# Opposition Brief — Appalachian Power Co. v. Environmental Protection Agency

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Opposition Brief
- **Published:** January 1, 2001
- **Citation:** 532 U.S. 903

## Text

Nos. 00-445, 00-632 and 00-633 a |
Jn the Supreme Court of the United States :

nme een 8

APPALACHIAN POWER COMPANY, ET AL., PETITIONERS
Vv.
ENVIRONMENTAL PROTECTION AGENCY

STATE OF MICHIGAN, ET AL., PETITIONERS
Vv.
ENVIRONMENTAL PROTECTION AGENCY

STATES OF OHIO AND INDIANA, PETITIONERS
Vv.
ENVIRONMENTAL PROTECTION AGENCY

ON PETITIONS FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE DISTRICT OF COLUMBIA CIRCUIT

BRIEF FOR THE RESPONDENT IN OPPOSITION

SETH P. WAXMAN
Solicitor General

GARY S. Guzy Counsel of Recerd

General Counsel LOIS J. SCHIFFER
JAN TIERNEY Assistant Attorney General

HOWARD HOFFMAN JON M. LIPSHULTZ
Attorneys Attorney
Environmental Protection Department of Justice
Agency Washington, D.C. 20530-0001
Washington, D.C. 20460 (202) 514-2217

QUESTIONS PRESENTED

1. Whether the Environmental Protection Agency,
in promulgating a final rule respecting implementation
of a National Ambient Air Quality Standard under the
Clean Air Act, 42 U.S.C. 7401 et seq., reasonably deter-
mined that it may consider the cost-effectiveness of
available pollution controls as a factor in identifying
“upwind” State air pollution emissions that “contribute
significantly” to nonattainment of the standard in
“downwind” States.

2. Whether the court of appeals properly deter-
mined that the Environmental Protection Agency’s
authority under the relevant provisions of the Clean
Air Act is sufficiently defined to satisfy the nondelega-
tion doctrine.

(I)

TABLE OF CONTENTS

Opinions below

Jurisdiction
Statement

Argument
Conclusion

TABLE OF AUTHORITIES
Cases:
American Petroleum Inst. v. EPA, 52 F.3d 1113

(D.C. Cir. 1995)
American Trucking Assn’s v. EPA, 175 F.3d 1027,
reh’g granted in part and denied in part, 195 F.3d 4
(D.C. Cir. 1999), cert. granted, 120 S. Ct. 2003
(2000)
Bowen v. Georgetown Univ. Hosp., 488 U.S. 204
(1988)
Chevron, U.S.A., Inc. v. NRDC, 467 U.S. 837
(1984)
Citizens to Preserve Overton Park, Inc. v. Volpe, 401
US. 402 (1971)
Ethyl Corp. v. EPA, 51 F.3d 1053 (D.C. Cir.
1995)
General Motors Corp. v. United States, 496 U.S.
530 (1990)
George E. Warren Corp. v. EPA, 159 F.3d 616
(1998), amended on other grounds, 164 F.3d 676
(D.C. Cir. 1999)
Grand Canyon Air Tour Coalition v. FAA, 154
F.3d 455 (D.C. Cir. 1998), cert. denied, 526 U.S.
1158 (1999)
Marsh v. Oregon Natural Res. Council, 490
US. 360 (1989)
Mistretta v. United States, 488 U.S. 361 (TBBB) cosceseicccsars
NRDC v. EPA, 824 F.2d 1146 (D.C. Cir. PEE eebhpiaisdiins

(IIT)

16

IV
Cases—Continued: Page
Train v. NRDC, 421 U.S. 60 (1975) 19
Union Elec. Co. v. EPA, 427 U.S. 246 (1976) .........ccsseeees 18, 19
Statute and regulations:
Clean Air Act, 42 U.S.C. 7401 et seq. 2
§ 109, 42 U.S.C. 7409 3
§ 110, 42 U.S.C. 7410 2
§ 110(a), 42 U.S.C. 7410(a) ....... its 3
§ 110(a)(2), 42 U.S.C. 7410(a)(2) 18
§ 110(a)(2)(A)(i), 42 U.S.C. 7410(a)(2)(A)(i) 19
§ 110(a)(2)(D), 42 U.S.C. 7410(a)(2)(D) 3, 9, 12,
14, 15, 16, 19, 20, 21
§ 110(k)(5), 42 U.S.C. 7410(k)(5) 3, 10, 16
§ 112, 42 U.S.C. 7412 (1994 & Supp. IV 1998) ............00 15
40 C.F.R.:
Section 50.9 3
Section 50.10 3
Section 51.121(e)(1) .:.. 4
Miscellaneous: :
62 Fed. Reg. (1977):
Bi TIO saninsivviisiscninaceeniviaeicitinniicapititaiieiiiiiatiihinnene 4
p. 60,320 .. 4
63 Fed. Reg. (1998):
p. 57,356 2, 3, 4
p. 57,359 3
pp. 57,369-57,370 . 6
pp. 57,377-57,378 6, 11, 21, 22
p. 57,378 6
p. 57,379 6,7
p. 57,384 esiniuiets 5, 10
pp. 57,387-57,398 10
pp. 57,392-57,394 11
pp. 57,394-57,395 18
pp. 57,396-57,398 18

pp. 57,399-57,403 6, 21, 22

Miscellaneous—Continued:

p. 57,400
p. 57,403

p. 57,404

p. 57,428

p. 57,428

pp. 57,446-57,447
p. 57,447

S. Rep. No. 95-127, 95th Cong., Ist Sess. (1977)

‘

eee eeeeeseseseceee

Jn the Supreme Court of the Gnited States

No. 00-445
APPALACHIAN POWER COMPANY, ET AL., PETITIONERS
Vv.
ENVIRONMENTAL PROTECTION AGENCY

No. 00-632
STATE OF MICHIGAN, ET AL., PETITIONERS
Vv.
ENVIRONMENTAL PROTECTION AGENCY

No. 00-633
STATES OF OHIO AND INDIANA, PETITIONERS
v.
ENVIRONMENTAL PROTECTION AGENCY

ON PETITIONS FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE DISTRICT OF COLUMBIA CIRCUIT

BRIEF FOR THE RESPONDENT IN OPPOSITION

OPINIONS BELOW

The opinion of the court of appeals (Pet. App. 1a-61a)!
is reported at 213 F.3d 663.

1 This brief responds to three petitions for certiorari filed in
this case: (1) Appalachian Power Co. v. EPA, No. 00-445 (filed
Sept. 20, 2000) (APC Pet.); Michigan v. EPA, No. 00-682 (filed Gct.

(1)

2

JURISDICTION

The judgment of the court of appeals was entered on
March 3, 2000. Petitions for rehearing were denied on
June 22, 2000 (Pet. App. 62a-65a). The petition in No.
00-445 was filed on September 20, 2000. The Chief
Justice extended the time for the States to file their
petitions for a writ of certiorari to and including
October 20, 2000, and the petitions in Nos. 00-632 and
00-633 were filed on that date. The jurisdiction of this
Court is invoked under 28 U.S.C. 1254(1).

STATEMENT

Petitioners seek review of a decision of the court
of appeals arising from an Environmental Protection
Agency (EPA) rulemaking under the Clean Air Act
(CAA), 42 U.S.C. 7401 et seg. The CAA, among other
things, directs EPA to develop National Ambient Air
Quality Standards (NAAQS) and encourages States to
implement the NAAQS through State Implementation
Plans (SIPs). 42 U.S.C. 7410. EPA promulgated a rule,
known as the “NOx SIP Call,” that required the SIPs of
22 States and the District of Columbia to be revised to
mitigate the interstate transportation of ozone. See 63
Fed. Reg. 57,356 (1998). Numerous petitioners chal-
lenged EPA’s rule through consolidated petitions for
review, and the court of appeals granted the petition in
part, but largely rejected petitioners’ objections to the
rule. See Pet. App. la-6la.

1. The NOx SIP Call requires certain States (in
order for their SIPs-to remain acceptable under the
Act) to develop plans to reduce emissions of ozone

20, 2000) (Michigan Pet.); and Ohio & Indiana v. EPA, No. 00-633
(filed Oct. 20, 2000) (Ohio Pet.). For convenience, all citations to
“Pet. App.” refer to APC’s petition appendix.

3

precursor air pollutants that contribute significantly to
nonattainment of the NAAQS for ozone in “downwind”
States. See generally 63 Fed. Reg. at 57,356. Ground-
level ozone, which causes adverse health effects, is
created from the chemical reactions of precursor
pollutants in sunlight. Jd. at 57,359. For nearly two
decades, scientists have accumulated evidence that the
wind-borne movement of nitrogen oxides (NOx) and
other ozone precursors, often over long distances,
contributes to serious downwind ozone problems, most
notably in many of the major eastern urban centers.
Ibid. The NOx SIP Call represents the culmination of a
multi-year effort by Congress, EPA, and the States to
develop solutions to that chronic interstate ozone
pollution problem. See Pet. App. 8a-12a.

2. The CAA makes “the States and the Federal
Government partners in the struggle against air pollu-
tion.” General Motors Corp. v. United States, 496 U.S.
530, 582 (1990). EPA is authorized to set NAAQS for
air pollutants at levels requisite to protect public health
and welfare. 42 U.S.C. 7409. EPA has established
NAAQS for several pollutants, including ozone. 40
C.F.R. 50.9, 50.10. Once EPA promulgates a NAAQS,
each State’s SIP must provide for its implementation,
maintenance and enforcement. 42 U.S.C. 7410(a). If
the Administrator of EPA finds that an approved SIP
is “substantially inadequate” to attain or maintain the
NAAQS, mitigate adequately “interstate pollutant
transport,” or otherwise comply with the CAA, she is
authorized to “require the State to revise the plan as
necessary to correct such inadequacies” (i.¢., issue a
“SIP Call”). 42 U.S.C. 7410(k)(5). Section 110(a)(2)(D)
of the CAA, 42 U.S.C. 7410(a)(2)(D), sometimes refer-
red to as the “good neighbor” provision, requires that
all SIPs, inter alia, prohibit emissions of air pollutants

4

in amounts that would “contribute significantly to
nonattainment in, or interfere with maintenance by,
any other State with respect toany * * * [NAAQS].”

3. On November 7, 1997, EPA issued a notice of
proposed rulemaking for the NOx SIP Call, finding that
22 States and the District of Columbia (for convenience,
the “23 States”) significantly contribute to nonattain-
ment of the ozone standard in downwind areas within
the meaning of the CAA’s good neighbor provision. 62
Fed. Reg. 60,318, 60,320 (1997).2 At the same time,
EPA proposed to require each of the 23 States to revise
its SIP to demonstrate that total emissions, within each
State, of NOx—the most significant ozone precursor
responsible for ozone transported to other States—
would be reduced by the amounts determined to be
significant and, therefore, would not exceed an assigned
NOx emissions “budget” established by EPA. Ibid.
EPA published the final rule on October 27, 1998. 63
Fed. Reg. at 57,356. Like the proposal, the final rule
determined that the 23 States contribute significantly
to downwind ozone nonattainment and required each of
those States to submit SIP revisions containing control
measures sufficient to meet the State’s NOx budget. 40
C.F.R. 51.121(e)(1).

4. The final rule was premised, first and foremost, on
state-of-the-art computer modeling of air quality, show-
ing which upwind States were, in fact, substantial
enough contributors to nonattainment of the “1-hour”

2 The 23 States were Alabama, Connecticut, Delaware, the
District of Columbia, Georgia, Illinois, Indiana, Kentucky, Massa-
chusetts, Maryland, Michigan, Missouri, North Carolina, New
Jersey, New York, Ohio, Pennsylvania, Rhode Island, South
Carolina, Tennessee, Virginia, West Virginia, and Wisconsin. 62
Fed. Reg. at 60,320.

5

ozone standard in downwind areas to warrant inclusion
in the SIP Call.’ For the proposal, EPA relied heavily
on modeling performed between 1995 and 1997 by the
Ozone Transport Assessment Group (OTAG), a work-
group with representatives from States, industry,
environmental organizations, and EPA. See Pet. App.
12a-13a. In response to comments arguing that the
OTAG modeling utilized for the proposal was not speci-
fic enough, EPA conducted additional, state-specific air-
quality modeling using two different modeling tech-
niques. Jd. at 13a. From that modeling, EPA compiled
detailed data summaries showing the magnitude, fre-
quency, and relative amount of each upwind State’s
emissions contributions to each downwind nonattain-
ment problem being studied. Jd. at 16a. That addi-
tional air quality analysis, fully documented in the
record for the final rule, confirmed EPA’s proposed
“significant contribution” finding as to the 23 States.
Id. at 18a; 63 Fed. Reg. at 57,384. As the court of
appeals correctly noted, in the course of the present
litigation, “no one quarrel[ed] either with [EPA’s] use
of multiple measures, or with the way it drew the line
at this stage.” Pet. App. 16a.

5. EPA then examined the cost-effectiveness of
available emissions controls in each of the 23 upwind

3 In the final rule, EPA also independently analyzed the need
for the SIP Call under an “8-hour” ozone standard that EPA issued
in 1997. See generally Pet. App. 6a-7a. However, in light of the
ongoing challenge to the 8-hour ozone standard in American
Trucking Ass’ns v. EPA, 175 F.3d 1027, reh’g granted in part and
denied in part, 195 F.3d 4 (D.C. Cir. 1999), cert. granted, 120 S. Ct.
2003, 2193 (2000) (A7'A), EPA stayed the findings for the SIP Call
under the 8-hour standard, and the court of appeals accordingly
limited its review to the support for the SIP Call under the 1-hour
standard. Pet. App. 7a-8a.

6

States as part of its analysis in determining the amount
of the State’s emissions that were considered to
“contribute significantly” to downwind nonattainment,
as well as the corresponding emission reductions that
were needed to eliminate the significant contribution.
The remaining emissions became each of those States’
“NOx budgets,” i.e, the maximum amount of NOx
emissions expected after the States implement controls
necessary to eliminate the “significantly contributing”
emissions. Pet. App. 16a-17a. In effect, EPA set each
State’s NOx budget to reflect the amount of “highly
cost-effective” NOx emissions reductions EPA believed
would be available in that State. Jd. at 17a; 63 Fed.
Reg. at 57,377-57,378, 57,399-57,403. For purposes of
that analysis, which included review of extensive
emissions control data, EPA determined that “highly
cost-effective” NOx emissions reductions are those that
cost no more than $2,000 per ton of NOx reduced. Pet.
App. 17a. EPA emphasized, however, that, in
developing SIP revisions to meet the NOx budgets,
States would be free to rely on any NOx emission
control measures they deemed appropriate, whether or
not they were the same controls assumed by EPA in
developing the budgets. Jd. at 42a; 63 Fed. Reg. at
57,369-57,370, 57,378.

EPA tested the efficacy of the proposed NOx emis-
sions budgets through further rounds of air quality
modeling. First, it conducted additional computer
modeling to ensure that the budgets would produce
appropriate downwind air quality improvements. See
63 Fed. Reg. at 57,379. That modeling confirmed that
the required reductions would, in fact, allow downwind
ozone nonattainment areas to make “appreciable pro-
gress towards attainment” and would not result in any
instances of “overkill,” 7.e., upwind emissions reductions

jae a a Ee

7

that “are more than necessary to ameliorate downwind
nonattainment in every downwind area affected by that
upwind State.” Jbid. EPA also compared the air
quality and cost impacts of its proposed approach to
alternative approaches premised, for example, on
“varying levels of controls in different parts of the 23
jurisdictions.” Jd. at 57,423. EPA concluded, however,
that none of those alternatives would “provide either a
significant improvement in air quality or a substantial
reduction in cost.” Pet. App. 26a (quoting 63 Fed. Reg.
at 57,423). The court of appeals noted that petitioners
“offer[ed] no material critique of EPA’s methodology in
reaching this answer.” Pet. App. 26a.

6. Various States and industry groups challenged
the NOx SIP Call through consolidated petitions for re-
view in the court of appeals. Other States, industry
groups, and environmental groups intervened in sup-
port of the rule. The petitions raised myriad issues,
including the two issues that provide the basis for the
petitions for writ of certiorari: (1) whether cost-effec-
tiveness of emissions controls may be considered in
determining what level of emissions contributions are
“significant”; and (2) whether the CAA or EPA’s
interpretations of its provisions are so undefined as to
violate the nondelegation doctrine. The court denied all
of the petitions for review on those and other major
issues. Pet. App. la-56a. It vacated, however, certain
relatively minor aspects of the rule, which are not at
issue here.‘ Judge Sentelle dissented. He concluded

4 On the basis of certain discrete record issues, the court of
appeals vacated the SIP Call as it applied to Wisconsin, Missouri,
and Georgia. The court also remanded the rule for EPA to recon-
sider issues respecting the definition of an electric generating unit
and a change in the control level assumed for large stationary
internal combustion engines. Pet. App. 56a.

8

that the relevant provisions of the CAA do not allow
EPA to consider cost of controls at all, and he would
have vacated the entire rule on that basis. Jd. at 57a-
6la. Petitioners sought rehearing and rehearing en
banc, primarily on the grounds articulated in the dis-
sent, but the court of appeals denied those petitions.
Id. at 62a-65a. Judge Sentelle would have granted the
petitions. /bid.

ARGUMENT

The court of appeals correctly ruled that EPA may
consider the cost-effectiveness of pollution controls in
determining which emissions contribute significantly
to nonattainment of the ozone standard in downwind
areas. That statutory ruling is correct, does not conflict
with any decision of this Court or any other court of
appeals, and accordingly does not warrant review by
this Court. The court of appeals also was correct in
holding that neither the relevant provisions of the CAA
nor EPA’s actions violate the nondelegation doctrine.
While the court of appeals’ analysis was premised, in
part, on a decision of that court that the federal govern-
ment has challenged in Browner v. American Trucking
Associations (ATA), No. 99-1257 (argued Nov. 7, 2000),
the judgment reached by the court of appeals is correct
and does not warrant further review, regardless of this
Court’s decision in ATA*

5 APC and Ohio suggest that the Court may wish to defer
action on their petitions pending a decision in ATA. APC Pet. i
n.*; Ohio Pet. 16 n.8. That action is not warranted as to either the
nondelegation issue or the cost issue in this case. The court of
appeals adopted a novel nondelegation standard in ATA, supra, at
1027, and the federal government has challenged that ruling
in Browner v. ATA, No. 99-1257. The court of appeals in this case,
however, has rejected petitioners’ nondelegation argument, even

9

1. The NOx SIP Call is EPA’s effort to implement .
the CAA provisions that address an interstate problem
—the accumulation of ozone, which, for example,
blankets the northeastern United States on warm
summer days as a result of air pollution emitted by
numerous sources in nearly two dozen States east of
the Mississippi River. EPA identified, through
sophisticated air quality modeling, those States that
contribute to that problem, and it then identified as
“significant contributions” those emissions in excess of
what the emission levels would be if all of the
contributing States imposed the same level of highly
cost-effective emission controls on their sources.

As we have explained in ATA v. Browner, No. 99-
1426, the Clean Air Act prohibits consideration of the
projected cost of pollution controls when establishing
NAAQS, but generally allows those costs to be
considered at the implementation stage. See Br. for
Fed. Resp’ts at 5-7, 17-31, 45-47, ATA v. Browner,
supra. In accordance with that overall statutory
structure, EPA has reasonably construed the relevant
provisions of the Act—Section 110(a)(2)(D) and

under its ATA ruling. Pet. App. 26a-28a. The relevant provisions
of the CAA would satisfy nondelegation requirements under any
plausible standard. See pp. 20-22, infra. The cross-petitioners in
ATA v. Browner, No. 99-1426, contend that the CAA requires
EPA to consider the costs of pollution control when setting
NAAQS. Petitioners in this case contend, however, that the CAA
precludes EPA from considering those costs when determining
how to implement the CAA’s trans-boundary pollution provisions
set out in Section 110(a)(2)(D), 42 U.S.C. 7410(a)(2)(D). If the
cross-petitioners in ATA prevail on their cost issue, that result
would weaken, rather than bolster, petitioners’ cost argument in
this case. And if the A7A cross-petitioners do not prevail on their
cost issue, that result would preserve the state of the law that
provided the basis for the court of appeals’ decision in this case.

10

(k)(5)—to allow consideration of cost-effectiveness of
controls in determining which contributions to the
interstate ozone problem are “significant[]” for pur-
poses of the NOx SIP Call. See 42 U.S.C. 7410(a)(2)(D)
and (k)(5). The court of appeals properly upheld EPA’s
determination. Petitioners’ challenges rely heavily on
mistaken characterizations of the manner in which EPA
considered costs in the rulemaking. Because the court
of appeals’ decision is correct and does not conflict with
any decision of this Court or another court of appeals,
petitioners’ challenge to EPA’s construction of the
relevant provisions of the CAA presents no issue war-
ranting this Court’s review.

a. The petitions for writ of certiorari rest largely on
the mistaken assertion that the NOx SIP Call “relfies]
on cost-effectiveness, to the exclusion of air quality
effects, in assessing whether one state’s emissions con-
tribute ‘significantly’ to another state’s ozone non-
attainment air quality.” APC Pet. 14; see also, e.g.,
Michigan Pet. 12; Ohio Pet. 5-6. To the contrary, EPA
focused on air quality—not cost—as the principal basis
for determining which States have total emissions with
sufficient impacts on downwind ozone nonattainment to
warrant inclusion in the SIP Call. EPA’s determina-
tions were premised on state-specific, multi-dimen-
sional, air-quality modeling analyses that were fully
documented in the administrative record and mostly
unchallenged in this case. See pp. 4-7, supra; Pet. App.
12a-14a, 16a; 63 Fed. Reg. at 57,384, 57,387-57,398.°

6 That modeling allowed EPA to make careful, air-quality-
based distinctions among all upwind States whose emissions could
potentially impact a particular downwind area. In many instances,
EPA determined that the ambient impacts downwind from a parti-
cular upwind State’s emissions were so small as to not be “signifi-
cant” with regard to particular downwind nonattainment pro-

Pe ee ee, eee Le ae ee, Seat

—_——-

11

As the court of appeals correctly recognized, only
after those determinations were made did EPA exa-

mine the amount of highly cost-effective NOx emissions
reductions available to develop the NOx budgets. Pet.
App. 16a-17a; see also 63 Fed. Reg. at 57,377-57,378.
That analysis was the principal factor only in deter-
mining the subset of each relevant upwind State’s total
NOx emissions that should be eliminated as the “signi-
ficant contribution” to downwind nonattainment. See
Pet. App. 16a-17a. Furthermore, after EPA derived
the proposed NOx budgets, EPA conducted additional
air quality modeling, again fully documented in the
record and mostly unchallenged in this case. The
modeling showed that the required emissions reduc-
tions, as a whole, would have an “appreciable impact”
on downwind nonattainment and that there is no
instance where a required upwind emission reduction is
“more than necessary to ameliorate downwind non-
attainment.” 63 Fed. Reg. at 57,4038, 57,446-57,447."

blems. See, e.g., 63 Fed. Reg. at 57,392-57,394 (comparing model-
ing data for upwind States that were, and were not, found to
contribute “significantly” to New York City’s nonattainment pro-
blem). The court of appeals pointed out that petitioners “really
{did] nothing more than quibble” with EPA’s modeling, and “no
one quarrel{ed]” with the overall analytical approach used by EPA
to interpret the data and determine significant contributions of
upwind States. Pet. App. 13a, 16a. One South Carolina utility
company did object to EPA’s findings respecting air quality
modeling for the State of South Carolina, but the court’s specific
rejection of the utility’s arguments illustrates the soundness of the
air quality modeling that EPA performed at that stage of its
analysis. See id. at 36a-37a.

7 EPA determined that, even after implementation of the SIP
Call, some “residual nonattainment” would likely persist for at
least one downwind area linked to each upwind State. See 63 Fed.
Reg. at 57,404, 57,447. Thus, if anything, EPA erred on the side of

Se gtr, ee ee as ane ee gee

12

Accordingly, and contrary to petitioners’ suggestions,
the question presented in this case is not whether EPA
may base a SIP Call exclusively (or primarily) on cost,
rather than air quality, considerations. Rather, the
question is whether EPA may use cost analyses to help
develop a fair, practical, and effective regulatory
approach supported—and bounded—by extensive and
mostly undisputed air quality modeling. The court of
appeals correctly answered that question.

b. The court of appeals ruled, on the basis of the
CAA and its legislative history, that EPA reasonably
construed Section 110(a)(2)(D). See Pet. App. 15a-25a.
EPA concluded that, when determining the amount of
each upwind State’s emissions that “contribute signifi-
cantly to nonattainment” in downwind States (42 U.S.C.
7410(a)(2)(D)), EPA could consider the level of emission
reduction that could be achieved in the upwind States
through cost-effective control measures. The CAA
. neither requires nor prohibits EPA’s consideration of
that sensible benchmark as part of the process for
solving a complex, and highly fact intensive, interstate
pollution problem. As the court of appeals properly
recognized, EPA’s approach represents a reasonable
construction of its obligations under the relevant pro-
visions of the CAA. See Chevron, U.S.A., Inc. v.
NRDC, 467 U.S. 837, 842-844 (1984).°

In upholding EPA’s construction of the statute, the
court of appeals correctly observed that “[t]he term

under-control rather than over-control. EPA stated that it would
continue to monitor the progress made on ozone nonattainment
and, if necessary, “may establish new budget levels and allocation
mechanisms for the post-2007 timetrame.” 63 Fed. Reg. at 57,428.

8 The court of appeals correctly noted that no party argued
(and the court did not hold) that EPA was required to consider
costs under Section 110(aX2)(D). Pet. App. 17a-18a, 22a.

13

‘significant’ does not in itself convey a thought that
significance should be measured in only one dimension.”
Pet. App. 21a.’ The court explained that EPA is justi-
fied in construing the term “significant” to allow for
consideration of emission control costs when making
regulatory decisions in the context presented here. See
id. at 2la-25a. Furthermore, the CAA’s legislative
history indicates that, at least since 1977, Congress has
anticipated the need to take account of pollution control
costs and the economic incentives of the States that
contribute to, or are affected by, interstate pollution.”
EPA’s approach fulfills Congress’s objective to amelio-
rate the impact of interstate pollutant transport and to
do so in a way that equitably distributes the burdens
borne by all the States that are contributors to this
complex, regional problem.

c. Petitioners are mistaken in suggesting that
EPA’s approach conflicts with other decisions of the
courts of appeals. See APC Pet. 17-19; Michigan Pet.
11-12. They essentially argue, based on Judge
Sentelle’s dissent, that Congress clearly intended to

9 At least one of the petitioners appears to agree with this
statement. See Ohio Pet. 10 (“It is true, as the court of appeals
noted, that the term ‘significant’ is inherently open-ended and is
susceptible of an interpretation that would consider costs of reduc-
tion as one of several factors in measuring ‘contributions’ that
require a regulatory response.”).

10 See S. Rep. No. 95-127, 95th Cong., Ist Sess. 41-42 (1977)
(noting the need to address the “serious inequities among several
States, where one State may have more stringent [SIP] require-
ments than another State,” and to “equalize the positions of the
States with respect to interstate pollution by making a source at
least as responsible for polluting another State as it would be for
polluting its own State”); see also id. at 42 (noting that “plants in
States with more stringent control requirements” are subject to a
“distinct economic and competitive disadvantage”).

14

preclude consideration of costs under Section
110(a)(2)(D). See Pet. App. 59a-60a. The court of ap-
peals correctly rejected petitioners’ contention. Judge
Sentelle relied on cases such as American Petrolewm
Institute v. EPA, 52 F.3d 1118 (D.C. Cir. 1995), and
Ethyl Corp. v. EPA, 51 F.3d 1058 (D.C. Cir. 1995),
which recognize that, where a statutory provision
unambiguously confines an agency’s authority to the
satisfaction of a specified goal, or to the consideration of
a specified factor, the agency is not at liberty to take
regulatory action under that provision to effectuate
other goals, or to base its decision on other factors."
EPA did not violate that principle. EPA properly
focused the NOx SIP Call on the precise air quality
issue that is the subject of Section 110(a)(2)(D)—the
elimination of emissions that “contribute significantly”
to nonattainment of the NAAQS in downwind States.
EPA merely considered emission control costs as part
of its analysis. This case therefore does not pose the
question whether EPA can take regulatory action pre-
mised on a goal or factor different from that set forth in
the relevant statutory provision, nor whether EPA has
taken action exceeding its statutory authority. See
APC Pet. 16 (citing Bowen v. Georgetown Univ. Hosp.,
488 U.S. 204, 208 (1988)). Rather, the question here is
simply whether EPA may consider costs as part of an
effort to give meaningful effect to an undefined term in
the relevant provision—in this case, the phrase “contri-

1! See American Petroleum Inst., 52 F.3d at 1119 (finding that
the relevant statutory provisions unambiguously. required that
regulation be “directed toward the reduction of VOCs and toxics
emissions”); Ethyl Corp., 51 F.3d at 1058 (finding that the relevant
statutory provisions unambiguously confined fuel additive waiver
determination to effects of additive on emission control devices).

15

bute significantly to nonattainment.” See Pet. App. 21a
(“The fundamental dispute is over the clarity of the
phrase ‘contribute significantly.’”). As the court of
appeals correctly recognized, that court’s previous de-
cisions support EPA’s determination. See id. at
21a-24a.

The court of appeals appropriately focused on cases
such as NRDC v. EPA, 824 F.2d 1146 (D.C. Cir. 1987)
(en banc). See Pet. App. 23a-24a. In NRDC, the court
considered challenges to EPA’s use of emission control
costs in setting an emission standard for vinyl chloride,
which the CAA regulates as a “hazardous” air pollut-
ant. See CAA § 112, 42 U.S.C. 7412 (1994 & Supp. IV
1998). Section 112 provided, at that time, that hazard-
ous pollutant emission standards were to be set “at the
level which in [the Administrator’s] judgment provides
an ample margin of safety to protect the public health.”
824 F.2d at 1148. The court of appeals ruled that EPA
may consider emission control costs in making that
determination, explaining that “the phrase ‘to protect
the public health’ evinces an intent to make health the
primary consideration,” but that nothing in the statute
or its legislative history indicated any congressional
intent to preclude consideration of costs. Jd. at 1155.”

The court of appeals in this case noted that it has
routinely applied its approach in NRDC to determine
when an agency may consider costs when making regu-

2 The court of appeals ultimately remanded EPA’s vinyl
chloride rule because the court found that EPA had “substituted
technological feasibility for health as the primary consideration.”
824 F.2d at 1164 (emphasis added); see also APC Pet. 7 (discussing
that aspect of the court’s decision). That concern, however, is not
present in this case. EPA’s consideration of costs was only one
component of its overall effort to implement Section 110(a)(2)(D)’s
air quality goals.

16

latory decisions. See Pet. App. 22a-23a." Petitioners
have failed to identify, either here or in the proceedings
below, any persuasive evidence that Congress intended
to preclude EPA from considering costs under Section
110(a(2)(D). See id. at 24a-25a."

d. There is no merit to the contentions of Michigan
and Ohio that EPA’s regulatory approach represents an
improper intrusion on state sovereignty. See Ohio Pet.
9-16; Michigan Pet. 1-19, 22-28. While the States’ argu-
ments are somewhat ambiguous, they seem to focus on
Section 110(k)(5)’s direction that EPA shall call for
revision of a State’s SIP “as necessary to correct * * *
inadequacies.” Ohio Pet. 11; Michigan Pet. 24-25. In
petitioners’ view, EPA’s analytical approach was so
blunt that it required some States to reduce emissions

13 See, e.g., George E. Warren Corp. v. EPA, 159 F.3d 616, 622-
624 (1998) (although improvement in air quality is the “overall
goal” of the CAA gasoline anti-dumping provisions, EPA per-
missibly considered economic factors since nothing “in the text or
structure” of the statute precluded such consideration), amended
on other grounds, 164 F.3d 676 (D.C. Cir. 1999); Grand Canyon Air
Tour Coalition v. FAA, 154 F.3d 455, 475 (D.C. Cir. 1998) (FAA
properly considered economic impacts on air tour industry as fac-
tor in developing regulation under statute providing for “sub-
stantial restoration of natural quiet” in Grand Canyon National
Park), cert. denied, 526 U.S. 1158 (1999).

4 In the court of appeals proceedings, petitioners advanced
conflicting theories of the extent to which Section 110(a)(2)(D)
allows consideration of costs. See Pet. App. 17a-20a. That diver-
gence continues here. Compare APC Pet. 16 (consideration of
costs precluded), and Michigan Pet. 8 (same), with Ohio Pet. 15
(costs may be considered, but only as a “secondary consideration”).
As the court of appeals apt.y observed, “[a]gainst this backdrop, it
would be at the very least ironic for us to say there is ‘clear con-
gressional intent to preclude consideration of cost’ under 110(a)
(2(D).” Pet. App. 20a (quoting NRDC v. EPA, 824 F.2d 1146 (D.C.
Cir. 1987) (en banc)).

17

more than “necessary,” while other States are tasked
with reducing emissions less than “necessary.” Ohio
Pet. 11-14; Michigan Pet. 25. Petitioners essentially
contend that EPA erred by not tailoring state NOx
budgets more precisely to the modeled impact of each
State’s emissions on downwind nonattainment areas.”
The court of appeals properly rejected the gist of that
argument on the basis of the rulemaking record. See
Pet. App. 25a-26a. The court observed that, before
selecting a relatively uniform analytical approach to
calculate each State’s NOx budget, EPA also modeled
approaches that introduced more regional variations,
similar to the approaches that petitioners now suggest.
Ibid. EPA found that the non-uniform approaches
provided no significant advantages over the uniform
approach, in terms of either air quality or cost, and that
“(t]he complaining states offer[ed] no material critique
of EPA’s methodology in reaching this answer.” Id. at
26a. The court correctly recognized that any regulatory
approach to an exceedingly complex interstate air pol-
lution problem could be attacked as having some
imprecision, particularly when viewed from a parochial
perspective. EPA considered various approaches
and reasonably selected one that struck an appropriate
balance among the relevant technical considerations.

16 While petitioners presented similar factual arguments to the
court of appeals, they were not presented in federalism terms. The
States’ federalism arguments below rested on a more sweeping
assertion that EPA’s decision to establish NOx budgets, in and of
itself, inappropriately restricted the States’ prerogatives to choose
emission control strategies. Pet. App. 37a-43a. The court of ap-
peals rejected that argument, and the States do not directly
challenge that aspect of the court decision here.

18

See ibid.; see also, e.g., Marsh v. Oregon Natural Res.
Council, 490 U.S. 360, 376-377 (1989).

e. There also is no merit to Michigan’s argument
that EPA’s consideration of cost-effectiveness of emis-
sion controls in the NOx SIP Call conflicts with this
Court’s decision in Union Electric Co. v. EPA, 427 U.S.
246 (1976). See Michigan Pet. 14-19. Michigan contends
that in Union Electric, the Court held that a SIP re-
vision submitted under Section 110(a)(2); 42 U.S.C.
7410(a)(2), may be evaluated only on the basis of
whether it meets the minimum conditions identified in
subparagraphs (A) to (H) of that provision and that
none of those minimum conditions includes considera-
tion of economic or technological feasibility. See Michi-
gan Pet. 15 (citing Union Elec., 427 U.S. at 257).

1 The complexity of developing a more “variable” type of
approach is apparent from the record. Each of the States subject
to the SIP Call was found to contribute “significantly” to 1-hour
ozone nonattainment in numerous (in some cases, aS many as a
dozen or more) downwind States, and many “upwind” States are
themselves “downwind” receivers of pollution contributions from
other States. See 63 Fed. Reg. at 57,394-57,395. Overall, EPA
found that there were more than 150 significant upwind-to-
downwind state pollution contribution linkages under the 1-hour
ozone standard. See ibid. (Table II-5). Furthermore, the magni-
tude, frequency, and relative amount of the air pollution contri-
oe underlying each of those linkages varies considerably. See,
e.g., id. at 57,396-57,398 (examples of modeling data for linkages).
Petitioners do not identify any alternative approach from the
administrative record that would adequately address all the com-
plex dimensions of this regional problem. Instead, petitioners
suggest that EPA’s approach is imprecise based on selective
comparisons that fail to grapple with the larger and more complex
problems that EPA needed to address. See, ¢.g., Ohio Pet. 12-13
(comparing Indiana/New York and Pennsylvania/New York

linkages); Michigan Pet. 22-23 (same).

19

Michigan’s understanding of Union Electric is incor-
rect.

The Court’s Union Electric decision addressed a
sulfur dioxide SIP submitted under the requirement of
Section 110(a)(2)(A)(i), which provided, at that time,
that each State must formulate a SIP to achieve the
primary NAAQS “as expeditiously as practicable but
. .» in no case later than three years from the date of
approval of such plan.” 427 U.S. at 249-251. The Court
stated in broad terms that “Congress intended claims of
economic and technological infeasibility to be wholly
foreign to the Administrator’s consideration of a [SIP}.”
Id. at 256. But the Court also made clear that its
holding concerning economic and technological feasi- x
bility was focused on the type of SIP revision at issue.

Id. at 265 (“In sum, we have concluded that claims of
economic or technological infeasibility may not be
considered by the Administrator in evaluating a state
requirement that primary ambient air quality
standards be met in the mandatory three years. a
(emphasis added). Union Electric

that consideration of “[e]economic and technological
factors” may be appropriate in circumstances other
than those directly at issue in that case. Id. at 264-265
n.13. Michigan is accordingly mistaken in suggesting
that Union Electric precludes EPA from considering
economic and technological factors when taking actions
under Section 110(a)(2D).”

Michigan’s reliance on Train v. NRDC, 421 U.S. 60, 79
(1975), is similarly misplaced. See Michigan Pet. 25. The Train
decision—which held that certain amendments to SIPs should be
treated as “revisions” and not as “postponement{s]” and, therefore,
should be subject to more relaxed statutory requirements under
the version of the CAA then in effect, 421 U.S. at 98-99—has no

direct bearing on the issues presented here.

20

2. APC alone objects to the court of appeals’
decision on nondelegation grounds. See APC Pet. 19-
21. As APC recognizes, the court of appeals recently
relied on the nondelegation doctrine to invalidate
EPA’s promulgation of revised ozone and particulate
matter NAAQS. See ATA, supra. This Court has
granted the federal government’s petition for a writ of
certiorari challenging the court of appeals’ ATA
decision. See Browner v. ATA, No. 00-1297. Regard-
less of the outcome of that case, the court of appeals
was correct in ruling that Section 110(a)(2)(D) does not —
violate the nondelegation doctrine.

The court of appeals concluded that its ATA ruling,
which requires agencies to identify an “intelligible
principle” when exercising discretion under broad
statutory grants, applies only to agency action that has
nationwide effect. See Pet. App. 26a-27a. The court
rejected petitioners’ nondelegation challenge primarily
on the ground that EPA’s interpretation of Section
110(a)(2)(D) has “confined the statute to a modest role.”
Id. at 28a. The Court need not rely on that particular
distinction, however, because Section 110(a)(2)(D) is
constitutional under any reasonable view of the non-
delegation doctrine. This Court’s decisions recognize
that the nondelegation doctrine is satisfied if a statu-
tory grant of authority itself sets forth an “intelligible
principle” that “clearly delineates the general policy,
the public agency which is to apply it, and the bounda-
ries of this delegated authority.” See Mistretta v.
United States, 488 U.S. 361, 372-373 (1989) (citation
omitted). Section 110(a)(2){D) plainly satisfies that
standard. It quite specifically directs EPA to ensure
that each SIP contains adequate provisions to prevent
emission of air pollutants in amounts that, inter alia,
“contribute significantly to nonattainment in, or inter-

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21 -

fere with maintenance by, any other State with respect
to any [NAAQS].” 42 U.S.C. 7410(aX(2)(D). Section
110(aX2)(D) simply confers the normal quantum of dis-
cretion that agencies routinely exercise in administer-
ing statutory programs. See, e.g., Chevron U.S.A., 467
U.S. at 843-845.

APC’s further suggestion that the Court should
alternatively find “EPA’s selection of its $2000-per-ton
cut-off point” to be “arbitrary and capricious” is also
without merit. APC Pet. 20-21. APC did not make that
argument in the court of appeals and has not even
identified it as a question presented in its petition for a
writ of certiorari. See APC Pet. i. APC’s argument
rests on an out-of-context partial quotation from the
court of appeals’ nondelegation ruling. The court stated
that the $2000-per-ton threshold, viewed from the per-
spective of A7'A’s nondelegation ruling, is a “radically
incomplete line-drawing device.” Pet. App. 26a; APC
Pet. 20. The court nevertheless expressly acknow]l-
edged the extensive factual support for the $2000-per-
ton threshold in the administrative record. Pet. App.
27a.

Whatever the merits of the court of appeals’ non-
delegation ruling in A7'A, that decision does not alter
the established standard for determining whether an
agency’s action is arbitrary or capricious. See, ¢.g.,
Citizens to Preserve Overton Park, Inc. v. Volpe, 401
U.S. 402, 416 (1971) (a court is limited to examining

18 See Pet. App. 27a (“EPA indicates that it rested the $2000/
ton figure on. ‘NOx emissions controls that are available and of
comparable cost to other recently undertaken or planned NOx
, Measures”) (quoting 63 Fed. Reg. at 57,400). EPA’s determination
was based on extensive analysis of emission control data that was
fully documented in the rulemaking record. See 63 Fed. Reg. at
57,377-57,378, 57,399-57,403.

22

whether the agency’s action “was based on a considera-
tion of the relevant factors and whether there has been _
a clear error of judgment”). EPA amply justified its
choice of the $2000-per-ton threshold in the rulemaking
proceeding. 63 Fed. Reg. at 57,377-57,378, 57,399-
57,403. Hence, even if APC had raised a challenge to
EPA’s selection of that threshold under the arbitrary
or capricious standard in the court of appeals, the
challenge would have failed. There is no reason for this
Court to address, for the first time in this case, that
entirely factbound question.

CONCLUSION
The petitions for writ of certiorari should be denied.
Respectfully submitted.

SETH P. WAXMAN

GARY S. Guzy Solicitor General

General Counsel Lois J. SCHIFFER ;
JAN TIERNEY Assistant Attorney General
HOWARD HOFFMAN JON M. LIPSHULTZ

Attorneys Attorney

Environmental Protection

Agency

JANUARY 2001

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386019_1603%3A5. Public record. Not legal advice.