The D.C. Circuit Court of Appeals recently denied rehearing en banc in cases involving two major Clean Air Act issues: the Cross-State Air Pollution Rule (“CSAPR” or the “Transport Rule”) and a suite of four rules regulating greenhouse gas (“GHG”) emissions from vehicles and stationary sources. The denials set the stage for petitions for Supreme Court review in one or both of the cases, with significant implications for federal regulation of GHGs and conventional air pollutants.
On January 24, 2013, in EME Homer Generation v. EPA, the D.C. Circuit denied EPA’s requests for reconsideration and rehearing en banc of the panel decision striking down CSAPR. As previously discussed on this blog, EPA issued CSAPR in 2011 as its latest effort to address interstate transport of sulfur dioxide (“SO2”) and nitrogen oxides (“NOx”). CSAPR was intended as a replacement for the Clean Air Interstate Rule (“CAIR”), EPA’s previous attempt to implement the “good neighbor” provisions of the Clean Air Act, which prohibit upwind states from causing or contributing to noncompliance in downwind states. Both programs established an emissions trading program for covered states.
CAIR was issued in 2004 and struck down by the D.C. Circuit in 2008, but in a twist on the usual course of events, the Court left CAIR in place while directing EPA to promulgate a new rule that complied with the Clean Air Act. On August 21, 2012, however, the D.C. Circuit vacated CSAPR and the Federal Implementation Plans (“FIPs”) that EPA issued along with it, and directed EPA to continue to enforce CAIR while it promulgates a replacement rule. As a result, CAIR remains in place despite the 2008 ruling that it, too, does not comply with the Clean Air Act. It remains to be seen whether EPA will petition for review by the Supreme Court, or craft another regulation on the interstate transport of air pollution.
On December 20, 2012, the D.C. Circuit also denied rehearing en banc of the Court’s June 26, 2012 decision upholding four rules regulating GHGs: (1) a threshold finding that GHG emissions endanger public health and welfare and are thus subject to regulation under the Clean Air Act (the “Endangerment Finding”); (2) a rule limiting GHG emissions from cars and light trucks (the “Tailpipe Rule”); (3) a rule governing the trigger of GHG emission limits for stationary sources, such as power plants (the “Timing Rule”); and (4) a rule increasing the regulatory threshold for GHGs above the threshold in the Clean Air Act itself, so that only the largest new and significantly modified emitters of would initially be required to seek Clean Air Act permits for their GHG emissions (the “Tailoring Rule”).
Because the thresholds in the Tailoring Rule depart from the regulatory floor contained in the Clean Air Act itself, it was widely viewed as the most vulnerable to challenge of EPA’s GHG regulations. In June, the D.C. Circuit sidestepped the issue by ruling that none of the petitioners had standing to challenge the Tailoring Rule, since, by increasing regulatory flexibility and decreasing regulatory burdens, that rule actually mitigated any potential injury stemming from EPA regulation of GHG emissions.
While the panel opinion upholding the four GHG rules was unanimous, the denial of rehearing en banc drew two separate dissenting opinions – one taking issue with all four rules and another aimed more specifically at the Tailoring Rule – as well as a concurrence supporting the denial from the three judges that initially decided the case. Counsel for one of the trade associations that challenged the rule confirmed that a petition for Supreme Court review would follow “as surely as the climate has been changing since the Earth had an atmosphere.”