D.C. Circuit Upholds EPA Regulations of Greenhouse Gas Emissions

June 27, 2012

On June 26, 2012, a three-judge panel of the D.C. Circuit Court of Appeals upheld four EPA rules related to the regulation of greenhouse gas (GHG) emissions under the Clean Air Act (CAA). The rules and related actions were challenged by state and industry petitioners in four related cases. (Lead case: Coalition for Responsible Regulation v. EPA,  D.C . Cir., No. 09-1322).

In a unanimous unsigned opinion, the three-judge panel denied challenges to the EPA’s Endangerment Finding, Light Duty Vehicle Rule, and application of the Prevention of Significant Deterioration program to GHGs. The court found that the agency’s actions were not arbitrary or capricious and affirmed that the agency’s interpretation of the Clean Air Act (CAA) was “unambiguously correct.”  The court also dismissed related challenges to the Tailoring Rule and Timing Memorandum for lack of standing.

Pursuant to Massachussetts v EPA, the Supreme Court held that EPA was required to undertake an endangerment analysis.  In December 2009, EPA found that greenhouse gases endangered public health and welfare. This finding triggers other regulatory obligations under the CAA, and therefore serves as the legal foundation for EPA’s GHG regulatory actions. The court denied claims that the EPA’s findings were arbitrary and capricious, deferring to EPA’s scientific judgments regarding endangerment and specifically approving EPA’s partial reliance on “major assessments” such as the Intergovernmental Panel on Climate Change. It also held that the Clean Air Act does not permit EPA to consider policy implications in this determination, contrary to the arguments of petitioners.

Similarly, the court rejected petitioners’ arguments that the EPA had discretion not to issue GHG emission standards for passenger vehicles in the Tailpipe Rule, holding that EPA was compelled by the CAA to issue regulations after finding endangerment. (Petitioners did not challenge the substance of the rule; auto manufacturers supported EPA in defending the regulations).

In its final ruling on the merits, the court upheld EPA’s longstanding interpretation on the applicability of the Prevention of Significant Deterioration (PSD) program, holding that EPA’s interpretation that the PSD section applies to “any air pollutant” regulated under the Clean Air Act was “unambiguously correct” given the text of the statute and the Supreme Court’s ruling in Massachusetts v. EPA. Petitioners had argued that a more narrow interpretation that would have excluded or limited PSD regulation of GHGs was required.  

Challenges to the Tailoring Rule and Timing Memorandum were dismissed for lack of standing, with the court finding that the petitioners failed to show that either rule caused them an “injury in fact” that could be redressed by vacating the rules. The court noted that the effect of the rules was actually to ease the compliance and administrative burdens of industry and state petitioners, in that the rules delayed permitting requirements and limited the number of sources subject to permitting at the current time. 

In summary, the decision strongly affirms EPA’s authority to regulate GHGs under the Clean Air Act.

Petitioners may now request an en banc hearing in front of the full D.C. Circuit Court of Appeals or review by the U.S. Supreme Court. In both cases, review is discretionary and requires support from judges in the respective courts. 

For more information about the petitioners’ challenges, see Debrief of the D.C. Circuit Court's Oral Arguments in GHG Cases