Texas v. U.S. Envtl. Prot. Agency

• Decision Date: 15 July 2016
• Docket Number: No. 16-60118,16-60118
• Citation: 829 F.3d 405
• Parties: State of Texas; Texas Commission on Environmental Quality; Public Utility Commission of Texas; Luminant Generation Company, L.L.C.; Big Brown Power Company, L.L.C. ; Luminant Mining Company, L.L.C.; Big Brown Lignite Company, L.L.C.; Luminant Big Brown Mining Company, L.L.C. ; Southwestern Public Service Company; Utility Air Regulatory Group; Coleto Creek Power, L.P.; NRG Texas Power, L.L.C. ; Nucor Corporation, Petitioners, v. United States Environmental Protection Agency; Gina McCarthy, in her official capacity as Administrator of the United States Environmental Protection Agency, Respondents.
• Court: U.S. Court of Appeals — Fifth Circuit

829 F.3d 405

State of Texas; Texas Commission on Environmental Quality; Public Utility Commission of Texas; Luminant Generation Company, L.L.C.; Big Brown Power Company, L.L.C. ; Luminant Mining Company, L.L.C.; Big Brown Lignite Company, L.L.C.; Luminant Big Brown Mining Company, L.L.C. ; Southwestern Public Service Company; Utility Air Regulatory Group; Coleto Creek Power, L.P.; NRG Texas Power, L.L.C. ; Nucor Corporation, Petitioners

v.United States Environmental Protection Agency; Gina McCarthy, in her official capacity as Administrator of the United States Environmental Protection Agency, Respondents.

No. 16-60118

United States Court of Appeals, Fifth Circuit.

Filed July 15, 2016

Lisa Bennett, Office of the Attorney General for the State of Texas, Kellie Elizabeth Billings–Ray, Assistant Attorney General, Office of the Attorney General, Environmental Protection & Administrative Law Division, Austin, TX, for Petitioners State of Texas, Texas Commission on Environmental Quality, Public Utility Commission of Texas.

Philip Stephen Gidiere, III, Esq., David Welles Mitchell, Balch & Bingham, L.L.P., Birmingham, AL, Daniel Jude Kelly, Associate General Counsel, Stephanie Zapata Moore, Dallas, TX, David Welles Mitchell, Balch & Bingham, L.L.P., Washington, DC, for Petitioners Luminant Generation

Company, L.L.C., Big Brown Power Company, L.L.C., Luminant Mining Company, L.L.C., Big Brown Lignite Company, L.L.C., Luminant Big Brown Mining Company, L.L.C.

Debra J. Jezouit, William M. Bumpers, Baker Botts, L.L.P., Washington, DC, Ann M. Seha, Assistant General Counsel, Minneapolis, MN, for Petitioner Southwestern Public Service Company.

Norman William Fichthorn, Esq., Aaron Michael Flynn, Hunton & Williams, L.L.P., Washington, DC, for Petitioner Utility Air Regulatory Group.

Derek Raymond McDonald, Carlos Ricardo Romo, Esq., Baker Botts, L.L.P., Austin, TX, for Petitioner Coleto Creek Power, L.P.

Aaron Michael Streett, Devi Chandrasekaran, Matthew Lynn Kuryla, Baker Botts, L.L.P., Houston, TX, for Petitioner NRG Texas Power, L.L.C.

David Richard Taggart, Esq., Bradley, Murchison, Kelly & Shea, L.L.C., Shreveport, LA, Mark H. Allison, Esq., Dover Dixon Horne, P.L.L.C., Little Rock, AR, Natalie J. Taylor, Attorney, Bradley, Murchison, Kelly & Shea, L.L.C., New Orleans, LA, for Petitioner Nucor Corporation.

Eugene Marc Trisko, Esq., Law Offices of Eugene M. Trisko, Berkeley Springs, WV, for Intervenor Local Union 2337 of the International Brotherhood of Electrical Workers.

Mark L. Walters, Office of the Attorney General, Environmental Protection & Administrative Law Division, Michael J. Nasi, Jackson Walker, L.L.P., Austin, TX, for Intervenors Balanced Energy for Texas, Texas Mining and Reclamation Association.

Clinton Frederick Beckner, III, Sidley Austin, L.L.P., Washington, DC, for Intervenor Texas Association of Business, Bay City Chamber of Commerce & Agriculture, Baytown Chamber of Commerce, Cedar Park Chamber of Commerce, Clear Lake Area Chamber of Commerce.

David Aiken Carson, Esq., Senior Counsel, U.S. Department of Justice, Environmental Defense Section, Denver, CO, Dustin J. Maghamfar, Trial Attorney, U.S. Department of Justice, Environment & Natural Resources Division, Brenda Mallory, Environmental Protection Agency, Washington, DC, for Respondents United States Environmental Protection Agency, Gina McCarthy, in her official capacity as Administrator of the United States Environmental Protection Agency.

Mary Melissa Whittle, Earthjustice, Austin, TX, Matthew Gerhart, Earthjustice, Denver, CO, for Intervenor National Parks Conservation Association.

Before CLEMENT, ELROD, and SOUTHWICK, Circuit Judges.

JENNIFER WALKER ELROD

, Circuit Judge:

The State of Texas, numerous energy companies, power plants, steel mills, consumer organizations, state regulators, and a labor union in Texas (collectively, “Petitioners”) challenge the Environmental Protection Agency's action disapproving Oklahoma's and Texas's plans for controlling regional haze and imposing EPA's own plans instead. Petitioners contend that EPA has acted outside its statutory authority and seek a stay pending review of the rule on the merits. EPA moves to dismiss or transfer the petition because it asserts this court lacks jurisdiction over the petition. Because the Clean Air Act gives jurisdiction over petitions for review to the courts of appeal generally and because the Act's forum selection clause designates the regional circuit as the appropriate venue for this challenge, we DENY EPA's motion to dismiss or transfer. Because Petitioners have demonstrated a strong likelihood of success on the merits, because they are likely to suffer irreparable injury in the absence of a stay while EPA has not shown similar injury from the issuance of a stay, and because the public interest weighs in favor of a stay, we GRANT the motion for a stay pending resolution of the petitions for review on the merits.

I.

A. The Clean Air Act's Regulatory Process

The Clean Air Act is “an experiment in cooperative federalism.” Michigan v. EPA , 268 F.3d 1075, 1083 (D.C. Cir. 2001)

. It “establishes a comprehensive program for controlling and improving the nation's air quality through state and federal regulation.” BCCA Appeal Grp. v. EPA , 355 F.3d 817, 821–22 (5th Cir. 2003). The Act requires the states and the federal government to set and seek to achieve targets for visibility in protected national parks and wildlife areas by modifying regulations that control air pollutants in ambient air. 42 U.S.C. §§ 7410, 7491, 7492(e)(2). While the federal government has the primary responsibility for identifying air pollutants and setting standards, the states “bear ‘the primary responsibility’ for implementing those standards” by promulgating state implementation plans (“SIPs”). Luminant Generation Co. v. EPA , 675 F.3d 917, 921 (5th Cir. 2012) (quoting BCCA Appeal Grp. , 355 F.3d at 822 ).

The Clean Air Act gives each state “wide discretion in formulating its plan” for achieving the air quality standards set by EPA. Union Elec. Co. v. EPA , 427 U.S. 246, 250, 96 S.Ct. 2518, 49 L.Ed.2d 474 (1976)

. “[S]o long as the ultimate effect of a State's choice of emission limitations is compliance with the national standards for ambient air, the State is at liberty to adopt whatever mix of emission limitations it deems best suited to its particular situation.” Train v. Nat. Res. Def. Council , Inc. , 421 U.S. 60, 79, 95 S.Ct. 1470, 43 L.Ed.2d 731 (1975).

The Clean Air Act confines EPA's role in implementing air quality standards “to the ministerial function of reviewing SIPs for consistency with the Act's requirements.” Luminant , 675 F.3d at 921

. The statute mandates that “the administrator shall approve such [a state implementation plan] as a whole if it meets all of the applicable requirements of this chapter.” 42 U.S.C. § 7410(k)(3) (emphasis added); see also

Fla. Power & Light Co. v. Costle , 650 F.2d 579, 587 (5th Cir. 1981) (“The great flexibility accorded the states under the Clean Air Act is ... illustrated by the sharply contrasting, narrow role to be played by EPA.”); Michigan , 268 F.3d at 1083 (EPA's “overarching role is in setting standards, not in implementation.”). “This division of responsibility between the states and the federal government ‘reflects the balance of state and federal rights and responsibilities characteristic of our federal system of government.’ ” Luminant , 675 F.3d at 921 (quoting Fla. Power & Light , 650 F.2d at 581 ). The structure of the Clean Air Act indicates a congressional preference that states, not EPA, drive the regulatory process. As our sister circuit recently observed, “[d]isagreeing with Congress's expressly codified policy choices isn't a luxury administrative agencies enjoy.” Central United Life Ins. Co. v. Burwell , 827 F.3d 70, 73, No. 15–5310, 2016 WL 3568084, at *2 (D.C. Cir. July 1, 2016).

Only if the state has not complied with the requirements of the Clean Air Act does EPA assume the role of primary regulator by drafting a state-specific plan. At that point, after disapproving a state implementation plan, EPA has two years to promulgate a federal implementation plan (“FIP”). 42 U.S.C. § 7410(c)(1)

. EPA promulgates the federal implementation plan “to fill all or a portion of a gap ... in a State implementation plan.” 42 U.S.C. § 7602. As a result, EPA's obligations and authority to promulgate the federal implementation plan are the same the state had when promulgating its implementation plan. See, e.g. , 77 Fed. Reg. 40,150, 40,164 (July 6, 2012) (“At the point EPA becomes obligated to promulgate a FIP, EPA steps into the State's shoes, and must meet the same requirements....”).

Within this framework, one provision of the Clean Air Act requires EPA and the states to jointly act to improve visibility at certain protected federal lands. 42 U.S.C. § 7491

. EPA's obligations under this provision begin with identifying the federal lands that need improved visibility. 42 U.S.C. § 7491(a)(2) ; 40 C.F.R. §§ 81.400 –81.437. After EPA has identified areas for targeted haze reduction, the Act requires EPA to write regulations providing the guidelines that states will use to design state implementation plans to reduce haze in the affected areas. 42 U.S.C. § 7491(b)(1), (2). In 1999, EPA promulgated the Regional Haze Rule. 40 C.F.R. § 51.308 ; 64 Fed. Reg. 35,714 (July 1, 1999). The Regional Haze Rule established the guidelines for state compliance with the air visibility requirements of § 7491.¹

The Regional Haze Rule requires five elements in a state implementation plan. For each affected wilderness and national park, the plan must: (1) set “reasonable progress goals” toward achieving natural visibility conditions that ensure improvements in visibility on the most impaired days over the period of the implementation plan; (2) calculate baseline visibility and natural visibility conditions; (3) devise a long-term strategy with enforceable emissions limitations,...