DC Judge Vacates EPA's Boiler MACT & CISWI Delay Notice

Jan 9: U.S. Washington, DC, District Court Judge Paul Friedman has issued a critical 42-page ruling regarding U.S. EPA's recently proposed Clean Air Act standards for boilers and certain incinerators (i.e. "Boiler MACT" rules, Proposed rules) [See WIMS 12/2/11]. EPA had proposed to delay finalization of the rules until the spring 2012, including the rule for Major Sources: Industrial, Commercial, and Institutional Boilers and Process Heaters (i.e.Boiler MACT) and for Commercial and Industrial Solid Waste Incineration Units (CISWI).

 

    However, in the case of Sierra Club v. Jackson (U.S. EPA), Case No. 11-1278, the Court vacated EPA's decision to delay. The Court indicated it would "grant in part and deny in part the parties' cross-motions for summary judgment. It will enter judgment for EPA on Claim 1 and Claim 2 and for Sierra Club on Claim 3. As a result, the Court will declare unlawful EPA's Delay Notice will vacate the Delay Notice, and will remand the Delay Notice to EPA for further proceedings consistent with this Opinion." Petitions for review of the decision have already been filed with the U.S. Court of Appeals, D.C. Circuit and the matter may be addressed quickly by the Appeals Court.

 

    The Court explains that after EPA initially issued its Boiler and CISWI rules which were being challenged in the Court of Appeals, ". . .on May 18, 2011, two days before the Boiler Rule and the CISWI Rule were to go into effect, EPA issued a notice, referred to by the agency as the 'Delay Notice,' staying the effective date of both rules 'until the proceedings for judicial review of these rules [in the court of appeals] are completed or the EPA completes its reconsideration of the rules, whichever is earlier[.]' 76 FED.REG. at 28,664. In the Delay Notice, EPA made explicit that it was staying the effective date of these two rules 'pursuant to the APA[, that is, the Administrative Procedure Act], rather than . . . the Clean Air Act.' Id. at 28,663. Specifically, EPA stated that it was acting pursuant to its authority under 5 U.S.C. § 705 of the APA, rather than under 42 U.S.C. § 7607(d)(7)(B) of the Clean Air Act." Sierra Club then filed this lawsuit on July 14, 2011 to challenge the validity of EPA's Delay Notice.

 

    Sierra Club argues that it is entitled to summary judgment on all three of its claims and requests that the Court declare the Delay Notice unlawful and vacate it. First, Sierra Club contends that the Delay Notice is unlawful because EPA promulgated it without providing the public with notice and an opportunity for comment; Second, Sierra Club contends that EPA lacked the authority to issue the Delay Notice; And third, Sierra Club contends that the Delay Notice is arbitrary and capricious for "at least four reasons, each of which independently requires vacatur." EPA opposes Sierra Club's motion for summary judgment and has filed its own cross-motion for summary judgment. As EPA describes it, the agency had the authority to promulgate the Delay Notice; the agency provided adequate justification for the Delay Notice; and the Delay Notice is not a rule and therefore is not subject to notice and comment requirements.

 

    The Court ruled on Claim 1: ". . .the Court concludes that the Delay Notice does not constitute substantive rulemaking, see 5 U.S.C. § 551(4), and therefore is not subject to notice and comment requirements. See id. §§ 553(b), (c). The Court will grant EPA's motion for summary judgment on Claim 1 and will deny Sierra Club's motion for summary judgment on that claim." On Claim 2: "The Court therefore concludes that EPA had the authority to issue the Delay Notice under Section 705 of the APA. The Court will grant EPA's motion for summary judgment on Claim 2 and will deny Sierra Club's motion for summary judgment on that claim."

 

    And, on Claim 3: "The Court concludes that the Delay Notice is arbitrary and capricious for three separate reasons: (1) the standard for a stay at the agency level is the same as the standard for a stay of agency action by a court, and EPA has not even attempted to justify its decision under that standard; (2) EPA is bound by its own precedents to apply the four-part test for stays and injunctions unless it provides a reasoned decision for its change of position, which it has not done; and (3) because EPA relies on Section 705 authorizing it to stay agency action 'pending judicial review,' the reasons it articulates to justify the stay must be based on the underlying litigation in the court of appeals, which they are not."

 

    The National Association of Manufacturers (NAM) Vice President for Energy and Resources Policy Chip Yost issued a statement on the decision saying, "The court's ruling to revoke the stay of the Boiler MACT and Incinerator rules will severely harm manufacturers' competitiveness, add to their uncertainty and cost vital jobs. It is already 20 percent more expensive to manufacture in the U.S. compared to our trade partners, and regulations such as Boiler MACT continue to set us back. The ruling by the court underscores the critical need for Congress to pass legislation to address the damaging Boiler MACT and Incinerator regulations. The EPA Regulatory Relief Act [H.R.2250, See WIMS 10/14/11] received bipartisan support when it passed the House last October, and manufacturers urge the Senate to act now to save jobs. Manufacturers are looking to Washington for policies that will eliminate the uncertainty of harmful regulations such as Boiler MACT and enable them to invest, grow and create jobs."

 

    House Republicans on the Energy and Commerce Committee issued a release stating, "By vacating EPA's stay, yesterday's ruling speeds the rules' compliance schedules, which were already unworkable. As a result of the ruling, facilities will be forced to determine how to implement the rules even though they are still being reconsidered." Committee Chairman Fred Upton (R-MI) said, "The ruling increases the already significant regulatory and legal uncertainty surrounding these complex rules, which by EPA's own estimates impose new costs in excess of $5 billion. It is increasingly clear that Congress must intervene to provide regulatory relief. The House-passed EPA Regulatory Relief Act provides EPA the framework to fix these rules and offers American businesses the flexibility and certainty they need to invest and create jobs. I urge the Senate to pass this legislation so we can put an end to the uncertainty and finally get the EPA to move forward in a way that protects jobs."

 

    Access the complete ruling (click here). Access the statement from NAM (click here). Access the release from House Republicans (click here). [#Air]

 

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