Legal showdown looms over EPA smog-fighting plan

By Sean Reilly | 11/16/2023 01:15 PM EST

The broader battle illustrates how evolving legal tactics can stymie even Clean Air Act regulations previously seen as secure.

Homes are seen with the Valero Houston Refinery in the background.

Homes are seen with the Valero Houston Refinery in the background March 23, 2020. Texas, Louisiana and Mississippi — alongside power companies and other businesses — are involved in a lawsuit seeking to throw out EPA's disapprovals of their state smog pollution plans. David J. Phillip/AP

Any time EPA mounts a fresh “good neighbor” crackdown on the perennial problem of state-hopping smog pollution, a barrage of legal attacks is a given.

But in the latest go-round, the agency faces a novel and unprecedented onslaught of litigation that is already undercutting its ability to curb emissions tied to a lung-damaging pollutant particularly harmful to children.

And while the Supreme Court weighs bids for a nationwide stay on implementation of the EPA blueprint, another high-stakes clash looms early next month.


A three-judge panel on the 5th U.S. Circuit Court of Appeals will hold oral arguments on jockeying by Texas, Louisiana and Mississippi — alongside power companies and other businesses — to throw out EPA’s disapprovals of their respective state good neighbor plans.

Because those disapprovals were an essential run-up to EPA’s decision to impose the federal alternative, a ruling in the plaintiffs’ favor could at least temporarily gut the agency’s ability to enforce stiffer curbs on smog-forming emissions from industries in those three states.

In the Dec. 4 arguments, the trio is likely to level an accusation that challengers in other circuit courts are similarly poised to raise: That EPA effectively sandbagged them by sitting on their plans for years and then tapping new air quality models and data to flunk them.

Not only did federal regulators overstep their statutory authority, they “deprived Texas of fair notice of the standards by which its submission would be judged,” Lone Star State lawyers wrote in a September brief.

Attorneys for EPA had earlier disputed the allegations of a “surprise switcheroo.” The updated modeling was intended not to move the goal posts, they wrote, but “to provide updated emissions projections, which neither the states nor EPA could validly ignore.”

Amid a mosh pit of lawsuits that now straddle more than a half-dozen appellate courts, the New Orleans-based 5th Circuit will be the first to hold arguments on the merits of the challenges to the disapproval rule.

A divided three-judge panel had earlier stayed the rule as it now applies to Texas, Louisiana and Mississippi. What’s expected to be a different panel will now decide whether to toss it.

Both Texas and Louisiana are heavy industry havens that are major sources of smog-forming pollutants. Sources include coal-fired power plants, refineries and chemical manufacturing operations. Louisiana, in particular, “has some of the greatest impacts on another state’s air quality of any state in the country,” according to the EPA filing.

The outcome is “very significant from the standpoint that these are a big chunk of the emissions that are causing problems nationwide,” Zachary Fabish, a Sierra Club senior attorney, said in an interview. The environmental group is one of several that filed a joint friend-of-court brief endorsing EPA’s rejection of “do-nothing” state submissions.

Fabish also helped prepare separate comments citing data that smog levels this year have been higher than what federal regulators anticipated when they designed their good neighbor rule.

‘The litigation just drags it out’

The broader battle illustrates how evolving and aggressive legal tactics can stymie even Clean Air Act regulations previously seen as secure based on a court-sanctioned foundation.

“Ultimately, I think EPA wins, but the litigation just drags it out further and further and further,” said Victor Flatt, an environmental law professor at Case Western Reserve University School of Law.

Of the 23 states initially covered by EPA’s good neighbor rule, which took effect in August, the agency has frozen implementation for a dozen in response to rulings by the 5th Circuit and other courts.

As a result, coal-fired power plants in those 12 states were spared from initial compliance — and potentially stiffer compliance costs — with the stricter regulations during the remainder of this summer’s ozone season, which ran from May through September.

Given the plodding pace of the appeals process, at least some of those holds could still be in place by next May, meaning that the impact on air quality could heighten during next year’s ozone season.

The good neighbor rule issued this year is the latest in a series dating back more than a decade; it is intended to enforce a Clean Air Act ban on industrial emissions that make it harder for downwind states to meet the current ground-level ozone standard of 70 parts per billion. Ozone, the main ingredient in smog, is linked to asthma attacks in children, worsened breathing problems in adults with chronic respiratory diseases and metabolic disorders like diabetes.

Eight years after EPA set the 70 ppb limit, more than 117 million people live in areas that are out of compliance, with upwind emissions in some places shouldering a significant share of the blame. The new plan is expected to prevent up to 1,300 premature deaths in 2026, according an agency forecast, with health benefits that far outweigh the costs.

But if state regulators normally have the lead on Clean Air Act oversight, they are often loathe to confront electric utilities and other politically influential business interests.

As a result, EPA has repeatedly stepped in to craft good neighbor regulations for them. Legal challenges have followed, but they usually played out before the U.S. Court of Appeals for the District of Columbia Circuit, the standard venue for fights over nationally applicable air rules. In 2019, for example, the D.C. Circuit largely upheld an earlier good neighbor rule that was in turn the offshoot of a predecessor approved by the Supreme Court in 6-2 decision five years earlier.

In the past, however, many states didn’t bother turning in their own good neighbor plans, giving EPA a relatively free hand. That changed in this round, with the result that foes seized on both a new foothold for lawsuits and an argument for bringing them elsewhere than the D.C. Circuit.

This February, EPA published the final rule in the Federal Register, rejecting in whole or in part 21 state plans after releasing a draft version last year. “I think everyone started thinking about challenging at that point,” said one lawyer for opponents who spoke on the condition of anonymity because of their involvement in the current litigation.

The day after the final rule’s publication, Texas pounced with the initial suit brought before the 5th Circuit. The disapproval of the state’s plan was a “locally or regionally applicable” action, the filing said, and therefore belonged before the regional appeals court.

EPA continues to contend that the proper venue is the D.C. Circuit. Bill Davis, deputy solicitor general in the Texas attorney general’s office, referred questions this week about the state’s strategy to press aides, who did not respond to emailed queries. An EPA spokesperson declined to comment on active litigation.

In the interim, proceedings in a host of other suits directly contesting the federal good neighbor rule are underway before the D.C. Circuit. In seeking a Supreme Court stay of the rule last month, three other states maintained that the plan “is down to a sliver of what the EPA intended” and is thus no longer workable.

The high court has yet to rule; the D.C. Circuit had previously rejected stay requests.

Flatt, the Case Western law professor, expects the latter court to eventually uphold the EPA good neighbor rule, which would then empower the agency to require holdout states to redo their emissions control plans. Asked by text how long that might take, Flatt called it a “hard question to answer,” but ventured a prediction: two to four years.