Regulatory Developments, Special Topics in Environmental Management

Court Denies Petition Compelling EPA to Issue Nationally Uniform Rules

A panel of the U.S. Court of Appeals for the D.C. Circuit denied an industry petition that sought to compel the EPA to issue nationally uniform regulations to resolve differences created by inconsistent decisions by regional federal circuit courts. Generally, the panel found that the Clean Air Act (CAA) section the petitioners relied on to support their argument addresses only inconsistencies in regulations and not inconsistencies arising from rulings by different courts. The panel’s opinion affirms the authority of EPA regional offices to act independent of EPA policy if such action is required by the circuit court that has jurisdiction over that EPA region. Furthermore, the panel agreed with an August 2016 rule in which the EPA stated that decisions only by the U.S. Supreme Court and the D.C. Circuit on the Agency’s implementation of nationally applicable CAA regulationsmust be applied uniformly nationwide.

Summit Directive

The case was spawned by a 2012 opinion by the 6th Circuit (Summit Petroleum Corp. v. EPA), which found that the EPA could not require a single CAA Title V permit for oil and gas facilities that are interrelated by function—that is by pipelines covering a very large area—and may instead issue permits only when facilities are geographically adjacent, that is, when they are physically abutting each other. The ruling voided the long-standing EPA policy on functional interrelatedness. The Agency promptly responded with a directive (the Summit Directive), which informed its regional air administrators that the 6th Circuit’s ruling applied only in the 6th Circuit’s area of jurisdiction and that the functional interrelatedness policy would continue to apply in all other EPA regions.

2016 Amendments

The Summit Directive was challenged in the D.C. Circuit by an industry petitioner. The court agreed that the directive “could not be squared” with EPA’s CAA Regional Consistency regulations. But the court did not rule on whether the Directive conflicted with the CAA itself. The EPA took the cue and quickly initiated rulemaking to amend the Regional Consistency regulations. In its final amendment, issued August 2016, the Agency stated: “… 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.”

Court Puzzled by Petition

The current case—National Environmental Development Association’s Clean Air Project et al. v. EPA— revolves around CAA Section 7601(a)(2), which directs the EPA to “promulgate regulations establishing general applicable procedures and policies for regional officers and employees.” The section further states that such regulations “shall be designed to assure fairness and uniformity in the criteria, procedures, and policies applied by the various regions in implementing and enforcing this chapter.”

Petitioners asserted that the 2016 amendment violated Section 7601(a)(2), but the D.C. Circuit panel was not persuaded that the EPA had acted outside its statutory authority. In its opinion, the panel states quickly that the petitioners’ position is “difficult to understand.” The panel explains:

“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.”

Section Soes Not Address Court Rulings

The petitioners contended that Section 7601(a)(2) requires the EPA to implement the CAA uniformly nationwide and establish a mechanism for resolving inconsistences created by court decisions.

The panel answers that nothing in the language of Section 7601(a) addresses judicially created inconsistencies in the application of EPA policies.

“Indeed, the fairness and uniformity requirements of section 7601(a)(2) apply only to EPA regulations promulgated for ‘regional officers and employees (including the Regional Administrator) to follow in carrying out a delegation under paragraph (1), if any,’” writes the panel. [emphasis added]

The panel continues: “In short, because the Administrator does not have any ‘powers’ to disobey court decisions issued within EPA regions, section 7601(a) does not even allow for the issuance of such regulations. And section 7601(a)(2) does not come into play in the absence of an Administrator’s lawful delegation. Therefore, the plain language of the Act surely does not support Petitioners’ position.”

Judicial Inconsistencies Allowable

The Petitioners further argued that section 7601(a) was intended to resolve the problem of inconsistent judicial decisions generated by another CAA Section (7607), which specifically addresses judicial review and the jurisdiction of the D.C. Circuit. The petitioners contended that the 2016 regulations violate Section 7601(a)(2) because they do not promote uniformity, but rather permit regional offices to take actions that may result in inconsistent application of the Act “if such [action] is required in order to act in accordance with a federal court decision.”

The panel responded: “Petitioners’ arguments seem to imply that EPA’s construction of section 7601(a) cannot be credited because intercircuit conflicts are inherently bad and, therefore, we should not assume that Congress meant to enact such a statutory scheme,” said the panel. “The main point here is that section 7601(a)(2) addresses only delegation-created inconsistencies, whereas section 7607(b)(1) obviously allows for judicially created inconsistencies. Contrary to what Petitioners suggest, these two provisions do not intersect. Indeed, in their brief to this court, Petitioners concede that section 7601(a)(2) was meant to address delegation-created inconsistencies, not judicially created inconsistencies.”

Chevron Deference

The panel also found that EPA’s interpretation of the CAA was entitled to the Chevron deference. First, the panel noted, intercircuit conflicts because of inconsistent judicial decisions are inevitable. “The Act does not instruct EPA how to address such intercircuit conflicts or how to implement the ‘fairness’ and ‘uniformity’ provisions of section 7601(a)(2),” the panel notes. This created a statutory gap.

“However, EPA has the delegated authority to enforce these statutory provisions and to fill any perceived gaps in the statute,” states the panel. “In our view, the Amended Regulations reasonably fill the statutory gaps, and, therefore, EPA’s construction of the Act is entitled to deference.”

The D.C. Circuit’s opinion is here.