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D.C. Circuit Hears Challenges to EPA Climate Regulations

By: Jonathan Kalmuss-Katz

On February 28 and 29, the D.C. Circuit Court of Appeals heard oral arguments in a series of challenges to the Environmental Protection Agency’s (“EPA’s”) regulation of greenhouse gasses (“GHGs”) under the Clean Air Act, far-reaching litigation spanning dozens of parties and at least four separate rules.  Decisions from the panel of Judges David Sentelle, David Tatel and Janice Rogers Brown are expected later this year.

The rare, two-day argument began with a challenge to EPA’s December 7, 2009 finding that emissions of six GHGs, including carbon dioxide, “may reasonably be anticipated both to endanger public health and to endanger public welfare.”  This “endangerment finding” is the cornerstone of all subsequent action by EPA to regulate GHGs. The Court appeared reluctant to second-guess the science behind EPA’s determination or to consider non-scientific factors as a basis for overturning it, noting that the Supreme Court had already rejected such lines of argument in its 2007 Massachusetts v. EPA decision.  As Judge Sentelle remarked: “Reading some of the briefs, I’d gotten the impression that Massachusetts was not decided.”

Arguments then turned to EPA’s April 1, 2010 “tailpipe rule,” which limits GHG emissions from cars and light trucks.  Notably, the auto industry was not among the challengers , as it had participated with EPA in a negotiated rulemaking; instead, it intervened in support of EPA’s regulation.  The challenge from some states and trade associations was motivated less by the substance of the tailpipe rule than its role in triggering GHG permitting requirements for power plants and other stationary sources, which took effect once GHGs became “subject to regulation” under the Clean Air Act.

Some of the petitioners contested whether the tailpipe regulations governing mobile sources of GHGs necessarily triggers GHG regulation of stationary sources, arguing that EPA’s historic interpretation of the Clean Air Act to that effect, dating back to 1978, was flawed.  Because the 60-day period for challenging EPA’s 1978 regulation had long passed, the petitioners characterized the new GHG rules as “grounds arising after” that prior rule, which  raised issues that could not have been previously litigated.  At oral argument, the judges focused heavily on this claim and other jurisdictional issues relating to this challenge.

Finally, the arguments closed with a discussion of EPA’s “tailoring rule,” which increased the regulatory threshold for new and modified stationary sources from 250 tons  to 75,000 tons of GHGs per year.  This is generally considered to be the most vulnerable of EPA’s rules, because the lower thresholds are expressly set forth in the Clean Air Act itself, while EPA’s tailoring rests upon its authority to interpret the statute in a way that avoids the “absurd” result of regulating thousands of smaller emitters.  Judge Sentelle, however, questioned the petitioners’ standing to challenge the tailoring rule, stating to industry counsel: “The harm you allege is a regulatory burden. The remedy you seek is a heavier regulatory burden.”

Since the D.C. Circuit previously declined to stay the rules, they will remain in effect while the Court deliberates, with a widely anticipated decision expected later this year.  For more information on EPA’s GHG rules and the pending litigation, contact Jeffrey Gracer


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