The Fifth Circuit Rejects EPA’s Disapproval of Alabama’s Opacity Regulation: Do We Blame EPA, DOJ, or Two Judges?

On Wednesday, in Alabama Environmental Council v. EPA, the Fifth Circuit Court of Appeals rejected EPA’s 2011 disapproval of Alabama’s opacity regulation.  The case involves relatively obscure provisions of the Clean Air Act, but the decision nonetheless provides a number of – abject – lessons.

First, a short history.  In 2003, Alabama adopted a revision to its opacity regulations.  The revision allowed exceedances of the opacity standard, so long as those exceedances did not extend to more than 2% of a facility’s operating time during any calendar quarter.  With some interim history and details not worth summarizing here, EPA approved the opacity regulation in 2008.  On January 15, 2009, EPA rejected a formal petition that it reconsider its approval.  However, on February 25, 2009 (yes, I believe that there may have been a change in administration in the interim), a second petition was filed, and the second petition was granted in April 2009.  In 2011, EPA formally disapproved the Alabama regulation.

Under the CAA, absent a SIP Call, EPA may only modify a SIP in order to “correct” a SIP revision approved “in error.”  First abject lesson?  If EPA wants to reject a previously-approved SIP provision under § 110(k)(6), its chances of surviving judicial challenge increase if EPA actually identifies the error previously made when the SIP was originally approved.  This EPA failed to do.

Second abject lesson?  If you’re DOJ and you are representing EPA following a disapproval under § 110(k)(6), scour the record and identify the error that EPA corrected by the retroactive disapproval.  This DOJ failed to do.  According to the Court, the brief filed by DOJ “fails to provide a clear statement of the error committed in the 2008 approval.”  Moreover, at oral argument, the DOJ attorney apparently acknowledged that EPA’s Federal Register notice did not identify any specific error.

Third and final abject lesson?  While courts of appeal pay lip service to agency discretion, they pretty much do what they damn well please.  The two-judge majority here specifically said that they were not requiring EPA to use “magic words” to invoke § 110(k)(6).  However, as Judge Molloy noted in his dissent, that is basically just what the majority did.  First, Judge Molloy quotes extensively from EPA’s Federal Register promulgation of the disapproval – identifying, notwithstanding EPA’s failure to use the word “error” and the concession by DOJ, the errors in the 2008 approval.

My favorite part of the dissent is where Judge Molloy points out that

No one affected by EPA’s decision in this case claims they were unable to understand why the agency was concerned about its prior decision.  On the contrary, both the State and the utility industries avoid making any such claim….  The majority’s conclusion that the EPA “failed to articulate an error” reflects a determination of what the majority expects the articulation of error to sound like and less to do with the EPA’s process or its findings….

Isn’t that telling?  If everyone except the court of appeals majority knows what EPA considered to be the “error” in its 2008 SIP approval, isn’t that sufficient?  Sounds to me as though the majority did want the “magic words.”

Finally, I note that Judge Molloy is a district judge, sitting by designation.  Doesn’t seem as though he cares much if he’s invited back by the 5th Circuit.

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