Texas v. Environmental Protection Agency

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued May 7, 2013 Decided July 26, 2013

No. 10-1425

STATE OF TEXAS, ET AL.,
PETITIONERS

v.

ENVIRONMENTAL PROTECTION AGENCY,
RESPONDENT

CONSERVATION LAW FOUNDATION, ET AL.,
INTERVENORS

Consolidated with Nos. 11-1062, 11-1128, 11-1247,
11-1249, 11-1250

On Petitions for Review of Final Actions of
the United States Environmental Protection Agency

Mark W. DeLaquil argued the cause for petitioners. With
him on the briefs were David B. Rivkin Jr., Andrew M.
Grossman, Matthew G. Paulson, Roger R. Martella Jr., F.
William Brownell, Henry V. Nickel, Norman W. Fichthorn,
Allison D. Wood, Charles H. Knauss, Shannon S. Broome, Greg
Abbott, Attorney General, Office of the Attorney General for the
State of Texas, J. Reed Clay Jr., Special Assistant and Senior
Counsel to the Attorney General, John A. Riley, and
 3

Christopher C. Thiele. Bill Cobb, Deputy Attorney General for
Civil Litigation, Office of the Attorney General for the State of
Texas, entered an appearance.

Madeline P. Fleisher, Attorney, U.S. Department of Justice,
argued the cause for respondent. With her on the brief were
Howard J. Hoffman, Elliott Zenick, and Sara Schneeberg,
Attorneys, U.S. Environmental Protection Agency. Thomas A.
Lorenzen and Perry M. Rosen, Attorneys, U.S. Department of
Justice, entered appearances.

Sean H. Donahue argued the cause for intervenors. With
him on the brief were Joanne M. Spalding, Nathan Matthews,
Vickie L. Patton, Pamela Campos, Peter Zalzal, Ann Brewster
Weeks, Lisa J. Zak, and David Doniger. Meleah A. Geertsma
and Craig H. Segall entered appearances.

No. 11-1037

UTILITY AIR REGULATORY GROUP,
PETITIONER

v.

ENVIRONMENTAL PROTECTION AGENCY,
RESPONDENT

WYOMING MINING ASSOCIATION AND STATE OF
CONNECTICUT,
INTERVENORS
 4

Consolidated with Nos. 11-1038, 11-1039, 11-1040,
11-1041, 11-1059, 11-1060, 11-1063, 11-1075,
11-1076, 11-1077, 11-1078, 11-1287, 11-1288,
11-1289, 11-1290, 11-1291, 11-1292, 11-1293

On Petitions for Review of Final Actions of
the United States Environmental Protection Agency

David B. Rivkin Jr. argued the cause for petitioner State of
Texas. Nancy E. Vehr, Attorney, Office of the Attorney General
for the State of Wyoming, argued the cause for the State of
Wyoming. With them on the briefs were Greg Abbott, Attorney
General, Office of the Attorney General for the State of Texas,
J. Reed Clay Jr., Special Assistant and Senior Counsel to the
Attorney General, Jay Jerde, Deputy Attorney General, Office
of the Attorney General for the State of Wyoming, Jeremiah I.
Williamson, Assistant Attorney General, and Mark W. DeLaquil
and Andrew M. Grossman.

Henry V. Nickel argued the cause for Non-State Petitioners
and Intervenor-Petitioner. With him on the briefs were F.
William Brownell, Norman W. Fichthorn, Allison D. Wood,
Peter S. Glaser, Charles H. Knauss, Shannon S. Broome,
Matthew G. Paulson, Roger R. Martella, and Eric Groten. Mark
E. Nagle entered an appearance.

Madeline P. Fleisher and Matthew R. Oakes, Attorneys,
U.S. Department of Justice, argued the causes for respondents.
With them on the brief were Howard J. Hoffman, Attorney,
United States Environmental Protection Agency, Elliott Zenick,
Assistant General Counsel, and Sara Schneeberg, Attorney.
Perry M. Rosen, Attorney, U.S. Department of Justice, entered
an appearance.
 5

George Jepsen, Attorney General, Office of the Attorney
General for the State of Connecticut, Kimberly P. Massicotte
and Scott N. Koschwitz, Assistant Attorneys General, Vickie L.
Patton, Pamela Campos, Peter M. Zalzal, Sean H. Donahue,
Joanne M. Spalding, Nathan Matthews, David D. Doniger,
Meleah A. Geertsma, Ann Brewster Weeks, and Lisa J. Zak were
on the briefs for intervenors in support of respondent.

Before: ROGERS, TATEL and KAVANAUGH, Circuit Judges.

Opinion for the Court by Circuit Judge ROGERS.

Dissenting opinion by Circuit Judge KAVANAUGH.

ROGERS, Circuit Judge: These cases present another set of
challenges to rules promulgated by the Environmental
Protection Agency (“EPA”) in response to the Supreme Court’s
holding that greenhouse gases unambiguously qualify as an “air
pollutant” under the Clean Air Act (“the Act” or “CAA”). See
Massachusetts v. EPA, 549 U.S. 497, 528–32 (2007). Last year,
in Coalition for Responsible Regulation, Inc. v. EPA, 684 F.3d
102 (D.C. Cir. 2012) (“Coalition”), this court upheld EPA’s
regulation in the Tailpipe Rule of greenhouse gases emitted by
cars and light trucks under Title II of the CAA, id. at 116–29, as
well as its determination that the rule triggered permitting
requirements for new major stationary sources of greenhouse
gases under Part C of Title I of the CAA, id. at 132–44. The
court dismissed for lack of standing under Article III of the U.S.
Constitution challenges by States and industry groups to Timing
and Tailoring Rules that ameliorated the burden of Part C
permitting for greenhouse gases. Id. at 144–48.

At issue here is implementation of the Part C permitting
requirements in several States without implementation plans for
greenhouse gases as of January 2, 2011, when the emission
 6

standards in the Tailpipe Rule took effect. The States of Texas
and Wyoming and industry groups petition for review of five
rules designed to ensure that a permitting authority existed to
issue the required greenhouse gas permits. Petitioners contend
the rules are based on an impermissible interpretation of the Part
C Prevention of Significant Deterioration program, CAA §§
160–169, and violate the Act’s “orderly process” for revision of
state implementation plans (“SIPs”) pursuant to CAA § 110.
The court on more than one occasion has interpreted
CAA § 165(a) unambiguously to prohibit construction or
modification of a major emitting facility without a Part C permit
that meets the statutory requirements with regard to each
pollutant subject to regulation under the Act. Because we now
hold that under the plain text of CAA § 165(a) and § 167 the
permitting requirements are self-executing without regard to
previously approved SIPs, industry petitioners fail to show how
they have been injured in fact by rules enabling issuance of the
necessary permits. State petitioners likewise fail, in the face of
Congress’s mandate in CAA § 165(a), to show how vacating the
rules would redress their purported injuries. Accordingly,
because petitioners lack Article III standing to challenge the
rules, we dismiss the petitions for lack of jurisdiction.

We begin in Part I with a brief overview of relevant
provisions of the Act and the regulatory and procedural
background of the challenged rules. In Part II, we address CAA
§ 165(a), which underlies the rules, and petitioners’
interpretation of the Part C permitting requirements. In Part III,
we turn to the challenged rules and must initially address
whether petitioners have Article III standing to challenge them.

I.

Title I, Part A, of the Act addresses air quality and
emissions limitations. It requires EPA to establish National
 7

Ambient Air Quality Standards (“NAAQS”) that set the
maximum permissible levels of pollutants for which air quality
criteria have been issued. CAA § 109, 42 U.S.C. § 7409.
States, in turn, are required to develop SIPs to determine, based
on local conditions and needs, how to implement the NAAQS
and related requirements. CAA § 110, 42 U.S.C. § 7410.
Section 110 provides the framework for SIP development and
submission by States to EPA,“within 3 years (or such shorter
period as [EPA] may prescribe)” of promulgation of a NAAQS.
CAA § 110(a)(1), 42 U.S.C. § 7410(a)(1). Among other things,
it requires that a SIP “includ[e] a permit program as required in
parts C and D of this subchapter” and “meet the applicable
requirements of . . . Part C.” CAA § 110(a)(2)(C), (J), 42 U.S.C.
§ 7410(a)(2)(C), (J). EPA must approve a SIP “if it meets all of
the applicable requirements of this chapter [i.e., Chapter 85 Air
Pollution Prevention and Control].” CAA § 110(k)(3), 42
U.S.C. § 7410(k)(3). But if EPA determines that a previously
approved SIP is “substantially inadequate to attain or maintain
the [NAAQS] . . . or to otherwise comply with any requirement
of this chapter, [EPA] shall require the State to revise the plan
as necessary to correct such inadequacies.” CAA § 110(k)(5),
42 U.S.C. § 7410(k)(5). Likewise, if EPA determines its
approval or disapproval of a SIP “was in error, [it] may in the
same manner as the approval [or] disapproval . . . revise such
action as appropriate without requiring any further submission
from the State.” CAA § 110(k)(6), 42 U.S.C. § 7410(k)(6).
When EPA disapproves a SIP “in whole or in part” or “finds that
a State has failed to make a required submission,” EPA must
promulgate a federal implementation plan (“FIP”) within two
years. CAA § 110(c)(1), 42 U.S.C. § 7410(c)(1).

Parts C and D of Title I address preconstruction review
requirements for new major stationary sources of air pollution.
Part C, Prevention of Significant Deterioration of Air Quality
(“PSD”), applies to areas that have attained the air quality
 8

standards for any criteria pollutant. CAA §§ 160–169, 42
U.S.C. §§ 7470–79. It bars construction of a “major emitting
facility” without a permit that includes emission limitations and
requires the proposed facility to use “the best available control
technology for each pollutant subject to regulation under this
chapter emitted from, or which results from, such facility.”
CAA § 165(a)(4), 42 U.S.C. § 7475(a)(4). Part C also provides
that EPA “shall . . . take such measures . . . as necessary to
prevent the construction or modification of a major emitting
facility which does not conform to the requirements of this part
. . . .” CAA § 167, 42 U.S.C. § 7477. A “major emitting
facility” is a stationary source that emits, or has the potential to
emit, either 100 tons or 250 tons per year of “any air pollutant.”
CAA § 169(1), 42 U.S.C. § 7479(1). Part D, Plan Requirements
for Nonattainment Areas, applies to areas that exceed the air
quality standards for a NAAQS pollutant, CAA §§ 171–193, 42
U.S.C. §§ 7501–15, and requires States to develop and submit
plans for attaining NAAQS, CAA § 172, 42 U.S.C. § 7502,
including a permitting program for new or modified major
stationary sources, CAA §§ 172(c)(5), 173, 42 U.S.C. §§
7502(c)(5), 7503.

In response to Massachusetts v. EPA, 549 U.S. at 528–32,
EPA determined that greenhouse gas emissions from motor
vehicles may reasonably be anticipated to endanger public
health and welfare by contributing to climate change, 74 Fed.
Reg. 66,496 (Dec. 15, 2009) (“Endangerment Finding”). It then
promulgated greenhouse gas emission standards for cars and
light trucks pursuant to Title II of the Act, 75 Fed. Reg. 25,324
(May 7, 2010) (“Tailpipe Rule”). EPA announced that, under its
longstanding interpretation of the Act, the Tailpipe Rule
automatically triggered regulation of stationary sources of
greenhouse gases under both the Part C preconstruction permit
and the Title V operating permit requirements because, once the
rule’s emission standards took effect on January 2, 2011,
 9

greenhouse gases became a regulated pollutant under the Act
requiring this permitting. 75 Fed. Reg. 17,004, 17,019 (Apr. 2,
2010) (“Timing Rule”). EPA adopted a phased-in approach
upon concluding that immediate implementation of Part C
permitting for all “major emitting facilit[ies]” of greenhouse
gases, CAA §§ 169(1), 302(j), 42 U.S.C. §§ 7479(1), 7602(j),
would impose tremendous costs on industry and State permitting
authorities; only stationary sources emitting over 75,000 or
100,000 tons of greenhouse gases annually would initially be
subject to PSD and Title V requirements. 75 Fed. Reg. 31,514,
31,523 (June 3, 2010) (“Tailoring Rule”).

On June 26, 2012, this court rejected challenges by States
and industry either on the merits or for lack of standing under
Article III. Coalition, 684 F.3d at 113. The court upheld the
Endangerment Finding and the Tailpipe Rule as consistent with
the Act and neither arbitrary nor capricious. Id. at 116–29. It
also affirmed EPA’s interpretation that the Tailpipe Rule
triggered PSD and Title V permitting requirements for
greenhouse gases emitted by major stationary sources. Id. at
129–44. The court agreed with EPA that “once the Tailpipe
Rule took effect and made greenhouse gases a regulated
pollutant under Title II of the Act, the PSD program
automatically applied to facilities emitting [specified amounts]
of greenhouse gases.” Id. at 133. The court further noted
petitioners had forfeited any challenge to EPA’s greenhouse gas-
inclusive interpretation of Title V. Id. at 136. Because PSD and
Title V permitting requirements applied by automatic operation
of the Act, the court held that State and industry petitioners
lacked standing under Article III to challenge the Timing and
Tailoring Rules, which mitigated, rather than caused, their
asserted injuries. Id. at 146–48.

Meanwhile, in April 2010, EPA had forewarned in the
Timing Rule that if a State with a previously approved SIP was
 10

unable to apply greenhouse gas PSD permitting requirements by
the effective date January 2, 2011, EPA would “exercise its
oversight authority as appropriate to call for revisions to SIPs
and to otherwise ensure sources do not commence construction
without permits that satisfy the minimum requirements of the
Federal PSD program.” Timing Rule, 75 Fed. Reg. at 17,022.
In June 2010, EPA requested States to submit letters explaining
whether their PSD programs would apply the new greenhouse
gas restrictions. Tailoring Rule, 75 Fed. Reg. at 31,525–26,
31,582–83. EPA stated its intention to issue a SIP Call pursuant
to CAA § 110(k)(5) to any State that lacked the ability to issue
PSD permits for greenhouse gas emissions and, as appropriate,
to move quickly in imposing a corresponding FIP. Id. at 31,526,
31,583. EPA also stated that, pursuant to CAA § 110(k)(6), it
might revise its prior approval of a SIP for any State that is
“unable or unwilling to adopt the [greenhouse gas permitting
requirements] by January 2, 2011.” Id. at 31,582.

On September 2, 2010, EPA gave notice that it was
proposing to find that EPA-approved PSD programs of thirteen
States were “substantially inadequate” because their SIPs did not
appear to apply PSD permitting requirements to greenhouse gas
pollutants, and to require that these States revise their SIPs
accordingly. 75 Fed. Reg. 53,892, 53,900 (Sept. 2, 2010)
(“Proposed SIP Call Rule”). EPA solicited comments on
whether approved PSD programs in other States applied to
greenhouse gas emitting sources and, if not, proposed to require
that those States also revise their SIPs. Id. at 53,892–93. EPA
expected to finalize the rule around December 1, 2010. Id. at
53,901. Pursuant to CAA § 110(k)(5), EPA proposed that
corrective SIP revisions be submitted within 12 months of the
final rule. Id. Because sources would be subject to PSD
permitting for greenhouse gas emissions on January 2, 2011,
States could choose an earlier deadline of as little as three weeks
in order to minimize the period when sources would not have a
 11

permitting authority available to act on their permit applications.
Id. at 53,896, 53,901–02. If a State failed to submit the required
revision by its chosen date, EPA, pursuant to CAA § 110(c),
would “immediately” issue a finding of failure to submit and a
FIP allowing EPA to act as a supplemental permitting authority
for that State and thereby prevent any gap in PSD permitting.
Id. at 53,904. EPA separately issued notice of the proposed FIP.
75 Fed. Reg. 53,883 (Sept. 2, 2012) (“Proposed FIP Rule”).

On December 13, 2010, EPA found that thirteen States
(including Texas and Wyoming) did not apply their existing
PSD programs to greenhouse gases and thus had “substantially
inadequate” SIPs requiring revision. See 75 Fed. Reg. 77,698,
77,705 (Dec. 13, 2010) (“SIP Call Rule”). Five of the thirteen
States chose SIP revision deadlines of between January – July
2011, anticipating completion of SIP revisions within a few
months and no need for permits by stationary sources before
then. Id. at 77,711–13. Seven States (including Wyoming)
accepted the early SIP revision deadline of December 22, 2010.
Id. at 77,710–13. On December 29, 2010, EPA found the seven
States had failed to meet that deadline, 75 Fed. Reg. 81,874
(Dec. 29, 2010) (“Failure Finding Rule”), and issued a
corresponding FIP, 75 Fed. Reg. 82,246 (Dec. 30, 2010) (“FIP
Rule”). Under the FIP, EPA was authorized to issue only the
greenhouse gas portion of the PSD permit and specified the FIP
would remain in place “only as long as is necessary for the state
to submit and for EPA to approve a SIP revision that includes
PSD permitting for [greenhouse gas]-emitting sources.” Id. at
82,251. States otherwise retained PSD permitting authority.
EPA also offered to delegate its greenhouse gas permitting
responsibility to the States. See id.

Of the thirteen States subject to the SIP Call Rule, Texas
alone did not identify a preferred SIP revision deadline. See 75
Fed. Reg. at 77,711. In August 2010, Texas had set forth its
 12

legal objections to EPA’s greenhouse gas regulations and
informed EPA that Texas had “neither the authority nor the
intention of interpreting, ignoring, or amending its laws in order
to compel the permitting of greenhouse gas emissions.” Letter
from Bryan Shaw, Chairman, Tex. Comm’n on Envtl. Quality,
and Greg Abbott, Tex. Atty. Gen., to Lisa Jackson, Admin.,
EPA (Aug. 2, 2010) (“Texas August 2010 Letter”). EPA
assigned Texas a default twelve-month SIP revision deadline of
December 1, 2011 under the SIP Call Rule, 75 Fed. Reg. at
77,711. EPA advised it was “planning additional actions to
ensure that [greenhouse gas] sources in Texas, as in every other
state in the country, have available a permitting authority to
process their permit applications as of January 2, 2011 (or, at the
state’s election, a short period thereafter that the state has said
will not impede the ability of sources to obtain permits in a
timely way).” Id.

Following up, on December 30, 2010, EPA determined,
pursuant to CAA § 110(k)(6), that its prior approval of Texas’s
PSD program “was in error” because the SIP failed to address
all pollutants that would become subject to regulation in the
future or provide assurances of Texas’s legal authority to do so.
75 Fed. Reg. 82,430, 82,431–33 (Dec. 30, 2010) (“Interim Error
Correction Rule”). EPA revised its approval to be a partial
disapproval, id. at 82,452–53, and simultaneously issued a
supplementary FIP, like those for the seven other States pursuant
to the FIP Rule, allowing EPA to issue greenhouse gas PSD
permits for stationary sources in Texas, id. at 82,456–58. EPA
issued the interim rule without public notice and comment,
invoking the “good cause” exception of 5 U.S.C. § 553(b)(B),
id. at 82,458, while simultaneously initiating notice and
comment procedures on a proposed final version of the rule, id.
at 82,434. On May 3, 2011, EPA issued the final rule, which
tracked the interim rule. 76 Fed. Reg. 25,178 (May 3, 2011)
(“Error Correction Rule”).
 13

II.

Petitioners now challenge five rules: the SIP Call Rule,
Failure Finding Rule, FIP Rule, and the Interim and Error
Correction Rules. Consistent with the court’s holding that the
PSD permitting requirements apply to greenhouse gases emitted
by major stationary sources, see Coalition, 684 F.3d at 132–44,
petitioners do not dispute that States had to update their SIPs to
incorporate greenhouse gases into their PSD programs. Instead,
they challenge the method and timing by which EPA required
SIP revisions, and contend that States could issue lawful PSD
permits under CAA § 165(a) in the interim. EPA, in turn,
defends its interpretation of CAA § 165(a), as reinforced by
CAA § 167, as unambiguously prohibiting construction of any
major emitting facility without a PSD permit addressing newly
regulated pollutants, regardless of whether the applicable SIP
has been updated. Given this, EPA maintains that, pursuant to
the analysis in Coalition, 684 F.3d at 144–48, petitioners lack
Article III standing to challenge the rules, because, far from
causing petitioners’ injury, the challenged rules inure to
petitioners’ benefit by ensuring that a permitting authority
existed to issue necessary PSD permits. Because the parties’
arguments and petitioners’ standing turn on the question of
whether § 165(a) is self-executing, that is where we begin.

A.
Where Congress has spoken to the precise question at issue,
“that is the end of the matter; for the court, as well as the
agency, must give effect to the unambiguously expressed intent
of Congress.” Chevron, U.S.A. Inc. v. Natural Resources
Defense Council, Inc., 467 U.S. 837, 842–43 (1984). Based on
the plain text of CAA § 165(a) and § 167, we agree with EPA
that the Part C permitting requirements are self-executing and
unambiguously require a PSD permit setting forth emission
limitations for each pollutant subject to regulation under the Act
 14

before a major emitting facility may be constructed, even when
the applicable SIP has not been updated to include requirements
for newly regulated pollutants.

CAA 165(a) provides, in relevant part:

No major emitting facility on which construction is
commenced after August 7, 1977, may be constructed
in any area to which this part applies unless–

(1) a permit has been issued for such proposed
facility in accordance with this part setting forth
emission limitations for such facility which
conform to the requirements of this part; [and]

...

(4) the proposed facility is subject to the best
available control technology [“BACT”] for each
pollutant subject to regulation under this chapter .
...

42 U.S.C. § 7475(a). CAA § 167 directs that EPA “shall . . .
take such measures . . . as necessary to prevent the construction
or modification of a major emitting facility which does not
conform to the requirements of this part, or which is . . . not
subject to an implementation plan which meets the requirements
of this part.” Id. § 7477.

By its plain terms, CAA § 165(a) prohibits construction of
a major emitting facility absent a Part C PSD permit that
requires, inter alia, BACT for each pollutant subject to
regulation under the Act. Its prohibition applies directly to
stationary sources and requires that the permit “conform to the
requirements of this part,” id. § 7475(a)(1) (emphasis added),
 15

rather than the requirements of an applicable implementation
plan. As counsel for Texas acknowledged, “Section 165 says
nothing about SIPs.” Oral Arg. Tape, No. 11-1037, at 3:05–09
(May 7, 2013). And by requiring BACT for “each pollutant
subject to regulation under this chapter,” CAA § 165(a)(4),
§ 7475(a)(4) (emphasis added), CAA § 165 neither explicitly
nor implicitly includes an exception for newly regulated
pollutants.

On three occasions, this court has interpreted CAA § 165(a)
as unambiguously prohibiting construction of major stationary
sources without a PSD permit that meets all statutory
requirements. In a pair of cases following EPA’s initial
implementation of the PSD program adopted in the 1977
amendments to the Act, the court stated that “[s]ection 165 by
its terms explicitly and without qualification prohibits the
construction of any major pollution-emitting facility . . . unless
the substantive requirements of that section have been met,”
Citizens to Save Spencer Cnty. v. EPA, 600 F.2d 844, 853 (D.C.
Cir. 1979), and that “[s]ection 165, in a litany of repetition,
provides without qualification that each of its major substantive
provisions shall be effective after 7 August 1977 with regard to
each pollutant subject to regulation under the Act,” Alabama
Power Co. v. Costle, 636 F.2d 323, 406 (D.C. Cir. 1979). Most
recently, in Coalition, 684 F.3d at 134, the court “agree[d] with
EPA that its longstanding interpretation of the PSD permitting
trigger is statutorily compelled.” Because “greenhouse gases are
now a ‘pollutant subject to regulation under’ the Act,” § 165(a)
itself required that “any ‘major emitting facility’ covered by the
PSD program must install BACT for greenhouse gases.” Id. at
133 (quoting CAA § 165(a)(4)). The court held that it “‘must
give effect to the unambiguously expressed intent of Congress,’
Chevron, 467 U.S. at 843, which here requires PSD coverage for
major emitters of any regulated pollutant.” Id. at 134.
 16

Granted, these opinions did not address the precise question
here — whether CAA § 165(a) is self-executing and applies
automatically to stationary sources with respect to newly
regulated pollutants, or whether States with existing PSD
programs may continue to issue lawful permits while they
incorporate new pollutants into their SIPs. The court’s repeated
interpretation of the plain text of § 165(a), however, accords
with EPA’s interpretation here, see SIP Call Rule, 75 Fed. Reg.
at 77,705 n.16. In particular, although the court had no occasion
to address the SIP-related issues in Coalition, 684 F.3d at 149,
it agreed with EPA’s interpretation that, by “automatic
operation” of the Act, id. at 144, “once the Tailpipe Rule took
effect and made greenhouse gases a regulated pollutant under
Title II of the Act, the PSD program automatically applied to
facilities emitting over 100/250 tpy of greenhouse gases,” id. at
133.

Like § 165(a)(1), § 167 by its plain terms grounds EPA’s
PSD enforcement authority in the requirements of Part C, rather
than the requirements of an applicable implementation plan. In
§ 167, Congress mandated that EPA take necessary enforcement
action to prevent construction or modification of a major
emitting facility that either “does not conform to the [Part C]
requirements . . . or . . . is not subject to an implementation plan
which meets the requirements of this part.” Id. (emphasis
added). In authorizing EPA to take enforcement action in either
circumstance, Congress distinguished between construction that
itself violates Part C and construction that is unlawful because
it occurs in an area that lacks a statutorily compliant SIP. That
Congress authorized EPA to enforce the Part C requirements
through § 167, independent of an applicable SIP, is further
evident from the different text in the general enforcement
provision of CAA § 113(a)(1), under which EPA is to initiate
enforcement proceedings for violations of “any requirement or
prohibition of an applicable implementation plan,” 42 U.S.C.
 17

§ 7413(a)(1) (emphasis added). “[W]here Congress includes
particular language in one section of a statute but omits it in
another section of the same Act, it is generally presumed that
Congress acts intentionally and purposely in the disparate
inclusion or exclusion.” Russello v. United States, 464 U.S. 16,
24 (1983) (internal quotation marks and alteration omitted).

The Supreme Court has similarly interpreted CAA § 167.
In Alaska Department of Environmental Conservation v. EPA,
540 U.S. 461, 484–85 (2004), the Court held that even where a
State administers a Part C permitting program pursuant to an
approved SIP, Congress vested EPA with a “broad oversight
role” in § 167 to ensure that PSD permits comply with statutory
requirements. The Court described the PSD permitting
requirements as applying directly to stationary sources through
CAA § 165(a) and, although recognizing that Alaska’s SIP
imposed analogous requirements, continued to look to Part C,
rather than the SIP, for the governing provisions. See id. at
472–73, 484–85. Likewise, in Sierra Club v. Jackson, 648 F.3d
848, 856 (D.C. Cir. 2011), this court recognized that § 167 gave
EPA discretion to take enforcement action where PSD permits
issued pursuant to an approved SIP violated the requirements of
§ 165(a), describing State-issued permits that failed to
incorporate subsequent EPA requirements as “not comply[ing]
with [CAA § 165(a)], which forbids the construction of such
facilities absent a PSD permit meeting the requirements of the
Clear Air Act.” Id. at 851–52.

The self-executing nature of the PSD permitting
requirements is further reinforced by comparing Parts C and D.
“Where Congress intended air quality programs to apply solely
through State-approved SIPs, Congress used explicit language
that . . . contrasts with the language of Section 165.” Intervenors
Br., No. 11-1037, at 20. Part D permits, for new sources of air
pollution in non-attainment areas, may be issued only if the
 18

permitting agency makes a determination “in accordance with
regulations issued by [EPA] . . . consistent with the assumptions
underlying the applicable implementation plan.” CAA
§ 173(a)(1), 42 U.S.C. § 7503(a)(1) (emphasis added). By
contrast, the Part C permitting requirements apply directly to
stationary sources and prohibit construction unless “a permit has
been issued for such proposed facility . . . setting forth emission
limitations . . . which conform to the requirements of this part.”
CAA § 165(a)(1), 42 U.S.C. § 7475(a)(1) (emphasis added).
Again, Congress distinguished between permitting requirements
that operate through a SIP and those that operate through the Act
itself, and in Part C chose the latter. See Russello, 464 U.S. at
24.

Texas and Wyoming assert this distinction between Part C
and Part D permits is “absurd.” States Reply Br., No. 11-1037,
at 17. But “a bare assertion of absurdity cannot overcome the
plain meaning of a statute: ‘there must be evidence that
Congress meant something other than what it literally said
before a court can depart from plain meaning.’” New York v.
EPA, 413 F.3d 3, 41 (D.C. Cir. 2002) (quoting Engine Mfrs.
Ass’n v. EPA, 88 F.3d 1075, 1088 (D.C. Cir. 1996)). In
Coalition, 684 F.3d at 142, the court concluded that the different
text in Parts C and D was a significant indicator of congressional
intent. Given the textual distinction between Part C and Part D,
petitioners’ reliance on United States v. Cinergy Corp., 623 F.3d
455 (7th Cir. 2010), as support that CAA § 165(a) is not self-
executing, is misplaced. In stating that “[t]he Clean Air Act
does not authorize the imposition of sanctions for conduct that
complies with a State Implementation Plan that the EPA has
approved,” id. at 458, the Seventh Circuit was addressing Part
D permits and the general enforcement provision of CAA
§ 113(a)(1), not Part C permits and the PSD enforcement
provision in CAA § 167. Petitioners also mistakenly rely on
General Motors Corp. v. United States, 496 U.S. 530 (1990),
 19

which held that EPA can enforce a previously approved SIP
under CAA § 113 even where it had unreasonably delayed
acting on a proposed SIP revision, id. at 540–41, and nowhere
suggested that EPA lacked authority pursuant to § 167 to
enforce the § 165(a) PSD permitting requirements directly.

Viewed alone and in context of other provisions of the Act,
the plain text of CAA § 165(a) and § 167 compel the
interpretation that the PSD permitting requirements are self-
executing and prohibit construction of a major emitting facility
without, inter alia, BACT technology for each pollutant subject
to regulation under the Act, irrespective of applicable SIP
provisions. Nothing in the text of § 165(a) or § 167, much less
this court’s opinions, delays operation of the Part C permitting
requirements until a State revises its SIPs to incorporate a newly
regulated pollutant. Once the Tailpipe Rule took effect and
greenhouse gases became a pollutant subject to regulation under
the Act, § 165(a) unambiguously prohibited a major emitting
facility from commencing construction without a PSD permit
restricting greenhouse gas emissions, and § 167 unambiguously
authorized EPA to enforce that prohibition irrespective of SIP
provisions. This understanding of congressional intent is
reinforced by the different text for Part D permits and precedent
of the Supreme Court and this court. “If the intent of Congress
is clear, that is the end of the matter; for the court, as well as the
agency, must give effect to the unambiguously expressed intent
of Congress.” Chevron, 467 U.S. at 842–43.

B.
Petitioners offer no alternative interpretation of the text of
CAA § 165(a) or § 167. Instead, they point to other provisions
in the Act and invoke the “cooperative federalism” underlying
the Act to support their position that the PSD permitting
requirements do not apply to a facility with respect to a newly
regulated pollutant until that pollutant is incorporated into the
 20

applicable SIP. Although statutory design may “shed new light
on congressional intent, notwithstanding statutory language that
appears ‘superficially clear,’” petitioners have “presented no
persuasive evidence that Congress intended any meaning other
than that suggested by a straightforward reading” of CAA
§ 165(a) and § 167. NRDC v. Browner, 57 F.3d 1122, 1127
(D.C. Cir. 1995). To the extent petitioners (and our dissenting
colleague) maintain that EPA was bound to proceed in
accordance with its regulation, 40 C.F.R. § 51.166(a)(6), and
point to actions by EPA in other circumstances regarding PSD
permitting that they claim are inconsistent with EPA’s self-
executing interpretation of CAA § 165(a), their reliance is
misplaced. So is the States’ invocation of the Tenth
Amendment.

1. To support their interpretation that States with PSD
programs in approved SIPs could continue to issue lawful
permits that did not address greenhouse gases after January 2,
2011, petitioners rely on the following provisions of the Act:

• CAA § 110 prescribes the framework for States to
implement and enforce the NAAQS and related requirements
through SIPs. Among other things, each SIP must include a
PSD permitting program and meet the applicable requirements
of the Act’s PSD program. CAA § 110(a)(2)(C), (J). On their
face these provisions give States a clear role in administering the
Part C PSD program, but they incorporate, rather than limit, the
permitting requirements of CAA § 165(a). The provisions
specify that SIPs must satisfy Part C’s requirements; they do not
suggest that a previously approved SIP trumps the plain text and
self-executing nature of § 165(a) or limits EPA’s enforcement
authority under § 167. In Spencer County, 600 F.2d at 865–66,
the court rejected an interpretation of the Act under which
implementation of the CAA § 165(a) permitting requirements
must await promulgation and approval of SIPs pursuant to CAA
 21

§ 110. To the extent petitioners also rely on CAA § 110(i), it
provides in relevant part that no action “modifying any
requirement of an applicable implementation plan may be taken
with respect to any stationary source” except through
promulgation of a FIP under CAA § 110(c) or a SIP revision
under CAA § 110(a). By its plain terms, subsection (i) limits
EPA’s and States’ authority to modify the terms of a previously
approved SIP without following prescribed procedures but does
not prevent other self-executing statutory provisions from
applying directly to stationary sources, irrespective of the
applicable SIP. Petitioners offer no basis on which the court can
ignore the plain text of CAA § 165(a) and § 167.

• CAA § 161 provides that “each applicable
implementation plan shall contain emission limitations and such
other measures as may be necessary, as determined under
regulations promulgated under this part, to prevent significant
deterioration of air quality.” 42 U.S.C. § 7471. Petitioners
maintain this provision confirms that the PSD permitting
requirements are not self-executing, but rather apply only
through SIPs adopted pursuant to EPA regulations. Like CAA
§ 110(a)(2)(C) and (J), however, CAA § 161 merely specifies
the minimum requirements of a SIP PSD program. Nothing in
CAA § 161 restricts operation of other statutory PSD provisions,
such as the CAA § 165(a) permitting requirements, but instead
requires that SIPs contain additional regulatory measures that
EPA determines are necessary to meet the goals of the PSD
program. As this court has recognized, “[n]othing in the plain
language of the statute limits the measures in the [SIP] to the
preconstruction permit process,” rather, § 161 “reflects an
understanding that other measures might be required — and are
within the authority conveyed by the Act.” Alabama Power,
636 F.2d at 362. Thus, while CAA § 110(a)(2)(C) and (J)
require that SIPs satisfy all applicable Part C PSD provisions,
 22

CAA § 161 requires that SIPs satisfy any other measures that
EPA promulgates in regulations.

• CAA § 166 requires EPA to conduct a study and
promulgate PSD regulations for new NAAQS pollutants, and
gives States twenty-one months to revise their SIPs accordingly.
42 U.S.C. § 7476(a)–(b). Reliance on this provision is
foreclosed by circuit precedent. In Coalition, 684 F.3d at
143–44, the court rejected a similar argument — that to regulate
new pollutants through the PSD program, EPA must go through
the § 166 process — stating that it “fails on its face” because
CAA § 166 applies only to new NAAQS pollutants and thus
does not apply to non-NAAQS pollutants like greenhouse gases.
In Alabama Power, 636 F.2d at 405–06, the court rejected as
“contradicted by the plain language of section 165,” the position
that the effective date of the PSD permitting requirements
should be delayed for most pollutants until EPA promulgated
regulations pursuant to CAA § 166.

• CAA § 168 delayed the effective date of most PSD
statutory provisions following enactment of the 1977 CAA
amendments, with certain exceptions, “[u]ntil such time as an
applicable implementation plan is in effect for any area.” 42
U.S.C. § 7478(a). So, petitioners maintain, when Congress
intended to impose new PSD requirements and bypass SIP
revision procedures, it did so explicitly, as in the exceptions in
CAA § 168(b). This contention fails for two reasons. First, the
Supreme Court has recognized that CAA § 168 was simply a
“temporary measure” governing immediate implementation of
the 1977 amendments, Envtl. Def. v. Duke Energy Corp., 549
U.S. 561, 576 n.6 (2007). As such, it does not apply to
pollutants newly subject to regulation in the future. Second,
even with respect to implementation of the 1977 amendments,
this court in Spencer County, 600 F.2d at 860–66, rejected an
interpretation that CAA § 168 delayed the effective date of the
 23

CAA § 165(a) permitting requirements until EPA approved SIP
revisions. Although recognizing inconsistency in the text of
§ 165(a) and § 168, id. at 860–63, the court upheld EPA’s
interim regulatory framework in which § 165(a) was to be
implemented as quickly as possible, concluding EPA had
adopted a reasonable accommodation of the two provisions, id.
at 890. Importantly, unlike in Spencer County, petitioners here
identify no statutory provision that conflicts with the plain text
and self-executing interpretation of CAA § 165(a) regarding
newly regulated pollutants and applicable SIPs. Indeed, Spencer
County appears to preclude petitioners’ interpretation of CAA
§ 165(a) because if the PSD permitting requirements operated
only through an approved SIP, there would have been no
conflict between § 165(a) and § 168.

2. The States maintain that EPA’s interpretation of
CAA § 165(a) as self-executing upsets the cooperative
federalism embodied in the Act. In enacting the statute
Congress found that “air pollution prevention (that is, the
reduction or elimination, through measures, of the amount of
pollutants produced or created at the source) and air pollution
control at its source is the primary responsibility of States and
local governments.” CAA § 101(a)(3), 42 U.S.C. 7401(a)(3).
Congress also found that “Federal . . . leadership is essential for
the development of cooperative Federal, State, regional, and
local programs to prevent and control air pollution.” CAA
§ 101(a)(4), 42 U.S.C. § 7401(a)(4). Accordingly, States are to
determine in the first instance how to implement the federally
established NAAQS and related emission limitations based on
local conditions and needs, but EPA remains “the ultimate
supervisor, responsible for approving [SIPs] and for stepping in,
should a state fail to develop or to enforce an acceptable plan.”
Duquesne Light Co. v. EPA, 698 F.2d 456, 471 (D.C. Cir. 1983).
 24

Put otherwise, although pollution control may be the
primary responsibility of States, Congress required federal
regulation and enforcement in specific circumstances. Where a
State fails to act or submits a SIP that does not meet minimum
requirements of the Act, Congress required EPA to issue a FIP
under CAA § 110(c)(1) to implement emission requirements
within that State and maintain federal standards. Similarly,
Congress charged EPA with regulating new source performance
standards under CAA § 111, Hazardous Air Pollutants under
CAA § 112, and motor vehicle emission standards under CAA
§ 202. See Train v. NRDC, 421 U.S. 60, 79 n.16 (1975). Self-
executing permitting requirements with respect to newly
regulated pollutants under CAA § 165(a) are thus not
inconsistent with the cooperative federalism scheme enacted by
Congress.

In the PSD context, the Supreme Court has acknowledged
that “Congress . . . vested EPA with explicit and sweeping
authority to enforce CAA ‘requirements’ relating to the
construction and modification of sources under the PSD
program,” noting that Congress “expressly endorsed an
expansive surveillance role for EPA in two independent CAA
provisions,” referring to enforcement actions pursuant to CAA
§ 113(a)(5) and § 167. Alaska Dep’t of Envtl. Conservation, 540
U.S. at 490. This still left, under EPA’s interpretation of the
ambiguous term BACT, considerable leeway to the permitting
authority, which EPA acknowledged. Id. But, as EPA pointed
out, Congress had determined federal PSD oversight was
necessary to prevent States from improperly competing for
industry by adopting more permissive pollution controls. See id.
at 486. One of Congress’s stated goals for the PSD program was
to ensure that economic growth occurred “in a manner
consistent with the preservation of existing clean air resources.”
CAA § 160(3), 42 U.S.C. § 7470(3). The same rationale
explains why Congress made CAA § 165(a) self-executing for
 25

newly regulated pollutants: otherwise, States would have a
perverse incentive to delay incorporating new pollutants into
revised SIPs in order to compete for industry in the interim.
“The states, in sum, are to tailor [federally established ambient
air] standards to their own conditions, but EPA is to ensure
national uniformity where needed, for example, to ensure that
states do not compete unfairly for industry . . . .” Duquesne, 698
F.2d at 471.

The rulemaking record demonstrates that EPA repeatedly
acted to accommodate States within the scope of the statutory
scheme enacted by Congress. In the SIP Call Rule, EPA
emphasized the primacy of SIPs and its preference for States to
serve as the PSD permitting authority, acting only when
necessary to ensure a permitting authority existed for affected
sources and then offering to delegate its FIP authority to the
States. Id. at 77,717. Neither Texas nor Wyoming has
suggested that revising their SIPs to incorporate PSD permitting
for greenhouse gases would require independent balancing of
local conditions and needs. As EPA observed, a corrective SIP
revision could constitute a simple addition of greenhouse gases
to the list of pollutants subject to PSD permitting. See SIP Call
Rule, 75 Fed. Reg. at 77,713. Indeed, most States’ PSD
programs automatically update to include newly regulated
pollutants like greenhouse gases. See id. at 77,702. Others
subject to the SIP Call Rule, including Respondent-Intervenor
Connecticut, worked cooperatively with EPA to revise their
SIPs and to ensure permitting continuity promptly and as
needed. See, e.g., id. at 77,710. Texas alone did not, informing
EPA that it had “no intention” of revising its SIP because of its
disagreement with EPA’s regulation of greenhouse gases under
the Act. Texas August 2010 Letter. Invoking “cooperative
federalism” in these circumstances has a hollow ring.
 26

3. Finding no support in the Act itself for their position
that the PSD permitting requirements apply only pursuant to an
applicable SIP, petitioners contend that interpreting CAA
§ 165(a) as self-executing is inconsistent with EPA’s regulation
on amendments to the PSD requirements for SIPs, 40 C.F.R.
§ 51.166(a)(6). They maintain that under this regulation, States
can continue to issue valid PSD permits pursuant to previously
approved SIPs for up to three years without incorporating newly
regulated pollutants.

Section 51.166(a)(6), Amendments, provides:

(i) Any State required to revise its implementation plan
by reason of an amendment to this section . . . shall
adopt and submit such plan revision to [EPA] for
approval no later than 3 years after such amendment is
published in the Federal Register.
...

(iii) Any revision to an implementation plan that an
amendment to this section required shall take effect no
later than the date of its approval and may operate
prospectively.

40 C.F.R. § 51.166(a)(6)(i), (iii) (emphasis added).

There is no conflict between CAA § 165(a)’s self-executing
nature and EPA’s regulation. The SIP revisions at issue were
not “required . . . by reason of an amendment to” 40 C.F.R.
§ 51.166, but rather by automatic operation of the Act itself. See
SIP Call Rule, 75 Fed. Reg. at 77,707–08. As EPA interprets
§ 51.166(a)(6), it applies to SIP revisions that would not have
been required but for an amendment to § 51.166, such as EPA’s
revision in 2002 of the Part C and Part D program requirements
for SIPs. See 67 Fed. Reg. 80,186, 80,240-41 (Dec. 31, 2002)
 27

(“Prevention of Significant Deterioration and Nonattainment
New Source Review Requirements” (“2002 Rule”)). Here, as
EPA explained in the SIP Call Rule, 75 Fed. Reg. at 77,707–08,
States were required to revise their SIPs even absent the
amendments to § 51.166 in the Tailoring Rule; those
amendments merely alleviated States’ PSD permitting burdens.
See also Error Correction Rule, 76 Fed. Reg. at 25,193–94. The
court effectively confirmed EPA’s explanation in concluding
that petitioners lacked Article III standing to challenge the
Tailoring Rule. Coalition, 684 F.3d at 146. EPA’s
interpretation of its regulation as inapplicable here is therefore
“controlling” because the interpretation is neither “plainly
erroneous [n]or inconsistent with the regulation,” and there is no
reason to suspect that it “does not reflect the agency’s fair and
considered judgment on the matter in question.” Auer v.
Robbins, 519 U.S. 452, 461–62 (1997) (internal quotation marks
omitted); see also Christopher v. SmithKline Beecham Corp.,
132 S. Ct. 2156, 2166 (2012).

Our dissenting colleague has a different interpretation of the
regulation, which he asserts “resolves this case.” Dissent at 2.
He reaches this conclusion ignoring the plain text of the Act.
Consequently his reasoning is flawed. For example, he finds no
distinction between SIP revisions triggered by automatic
operation of the Act and those required solely by EPA’s
amendments to its regulations. But Congress itself has codified
the distinction. In CAA § 110(a)(2)(C) and (J), Congress
required that SIPs satisfy all applicable statutory PSD
provisions; in CAA § 161, Congress separately required that
SIPs satisfy “other measures” that EPA promulgates in
regulations, 42 U.S.C. § 7471 (emphasis added). According to
our colleague, in either instance, “the changes to the PSD
regulations still ultimately are what require the changes to the
SIP.” Dissent at 4. This ignores the statutory text as well as the
law of the circuit that States were “required to issue permits [for
 28

greenhouse gas emissions] not because of anything EPA did in
the Timing and Tailoring Rules, but by automatic operation of
the statute,” Coalition, 684 F.3d at 146. As this court
understood Congress’s mandate, even if EPA never amended
§ 51.166 in the Tailoring Rule, States still would have been
obligated to update their SIPs to incorporate greenhouse gases
in order to issue valid PSD permits. This holding forecloses our
dissenting colleague’s assertion. See LaShawn A. v. Barry, 87
F.3d 1389, 1395 (D.C. Cir. 1996) (en banc). Indeed, he has
acknowledged that “[t]his [c]ourt has ruled that the statute
requires pre-construction and operating permits for stationary
sources that emit or have the potential to emit certain specified
amounts of an air pollutant, including carbon dioxide.” Ctr. for
Biological Diversity v. EPA, – F.3d –, 2013 WL 3481511, at *9
(D.C. Cir. 2013) (Kavanaugh, J., concurring) (emphasis added).

Additionally, the Supreme Court has instructed that courts
must defer to an agency’s interpretation of its regulation unless
it is “plainly erroneous or inconsistent with the regulation.”
Auer, 519 U.S. at 461–62. EPA’s interpretation is neither. The
dissent cites the preamble to the 2002 Rule, which, in making
extensive changes to the regulatory PSD requirements, extended
the SIP revision timeline in § 51.166(a)(6)(i) to three years. See
67 Fed. Reg. at 80,240-41. The significant SIP revisions
required as a result of the 2002 Rule would not have been
required but for the regulatory amendments. See id. at 80,240.
By contrast, on the same page of the preamble to the 2002 Rule,
EPA reiterated its longstanding interpretation that “[t]he PSD
program applies automatically to newly regulated . . .
pollutants.” Id. Thus, the 2002 Rule is consistent with EPA’s
interpretation that the three-year timeline in § 51.166(a)(6)(i)
applies to SIP revisions that are required solely “by reason of an
amendment” to the regulation, whereas the PSD permitting
requirement “applies automatically” to newly regulated
pollutants.
 29

Most fundamentally, our dissenting colleague fails to
account for the statutory provisions that compel the self-
executing conclusion in this case. The issue is not whether “the
regulation contemplates a construction moratorium in the period
until the State revises its SIP,” Dissent at 6 (emphasis added),
but rather whether the Act itself requires one with respect to
newly regulated pollutants. Our colleague asserts that “Section
165 applies only through the relevant SIP, not directly to
sources.” Dissent at 8. This assertion is belied the plain text of
both CAA § 165 and § 167, as repeatedly interpreted by this
court. He further suggests that it would “make no sense” for the
Act to create a role for States in implementing the PSD program
but also require that newly regulated pollutants be incorporated
into PSD permitting as soon as they become subject to
regulation. Dissent at 8. This ignores that Congress, in enacting
the PSD program as part of the 1977 Amendments, intended to
eliminate perverse incentives for States to compete improperly
for industry, as highlighted by the Supreme Court in Alaska
Dep’t of Envtl. Conservation, 540 U.S. at 486. Regardless of
how our dissenting colleague interprets 40 C.F.R.
§ 51.166(a)(6)(i), or how EPA may have applied the regulation
in the past, the Act itself prohibited the construction of any
major emitting facility after January 2, 2011 without a PSD
permit limiting greenhouse gas emissions. “[A] valid statute
always prevails over a conflicting regulation,” Nat’l Family
Planning & Reprod. Health Ass’n, Inc. v. Gonzales, 468 F.3d
826, 829 (D.C. Cir. 2006), and a regulation can never “trump the
plain meaning of a statute,” Atl. City Elec. Co. v. FERC, 295
F.3d 1, 11 (D.C. Cir. 2002). As EPA explained in the Error
Correction Rule, 76 Fed. Reg. at 25,193, “because [40 C.F.R.
§ 51.166(a)(6)] is a regulation, it cannot, no matter how it is
interpreted, override the CAA requirements that apply PSD
requirements to [greenhouse gas]-emitting sources so that those
CAA requirements do not take effect as of January 2, 2011.”
Given that the self-executing nature of the Part C PSD
 30

permitting requirements is compelled by the plain text of CAA
§ 165(a) and § 167, reliance on the regulation to undercut
Congress’s mandate is misplaced.

4. The other EPA actions that petitioners (and our
dissenting colleague) claim are inconsistent with EPA’s self-
executing interpretation of CAA § 165(a) do not advance their
position. Petitioners refer specifically to EPA’s implementing
new and revised NAAQS for particulate matter; promulgating
phased-in PSD permitting through the Tailoring Rule; and
grandfathering a PSD permit to the Avenal Energy Project in
California. To the extent petitioners suggest these actions may
be inconsistent with Congress’s mandate in CAA § 165(a), the
court no less than EPA is bound to adhere to Congress’s plain
command, see Chevron, 467 U.S. at 842–43. Petitioners point
to no judicial sanction of EPA’s purportedly inconsistent
application of the PSD permitting requirements in these other
contexts.

Reliance on these actions is misplaced, in any event, for
EPA justified each of its other actions on grounds inapplicable
here. To the extent EPA allowed States to continue
implementing their existing PSD programs while they revised
SIPs to incorporate different forms of particulate matter, see
Dissent at 6-7, it did so on the express basis that the SIPs and
PSD permits already regulated particulate matter in some form.
See 73 Fed. Reg. 28,321, 28,340–41 (May 16, 2008) (“New
Source Review Program for Fine Particulate Matter”); 52 Fed.
Reg. 24,672, 24,682–83 (July 1, 1987) (“Regulations for
Implementing Revised Particulate Matter Standards”). (By
contrast, here, the preexisting SIPs of several states failed to
regulate greenhouse gases altogether.) Thus, in promulgating
PSD regulations for fine particulate matter, EPA interpreted
CAA § 165(a) to be self-executing, 73 Fed. Reg. at 28,324,
28,340, but determined that States could continue to implement
 31

their existing PSD programs because emissions limitations for
coarse particulate matter served as an adequate surrogate for fine
particulate matter, id. at 28,341. Petitioners here neither
challenged this surrogate approach before EPA, see CAA
§ 307(d)(7)(B), 42 U.S.C. § 7607(d)(7)(B), nor maintain that
any similar surrogate exists for greenhouse gases. Similarly,
EPA justified the phased-in approach of the Tailoring Rule on
the administrative law doctrines of “absurd results,”
“administrative necessity,” and “one-step-at-a-time,” see
Tailoring Rule, 75 Fed. Reg. at 31,516, none of which
petitioners maintain would support delaying the PSD permitting
requirements until the several States revised their inadequate
SIPs. Finally, EPA grandfathered the PSD permit for the
Avenal Energy Project pursuant to CAA § 165(c), which
provides that “[a]ny completed permit application . . . shall be
granted or denied not later than one year after the date of filing
of such completed application”; Avenal had submitted a
completed permit application to EPA more than one year before
the new greenhouse gas requirements took effect on January 2,
2011 — circumstances that petitioners do not identify here.

5. Finally, State petitioners invoke the Tenth
Amendment to the Constitution, which provides: “The powers
not delegated to the United States by the Constitution, nor
prohibited by it to the States, are reserved to the States
respectively, or to the people.” U.S. CONST. AMEND X. They
contend that EPA’s “requirement that States cede their rights
and carry out federal policy, or face unprecedented and unlawful
sanctions [in the form of a construction moratorium,] constitutes
coercion and commandeering of the organs of State government,
in violation of the Tenth Amendment.” States Br., No. 11-1037,
at 37. They urge the court to apply the canon of constitutional
avoidance and construe CAA § 165(a) as not self-executing.
 32

The States’ reliance on the Tenth Amendment is met by
Supreme Court precedent repeatedly affirming the
constitutionality of federal statutes that allow States to
administer federal programs but provide for direct federal
administration if a State chooses not to administer it. See, e.g.,
New York v. United States, 505 U.S. 144, 167–68, 173–74
(1992) (upholding access incentives of the Low-Level
Radioactive Waste Policy Act); Hodel v. Va. Surface Mining &
Reclamation Ass’n, Inc., 452 U.S. 264, 288 (1981) (upholding
the Surface Mining Control and Reclamation Act). Under the
challenged rules, the thirteen States found to have “substantially
inadequate” SIPS could revise their SIPs to incorporate newly
regulated pollutants by January 2, 2011, or allow EPA to
regulate those emissions pursuant to a FIP until their revised
SIPs were approved by EPA, which EPA pledged to do
expeditiously, SIP Call Rule, 75 Fed. Reg. at 77,716–17. State
petitioners concede that direct federal regulation of greenhouse
gas emissions is within Congress’s authority under the
Commerce Clause. Contrary to their suggestion, the
circumstance here are not comparable to Congress’s coercive
financial threat to withhold all Medicaid funds from States in the
Patient Protection and Affordable Care Act provision challenged
under the Spending Clause in National Federation of
Independent Business v. Sebelius, 132 S. Ct. 2566, 2601–06
(2012) (Roberts, C.J., joined by Breyer and Kagan, J.J.); see also
id. at 2659–66 (joint dissenters Scalia, Kennedy, Thomas, and
Alito, J.J.). Even assuming a temporary construction delay of up
to twelve months for new major emitting facilities is significant,
State petitioners make no effort to demonstrate this delay is of
the same magnitude and nature as the Medicaid expansion
provision that would strip “over 10 percent of a State’s overall
budget,” id. at 2605. Unlike the Medicaid provision, which was
held unconstitutional because it threatened to withhold all
existing Medicaid funds from States unwilling to carry out the
expansion, id. at 2603–08, EPA assumed authority over only the
 33

greenhouse gas portion of PSD permits and left the rest of the
States’ SIPs and permitting authority in place. Therefore, the
constitutional avoidance canon does not apply, much less
require us to alter our interpretation of the plain text of CAA
§ 165(a) and § 167.

III.

Having concluded the Part C PSD permitting requirements
are unambiguously self-executing with respect to newly
regulated pollutants, and apply directly to major stationary
sources irrespective of the applicable SIP, we turn to the
question of standing.

Petitioners challenge EPA’s SIP Call Rule, Failure Finding
Rule, and FIP Rule on two primary grounds. They contend, first,
that EPA may not find a SIP to be “substantially inadequate”
pursuant to CAA § 110(k)(5) based on a requirement that did
not exist at the time the State submitted its SIP to EPA for
approval; and second, that pursuant to CAA § 110(a) and 40
C.F.R. § 51.166(a)(6)(i), States should have been given at least
three years to revise their SIPs to incorporate the new
greenhouse gas requirements. State Petitioners further challenge
the SIP Call Rule as procedurally defective because Wyoming
was not included among the States with presumptively
inadequate SIPs in the Proposed SIP Call Rule. Texas and
industry groups also challenge the Interim and Error Correction
Rules on both procedural and substantive grounds, contending
that EPA improperly invoked the “good cause” exception to
notice and comment procedures in promulgating the Interim
Error Correction Rule, and exceeded its authority under CAA
§ 110(k)(6) when it retroactively disapproved Texas’s PSD SIP
provisions.
 34

To establish Article III standing, a petitioner must
demonstrate it has suffered a concrete and particularized injury
that is imminent and not conjectural, that was caused by the
challenged action, and that is likely to be redressed by a
favorable judicial decision. Lujan v. Defenders of Wildlife, 504
U.S. 555, 560–61 (1992). The petitioner bears the burden of
averring facts in its opening brief establishing these elements.
Sierra Club v. EPA, 292 F.3d 895, 899–901 (D.C. Cir. 2002).
In Coalition, 684 F.3d at 146, the court held, after determining
the PSD permitting requirements applied to major emitters of
greenhouse gases by automatic operation of the Act, that State
and industry petitioners lacked Article III standing to challenge
the Timing and Tailoring Rules because those rules “actually
mitigate[d] Petitioners’ purported injuries.” The court observed
that “Industry Petitioners were regulated and State Petitioners
required to issue permits not because of anything EPA did in the
Timing and Tailoring Rules, but by automatic operation of the
statute.” Id. Thus, “[i]f anything, vacature of the [Rules] would
significantly exacerbate Petitioners’ injuries.” Id.

The same principle applies here. Because CAA § 165(a) is
self-executing, construction of a major emitting facility could
not commence as of January 2, 2011 without a PSD permit
limiting greenhouse gas emissions. The challenged rules
operated to fill a permitting gap in several States and thereby
ensure that a permitting authority existed to issue necessary PSD
permits. See, e.g., SIP Call Rule, 75 Fed. Reg. at 77,700.
Vacating the challenged rules would mean neither those States
nor EPA could issue greenhouse gas PSD permits, and
construction of a major emitting facility could not proceed in
those States.

Industry petitioners premise their standing on the contention
that without the challenged rules industry would not have been
subject to PSD requirements for greenhouse gases in those
 35

several States until they revised their SIPs and EPA approved
them. But because by its plain text CAA § 165(a) is self-
executing, industry petitioners’ purported injury was caused by
automatic operation of the Act, not the challenged rules. The
challenged rules mitigated the injury that otherwise would have
occurred when industry petitioners could not obtain lawful PSD
permits in those States. Counsel for industry petitioners
conceded at oral argument that, if CAA § 165(a) was self-
executing, his clients lacked Article III standing to challenge
rules that enabled issuance of necessary permits. Oral Arg.
Tape, No. 11-1037, at 40:25–41:05 (May 7, 2013).

State petitioners contend the challenged rules injured their
quasi-sovereign interests in regulating air quality within their
borders. Again, however, the claimed injury was caused by
automatic operation of CAA § 165(a), rather than the challenged
rules, and thus vacating them would not redress the State
petitioners’ injury. Although State petitioners maintain the
challenged rules “supplanted” their right to issue valid PSD
permits while they revised their SIPs, States Br., No. 11-1037,
at 15; Texas Br., No. 10-1425, at 19, the rules actually
supplemented the States’ permitting authority: in issuing FIPs,
EPA assumed authority over only the greenhouse gas portions
of the PSD permits until affected States revised their SIPs, and
EPA offered to delegate this authority to those States. See FIP
Rule, 75 Fed. Reg. at 82,251; Interim Error Correction Rule, 75
Fed. Reg. at 82,457–58. Neither the States’ briefs nor their
counsel at oral argument identified a concrete redressable injury
or explained how the States had Article III standing to challenge
the rules if CAA § 165(a) was self-executing, in light of this
court’s conclusion in Coalition, 648 F.3d at 144–46, regarding
the lack of standing to challenge the Timing and Tailoring Rules.
By post-argument letter of May 20, 2013 Texas’s counsel states
the SIP Call Rule directly injured the State’s sovereign interest
in the continued validity of its domestic law and its continued
 36

authority to regulate emissions from sources within its borders.
To the extent these are cognizable injuries, they were caused by
the Act, not the challenged rules: vacatur of the rules would not
restore either State’s ability to issue necessary PSD permits with
greenhouse gas requirements for construction of major emitting
facilities but would result in a construction moratorium until
they submitted revised SIPs that EPA approved. State
petitioners have not suggested a moratorium would redress their
claimed injuries.

Put otherwise, because CAA § 165(a) is self-executing, the
challenged rules determined the timeline for affected States to
submit required SIP revisions and established how soon EPA
could promulgate a FIP to enable issuance of necessary
greenhouse gas PSD permits. State petitioners do not assert a
concrete injury based on EPA’s chosen timeline. And State
petitioners fail to show how the “special solicitude” due to
States in addressing their standing to ensure enforcement of the
Act, Massachusetts v. EPA, 549 U.S. at 520, applies when they
attempt to block operation of the Act, see id. at 520 n.17. In any
event, “nothing in the Court’s opinion [in Massachusetts v.
EPA] remotely suggests that states are somehow exempt from
the burden of establishing a concrete and particularized injury in
fact.” Coalition, 684 F.3d at 148.

Accordingly, because “[p]etitioners have failed to establish
that the [challenged] Rules caused them ‘injury in fact,’ much
less injury that could be redressed by the Rules’ vacatur,” id. at
146, we must dismiss the petitions for lack of jurisdiction.
 KAVANAUGH, Circuit Judge, dissenting: Under the
federal Clean Air Act, States control air pollution within their
borders by adopting State Implementation Plans, known as
SIPs. When EPA issues new national air pollution
regulations, States are required to update their SIPs
accordingly. If a State does not update its SIP in a timely
manner, EPA may impose a Federal Implementation Plan, or
FIP, for that State.

In this case, EPA issued new regulations governing
emissions of greenhouse gases. EPA’s action required that
States in turn revise the portions of their SIPs incorporating
the Prevention of Significant Deterioration (PSD) program,
which requires construction permits for large construction
projects. EPA set short deadlines for States to update their
SIPs. Texas and Wyoming did not meet their deadlines, and
EPA imposed FIPs for Texas and Wyoming. Texas,
Wyoming, and Industry Petitioners 1 challenge EPA’s action.

As a starting point, the parties here all agree that the
States must revise their SIPs to incorporate greenhouse gas
regulations. Texas, Wyoming, and Industry Petitioners argue,
however, that an EPA regulation expressly gives States up to
three years to revise their SIPs. Moreover, Texas and
Wyoming assert that, during those three years, they have
authority to issue valid PSD construction permits under their

1
Industry Petitioners include Utility Air Regulatory Group,
National Mining Association, Peabody Energy Company, SIP/FIP
Advocacy Group, Coalition for Responsible Regulation, Inc.,
Industrial Minerals Association – North America, National
Cattlemen’s Beef Association, Great Northern Project
Development, L.P., Rosebud Mining Company, Alpha Natural
Resources, Inc., Chase Power Development, LLC, Texas Chemical
Council, Texas Association of Business, and Texas Association of
Manufacturers.
 2
old SIPs, which do not consider a source’s greenhouse gas
emissions.

In my view, this case is straightforward. The relevant
EPA regulation plainly gives States three years to revise their
SIPs whenever new pollutants, like greenhouse gases, are
regulated under EPA’s PSD regulations. See 40 C.F.R.
§ 51.166(a)(6)(i). During that time, States may still issue
PSD construction permits.

EPA also relied on an alternative ground in imposing a
FIP on Texas before Texas’s 12-month deadline for revisions
had even passed. EPA retroactively disapproved Texas’s pre-
existing SIP because, according to EPA, the SIP was flawed
when EPA approved it 18 years earlier. EPA claims that
Texas’s SIP was flawed because the SIP neither (i) updates
automatically to incorporate new federal regulations, such as
the greenhouse gas regulations, nor (ii) provides express
assurances that the State will update its plan as necessary
whenever a new EPA regulation issues. But neither the Act
nor EPA regulations require either an automatically updating
SIP or assurances that the State will reflexively update its
plan. So Texas’s SIP was not flawed when EPA approved it
18 years earlier, and it cannot be retroactively disapproved on
that basis.

For those reasons, I would vacate the relevant EPA
orders.

I

An EPA regulation, 40 C.F.R. § 51.166(a)(6)(i), resolves
this case. That regulation gives a State without an
automatically updating SIP (that is, without a SIP that
 3
automatically incorporates new EPA regulations) three years
to revise its SIP when EPA changes the PSD requirements.

The regulation states quite plainly: “Any State required to
revise its implementation plan by reason of an amendment to
this section [with certain specified exceptions] shall adopt and
submit such plan revision to the Administrator for approval
no later than 3 years after such amendment is published in the
Federal Register.” 40 C.F.R. § 51.166(a)(6)(i). In various
forms, this regulation has been in place since 1980, with the
relevant time period increased in 2002 from nine months to
three years. See 67 Fed. Reg. 80,186, 80,241 (Dec. 31, 2002);
45 Fed. Reg. 52,676, 52,687 (Aug. 7, 1980). Under the
regulation, States with SIPs that do not automatically
incorporate newly covered pollutants – for example,
Wyoming and Texas – have three years to submit new SIPs
when EPA changes the relevant air pollution regulations. In
the interim, those States are able to issue construction permits
under their old SIPs.

Here, however, Texas and Wyoming were not given three
years to revise their SIPs. And EPA did not allow States to
issue valid construction permits under their old SIPs. Put
simply, EPA did not follow its own regulation. EPA could of
course withdraw or amend the regulation setting forth the
three-year revision deadline, but it has not done
so. Therefore, the regulation applies. See, e.g., Transactive
Corp. v. United States, 91 F.3d 232, 238 (D.C. Cir. 1996)
(agency cannot “ignore its own regulation”); Panhandle
Eastern Pipe Line Co. v. FERC, 613 F.2d 1120, 1135 (D.C.
Cir. 1979) (“It has become axiomatic that an agency is bound
by its own regulations. The fact that a regulation as written
does not provide [the agency with] a quick way to reach a
desired result does not authorize it to ignore the regulation or
label it ‘inappropriate.’ ”) (footnote omitted).
 4
EPA has offered three explanations for why the
regulation does not bar its actions here. In my view, none
suffices to overcome the plain language of Section
51.166(a)(6)(i).

First, EPA has said that the changes States had to make
to their SIPs in this case were not “by reason of” changes to
EPA’s PSD regulations, as the language of Section
51.166(a)(6)(i) demands to trigger the three-year revision
period. I disagree.

EPA changed its PSD regulations to encompass
greenhouse gases. By reason of that change, States’ SIPs
must be revised. So by its terms, Section 51.166(a)(6)(i)
applies. To be sure, EPA changed its PSD regulations in part
because the statute required EPA to alter its PSD regulations
once greenhouse gases were considered a covered pollutant.
That is because the statute itself requires the PSD program to
cover any pollutant subject to regulation under the Act. See
Coalition for Responsible Regulation, Inc. v. EPA, 684 F.3d
102, 143 (D.C. Cir. 2012).

But regardless of whether EPA changes its PSD
regulations as a matter of statutory discretion or as a matter of
statutory dictate, the resulting SIP revisions are required “by
reason of an amendment to” the PSD regulations. Where the
change to the PSD regulations is a matter of statutory dictate,
the causal chain may begin with the statute, which in turn
requires EPA to change the PSD regulations, which in turn
requires changes to the SIP. But the changes to the PSD
regulations still ultimately are what require the changes to the
SIP. I think it’s plainly incorrect to say – as EPA does and
the majority opinion accepts – that Section 51.166(a)(6)(i)
and its “by reason of” requirement apply when EPA makes a
discretionary change to the PSD regulations but does not
 5
apply when EPA makes a statutorily mandated change to the
PSD regulations. See Auer v. Robbins, 519 U.S. 452, 461
(1997). EPA’s position is a bit like saying that a car accident
victim wasn’t injured by reason of the other driver’s
negligence but rather by reason of the car’s poor design when,
in fact, the victim was injured by reason of both causes. So
too here.

Moreover, the language in the preamble to EPA’s 2002
amendment to Section 51.166(a)(6)(i), which changed the
relevant time for a State to update its SIP from nine months to
three years, says simply that Section 51.166(a)(6)(i) applies
whenever EPA “revise[s]” the PSD regulations. 67 Fed. Reg.
at 80,241. In other words, in 2002 when EPA explained this
regulation, EPA itself did not think the “by reason of”
language somehow drew a distinction between (i) cases
involving discretionary changes to the PSD regulations and
(ii) cases involving statutorily mandated changes to the PSD
regulations. Instead, EPA said that Section 51.166(a)(6)(i)
applies whenever EPA revises the PSD regulations.

In addition, if EPA were right here, then the three-year
time period in Section 51.166(a)(6)(i) for a State to update its
SIP should not have applied when EPA changed or revised
the National Ambient Air Quality Standards in the past. After
all, in those cases, once EPA decided to revise the NAAQS,
the required SIP changes were statutorily mandated, not just a
matter of EPA discretion. Yet tellingly, in those cases EPA
actually cited and applied Section 51.166(a)(6)(i) and gave
States the required time to comply, as set forth in the
regulation. See, e.g., 73 Fed. Reg. 28,321, 28,341 (May 16,
2008) (applying Section 51.166(a)(6)(i) when the PM2.5
NAAQS were updated); 52 Fed. Reg. 24,672, 24,682 (July 1,
1987) (applying Section 51.166(a)(6)(i) when the PM10
NAAQS were instituted). So EPA’s interpretation of the
 6
regulation here not only is contrary to the regulation’s plain
terms and EPA’s own prior descriptions, but also is flatly
inconsistent with how EPA has previously applied the
regulation.

Second, EPA suggests that, regardless of how much time
a State takes to revise its SIP, the regulation contemplates a
construction moratorium in the period until the State revises
its SIP. That is, the State cannot issue valid permits under its
existing SIP in the interim. This is a very weak argument.

Most importantly, the regulation by its terms does not
impose a construction moratorium during the period in which
a State without an automatically updating SIP is revising its
SIP. And it would be borderline nonsensical for the agency to
give a State three years to revise its SIP to meet new PSD
requirements – as EPA’s regulation expressly does – only
then to simultaneously tell the State that permits must meet
the new PSD requirements during those three years. A State
that took advantage of the three-year period would do so at
the expense of bringing major construction in the State to a
grinding halt. As I see it, it does not make any sense to read
the regulation to silently impose such a ridiculous regime.

Moreover, in the past, EPA has not barred States from
issuing permits during this interim period. EPA has
traditionally allowed States without automatically updating
SIPs to issue permits under their existing SIPs during the
interim period. See, e.g., 60 Fed. Reg. 55,792, 55,794 (Nov.
3, 1995) (“[T]he implementation date for States with SIP-
approved PSD permitting programs . . . will be the date on
which EPA approves each revised State PSD program
containing the PM-10 increments. In accordance with 40
CFR 51.166(a)(6)(i), each State with SIP-approved PSD
programs was required to adopt the PM-10 increment
 7
requirements within nine months [the period of time the
regulation then required] of the effective date . . . .”); 52 Fed.
Reg. at 24,682 (“States with approved PSD SIP’s will have 9
months” – the period of time the regulation then required –
“from the effective date of today’s PSD amendments to
revise their SIP’s for PM10 and submit them to EPA for
approval. See revised section 51.166(a)(6) [formerly section
51.24(a)(6)]. In the meantime, the EPA expects these States to
continue implementing their existing programs for particulate
matter.”) (emphasis added).

In the past, in other words, EPA has recognized and
adhered to the plain language of Section 51.166(a)(6)(i). But
here, EPA has basically re-interpreted the regulation to be
meaningless. As a matter of basic administrative law, we
cannot countenance the agency’s blatant disregard of the text
of its own regulations. See Auer, 519 U.S. at 461; Panhandle
Eastern Pipe Line Co., 613 F.2d at 1135 (agency does not
have “authority to play fast and loose with its own
regulations”).

Third, in its brief and at oral argument, EPA’s counsel
ultimately asserted that the regulation cannot trump the
statute, and EPA’s counsel actually suggested that EPA’s own
regulation was invalid. But the regulation remains binding
law, and States and Industry have not challenged it in this
case – rather, they have invoked and relied on it. In this
posture, EPA cannot disclaim the validity of its own
regulation. If EPA thinks its own regulation violates the
statute, it can of course endeavor to amend or withdraw
it. Until then, however, States are entitled to rely on it, and
EPA must follow it.

In any event, EPA’s regulation is not invalid under the
statute. Although I think the statute gives EPA discretion to
 8
amend the regulation so as to shorten the lag time for States to
revise their SIPs, the statute certainly does not forbid this
current regulation. In one form or another, the regulation has
been on the books and applied by EPA for some 30 plus
years. And the regulation represents an entirely sensible and
reasonable reading of the statute.

EPA’s counsel contended, however, that Section 165 of
the Clean Air Act unambiguously triggers a construction
moratorium in States like Wyoming and Texas whenever new
pollutants are regulated under the Act, because Section 165
applies directly to sources and immediately prohibits
construction of sources without up-to-date permits. Section
165, as relevant, states: “No major emitting facility on which
construction is commenced after August 7, 1977, may be
constructed in any area to which this part applies unless,”
among other things, “a permit has been issued for such
proposed facility in accordance with this part” and “the
proposed facility is subject to the best available control
technology for each pollutant subject to regulation under this
chapter.” 42 U.S.C. § 7475. But Section 165 applies only
through the relevant SIP, not directly to sources. See id. §
7471 (“each applicable implementation plan shall contain
emission limitations and such other measures as may be
necessary, as determined under regulations promulgated
under this part, to prevent significant deterioration of air
quality in each region”); EME Homer City Generation, L.P. v.
EPA, 696 F.3d 7, 28 (D.C. Cir. 2012) (Clean Air Act
“reserves the first-implementer role for the States”). It would
make no sense for the Clean Air Act to set out a role for the
States in implementing the PSD program in the first instance
but then bypass the States when the PSD program is amended.
To be sure, because of Section 165, States are required to
change their SIPs when EPA changes the PSD requirements.
But the statute does not tell us how quickly States must do so
 9
or what happens in the interim. For some 30 years, EPA’s
regulation has filled that statutory gap. It is at least
reasonable to read the statutory language – as EPA has done
for those 30 years – to allow a facility to begin construction if
a permit has been issued in accordance with the existing SIP
while the State goes about revising that SIP within a time
reasonably set by EPA.

The regulation, then, represents a reasonable way to fill a
statutory gap and structure the transition process when EPA
has adopted new PSD regulations that require changes to
SIPs. Therefore, I would not accept EPA’s drive-by effort to
neuter the regulation here instead of going through the
requisite legal process for amending or repealing it.

***

In this case, EPA in effect has required all States –
including those without automatically updating SIPs, such as
Texas and Wyoming – to immediately update their PSD
permitting process when PSD requirements are
changed. That approach cannot be squared with EPA’s
regulation. Section 51.166(a)(6)(i) expressly allows the
States without automatically updating SIPs three years to
update the PSD programs in their SIPs when PSD
requirements are changed. That regulation has been on the
books and followed by EPA for some 30 years. EPA may
now believe that the regulation is bad policy. If so, EPA
should change the regulation. But until then, the regulation
remains binding law.

In light of the regulation, I would therefore vacate the
relevant EPA orders in this case.
 10
II

EPA also relied on alternative grounds for imposing a
Federal Implementation Plan on Texas. EPA retroactively
disapproved Texas’s SIP 18 years after the SIP was
promulgated, allegedly because the SIP was flawed when
EPA first approved it. In my view, EPA’s alternative ground
for imposing a FIP on Texas is likewise flawed.

EPA disapproved Texas’s SIP under the “error
correction” provision of the Clean Air Act, Section 110(k)(6).
Section 110(k)(6) provides: “Whenever the Administrator
determines that the Administrator’s action approving,
disapproving, or promulgating any plan or plan revision (or
part thereof) . . . was in error, the Administrator may . . .
revise such action as appropriate without requiring any further
submission from the State.” 42 U.S.C. § 7410(k)(6). Both
Texas and EPA agree that the error correction provision
allows EPA to revise its action approving or disapproving a
SIP only when that action “was in error.” That is, Section
110(k)(6) can be used to retroactively disapprove a SIP only if
the SIP was out of compliance with the Act or EPA
regulations when the SIP was originally approved.

EPA claims that Texas’s SIP was flawed when it was
originally approved because the SIP neither (i) updates
automatically to incorporate new federal regulations, like the
greenhouse gas regulations, nor (ii) provides assurances that
the State will update its plan as necessary whenever a new
EPA regulation issues. See 76 Fed. Reg. 25,178, 25,179 (May
3, 2011); 75 Fed. Reg. 82,430, 82,431 (Dec. 30, 2010). EPA
therefore issued a FIP for Texas.

The problem with EPA’s analysis is that nothing in the
Clean Air Act or in EPA’s regulations requires that SIPs
automatically update or that States provide express assurances
 11
that they will revise their plans every time EPA issues a new
regulation. To begin with, EPA admits both in its briefs and
in its regulations that SIPs are not required to be automatically
updating. EPA Br. 55; 76 Fed. Reg. at 25,198. So the fact
that Texas’s SIP does not automatically incorporate new
federal regulations is a red herring. In addition, nothing in the
PSD permitting regulations or in the statute requires a State to
“address, or provide assurances of the requisite legal authority
concerning, the application of PSD to all pollutants newly
subject to regulation.” 75 Fed. Reg. at 82,433. And EPA
cannot disapprove a SIP based on a non-existent requirement.
To be sure, the Clean Air Act requires States to provide
“assurances that the State . . . will have adequate personnel,
funding, and authority under State (and, as appropriate, local)
law to carry out such implementation plan.” 42 U.S.C.
§ 7410(a)(2)(E). But providing “assurances that the State”
has “authority” to “carry out such implementation plan” just
means that the State must be capable of administering the SIP
it submits to EPA. That language does not require a State to
assure EPA in advance that the State has “authority” to revise
its plan every time a new pollutant is regulated. So Texas’s
1992 SIP was not flawed when EPA originally approved it.

Because Texas’s SIP was valid when approved, EPA’s
action in approving it back in 1992 was not “in error.” So
EPA was not authorized to disapprove it now under Section
110(k)(6).

***

In sum, EPA did not have authority to disapprove
Texas’s and Wyoming’s SIPs or to issue FIPs to regulate
emissions of greenhouse gases in those States until the
expiration of the three-year period set forth in EPA’s
regulation. Under that binding EPA regulation, States without
 12
automatically updating SIPs are entitled to three years to
revise their SIPs to cover greenhouse gases. During that time,
States have legal authority to issue valid permits under their
existing SIPs. EPA’s orders should therefore be vacated.

For those reasons, I respectfully dissent.