United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued November 8, 2004 Decided February 18, 2005
No. 03-1222
CENTER FOR ENERGY AND ECONOMIC DEVELOPMENT,
PETITIONER
V.
ENVIRONMENTAL PROTECTION AGENCY,
RESPONDENT
PHELPS DODGE CORPORATION, ET AL.,
INTERVENORS
On Petition for Review of an Order of the
Environmental Protection Agency
Paul M. Seby argued the cause for petitioner. With him
on the briefs was Peter S. Glaser. Adam T. DeVoe and Sean
M. Sullivan entered appearances.
Kenneth C. Amaditz, Attorney, U.S. Department of
Justice, argued the cause for respondent. With him on the
brief were John C. Cruden, Deputy Assistant Attorney
General, and Jan M. Tierney, Attorney, U.S. Environmental
Protection Agency.
Joseph P. Mikitish, Assistant Attorney General, Attorney
General's Office of State of Arizona, argued the cause for
2
amici curiae State of Arizona, et al. in support of respondent.
With him on the brief were Terry Goddard, Attorney General,
Bill Lockyer, Attorney General, Attorney General’s Office of
State of California, Manel M. Medeiros, Solicitor General,
Lisa Madigan, Attorney General, Attorney General’s Office
of State of Illinois, Gary Feinerman, Solicitor General,
Patricia Madrid, Attorney General, Attorney General,
Attorney General’s Office of State of New Mexico, Tracy M.
Hughes, Special Assistant Attorney General, Mark Shurtleff,
Attorney General, Attorney General’s Office of State of Utah,
Fred Nelson, Assistant Attorney General, Patrick J. Crank,
Attorney General, Attorney General’s Office of State of
Wyoming, and Jay Jerde, Senior Assistant Attorney General.
Charles F. Noble, Attorney, New Mexico Environment
Department, entered an appearance.
Chris S. Leason, Vickie L. Patton, and Thomas A.
Bloomfield were on the brief for intervenors Phelps Dodge
Corporation, et al.
Before: EDWARDS and HENDERSON, Circuit Judges, and
WILLIAMS, Senior Circuit Judge.
Opinion for the Court filed by Senior Circuit Judge
WILLIAMS.
WILLIAMS, Senior Circuit Judge: Haze obscuring the
Grand Canyon and various other national parks and
wilderness areas in the west is a multi-state problem. In the
interests of developing a solution, the Environmental
Protection Agency in 1999 adopted a Regional Haze Rule
(“Haze Rule”), 40 C.F.R. §§ 308-309. Section 308 required
states to impose best available retrofit technology (“BART”)
on so-called “BART-eligible sources,” a specified class of
large stationary pollution sources that had been in operation
since August 7, 1977. In American Corn Growers Ass’n v.
3
EPA, 291 F.3d 1 (D.C. Cir. 2002), we vacated parts of § 308
because we found EPA’s methods for determining BART
inconsistent with the Clean Air Act. Those aspects of the
Haze Rule remain pending before EPA on remand.
Section 309 of the Haze Rule, however, permitted states
to reduce haze by alternative means, including a regional
approach, so long as the alternative would be “better than
BART”—i.e., improve visibility more rapidly than under
BART. In the rule before us, which implements the Haze
Rule, EPA approved a regional alternative. To determine
whether the rule was better than BART, EPA used a BART
methodology quite similar to the one American Corn Growers
condemned. On a challenge by the Center for Energy and
Economic Development, representing a group of pollution
sources in the region, we find that the similarity fatally taints
EPA’s rule.
* * *
The disputed regulations in this case arise from two
amendments to the Clean Air Act. Section 169A, adopted in
1977, “declare[d] as a national goal the prevention of any
future, and the remedying of any existing, impairment of
visibility in mandatory class I Federal areas which impairment
results from manmade air pollution.” 42 U.S.C. § 7491(a)(1).
It instructed EPA to require covered states to submit state
implementation plans (“SIPs”) that “contain such . . .
measures as may be necessary to make reasonable progress
toward meeting the national goal.” 42 U.S.C. § 7491(b)(2).
In determining reasonable progress, EPA was to consider four
factors—“the costs of compliance, the time necessary for
compliance, . . . the energy and nonair quality environmental
impacts of compliance, and the remaining useful life of any
existing [regulated] source.” 42 U.S.C. § 7491(g)(1). In
imposing BART requirements on the states, EPA was to
4
consider those four factors, plus “the degree of improvement
in visibility which may reasonably be anticipated to result
from the use of such technology.” 42 U.S.C. § 7491(g)(2).
On July 1, 1999 EPA promulgated the Haze
Rule—essentially 40 C.F.R §§ 51.308-309. Section 308 sets
out requirements for SIPs to achieve natural visibility
conditions by 2064. 40 C.F.R. § 51.308(d). In American
Corn Growers we addressed § 308(e)(1), which had instructed
states to measure the first four BART factors by source, but to
measure the degree of anticipated visibility improvement by
area affected—in effect, by groups of sources defined by area
of impact. 40 C.F.R. §§ 51.308(e)(1)(ii)(A)-(B). “To treat
one of the five statutory factors in such a dramatically
different fashion distorts the judgment Congress directed the
states to make for each BART-eligible source.” American
Corn Growers, 291 F.3d at 6. As a result, we found, a state
could be compelled to impose BART on a source even if the
imposition would have “no appreciable effect on the haze in
any class I area.” Id. at 7. We reversed and remanded, and
the remand is now pending before EPA.
Section 169B, adopted in 1990, expressed a broadened
congressional concern, instructing EPA to research visibility
impairment in national parks and wilderness (“Class I”) areas.
42 U.S.C. § 7492(a)(1). It also directed EPA to “establish a
visibility transport commission for the region affecting the
visibility of the Grand Canyon National Park.” 42 U.S.C.
§ 7492(f). One year later, EPA created the Grand Canyon
Visibility Transport Commission (the “Commission”) to
conduct research and recommend remedial measures. The
Commission submitted recommendations to EPA in a 1996
report, covering the Grand Canyon and fifteen other Class I
areas on the Colorado Plateau.
5
EPA pursued the implications of § 169B by incorporating
in the Haze Rule not only a BART mandate but a regional
alternative. It allowed states “to implement an emissions
trading program or other alternative measure” so long as the
alternative would achieve “better than BART” results. 40
C.F.R. §§ 51.308(e)(2), 51.309(a). Under § 309, the
Commission, or a regional body formed to implement a prior
Commission report, may opt for a regional alternative by
submitting an “annex” to that report. If EPA approved the
program described in the annex, then any state among the nine
covered by the Commission could adopt the program in lieu
of the state-by-state requirements. See 40 C.F.R. § 51.309(f).
EPA approval would turn largely on whether the regional
alternative provides “greater reasonable progress [toward
natural visibility levels] than would be achieved by [BART].”
40 C.F.R. § 309(f)(1)(i).
The Western Regional Air Partnership (“WRAP”), a
regional body formed to implement the 1996 Commission
report, submitted an annex in September 2000. The resulting
plan has a number of important similarities to and differences
from the program before us in American Corn Growers.
First, to develop “milestones” that would meet the Haze
Rule’s better-than- BART standard, WRAP estimated BART’s
likely achievements with a methodology similar to what we
rejected in American Corn Growers. It applied the four
factors other than visibility improvement by source category
rather than individually, but, just as had the approach rejected
in American Corn Growers, it measured visibility
improvement in terms of the cumulative effect on particular
Class I areas of changes in emissions from all covered sources
in the “transport region.” See Annex, Attachment C at C-4,
C-11-12. Ultimately, “the milestones were negotiated
numbers,” see Annex Rule, 68 Fed. Reg. 33,764, 33,769/1
(June 5, 2003), but these estimations were evidently a core
basis for the negotiations.
6
Second, the Annex doesn’t directly impose restrictions on
any sources. Rather, it sets various emission limitation
“milestones” that steadily decline over time. If sources in the
aggregate fail to meet these milestones “voluntarily,” a
backstop emissions trading program will come into force.
Under it, sources may not emit the relevant pollutants in
amounts exceeding their entitlements—which they will have
received either via allotment from the state or via trading. It
was plausible that the trading program would meet the better-
than-BART benchmark because it covers many sources
besides ones that are BART-eligible under the statutes and
§ 308. And the provision for trading presumably would
reduce the cost for any given level of emissions reduction.
See generally Acid Rain Program: General Provisions and
Permits, Allowance System, Continuous Emissions
Monitoring, Excess Emissions and Administrative Appeals, 58
Fed. Reg. 3590 (Jan. 11, 1993).
EPA approved and promulgated the substantially similar
Annex Rule. 68 Fed. Reg. 33,764 (June 5, 2003).
The Center for Energy and Economic Development,
representing a group of pollution sources in the region,
petitions for review. It argues that the EPA’s BART
benchmark is unlawful under our analysis in American Corn
Growers. After addressing various preliminary issues, we
grant the petition.
* * *
EPA raises two jurisdictional objections to the
petition—that the petitioner lacks standing and that our
judgment in American Corn Growers precludes review. We
reject both.
7
Standing of course comprises the familiar elements of
injury in fact, causation, and redressability, Lujan v.
Defenders of Wildlife, 504 U.S. 555, 560-61 (1992). EPA has
posed several objections to standing, some in its original brief
and another in a round of briefing that we requested after oral
argument. Initially EPA said that the Annex Rule’s
“voluntary” system of trading emission allowances was more
favorable to the Center than are the “command and control”
§ 308 BART rules that would otherwise apply on remand
from American Corn Growers. Moreover, if the Center is
correct that the Annex Rule does not achieve enough visibility
improvement to constitute “reasonable progress,” EPA
reasoned that a rule meeting that standard would necessarily
be more stringent and thus would only worsen the Center’s
burden.
Both arguments fail. The Center rightly points out that
the Annex Rule requires immediate compliance with certain
reporting requirements, subject to sanctions, so the rule
burdens the Center’s members now, which normally is enough
for standing. See Sierra Club v. EPA, 292 F.3d 895, 900
(D.C. Cir. 2002). As to the difference between § 308 and the
Annex Rule, EPA’s argument that the Annex Rule is
necessarily more lenient errs on two counts. First, as between
a § 308 that has not yet been repromulgated, see 69 Fed. Reg.
25,184 (May 5, 2004), and a living Annex Rule, the injury
from the latter seems clear. Second, contrary to EPA’s
characterization, the Center’s complaint about the method of
calculating reasonable progress is not that the Annex Rule is
too lenient, but that, in violation of American Corn Growers,
it lacks legally required evidence of attendant visibility gains.
The Center’s hope that both § 308 and the Annex Rule will
emerge from remand imposing substantially lighter burdens
on its members is hardly chimerical. “Where an agency rule
causes the injury,” as here, “the redressability requirement
may be satisfied . . . by vacating the challenged rule and
8
giving the aggrieved party the opportunity to participate in a
new rulemaking the results of which might be more favorable
to it.” America’s Community Bankers v. FDIC, 200 F.3d 822,
828-29 (D.C. Cir. 2000).
Following oral argument, we invited the parties to brief
the issue whether any harm to the Center’s members from the
Annex could properly be said to stem from EPA’s action.
After all, EPA’s rules offered the Annex as an optional
alternative to § 308, and for the moment § 308 languishes in
unpromulgated limbo. State pursuit of the Annex alternative
is the direct cause of injury to the Center’s members, and all
the states could, for a time, have refrained from any action.
EPA responded that as between §§ 308 and 309, “[t]he choice
is left entirely to the States,” four of which did not choose
§ 309. Intervenors and seven amici states in support of EPA
also remind us that the western states themselves initially
provided the “blueprint” or “roadmap” for the Annex Rule.
See Amicus Supp. Br. at 4, Intervenors Supp. Br. at 6. “A
decision to strike the Annex Rule,” the amici states observe,
“would not prevent Western States from adopting the same
limitations in order to achieve reasonable progress.” Amicus
Supp. Br. at 13; see also Resp. Supp. Br. at 11-12.
The existence of state choice is in itself immaterial.
“‘Your money or your life?’ calls for a choice, but each
option makes the recipient of the offer worse off.” Henn v.
Nat’l Geographic Soc’y, 819 F.2d 824, 826 (7th Cir. 1987).
Under § 309(f)(1) of the Haze Rule a state can, by filing a
valid annex with the Commission or appropriate regional
body, “satisfy the requirements of § 51.308(b) through (e),”
i.e., fulfill its otherwise applicable Haze Rule obligations and
avoid the trouble of expending its own administrative
resources to develop other measures while BART remains
pending before EPA. The states’ choice, in other words, is
between one burden and another.
9
Nor does the states’ initiative in designing the Annex
undermine the inference that EPA’s pressure has been
decisive, much less prove that the states acted spontaneously.
The Annex Rule addresses regional haze—“air pollutants
emitted by numerous sources across a broad region” that
impair “visibility in the 16 Class I areas on the Colorado
Plateau.” 68 Fed. Reg. at 33,765. Regional haze is a problem
in which the benefits of each state’s emissions controls are
largely felt in other states. Without federal intervention, then,
a state calculating how hard it should press in limiting
pollution has no incentive to consider resulting enhancements
of other states’ welfare. There is no reason to believe that
New Mexico, for example, would without federal pressure
tighten limits for in-state polluters an extra notch so that
tourists could gaze at clear skies above the Grand Canyon.
Even an anti-pollution commitment demonstrated by
“numerous stakeholder meetings and public workshops across
the West,” Intervenors Supp. Br. at 3, does not explain why
one state would, absent federal pressure, martyr itself for
another, or subject its electric power users (for example) to
additional costs for the benefit of out-of-state interests. Cf.
Maryland People’s Counsel v. FERC , 761 F.2d 768, 778
(D.C. Cir. 1985) (“[I]t is ridiculous to assume that” a
company would “engage in . . . self-sacrificing behavior”
“simply because there is nothing that stops it from doing so”).
The western states, though active, were not self-starting: “The
Commission was given the charge to . . . address[] regional
haze.” WRAP Report, at I.B. (emphasis added).
As a result, the regulatory scheme “is at least a
substantial factor motivating the [states’] actions,” and the
Center alleges an injury to its members that is “fairly
traceable” to that scheme. Tozzi v. U.S. Dep’t of Health and
Human Servs., 271 F.3d 301, 308 (D.C. Cir. 2001) (quoting
Cmty. for Creative Non-Violence v. Pierce, 814 F.2d 663, 669
(D.C. Cir. 1987)).
10
Moreover, as the western states are well aware, § 308’s
days as an unpromulgated rule are numbered. Nothing in
American Corn Growers suggests the contrary. Given zero
prospect of avoiding federal regional haze regulation
altogether, the states have reason to get ahead of the game by
devising their own plans, and securing EPA approval, now.
Under the Haze Rule, states adopting a § 309 alternative must
submit their SIPs by December 31, 2003, five years before
states operating under § 308 must submit theirs. 40 C.F.R.
§§ 51.309(c), 51.308(b). The amici states suggest that § 309’s
requirement of swifter action makes it less appealing,
showing—they suppose—that § 308 cannot have played a
causal role. But the distinction cuts the other way if the states
have reason to believe complying with § 309 will be more
appealing, as it may well, at least in part because the
emissions trading program is likely to enable sources to
achieve the desired cutbacks at lower total cost. Thus, even a
state believing that the BART rule emerging from remand will
be materially milder than its predecessor could reasonably
prefer the Annex approach and would have a regulatory
incentive to jump now, for fear of losing the Annex option.
Cf. Block v. Meese, 793 F.2d 1303, 1308 (D.C. Cir. 1986)
(finding standing on a showing that agency action “create[d] a
disincentive” from which plaintiffs suffered). So understood,
the earlier § 309 deadline spurs states promptly to implement
§ 309 rather than wait for § 308 to reemerge from remand.
EPA’s second jurisdictional challenge is that the Center’s
claims were ripe but defeated in American Corn Growers, and
are now precluded. In particular, EPA objects to the Center’s
arguments regarding EPA’s statutory authority to promulgate
the Annex Rule, the Annex Rule’s effect on state discretion,
and the Annex Rule’s compliance with § 309 reasonable
progress goals. These purely legal arguments, EPA contends,
were ripe for review when it promulgated the Haze Rule, as
that rule, especially §§ 308(e)(2) and 309(f), set out the
11
criteria for approving an Annex—criteria the Annex Rule
faithfully applied. EPA reads American Corn Growers as
having struck down only the group BART provisions
governing BART imposition, not those governing BART
alternatives. As the Center neither sought clarification nor
petitioned for rehearing, EPA regards this petition as a “back-
door challenge” to the Haze Rule, Resp. Br. at 22, filed well
past the Clean Air Act’s sixty-day, post-publication window.
See 42 U.S.C. § 7607(b)(1).
The Center, by contrast, reads American Corn Growers
as concluding “that the Haze Rule’s BART provisions are
contrary to . . . § 169A.” 291 F.3d at 8-9. By the Center’s
reading, we have already held §§ 308(e)(2) and 309(f) to be
invalid “BART provisions” because American Corn Growers
did not distinguish mandatory BART from BART
alternatives. Reply Br. at 10-11. Alternatively, the Center
argues that American Corn Growers implicitly regarded
issues revolving around §§ 308(e)(2) and 309(f) as unripe and
therefore to be dealt with in “a more choate situation in the
future.” Reply Br. at 12-13.
The exact parsing of American Corn Growers has in the
end no effect. While we limited the decision carefully,
“hold[ing] only that the Haze Rule’s treatment of
§ 169A(g)(2)’s benefit calculation and its infringement on
states’ authority . . . render the BART provisions of the rule
impermissible,” 291 F.3d at 9, we gave no intimation that a
better-than-BART standard, defined simply as achieving more
rapid progress than BART, could ever pass muster. On the
other hand, we never explicitly addressed better-than-BART
in the § 309 context, a hesitation reasonably based on the
possibility that the BART benchmark used to calculate
“better-than-BART” might in the end differ materially from
the original BART. See Nat’l Park Hospitality Ass’n v. Dep’t
of Interior, 538 U.S. 803, 812 (2003) (facial challenge to a
12
federal regulation is unripe if it “rel[ies] on specific
characteristics of certain types of [disputed] contracts to
support [its] positions”). As in fact it did: recall that whereas
the BART calculation struck down in American Corn
Growers applied the first four factors by source, the progress
imputed from BART to support the Annex “milestones” was
estimated on the basis of clusters of sources by source type.
Either way American Corn Growers is read, it plainly forbade
use of the original BART methodology in any § 169A
context. We thus turn to the merits.
* * *
The Center’s first argument on the merits is that § 169A
flatly bars the Annex Rule’s approach insofar as it deviates
from BART (correctly conceived). Under section 169A(b)(2),
EPA’s regulations must require SIPs
to contain such emission limits, schedules of compliance
and other measures as may be necessary to make
reasonable progress toward meeting the national
[visibility] goal . . . , including—
(A) . . . a requirement that each [BART-eligible
source] . . . shall [implement BART] as determined
by the State . . . .
42 U.S.C. § 7491(b)(2). We review EPA’s interpretation of
this provision under the standard framework of Chevron
U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467
U.S. 837 (1984). Provided the statute is ambiguous, we defer
to the agency’s interpretation as long as it is reasonable.
The Center asserts that § 169A(b)(2) can be read only one
way. That is, each SIP’s constituent measures must
“includ[e]” BART. That the Annex Rule—unlike
13
§ 169A—also applies to BART-ineligible sources is no
answer, the Center insists, at least to the extent EPA applies
the Annex Rule to BART-eligible ones. The Center also cites
excerpts from the Clean Air Act’s legislative history to
suggest Congress did not intend to give EPA a choice on
whether to include BART.
EPA, by contrast, sees “at least two permissible
interpretations” of § 169A(b)(2). Resp. Br. at 30. One is the
Center’s. The other is that each SIP’s “emission limits,
schedules of compliance and other measures” must
“include[e]” BART only “as may be necessary to make
reasonable progress toward” national visibility goals. Id.
(quoting 42 U.S.C. § 7491(b)(2)). If WRAP’s alternatives
would achieve greater progress than BART, then BART
would not be “necessary to make reasonable progress.” The
Ninth Circuit, EPA observes, upheld this reading in Central
Arizona Water Conservation District v. EPA, 990 F.2d 1531,
1543 (9th Cir. 1993).
The Center never explains why EPA must detach the
“inclu[sion]” of BART from the condition that it be
“necessary to make reasonable progress” to national visibility
goals. Nor can we discern a reason. Moreover, the Center’s
legislative history references all pertain to § 169A.
Congress’s addition of § 169B, however, clarified that the
focus of the Clean Air Act was to achieve “actual progress
and improvement in visibility,” 42 U.S.C. § 7492(b), not to
anoint BART the mandatory vehicle of choice. It is no
wonder, then, that § 169B(d)’s list of issues on which any
visibility transport commission is to make assessments and
reports, see 42 U.S.C. § 7492(d), includes no reference to
BART at all. Thus the Center has shown neither that
Congress’s language precluded non-BART alternatives where
BART wasn’t “necessary to make reasonable progress,” nor
that EPA’s reading is otherwise unreasonable.
14
EPA nevertheless must rationally exercise its § 169A
discretion to approve better-than-BART SIPs. See 42 U.S.C.
§ 7607(d)(9)(A). The Center argues that EPA did not,
because American Corn Growers invalidated “the key
premise on which EPA developed the Annex Rule—that
‘better than BART’ means ‘better than group-BART,’” Pet.
Br. at 37. The latter is the Center’s label for the hybrid BART
condemned in American Corn Growers: evaluating prospects
of visibility improvement by reference to all sources affecting
an area, but evaluating the other BART factors by reference to
individual plants or similar types of plants. Given that WRAP
developed the Annex using a variant of pre-remand BART,
the Center considers the ensuing emission limitations
irrational. In other words, EPA cannot under § 309 require
states to exceed invalid emission reductions (or, to put it more
exactly, limit them to a § 309 alternative defined by an
unlawful methodology).
By EPA’s contrary reading, American Corn Growers
only invalidated group (or hybrid) BART “when imposing
BART on specific sources.” Resp. Br. at 35. Whether this
distinction was relevant for purposes of ripeness, EPA
provides no reason why it signifies the substantive difference
EPA presses here. Once installed, the Annex Rule is not
merely advisory—covered states impose its requirements on
the Center’s members. The less stringent § 308 BART is, the
less stringent need be the state requirements under § 309.
EPA makes no effort to distinguish the original BART
calculations from those employed in choosing the Annex
Rule’s “milestones.” This omission was a sensible saving of
paper. Though the Annex Rule clustered sources by source
type in hypothesizing emissions reductions, it looked to the
impact of all emissions reductions to estimate visibility
progress, and thus remained a hybrid.
15
Consequently, we do not reach the Center’s additional
objections to the Annex Rule’s impact on state authority and
implementation of § 169A reasonable progress goals. The
petition for review is
Granted.