Judges sharply question EPA, petitioners during cross-state rule arguments

In a vigorously contested oral argument, a federal appeals court today considered the legality of a key Obama administration regulation aimed at limiting air pollution that crosses state lines.

Sixteen states and various power companies are challenging U.S. EPA's Cross-State Air Pollution Rule (CSAPR), which is designed to meet the requirements of the "good neighbor" provision in the Clean Air Act. The regulation sets limits on nitrogen oxides (NOx) and sulfur dioxide (SO2) emissions from coal-fired power plants in 27 Eastern states (Greenwire, April 12).

A three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit this morning heard two hours of arguments in the case, EME Homer City Generation v. EPA.

The judges sharply questioned the challengers and EPA, with both sides at various points facing skepticism from the bench.

At times, the judges appeared to struggle to reconcile language of the Clean Air Act with two of the same court's previous decisions, an area of confusion that the parties are seeking to exploit.


EPA was forced to come up with a new rule after the same court found serious problems with the Bush administration's Clean Air Interstate Rule (CAIR) in 2008. The court held in North Carolina v. EPA that the program -- which also set up a trading system -- did not do enough to protect states from air pollution. The court allowed the rule to stay in effect while EPA went back to the drawing board.

That ruling followed a 2000 case, Michigan v. EPA, in which the D.C. Circuit tackled some of the same issues.

Judge Judith Rogers generally seemed most sympathetic to EPA, particularly when poking holes in the petitioners' argument that state sovereignty is infringed upon because it is EPA that has come up with a definition for what constitutes a "significant contribution" to another state's failure to reach its emissions targets.

Rogers noted that under the Clean Air Act, states already know they are subject to the "good neighbor" provision and can make efforts to monitor and regulate emissions before EPA acts.

"I'm not clear why the states can't know what to do," she told Texas Assistant Solicitor General Bill Davis, an attorney representing the states challenging the rule.

Judge Thomas Griffith also seemed to be with EPA on that issue, questioning why Davis was focusing on EPA's role in defining a state's significant contribution to downwind pollution in other states.

"Isn't that exactly what they are supposed to do?" he asked.

Of the three judges, Brett Kavanaugh was most hostile to EPA. At one point, he pressed Justice Department attorney Jon Lipshultz on whether EPA would accept any limit of its power to force emissions reductions, including a hypothetical situation in which a state is forced to reduce emissions by more than the amount it contributes to a neighboring state being out of attainment with national standards.

"That's where your legal theory leads, and that seems absurd," Kavanaugh said.

As the argument progressed, it became apparent that an issue that had not been briefed at great length could prove crucial: the question of whether the petitioners had waived some of their arguments by failing to make them at the notice-and-comment stage before the regulation was finalized.

Attorney Peter Keisler of Sidley Austin, representing the industry petitioners, was forced to give a forceful rebuttal in which he stated that the relevant issues had been "specifically raised" at an earlier point.

The case is on an expedited schedule, meaning a decision is expected within months.

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