EM Feature

30 August 2002EM

EMEMFeature

INTRODUCTIONIn 1999, the U.S. Environmental Protection Agency (EPA) pro-mulgated the Regional Haze Rule1 pursuant to Section 169Aof the Clean Air Act (CAA),2 which sets a national goal of rem-edying visibility impairments in Class I areas resulting fromman-made air pollution and directs EPA to issue regulationsto reach that goal. Class I areas include all national parks,wilderness areas, and memorial parks larger than 5000 acres,

BART Sent Back tothe Drawing BoardBART Sent Back tothe Drawing BoardA Summary of theDC Circuit’s Opinion onthe Regional Haze Rule

by Debra J. Jezouit and Joshua B. Frank

In May, the DC Circuit Court of Appeals handed

down a decision vacating a portion of the Regional

Haze Rule. The court determined that the portion of

the rule dealing with Best Available Retrofit

Technology (BART) contravened the language of the

Clean Air Act and did not give enough discretion to

the states in applying it. However, EPA’s natural

visibility and no degradation goals, and its reasonable

progress criteria, were upheld and found not to be

arbitrary and capricious. This article provides a

summary of the DC Circuit’s opinion.

EMAugust 2002 31

and national parks larger than 6000 acres thatwere in existence on August 7, 1977. Pursuant tothe statutory directive, the Regional Haze Rulerequires each state to develop a strategy for achiev-ing EPA’s visibility goals, which include improv-ing visibility on the 20% most-impaired days,ensuring that there is no degradation in visibilityduring the 20% clearest days, and determiningthe annual rate of visibility improvement thatwould lead to “natural visibility” conditionswithin 60 years after the states develop regionalhaze control plans (i.e., by 2064). The rule fur-ther requires identification of all major station-ary sources subject to Best Available RetrofitTechnology (BART) requirements based on thecollective benefits to visibility in Class I areasof controlling those sources.

On May 24, 2002, a three-judge panel of theU.S. Court of Appeals for the District of Colum-bia Circuit (DC Circuit) issued an opinion in theappeal of the Regional Haze Rule, in part vacat-ing the rule and in part upholding it.3 The courtdetermined that the portion of the rule dealingwith BART contravened the language of the CAAand did not give enough discretion to the statesin applying it. However, EPA’s regional haze goalsset forth in the rule—natural visibility and no deg-radation—and the agency’s reasonable progresscriteria were upheld and found not to be arbi-trary and capricious. In addition to the Ameri-can Corn Growers Association, which was namedin the suit, other industry petitioners includedgroups representing coal companies, railroads,and coal-fired electric generators. The environ-mental group Sierra Club also petitioned for re-view of the rule, regarding EPA’s “reasonableprogress” criteria, and interveners included thestates of Maine, New Hampshire, Vermont, andMichigan, and Native American tribes. While in-dustry petitioners and the state of Michigan ar-gued against the rule because it would force theinstallation of expensive pollution control equip-ment, all other parties, including the states, ar-gued that the rule is an effective and cost-efficient

method of controlling regional haze.

SUMMARY OF REGIONAL HAZE DECISIONThe issues addressed by the court in this proceeding included(1) whether EPA acted contrary to law in establishing a grouprather than a source-by-source approach to BART determina-tions; (2) whether EPA acted without legal authority and in anarbitrary and capricious manner by promulgating the “natural

visibility goal” and “no degradation requirement”; and (3)whether EPA failed to set reasonable criteria for measuring orassuring “reasonable progress,” and whether the agency actedcontrary to law in extending the statutory deadline for sub-mission of the state regional haze control plans.

First, the court concluded that the rule’s BART provisionsare contrary to the text, structure, and history of the CAA be-cause they unduly constrain the authority delegated to the statesby the CAA. According to the court, requiring states to installBART without empirical evidence that the technology will im-prove visibility conditions in Class I areas, and not allowingstates to make exceptions, impermissibly constrains the states’broad role in the State Implementation Plan (SIP) process.Accordingly, the court vacated and remanded on the issue ofthe rule’s “group BART” approach and its infringement on states’authority under the CAA. Second, the court held that EPA’spromulgation of a “national visibility goal” and a “no degrada-tion requirement” is within its discretion and is a consistentand reasonable interpretation of the CAA. Third, the courtdeclined to rule on whether EPA had gone far enough to meetits statutory responsibilities, and whether it contravened theCAA by allowing three years instead of one year to file regionalhaze SIPs. Both issues were considered premature because EPAcould change its position on remand of the BART issue.

“Group BART”Section 169A of the CAA requires states to determine whichBART-eligible sources (i.e., certain major stationary sources builtbetween August 1962 and August 1977) contribute to visibilityimpairment in Class I areas. To make this evaluation, statesmust consider (1) the cost of compliance; (2) the energy andnon-air quality environmental impacts of compliance; (3) anyexisting pollution control technology in use at the source; (4)the remaining useful life of the source; and (5) the degree ofimprovement in visibility that may be reasonably anticipatedto result from the use of such technology. EPA’s Regional HazeRule requires states to address the first four criteria on an indi-vidual basis, but the fifth criteria on a group basis. The rulerequires states to “find that a BART-eligible source is ‘reason-ably anticipated to cause or contribute’ to regional haze if itcan be shown that the source emits pollution within a geo-graphic area from which pollutants can be emitted and trans-ported downwind to a Class I area.”4 The rule further requiresstates to assess the degree of visibility improvement on thebasis of emission reductions achievable from all sources in theregion of the Class I area. Industry petitioners argued that thearea-wide treatment of the fifth criteria (i.e., “group BART”) iscontrary to the language, statutory structure, and legislativehistory of Section 169A of the CAA and unlawfully constrainsthe states by requiring BART controls at sources without anyempirical evidence of the particular source’s contribution tovisibility impairment in a Class I area.

EM Feature

32 August 2002EM

Despite EPA’s arguments that its bifurcation of the fivefact- ors should be upheld because the CAA was unclear,the court agreed with the industry petitioners that treatingthe fifth factor differently than the other four was contraryto the text, structure, and legislative intent of the CAA. Ac-cording to the court, all five factors work together to helpthe states determine what technology is required at an in-dividual source. The court stated that this is evident fromthe states’ duty, under the CAA, to calculate the cost of com-pliance to determine the level of pollution control equip-ment required at an individual source. The court stated thatthe only way for states to determine whether the costs areappropriate is to compare the costs to the individual sourcewith the degree of visibility improvement from installingcontrols at that source. The court found that EPA’s groupBART approach could result in a source spending millionsof dollars on new technology that would have no appre-ciable effect on the regional haze in any Class I area.

Furthermore, the court heldthat because it is the states’ re-sponsibility under the CAA, andnot EPA’s, to determine whichsources should be required to in-stall BART, the Regional HazeRule unlawfully constrains thestates’ authority. Because the rulerequires BART controls based simply on a finding that a sourcecould affect a Class I area, the states have essentially no say asto which sources should be regulated with which technology.The court reinforced its position by citing the ConferenceReport on the 1977 amendments to the CAA, which makes itclear that the states, and not EPA, would make BART determi-nations.5 The court did note, however, that if a mechanismexisted by which a state could exempt a BART-eligible sourceon the basis of an individual determination, then it was pos-sible that the meaning of the CAA would not be violated.Under the rule’s current construction, exemptions may onlybe obtained through EPA. Accordingly, the court vacated theBART provisions in the rule.

“Natural Visibility” and “No Degradation”Industry provided four arguments in support of its claim thatthe natural visibility goal and no degradation requirement arearbitrary and capricious: (1) EPA exceeded its authority underSection 169A(a)(1) and adopted regulations that conflict withthe prevention of significant deterioration (PSD) program inestablishing “natural visibility” as the goal of the regional hazeprogram; (2) the regulations impermissibly constrain states’discretion by requiring that the states develop their visibilityprograms using the “no degradation” requirement; (3) EPAhas no authority to impose upon the states the goal of achiev-ing natural visibility conditions and, thereby, restrict the

opportunity of some states to participate in the planning pro-cess aimed at addressing regional haze; and (4) EPA promul-gated the Regional Haze Rule without providing adequatenotice and an opportunity for comment. The court rejectedEPA’s argument that these contentions were not properly raised,however, the court also rejected industry’s claims on the rule’smerits, holding that the EPA action was neither manifestlycontrary to the statute nor arbitrary or capricious in substance.

First, according to the court, the regulations adoptedby EPA in the rule are not contrary to the PSD program,despite that program’s allowance for small amounts ofdegradation. The CAA creates a national goal of remedy-ing visibility impairment. The regional haze regulationsexpound on that by providing for an improvement in vis-ibility for the most-impaired days and ensuring no degra-dation in visibility. The court decided that the regulationsand the statute are not contradictory, but merely that theregional haze regulations expound on the CAA. Further-

more, according to thecourt, the PSD programdoes not create an entitle-ment to degrade visibility.

Second, industry ar-gued that because statesmust determine the “rea-sonable progress” sources

should make in enhancing visibility, and that reasonableprogress could sometimes require visibility degradation, theno degradation requirement restricts states’ authority toapply the statutory criteria. The court found this to be in-correct because the rule merely elucidates on the definitionof “reasonable progress,” which does not include the possi-bility of visibility degradation.

Third, the court found no evidence to support the claimthat the rule restricts the opportunity of states to participatein the planning aspect of the rule.

Finally, the court found industry’s argument that there wasnot adequate opportunity for notice and comment was with-out merit. Industry argued that it had no notice of the naturalvisibility goal, but the court found that industry had receivedadequate notice because there was no material inconsistencybetween the statutory goal of Section 169A(a)(1) and the pro-mulgated regulatory goal.

“Reasonable Progress”Sierra Club argued that EPA’s regulations do not qualify as “rea-sonable progress” criteria. However, the court held that theissue is unripe for review because the BART issue was remanded,and because EPA could change its criteria for evaluating rea-sonable progress on remand. Similarly, the court also foundpremature Sierra Club’s contention that EPA violated the CAAby allowing three years for states to file regional haze SIPs. The

As a result of the petitions for review en banc and potentialappeals to the Supreme Court, and the possibilitythat EPA will still have to go back to the drawing board,finalization and implementation of the Regional Haze Rulelikely will be significantly delayed.

EMAugust 2002 33

Transportation and Equity Act for the 21st Century states that,for areas designated as “attainment” or “unclassified,” EPA mustrequire SIPs to be submitted one year after the area has beendesignated.6 However, the Regional Haze Rule allows for threeyears upon a submission of a commitment SIP. While the courtraised doubts about the validity of the three-year requirement,it remanded the issue with the BART provisions. Thus, thecourt did not reach a decision on the merits of any of SierraClub’s contentions regarding reasonable progress.

Dissent by Judge GarlandJudge Merrick B. Garland concurred with parts III and IV of thedecision, regarding the natural visibility goal and no degrada-tion requirement and the reasonable progress criteria and exten-sion of the statutory deadline, respectively, but dissented on theissue of vacating and remanding the BART requirements. Con-trary to the opinion of the court, he concluded that the BARTprovisions appropriately adhered to the language of the CAA.

Judge Garland argued that the rule, which creates a presump-tion that a source upwind from a Class I area impairs visibility inthat region, is not unreasonable. Rather than forcing noncon-tributing sources to adopt expensive technology automatically,it allows for exceptions to the group BART rule and shifts theburden of proof onto the emitting party. This, he claimed, is areasonable construction of the CAA, which requires BART tech-nology if a source “emits any air pollutant which may reason-ably be anticipated to cause or contribute to any impairment ofvisibility in any [Class I] area.”7 Judge Garland further arguedthat the fifth factor is materially different from the other four, inthat it addresses the results, and not the cost-effectiveness, of thetechnology. For this reason, he believed it is reasonable to deter-mine BART under a group approach, even if a source-specificstandard is used for the other criteria. In addition, Judge Garlandfound that the court should not assume that Congress enacteda statute that makes its stated goals impracticable to achievewithout specific textual evidence to the contrary.

Finally, Judge Garland claimed that the rule does not in-fringe states’ rights. While the CAA does require states to deter-mine which sources can reasonably be anticipated to contributeto any impairment of visibility, and to consider the five enunci-ated criteria to determine BART for that source, the RegionalHaze Rule merely clarified and does not contravene this termi-nology. Judge Garland pointed out that, under the rule, it is thestate that must determine both that the source emits coveredpollutants and that the region into which the source emits mayreasonably be anticipated to include a Class I area. Furthermore,it is also the state that must examine the five criteria and deter-mine which technology is most appropriate for a particularsource. Thus, although Judge Garland concurred with parts IIIand IV of the court’s opinion, he dissented from vacating andremanding the BART provisions because he believes they donot contravene the language, structure, or history of the CAA.

About the AuthorsDebra J. Jezouit is a partner with the Environmental Practice Groupin the Washington, DC, office of Baker Botts L.L.P. She is an experton the Clean Air Act, with more than 11 years of experience on CAAregulatory and litigation matters. Joshua B. Frank is an associatealso with the Environmental Practice Group in the Washington, DC,office of Baker Botts. He practices in the areas of environmentaland energy regulatory law and litigation.

His dissent may provide EPA with hope of obtaining a morefavorable decision through a petition for review en banc orthrough appeal to the U.S. Supreme Court.

CONCLUSIONThe DC Circuit’s May 24th decision left the precepts of theRegional Haze Rule generally intact, finding that the rule’s goalswere neither arbitrary nor capricious. However, the court vacatedand remanded the BART requirements because of their focus ongroup effects and because of the limitations on state involve-ment. There was no clear victory for either EPA or industry. Al-though the court declined to rule on the “reasonable progress”issues brought by the Sierra Club, finding that they were prema-ture, the three-year deadline for SIPs may need to be altered onremand because it likely conflicts with the Transportation EquityAct for the 21st Century. Both EPA and Sierra Club have peti-tioned for review en banc. If EPA’s petition is denied, or if thethree-judge panel’s decision is ultimately affirmed by the full DCCircuit or the Supreme Court, the group BART approach couldstill be revived by EPA if it awards more power to the states. Never-theless, as a result of the petitions for review en banc andpotential appeals to the Supreme Court, and the possibility thatEPA will still have to go back to the drawing board, finalizationand implementation of the Regional Haze Rule likely will be sig-nificantly delayed. The decision could also jeopardize thework of groups such as the Western Regional Air Partnership, acollaborative effort of tribal governments, state governments, andvarious federal agencies to protect visibility in the West. The futureof EPA’s BART guidelines, which are intended to assist state andtribal governments in setting BART limits, is also in question. Allin all, the court’s decision to vacate EPA’s BART provisionsleaves the future of the Regional Haze Rule looking a little hazy.

The text of the DC Circuit’s opinion may be found on theGeorgetown University Law Center’s Web site at www.ll.georgetown.edu/Fed-Ct/Circuit/dc/opinions/99-1348a.html.

ACKNOWLEDGMENTSpecial thanks to Stephen S. Smith, Georgetown UniversityLaw Center, Class of 2004, for his contributions to this article.

REFERENCES1. 64 Fed. Regist. at 35,714, codified at 40 C.F.R. §§ 81.401-81.437.2. 42 U.S.C. § 7491.3. American Corn Growers Association vs. EPA, 291 F.3d 1 (D.C. Cir. 2002).4. 64 Fed. Regist. at 35,740.5. See H.R. Conf. Rep. No. 95-564 (1977).6. The transportation Equity Act for the 21st Century, Pub. L. No. 105-178,

112 Stat. 107, 463 (1998).7. 42 U.S.C. § 7491(b)(2)(A).