRIEF IN OPPOSITION FOR RESPONDENTS
: STATE OF NEW YORK, ET AL.
J. JARED SNYDER ANDREW M. Cuomo
Micuact J. Myers Attorney General of the
Assistant Attorneys General State New York
Office of the Attorney General Barpara D. UNDERWOOD*
The Capitol Solicitor General
Albany, NY 12224 DANIEL SMIRLOCK
(518) 474-8010 Deputy Solicitor General
Anpr_Ew D. BING
Assistant Solicitor General
120 Broadway, 25" Floor
New York, NY 10271
* Counsel of Record (212) 416-8016
Counsel for Respondents State of New York, et al.
(Additional Counsel listed on signature page)
i
COUNTER STATEMENT OF
QUESTION PRESENTED
The Clean Air Act requires that “any physical change”
to a “stationary source” of air pollution that increases
emissions from the source undergo the “New Source Review”
permitting process. The question presented is whether the
Environmental Protection Agency (EPA) can exempt from
this process substantial replacements of plant equipment that
produce large, non-de minimis emissions increases.
li
TABLE OF CONTENTS
COUNTER STATEMENT OF QUESTION
CSG boc ba es edb rs ee eceess veers
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TABLE OF CITED AUTHORITIES ............
BrAsemen) OF THE CASE .......cccceceee:
cect ne weceercesees
RE gc ces cece ces escevececes
The Court of Appeals’ Decision ..............
REASONS FOR DENYING THE PETITION .....
I. THE DECISION BELOW IS A ROUTINE
APPLICATION OF ESTABLISHED PRINCIPLES
OF STATUTORY CONSTRUCTION .......
A. EPA’s Claim That the Court of Appeals
Created a New Rule of Statutory
Construction Is Incorrect. ...........
B. The Court of Appeals’ Decision is
Consistent With this Court’s Precedent
Regarding the Meaning of the Word
as uae Gs ales eve vn tes
Page
ii
iV
iil
Contents
Page
C. The Court of Appeals’ Decision Does Not
Conflict With This Court’s Decisions
Regarding Congressional Ratification of
Regulatory Interpretations. .......... 12
Il. THE DECISION BELOW DOES NOT HAVE
THE ADVERSE CONSEQUENCES
CLAIMED BY THE PETITIONERS ...... 16
A. The Decision of the Court Below Does
Not Prevent EPA From Administering the
NSR Program in a Way That Promotes Its
PUG COO | kb ke cca eenn causes 16
B. The Rule Vacated by the Court of Appeals
Would Not Benefit the Environment. .. . 18
C. The Utility Industry’s Equitable
Arguments Are Legally Irrelevant and
Pacteaiiy TROGGTOCE. 2... os ccsccavinss 20
CRI Ue ks 6S a on ee Keene neeee eee eween 22
iv
TABLE OF CITED AUTHORITIES
Page
CASES
Alabama Power v. Costle,
636 8.26 S20 (COA. Cot. IST) oc ccccceses 4,5, 16, 17
BP America Production Co. v. Burton,
No. 05-669, slip op. (U.S. Dec. 11, 2006) ...... 10
Brown v. Gardner,
- kEUF Boy 74 | Re ere ar rr 8, 14
Chevron, U.S.A., Inc. v. Natural Resources
Defense Council, Inc.,
Me Te re COE ok what cwenees sada wees passim
Department of Housing & Urban Development v.
Rucker,
Egle Be fy os rer ere err 8,9
Flora v. United States,
p gtk Se! | denen eee vorrer LO
Harrison v. PPG Industries, Inc.,
Gtk By Co. eer erry 9
In re: Tennessee Valley Authority,
9 E.A.D. 357 (Env.App. Bd. 2000),
rev'd on jurisdictional grounds, Tennessee Valley
Authority v. Whitman, 336 F.3d 1236 (4th Cir. 2003)
PEAT ORE PEP ee OE Per ene 2,19
New York v. EPA (“New York I’),
413 F.3d 3, reh. denied 431 F.3d 801 (D.C. Cir.
NE oka ween OPO hr eae ba, 3, 2
Cited Authorities
Page
Norfolk S. Rwy. Co. v. Kirby,
ee ae Oe CED 6a Ks Ca oe ed Rake hE 9
Puerto Rican Cement Co. v. EPA,
BOP Fe F98 C1 Cis BGR ion ok een dees 19
Red Lion Broadcasting v. FCC,
pO Be ei. , rer er er rr 13
SEC v. Sloan,
436 U.S. 103 (1978) ......---- eee e eee 13, 14, 15
Small v. United States,
BOG LED. Bee Ce bos kd th wade ceeay eeewt 10
State of New York v. U.S. Environmental
Protection Agency,
og Af SS oe Ge. : rere green l
TWA v. Hardison,
OOF CE ee COTE ohn a see tea de eee 13
United States v. Gonzales,
.s Gh REC. . 55 Sen Ere nore Deo 5,9, 10
United States v. S. Ind. Gas and Electric Co.,
245 F. Supp. 2d 994 (S.D. Ind. 2003) ......... 20-21
United States v. Ohio Edison,
276 F. Supp. 2d 829 (S.D. Ohio 2003) ......... a 21
vi
Cited Authorities
Page
FEDERAL STATUTES
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BNE oe eg! | ee 2,9, 18
Re Sin Se PREREILED cc vercdinvrcbesesenuses 14
RRM PETE fata ed ods Veveeeaskvee tess l
Ree FRPEEED oe cd sha eke bea eee eeu adene 13,14
ee Ss PUTER 4 060s eer er escwee ewes i,2
ath OS ol & oo | rr eee 1,2
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be Se Gn Sine eae a 12
FEDERAL REGULATIONS
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ee OS OEE) 0 cic bss cewseteves eevee 2
re OUEST oss ce pu ctcwrasansme es 2
i ere 60va nase teweseenewes 3
40 C.F.R. § 52.21 (cc) (2005) ...........-. ans 3
40 C.ER. § 52.21 (cc)(1) (2005) 2... ...0 0. ee 3
Vil
Cited Authorities
MISCELLANEOUS
Brief for the United States as Amicus Curiae Supporting
Reversal in Engine Mfrs. Assn. v. South Coast Air
Quality Management District, S. Ct. Case
Page
No. 02-1343 (Aug. 2003), 2003 WL 22068761 12
Brief of United States Amicus Curiae in South Florida
Water Management District v. Miccosukee Tribe,
S.Ct. No. 02-626 (Sept. 2003), 2003 WL 22137034
ee ee rae EOP egret Sey:
FEDERAL REGISTER
Se KR rere ree ee err eee ee 15
ST Fed. Row, SZ,SES IGGS) oon doce ncesencccss 2
CFTR: Be: GR tee ne eek oe heeds shi ve seerns 17
i Os er rere ee eer ee 19
PE POS BOE, FOE xc dae cosscwrixswseaes 2, 12, 15
H.R. Rep. No. 91-1146, 91st Cong., 2d Sess. 1 (1970)
eevee eeustkevwedes een 84208802 6980.9 6.4 9.9 8 9°89 8 Oo 6 8
STATEMENT OF THE CASE
Respondents are thirteen states, the District of Columbia,
various municipalities and environmental organizations that
filed petitions for review of a rule (the “Rule”) that EPA
promulgated in 2003 under the new source review (NSR)
provisions of the Clean Air Act. NSR is a permitting process
that applies to a plant “modification,” which includes “any
physical change” that increases emissions. The Rule
interprets “modification” to exclude from the NSR
requirements substantial equipment replacement projects that
produce large, non-de minimis emission increases. In a
unanimous decision, the United States Court of Appeals for
the District of Columbia Circuit vacated the Rule as contrary
to the plain language of the statute. State of New York v. U.S.
Environmental Protection Agency, 443 F.3d 880 (D.C. Cir.
2006).
The NSR Program
Congress enacted the 1970 amendments to the Clean Air
Act “to speed up, expand, and intensify the war against air
pollution in the United States with a view to assuring
that the air we breathe throughout the Nation is wholesome
once again.” H.R. Rep. No. 91-1146, 91* Cong., 2d Sess. |
(1970). Because of insufficient progress toward clean air,
Congress added the NSR provisions in 1977 to govern the
construction and “medification” of existing major sources.
42 U S.C. §§ 7479(2)(C) and 7501(4).' To obtain a permit, a
' NSR consists of two programs: one for areas “in attainment”
with the national ambicnt air quality standards (NAAQS) and one
for nonattainment areas. In attainment areas, a new or modificd
source must comply with prevention of significant deterioration
(PSD) requirements designed to prevent air quality from deteriorating
significantly. See 42 U.S.C. § 7475. In nonattainment areas, new or
modified sources must comply with nonattainment NSR requirements
that are designed to ensure reasonable progress toward attainment
of the NAAQS. See 42 U.S.C. § 7503; Pet. App. 3a n.1.
2
source must satisfy specified air-quality-based and
technology-based requirements. See Pet. App. 3a n.1.
A “modification” that triggers NSR requirements is
defined in the statute as “any physical change in, or change
in the method of operation of, a stationary source which
increases the amount of any air pollutant emitted by such
source or which results in the emission of any air pollutant
not previously emitted.” See 42 U.S.C. §§ 7479(2)(C) and
7501(4) (referencing definition of “modification” found in
42 U.S.C. § 7411(a)(4)). Regulations adopted in 1980 limit
the scope of the modification provision to “significant”
emission increases. See 40 CFR § 52.21(b)(2)(i) and (b6)(23).
In addition, the EPA’s implementing regulations have always
included a regulatory exemption for “routine maintenance,
repair and replacement,” which EPA consistently has viewed
as limited to de minimis circumstances. See 70 Fed. Reg.
33,841/1 (acknowledging that, before the present rulemaking,
EPA “generally had interpreted the [routine maintenance]
,99),
exclusion as being limited to de minimis circumstances ’).
The Rule at Issue
In issuing the Rule, EPA abandoned its longstanding
interpretation of the statutory definition of modification as
encompassing the replacement of equipment.’ The Rule
> See, e.g., 57 Fed. Reg. 32,316/2 (1992) (EPA “has always
recognized that the definition of physical or operational change in
section 11 1(a)(4) could, standing alone, encompass the most mundane
activities at an industrial facility (even the repair or replacement of
a single leaky pipe, or a change in the way that pipe is utilized).”)
(italics supplied); Jn re: Tennessee Valley Authority, 9 E.A.D. 357,
390 (Env. App. Bd. 2000) (hereafter “Jn re TVA”) (EPA's
Environmental Appeals Board (EAB) concluded that “TVA's
replacement of various boiler components and elements clearly
constituted physical changes”), reversed on jurisdictional grounds,
Tennessee Valley Authority v. Whitman, 336 F. 3d 1236 (4* Cir. 2003).
3
expands the routine maintenance exemption to encompass
activities that EPA concedes cannot be characterized as de
minimis. 68 Fed. Reg. 61,272/3. It exempts “equipment
replacement” activities that cost up to 20 percent of the entire
process unit’s replacement cost, as long as the new
component “serve[s] the same purpose” as the
replaced component, does not change the unit’s “basic
design parameters,” and does not exceed otherwise
applicable limitations on the unit’s emissions.’ 40 C.F.R.
§§ 52.21(b)(56) and 52.21(cc) (2005). See Pet. App. 41a,
171a-175a. The Rule would allow a plant to use the
exemption repeatedly, with each component replacement
judged independently against the 20 percent threshold. See
40 C.F.R. § 52.21(cc)(1) (2005). See Pet. App. 172a.
Thus, for example, at a typical 1,000 megawatt power
plant with a replacement cost of $800 million, the Rule would
exempt the replacement of plant components that cost as
much as $160 million. See Government Accountability
Office, “New Source Review Revisions Could Affect Utility
Enforcement Cases and Public Access to Emissions Data”
(“GAO Report”) at 18 (Joint App. 1280). EPA concedes that
the Rule would exempt almost all of the emission-increasing
activities at issue in several of its own enforcement cases
against power plants. See 68 Fed. Reg. 61,258/1 (stating that
“we now believe that such activities, if conducted in the
future, should be excluded from major NSR”).*
3 The limitation of the exemption to activities that do not result in
emission increases that exceed otherwise applicable limitations does
not prevent substantial emission increases because many plants are not
subject te-Hmits on annual emissions and, where such limits exist, they
are often well in excess of the plant’s actual emissions. See, e.g., United
States v. Ohio Edison Co., 276 F. Supp. 2d 829, 876 (S.D. Oh. 2003)
(hourly emission limits in plant’s permit did not prevent substantial
emission increases resulting from physical changes).
* The 20 percent threshold would have exempted 95 to 98
percent of the violations at issue in EPA’s NSR enforcement cases
(Cont'd)
4
The Court of Appeals’ Decision
In a unanimous decision, the court of appeals vacated
the Rule because it would unlawfully exempt from NSR
emissions-increasing activities that fall within the plain
meaning of the statutory phrase “any physical change.” The
court applied the test established by this Court in Chevron,
U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467
U.S. 837 (1984), which provides that, when “Congress has
directly spoken to the precise question at issue,” an agency
“must give effect to the unambiguously expressed intent of
Congress.” Jd. at 842-43. The court of appeals concluded
that the plain language of the statutory definition of
“modification” clearly encompasses the replacement of
equipment that leads to an emission increase. Pet. App. 5a.
The court began its interpretation with the statutory phrase
“any physical change.” Observing that EPA conceded that
the “real-world, common-sense usage” of the term “physical
change” includes the replacement of plant equipment,
Pet. App. 6a, the court held that Congress intended the
statutory definition to cover “any” such change that increases
emissions. /d. at 7a (“Because Congress used the word ‘any,’
EPA must apply NSR whenever a source conducts an
emission-increasing activity that fits within one of the
ordinary meanings of ‘physical change.’”’).
In its ruling, the court of appeals followed precedent
established more than a quarter-century earlier when it struck
down a similar EPA attempt to limit the scope of NSR. See
Alabama Power v. Costle, 636 F.2d 323 (D.C. Cir. 1979).
The court reiterated its determination in Alabama Power that
the statutory NSR mandate “‘is nowhere limited to physical
changes exceeding a certain magnitude.’” /d. at 9a (quoting
(Cont'd)
had the Rule been in place at the time. GAO Report, supra, at 18-19
(Joint App. 1280-81).
Alabama Power, 636 F.2d at 400). It also noted that although
one Senator proposed to limit NSR to “major expansion
programs,” the court determined in Alabama Power that “‘the
language of the statute clearly did not enact such limit into
law.’” Jd. (quoting Alabama Power, 636 F.2d at 400).
The court rejected EPA’s argument that because “physical
change” is capable of multiple meanings, Congress
authorized EPA to exclude some physical changes from the
definition, whether or not they increase emissions, and to
apply NSR only to “any” of the changes it chooses not to
exciude. Pet. App. 6a-7a. The court relied on this Court’s
prior decisions holding that “[rJead naturally, the word ‘any’
has an expansive meaning, that is, ‘one or some
indiscriminately of whatever kind.”” /d. at 7a (quoting United
States v. Gonzales, 520 U.S. 1, 5 (1997)). Considering the
broad, inclusive meaning of the word “any,” the court ruled
that Congress need not spell out the types of changes that
would trigger NSR requirements with a “phrase such as
‘regardless of size, cost, frequency, [or] effect.’” /d. at lla.
In other words, said the court, there is “no reason why ‘any’
should not mean ‘any.”” /d. at 8a.
The court concluded that “the scope of the definitional
phrase is limited only by Congress’s determination that such
changes be linked to emission increases.” /d. at 1la-12a.
Therefore, the court determined that the Rule was unlawful:
“Congress defined ‘modification’ in terms of emission
increases, but the [Rule] would allow ecquipment
replacements resulting in non-de minimis emission increases
to avoid NSR.” /d. at 17a.
On June 30, 2006, the court of appeals unanimously
denied EPA’s petition for rehearing, Pet. App. 18a-19a, and
petition for rehearing en banc, with no judge seeking a vote.
UARG Pet. App. 191a-192a.
6
REASONS FOR DENYING THE PETITION
I. THE DECISION BELOW IS A ROUTINE
APPLICATION OF ESTABLISHED PRINCIPLES
OF STATUTORY CONSTRUCTION
The decision below is an unexceptional, case-specific
application of the statutory interpretation principles
articulated by this Court in Chevron. Contrary to EPA’s
contention, the court of appeals did not create a new
exemption from those principles. Nor did it depart from this
Court’s precedent regarding the meaning of the word “any.”
Simply put, the court’s interpretation of the statutory text
does not break any new ground and does not merit the Court’s
review.
A. EPA’s Claim That the Court of Appeals Created
a New Rule of Statutory Construction Is
incorrect.
Recognizing the absence of any conflict among the courts
of appeals, EPA tries to manufacture a question deserving of
this Court’s review by claiming that the court of appeals
“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 Pet. 9. EPA is incorrect
because the court of appeals’ decision is nothing more than
a routine application of Chevron. Rather than departing from
the precedent of this Court, the court correctly applied
Chevron, finding, under Chevron’s first step,’ that Congress
> Chevron requires a court, applying “traditional tools of
statutory construction,” first to determine “whether Congress has
directly spoken to the precise question at issue.” Chevron, 467 U.S.
at 842, $43 n.9. If Congress has spoken, then “that is the end of the
matter,” and both agencies and courts must give effect to Congress's
(Cont'd)
7
clearly intended the definition of modification to encompass
equipment replacement activities that cause more than a
de minimis increase in emissions. Pet. App. 5a-12a.
In its petition, EPA attempts to create a conflict with
Chevron by conflating Chevron’s separate questions. Thus,
EPA attempts to explain away this Court’s prior decisions
interpreting the word “any” expansively, arguing that these
cases “generally involved the Court’s own determination of
the best meaning of the language at issue, not the clearly
distinct question presented in the Chevron context, namely
whether an agency interpretation of statutory text is
reasonable.” EPA Pet. at 12. But EPA is wrong because
Chevron step one, which is what applies here, entails judicial
determination of a statute’s meaning. In this inquiry, the court,
not the agency, has the last word:
The judiciary is the final authority on issues of
statutory construction and must reject
administrative constructions which are contrary
to clear congressional intent. If a court, employing
traditional tools of statutory construction,
ascertains that Congress had an intention on the
precise question at issue, that intention is the law
and must be given effect.
Chevron, 476 U.S. at 843 n.9 (citations omitted).°
(Cont'd)
intent. Jd. at 842. If, applying traditional tools of statutory
construction, a court is unable to determine Congressional intent,
then, under Chevron’s sccond step, the court must determine whether
the agency’s conclusion is based on a permissible construction of
the statute. Jd. at 842-43.
* Petitioners’ contrary approach to statutory construction is itself
at odds with Chevron ’s principle that courts have the primary role in
(Cont'd)
8
EPA also mischaracterizes the decision below in claiming
that the court relied solely on the word “any” in finding the
“modification” definition to be unambiguous, without
considering the statutory context. EPA Pet. at 9. Thus, in
attempting to distinguish this Court’s decision in Department
of Housing & Urban Development v. Rucker, 535 U.S. 125,
130-31 (2002), EPA states “that the Court expressly relied
on a combination of factors — not merely the word “any”
alone — to support its conclusion. ...” EPA Pet. at 12. But
here too, the court of appeals relied on a combination of
factors, and not solely on the meaning of the word “any.”
Instead, noting that “the sort of ambiguity giving rise to
Chevron deference ‘is a creature not of definitional
possibilities, but of statutory context,’” id. at 5a-6a (internal
quote from Brown v. Gardner, 513 U.S. 115, 118 (1994)),
the court of appeals found that the context and purpose of
the Act’s NSR provisions establish that Congress “intended
NSR to apply to any type of physical change that increases
emissions.” /d. at 8a. In particular, the court pointed to
Congress’s evident intent to regulate all changes that increase
emissions, including the replacement of equipment:
After using the word “any” to indicate that
“physical change” covered all such activities, and
was not left to agency interpretation, Congress
limited the scope of “any physical change” to
changes that “increase [] the amount of any air
pollutant emitted by such source or which result
[] in the emission of any air pollutant not
previously emitted.”
(Cont'd)
interpreting statutes and, if accepted, would effect a substantial
transfer of policy-making authority from Congress to administrative
agencies. See Pet. App. 11a (“Only ina Humpty Dumpty world would
Congress be required to use superfluous words while an agency could
ignore an expansive word that Congress did use. We decline to adopt
such a world-view.”).
9
Pet. App. lla-12a (quoting from 42 U.S.C. § 7411(a)(4)).
This one express limitation indicated to the court that
Congress intended no others, and that “any” therefore
encompasses a// physical changes that increase emissions.
By construing the phrase “any physical change” in the
full statutory context, instead of adopting EPA’s narrow focus
on the meaning of the single word “change,” the court of
appeals correctly concluded that Congress made its intentions
clear in the statute, and thus followed this Court’s decision
in Chevron. EPA may disagree with how the court interpreted
the statutory language, but that disagreement is not a basis
for this Court to hear this case.
B. The Court of Appeals’ Decision is Consistent
With this Court’s Precedent Regarding the
Meaning of the Word “Any.”
EPA also errs in claiming that the court of appeals’
decision is contrary to this Court’s precedent regarding the
meaning of the word “any.” EPA Pet. at 12-13. To the
contrary, the court of appeals’ treatment of the word “any”
in the statutory definition is consistent with decisions of this
Court holding that “[r}jead naturally, the word ‘any’ has an
expansive meaning, that is, ‘one or some indiscriminately of
whatever kind.’” United States v. Gonzales, 520 U.S. 1, 5
(1997); see also Norfolk S. Rwy. Co. v. Kirby, 543 U.S. 14,
31-32 (2004); Rucker, $35 U.S. at 130-31. The court of
appeals appropriate!y relied on these precedents in
determining that Congress’s use of the word “any” establishes
that Congress denied EPA discretion to limit the scope of
the modification provisions to just some types of physica:
changes. See, e.g., Harrison v. PPG Industries, Inc., 446 US.
578 (1980) (in another case construing the 1977 amendments
to the Act, this Court held that Congress made clear that the
term “any final action” reviewable in the U.S. courts of
appeals could not be limited to certain types of final actions).
10
See Pet. App. 7a. Accordingly, the court below adhered to
this Court’s precedent in holding that the phrase “any physical
change” refers “indiscriminately” to any of the various
physical changes, “of whatever kind,” that may be undertaken
at an industrial facility, as long as they increase emissions.
See Gonzales, 520 U.S. at 5.
The cases EPA cites in support of its restrictive
interpretation of the language following “any” involve
statutes where contextual factors not present here supported
a narrower construction. For example, in Small v. United
States, 544 U.S. 385 (2005), a broad interpretation of “any
court” to include foreign courts would have been inconsistent
with traditional principles of sovereignty. Jd. at 388-90.
Likewise, the broad reading of “any sum” advocated by the
taxpayer in Flora v. United States, 362 U.S. 145 (1960),
would have abrogated the traditional principle allowing
taxpayer suits for refunds only if the disputed tax had been
paid. /d. at 157-58.’ In contrast, the statutory context here
establishes Congress’s concern with the effect of increased
emissions and supports the natural reading of the statute as
applying to any type of physical change that increases
emissions.
EPA’s attempt to show that the court of appeals’ decision
is contrary to the Court’s construction of another Clean Air
Act provision in Chevron itself (EPA Pet. at 14) is also
’ The Alliance of Automobile Manufacturers, et al.’s reliance,
in their brief supporting the petition, on this Court’s recent decision
in BP America Production Co. v. Burton, No. 05-669, slip op. (U.S.
Dec. 11, 2006), is likewise misplaced. In that casc, this Court held
that the general six-year statute of limitations for government contract
actions docs not apply to administrative pay orders issued by the
Minerals Management Service. It held that the language of the statute
of limitations clearly did not refer to administrative actions, and
therefore had no occasion to defer to the agency’s construction of
the statutory term “any contract.”
1]
unfounded. In Chevron, the Court considered the definition
of “stationary source,” which the Act defines as including
“any building, structure, facility or installation which emits
or may emit any pollutant.” See id., 467 U.S. at 846. Chevron
did not concern EPA’s authority to construe the “stationary
source” definition to exclude buildings or facilities falling
within the usual scope of the statutory language. Instead, the
question before the Court was whether the statutory language
specified how EPA must treat a facility that consists of
multiple buildings: as one source (because it is one “facility”’)
or as multiple sources (because the facility consists of
multiple “buildings”). The Court concluded that the
definition of “stationary source” was not designed to answer
that question, explaining that “the terms [any building,
structure, facility or installation] are overlapping and the
language is not precisely directed to the question of the
applicability of a given term in the context of a larger
operation.” /d. at 862. Here, in contrast, Congress plainly
intended for section 1 1 1(a)(4) to answer the question of what
types of physical changes constitute a modification: those
that increase emissions.
Therefore, the court below broke no new ground in
construing the Act, and its decision is consistent with
decisions of this Court interpreting the word “any.” Indeed,
the court’s reading of “ary” follows the approach repeatedly
urged on this Court by the Solicitor General himself. For
example, in 2003, the United States submitted an amicus
brief in South Florida Water Management District v.
Miccosukee Tribe, S.Ct. No. 02-626 (Sept. 2003), regarding
the proper construction of 33 U.S.C. § 1362(12), which
governs “any addition of any pollutant to navigabie waters
from any point source.” In that brief, the United States
contended that Congress’s “use of the modifier ‘any’ with
reference to ‘addition,’ ‘pollutant,’ and ‘point source’
expresses Congress’s understanding that the various types
of additions, pollutants, and point sources are all within the
12
Clean Water Act’s regulatory reach.” /d., Brief of United
States as Amicus Curiae Supporting Petitioner, 2003 WL
22137034, at 19 (italics supplied).* In the same way, the
“various types” of physical changes are covered by the statute
here, as long as they result in increased emissions. The court
of appeals’ straightforward application of this Court’s
caselaw regarding “any” does not present a question
warranting this Court’s review.
C. The Court of Appeals’ Decision Does Not Conflict
With This Court’s Decisions Regarding
Congressional Ratification of Regulatory
Interpretations.
In an effort to circumvent the plain language of the
statute, EPA claims now, for the first time, that Congress
“ratified” the preexisting exclusion of some activities that
might otherwise have fallen within the broad definition of
“modification” under the distinct new source performance
standards (NSPS) program when it enacted the NSR
provisions in 1977. EPA Pet. at 16-20. In its brief in the court
of appeals and in its regulatory decision, however, EPA
“explicitly disclaimed” any “ratification” argument. See EPA
Brief in New York v. EPA (January 10, 2006), at 19 (“EPA
does not contend that ... Congress ‘ratified’ [the routine
maintenance] exclusion; in fact, EPA has explicitly
disclaimed any such argument”); 70 Fed. Reg. 33,841/2
(“we do not believe Congress intended to ratify the then-
existing interpretation”). EPA cannot now credibly claim that
®> Accord, Bricf for the United States as Amicus Curiae
Supporting Reversal in Engine Mfrs. Assn. v. South Coast Air Quality
Management District, S. Ct. Case No. 02-1343 (Aug. 2003), 2003
WL 22068761, at 13-15 (concerning a Clean Air Act provision
encompassing “any standard,” the United States argued: “Congress
did not define the term ‘standard’ for purposes of Section 209(a),
but it also expressed no intent in Section 209(a) to limit that
provision’s preemptive effect to particular types of standards”).
13
the court of appeals committed egregious error by eschewing
an approach that the agency itself disclaimed.
To the contrary, this Court’s own ratification
jurisprudence demonstrates that the error lies in EPA’s
eleventh-hour ratification argument, not the court of appeal’s
decision. To show ratification, petitioners must demonstrate
that Congress was aware of, and intended to incorporate, the
preexisting regulatory exemptions. SEC v. Sloan, 436 U.S.
103, 120-21 (1978).° Indeed, in its petition, EPA
acknowledges that mere Congressional “silence” does not
constitute ratification. EPA Pet. at 16 (citing TWA, 432 U.S.
at 76 n.11). But in this case, silence is ail that EPA has; there
is no evidence that Congress was even aware of the
preexisting exemptions, let alone that it approved them.
Petitioners cite nothing in the language of the statute or
the legislative history to support their claim that “Congress
ir: 1977 had before it EPA’s preexisting PSD rules, and
Congress reviewed those rules provision-by-provision,
adopting some elements and changing others,” Petition of
Utility Air Regulatory Group (UARG) at 16. EPA cites only
the savings clause of 42 U.S.C. § 7478(a), in which Congress
provided that existing regulations will remain in place until
states submit their plans to implement the new statutory
program. See EPA Pet. at 19. But this provision refutes, rather
than supports, petitioners’ ratification argument. Specifically,
§ 7478(a) states that EPA’s preexisting PSD regulations were
to apply only “[u]ntil such time as an applicable
implementation plan is in effect for any area,” and
®° The cases that EPA relics upon are distinguishable because
they involve agency interpretations that are “expressly accepted” by
Congress. Red Lion Broadcasting v. FCC, 395 U.S. 367, 382 (1969);
see also TWA v. Hardison, 432 U.S. 63, 73-74 (1977) (incorporating
much of the agency guidance verbatim, including concepts of
“reasonable accomodat{ion]” and “undue hardship”).
14
emphasized that the implementation plan must “meet/] the
requirements of this part to prevent significant deterioration
of air quality with respect to any air pollutant.” /d. (emphasis
added). Thus, as the court of appeals held in rejecting a
similar EPA argument in New York v. EPA (“New York I”),
413 F.3d 3 (D.C. Cir.), reh. denied, 431 F.3d 801 (D.C. Cir.
2005), Congress adopted EPA’s preexisting regulation “only
provisionally,” indicating that it saw that interpretation “not
as necessarily complying with the new statute but as merely
filling a gap that would have existed before its
implementation.” 431 F.3d at 802-03 (emphasis in original)
(rejecting EPA’s argument that § 129(a)(1) of the 1977
Amendments approved EPA’s pre-1977 nonattainment NSR
regulation).'°
Nor can EPA persuasively argue that even if Congress
did not expressly approve the pre-1977 regulatory exemptions
from the NSPS definition of “modification,” when 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 Pet. at 16.
The argument fails here, because “[w]here the law is plain,
subsequent reenactment does not constitute an adoption of a
previous administrative construction.” Brown, 513 U.S. at
121 (internal quotation and citation omitted); Sloan, 436 U.S.
at 121. Thus, whatever was EPA’s pre-1977 interpretation of
“modification” in the NSPS regulations, that interpretation
cannot justify an NSR exemption that contravenes the plain
statutory language defining “modification” to include “any
physical change” that increases emissions.
' In New York I, the D.C. Circuit rejected UARG’s argument
that Congress incorporated the regulatory definition of modification
from’ the NSPS program when it cross-referenced the statutory
definition of modification in the NSR provisions. /d., 413 F.3d at
36-39. No party petitioned for certiorari of that decision and it cannot
be challenged in this case.
15
Finally, even if Congress had ratified the pre-1977
exclusion of routine maintenance from the definition of
“modification,” that would not authorize EPA to carve out
the far broader exemption at issue here. 68 Fed. Reg. 61270/
3 (acknowledging that the Rule expands the routine
maintenance exemption).'' While EPA “generally had
interpreted the [routine maintenance] exclusion as being
limited to de minimis circumstances,” 70 Fed. Reg. 33,841/
1, the Rule would allow multimillion dollar activities — in
the case of power plants, activities costing over $100 million
— to evade NSR review even if they increase emissions by
thousands of tons a year, well in excess of any de minimis
threshold. Therefore, the language of the pre-1977 exemption
did not clearly signal to Congress that EPA intended to
exempt “physical changes” producing larger-than-de minimis
emissions increases.
As for the other three pre-1977 exemptions, see EPA Pet.
at 16-17, they construed statutory language not at issue here,
and thus could not have alerted the 1977 Congress to EPA’s
reading of “physical change.” See 39 Fed. Reg. 42,514
(expressing EPA’s view that an “increase in the production rate”
or in “hours of operation” or the “use of an alternative fuel or
raw material,” “shall not be considered a change in the method
of operation.” (emphasis added)).'* In short, petitioners fall far
short of demonstrating the congressional awareness necessary
to show ratification. See Sloan, 436 U.S. at 121.
'' In fact, if EPA is now correct that Congress intended to ratify
the routine maintenance exemption, such ratification would, to use
EPA’s own words, “congeal” the routine maintenance exclusion, 70
Fed. Reg. 33841/2, thereby barring EPA from promulgating the
substantially broader exclusion at issue here.
2 Because these activities are not changes in the method of
operation — and would not be covered by the definition of
modification regardless of the resulting emission increases — it does
not matter whether the resulting emission increases would not, tn
all cases, be de minimis. See EPA Pet. at 17.
16
ll. THE DECISION BELOW DOES NOT HAVE THE
ADVERSE CONSEQUENCES CLAIMED BY THE
PETITIONERS
As explained above, the court of appeals’ decision is a
routine, case-specific interpretation of a statute, and therefore
does not implicate any important questions of federal law.
For that reason, the petitions should be denied, and
petitioners’ policy arguments should be disregarded. Even if
those policy arguments are considered, however, they are
factually incorrect.
A. The Decision of the Court Below Does Not
Prevent EPA From Administering the NSR
Program in a Way That Promotes Its Policy
Goals.
Contrary to petitioners’ suggestions, the court of appeals’
decision does not place EPA in a “regulatory straitjacket,”
depriving it of the ability to tailor the NSR program to
“changing conditions and policies.” EPA Pet. at 21-22;
see also UARG Pet. at 21. Instead, the court of appeals’
decision simply recognizes that EPA lacks authority to
exempt physical changes that increase emissions by
non-de minimis amounts. EPA’s authority otherwise to
structure the NSR program to effectuate its policy goals is
unaffected by the decision.
First, under the statutory definition of modification, as
implemented by 1980 regulations not at issue here, not all
physical changes trigger NSR, but only those changes that
increase actual emissions by amounts exceeding specific
de minimis thresholds. See, e.g., 40 C.F.R. § 51.166(b)(23)(1);
see also Alabama Power, 636 F.2d at 400 (EPA possesses
authority to exempt from NSR “some emission increases on
grounds of de minimis or administrative necessity”). Indeed,
17
under regulatory language added in 2002 and not at issue
here, NSR is triggered only if the emissions increase exceeds
the highest average level emitted by the source during any
two-year period in the previous five years (for electric
utilities) or ten years (for non-utilities). New York J, 413 F.3d
at 22. According to EPA itself, this “lookback” provision
“promotes economic growth and administrative efficiency”
by “affording sources the flexibility to respond rapidly to
market changes” and “focusing limited regulatory resources
on changes most likely to harm the environment.” /d. at 24.
Second, under other regulations upheld by the court of
appeals, emissions increases are measured plantwide, thus
allowing increases at individual components of a polluting
facility to be “offset by contemporaneous decreases of
pollutants” elsewhere in the facility. Alabama Power, 636
F.2d at 400 (emphasis added). “Within the terminology of
the Act,” changes that do not produce a net increase in any
pollutant “are not ‘modifications’ at all.” /d. at 401. Alabama
Power noted that this “bubble” approach “is precisely suited
to preserve air quality within a framework that allows cost-
efficient, flexible planning for industrial expansion and
improvement.” /d. at 402; see also id. at 400 (explaining
that the operating flexibility provided by the bubble approach
and by EPA’s de minimis authority “will allow for
improvement of plants, technological changes, and
replacement of depreciated capital stock.”) (emphasis
added).’’
’ In addition, EPA’s “plantwide applicability limit” provision,
added in 2002 and previously upheld by the court of appeals, creates
an alternative mechanism for taking advantage of a plant-wide
bubble. See 67 Fed. Reg. 80,189/3; New York I, 413 F.3d at 37-38
(deferring to EPA’s finding that plantwide applicability limits
“encourage sources to implement physical or operational changes
that improve efficiency and reduce emission rates’).
18
Finally, EPA’s contention that the decision below
jeopardizes the validity of the existing routine maintenance
exemption and other exclusions from the definition of
modification is incorrect. EPA Pet. at 23-24. The decision
does not affect the validity of the routine maintenance
exemption as long as EPA continues to apply it to de minimis
circumstances, rather than to exempt the massive
multimillion-dollar projects exempted by the Rule. Likewise,
existing regulations providing that fluctuations in hours of
operation or production rate do not constitute changes in the
method of operation are unaffected by the decision below.
See supra at 15.
B. The Rule Vacated by the Court of Appeals Would
Not Benefit the Environment.
EPA contends that the Rule would benefit the
environment by increasing the efficiency of industrial
operations and therefore reducing “the amount of pollution
generated per product produced.” EPA Pet. at 22-23. See also
UARG Pet. at 21 (claiming that the court’s decision will be
“devastating” to the environment). But in enacting the NSR
provisions, Congress intended to protect public health and
the environment by guarding against increases in total facility
emissions, not just emissions “per product produced.”
To the extent that an activity designed to improve efficiency
will not significantly increase a facility’s total emissions,
that activity is already exempt from NSR. See 42 U.S.C.
§ 7411(a)(4); 40 C.F.R. § 52.21(b)(2)(1) (only changes that
increase emissions significantly trigger NSR). Therefore, the
sole effect of the Rule is to exempt physical changes that do
produce significant increases. Allowing facilities to make
such emissions-increasing changes without installing up-to-
date air pollution controls and without ensuring that ambient
19
air quality is protected would degrade rather than benefit the
environment. '4
Indeed, the record of EPA’s enforcement cases addressing
violations of the NSR modification requirements establishes
that the large-scale plant refurbishments exempted by the
Rule can increase emissions substantially. For example, in
an enforcement action against the Tennessee Valley Authority,
EPA identified thirteen plant refurbishments that would
increase emissions significantly. See Jn re TVA, 9 E.A.D. at
451-52. EPA’s Environmental Appeals Board rejected TVA’s
claim that the projects were simply “routine maintenance,”
because “TVA’s view of the breadth of the exception would
. swallow the rule that subjects existing sources to the
requirement to install modern pollution controls when
physical changes that increase emissions are made to these
plants.” Jd. at 378. Nevertheless, all but one of these
expansive, emission-increasing equipment replacement
projects would have been exempt under the Rule. See 68
Fed. Reg. 61,257/2."°
'* Projects that improve efficiency can increase cmissions if
the modified unit is utilized more afterwards. In that case, NSR
requirements remain applicable. See Puerto Rican Cement Co. v.
EPA, 889 F.2d 292, 297 (Ist Cir. 1989) (upholding EPA’s
interpretation that efficiency project triggered NSR because “a firm’s
decision to introduce new, more efficient machinery may Icad the
firm to decide to increase the level of production, with the result
that, despite the new machinery, overall emissions will increase”).
'S’ By way of example, the rule would exempt the $23 million
equipment replacement project undertaken by TVA at Unit 1 of its
coal-fired Cumberland Plant. Schocngold Dec., Att. K (Joint App.
1322) (2.4% of unit’s replacement cost). That project, which required
a three-month shutdown of the unit, resulted in an emissions increase
of 21,187 tons of nitrogen oxides per year, /n re TVA, 9 E.A.D. at
443, 491 — more than the total annual NOx emissions from all sources
in the District of Columbia. See www.cmisstonsonline.org/nei99v3/
state/stindex.htm.
20
C. The Utility Industry’s Equitable Arguments Are
Legally Irrelevant and Factually Incorrect.
Finally, the Court should reject UARG’s reliance on the
briefs submitted to this Court in Environmental Defense v.
Duke Energy Corp., No. 05-848, to support UARG’s claim
that the court of appeals’ decision will expand the application
of NSR requirements and thwart industry reliance on its prior
understanding of those requirements. UARG’s arguments are
irrelevant to this proceeding, which addresses only the
definition of “physical change,” and does not attempt to
define how emissions increases are to be calculated. See Pet.
App. at 15a (industry’s maximum emissions argument
“is irrelevant because it does not address what constitutes a
‘physical change’””).
In any event, UARG’s claim of ignorance cannot be
supported. As the United States explained in Duke Energy,
UARG’s claim that the utility industry has always understood
EPA’s emissions increase test under NSR to be identical to
the agency’s NSPS emissions test is false.'° Furthermore, the
record of the present rulemaking, and of EPA’s enforcement
cases, establishes that industry understood that replacement
of plant equipment in order to extend a plant’s life would
trigger NSR requirements.'’ See United States v. S. Ind. Gas
© Responding to a similar contention made by Duke Energy,
the United States pointed out that the utility industry industryhas
long understood that EPA’s regulatory test for NSR emissions
increases — turning on actual emissions — does not restrict NSR
coverage to cases in which there is an increase in “capacity” measured
by hourly emission rates. See, e.g., United States Reply Br. in No.
05-848 at 14 & n.11 (citing UARG documents); Brief for the United
States in No. 05-848 at 32-33 (discussing 1982 settiement agreement
requiring EPA to consider substituting an hourly rate test for the
actual annual test EPA had adopted in 1980).
For example, the administrative record includes a 1989 power
company memorandum reporting on advice provided by UARG that
(Cont'd)
21
and Electric Co., 245 F.Supp. 2d 994, 1018-19 (S.D. Ind.
2003) (noting that defendant utility received notice of the
narrow scope of the routine maintenance exemption from,
among other things, a 1989 UARG memorandum stating that
‘routine’ activities include only those that (1) are frequently
done at that plant, (2) involve no major equipment, (3) are
inexpensive, and (4) do not extend the life of a plant”);
Ohio Edison, 276 F.Supp. 2d at 888 (finding that language
of statute, regulations and preambles made it “ascertainably
certain that only de minimis activities would serve to trigger
the routine maintenance exemption’).
(Cont’d)
states: “UARG believes that under the present EPA policy, in order
to qualify for the routine maintenance exemption, the activity would
have to be: frequent; inexpensive; able to be accomplished at a
scheduled outage; will not extend the normal economic life of the
unit; [and] be of standard industry design.” See Comments of New
York Attorney Gencral Eliot Spitzer, et a/., on Proposed Amendments
to Prevention of Significant Deterioration and Non-attainment New
Source Review Requirements, Docket No. A-2002-04 (May 2, 2003),
Ex. 14, pg. 4 (Joint App. 1077).
22
CONCLUSION
The petitions for writ of certiorari should be denied.
Dated: January 26, 2007
Respectfully submitted,
ANDREW M. Cuomo
Attorney General
of the State New York
BARBARA D. UNDERWwOoOoD*
Solicitor General
DANIEL SMIRLOCK
Deputy Solicitor General
Anprew D. BING
Assistant Solicitor General
120 Broadway, 25" Floor
New York, NY 10271
(212) 416-8016
J. JARED SNYDER
MIcHAEL J. Myers
Assistant Attorneys General
Office of the Attorney General
The Capitol
Albany, NY 12224
(518) 474-8010
* Counsel of Record
Counsel for Respondents State of
New York, et al.
23
EpMuUND G. Brown Jr.
Attorney General of California
Department of Justice
1300 I Street
P.O. Box 944255
Sacramento, CA 94244
(916) 324-4223
RICHARD BLUMENTHAL
Attorney General
of Connecticut
55 Elm Street
P.O. Box 120
Hartford, CT 06141
(860) 808-5250
JOSEPH R. Bipen, Ill
Attorney General of Delaware
Department of Justice
102 W. Water Street, 3 Floor
Dover, DE 19904
(302) 739-4636
LINDA SINGER
Acting Attorney General
of the District of Columbia
One Judiciary Square
441 4th Street, N.W.
Washington, D.C. 20001
(202) 724-1305
LisA MADIGAN
Attorney General of Illinois
188 West Randolph, Suite 2001
Chicago, IL 60601
(312) 814-3772
G. STEVEN ROWE
Attorney General of Maine
6 State House Station
Augusta, ME 04333
(207) 626-8800
DouGLas F. GANSLER
Attorney General
of Maryland
200 Saimt Paul Place
Baltimore, MD 21202
(410) 576-6300
MARTHA COAKLEY
Attorney General
of Massachusetts
1 Ashburton Place
Boston, MA 02108
(617) 727-2200
Ke.__y A. AYOTTE
Attorney General
of New Hampshire
33 Capitol Street
Concord, NH 03301
(603) 271-3679
STUART RABNER
Attorney General
of New Jersey
Richard J. Hughes
Justice Complex
P.O. Box 093
Trenton, NJ 08625
(609) 292-6945
Gary KING
Attorney General
of New Mexico
Ron Curry
Secretary of the
Environment Department
P.O. Drawer 1508
Santa Fe, New Mexico 87504
(505) 827-6010
SUSAN SHINKMAN
Chief Counsel
Ropert A. REILEY
Assistant Counsel
Commonwealth of
Pennsylvania, Department
of Environmental Protection
RCSOB, POB 8464
Harrisburg, PA 17105
(717) 787-7060
Patrick C. LYNCH
Attorney General
of Rhode Island
150 South Main Street
Providence, RI 029063
(401) 274-4400
WILLIAM H. SorReELt
Attorney General of Vermont
Office of the Attorney
General
109 State Street
Montpelier, VT 05609
(802) 828-3171
BARBARA BAIRD
Principal Deputy
District Counsel
South Coast Air Quality
Management District
21865 Copley Dr.
Diamond Bar, CA 91765
(909)396-2302
MicHAEL A. CARDOZO
Corporation Counsel of the
City of New York
100 Church Street
New York, NY 10007
(212) 788-1145
For City of New York
Dennis J. HERRERA
City Attorney
City Hall, Room 234
1 Dr. Carlton B.
Goodlett Place
San Francisco, CA 94102
(415) 554-4700
DANIEL C. Esty
Esty & ASSOCIATES
213 Preston Road
Cheshire, CT 06410
(203) 271-3248
For the City of Hartford, City
of New Haven, City of New
London, City of Waterbury,
Town of Westport,
Connecticut
25
RosBert W. ALLEN
TYLER Cooper &
ALcorn, LLP
205 Church Street
New Haven, CT 06509
(203) 784-8200
For the City of Groton,
City of Middletown, City
of Stamford, Town of
Cornwall, Town of East
Hartford, Town of Easton,
Town of Greenwich,
Town of Hebron, Town of
Lebanon, Town of Newtown,
Town of North Stonington,
Town of Pomfret, Town of
Putnam, Town of Rocky Hill,
Town of Salisbury, Town of
Thompson, Town of
Wallingford, Town of
Washington, Town of
Westbrook, Town of Weston,
and Town of Woodstock,
Connecticut
Keri N. POWELL
Earthjustice
8 Whitehall Place
Cold Spring, NY 10516
(845) 265-2445
For Natural Resources
Defense Council,
Environmental Defense,
Sierra Club, American
Lung Association, Communities
for a Better Environment
and United States Public
Interest Research Group
Lead counsel for
Environmental Group
Respondents
LEAH WALKER CASEY
CARTER, CONBOY, CASE,
BLACKMORE, MALONEY
& Lairp, PC
Corporate Woods Blvd.
Aibany, NY 12211
(518) 465-3484
Attorney for
Adirondack Mountain Club
26
MICHAEL D. FIORENTINO
Mid-Atlantic Environmental
Law Center
4601 Concord Pike
Wilmington, DE 19803
(302) 477-2072
Attorney for
Delaware Nature Society
JONATHAN F. Lewis
ANN BREWSTER WEEKS
Clean Air Task Force
18 Tremont Street, Suite 530
Boston, MA 02108
(617) 624-0234
For Alabama
Environmental Council,
Clean Air Council, Group
Against Smog
and Pollution, Michigan
Environmental Council,
the Ohio Environmental
Council, Scenic Hudson,
and Southern Alliance for
Clean Energy
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