United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued November 16, 2010 Decided June 24, 2011
No. 09-1297
MEDICAL WASTE INSTITUTE AND ENERGY RECOVERY
COUNCIL,
PETITIONERS
v.
ENVIRONMENTAL PROTECTION AGENCY,
RESPONDENT
COALITION FOR RESPONSIBLE WASTE INCINERATION, ET AL.,
INTERVENORS
On Petition for Review of a Final Action
of the Environmental Protection Agency
Michael B. Wigmore argued the cause for petitioners. With
him on the briefs was Sandra P. Franco.
Ronald A. Shipley, William L. Wehrum, James W. Rubin,
and Richard G. Stoll were on the briefs for intervenor Coalition
for Responsible Waste Incineration and amici curiae
Manufacturers’ HMIWI Coalition and Cement Kiln Recycling
Coalition in support of petitioners.
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Perry M. Rosen, Attorney, U.S. Department of Justice,
argued the cause for respondent. With him on the brief was
Michael W. Thrift, Counsel, U.S. Environmental Protection
Agency. Daniel R. Dertke, Attorney, U.S. Department of
Justice, entered an appearance.
James S. Pew argued the cause for intervenors Natural
Resources Defense Council and Sierra Club in support of
respondent. With him on the brief were Colin C. O'Brien and
John D. Walke.
Before: SENTELLE, Chief Judge, and GINSBURG and
KAVANAUGH, Circuit Judges.
Opinion for the Court filed by Chief Judge SENTELLE.
SENTELLE, Chief Judge: Petitioners Medical Waste
Institute and Energy Recovery Council, trade associations
representing the medical waste and waste-to-energy industries,
respectively, petition for review of a regulation promulgated by
the Environmental Protection Agency (“EPA”) setting
performance standards for new and existing
hospital/medical/infectious waste incinerators (“HMIWI”).
Petitioners argue that the data set EPA used to establish these
standards was flawed, that the agency’s pollutant-by-pollutant
approach to setting target emissions levels was impermissible,
and that the agency acted arbitrarily when it removed a
provision exempting HMIWI from complying with the standards
during periods of startup, shutdown, and malfunction. The EPA
counters that this court lacks jurisdiction to review the two latter
claims, and that the use of the data set was justifiable. We agree
with the EPA and deny the petition for review.
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I.
The challenged regulation, titled “Standards of Performance
for New Stationary Sources and Emissions Guidelines for
Existing Sources: Hospital/Medical/Infectious Waste
Incinerators,” was issued pursuant to Section 129 of the Clean
Air Act (“CAA”), 42 U.S.C. § 7429. The statute directs the
EPA to set required levels of emissions reduction for nine listed
air pollutants, as well as for opacity where appropriate.
§ 7429(a)(4). The statute sets forth the factors EPA is to
consider in establishing the standards.
Standards applicable to solid waste incineration units . . .
shall reflect the maximum degree of reduction in emissions
of air pollutants listed under section (a)(4) that the
Administrator, taking into consideration the cost of
achieving such emission reduction, and any non-air quality
health and environmental impacts and energy requirements,
determines is achievable for new or existing units in each
category. The Administrator may distinguish among
classes, types . . . and sizes of units within a category in
establishing such standards. The degree of reduction in
emissions that is deemed achievable for new units in a
category shall not be less stringent than the emissions
control that is achieved in practice by the best controlled
similar unit, as determined by the Administrator. Emissions
standards for existing units in a category may be less
stringent than standards for new units in the same category
but shall not be less stringent than the average emissions
limitation achieved by the best performing 12 percent of
units in the category . . . .
§ 7429(a)(2). The level of emissions control identified by the
Administrator pursuant to this provision is commonly known as
a “maximum achievable control technology,” or “MACT,”
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standard. 74 Fed. Reg. 51,368, 51,370 (Oct. 6, 2009). The
minimum levels of stringency that the EPA may require are
referred to as the MACT “floors.” Id.; see Sierra Club v. EPA
(“Sierra Club-HMIWI”), 167 F.3d 658, 660 (D.C. Cir. 1999).
Once the EPA establishes these floors, it is permitted to set more
stringent MACT standards – that is, go “beyond the floor” – if,
taking into account the factors identified in the statute, it
determines that more stringent emissions limitations are
achievable. 74 Fed. Reg. at 51,370. The statute also directs
EPA to review and, if appropriate, revise the standards issued
pursuant to this section every five years. § 7429(a)(5).
EPA first promulgated MACT standards pursuant to the
CAA in September of 1997. 62 Fed. Reg. 48,348 (Sept. 15,
1997). EPA divided the HMIWI population into three
subcategories (small-, medium-, and large-capacity units) and
set standards for the nine listed pollutants in each category,
which resulted in 27 separate floor determinations. See 167 F.3d
at 660. Because it did not have enough data to calculate MACT
floors for existing units based on emissions limitations actually
achieved by best performing units, it used surrogate data –
specifically, emissions limitations set by state regulations and
permit requirements – to make its calculations. See 167 F.3d at
660-61; 62 Fed. Reg. at 48,352; 72 Fed. Reg. 5510, 5513 (Feb.
6, 2007). But for 17 of the 27 floor determinations, the share of
the HMIWI population covered by the applicable regulations
was less than 12 percent. 167 F.3d at 661. In order to meet the
statutory requirement that the MACT floor in each category be
set at the level of the average emissions limitation achieved by
the top-performing 12 percent of units, the EPA supplemented
its data set yet again, this time using “uncontrolled” data – that
is, data from incinerators with no pollution controls in place. Id.
The Sierra Club petitioned for review of the 1997 MACT
standards. This court concluded that “EPA’s method looks
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hopelessly irrational.” Sierra Club-HMIWI, 167 F.3d at 664.
We did not vacate the standards altogether, however, because
“[i]t is possible that EPA may be able to explain [the standards],
and the Sierra Club has expressly requested that we leave the
current regulations in place during any remand, rather than
eliminate any federal control at all.” Id. We remanded the case
to the EPA for further explanation.
The 1997 regulations that remained in place after the Sierra
Club-HMIWI decision were fully implemented by September
2002. 72 Fed. Reg. at 5510. In the wake of the implementation
of these standards, approximately 94% of HMIWI shut down
and an additional 3% obtained exemptions from the regulations.
Id. at 5518.
In February 2007, EPA finally issued a proposed rule in
response to the 1999 remand. 72 Fed. Reg. at 5510. In this
proposal, EPA offered a detailed rationale for its approach to
determining the MACT floors. It identified and corrected errors
in its previous methodology, which resulted in revised MACT
floor determinations. The new floor determinations were based
on much of the same data upon which EPA had relied in 1997,
but the adjusted methodology “result[ed] in proposed emission
limits that in many cases are more stringent than the limits
promulgated in 1997.” In addition to undertaking revisions in
response to this court’s remand, the EPA made further revisions
in fulfillment of its obligation under the CAA to conduct a
review of emissions standards every five years and revise the
standards as necessary to keep them aligned with the statutory
requirements. 72 Fed. Reg. at 5518; see §§ 7411(a)(1),
7429(a)(5). Specifically, in performing its five-year review it
revised some of the emissions limitations “to reflect the actual
performance of the MACT technologies” under the 1997
standards. 72 Fed. Reg. at 5533.
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On December 1, 2008, the EPA issued a new proposed rule,
declaring that “following recent court decisions and receipt of
public comments regarding [the February 2007] proposal, we
chose to re-assess our response to the Court’s remand.” 73 Fed.
Reg. 72,962, 72,962 (Dec. 1, 2008). The EPA explained it no
longer was confident that state regulatory limits were reasonable
substitutes for actual emissions data. Because of this uncertainty
combined with the unavailability of emissions data from the
many units that had shut down in the wake of the 1997
requirements, EPA concluded that “the best course of action is
to re-propose a response to the remand based on data from the
57 currently operating HMIWI.” Id. at 72,970. Although the
EPA stated that this new proposed rule discharged its duty to
perform a five-year review, it maintained that its recalculation
of MACT floors was done pursuant to its duty to set emissions
limitations in the first instance, not solely in fulfillment of its
review duty under § 7429(a)(5).
The EPA issued its final rule on October 6, 2009. 74 Fed.
Reg. at 51,368. The final rule used the same basic
methodological approach as the 2008 proposal, with a few
statistical adjustments that resulted in generally more stringent
limits than had been previously proposed. In the final rule, the
EPA for the first time removed the “startup, shutdown, and
malfunction exemption” (“SSM exemption”), which had
provided that no waste was counted against a unit during an
SSM period.
This challenge followed the publication of the final rule.
The Clean Air Act empowers us to reverse the Administrator’s
action in rulemaking if it is “arbitrary, capricious, an abuse of
discretion, or otherwise not in accordance with law.”
§ 7607(d)(9)(A); see Bluewater Network v. EPA, 370 F.3d 1, 11
(D.C. Cir. 2004) (noting that review under the CAA’s “arbitrary
and capricious” standard is the same as review under the
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Administrative Procedure Act, 5 U.S.C. § 706(2)(A)).
II.
A.
The petitioners contend that the EPA exceeded its authority
under the Clean Air Act when it revised the HMIWI MACT
floors based on data collected after implementation of the 1997
standards. It is undisputed that once the EPA has set the floors,
it may thereafter establish standards more stringent than those
floors. However, petitioners raise an objection to the standards
established by the EPA after remand of the earlier decision. The
objection is double faceted, but in both its aspects is based on
the proposition that the CAA only authorizes a one-time
establishment of floors based on the level of emission control
“achieved in practice by the best controlled similar unit” for new
units, and at “the average emissions limitation achieved by the
best performing 12 percent of units in the category” for existing
units. Petitioners’ first objection to the setting of the standards
before us is that the EPA based its calculations not on the best
performing 12 percent at the time of the original rulemaking, but
rather on the best performing 12 percent of the remaining
entities in the field after the shutdown of 97 percent of the units
existing during the earlier proceeding. As the remaining units
are the most efficient of the original group, the emissions levels
upon which the EPA based its floor were ratcheted downward.
Petitioners refer to this approach as “MACT-on-MACT.” That
gives rise to the second facet of this argument. Petitioners
contend that the new “floors” are in fact revised standards
subject to the provisions of §§ 7411(a)(1) and 7429(a)(5), which
require the EPA to consider the cost of compliance. Briefly put,
petitioners contend that to set standards more stringent than
floors based on the 1997 data, the EPA must consider cost and
other factors listed in the statute—either as part of an initial
8
standard-setting process or as part of the five-year review.
Petitioners further argue that the remand in Sierra Club-
HMIWI did not authorize the recalculation of the MACT floors.
They argue that by remanding the standards without vacating,
the court “affirmed the validity of the EPA’s 1997 data set.”
The EPA, they contend, should have continued to use that data
set in responding to the remand, as it did in its 2007 proposal.
When the EPA chose instead to abandon that data set and rely
on compliance data collected after the 1997 standards were
implemented, it was acting outside the scope of the remand.
The EPA responds that nothing in the Clean Air Act or in
the Sierra Club-HMIWI decision suggests that it is prohibited
from resetting the MACT floors in order to correct its own
errors. It suggests that the approach petitioners label “MACT-
on-MACT” would be more accurately described as “MACT-on-
Unsupportable-Standards-Erroneously-Labeled-as-MACT.” It
insists that its action was a reasonable response to this court’s
remand.
We agree with the EPA. Granted, its action was fraught
with cunctation. The ten-year gap between our remand and the
promulgation of the revised floors no doubt contributed to the
unavailability of emissions data from a larger segment of the
HMIWI units operating in 1997. The delay imposed protracted
regulatory uncertainty on the industry, which continued to be
subject to the 1997 standards while the agency dithered. But
neither the length of the delay nor the problems caused by that
delay affect the ultimate validity of the EPA’s product.
When this court remanded the 1997 standards without
vacating them, we did not thereby affirm the data set the EPA
had used to set those standards. We did not hold that the use of
regulatory data to set MACT floors was “inherently
9
impermissible” under the statute, but instead left open the
possibility that the use of such data might be acceptable “as long
as it allows a reasonable inference as to the performance of the
top 12 percent of units.” Sierra Club-HMIWI, 167 F.3d at 662-
63. We most certainly did not mandate that EPA must proceed
from the data set it had employed in the initial setting of the
floors. Indeed, we withheld vacatur for the purpose of allowing
the EPA an opportunity to establish the reasonableness of its
then-current regulations. Had we been satisfied of the adequacy
of the regulations and the data set on which the regulations were
based, the remand would hardly have been necessary. As we
stated at the time, “[i]t is possible that EPA may be able to
explain [its methodology].” Id. at 664. We remanded so that
the agency could attempt to do so. We declined to vacate the
standards at the express request of the petitioner Sierra Club,
which did not want the court to eliminate all federal control
while the EPA determined its next step. Id.
In the course of revisiting its 1997 standards and attempting
to arrive at a reasonable explanation for its action, the EPA came
to believe that the approach it had taken in setting those
standards was unsupportable. Far from being an inappropriate
response to the remand, this is precisely the type of analytic
assessment we expect an agency to conduct when its regulation
has been remanded by a court. Once the EPA concluded that the
regulatory data it had used in 1997 did not reliably approximate
the emissions levels achieved in practice by best performing
units, it rightly recognized that it could not continue to use that
data set. By the time the EPA had identified the infirmities in its
data set, it was no longer able to gather emissions data from the
vast majority of HMIWI units operational at the time the
original floors were promulgated. See 73 Fed. Reg. at 72,970.
Therefore, it chose to use “the most reliable” data available:
actual emissions levels from the 57 units remaining in operation.
Id. This decision constituted a reasonable attempt at following
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the statute’s direction to set the MACT floors at a level achieved
by the best performing units. It was also well within the scope
of the remand.
At oral argument, counsel for the petitioners affirmed that
they would not be challenging EPA’s decision to reset the floors
as so-called MACT-on-MACT if the court had vacated the
standards at the time of remand, because in that case the agency
would be regulating on a blank slate. We are not persuaded that
remand without vacatur as opposed to vacatur has the outcome-
changing significance the petitioners ascribe to it. Although in
Sierra Club-HMIWI we did not vacate the standards, we made
clear that we had serious concerns about their validity. The
standards remained in place, but they had not been accepted by
the court as fulfillment of the agency’s duty under the Clean Air
Act to set emissions levels.
Sierra Club-HMIWI left open the question whether the EPA
could offer a reasonable explanation for its use of the regulatory
data in its initial determination. On remand, the EPA
determined that it could not. When the EPA determined that its
regulation rested on unreliable data and that it had to reset the
floors, the agency was functionally regulating on a blank slate
even though the regulation continued to remain on the books.
Therefore, the emissions levels contained in the new rule are
properly characterized not as “beyond-the-floor,” or as a
revision conducted as part of the five-year review, but as the
floor-setting that is the initial step in establishing emissions
standards. See 42 U.S.C. § 7429(a)(2), (5). The former require
consideration of the costs of compliance, but the latter does not.
Id. We hold that, given this court’s previous remand without
vacatur and the agency’s subsequent determination that it was
unable to provide a rational explanation for continued use of the
data upon which it had relied, the EPA acted lawfully in
resetting the MACT floors based on post-compliance emissions
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data.
B.
The petitioners’ second challenge is to the EPA’s
“pollutant-by-pollutant” approach to setting MACT floors. In
other words, the petitioners are challenging EPA’s interpretation
of the statutory requirement that it determine the level of
emissions control achieved by “the best controlled similar unit”
to permit it to identify a top-performing unit (or units, when
setting standards for existing HMIWI) for each individual
pollutant, rather than one unit that is the best controlled overall.
See § 7429(a)(2). The result, petitioners argue, is that the floors
are set with reference to “a hypothetical ‘super unit’” that attains
maximum emissions control for every pollutant. The petitioners
insist that EPA’s approach, and the resulting floors, violate the
CAA because these floors have never been “achieved in
practice” by any single unit.
We will not reach the merits of this challenge.
Petitioners’ claim is barred by 42 U.S.C. § 7607(b)(1). That
provision directs that any petition for review must be filed
within sixty days from the date that notice of the challenged
action appears in the Federal Register. The filing period in the
Clean Air Act “is jurisdictional in nature,” Motor & Equip.
Mfrs. Ass’n v. Nichols, 142 F.3d 449, 460 (D.C. Cir. 1998)
(internal quotation marks omitted); if the petitioners have failed
to comply with it, we are powerless to address their claim.
Petitioners did in fact fail to comply.
EPA used the same pollutant-by-pollutant approach to
set the standards in its 1997 rule. See 62 Fed. Reg. at 48,363-64.
Although this approach was questioned by commenters (and
EPA responded to those comments in its final rule), see id., no
one challenged the pollutant-by-pollutant approach in court at
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that time. The sixty-day window provided by statute has long
since closed, and we may not reopen it and entertain a belated
challenge to the EPA’s pollutant-by-pollutant approach now.
The petitioners point out that they lodged objections to the
approach during the rulemaking that culminated in the 2009
final rule, see 74 Fed. Reg. at 51,380-82, in compliance with the
statutory requirement that objections must be “raised with
reasonable specificity during the period for public comment” in
order to be preserved for judicial review. See § 7607(d)(7)(B).
While this is true, a renewed objection before the agency does
not compensate for the petitioners’ failure to raise their
complaint before the court within sixty days of the EPA’s first
use of the pollutant-by-pollutant approach, as required by the
statute. Nor does the EPA’s defense of the methodology in its
comments demonstrate it actually or constructively reopened the
issue. See Am. Road & Transp. Builders Ass’n v. EPA, 588 F.3d
1109, 1115 (D.C. Cir. 2009). The petitioners’ challenge to the
EPA’s longstanding practice of setting floors based on the
emissions levels achieved by the best performing units with
respect to each individual pollutant is barred.
C.
The petitioners’ final challenge is to the EPA’s removal of
a provision exempting HMIWI from meeting emissions
standards during periods of startup, shutdown, or malfunction
(“SSM”). The SSM exemption had appeared in the 1997 rule,
and was retained in the 2007 proposal and 2008 re-proposal.
See 74 Fed. Reg. at 51,375. But in the 2009 final rule, the EPA
announced its decision to remove the exemption and make the
emissions limits applicable at all times. Id. The EPA grounded
its action in this court’s Sierra Club v. EPA (“Sierra Club-
SSM”) opinion, published after the 2008 proposal issued, which
vacated provisions (promulgated under a different section of the
CAA) exempting “major sources of air pollution” from
13
following normal emissions standards during SSM periods. 551
F.3d 1019, 1021 (D.C. Cir. 2008). Although the EPA
recognized that the Sierra Club-SSM decision did not directly
impact the HMIWI standards at issue in the rulemaking then
underway, it concluded that “the legality of source category-
specific SSM provisions such as those adopted in the 1997
HMIWI rule [was] questionable” in the wake of the court’s
opinion. See 74 Fed. Reg. at 51,394. In addition, it determined
that “the exemption and definitions as promulgated in 1997
provided virtually no utility” to HMIWI units. Id. Petitioners
argue that the EPA’s decision to remove the SSM exemption
was arbitrary and capricious.
Again the petitioners have failed to comply with a
procedural prerequisite for judicial review. The Clean Air Act
instructs that:
Only an objection to a rule or procedure which was raised
with reasonable specificity during the period for public
comment (including any public hearing) may be raised
during judicial review. If the person raising an objection
can demonstrate to the Administrator that it was
impracticable to raise such objection within such time or if
the grounds for such objection arose after the period for
public comment (but within the time specified for judicial
review) and if such objection is of central relevance to the
outcome of the rule, the Administrator shall convene a
proceeding for reconsideration of the rule and provide the
same procedural rights as would have been afforded had the
information been available at the time the rule was
proposed.
§ 7607(d)(7)(B). Petitioners did not raise their objection to the
removal of the SSM exemption before the agency with
reasonable specificity. Petitioners correctly point out that
14
because the first indication from the agency that it would
remove the exemption was in the final rule, they did not have a
provocation or an opportunity to object to the removal during
the comment period. But the statute provides for just such a
situation by offering an alternative way to present an objection
to the agency in order to tee it up for judicial review. It requires
an interested party unable to raise its objection during the
comment period to file a motion for reconsideration. Petitioners
did not do so, and “[p]etitioners who fail to comply with this
exhaustion requirement are barred from seeking judicial
review.” Nat’l Ass’n of Clean Air Agencies v. EPA, 489 F.3d
1221, 1231 (D.C. Cir. 2007). We will not review the
petitioners’ challenge to the EPA’s decision to remove the SSM
exemption from the final rule.
III.
We hold that the EPA’s decision to use emissions data from
the HMIWI units remaining in operation after the
implementation of the 1997 standards, once it determined that
the data set upon which it had relied in 1997 was flawed, was
reasonable. We do not have jurisdiction to review the
challenges to the EPA’s long-standing practice of setting
emissions floors based on emissions levels achieved by the best
performing unit or units for each individual pollutant, and to the
agency’s removal of an exemption from compliance with
emissions limitations during periods of startup, shutdown, and
malfunction.
The petition is dismissed in part and denied in part.