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Sierra Club v. Lisa P. Jackson

January 9, 2012

SIERRA CLUB, PLAINTIFF,
v.
LISA P. JACKSON, ADMINISTRATOR, U.S. ENVIRONMENTAL PROTECTION AGENCY, DEFENDANT.



The opinion of the court was delivered by: Paul L. Friedman United States District Judge

OPINION

This matter is before the Court on the parties' cross-motions for summary judgment on plaintiff's three claims. Upon consideration of the parties' papers, the relevant legal authorities, and the entire record in this case, the Court will grant in part and deny in part the parties' cross-motions for summary judgment, will enter judgment for defendant on Claim 1 and Claim 2, and will enter judgment for plaintiff on Claim 3. As a result, the Court will declare unlawful the defendant's "Delay Notice," 76 FED. REG. 28,662 (May 18, 2011), will vacate the Delay Notice, and will remand the Delay Notice to defendant for further proceedings consistent with this Opinion.*fn1

I. BACKGROUND

The Court previously has described the factual and procedural background of this case, see Sierra Club v. Jackson, Civil Action No. 11-1278, 2011 WL 4448610, at *1-3 (D.D.C. Sept. 27, 2011), and therefore will limit its discussion accordingly.

In Sierra Club v. Jackson, Civil Action No. 01-1537, this Court ordered defendant, the Environmental Protection Agency, to promulgate long-overdue emission standards under the Clean Air Act by February 21, 2011. See Sierra Club v. Jackson, Civil Action No. 01-1537, 2011 WL 181097, at *14 (D.D.C. Jan. 20, 2011). In accordance with that order, on February 21, 2011, EPA signed two rules regulating emission standards: (1) the "Boiler Rule," defined by EPA as a rule "to regulate emissions of hazardous air pollutants . . . from industrial, commercial, and institutional boilers and process heaters located at major sources of [hazardous air pollutant] emissions"; and (2) the "CISWI Rule," defined by EPA as a rule to "regulate emissions of certain air pollutants from commercial and industrial solid waste incineration units[.]" 76 FED. REG. 28,662, at 28,663 (May 18, 2011).

As EPA describes it, by 2014, the Boiler Rule will lead to significant annual health benefits; according to EPA's estimates, the rule will help avoid:

# 2,500 to 6,500 premature deaths, # 1,600 cases of chronic bronchitis, # 4,000 nonfatal heart attacks, # 4,300 hospital and emergency room visits, # 3,700 cases of acute bronchitis, # 78,000 cases of respiratory symptoms, # 310,000 days when people miss work or school, # 41,000 cases of aggravated asthma, and # 1,900,000 days when people must restrict their activities.

PMSJ, Ex. C, EPA Fact Sheet, Final Air Toxics Standards for Industrial, Commercial, and Institutional Boilers and Process Heaters at Major Source Facilities at 2-3. Similarly, according to EPA's estimates, by 2016, the CISWI Rule will help avoid:

# 40 to 100 premature deaths, # 27 cases of chronic bronchitis, # 64 nonfatal heart attacks, # 68 hospital and emergency room visits, # 65 cases of acute bronchitis, # 1,350 cases of respiratory symptoms, # 5,300 days when people miss work or school, # 700 cases of aggravated asthma, and # 31,000 days when people must restrict their activities.

PMSJ, Ex. D, EPA Fact Sheet, Final Amendments to New Source Performance Standards and Emission Guidelines for Commercial and Industrial Solid Waste Incineration Units at 2.

On March 21, 2011, EPA published the Boiler Rule and the CISWI Rule in the Federal Register and established an effective date of May 20, 2011 for each rule. See 76 FED.

REG. at 28,663. Also on March 21, 2011, EPA announced that it was initiating an administrative reconsideration process with respect to certain aspects of each rule, see id., a procedure provided for under the Clean Air Act. See 42 U.S.C. § 7607(d)(7)(B).

Shortly thereafter, multiple parties, including plaintiff Sierra Club, filed petitions for review of the Boiler Rule and the CISWI Rule in the United States Court of Appeals for the District of Columbia Circuit. The court of appeals consolidated 16 petitions for review of the Boiler Rule into one proceeding, U.S. Sugar Corp v. EPA, No. 11-1108, and consolidated 17 petitions for review of the CISWI Rule into another proceeding, American Forest & Paper Ass'n v. EPA, No. 11-1125. Those petitions for review present substantive challenges to the legal sufficiency of the Boiler Rule and the CISWI Rule under the Clean Air Act, a matter that both Sierra Club and EPA agree is reserved for the exclusive jurisdiction of the court of appeals. See 42 U.S.C. § 7607(b)(1); see also Sierra Club v. Johnson, 444 F. Supp. 2d 46, 60 (D.D.C. 2006).*fn2

While those petitions for review were pending 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. Id.

Sierra Club filed this lawsuit on July 14, 2011 to challenge the validity of EPA's Delay Notice. See generally Compl. In its complaint, Sierra Club asserts that it has a cause of action against EPA under the APA, and that this Court has jurisdiction to review the Delay Notice under the federal question statute, 28 U.S.C. § 1331. Compl. ¶ 8. Sierra Club contends that the Delay Notice is unlawful for three independent reasons: (1) EPA failed to provide notice and an opportunity for comment before issuing the Delay Notice, id. ¶¶ 33-36; (2) EPA lacked the authority to issue the Delay Notice, id. ¶¶ 37-43; and (3) EPA failed to provide adequate justification for the Delay Notice. Id. ¶¶ 44-47. In its request for relief, Sierra Club asks that the Court declare the Delay Notice unlawful and that the Court vacate it. Id. at 10.

The parties simultaneously briefed EPA's motion to dismiss for lack of subject matter jurisdiction and cross-motions for summary judgment. On September 27, 2011, the Court denied EPA's motion to dismiss, concluding that "[b]ecause EPA's Delay Notice was issued under the APA, it is subject to judicial review in this Court under 28 U.S.C. § 1331." Sierra Club v. Jackson, 2011 WL 4448610, at *11. Subsequently, in reviewing the parties' cross-motions for summary judgment, the Court found insufficient the parties' briefing on Sierra Club's first claim - that EPA failed to provide notice and an opportunity for comment before issuing the Delay Notice - and the Court therefore ordered supplemental briefing. See Sierra Club v. Jackson, Civil Action No. 11-1278, 2011 WL 4852208, at *1 (D.D.C. Oct. 13, 2011). That supplemental briefing has been completed, and the parties' cross-motions for summary judgment are ripe for decision.

In the parties' supplemental briefing, EPA again argued that this Court lacks subject matter jurisdiction over this case. The Court therefore first will address the issue of subject matter jurisdiction. It concludes that nothing in the parties' supplemental briefing requires the Court to revisit its determination that it has jurisdiction over Sierra Club's complaint. The Court then will address the merits of the parties' cross-motions for summary judgment.*fn3

II. SUBJECT MATTER JURISDICTION

On September 27, 2011, the Court denied EPA's motion to dismiss for lack of subject matter jurisdiction. See Sierra Club v. Jackson, 2011 WL 4448610, at *1. As the Court stated, it was unclear from EPA's papers whether the agency was asserting "(1) that this Court actually lacks jurisdiction, or (2) that this Court has jurisdiction, but should defer to the ancillary jurisdiction of the court of appeals." Id. at *4. "When pressed to clarify EPA's position during oral argument [on the motion to dismiss], counsel for EPA relied primarily on the agency's ancillary jurisdiction argument, but ultimately also asserted that the Clean Air Act divests this Court of jurisdiction over Sierra Club's complaint." Id.

The Court disagreed with EPA, concluding: EPA acted, by its own admission, under the [APA] in issuing the Delay Notice, rather than under the Clean Air Act. It did so because the APA's administrative stay provision gave EPA more flexibility than the Clean Air Act, the latter's stay provision being expressly limited to a maximum of three months, a time that has since passed in this case. But in its motion to dismiss, EPA asks this Court to conclude that the agency in fact acted under the Clean Air Act - the very Act that the agency expressly denied invoking in issuing the Delay Notice. . . [T]he Court . . . holds that the Delay Notice was issued under the APA, not the Clean Air Act. Because EPA's Delay Notice was issued under the APA, it is subject to judicial review in this Court under 28 U.S.C. § 1331.

Sierra Club v. Jackson, 2011 WL 4448610, at *11. Because EPA specifically invoked the APA to avoid the three-month limitation on stays issued under the Clean Air Act, the agency "must suffer the jurisdictional consequences of that decision." Id. at *7.

In reviewing the parties' cross-motions for summary judgment, the Court discovered an issue that neither side raised at the motion to dismiss stage that ultimately could relate to the Court's subject matter jurisdiction. The Court therefore ordered supplemental briefing in a Memorandum Opinion and Order issued on October 13, 2011. See Sierra Club v. Jackson, 2011 WL 4852208, at *1. As the Court stated in that Memorandum Opinion and Order, on the issue of Sierra Club's first claim the case law suggests that the suspension or delayed implementation of a final regulation normally constitutes substantive rulemaking that requires notice and an opportunity for comment. Id. at *2. In NRDC v. Abraham, 355 F.3d 179 (2d Cir. 2004), a case that neither side cited, the Second Circuit provides the reason why: "because 'altering the effective date of a duly promulgated standard could be, in substance, tantamount to an amendment or rescission of the [rule.]'" Sierra Club v. Jackson, 2011 WL 4852208, at *2 (quoting NRDC v. Abraham, 355 F.3d at 194) (alteration in original).

But the reasoning set forth in Abraham raised a new question in this case:

[I]f a suspension or delayed implementation constitutes a substantive rulemaking for the reason stated by NRDC v. Abraham, then the question arises why, at least under the Clean Air Act, any challenge to such a rule - including a challenge regarding the requirements of notice and comment - should not be raised in the court of appeals rather than in this Court?

Sierra Club v. Jackson, 2011 WL 4852208, at *2. In view of that unaddressed issue, the Court directed the parties to file supplemental memoranda on three questions:

(1) Is it Sierra Club's position that the Delay Notice is a rule because it operates as an amendment or rescission of the Boiler Rule and the CISWI Rule?

(2) If so, then why does Sierra Club's first claim not fall within the court of appeals' exclusive jurisdiction under 42 U.S.C. § 7607(b)(1) to review an amendment or rescission of the Boiler Rule and the CISWI Rule?

(3) If not, then on what authority does Sierra Club rely for the proposition that EPA was required to provide notice and an opportunity for comment before issuing the Delay Notice?

Id. at 3.

The parties made clear in their supplemental briefing that neither side contends that the Delay Notice operates as an amendment or rescission of the Boiler Rule or the CISWI Rule. See Pl. Supp. at 1 ("EPA's Delay Notice is neither an amendment nor a rescission of the delayed rules."); Def. Supp. Response at 2 (The Delay Notice "is only a temporary procedural device . . . that maintains the status quo[.]"); see also Intervenor Supp. Response at 1 n.1 (The Delay Notice "preserv[es] the status quo until administrative reconsideration or judicial review is complete."). According to the parties, the Delay Notice is a temporary stay that makes no change to the substantive requirements of either the Boiler Rule or the CISWI Rule. See Pl. Supp. at 4, 6; Def. Supp. Response at 2.

The Court finds no reason to disagree with the parties' characterization. Consequently, the Court need not revisit its prior decision denying EPA's motion to dismiss for lack of subject matter jurisdiction. The issue raised by the Second Circuit in NRDC v. Abraham is not implicated here. Instead, because EPA's Delay Notice was issued under the APA and because all agree that the Delay Notice does not operate as an amendment or rescission of a Clean Air Act rule, it is subject to judicial review in this Court under 28 U.S.C. § 1331. See Sierra Club v. Jackson, 2011 WL 4448610, at *11.

III. THE MERITS

EPA's Delay Notice is subject to review by this Court under the standard set forth in Section 706 of the APA. "The standard of review under Section 706 of the APA is a highly deferential one. It presumes agency action to be valid." Air Transport Ass'n of Am., Inc. v. National Mediation Bd., 719 F. Supp. 2d 26, 30 (D.D.C. 2010) (quotations omitted), aff'd, Nos. 10-5253, 10-5254, 10-5255, 2011 WL 6266355, at *1 (D.C. Cir. Dec. 16, 2011). Nevertheless, the Court "must reject agency action if it is 'arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.'" Id. (quoting 5 U.S.C. § 706(2)(A)). The Court also must reject agency action if it is "in excess of statutory jurisdiction, authority, or limitations, or short of statutory right[.]" 5 U.S.C. § 706(2)(C).

As the Supreme Court has stated, an agency action is arbitrary and capricious if the agency relied on factors which Congress has not intended it to consider, entirely failed to consider an important aspect of the problem, offered an explanation for its decision that runs counter to the evidence before the agency, or is so implausible that it could not be ascribed to a difference in view or the product of agency expertise.

Air Transport Ass'n of Am., Inc. v. National Mediation Bd., 719 F. Supp. 2d at 30 (quoting Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983)). Although review under Section 706 is "narrow," the agency "must examine the relevant data and articulate a satisfactory explanation for its action including a 'rational connection between the facts found and the choice made.'" Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins.

Co., 463 U.S. at 43 (quoting Burlington Truck Lines v. United States, 371 U.S. 156, 168 (1962)).

The parties have filed cross-motions for summary judgment. Under Rule 56 of the Federal Rules of Civil Procedure, summary judgment may be granted if "materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations . . . , admissions, interrogatory answers, or other materials" show that there is no genuine dispute as to any material fact and that the movant is entitled to judgment as a matter of law. FED. R. CIV. P. 56(c)(1)(A); see id. FED. R. CIV. P. 56(a). But where, as here, a case involves review of a final agency action under the APA, "the Court's role is limited to reviewing the administrative record, so the standard set forth in Rule 56(c) does not apply." Air Transport Ass'n of Am., Inc. v. National Mediation Bd., 719 F. Supp. 2d at 32.

Under the APA, it is the role of the agency to resolve factual issues to arrive at a decision that is supported by the administrative record, whereas the function of the district court is to determine whether or not as a matter of law the evidence in the administrative record permitted the agency to make the decision it did. . . . Summary judgment serves as the mechanism for deciding, as a matter of law, whether the agency action is supported by the administrative record and otherwise consistent with the APA standard of review, but the normal summary judgment standard does not apply.

Id. (quotations and citations omitted).

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. See PMSJ at 14-15. Second, Sierra Club contends that EPA lacked the authority to issue the Delay Notice. See id. at 15-19. And third, Sierra Club contends that the ...


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