On March 27, 2013, the U.S. Environmental Protection Agency ("EPA") moved to dismiss a lawsuit by the Sierra Club seeking to require it to promulgate a Federal Implementation Plan ("FIP") for Texas that complies with the Clean Air Act’s ("CAA") "good-neighbor" provision in Section 110(a)(2)(D)(i)(I) with respect to ozone and fine particulate matter emissions. According to EPA, the D.C. Circuit’s recent rejection of its Cross-State Air Pollution Rule ("CSAPR") in EME Homer City Generation, L.P. v. EPA, 696 F.3d 7 (D.C. Cir. 2012), left it without authority to promulgate such a FIP for Texas. 

The "good-neighbor" provision at issue requires each state to adopt State Implementation Plan ("SIP") provisions that prohibit air pollution from a state that will "contribute significantly to nonattainment in, or interfere with maintenance by," any other state with respect to National Ambient Air Quality Standards ("NAAQS"). If EPA disapproves a state’s SIP submission, EPA must promulgate a FIP for that state to address the CAA requirements at issue.

In September 2010, Sierra Club brought suit against EPA, alleging that the agency had failed to either approve a SIP or promulgate a FIP to satisfy the good-neighbor provision with respect to the ozone and fine particulate matter NAAQS for Texas. Subsequently, in connection with its issuance of the CSAPR, EPA promulgated a FIP covering Texas that was intended to achieve this end. In EME Homer City, however, the D.C. Circuit vacated that FIP (as well as FIPs that EPA had issued for other states), holding that EPA must first define states’ good-neighbor obligations and give them an opportunity to make a SIP submission addressing those obligations.

EPA has not yet promulgated a rule to quantify Texas’s good-neighbor obligations with respect to ozone and fine particulate matter. Thus, in its recent court filing, EPA argued that absent reversal of EME Homer City by the U.S. Supreme Court, it is without authority to promulgate a good-neighbor FIP at this time. The case is Sierra Club v. U.S. Environmental Protection Agency, No. 1:10-cv-01541-CKK (D.D.C.), and EPA’s Memorandum in Support of Defendants’ Motion to Dismiss Under Federal Rule of Civil Procedure 12(b)(6) is available here.