DC Circuit Invalidates Cross-State Air Pollution Rule

On August 21, 2012, the DC Circuit by a 2-1 split decision struck down the US Environmental Protection Agency's (EPA) Cross-State Air Pollution Rule (CSAPR). EME Homer City Generation v. EPA, No. 11-1302 (DC Cir. Aug. 21, 2012). CSAPR represented EPA's latest attempt to address emissions of nitrogen oxides (NOx) and sulfur dioxide (SO2) from power plants in upwind states that cause downwind states to fail to attain (or maintain) National Ambient Air Quality Standards (NAAQS) for ozone and fine particulate matter. An earlier attempt to address the issue, the Clean Air Interstate Rule (CAIR), had also been struck down by the Court, though it has been allowed to continue in effect pending EPA's development of CSAPR. In this case, the Court vacated CSAPR in its entirety and remanded the rule to EPA, ordering the agency to continue to implement CAIR until a valid replacement could be formulated.

The Court, in a majority opinion written by Judge Brett Kavanaugh, found that EPA acted beyond its statutory authority under the Clean Air Act (CAA) by requiring upwind states to make emissions reductions greater than necessary to eliminate their "significant contribution" to downwind states' non-attainment of NAAQS. The majority further found that EPA acted unlawfully by issuing federal implementation plans (FIPs) to implement CSAPR without allowing the regulated states an opportunity first to address EPA's "significant contribution" quantification through a state implementation plan (SIP) process. Judge Janice Rogers wrote a lengthy dissent, taking issue with both the majority's determination that it had jurisdiction over these issues and its analysis of the merits. The ruling will have some impact on other EPA actions that were premised on planned CSAPR reductions but should not affect other separate major EPA rules, including the Mercury and Air Toxic Standards (MATS) rule. EPA has until October 5, 2012 to determine if it will seek a rehearing in the case and is not likely to take further significant regulatory action on CSPAR until after the presidential elections.

Background

EPA issued a final CSAPR rule in August 2011, three years after the DC Circuit had invalidated CAIR. The DC Circuit, in North Carolina v. EPA, 531 F.3d 896 (DC Cir. 2008), vacated CAIR because, among other things, the Court found it was not likely to result in sufficient reductions within a sufficient timeframe to ensure upwind states reduced their significant contributions to downwind state non-attainment. In...