DC Circuit Issues Two Important Clean Air Act and Administrative Law Decisions


Environmental_Protection_Agency_logo-275x300The U.S. Court of Appeals or the District of Columbia has recently issued two important rulings on the Clean Air Act in particular and administrative law in general: California Communities Against Toxics, et al., v. EPA and Murray Energy Corporation v. EPA.

The Battle of the Memos: Seitz Makes Way for Wehrum
In the California Communities case, decided on August 20, 2019, the court held, in a 2 to 1 decision, that a petition to review a change in EPA policy announced in an agency memorandum which reversed an agency policy announced nearly 25 years ago in another agency memo must be rejected because the memo at issue was not a “final agency action” subject to the Administrative Procedure Act (APA). In 1995, the “Seitz Memo,” which interpreted Section 112 of the Clean Air Act and addresses the regulation and control of hazardous air pollutants from stationary sources, stated that once a source of toxic emissions is classified as “major,” the facility remains subject to regulation as a major source even if the facility makes changes to the facility to limit its potential to emit such toxics below the major source threshold. Then, in 2018 under a new administration, the “Wehrum Memorandum” was issued which reversed this policy and its interpretation of the law. (Both memos were issued without any kind of advance notice or opportunity to comment.) If a source takes steps to limit its potential to emit, then it may be regulated as an area source, and subject to less rigid regulation. The court majority held that the Wehrum Memo was not a final agency action and was not subject to judicial review when it was measured against both prongs of the “finality test” devised by the Supreme Court in the cases of Bennet v. Spear, 520 US 154 (1997) and US Army Corps of Engineers v. Hawkes, 136 S. Ct. 1807 (2016). While the memo undoubtedly represented the consummation of the agency’s decision-making process, the memo had no direct and appreciable legal consequences, and not therefore being a final action, the case must be dismissed. Judge Rogers filed a strong dissenting opinion.

Secondary Ozone Standards Get Remanded
The Murray Oil Corporation case was decided on August 26, 2019. In a Per Curiam ruling, the court reviewed and partially upheld EPA’s 2015 revisions to the primary and secondary ozone standards. By law, EPA is required to periodically review and update the national ambient air quality standards (NAAQS) for ozone. The primary standards are required to protect public health, and the secondary standards must protect the public welfare. The ozone NAAQS have been promulgated in 1979, 1997, 2008 and 2015, and the standards are tightened every year, and they must be implemented by the states subject to EPA oversight. A number of states and industry groups challenged the standards as basically being unattainable, but these challenges were rejected by the court, which held that EPA’s findings were supported by epidemiological evidence and exposure and risk assessments. Similarly, the environmental petitioners’ arguments that the primary standard was insufficiently protective were rejected by the court. However, with respect to the secondary public welfare standard, the court held that EPA failed to justify its failure to explain why it departed from the technical advice and recommendations made by an advisory committee, the Clean Air Scientific Advisory Committee (CASAC), contrary to the requirements of the Clean Air Act. The secondary standards were remanded to the agency for further consideration (but not to consider the economic costs of implementation, an issue which has been foreclosed by the Supreme Court). Lastly, the court vacated a unique “grandfathering rule,” located at 40 CFR Section 51.166(i)(11) which would permit the processing of preconstruction permit applications on file when the 2015 revised NAAQS became effective. EPA argued that two provisions of the Act, 42 USC Section 7475(a) and 42 USC Section 7475(c), were ambiguous as to how to treat such applications, but the court held that the law was not ambiguous, and the agency could not rely on “Chevron deference” to justify its reading of the law. The rule was vacated.