United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued September 3, 2002 Decided October 22, 2002
No. 99-1255
Ethyl Corporation,
Petitioner
v.
Environmental Protection Agency and
Christine Todd Whitman, Administrator,
Environmental Protection Agency,
Respondents
Association of International Automobile
Manufacturers, Inc., et al.,
Intervenors
Consolidated with
00-1515, 01-1464
On Petitions for Review of Final Action of the
Environmental Protection Agency
---------
Kevin L. Fast argued the cause for petitioner. With him
on the briefs were Douglas S. Burdin and Andrew J. Turner.
Alan D. Greenberg, Attorney, U.S. Department of Justice,
argued the cause for respondents. With him on the brief was
John T. Hannon, Attorney, U.S. Environmental Protection
Agency. Lois J. Schiffer, Assistant Attorney General, Chris-
topher S. Vaden and Eric G. Hostetler, Attorneys, U.S.
Department of Justice, and Mark M. Kataoka, Attorney, U.S.
Environmental Protection Agency, entered appearances.
Mitchell H. Bernstein argued the cause for intervenors
Alliance of Automobile Manufacturers and Association of
International Automobile Manufacturers, Inc. With him on
the brief were Richard A. Penna, Charles R. Sensiba, Julie
C. Becker and Charles H. Lockwood II.
Before: Edwards and Rogers, Circuit Judges, and
Williams, Senior Circuit Judge.
Opinion for the Court filed by Senior Circuit Judge
Williams.
Williams, Senior Circuit Judge: Title II of the Clean Air
Act, 42 U.S.C. s 7521 et seq. (1955), sets up a program for
the regulation of both motor vehicles and their fuels in order
to reduce harmful emissions. Section 206 charges the Envi-
ronmental Protection Agency with testing new motor vehicles
to ensure that each vehicle's emissions will comply with
federal emissions standards throughout its "useful life." 42
U.S.C. s 7525(a)(1). Section 206(d) says that the agency
"shall by regulation establish methods and procedures for
making tests under this section." Id. s 7525(d) (emphasis
added).
In a rulemaking pursuant to s 206, the EPA adopted a
Compliance Assurance Program or "CAP 2000." 64 Fed.
Reg. 23,906 (1999). CAP 2000 does not, however, set out
"methods and procedures for making tests." Rather, it es-
tablishes a framework for automobile manufacturers to devel-
op their own tests, to be used once the EPA gives approval,
case-by-case, after private proceedings with each manufactur-
er.
Petitioner Ethyl manufactures and markets fuel and lubri-
cant additives for use in motor vehicles. It argues that CAP
2000 violates the Act because it provides for test procedures
and methods to be vetted in individual closed proceedings
rather than in a notice-and-comment rulemaking. And it
claims to be injured because the mechanism adopted by the
EPA deprives it of the opportunity to observe the rulemaking
process and thus gain information useful in its efforts both to
develop and improve its products and to key them to the
certification tests. For the reasons given below we grant the
petition.
* * *
Before a manufacturer may introduce a new motor vehicle
into commerce, it must obtain an EPA certificate indicating
compliance with the requirements of the Act and applicable
regulations. It submits an application containing test data
and other information specified by the EPA, which issues a
certificate if the manufacturer has shown, among other
things, that the vehicle's emissions control systems will
achieve compliance with emissions standards over the vehi-
cle's full useful life. See 40 CFR s 86.1848-01.
Critical here is the question of the control systems' possible
deterioration over time. Before 1993 EPA had had a durabil-
ity test that called for prototype vehicles to be driven over a
50,000-mile course known as the Automobile Manufacturers
Association ("AMA") driving cycle. 58 Fed. Reg. 3994, 3995/1
(1993). In 1993 it adopted a "revised durability program" or
"RDP" that retained that test "as the standard EPA-defined
procedure." Id. But the RDP regulations also permitted
automobile companies to develop alternative test methods and
procedures provided that they (a) obtained EPA approval for
each such test and (b) performed in-use testing to verify the
accuracy of the emissions deterioration predictions made by
their tests. See id. at 3995. The EPA did not adopt these
tests through rulemaking but simply approved them on a
case-by-case basis.
In May 1999 the EPA replaced RDP with CAP 2000.
These regulations eliminate the AMA driving cycle as an
EPA-defined test method. Instead, the program available as
an alternative in 1993-99, under which manufacturers are to
develop their own emissions durability test methods and
procedures, has become the sole method. Thus, rather than
promulgating methods and procedures for durability testing
itself, the EPA now requires, through CAP 2000, that "[t]he
manufacturer shall propose" a durability program. 40 C.F.R.
s 86.1823-01. Each manufacturer is required to obtain EPA
approval for its tests, and must verify its results through in-
use testing.
Manufacturer-proposed tests under CAP 2000 must (a)
"effectively predict the expected deterioration of candidate in-
use vehicles over their full and intermediate useful life," and
(b) be "consistent with good engineering judgment."
40 C.F.R. s 86.1823-01(a). Within these criteria, the
manufacturer-developed mileage accumulation procedures are
to be
based upon whole-vehicle full-mileage accumulation,
whole-vehicle accelerated mileage accumulation (e.g.,
where 40,000 miles on a severe accumulation cycle is
equivalent to 100,000 miles of normal in-use driving),
bench aging of individual components or systems, or
other approaches approved by the Administrator.
40 C.F.R. s 86.1823-01(a)(1)(ii). The "bench aging" referred
to is a system whereby components are removed from the
vehicle and tested for durability separately. 40 C.F.R.
s 86.1823-01(a)(1)(B).
In adopting this system of individualized test approval, the
EPA explicitly found that "rulemaking for each durability
program is not required." 64 Fed. Reg. at 23,914/3. It also
said, in a response to petitions for reconsideration by Ethyl,
that public participation in the certification process would
interfere with the process of reviewing manufacturers' sub-
missions "because of the large amount of information claimed
confidential" and that, because the process was annual, the
use of notice-and-comment procedures would be "administra-
tively burdensome." August 23, 2001 Response to Ethyl
Corporation Petitions Denying Reconsideration of Three EPA
regulations: CAP 2000, Heavy Duty Gasoline, and OBD/IM,
EPA Air Docket A-96-50, No. VI-C-03, 39.
Ethyl challenges not only CAP 2000 but also regulations
governing the certification of heavy duty vehicles and en-
gines, 65 Fed. Reg. 59,896 (2000), which incorporate the CAP
2000 regulations by reference, and EPA's denial of its various
petitions for reconsideration, 66 Fed. Reg. 45,777 (2001).
* * *
The EPA argues that we need not reach the merits be-
cause, it says, Ethyl lacks both Article III and "prudential"
standing. We think it has both.
As is well known, Article III requires a party seeking
judicial relief to show (1) that it has suffered an "injury in
fact"; (2) that the injury is caused by or fairly traceable to
the challenged actions of the defendant; and (3) that it is
likely that the injury will be redressed by a favorable deci-
sion. Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-561
(1992).
Ethyl's assertions of injury fall into two categories. First,
as we've already mentioned, it says that as a manufacturer of
additives for motor vehicle fuels it has an interest in under-
standing the test methods and procedures by which the EPA
certifies new motor vehicles. CAP 2000's provision for
closed-door adoption of emission test procedures deprives
Ethyl of information that might well help it develop and
improve its products with an eye to conformity to emissions
needs.
Second, Ethyl says that CAP 2000 deprives it of informa-
tion that might be useful for securing EPA approval for its
own fuel additive products under the Act. It points in
particular to s 211(f), which prohibits use of any fuel or fuel
additive that is not "substantially similar" to the fuels used to
certify vehicles under s 206, unless a waiver is obtained from
EPA. See 42 U.S.C. s 7545(f).
EPA's response to this focuses almost entirely on Ethyl's
asserted interest in the s 211(f) waiver process, completely
ignoring its interest in obtaining information about vehicle
certification for present-day research and development of
products that will be judged (by both the government and
consumers) according to their effect on vehicle emissions.
The Supreme Court has made clear, however, that a denial of
access to information can work an "injury in fact" for stand-
ing purposes, at least where a statute (on the claimants'
reading) requires that the information "be publicly disclosed"
and there "is no reason to doubt their claim that the informa-
tion would help them." Federal Election Comm'n v. Akins,
524 U.S. 11, 21 (1998). Here, against Ethyl's fairly detailed
description of how the information that open rulemaking
proceedings provide would prove useful to it, the EPA offers
little more than a vague shrug of skepticism.
Because Article III standing is clear from Ethyl's informa-
tional and market interests in the vehicle-testing program, we
need not address the interest based on its need to seek
variances under s 211(f).
To show "prudential" standing, Ethyl must fall within the
"zone of interests" protected or regulated by the Act. See
Bennett v. Spear, 520 U.S. 154, 162 (1997). The test is not a
particularly demanding one, Clarke v. Securities Industry
Association, 479 U.S. 388, 399 (1987), and includes not only
those challengers expressly mentioned by Congress, but also
unmentioned potential challengers that Congress would have
thought useful for the statute's purpose (whose challenges
thereby support an inference that Congress would have in-
tended eligibility). See Hazardous Waste Treatment Council
v. EPA, 861 F.2d 277, 283 (D.C. Cir. 1988). It excludes
parties whose interests are not consistent with the purposes
of the statute in question. See Clarke, 479 U.S. at 399. As a
manufacturer of fuel additives seeking an open process for
testing the emissions control systems whose character may
affect the efficacy of its products, Ethyl's interests appear
congruent with those of the statute, i.e., the development of
products that will reduce harmful air pollutants. Indeed, this
court has long recognized the interdependence between motor
vehicle certification under the Act (the process at stake here)
and fuel regulations (under which Ethyl is a direct regulatee).
See e.g., Lubrizol Corp. v. EPA, 562 F.2d 807, 810 (D.C. Cir.
1977); Amoco Oil Co. v. EPA, 501 F.2d 722, 737 (D.C. Cir.
1974). The case is not unlike National Cottonseed Products
Association v. Brock, 825 F.2d 482, 489-492 (D.C. Cir. 1987),
where we found standing for a manufacturer whose respira-
tors had been assigned a low rating by an agency supervising
conditions in a workplace for which the respirators were a
potential means of compliance. We treated the respirator
seller's interest, and that of the regulated firms, as " 'two
sides of the same coin.' " Id. at 491 (quoting FAIC Sec., Inc.
v. United States, 768 F.2d 352, 359 (D.C. Cir. 1985)).
On to the merits: As we said, s 206(d) of the Act states
that the administrator "shall by regulation establish methods
and procedures for making tests under this section." 42
U.S.C. s 7525(d). Although special provisions govern review
under the Act, here the relevant provisions are the same as
under the Administrative Procedure Act. We are to reverse
the challenged EPA actions if they are "arbitrary, capricious,
an abuse of discretion, or otherwise not in accordance with
law" or "in excess of statutory jurisdiction, authority, or
limitations." 42 U.S.C. s 7607(d)(9)(A), (C).
CAP 2000 does not, as s 206 directs, "establish methods
and procedures for making tests," and it is the only "regula-
tion" in the picture. Instead, it provides criteria for individu-
al automobile manufacturers to develop their own test meth-
ods and procedures, which the EPA approves in a process
that does not involve rulemaking.
Conceivably s 206(d)'s requirement that EPA use regula-
tion to "establish methods and procedures for making tests"
could be squared with the record by reading "making tests"
as referring to devising the tests rather than conducting
them. Thus Congress would be mandating that the EPA use
regulations merely to set up a system for picking tests (which
might then be picked any old way) rather than mandating the
use of regulations to decide how the tests themselves should
be conducted. But nothing in the context of the provision
suggests that the "establish[ment]" under s 206(d) is to be so
remote from the actual process of conducting tests, and it is
hard to see any congressional purposes that would be served
by such a requirement. Indeed, neither in the administrative
proceedings nor before us has the EPA invoked such a
reading.
Rather, the EPA seeks to defend CAP 2000 by treating the
issue as involving simply the level of specificity or generality
at which it was supposed to act, citing American Trucking
Associations v. Department of Transportation, 166 F.3d 374
(D.C. Cir. 1999) (agency to promulgate by regulation safety
rating "requirements" and means to determine whether carri-
ers had met the requirements), and New Mexico v. EPA, 114
F.3d 290 (D.C. Cir. 1997) (agency to promulgate "criteria" for
a certification process). In those cases, as Congress had not
specified the level of specificity expected of the agency, we
held that the agency was entitled to broad deference in
picking the suitable level. See American Trucking, 166 F.3d
at 379-80; New Mexico, 114 F.3d at 294. But here Ethyl's
challenge is not that the EPA was too general in establishing
test procedures by regulation, but that it didn't establish
them by regulation at all.
EPA's failure to act by regulation is thus similar to, and
controlled by, our decision in MST Express v. Department of
Transportation, 108 F.3d 401 (1997), which preceded Ameri-
can Trucking and involved the same statutory requirement of
proceeding by regulation in setting safety requirements for
common carriers. Rather than promulgate regulations stat-
ing the means for determining whether carriers met the
safety fitness requirements, the agency had simply required a
carrier to "demonstrate that it has adequate controls in place"
to ensure compliance with the substantive requirements, and
had developed a "safety fitness rating methodology." Id. at
402, 403. This methodology provided agency inspectors with
detailed guidelines for evaluating a motor carrier's safety
rating--but it was not the product of notice-and-comment
rulemaking. See id. at 403. We found that the agency had
"failed to carry out its statutory obligation to establish by
regulation a means of determining whether a carrier has
complied with the safety fitness requirements." Id. at 406.
EPA's error here is similar.
There may, of course, be cases in which it is hard to
distinguish between promulgations of (1) vaguely articulated
test procedures (which would be reviewed deferentially under
such cases as American Trucking) and (2) procedures for
later development of tests (invalid under MST Express).
Both, after all, necessarily imply a later (or at least different)
proceeding in which the agency will fill in details. In this
case, however, one can distinguish on the basis of the lan-
guage used by the agency. With CAP 2000, the EPA does
not claim to have itself articulated even a vague durability
test. Rather, CAP 2000 requires that "[t]he manufacturer
shall propose a durability program" for EPA approval. 40
C.F.R. s 86.1823-01(a). It thus falls on the forbidden side of
the line.
The EPA also defends CAP 2000 on grounds that seem to
flout the evident congressional purpose. First, it argues that
because it has chosen to approve test procedures only for one
model year at a time, proceeding by regulation would be
administratively burdensome. Obviously this cannot over-
come a clear congressional command. Further, it is true only
in the sense that an open procedure--the very thing mandat-
ed by Congress--is less convenient than a closed one. It may
be. Other parties may raise questions or find fault in proce-
dures that look fine to the agency and the auto makers. But
Congress has already made the trade-off. Nothing in our
opinion requires that EPA use only a "one-size-fits-all" test
method. All that is required is that it establish its proce-
dures, no matter how variegated, "by regulation."
Finally, both EPA and the auto manufacturers who inter-
vene on its behalf argue that the approach of CAP 2000 is
necessary because of the presence of what the manufacturers
believe to be "confidential business information" ("CBI"). If
the EPA were to establish test methods and procedures by
regulation, they say, important CBI might become public,
allowing competitors to "back engineer" their products. See
Tr. of Oral Argument at 29-30. Moreover, they argue that
the sheer "amount of claimed confidential business informa-
tion would significantly reduce the usefulness of public notice
and an opportunity to comment upon manufacturers' durabili-
ty programs." EPA Br. at 44.
It is hard to know what to make of this argument. First
and foremost, s 208(c) provides that the administrator may
protect the confidentiality of "methods or processes entitled
to protection as trade secrets." 42 U.S.C. s 7542(c). Espe-
cially given this available remedy, it seems to us a complete
non sequitur to suggest that because a procedure (the rule-
making mandated by s 206(d)) may involve some protectable
CBI, the entire procedure should be short-circuited and re-
placed with a cluster of closed bargaining sessions between
the EPA and each manufacturer. Congress obviously expect-
ed that rulemakings would proceed despite the existence of
CBI that would require protection under s 208(c). Plainly
the theory provides no basis for disregarding the congression-
al command.
* * *
CAP 2000, rather than constituting an EPA establishment
"by regulation" of "methods and procedures for making
tests," as required by s 206(d), is instead a promulgation of
criteria for the later establishment of such methods and
procedures by private negotiation between the EPA and each
regulated auto maker. So it is "not in accordance with law."
We therefore vacate the CAP 2000 program and remand the
case to the EPA with instructions to establish test methods
and procedures by regulation.
So ordered.