531 F.3d 896 (D.C. Cir. 2008), 05-1244, North Carolina v. E.P.A.

Docket Nº:05-1244, 05-1246, 05-1249, 05-1250, 05-1251, 05-1252, 05-1253, 05-1254, 05-1256, 05-1259, 05-1260, 05-1262, 06-1217, 06-1222, 06-1224, 06-1226, 06-1227, 06-1228, 06-1229, 06-1230, 06-1232, 06-1233, 06-1235, 06-1236, 06-1237, 06-1238, 06-1240, 06-1241, 06-1242, 06-1243, 06-1245, 07-1115.
Citation:531 F.3d 896
Party Name:State of NORTH CAROLINA, Petitioner v. ENVIRONMENTAL PROTECTION AGENCY, Respondent Utility Air Regulatory Group, et al., Intervenors.
Case Date:July 11, 2008
Court:United States Courts of Appeals, Court of Appeals for the District of Columbia Circuit
 
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Page 896

531 F.3d 896 (D.C. Cir. 2008)

State of NORTH CAROLINA, Petitioner

v.

ENVIRONMENTAL PROTECTION AGENCY, Respondent

Utility Air Regulatory Group, et al., Intervenors.

Nos. 05-1244, 05-1246, 05-1249, 05-1250, 05-1251, 05-1252, 05-1253, 05-1254, 05-1256, 05-1259, 05-1260, 05-1262, 06-1217, 06-1222, 06-1224, 06-1226, 06-1227, 06-1228, 06-1229, 06-1230, 06-1232, 06-1233, 06-1235, 06-1236, 06-1237, 06-1238, 06-1240, 06-1241, 06-1242, 06-1243, 06-1245, 07-1115.

United States Court of Appeals, District of Columbia Circuit.

July 11, 2008

Argued March 25, 2008.

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Held Invalid40 C.F.R. §§ 51.121 , 51.122 , 51.123 , 51.124 , 51.125 .40 C.F.R. §§ 72.2 , 72.7 , 72.9 , 72.21 , 72.24 , 72.40 , 72.72 , 72.73 , 72.90 , 72.95 , 72.96 .40 C.F.R. §§ 73.10 , 73.27 , 73.30 , 73.31 , 73.32 , 73.33 , 73.34 , 73.35 , 73.36 , 73.37 , 73.38 , 73.50 , 73.51 , 73.52 , 73.70 .40 C.F.R. §§ 74.4 , 74.18 , 74.40 , 74.42 , 74.43 , 74.44 , 74.46 , 74.47 , 74.49 , 74.50 .40 C.F.R. §§ 77.3 , 77.4 , 77.5 , 77.6 .40 C.F.R. §§ 78.1 , 78.3 , 78.4 , 78.5 ,

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78.12 , 78.13 ,40 C.F.R. §§ 96.101 , 96.102 , 96.103 , 96.104 , 96.105 , 96.106 , 96.107 , 96.108 , 96.110 , 96.111 , 96.112 , 96.113 , 96.114 , 96.120 , 96.121 , 96.122 , 96.123 , 96.124 , 96.140 , 96.141 , 96.142 , 96.143 , 96.151 , 96.152 , 96.153 , 96.154 , 96.155 , 96.156 , 96.157 , 96.160 , 96.161 , 96.162 , 96.170 , 96.171 , 96.172 , 96.173 , 96.174 , 96.175 , 96.176 , 96.180 , 96.181 , 96.182 , 96.183 , 96.184 , 96.185 , 96.186 , 96.187 , 96.188 , 96.201 , 96.202 , 96.203 , 96.204 , 96.205 , 96.206 , 96.207 , 96.208 , 96.210 , 96.211 , 96.212 , 96.213 , 96.214 , 96.220 , 96.221 , 96.222 , 96.223 , 96.224 , 96.251 , 96.252 , 96.253 , 96.254 , 96.255 , 96.256 , 96.257 , 96.260 , 96.261 , 96.262 , 96.270 , 96.271 , 96.272 , 96.273 , 96.274 , 96.275 , 96.276 , 96.280 , 96.281 , 96.282 , 96.283 , 96.284 , 96.285 , 96.286 , 96.287 , 96.288 , 96.301 , 96.302 , 96.303 , 96.304 , 96.305 , 96.306 , 96.307 , 96.308 , 96.310 , 96.311 , 96.312 , 96.313 , 96.314 , 96.320 , 96.321 , 96.322 , 96.323 , 96.324 , 96.340 , 96.341 , 96.342 , 96.351 , 96.352 , 96.353 , 96.354 , 96.355 , 96.356 , 96.357 , 96.360 , 96.361 , 96.362 , 96.370 , 96.371 , 96.372 , 96.373 , 96.374 , 96.375 , 96.376 , 96.380 , 96.381 , 96.382 , 96.383 , 96.384 , 96.385 , 96.386 , 96.387 , 96.388 .

On Petitions for Review of an Order of the Environmental Protection Agency.

Robin L. Juni argued the cause for petitioners on SO2 Issues. Bart E. Cassidy argued the cause for petitioners on Title IV Exempt Units Issues. With them on the briefs were Peter H. Wyckoff , Jeffrey A. Knight, Lisa M. Jaeger , Brian J. McManus, William H. Lewis Jr., Steven J. Shimberg , Deborah E. Jennings , Meredith DuBarry Huston , Michael R. Barr , Sheldon A. Zabel , Kathleen C. Bassi , Stephen J. Bonebrake , Sam Kalen , Kyle W. Danish , and Alvin Bruce Davis . Carol F. McCabe entered an appearance.

Marc D. Bernstein , Special Deputies Attorney General, Attorney General's Office of State of North Carolina, argued the cause for petitioners on North Carolina Issues. With him on the briefs were Roy Cooper , Attorney General, James C. Gulick , Senior Deputy Attorney General, J. Allen Jernigan , Special Deputies Attorney General, and John C. Evans, Assistant Attorney General.

William M. Bumpers , Robert A. Manning , and Michael W. Steinberg argued the causes for petitioners on Border State Issues. With them on the briefs were David A. Savage , Michael B. Heister, William H. Lewis Jr., and Alvin Bruce Davis . James S. Alves and Winston K. Borkowski entered appearances.

Alvin B. Davis argued the cause for petitioners on Fuel-Adjustment Issues. With him on the briefs was David A. Savage . Joshua B. Frank entered an appearance.

Sheldon A. Zabel , Kathleen C. Bassi , Stephen J. Bonebrake , and Robert A. Manning were on the briefs of petitioners Northern Indiana Public Service Company and Florida Association of Electric Utilities on NOx-Related Claims.

Angeline Purdy and Norman L. Rave, Jr. , Attorneys, U.S. Department of Justice, argued the cause for respondents. With them on the brief were John C. Cruden , Deputy Assistant Attorney General, and Steven E. Silverman and Geoffrey Wilcox, Counsel, U.S. Environmental Protection Agency. Paul D. Tanaka , Attorney, U.S. Department of Justice, entered and appearance.

Andrew M. Cuomo , Attorney General, Attorney General's Office of the State of New York, Barbara D. Underwood , Solicitor

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General, Daniel Chepaitis, Assistant Solicitor General, J. Jared Snyder, Assistant Attorney General, Richard Blumenthal , Attorney General, Attorney General's Office of the State of Connecticut, Stuart Rabner, Attorney General, Attorney General's Office of the State of New Jersey, Joseph R. Biden, III , Attorney General, Attorney General's Office of the State of Delaware, Lisa Madigan, Attorney General, Attorney General's Office of the State of Illinois, Douglas F. Gansler, Attorney General, Attorney General's Office of the State of Maryland, Martha Coakley , Attorney General, Attorney General's Office of the Commonwealth of Massachusetts, Kelly A. Ayotte , Attorney General, Attorney General's Office of the State of New Hampshire, Gary K. King , Attorney General, Attorney General's Office for the State of New Mexico, Patrick C. Lynch , Attorney General, Attorney General's Office of the State of Rhode Island, and Linda Singer , Attorney General at the time the brief was filed, Attorney General's Office for the District of Columbia, were on the brief of amici states in support of petitioner North Carolina. Michael J. Myers, Assistant Attorney General, Attorney General's Office of the State of New York, Matthew I. Levine , Assistant Attorney General, Attorney General's Office of the State of Connecticut, Jean P. Reilly, Ruth E. Carter, and Kevin P. Auerbacher , Assistant Attorneys General, Attorney General's Office of the State of New Jersey, and James R. Milkey, Assistant Attorney General, Attorney General's Office of the Commonwealth of Massachusetts, entered appearances.

Kristen M. Campfield , Attorney, was on the brief for amicus curiae Commonwealth of Pennsylvania, Department of Environmental Protection, in support of petitioner ARIPPA and seeking remand.

Sean H. Donahue, Vickie L. Patton , and John D. Walke were on the joint brief of intervenors in support of respondent.

Peter Glaser, Harold P. Quinn , Norman W. Fichthorn , C. Grady Moore III , P. Stephen Gidiere III , Claudia M. O'Brien, and Nathan H. Seltzer were on the brief for industry intervenors.

Before: SENTELLE , Chief Judge, and ROGERS and BROWN , Circuit Judges.

Opinion for the Court filed PER CURIAM.

PER CURIAM:

These consolidated petitions for review challenge various aspects of the Clean Air Interstate Rule. Because we find more than several fatal flaws in the rule and the Environmental Protection Agency (“EPA" ) adopted the rule as one, integral action, we vacate the rule in its entirety and remand to EPA to promulgate a rule that is consistent with this opinion.

I. Background

A. Title I of the Clean Air Act

Title I of the Clean Air Act (“CAA" ), 42 U.S.C. §§ 7401 et seq. , requires EPA to issue national ambient air quality standards (“NAAQS" ) for each air pollutant that “cause[s] or contribute[s] to air pollution which may reasonably be anticipated to endanger public health or welfare [and] the presence of which in the ambient air results from numerous or diverse mobile or stationary sources ...," id. § 7408(a)(1)(A), (B). It also requires EPA to divide the country into areas designated as “nonattainment," “attainment," or “unclassifiable" for each air pollutant, depending on whether the area meets the NAAQS. Id. § 7407(c), (d) . Title I gives states “the primary responsibility for assuring air quality" within their borders, id.

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§ 7407(a) , and requires each state to create a state implementation plan (“SIP" ) to meet the NAAQS for each air pollutant and submit it to EPA for its approval, id. § 7410 . If a state is untimely in submitting a compliant SIP to EPA, EPA must promulgate a federal implementation plan (“FIP" ) for the state to follow. Id. § 7410(c)(1) .

One provision of Title I requires SIPs to

contain adequate provisions-(i) prohibiting, consistent with the provisions of this subchapter, any source or other type of emissions activity within the State from emitting any air pollutant in amounts which will-(I) contribute significantly to nonattainment in, or interfere with maintenance by, any other State with respect to any [NAAQS]....

42 U.S.C. § 7410(a)(2)(D)(i)(I) (statutory provision to which we refer throughout this opinion as “section 110(a)(2)(D)(i)(I)" ). In 1998, EPA relied on this provision to promulgate the NOx SIP Call, which imposed a duty on certain upwind sources to reduce their NOx emissions by a specified amount so that they no longer “ ‘contribute significantly to nonattainment in, or interfere with maintenance by,’ a downwind State." Finding of Significant Contribution and Rulemaking for Certain States in the Ozone Transport Assessment Group Region for Purposes of Reducing Regional Transport of Ozone, 63 Fed.Reg. 57,356, 57,358 (Oct. 27, 1998) (“NOx SIP Call" ). The NOx SIP Call created an optional cap-and-trade program for nitrogen oxides (“NOx" ). Id. at 57,359. Like the NOx SIP Call, the Clean Air Interstate Rule-Rule To Reduce Interstate Transport of Fine Particulate Matter and Ozone (Clean Air Interstate Rule); Revisions to Acid Rain Program; Revisions to the NOx SIP Call, 70 Fed.Reg. 25,162 (May 12...

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