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Debrief of the D.C. Circuit Court's Oral Arguments in GHG Cases

 

The D.C. Circuit Court of Appeals heard oral argument on February 28th and 29th in four cases where petitioners challenged the Environmental Protection Agency’s (EPA) regulation of greenhouse gases and related actions under the Clean Air Act. 

The petitioners challenged EPA’s finding that greenhouse gases (GHGs) endanger public health and welfare, as well as GHG regulations “triggered” by that finding, specifically regulations for new motor vehicles in the “light duty vehicle rule” and for very large new and modified stationary sources in the “tailoring rule.” Taken together these regulatory actions represent EPA's response to the Supreme Court’s ruling in Massachusetts v. EPA, where the court held that GHGs are pollutants under the definition in the Clean Air Act and that the agency must examine whether GHGs present a danger to public health and welfare and must take “further action” to regulate GHGs if it finds endangerment.

The D.C. Circuit’s eventual ruling in these cases has the potential to halt, delay, modify, or greatly increase the scope of GHG regulation under the Clean Air Act.

The Georgetown Climate Center’s Gabriel Pacyniak participated with other panelists in a debriefing of oral arguments on March 1. Video recordings of that debrief are available below. Several participants in the debriefing were directly involved in the litigation.

The event was co-sponsored by the Environmental Law Institute; Georgetown Climate Center; Jones Day; International Emissions Trading Association; DC Bar Environment, Energy, and Natural Resources Section; and the Climate Change, Sustainable Development, and Ecosystems Committee of the ABA's Section of Environment, Energy, and Resources.

Watch Discussion About the Circuit Court's Oral Arguments


Actions Challenged In Four GHG Cases

The four cases heard in front of the D.C. Circuit challenged the following EPA actions:

Endangerment Finding: Petitioners challenged EPA’s 2009 endangerment finding made under Title II of the Clean Air Act, where EPA found (1) that carbon dioxide, methane and four other GHGs endanger public health and welfare, and (2) that emissions from new motor vehicles and engines contribute to the GHG pollution causing this endangerment.  Among other claims, petitioners argued that EPA should have taken into account the potential impacts of regulation to address GHG emissions, that the agency’s findings overstated the certainty of the science, that EPA impermissibly included two gases that were not emitted by motor vehicles, and that EPA should have reconsidered its decision when petitions were filed presenting new information. (Coalition for Responsible Regulation v. EPA, Docket No. 09-1322).

Light Duty Vehicle Rule: Petitioners challenged a joint rule of EPA and the National Highway Traffic Safety Administration (NHTSA), where the two agencies issued harmonized standards for GHG emissions and fuel economy for new light duty passenger vehicles model years 2012-2016. The motor vehicle manufacturers directly affected by these regulations supported the rule and intervened on EPA’s behalf in the case. The state and industry petitioners challenging the rule were concerned with the way in which the rule triggered regulations for stationary sources under the Clean Air Act’s Prevention of Significant Deterioration (PSD) program, and argued that EPA should have considered the impacts on stationary sources in its rulemaking, among other claims. (Coalition for Responsible Regulation v. EPA, Docket No. 10-1092).

EPA’s Historic Interpretation of the Applicability of PSD Provisions: Petitioners challenged EPA’s historic interpretation of the applicability of the PSD program under Part C of Title I in the Clean Air Act, a program that requires pre-construction permitting and the application of “Best Available Control Technology” for affected major sources. Since 1978, EPA has interpreted the Clean Air Act to require application of the PSD program to “any pollutant ... subject to regulation under the Act,” and to require application of PSD provisions to any major source that was located in an area classified as in attainment or unclassifiable for “any” pollutant. Under this historic interpretation, EPA was required to apply the PSD provisions to GHGs once they became “subject to regulation,” and facilities in all areas of the U.S. would be subject to these provisions if they were a major source, because all areas of the U.S. were “unclassifiable” with regards to GHGs. Petitioners argued that this long-standing interpretation was impermissible, at least in the case of GHGs, because there were other permissible interpretations of PSD applicability that would not lead to absurd results.  The court specifically ordered petitioners in this case to address the timeliness of their claims at oral argument, as Clean Air Act Section 307(b)(1) requires challenges to be filed within sixty days of the agency action in question, unless the challenge is based “solely on grounds arising” after the sixtieth day. (American Chemistry Council v. EPA, Docket No. 10-1167).

Timing Memorandum and Tailoring Rule:  Petitioners are challenging two EPA actions that together phased-in the implementation of the PSD regulations and Title V operating permits for GHG emissions, beginning with only very large sources in the foreseeable future. In 2010, EPA affirmed in the timing memorandum its interpretation that the PSD program applied to a specific pollutant once regulations were in effect that required “actual control” of emissions of that pollutant. In the case of GHGs, this required application of the PSD program to GHG emissions once the light duty vehicle rule went into effect on January 2, 2011. In the tailoring rule, EPA phased-in implementation of the PSD program for GHG emissions beginning with new or majorly modified sources that were the largest sources of emissions, despite the fact that the statutory definition of a “major source” would require the program to apply to thousands of additional sources emitting over 100 or 250 tons per year (depending on the type of source).  EPA said that this “tailoring” of the PSD program was justified by the judicial doctrines of administrative necessity, one-step-at-a-time rulemaking, and avoiding absurd results, because applying the program to all sources exceeding the low statutory thresholds would have imposed undue costs on small sources and overwhelmed the resources of permitting authorities. Petitioners argued that this tailoring was an impermissible violation of the statute, that EPA was required to adopt other, narrower interpretations of PSD applicability that would have avoided the need for such “tailoring,” and that the EPA was violating the Constitutional separation of powers, among other claims. The court specifically ordered petitioners in this case to address issues of standing at oral argument, as petitioners claimed  that they would be harmed by the regulatory burden created by EPA’s regulation, whereas EPA stated that the tailoring rule would actually reduce the regulatory burden that would otherwise be required by the PSD provisions. (Coalition of Responsible Regulation v. EPA, Docket No. 10-1073).

N.b., the lead case in three of the dockets has the same name, “Coalition for Responsible Regulation v. EPA.”

For more information on EPA’s actions to regulate GHG emissions, see GCC’s brief “What States Need to Know About EPA’s Climate Actions.”

Federal Court Enjoins California’s Low Carbon Fuel Standard

 

On December 29, 2011, the United States District Court for the Eastern District of California granted partial summary judgment to the plaintiffs in Rocky Mountain Farmers Union v. Goldstene, holding that California’s Low Carbon Fuel Standard (LCFS) violated the dormant Commerce Clause of the United States Constitution.  The court also granted the plaintiffs a preliminary injunction, prohibiting enforcement of the LCFS until the litigation is completed. 

Judge Lawrence J. O’Neill acted in response to summary judgment motions filed by California and by two groups of plaintiffs – one associated with corn ethanol producers and led by the Rocky Mountain Farmers Union (RMFU), and one associated with petroleum producers, refiners and users led by the National Petrochemical & Refiners Association (NPRA).  Judge O’Neill addressed three central legal issues in the case: whether the LCFS violates the dormant Commerce Clause, whether it is preempted by the federal Renewable Fuel Standard (RFS2), and whether there is a “savings clause” that insulates the LCFS from dormant Commerce Clause or preemption challenges.  As discussed below, Judge O’Neill (1) held that the LCFS violates the dormant Commerce Clause both by discriminating against out-of-state crude oil and corn ethanol and by seeking to regulate conduct outside of California, (2) declined to rule on the preemption issue because the parties had not adequately briefed the relevant standard of review, and (3) rejected California’s argument that the LCFS was protected from challenge by a savings clause. 

On January 5, 2012, California appealed Judge O’Neill’s rulings to the United States Court of Appeals for the Ninth Circuit.  California has indicated that it will not enforce the LCFS while the injunction is in effect, but that it will continue its rulemaking and stakeholder processes regarding potential amendments to the LCFS. 

A full summary of the court's decision has been prepared by the Georgetown Climate Center.  You may download the pdf summary, here.

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