Natural Res. Def. Council v. Environ. Prot. Agency, No. 04-1438.

• Court: United States Courts of Appeals. United States Court of Appeals (District of Columbia)
• Writing for the Court: Randolph
• Citation: 464 F.3d 1
• Parties: NATURAL RESOURCES DEFENSE COUNCIL, Petitioner v. ENVIRONMENTAL PROTECTION AGENCY and Michael O. Leavitt, Administrator, U.S. Environmental Protection Agency, Respondents Methyl Bromide Industry Panel of the American Chemistry Council, Intervenor.
• Docket Number: No. 04-1438.
• Decision Date: 29 August 2006

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464 F.3d 1 NATURAL RESOURCES DEFENSE COUNCIL, Petitioner
v.
ENVIRONMENTAL PROTECTION AGENCY and Michael O. Leavitt, Administrator, U.S. Environmental Protection Agency, Respondents
Methyl Bromide Industry Panel of the American Chemistry Council, Intervenor. No. 04-1438. United States Court of Appeals, District of Columbia Circuit. August 29, 2006. Rehearing En Banc Denied August 29, 2006.

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On Petition for Rehearing.

David D. Doniger, Amanda Cohen Leiter, Natural Resources Defense Council, Washington, DC, for Petitioner.

Steven Edward Rusak, Attorney, David S. Gualtieri, John Charles Cruden, Assistant Attorney General, Steven Edward Rusak, Attorney, U.S. Department of Justice, Ann R. Klee, General Counsel, Diane E. McConkey, U.S. Environmental Protection Agency, Washington, DC, for Respondents.

David Burton Weinberg, Wiley, Rein & Fielding, Washington, DC, for Intervenor.

Before: HENDERSON and RANDOLPH, Circuit Judges, and EDWARDS, Senior Circuit Judge.

Opinion for the Court filed by Circuit Judge RANDOLPH.

Concurring opinion filed by Senior Circuit Judge EDWARDS.

RANDOLPH, Circuit Judge.

The United States and other countries entered into the Montreal Protocol on Substances that Deplete the Ozone Layer, Sept. 16, 1987, S. TREATY DOC. NO. 100-10,

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1522 U.N.T.S. 29 ("Montreal Protocol"), a treaty in which the signatory nations agreed to reduce the use of certain substances, including methyl bromide, that degrade the stratospheric ozone layer. The Environmental Protection Agency issued a rule implementing "critical use" exemptions from the treaty's general ban on production and consumption of methyl bromide. Protection of Stratospheric Ozone: Process for Exempting Critical Uses From the Phaseout of Methyl Bromide, 69 Fed. Reg. 76,982 (Dec. 23, 2004) (codified at 40 C.F.R. pt. 82) ("Final Rule"). We dismissed the Natural Resources Defense Council's petition for judicial review for lack of standing. Natural Res. Def. Council v. EPA, 440 F.3d 476, 477-78 (D.C.Cir. 2006) ("NRDC I"). In their respective petition for and opposition to rehearing, NRDC and EPA offered new information that has led us to change our view of the standing issue. We therefore grant the petition for rehearing, withdraw our previous opinion, and decide the merits. FED. R. APP. P. 40(a)(4)(A); see, e.g., Moldea v. New York Times Co., 22 F.3d 310, 311-12 (D.C.Cir.1994).

I.

In the mid-1970s, scientists discovered that certain man-made chemicals can destroy the layer of ozone gas in the stratosphere approximately ten to twenty-five miles above the Earth's surface. Stratospheric ozone absorbs ultraviolet radiation; as the ozone layer thins, less radiation is absorbed. Increased human exposure to ultraviolet radiation is linked to a range of ailments, including skin cancer and cataracts.

Amidst growing international concern about ozone depletion, the United States and twenty-four other nations entered into the Montreal Protocol. The Protocol requires signatory nations — which now number 189 — to reduce and eliminate their production and use of ozone-depleting chemicals in accordance with agreed-upon timetables. Montreal Protocol arts. 2-2I. The Senate ratified the treaty in 1988, and Congress incorporated its terms into domestic law through the Clean Air Act Amendments of 1990, Pub.L. No. 101-549, tit. VI, 104 Stat. 2399, 2648. Since then, the United States has reduced its use of methyl bromide to less than 39% of its 1991 baseline.

In 1997, the Parties "adjusted" the Protocol to require developed-country Parties to cease "production" and "consumption"¹ of methyl bromide by 2005. See Montreal Protocol art. 2H(5).² In response, Congress amended the Clean Air Act to require EPA to "promulgate rules for reductions in, and terminate the production, importation, and consumption of, methyl bromide under a schedule that is in accordance with, but not more stringent than, the phaseout schedule of the Montreal

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Protocol Treaty as in effect on October 21, 1998." 42 U.S.C. § 7671c(h).

Methyl bromide is a naturally occurring gas produced by oceans, grass and forest fires, and volcanoes. U.S. Dep't of Agric., Agric. Research Serv., Soil Physics & Pesticide Research: Methyl Bromide 1 (2005), http://www.ars.usda.gov/Research/docs.htm?docid=10408. It is also man-made and used as a broad-spectrum pesticide. See Final Rule, 69 Fed.Reg. at 76,983. Methyl bromide is typically injected into soil as a fumigant before several types of crops are planted. The United States regulates methyl bromide as a "class I" ozone-depleting substance. See 42 U.S.C. § 7671c(h). Methyl bromide has an "ozone depletion potential" ("ODP") of 0.38-0.60. This puts it in the middle range of substances scheduled for elimination under the Protocol. It is not nearly as destructive as chlorofluorocarbons and most other class I substances, almost all of which were phased out in 2000. 42 U.S.C. § 7671c(b). On the other hand, it is significantly more destructive than "class II" substances, which are to be phased out in 2030. See 42 U.S.C. § 7671d(b).

In light of methyl bromide's wide use and the lack of comparable substitute pesticides, see Final Rule, 69 Fed.Reg. at 76,985, the Protocol allows exemptions from the general ban "to the extent that the Parties decide to permit the level of production or consumption that is necessary to satisfy uses agreed by them to be critical uses." Montreal Protocol art. 2H(5); see also 42 U.S.C. § 7671c(d)(6) ("To the extent consistent with the Montreal Protocol, the [EPA] Administrator . . . may exempt the production, importation, and consumption of methyl bromide for critical uses."). The Parties to the Protocol meet annually to "decide to permit the level of production or consumption that is necessary to satisfy uses agreed by them to be critical uses." Montreal Protocol art. 2H(5). At one of these meetings the Parties set general guidelines for implementing the critical-use exemptions, see Ninth Report, supra note 2, at 26-27 ("Decision IX/6"), and at another the Parties approved exemptions for 2005. The United States formally began the process of establishing its 2005 critical-use exemptions in May 2002, when EPA published a notice in the Federal Register seeking applications for 2005 and 2006 critical uses of methyl bromide and the amounts of new production and consumption needed to satisfy those uses. See Protection of Stratospheric Ozone: Process for Exempting Critical Uses From the Phaseout of Methyl Bromide, 67 Fed.Reg. 31,798 (May 10, 2002). EPA teams composed of biologists and economists reviewed each application and decided which to include in the aggregate U.S. nomination to the Parties. The final U.S. nomination, submitted to the Montreal Protocol's administrative body (the "Ozone Secretariat") in February 2003, requested a total exemption of about ten-thousand metric tons of methyl bromide for sixteen different uses.

The process then moved to the international stage. Two working groups operating under the auspices of the Ozone Secretariat — the "Methyl Bromide Technical Options Committee" and the "Technology and Economic Assessment Panel" — evaluated each country's nomination and made a recommendation to the Parties at their November 2003 meeting. At that meeting, the Parties deadlocked over the proposed critical-use exemptions and called an "extraordinary meeting" to make the final decisions. See U.N. Env't Programme, Report of the Fifteenth Meeting of the Parties to the Montreal Protocol on Substances that Deplete the Ozone Layer, U.N. Doc. UNEP/OzL.Pro.15/9, at 8-11, 77-78 (Nov. 11, 2003).

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The Parties reached agreement at their First Extraordinary Meeting in March 2004. They granted the United States critical uses in sixteen categories, amounting to 8,942 metric tons of methyl bromide. To satisfy these critical uses, the Parties authorized 7,659 metric tons of new production and consumption, with the remainder (1,283 metric tons) to be made up from existing stocks of methyl bromide. See U.N. Env't Programme, Report of the First Extraordinary Meeting of the Parties to the Montreal Protocol on Substances that Deplete the Ozone Layer, U.N. Doc. UNEP/OzL.Pro.ExMP/1/3, at 14-15, 26 (Mar. 27, 2004) ("Decision Ex.I/3"). Decision Ex.I/3 noted that "each Party which has an agreed critical use should ensure that the criteria in paragraph 1 of decision IX/6[³] are applied when . . . authorizing the use of methyl bromide and that such procedures take into account available stocks." Id. ¶ 5.

With Decision Ex.I/3 in hand, EPA proposed rules to implement the critical-use exemption. See Protection of Stratospheric Ozone: Process for Exempting Critical Uses From the Phaseout of Methyl Bromide, 69 Fed.Reg. 52,366 (Aug. 25, 2004). Many parties, including NRDC, submitted comments. The Final Rule, issued in December 2004, authorized new production and consumption up to the limit established in Decision Ex.I/3. Final Rule, 69 Fed.Reg. at 76,990 tbl.1. It also authorized the use of stocks as permitted by the decision, id. at 76,986, 76,991 tbl.2, and permitted noncritical users to draw upon existing stocks, id. at 76,988.⁴

NRDC believes the Final Rule violated Decision IX/6 and Decision Ex.I/3 because EPA failed to disclose the full amount of existing stocks, failed to offset new production and consumption by the full amount of these stocks, and failed to reserve the stocks for critical uses, and because the total amount of methyl bromide critical use the Final Rule authorized is not the technically and economically feasible minimum.⁵ These claims depend upon the legal status of Decisions IX/6 and Ex.I/3.

After oral argument, we ordered supplemental briefing to address the question whether consensus decisions of the Parties are "cognizable in federal court actions brought to enforce the Protocol and the relevant terms of the Clean Air Act." EPA and NRDC agree that the decisions are not "adjustments" to the...