Score a victory for EPA in its long-running set of disputes with the State of Texas and generation facilities in Texas. Yesterday, in Luminant Generation Co. v. United States Environmental Protection Agency, the 5th Circuit Court of Appeals affirmed EPA’s decision to partially approval and partially reject the Texas SIP, essentially rejecting both environmentalist and industry challenges to EPA’s determination regarding excess emissions during startup, shutdown, and malfunction/maintenance (SSM). In short, the Court agreed with EPA’s decision to allow sources to assert an affirmative defense to an enforcement case related to excess emissions during unplanned SSM events, but to deny that defense in the case of planned SSM events.
Here are the highlights. The Court:
- undertook a careful Chevron deference analysis and determined that EPA’s interpretation was entitled to Chevron deference, was based on a reasonable interpretation of the statute, and was not arbitrary and capricious.
- made clear that the burden to establish the defense for unplanned SSM events remains always on the defendant; it does not shift to the plaintiff once the defendant has made a prima facie case.
- relied in part on EPA’s consistency in interpreting the relevant statutory provisions, as demonstrated by a series of EPA guidance memoranda issued over the years. As someone always concerned about EPA’s reliance on guidance, this section of the opinion troubles me, though I understand it here.
- reasonably distinguished between planned and unplanned SSM events, noting that, by definition, penalties cannot prevent excess emissions from unplanned events, but can help prevent excess emissions from planned events.
- noted further that the CAA only authorized defenses that are “’narrowly tailored’ to address unavoidable, excess emissions.”
- refused to sever startup and shutdown from maintenance. The problem with the SIP really was with the maintenance provisions, but the Court, for reasons too complicated to summarize here, refused to sever them. If Texas were to go back to the drawing board, however, it appears that the Court provided Texas with a roadmap for writing a SIP that would create an affirmative defense for planned startup and shutdown excess emissions, but not excess emissions resulting from planned maintenance activities.
The bottom-line take-away? The courts’ default remains to affirm EPA. If EPA provides a reasoned basis in the statute, particularly where the interpretation has been consistent over time, it is likely to win. The extended losing streak suffered by the Bush Administration EPA in the courts only goes to show that, whatever the policy merits of those positions (and I agreed with some of them), they were radical – not conservative – legal positions. The agency has to work hard to lose consistently in the courts.