On August 26, 2022, the Court of Appeals for the District of Columbia Circuit (D.C. Circuit) denied the Sierra Club’s petition to review certain Environmental Protection Agency (EPA) decisions under the Clean Air Act (CAA). The Sierra Club had sued the EPA in 2020, claiming that the EPA did not have the authority to lift anti-backsliding requirements for the Houston and Dallas metropolitan areas. After reviewing the CAA’s statutory text, the D.C. Circuit determined that the Sierra Club had not brought the petition in the proper venue and transferred the case to the Fifth Circuit Court of Appeals for further proceedings.
- The CAA requires the EPA to promulgate certain national ambient air quality standards (NAAQS) for airborne pollutants. The EPA must review and revise the NAAQS every five years. After the EPA sets a specific NAAQS, each state is responsible for implementing that standard by adopting a state implementation plan (SIP) which specifies the state’s chosen method for achieving or maintaining the NAAQS. The EPA must also approve the state’s plan.
- Each state must designate all areas within its borders as “attainment” or “nonattainment” areas for areas that have met or have not met the specific NAAQS, respectively. In its SIP, the state must include a plan for each of the nonattainment areas to ultimately comply with the NAAQS. The EPA then approves nonattainment designations for specified areas and can only redesignate an area as attainment after the area satisfies five statutory conditions and the Agency approves a maintenance plan to make certain that the area will continue to meet the NAAQS for at least 10 years.
- The five statutory conditions are: (1) the EPA determines the area meets the NAAQS; (2) the EPA has fully approved the SIP for the area; (3) the improvement in air quality is due to permanent and enforceable reductions in emissions resulting from implementation of the SIP; (4) the EPA has approved the maintenance plan for the area; and (5) the state containing the nonattainment area has met all requirements under its SIP.
- In 1990, Congress amended the CAA to increase regulation of pollutants that were “particularly injurious to public health.” The amendments included a new graduated classification scheme for ozone nonattainment areas and included mandatory controls that each state was required to adopt into its SIP for those areas.
- The amendments also included an anti-backsliding provision that applied if the EPA lessened or strengthened a standard as part of its five-year review. The anti-backsliding regulations require that even if the EPA adopts a less stringent NAAQS, the nonattainment areas must still implement controls to meet the previous, stricter regulations.
- In 1997, the EPA adopted stricter NAAQS for ozone. In 2004, the agency also adopted an implementation regulation which construed anti-backsliding provisions to apply both when the EPA relaxed an NAAQS, but also when it strengthened one.
- The EPA argued that if Congress intended to maintain existing controls when a certain NAAQS is relaxed, it also intended to maintain those same controls when the same NAAQS is strengthened. The D.C. Circuit agreed with the EPA’s interpretation in a 2006 case.
- In 2008, the EPA strengthened the NAAQS for ozone again. In the rule, the agency provided three separate procedures where nonattainment areas under the 1997 NAAQS could avoid anti-backsliding requirements for that 1997 standard. After significant litigation, the D.C. Circuit rejected two of those procedures as both would have allowed for the termination of the anti-backsliding requirements even if the nonattainment area had failed to meet all five statutory criteria for attainment designation (referred to as South Coast II by the court).
- The EPA published final rules in February 2020 lifting anti-backsliding requirements for nonattainment areas in the Dallas and Houston metropolitan areas and approved changes to the Texas SIP, following the D.C. Circuit’s decision in South Coast II.
- In the new rules, the EPA created an option for states to shed anti-backsliding controls for a revoked NAAQS as long as the area met the five statutory criteria for that revoked standard, even if the area has not achieved attainment under current standards or fulfilled redesignation criteria for the revoked standard.
- The EPA then terminated Houston and Dallas nonattainment areas’ anti-backsliding obligations under the 1997 ozone NAAQS.
- The Sierra Club and several other advocacy groups challenged the EPA’s actions and argued that the termination of the anti-backsliding regulations violates the Agency’s regulations and the CAA. The Sierra Club filed petitions in both the Fifth and the D.C. Circuit but sought to litigate the petition in the D.C. Circuit.
- After the Sierra Club sued the EPA, the litigation began to focus on a singular issue: what was the correct venue to challenge the EPA’s actions? The EPA’s actions under the CAA must be challenged in one of the federal U.S. Circuit Courts of Appeal, depending on the scope of the regulation challenged. The D.C. Circuit, based in the nation’s capital, is the preferred venue for many challenges to EPA and other agency actions. However, because the actions challenged were solely within the boundaries of the Fifth Circuit (composed of U.S. federal courts in Louisiana, Mississippi, and Texas), the actions could also potentially be litigated in the Fifth Circuit.
- Although the Sierra Club challenged the rules in the D.C. Circuit, the EPA argued, and the D.C. Circuit agreed, that the Fifth Circuit was the only proper and exclusive venue where the case could be brought.
- The case came down to several sentences in the CAA’s petition regarding venue, which required that judicial review of any NAAQS or nationally applicable regulation promulgated under the CAA may only be filed in the D.C. Circuit. Any other regulatory action challenged under the CAA which is only locally or regionally applicable may only be filed in the corresponding Circuit Court of Appeals. However, any locally or regionally-applicable regulation that is based on “a determination of nationwide scope or effect” and published by the EPA may only be filed in the D.C. Circuit.
- Therefore, the case boiled down to whether the challenge to the EPA’s rules terminating anti-backsliding regulations was proper to bring in the D.C. Circuit, or in the Fifth Circuit. If the EPA’s rules were nationally applicable rather than regionally or locally applicable, the case could only be brought in the D.C. Circuit. Likewise, if the EPA’s rule was only locally or regionally applicable, but it was based on a “determination of nationwide scope or effect,” then the case also could only be brought in the D.C. Circuit. However, if the rule was only locally or regionally rather than nationally applicable, the case could only be brought in the Fifth Circuit.
- After reviewing the rules, the D.C. Circuit determined that the rules were only locally or regionally applicable. The rules, on their face, only apply to the Houston and Dallas metropolitan areas, rather than applying nationally. In addition, CAA itself states that an action approving or promulgating a SIP is specifically a “locally or regionally applicable” action.
- In response, the Sierra Club argued that the rules were nationally applicable because they rested on interpretations of the CAA that did not have a geographic limitation. The D.C. Circuit soundly rejected this argument, stating that although it recognized that many locally or regionally applicable actions may require interpretation of the CAA, that interpretation does not turn the action into a nationally applicable one.
- The D.C. Circuit then transferred the case to the Fifth Circuit for further proceedings on the merits of the action.
Effect of the ruling
- This ruling provides an additional arrow in the quiver for advocacy and industry groups to challenge locally or regionally applicable EPA actions under the CAA in the local Circuit.
- Based on the Circuit where the EPA action occurs, industry and advocacy groups may find that the local Circuit provides a more hospitable environment to bring their claims.
- This ruling also comes at a time of increased uncertainty around agency regulations in the wake of the Supreme Court’s ruling in West Virginia v. EPA.
- In West Virginia v. EPA, the Supreme Court recently clarified its take on the “major questions doctrine,” which will likely cause major upheaval in how agency regulations are promulgated and litigated in the coming years. The major questions doctrine requires agencies to promulgate regulations concerning matters of vast economic and political significance only when Congress has delegated clear authorization to agencies for those matters. The Supreme Court did not directly define what is considered to be of vast economic and political significance to the country, instead referencing several examples from previous cases but not providing a test or further guidance.
- Arguments including West Virginia v. EPA and the major questions doctrine have already begun to appear in comments to the EPA regarding chemical regulations, including this July 2022 comment from Texas Attorney General Ken Paxton regarding a proposed rule banning chrysotile asbestos.