Companies operating in Illinois, Indiana, Kentucky, Louisiana, Maryland, Michigan, New Jersey, New York, Ohio, Pennsylvania, Virginia, and West Virginia – whose operations involve the release of emissions — will need to consult the Environmental Protection Agency’s Revised Cross-State Air Pollution Update Rule to determine whether their operations might be affected by the Federal Implementation Plan.
The rule requires power plants and other high-emitting machinery to install emission-reduction equipment and update pollution controls.
The District of Columbia Circuit of the United States Court of Appeals unanimously affirmed the rule over objections that it was “arbitrary and capricious,” and that the EPA failed to conduct an appropriate assessment under the Clean Air Act (“CAA”). At issue was whether the rule was allowed to regulate activities in certain states under the CAA’s “Good Neighbor Provision,” which requires each state to prevent its air pollutant emissions from contributing significantly to a downwind state’s inability to meet EPA emission guidelines.
According to the D.C. Circuit, the EPA is allowed to regulate state emissions after following a four-step process which includes air-quality modeling, emission quantification based on that modeling, application of a multifactor cost-benefit test, and specification of enforceable measures designed to meet emission-reduction requirements in the affected states.
A trade group in the affected states challenged the rule on the grounds that the EPA had not properly implemented these steps, cut corners in order to propound the rule by the applicable deadline, and that its adoption of the rule was “arbitrary.” According to the trade group, a more comprehensive testing model showed lower emissions levels that did not meet the standard for EPA involvement.
The D.C. Circuit disagreed, finding that executive agency determinations based upon “highly complex and technical matters” are “entitled to great deference” because courts lack the expertise necessary to oversee such actions, and policy choices are more correctly made by a “politically accountable branch of the government.”
The takeaway for concerned businesses is that courts will be reluctant to interfere with executive agency decisions dealing with complex or technical matters, even if that agency may be rushed or not using the best methodology to support those decisions. Companies should therefore be hesitant to invest significant resources into alternative testing or legal representation when confronted with a regulation that requires significant expertise to understand or apply.