Reply Brief — American Chemistry Council v. Sierra Club

No. 09-495

Supreme Court, U.S.

FILED

FEB § - 2010

OFFICE OF THE CLERK

IN THE

Supreme Court of the United States

AMERICAN CHEMISTRY COUNCIL, AMERICAN FOREST

AND PAPER ASSOCIATION INC., AMERICAN PETROLEUM

INSTITUTE, NATIONAL PETROCHEMICAL & REFINERS

ASSOCIATION,

Peti

Vv.

SIERRA CLUB, et al.,

tioners,

Respondents.

On Petition for a Writ of Certiorari

to the United States Court of Appeals for the

District of Columbia Circuit

REPLY BRIEF FOR PETITIONERS

CARTER G. PHILLIPS*

DAVID T. BUENTE J

R.

PETER R. STEENLAND JR.

JAMES W. COLEMAN

SIDLEY AUSTIN LLP

1501 K Street, N.W.

Washington, DC 2

(202) 736-8000

Counsel for Petitioners

February 9, 2010 * Counsel of Recor

0005

d

WILSON-EPES PRINTING CO _ INC. — (202) 789-0096 - WAaASHINGTON,O C 20002

RULE 29.6 STATEMENT

Petitioner American Forest & Paper Association

(““AF&PA”) is the national trade association of the

forest, paper and wood products industry.

Petitioner Amcrican Petroleum Institute (“API”) is

a nationwide, not-for-profit association.

National Petrochemical & Refiners Association

(“NPRA”) is a national trade association.

The AF&PA, API, and NPRA have no parent

companies, and no publicly-held company has a 10%

or greater ownership interest in either the AF&PA,

API, or NPRA.

The American Chemistry Council (“ACC”) is a not-

for-profit trade association. ACC has no outstanding

shares or debt securities in the hands of the public

and has no parent company. No publicly held

company has a ten percent (10%) or. greater

ownership interest in ACC.

TABLE OF CONTENTS

Page

PEL hake BO LAE RORIEC YD cekesissccstssiadessaresbupasene i

TABLE OF AUT RAGA 2 Less conse ccccessnccenerseccescsveanas iV

REPLY BRIEF FOR PETITIONERG................... 1

I. PETITIONERS RAISED THE QUESTION

PRESENTED IN THE D.C. CIRCUIT........ s 2

ll. THE CIRCUITS ARE DIVIDED ON THE

QUESTION WHETHER A PETITIONER

SEEKING TO CHALLENGE A LONG-

STANDING RULE MUST FIRST FILE A

PR RL ERPEN ECP TURIN ALE? vescsesavcccsssasscssenvesaes 3

lil. THE DECISION BELOW WILL INTRO-

DUCE SUBSTANTIAL UNCERTAINTY

INTO THE AGENCY REVIEW PROCESS . 6

[V. THE VACATUR OF THE SSM RULE

WILL HAVE SERIOUS AND UNAVOID-

ABLE ADVERSE IMPACTS ......................... 7

ed Re REE Sakcsascaese isis ecdccrdovadenteeeiaaabnen 9

(111)

lV

TABLE OF AUTHORITIES

CASES Page

Am. Road & Transp. Builders Ass'n v.

EPA, 588 F.3d 1109 (D.C. Cir. 2009)......... 7

Dunn-McCampbell Royalty Interest, Inc. v.

Nat'l Park Serv., 112 F.3d 1283 (5th Cir.

LS SREIN RRS Cree ee REN RU een unc mee 4,5

Envtl. Def. v. EPA, 467 F.3d 1329 (D.C.

RS ie ee ae 6

Kennecott Utah Copper Corp. v. Dep’t of the

Interior, 88 F.3d 1191 (D.C. Cir. 1996) ..... 6

Legal Envtl. Assistance Found., Inc. v.

EPA, 118 F.3d 1467 (11th Cir. 1997) ........ 4

Nat'l Ass’n of Mfrs. v. Dep’t of the Interior,

134 F.3d 1095 (D.C. Cir. 1998).................. 6

NRDC v. EPA, 571 F.3d 1245 (D.C. Cir.

ID oii: 4c crises cinbda in, cimakael cigdeenenineedasauaieien tien 6

Oljato Chapter of Navajo Tribe v. Train,

515 F.2a 654 (D.C. Cir. 1978) .........4...605... 5

PanAmSat Corp. v. FCC, 198 F.3d 890

Re WD isin keecapsacines amicsaitesauechnccmects 6

Save the Bay, Inc. v. EPA, 556 F.2d 1282

Rh Rg so eacen nag cquaviavsesseseuniavecciessases 5

Stevens v. Dep’t of Treasury, 500 U.S. 1

1 |) eee nett nee nn ernun rs 2

Union Elec. Co. v. EPA, 515 F.2d 206 (8th

Cir. 1975), ), aff'd, 427 U.S. 246 (1976)..... 5

Va. Bankshares, Inc. v. Sandberg, 501 U.S.

RR Ero ivisn sess useidcheschtvec oameiwase es 2

Wind River Mining Corp. v. Untted States,

946 F.2d 710 (9th Cir. 1991)... 5

Yee v. City of Escondido, 503 U.S. 519

sc nan teense cesuuicvaiesiasesucauecwiaraaeoaieeereec: Y «

STATUTES AND REGULATION

Se AO RO ice Cee 8

42 U.S.C. § 7604(a)

42 U.S.C. §7607(b)

CROCCO EET EHH HEM EEE

74 Fed. Reg. 51,368 (Oct. 6, 2009) (to be

codified at 40 C.F.R. pt. 60) .................0.008

OTHER AUTHORITIES

GAO, EPA’s Strategy and Resources May

Be Inadequate to Control Air Toxics

S| OP RIOR CECT IAP apie

GAO, Mercury Control Technologies at

Coal-Fired Power Plants Have Achteved

Substantial Emissions Reductions (Oct.

2009)

GAO, GAO/RCED-00-72, Status of Imple-

mentation and Issues of the Clean Air Act

Amendments of 1990 (Apr. 2000)

9

,6

REPLY BRIEF FOR PETITIONERS

The D.C. Circuit’s holding is that a regulation

adopted in 1994 can be reviewed more than a decade

later, notwithstanding the unequivocal language of

42 U.S.C. §7607(b)(1), that such a challenge is barred

if not brought within the 60 days after the regulation

is published. Every other circuit (and many panels of

the D.C. Circuit) would hold that such a challenge is

time-barred and that the challengers must seek

rescission of the rule by the agency first and then

proceed with judicial review if the agency chooses not

to withdraw the rule. That approach is textually

required and it promotes an orderly administrative

process. Indeed, the Solicitor General agrees that the

decision below is clearly wrong. That is an

understatement. The D.C. Circuit's holding is

lawless, tramples important reliance interests, and in

this particular case wreaks havoc on a wide array of

industries. Those are reasons enough to warrant

certiorari and nothing that respondents offer detracts

from that conclusion.

Respondents make four principal arguments. First,

Sierra Club asserts that the Petitioners’ claim was

not made below. Second, both Respondents allege

that, regardless of the court’s error, there 1s no circuit

split on the question presented. Third, they assert

that the D.C. Circuit’s jurisdiction over cases outside

the statutory period for review has minimal practical

importance. Finally, they suggest that the vacatur of

the SSM _ provision itself has little practical

importance. On each question, the United States and

Sierra Club are mistaken. Petitioners presented

their claim to the D.C. Circuit, which clearly decided

it; there 1s a square conflict among the circuits; the

decision below will introduce increasing uncertainty

2

into judicial challenges te agency decisions; and the

decision below threatens regulated industries with

substantial, unavoidable liability.

I. PETITIONERS RAISED THE QUESTION

PRESENTED IN THE D.C. CIRCUIT.

The question presented here was both presented

and decided below. In their brief before the D.C.

Circuit, Petitioners stated:

The appropriate way to challenge a_long-

standing regulation believed to violate a statute

is to file a petition to amend or rescind the rule

and then challenge if denied. Petitioners’ claim

that the petition process would be a “waste of

time and resources” cannot stand. With a

petition, all interested parties, including

industry intervenors, may fully participate in the

proceedings. If Petitioners followed this required

path, this Court would have a complete record on

which to base its review, hardly a waste of time

or resources.

Int. Br. at 18 n.13 (internal citations omitted). Thus,

the question presented in this case was presented

below. Furthermore, it was actually decided below.

Va. Bankshares, Inc. v. Sandberg, 501 U.S. 1083,

1099 n.8 (1991); Stevens v. Dep't of Treasury, 500 U.S.

1, 8 (1991). Indeed, the question presented was one

of the subjects of the dissent. Pet. App. at 20a.

The court of appeals held that “[a] constructive

reopening occurs if the revision of accompanying

regulations ‘significantly alters the stakes of judicial

review.” Pet. App. at 9a. That holding is what

Petitioners are challenging; they believe there 1s no

basis in the statute to allow that result. That issue is

clearly fair game for this Court. Yee v. City of

Escondido, 503 U.S. 519, 535 (1992).

3

II. THE CIRCUITS ARE DIVIDED ON THE

QUESTION WHETHER A_ PETITIONER

SEEKING TO CHALLENGE A _ LONG-

STANDING RULE MUST FIRST FILF A

PETITION TO RESCIND.

Both the United States and Sierra Club analyze the

issue as if the term “constructive reopening” has

some talismanic meaning. It does not; it is the flip

side of the coin that insists that the proper approach

is for the challenging party to file a petition to rescind

the rule and seek judicial review of that order, if

appropriate. Thus, the repeated assertion that other

circuits do not’ specifically reject “constructive

reopening” is irrelevant. See, e.g., US Br. at 12;

Sierra Club Br. at 21-22. On the relevant question—

whether a party seeking to challenge a longstanding

rule must first file a petition to rescind—the circuits

are squarely divided.

The government accurately summarizes_ the

situation when it states “the courts of appeals have

held that a party may obtain judicial review of even a

long-established rule by petitioning the agency to

amend or rescind it and then seeking judicial review

if that petition is denied.” US Br. at 12. The

government also notes, accurately, that the other

circuits do not mention, or invoke and then reject, the

D.C. Circuit's “constructive reopening” terminology.

Id. at 13. But there is no magic in that terminology.

Given the clarity of the statute, hardly anyone would

assume that any kind of “reopening” is available,

constructive or otherwise. ‘Thus, that the other

courts reject the D.C. Circuit's doctrine in fact, if not

by name, is more than enough reason to warrant this

Court's review.

The government suggests that the other circuits

have not “held that seeking review of the denial of a

4

petition to rescind is the exclusive means of securing

review of an old rule.” J/d. That is not a fair reading

of the decisions of the other circuits. Of course, there

may be other means to review an “old rule,” if the

text of the relevant statute allows challenges

whenever the rule is applicd or whenever new

circumstances require. But when a rule is “old” in

the sense that the text of the statute dictates that

review is no longer available, the other courts of

appeals’ opinions, fairly read, indicete that seeking

review of the denial of a petition to rescind is the only

appropriate means of securing review. !

For instance, when the Fifth Circuit held that the

petitioners challenge was time-barred in Dunn-

McCampbell Royalty Interest, Inc. v. National Park

Service, 112 F.3d 1283 (5th Cir. 1997), it noted: “If

Dunn-McCampbell were able to point to ... an

application of the regulations [to Dunn-McCampbell]

here, or if they had petitioned the National Park

Service to change the ... regulations and been

denied, this court might have jurisdiction to hear that

case.” Id. at 1287-88. Thus, the Fifth Cuircuit

identified only two ways to avoid the time bar. First,

the petitioner could identify an application of the

statute to itself—this exception does not apply in

Clean Air Act cases. Compare id. at 1288, with 42

U.S.C. § 7607(b)(2). Second, the petitioner can

' Of course, the rule then reviewed is the denial of the petition

to rescind, not the “old rule,” because the old rule is still

shielded from direct review. See Legal Envtl. Assistance Found.,

Inc. v. EPA, 118 F.3d 1467, 1473 (11th Cir. 1997),

There are other ways to direct an agency to reexamine an old

rule. For instance, a court could vacate a new rule because that

new rule drastically changed the regulatory context of an old

rule, and instruct the agency that if it wishes to avoid vacatur of

the new rule, it must reconsider the old rule.

5

petition to rescind the regulation in question. It is

impossible to read the Fifth Circuit’s opinion as

countenancing any othey way around the time bar.

After all, the Circuit was relying explicitly on a

decision holding that one muy bring an action outside

the statutory time period “only by petitioning the

agency to review the application of the regulation to

that particular challenger.” 112 F.3d at 1287 (citing

Wind River Mining Corp. v. United States, 946 F.2d

710, 715 (9th Cir. 1991)) (emphasis added). ?

Similarly, in Union Electric Co. v. EPA, 515 F.2d

206 (8th Cir. 1975), aff'd, 427 U.S. 246 (1976), the

court concluded that “fiJt is only when the

Administrator fails to act upon the basis of the new

information presented to him that a petition for

review is proper.” Jd. at 220 (emphasis added). And

this position was adopted by the D.C. Circuit in

Oljato Chapter of Navajo Tribe v. Train, 515 F.2d

654, 666 (D.C. Cir. 1975), and embraced by the Fifth

Circuit in Save the Bay, Inc. v. EPA, 556 F.2d 1282

(5th Cir. 1977)

Sierra Club, for its part, suggests that the

decisions of the other circuits would not require filing

a petition for review in this case because those cases

merely concern situations in which there is “new

information.” Sierra Club Br. at 21. But if this is a

distinction, it cuts the other way. After all, the

statutory text of the CAA expressly provides an

exception to the 60-day bar for petitions raised on the

basis of new information: “if such petition is based

The Fifth Circuit accurately characterized Wind River,

which clearly implhed that the petition to rescind process was

the exclusive means of avoiding the statutory time bar. Wind

River, 946 F.2d at 715 Wind River emphasized that “the

narrow scope of challenges to agency decisions that” it alowed

would not undercut the statutory time bar. /d. at 716

6

solely on grounds arising after such sixtieth day, then

any petition for review under this subsection shall be

filed within sixty days after such grounds arise.” 42

U.S.C. § 7607(b)(1). Ifa party must file a petition to

rescind when there is “new information,” surely it

must file such a petition when there is not. Thus, the

decisions of the other circuits are in direct conflict

with the decision below on the question presented.

lil. THE DECISION BELOW WILL INTRO-

DUCE SUBSTANTIAL UNCERTAINTY IN-

TO THE AGENCY REVIEW PROCESS.

The government predicts that the D.C. Circuit's

practice of asserting jurisdiction outside the statutory

time period for review will be infrequently employed,

and thus will have little effect. US Br. at 10-12

This prediction 1s unsupportable.

First, the government argues that, in the past,

“plaintiffs have rarely invoked the ‘constructive

reopening’ doctrine.” US Br. at 18. That is hard to

determine, given the lag between filing petitions for

review and published decisions resulting from that

petition. Sierra Club filed this case in April 2002,

relatively soon after the first spate of “constructive

reopening’ decisions appeared. See, e.g., PanAmSat

Corp. v. FCC, 198 F.3d 890, 894 (D.C. Cir. 1999);

Nat'l Ass'n of Mfrs. v. Dep't of the Interior, 134 F.3d

1095, 1104 (D.C. Cir. 1998); Kennecott Utah Copper

Corp. v. Dep't of the Interior, 88 F.3d 1191, 1214 (D.C.

Cir. 1996). Indeed, that generation of cases seems to

have spawned another gencration. See, e.g., Pet.

App. at la—2la; NRDC v. EPA, 571 F.3d 1245 (D.C.

Cir. 2009); Envtl. Def. v. EPA, 467 F.3d 1329, 1333-

34 (D.C. Cir. 2006). In any event, two published

decisions issued within months of each other is

hardly evidence that the “constructive reopening” line

of cases is going away.

7

Second, there is reason to think that the volume of

these cases may soon increase dramatically. This is

because of the D.C. Circuit’s recent decision in

American Road & Transportation Builders Associ-

ation v. EPA, 588 F.3d 1109, 1112 (D.C. Cir. 2009),

which held that the petition for review procedure may

not be used to bring a challenge that could have been

brought when the rule was first promulgated, even if

the challenge is substantive. Jd. at 1113. This rule,

which also appears inconsistent with those of the

other circuits, will push more and more D.C. Circuit

plaintiffs to the “constructive reopening” argument.

IV. THE VACATUR OF THE SSM RULE WILL

HAVE SERIOUS AND UNAVOIDABLE AD-

VERSE IMPACTS.

The government argues that the decision below

“only” applies directly to 35 source categories, and

that EPA is fixing the rest.’ US Br. at 14-16. As

noted below, changing 35 rules is a massive task.

And, as the government has acknowledged, seventy-

four more categories have now been “called into

question.” Kushner Letter at 2 n.1; see also Chamber

of Commerce Br. at 12 n.3. And some of these

categories use language that closely mirrors the SSM

provision at issue below. Kushner Letter at 2 n.1.

Furthermore, the government's recent actions show

that the decision may have even broader conse-

quences. EPA summarily removed an exemption for

oe

4A letter from the government and its brief in opposition also

state, without precision or support, that “most” source categories

do not need to rely on the SSM provision referenced in their

rules, for “various reasons.” US Br. at 14—15 (citing Letter from

Adam M. Kushner, Director, Office of Civil Enforcement 2-3

(Kushner Letter), available at http://www.epa.gov/compliance/

civil/caa/sam-memo080409._ pdf)

8

SSM that had been in place since 1997 for hospital,

medical, and infectious waste incinerators, finding

that the D.C. Circuit's ruling applies to waste

incinerators regulated by another section of the Clean

Air Act, 74 Fed. Reg. 51,368, 51,375 (Oct. 6, 2009) (to

be codified at 40 C.F.R. pt. 60).

Regardless, even thirty-five rules, standing alone,

would take many years to promulgate. The most

recent Government Accountability Office (GAO)

report on the topic notes that “[Djeveloping MACT

[Maximum Achievable Control Technology] standards

for hazardous air pollutants can take up to 3 years.”

GAO, Mercury Control Technologies at Coal-Fired

Power Plants Have Achieved Substantial Emissions

Reductions 2 (Oct. 2009).

Historically, these standards are _ notoriously

difficult to promulgate, and require years to adopt.

The 1990 Clean Air Act Amendments charged EPA

with issuing MACT rules for all major sources of 189

toxic pollutants under a phased schedule. 42 U.S.C.

§ 7412(e). But within the first year of that effort, the

GAO determined that EPA could not meet the

prescribed schedule “because some data take years to

acquire.” GAO, EPA’s Strategy and Resources May

Be Inadequate to Control Air Toxics 3 (June 1991). In

April 2000, GAO found that EPA missed its deadline

for 102 of 117 hazardous air pollutant requirements.

GAO, GAO/RCED-00-72, Status of Implementation

and Issues of the Clean Air Act Amendments of 1990,

at 11 (Apr. 2000). The government’s assertion that it

can “quickly” solve the problems created by the

decision below is a triumph cf wishful thinking over

the documented reality of EPA’s MACT regulation

history.

Finally, the government suggests that the practical

impact of the decision below may be minimized

9

because it could use “enforcement discretion.” US Br.

at 16. But this is not a binding commitment to

forswear civil or criminal enforcement actions against

sources that have done everything possible to comply

with now unattainable standards. Instead, it merely

notes that it will consider “among other things, the

good faith efforts of the source to minimize emissions

during SSM events.” Jd. (quoting Kushner letter at

3). A close read of this statement reveals that EPA

has promised very little. Most importantly, neither

the government nor Sierra Club suggests how sources

faced with unattainable standards will be protected

from the substantial penalties that citizens’ enforce-

ment suits could impose. 42 U.S.C. § 7604(a).

CONCLUSION

For the foregoing reasons, the petition for a writ of

certiorari should be granted.

Respectfully Submitted,

CARTER G. PHILLIPS*

DAVID T. BUENTE JR.

PETER R. STEENLAND JR.

JAMES W. COLEMAN

SIDLEY AUSTIN LLP

1501 K Street, N.W.

Washington, DC 20005

(202) 736-8000

Counsel for Petitioners

February 9, 2010 * Counsel of Record