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Aug 11 2016

D.C. Circuit Court Decision Highlights the Power of the EPA

August 8, 2016 (Houston)

James SmithBy James Smith – “Environmental Alert” (Schirrmeister, Diaz-Arrastia, Brem LLP)


The U.S. Court of Appeals for the District of Columbia Circuit dismissed industry challenges to the Major Boilers Rule, the Area Boilers Rule, and the Commercial/Industrial Solid Waste Incinerators Rule.  In one particular component of its rejection of industry’s challenge, the D.C. Circuit Court highlighted the power of the EPA in implementing environmental statutes.

Setting MACT for Major Sources

For major boilers, the Clean Air Act requires the EPA to establish and require emission limits based on maximum available control technology (“MACT”) to control specified hazardous air pollutants.  As part of the MACT process, EPA must develop minimum MACT standards that require new sources to control emissions at least as well as the best performing similar sources.  For existing sources, MACT standards are based on the top 12% of sources or the average of all sources, depending on the number of sources in a given category or subcategory.

EPA’s Pollutant-by-Pollutant Approach

In its identification of the best performing sources, and of the top 12% performing sources, the EPA took a pollutant-by-pollutant approach.  One source could be best performing for one hazardous pollutant and another source best for another pollutant.  The EPA then set MACT standards based on a hypothetical source, which did not exist in reality, and which met MACT standards for each pollutant.

Not surprisingly, industry objected to this approach, calling it inconsistent with the statutory language, arbitrary and capricious.  Industry argued that proper statutory interpretation required the EPA to base MACT standards on actual performing sources, as the statute says that the EPA should look to “the emissions control that is achieved in practice by the best controlled similar unit.”

When Faced with Two Reasonable Approaches, EPA Wins

The D.C. Circuit Court determined that industry’s proposed interpretation was reasonable and that the EPA’s interpretation, that it could use the pollutant-by-pollutant approach, was also reasonable.  Under longstanding U.S. Supreme Court guidance, the result is clear.  When multiple interpretations of an agency’s enabling statute are reasonable, the agency gets to choose.  The D.C. Circuit Court upheld the EPA’s pollutant-by-pollutant approach in setting MACT standards.

Environmental laws are known (some say “notorious”) for being open to multiple interpretations.  At times, the language is unclear; at other times, the specific issue is not actually addressed in the statute.  In these cases, the EPA gets to choose the final interpretation, as long as the EPA chooses one of the reasonable interpretations.  Courts do not evaluate if the EPA’s choice is the most reasonable, or if the EPA’s choice promotes the best policy; those evaluations are left to the EPA.

Rules May Get Stricter

This D.C. Circuit Court panel of three Republican appointed judges rejected all of industry’s challenges.  Environmental groups also challenged the rules, and the Court agreed with the environmental groups on some issues.  The Court sent the rules back to the EPA for further evaluation, which may result in even stricter rules.

For a copy of the DC Circuit Court’s decision, click here.

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