American Bar Association
Media Alerts
Media Alerts - WildEarth Guardians v. EPA - Tenth Circuit
Decrease font size
Increase font size
November 2, 2014
  WildEarth Guardians v. EPA - Tenth Circuit
Case Name: WildEarth Guardians v. EPA - Tenth Circuit

Headline: Tenth Circuit upholds EPA's decision allowing New Mexico, Utah, and Wyoming to use a regional cap-and-trade program instead of the Best Available Retrofit Technology ("BART") regulations.

Areas of Law: Environmental Law, Administrative Law

Issues Presented:

1. Did the EPA use proper standards of analysis when determining that the regional cap-and-trade program will achieve greater reasonable progress than BART regulations?

2. Could the EPA have reasonably concluded that the cap-and-trade program would be effective with only three states participating?

3. Was the EPA required to consider emissions from New Mexico's Escalante coal plant when approving the state's implementation plan?

Brief Summary:

Three states adopted a regional cap-and-trade program that would allow them to remain compliant with the Clean Air Act. They convinced the Environmental Protection Agency that this program would yield better results than the standard BART regulations, and the EPA approved its use and implementation. Several environmental groups filed petitions for review, arguing that the EPA should not have approved the program.

The Tenth Circuit considered each of the petitioners' arguments and held that the EPA had not acted arbitrarily or capriciously in finding that the regional cap-and-trade program would achieve greater reasonable progress than BART and that it would achieve reasonable progress towards eliminating visibility impairment, even though it did not consider emissions from New Mexico's Escalante coal plant in its analysis. The court denied the petitions for review.

Extended Summary:

The Clean Air Act requires the Environmental Protection Agency to establish regulations requiring states to develop implementation plans to improve visibility and adopt, maintain, and enforce air quality standards. The EPA then monitors the states' implementation plans to ensure compliance. Once approved, those implementation plans become enforceable as federal law under 42 U.S.C. §§ 7413, 7604.

Congress also tasked the EPA with establishing a visibility transport commission to study regional haze in the Grand Canyon area and recommend solutions to reduce it. The EPA went a step further by establishing a commission to consider visibility in the greater Colorado Plateau area. This commission's role was passed onto the Western Regional Air Partnership, which made recommendations that resulted in the Regional Haze Rule. Under this rule, the nine states contributing to the regional haze were required to submit an implementation plan for reducing emissions. States could either apply the Best Available Retrofit Technology ("BART") approach under 40 C.F.R. § 51.308 or, alternatively, use a cap-and-trade program recommended by the transport commission if the states would expect better results than they would under BART regulations. This approach is authorized by 40 C.F.R. § 51.309, and is therefore referred to as a "309 program".

The states of New Mexico, Utah, and Wyoming, the County of Bernalillo, and the City of Albuquerque (collectively referred to as "participants") opted to participate in the 309 program. They convinced the Environmental Protection Agency that this program would yield better results than they would achieve under BART regulations, and the EPA approved their use of the 309 program in lieu of BART. WildEarth Guardians, Heal Utah, National Parks Conservation Association, Powder River Basin Resource Council, and Sierra Club (collectively referred to as "petitioners") filed petitions for review, arguing that the EPA should not have approved the 309 program.

The Clean Air Act authorizes judicial review of the EPA's approval of state implementation plans. The court noted that its standard of review was governed by the Administrative Procedure Act, which allows the court to reverse agency action only if it is "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." 5 U.S.C. § 706(2)(A). If the EPA considered the relevant data and rationally explained its decision, its decision would not be overturned. The court further noted that administrative agencies are given great deference when operating under an "unwieldy and science-driven statutory scheme", citing Nat'l Ass'n of Clean Air Agencies v. EPA, 489 F.3d 1221, 1229 (D.C. Cir. 2007).

The petitioners made three arguments against the EPA's approval of the 309 program. The first argument was that the 309 program was not better than the standard BART rules. The Regional Haze Rule, 40 C.F.R. § 51.308(e)(2), outlines a three-step process for determining if an alternative program is better than BART. It requires establishing a BART benchmark and predicting emission reductions if BART were implemented, predicting the emission reductions if the alternative program were implemented, and comparing the two. The petitioners argued that this process was not followed because the BART benchmark inappropriately adopted the presumptive emission rate in Appendix Y of the BART guidelines, the 309 program participants misapplied the "clear weight of the evidence" standard, and the participants overstated the effectiveness of the 309 program through inappropriate use of qualitative factors. The court considered each of these sub-arguments in turn and held that the better-than-BART determination was not arbitrary or capricious.

In 2006, the EPA amended the Regional Haze rule and recognized that "the [Appendix Y] presumptions represent[ed] a reasonable estimate of a stringent case BART." 71 Fed. Reg. at 60,619. The EPA decided that states could rely on them when attempting to meet requirements other than BART and avoid the need to perform a source-by-source emissions prediction. The Appendix Y presumptive emission rate was 0.15 pound per million British thermal units.

The petitioners argued that the participants should have determined a BART benchmark by performing a source-by-source analysis of each BART-regulated source, rather than relying on the Appendix Y presumptive rate. The court declined to consider this argument because it was untimely. It explained that, under 42 U.S.C. § 7607(b)(1), a petitioner only has 60 days to bring a lawsuit after an agency acts. In this instance, the petitioners had 60 days from the EPA's publication of the amended Regional Haze Rule. It was published to the Federal Register on October 13th, 2006. The petitions for review were not filed until December 2012 and January 2013, more than six years later. The court therefore lacked jurisdiction over the petitioners' challenge to the EPA regulation authorizing Appendix Y's use in lieu of a source-by-source determination, and so declined to consider it.

The petitioners also argued that the EPA should have considered whether the use of category-wide information was appropriate under 40 C.F.R. § 51.308(e)(2)(i)(C), which mandates the use of source-specific and category-wide information "as appropriate". According to petitioners, certain source-specific and category-wide information demonstrated that the BART benchmark grossly underestimated the sulfur dioxide reductions possible through use of the BART system. This information was provided by Ms. Stamper, the petitioners' expert witness. The court disagreed with the petitioner's contentions because, when the Western Regional Air Partnership submitted its better-than-BART determination in 2010 and the 309 program participants relied on the determination in their 2011 implementation plans, the data cited by the petitioners was not available. The EPA could reasonably conclude that inclusion of this data was infeasible because the determination resulted from years of coordinated efforts that took place before much of the petitioners' data existed. The court concluded that this determination was not arbitrary or capricious, comparing the circumstances to those in San Luis & Delta-Mendota Water Auth. v. Jewell, 747 F.3d 581, 620-21 (9th Cir. 2014) (holding that use of an imperfect analysis is not arbitrary or capricious when removal of those imperfections would not be feasible). The court further reasoned that reliance on Ms. Stamper's data would have been invalid under EPA regulations allowing for the use of the presumptive benchmark, noting that imprecision is inherent in simplifying assumptions such as those used to establish that benchmark.

The petitioners' next sub-argument was that the method used to compare the 309 program's effectiveness to the effectiveness of the BART program was improper. They reasoned that the EPA should not have compared the 309 program as a whole to BART but, rather, should have compared the 309 program's "milestones" to the effectiveness of BART. The court declined to entertain the argument because it was only raised in the petitioners' reply brief and was not mentioned in their opening brief. The court also declined to hear the argument because it was "unexhausted". Only "an objection to a rule or procedure which was raised with reasonable specificity during the period for public comment (including any public hearing) may be raised during judicial review." 42 U.S.C. § 7607(d)(7)(B). The petitioners failed to raise the issue in the EPA proceedings. As such, the issue was unexhausted and could not be heard.

The petitioners further argued that the consideration of qualitative factors when determining its effectiveness was improper, contending that a fully quantitative approach was required by 40 C.F.R. § 51.308(e)(3). The court rejected this argument. In 2006, the EPA amended 40 C.F.R. § 51.308(e)(2)(i) to provide a "clear weight of the evidence" standard as an alternative to the quantitative approach. The EPA clarified this standard as one that "attempt[s] to make use of all available information and data which can inform a decision while recognizing the relative strengths and weaknesses of that information in arriving at the soundest decision possible." Even though the EPA used quantitative examples in crafting that rule, the court held that this did not preclude the use of qualitative factors.

The court then considered each of the four factors the petitioners argued was qualitative to determine the reasonableness of the EPA's decision to utilize them. When comparing the effectiveness of BART to the 309 program, the EPA included "all sources with emissions greater than 100 tons/year of [sulfur dioxide]." This included sources not otherwise subject to BART regulation. The petitioners argued that the EPA should have only considered BART-eligible emission sources. The court disagreed, holding that the EPA could reasonably have interpreted 40 C.F.R § 51.308(e)(2)(i)(D) and (E) as allowing the use of all sources regulated by the 309 program.

The petitioners also argued that the EPA should not have considered emissions reductions from new sources of emissions, as those already would not have been subject to BART; they are regulated separately under the Clean Air Act. The court disagreed, reasoning that the EPA could reasonably conclude that the 309 program would "go beyond the existing regulatory process" in reducing emissions from new sources. It recognizes the EPA's two-fold strategy of regulating emissions for new sources while also encouraging voluntary reductions in emissions through the 309 program. In light of that strategy, it held that the EPA's decision to include emissions from new sources was not arbitrary or capricious.

The petitioners then argued that the EPA should not have relied on the purported benefits of a mass-based cap on emissions because it could not outperform BART. The mass-based cap was designed to allow for an increase in production of emissions-producing sources to accommodate an increased demand for electricity. It assumed that current sources were producing at 85% of their capacity, and estimated potential future emission levels using that assumption. The petitioners argued that many such sources were operating at far less than 85% capacity and, as such, those sources could ultimately exceed those estimated emission levels. The court noted that the EPA had a "reasonable foundation" for disagreeing with the petitioners' conclusion that this made the 309 program less effective than BART, and held that the EPA's decision was not arbitrary or capricious.

The petitioners' final sub-argument was that the EPA should not have considered early reductions in emissions when comparing the 309 program to BART. These were emission reductions that were achieved prior to formal implementation of the 309 program. It reasoned that the early reductions that had already been achieved could not have been causally linked to the 309 program, so they were impermissibly considered when comparing the program's effectiveness to that of BART regulation. The court sided with the EPA, noting that it was not required to show a causal relationship between the already achieved emissions reductions and the 309 program. The already-achieved reductions "tended to support the soundness of a strategy encouraging early reductions through the 309 program" and the EPA's decision to consider them was not arbitrary or capricious.

The second of the petitioners' three main arguments was that the 309 program should not have been approved because only three of the nine eligible states opted to participate in it, while the other six chose BART regulation. The petitioners reasoned that the 309 program could not be effective if only three states implemented it. The EPA opposed the argument as an untimely attack on the Regional Haze Rule. The court disagreed, considering it a timely challenge to the EPA's approval of the states' implementation plans. The court then concluded that the argument was invalid because neither the Clean Air Act nor the EPA's own regulations required participation by a certain number of states or tribes. It examined the EPA's rulemaking process and found that the EPA had not imposed any requirement that a minimum number of states participate.

The court considered the petitioners' argument that the 309 program will be ineffective with so few states participating. Petitioners argued that, even if the EPA wasn't precluded from allowing only three states to participate, it should not have allowed the program to go forward for lack of effectiveness. The court noted that states not participating in the 309 program would still be regulated under BART and held that the EPA could have reasonably concluded that the two different means of regulation would, together, be effective. The petitioners challenged the factual basis for that conclusion, noting that the three states generating the most emissions (California, Nevada, and Arizona) opted not to participate in the program, while the states that did choose to participate only contribute 36% of the emissions over the Colorado Plateau. The program also excluded dozens of coal-fired power plants while only including 15. The court held that, these arguments notwithstanding, the EPA could still have reasonably concluded that the 309 program would achieve the stated purpose of making "'reasonable progress' toward improvement of visibility over the Colorado Plateau."

The petitioners also argued that the exclusions from the 309 program prevented it from qualifying as a regional program, and that the program must be a regional program to satisfy statutory and regulatory purposes. The court disagreed with the assertion that the 309 program was not a regional program, noting that 42 U.S.C. § 7492(c)(1) does not require a minimum number of state participants for a program to qualify as a "regional program".

The petitioner's next sub-argument was that the EPA changed its position on the "critical mass" issue without sufficient explanation, making its decision arbitrary and capricious. The court agreed that unexplained deviations from past practices can indicate an arbitrary and capricious decision, but noted that such an inconsistency first requires analyzing the agency's interpretation. Nat'l Cable & Telecomms. Ass'n v. Brand X Internet Servs., 545 U.S. 967, 981 (2005). In this instance, the court found that the EPA never made a definitive statement that the 309 program required a "critical mass of participating states" to succeed. Since there was no prior policy, there was no inconsistency and the approval of the 309 program was not arbitrary or capricious.

The petitioners' third main argument was that approval of the implementation plans was inappropriate because the EPA failed to consider emissions from the Escalante Coal Plant, New Mexico's second-largest non-BART coal plant. In considering this argument, the court examined the "regulatory and factual setting" for New Mexico's implementation plan. 40 C.F.R. § 51.308(d)(1) requires states to establish reasonable progress goals that would improve visibility on the most impaired days while not reducing visibility on the least impaired days. States must first consider the cost of compliance, the amount of time needed for compliance, the energy and non-air quality environmental impacts of compliance, and remaining useful life of potentially affected sources. Id. § 51.308(d)(1)(i)(A). States must then determine the rate of required progress by comparing the baseline visibility with natural visibility conditions expected by 2064. Id. § 51.308(d)(1)(i)(B). If a state cannot achieve the uniform rate of progress, "it must demonstrate that a slower rate of progress is reasonable and that a greater rate of progress is unreasonable". Id. § 51.308(d)(1)(ii).

New Mexico determined that the uniform rate of progress would not be "reasonably achievable". It used a source-specific study by the Western Regional Air Partnership to argue that it could not achieve natural visibility conditions by 2064. It proposed a less ambitious reduction in emissions. When that proposal came under fire, the state offered to consider additional emission reductions in its analysis for 2013. It did so, but did not consider emissions from the Escalante Coal Plant.

The EPA argued that petitioners had not exhausted the argument and so could not bring it before the court. The court disagreed, holding that the petitioners had properly exhausted the argument because of prior comments to the EPA that had put them on notice. The form of the comments was imperfect. The petitioners did not initially argue that the EPA was required to analyze the Escalante plant, nor did they cite to 40 C.F.R. § 51.308(d). The court still held that the comments were "adequate notification of the general substance of the complaint", citing the standard adopted by S. Coast Air Quality Mgmt. Dist. v. EPA, 472 F.3d 882, 891 (D.C. Cir. 2006).

The crux of the petitioners' argument was that New Mexico should have included the Escalante plant in its reasonable-progress analysis, and that the EPA's approval of the state's implementation plan was unreasonable without that inclusion. The court disagreed. It noted that the regulations outlining the four-factor reasonable-progress analysis did not include the source-specific analysis that petitioners insisted was necessary. Rather, that language was a part of the better-than-BART analysis, a distinct and unrelated analysis. Likewise, nothing in the Clean Air Act or the Regional Haze Rule required a source-specific analysis in this instance.

Having rejected all of the petitioner's arguments, the court held that the Environmental Protection Agency did not act arbitrarily or capriciously when it approved the participants' implementation plans. It denied the petitions for review.

To read the full opinion, please visit:

https://www.ca10.uscourts.gov/opinions/12/12-9596.pdf

Panel: Bacharach, Seymour, Murphy

Date of Issued Opinion: October 21, 2014

Docket Number: No. 12-9596

Decided: Petition for review of final decisions issued by the United States Environmental Protection Agency was denied.

Counsel:
Jenny K. Harbine, Earthjustice, Bozeman, Montana (John Barth, Hygiene, Colorado, and Ashley D. Wilmes, WildEarth Guardians, Boulder, Colorado, with her on the briefs), for Petitioners.

Chloe H. Kolman, United States Department of Justice, Environment & Natural Resources Division, Washington, D.C. (Stephanie J. Talbert, United States Department of Justice, Environment & Natural Resources Division, Washington, D.C., Robert G. Dreher, Acting Assistant Attorney General, United States Department of Justice, Environment & Natural Resources Division, Washington, D.C.; M. Lea Anderson, Of Counsel, United States Environmental Protection Agency, Washington, D.C.;
Matthew C. Marks, Of Counsel, United States Environmental Protection Agency, Washington, D.C.; Brian Tomasovic, Of Counsel, United States Environmental Protection Agency, Dallas, Texas; Sara L. Laumann, Of Counsel, United States Environmental Protection Agency, Denver, Colorado, with her on the brief), for Respondent.

E. Blain Rawson, Ray Quinney & Nebeker, P.C., Salt Lake City, Utah (Emily Smith Loeffler, Quinney & Nebeker, P.C., Salt Lake City, Utah, Michael G. Jenkins, Assistant General Counsel, PacifiCorp Energy with him on the brief), for Intervenor PacifiCorp Energy.

Matthias L. Sayer, Assistant Attorney General, Wyoming Office of Attorney General, Cheyenne, Wyoming (Jay A. Jerde, Deputy Attorney General, Wyoming Office of Attorney General, Cheyenne, Wyoming, with him on the brief), for Intervenor State of Wyoming.

Christopher L. Colclasure, Holland & Hart LLP, Denver, Colorado, for Intervenor Basin Electric Power Cooperative;

Richard L. Alvidrez and Robert H. Clark, Miller Stratvert P.A., Albuquerque, New Mexico; Kallie H. Kuehl, Corporate Counsel, Albuquerque, New Mexico, on the brief for Intervenor Public Service Company of New Mexico.

Jeffrey M. Kendall, General Counsel and William G. Grantham, Assistant General Counsel, for New Mexico Environment Department, on the brief for Intervenor New Mexico Environment Department.

Carol Parker, Assistant City Attorney and Adelia W. Kearny, Deputy City Attorney, Albuquerque, New Mexico, on the brief for Intervenor City of Albuquerque.

H. Michael Keller and Mary Jane E. Galvin-Wagg, Van Cott, Salt Lake City, Utah; Mason Baker, General Counsel, Salt Lake City, Utah, on the brief for Intervenor Utah Associated Municipal Power Systems.

John E. Swallow, Utah Attorney General and Christian C. Stephens, Assistant Attorney General, Salt Lake City, Utah; Craig W. Anderson, Division Chief and Assistant Attorney General, Environment Division, Utah Attorney General's Office, Salt Lake City, Utah, on the brief for Intervenor Utah Division of Air Quality.

Paul M. Seby and Marian C. Larsen, Seby Larsen LLP, Denver, Colorado, on the brief for Amicus Curiae American Coalition for Clean Coal Electricity.

Author: Bacharach

Case Alert Author: Ian M. Alden

Case Alert Circuit Supervisor: Barbara Bergman

    Posted By: Dawinder Sidhu @ 11/02/2014 01:52 PM     10th Circuit  

FuseTalk Enterprise Edition - © 1999-2018 FuseTalk Inc. All rights reserved.

Discussion Board Usage Agreement

Back to Top