On March 26th, the U.S. Court of Appeals for the D.C. Circuit (D.C. Circuit) granted a major victory to the Environmental Protection Agency (EPA) in the EPA's efforts to regulate air pollutants. In a unanimous decision, a three-judge panel upheld the agency's National Ambient Air Quality Standards (NAAQS or "standards") for ozone and fine particulate matter (PM) against challenges brought by industry representatives, environmental activists and several states.
The court's decision in American Trucking Association, Inc. v. EPA clears the way for implementation of the new NAAQS, which the EPA originally proposed in 1997. As the next step in that process, the EPA will designate areas that do not comply with the new standards. Last week, EPA officials stated that the timetable for announcing these noncompliance areas is uncertain because the agency is in the midst of examining monitoring data for ozone and PM.
Once the EPA designates noncompliance areas, the new standards will begin to have real effects on emitting sources. Under the Clean Air Act, states must develop plans to implement the NAAQS and submit these approaches to the EPA for approval. The State Implementation Plans (SIPs) must reduce emissions from industrial and other sources sufficient to achieve the new standards, and will likely impose additional requirements on power plants, which are a source of both PM and ozone precursors. States that fail to develop adequate plans are subject to sanctions or to imposition of a federal implementation plan.
The D.C. Circuit's decision comes approximately one year after the U.S. Supreme Court reversed much of an earlier ruling issued by the same three-judge panel (ATA I). In February 2001, the Supreme Court rejected industry arguments that the Clean Air Act, as interpreted by the EPA, effected an unconstitutional delegation of Congressional authority. The Supreme Court then remanded the case to the D.C. Circuit to consider claims that the EPA's actions in setting the standards were "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law" and, therefore, violated Section 307(d)(9) of the Clean Air Act.
In its opinion issued March 26th, the D.C. Circuit first rejected industry claims that its statements in ATA I, to the effect that the EPA did not articulate a clear principle for setting the level of the NAAQS effectively, established that the EPA had acted arbitrarily. The court noted that those statements reflected constitutional analysis regarding the delegation issue, and did not prejudge whether the levels set were reasonable under traditional administrative law analysis. The court then affirmed the EPA's broad discretion in setting health standards, rejecting industry arguments that the EPA was required to determine a "safe" level for each pollutant, and upheld the EPA's use of published scientific studies without the need to review and make public the data underlying those studies. Finally, the court rejected a challenge that environmental activists brought against the EPA's 24-hour PM standard.
The court's decision clears from its plate all but two issues related to the new NAAQS: (1) how the new ozone standard should be implemented consistent with the specific provisions of Subpart 2 of the Clean Air Act, which is written in terms of the older one hour standard; and (2) to what extent the purported health benefits of ground-level ozone (such as protecting against skin cancer by blocking ultraviolet sunlight) should be balanced against its adverse health impacts in setting the ozone standard. The EPA has begun a major rulemaking to develop its interpretation of how the ozone standard should be implemented, with a proposed rule expected this summer and a final decision next year. With respect to the health benefits issue, the EPA issued a proposed conclusion in December 2001 that the information in the record for the 1997 ozone standard was insufficient to assess whether ground-level ozone afforded any significant health benefits, and that the EPA therefore would not reconsider the level set in the ozone NAAQS. If the EPA adheres to this position in its final response to the remand, its position will likely be challenged by industry.