Several recent developments in air regulations are likely to impact regional, national and international air pollution policy.  In part I of our Air Update we address several Clean Air Act topics:

• The D.C. Circuit Court of Appeals issues two important Clean Air Act opinions, one clarifying a recent decision to uphold revisions to NAAQS for ozone, and the other striking down a 2012 rule regulating nitrogen oxide emissions.

• The Supreme Court heard oral arguments regarding the cross state air pollution rule, promulgated under the “good neighbor” provision of the Clean Air Act.

• The governors of eight northeastern states petitioned EPA to reduce air pollution emissions from nine upwind states.

D.C. Circuit Court of Appeals Issues Two Clean Air Act Decisions

On December 11, 2013, the Court of Appeals for the District of Columbia Circuit issued two significant Clean Air Act opinions.

In Mississippi v. EPA, No. 08-1200 (D.C. Cir. Dec. 11, 2013), the Court revised its July opinion upholding in part the EPA’s 2008 revisions to the National Ambient Air Quality Standards (“NAAQS”) for ozone.  TheDecember opinion clarifies the EPA’s duty (and the Court’s arbitrary and capricious standard of review of EPA) to protect public health with an adequate margin of safety for sensitive sub-populations such as asthmatics, children, or the elderly.  The July opinion indicated that the review was only for “egregious procedural errors” rather than arbitrary and capricious EPA actions.  The rest of the July opinion, which upheld the health-based NAAQS but remanded the welfare-based standard, remained unchanged.

In Daimler Trucks North America v. EPA, No. 12-1433 (D.C. Cir. Dec. 11, 2013), the Court vacated a 2012 rule regulating nitrogen oxide (“NOx”) emissions by heavy-duty motor vehicles (http://www.cadc.uscourts.gov/internet/opinions.nsf/0/3AFC4E458CCB9B9785257C3E005C5578/$file/12-1433-1469799.pdf).  The rule allowed for nonconformance penalties (“NCPs”) to protect technological laggards by allowing them to pay a penalty for engines temporarily unable to meet a new or revised emission standard.  Competitors of one such laggard, Navistar Inc., sought to vacate the rule.  The Court agreed with the competitors, and vacated the rule because EPA failed to provide notice to the competitors of revisions to certain criteria related to the NCPs.  Moreover, EPA acknowledged that Navistar’s engines would be compliant by 2014, and thus vacatur would cause no harm.

Supreme Court Hears Oral Arguments Regarding EPA’s Authority Under Clean Air Act

On Tuesday December 10, 2013, eight Supreme Court justices (Alito recused himself) heard oral arguments in the consolidated appeals U.S. Environmental Protection Agency et al. v. EME Homer City Generation LPet al., No. 12-1182 (U.S.), and American Lung Association et al. v. EME Homer City Generation LP et al., No. 12-1183 (U.S.).  At issue was whether EPA exceeded its authority in promulgating the Cross State Air Pollution Rule (“CSAPR”), promulgated under the “good neighbor” provision of the Clean Air Act.  The good neighbor provision limits the pollution from sources in one state that contributes significantly to nonattainment in another state.  Several states, labor and industry groups argued that EPA improperly took costs into account in promulgating the CSAPR, and that EPA failed to provide states with enough information to develop state implementation plans.  Oral arguments will be posted Friday, December 13.

Eight States Petition EPA to Reduce Air Pollution from Upwind States

Connecticut, Delaware, Maryland, Massachusetts, New Hampshire, New York, Rhode Island and Vermont petitioned the EPA to require nine upwind states—Illinois, Indiana, Kentucky, Michigan, North Carolina, Ohio, Tennessee, Virginia and West Virginia—to reduce air pollution.  Pennsylvania separately joined the petition.  EPA has 18 months to respond.  The petition is the latest salvo in a battle between upwind and downwind states.  In December of 2012, seven of the petitioning statesindicated that they would sue EPA in order to force it to regulate methane emissions from oil and gas operations.  The intent to sue letter prompted a response from 13 states, many of which have significant oil and gas development interests.  The back and forth between these states likely serves as a prelude to more intense wrangling over air pollution certain to come next year, when EPA—as directed by President Obama—is expected to issue a rule regulating greenhouse gas emissions from existing power plants.

Stay tuned for part II of our Air Update, which will address recent developments related to the regulation of greenhouse gases.