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National Environmental Development Association's Clean Air Project v. Environmental Protection Agency

United States Court of Appeals, District of Columbia Circuit

June 8, 2018

National Environmental Development Association's Clean Air Project, Petitioner
v.
Environmental Protection Agency, Respondent

          Argued April 2, 2018

          On Petitions for Review of Amendments to Regulations Promulgated by the United States Environmental Protection Agency

          Allison D. Wood and Shannon S. Broome argued the cause for petitioners. With them on the briefs were Felicia H. Barnes, Leslie Sue Ritts, and Charles H. Knauss. Stacy R. Linden entered an appearance.

          Andrew J. Doyle, Attorney, U.S. Department of Justice, argued the cause for respondent. With him on the brief were Jeffrey H. Wood, Acting Assistant Attorney General, and Carol S. Holmes, Attorney Advisor, U.S. Environmental Protection Agency.

          Before: Garland, Chief Judge, and Edwards and Silberman, Senior Circuit Judges.

          EDWARDS, SENIOR CIRCUIT JUDGE.

         This case involves a challenge by Petitioners National Environmental Development Association's Clean Air Project, American Petroleum Institute, and Air Permitting Forum ("Petitioners") to Amendments to Regional Consistency Regulations ("Amended Regulations"), 40 C.F.R. §§ 56.3-56.5 (2017), adopted by the Environmental Protection Agency ("EPA") pursuant to § 7601 of the Clean Air Act ("Act"), 42 U.S.C. § 7601. The Amended Regulations were issued in response to this court's decision in National Environmental Development Association's Clean Air Project v. EPA (NEDACAP I), 752 F.3d 999 (D.C. Cir. 2014).

         NEDACAP I arose after the Sixth Circuit issued Summit Petroleum Corp. v. EPA, 690 F.3d 733 (6th Cir. 2012). In Summit, EPA had in force regulations adopted pursuant to the Act concerning "major sources" of pollution. The Act requires an operator of a "major source" of pollution to obtain a permit for a fixed term. 42 U.S.C. § 7661a(a). Under EPA regulations, multiple pollutant-emitting activities are treated as a single stationary source if they are, inter alia, "adjacent." 40 C.F.R. § 71.2; id. § 52.21(b)(5)-(6). EPA had determined whether facilities were "adjacent" on the basis of the functional interrelationships between the facilities, and not simply the physical distance separating them. In Summit, however, the Sixth Circuit vacated an EPA determination that a natural gas plant and associated wells were one "source" for the purpose of permitting under the Act.

         EPA took exception to the Summit decision because it effectively overturned a nationally applicable EPA policy. In December 2012, EPA issued a Directive to the Regional Air Directors of each of the ten EPA regions stating that,

[o]utside the [Sixth] Circuit, at this time, the EPA does not intend to change its longstanding practice of considering interrelatedness in the EPA permitting actions in other jurisdictions. In permitting actions occurring outside of the [Sixth] Circuit, the EPA will continue to make source determinations on a case-by-case basis using the [agency's] three factor test.

NEDACAP I, 752 F.3d at 1003. One of the Petitioners here filed suit in this court challenging EPA's Summit Directive. The petitioner argued that by establishing inconsistent permit criteria applicable to different parts of the country, the Summit Directive violated the Clean Air Act and EPA regulations. We granted the petition for review, holding that the Summit Directive could not be squared with EPA's regulations. Id. We did not decide whether the Summit Directive also contravened the requirements of the Clean Air Act.

         Almost immediately after the decision in NEDACAP I was issued, EPA instituted rule making to amend the old Regional Consistency Regulations. In August 2016, EPA issued the Amended Regulations that are at issue in this case. To address the Summit issue, the Amended Regulations make it clear that

only the decisions of the U.S. Supreme Court and decisions of the U.S. Court of Appeals for the D.C. Circuit Court that arise from challenges to "nationally applicable regulations . . . or final action, " as discussed in Clean Air Act section 307(b) (42 U.S.C. 7607(b)), shall apply uniformly.

40 C.F.R. § 56.3(d).

         The Petitioners challenge the Amended Regulations principally on the ground that, under 42 U.S.C. § 7601(a), EPA is required to implement the Act uniformly nationwide and establish mechanisms for resolving judicially created inconsistencies. Petitioners' position is difficult to comprehend, however. For example, if the Sixth Circuit issues a decision that is contrary to EPA national policy, as happened in Summit, Petitioners contend that the agency cannot follow the approach announced in the Summit Directive. Does that mean that EPA must apply the Sixth Circuit decision in all regions? The statute does not require this. And if the Seventh Circuit subsequently issues a judgment that is at odds with the Sixth Circuit decision, would EPA be required to change its position again? Petitioners offer no viable answers.

         Under the Act, the D.C. Circuit has jurisdiction to hear petitions for review of "any . . . nationally applicable regulations promulgated, or final action taken" under the Act, as well as any other final agency action that is, inter alia, "based on a determination of nationwide scope or effect." 42 U.S.C. § 7607(b)(1). The Act assigns all other petitions for review - including most challenges to "any . . . final action . . . which is locally or regionally applicable" - to "the United States Court of Appeals for the appropriate circuit." Id. Under this statutory scheme, it is hardly surprising that judicial review of EPA actions sometimes results in circuit court rulings that are inconsistent with other circuit court rulings applicable to different EPA regions. As we explain below, the Amended Regulations reflect permissible and sensible solutions to issues emanating from intercircuit conflicts and agency nonacquiescence. We therefore defer to EPA's reasonable construction of the statute and deny the petitions for review.

         I. Background

         EPA is run by an Administrator, whose office is located in Washington, D.C. The agency also has ten regional offices, each of which is responsible for administering agency programs within the states in a designated region. "The Administrator is authorized to prescribe such regulations as are necessary to carry out his functions under [the Act] . . . [and] may delegate to any officer or employee of the Environmental Protection Agency such of his powers and duties under [the Act], except the making of regulations subject to section 7607(d) of this title, as he may deem necessary or expedient." 42 U.S.C. § 7601(a)(1). In addition, the Act requires the Administrator to "promulgate regulations establishing general applicable procedures and policies for regional officers and employees (including the Regional Administrator) to follow in carrying out a delegation." Id. § 7601(a)(2).

         The Act also provides that regulations with respect to delegations under § 7601(a)(1) must be designed

(A) to assure fairness and uniformity in the criteria, procedures, and policies applied by the various regions in implementing and enforcing the chapter;
. . . and
(C) to provide a mechanism for identifying and standardizing inconsistent or varying criteria, procedures, and policies being employed by such officers and employees in implementing and enforcing the chapter.

Id. § 7601(a)(2). Over the years, EPA Administrators have made many such delegations to facilitate agency operations.

         As noted above, judicial review of EPA actions is bifurcated between petitions for review that must be filed in the United States Court of Appeals for the D.C. Circuit and petitions that may be filed in the regional circuit courts. The Act provides:

A petition for review of action of the Administrator in promulgating any . . . nationally applicable regulations promulgated, or final action taken, by the Administrator . . . may be filed only in the United States Court of Appeals for the District of Columbia. A petition for review of the Administrator's action . . . which is locally or regionally applicable may be filed only in the United States Court of Appeals for the appropriate circuit. Notwithstanding the preceding sentence a petition for review of any action referred to in such sentence may be filed only in the United States Court of Appeals for the District of Columbia if such action is based on a determination of nationwide scope or effect and if in taking such action the Administrator finds and publishes that such action is based on such a determination.

Id. § 7607(b)(1); see also Dalton Trucking, Inc. v. EPA, 808 F.3d 875, 878-80 (D.C. Cir. 2015) (discussing the jurisdiction and venue provisions under the Clean Air Act). The Petitioners acknowledge that this statutory scheme "creates the possibility of geographically inconsistent judicial decisions on [Act] issues, " because different circuits may reach different results on the same question. Pet'rs' Br. 22.

         As outlined in the introduction to this opinion, the dispute in this case stems from the Sixth Circuit's decision in Summit. That case resolved a challenge to EPA's interpretation of the word "adjacent, " an interpretation the Sixth Circuit rejected. 690 F.3d at 735. EPA then issued the aforementioned Summit Directive in which the agency made it clear that it would not follow Summit in EPA regions outside of the Sixth Circuit. One of the Petitioners here challenged the Summit Directive in this court in NEDACAP I, arguing that the directive violated EPA's consistency obligations under both § 7601(a)(2) and the agency's then-effective regulations. 752 F.3d at 1003.

         The consistency regulations that were at issue in NEDACAP I read, ...


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