An amalgam of state and federal statutes, regulations, and common-law principles covering air pollution, water pollution, hazardous waste, the wilderness, and endangered wildlife.
D.C. Circuit Strikes Down Obama-Era Rule on Air Conditioner Chemicals
In 2017 a three-judge panel of the U.S. Court of Appeals for the District of Columbia ruled that the ENVIRONMENTAL PROTECTION AGENCY exceeded its statutory authority when it established a rule requiring businesses to stop using certain substances that the agency had previously approved. These substances are commonly used in a variety of products, including motor vehicle air conditioners, and the EPA's rule would require companies to use alternative chemicals in those common products. Mexichem Fluor, Inc. v. Environmental Protection Agency, 866 F.3d 451 (D.C. Cir. 2017).
The statutory issue in the case focused on Title VI of the CLEAN AIR ACT, 42 U.S.C. §§ 7671 et seq., which focuses on stratospheric ozone protection. In 1987 the United States entered into the Montreal Protocol, under which all members of the UNITED NATIONS agreed to regulate the production and use of ozone-depleting substances. Congress enacted Title VI in 1990 to implement the U.S. obligations under the protocol. The ban on ozone-depleting substances took effect in 1994.
Section 612(a) of Title VI establishes that the United States, “[t]o the maximum extent practicable,” must replace ozone-depleting substances with “chemicals, product substitutes, or alternative manufacturing processes that reduce overall risks to human health and the environment.” Section 612(c) prohibits a manufacturer from replacing an ozone-depleting substance with a prohibited substance. The statute delegated authority to the EPA to determine which substances are prohibited. The program used by the EPA to review substances became known as the Significant Safe Alternatives Policy, or SNAP.
Before 1994 many manufacturers used ozone-depleting substances in a variety of Page 77 | Top of Articlecommon products, including aerosols, motor vehicle air conditioners, commercial refrigerators, and foams. The EPA established a list of safe substitutes and included hydrofluorocarbons (HFCs) as one of those substitutes. Many manufacturers now use HFCs in those common products. When the EPA approved its regulation in 1994, the agency determined that Title VI did not give the EPA authority “to review substitutes for substances that are not themselves” ozone-depleting substances.
In the years that followed the approval of the regulation, studies showed that when HFCs are emitted, they trap heat in the atmosphere. Thus, they are known as “greenhouse gases,” which contribute to global warming. On the other hand, HFCs do not deplete the ozone layer, so they are not considered ozone-depleting substances and are themselves substitutes for ozone-depleting substances. Nevertheless, the EPA became increasingly concerned about the role that greenhouse gases play in climate change. In 2009 the agency issued a report summarizing its findings about the effects of greenhouse gases.
Despite calls to take action, Congress did not amend the Clean Air Act, so President BARACK OBAMA decided to address the problem through executive power. He announced in 2013 that the EPA would adopt rules aimed at reducing greenhouse gases. The president's plan called for the EPA to “use its authority through the Significant New Alternatives Policy Program” to reduce emissions of HFCs. Pursuant to this directive, the EPA in 2015 announced a rule change under which HFCs were moved from the list of “safe” substitutes to “prohibited” substitutes. Accordingly, manufacturers who had used HFCs for years could no longer do so.
The EPA asserted that Title VI gave the agency authority to (in the agency's words) “change the listing status of a particular substitute” in light of “new information.” The new information, according to the EPA, was that greenhouse gases contribute to global warming, so the agency argued that it had the ability to change a substance from safe to prohibited. Moreover, the agency said it could require manufacturers to replace HFCs with other substances even though HFCs are not ozone-depleting substances.
Manufacturers that use HFCs in their products challenged the rule as petitioners in federal court. The two named manufacturers included Mexichem Fluor and Arkema. These petitioners made two principal arguments. First, they asserted that the EPA did not have statutory authority under Title VI to require manufacturers to replace HFCs because HFCs are not ozone-depleting substances addressed by the Act. Second, the petitioners argued that the EPA acted in an arbitrary and capricious manner because it did not adequately explain its decision or consider some additional facts when promulgating the rule change in 2015.
A three-judge panel with the D.C. Circuit reviewed the petition. In a 2–1 decision, the court ruled in the petitioners' favor. Judge BRETT M. KAVANAUGH wrote for the majority, while Judge Robert L. Wilkins concurred in part and dissented in part.
The majority focused on the EPA's reading of the term “replace” in the statute. The EPA had authority to establish guidelines for when a manufacturer could replace an ozone-depleting substance with a substitute substance. According to the EPA, this replacement process is ongoing, so the EPA should have continual authority to establish which substitutes are safe and which ones are prohibited.
The majority disagreed. The court reviewed definitions of “replace” and noted that the word means “take the place of” or “a new thing taking the place of the old.” With respect to the substances at issue, the court noted,
[M]anufacturers “replace” an ozone-depleting substance when they transition to making the same product with a substitute substance. After that transition has occurred, the replacement has been effectuated, and the manufacturer no longer makes a product that uses an ozone-depleting substance. At that point, there is no ozone-depleting substance to “replace” as the EPA itself long recognized.
The EPA also tried to argue that it could retroactively determine that a substitute substance is prohibited rather than safe. The court did not dismiss the argument but instead remanded the case for the EPA to determine whether it could articulate a “retroactive disapproval” theory that would be consistent with the statute. The court ruled that the EPA could not enforce the substance of its 2015 rule until the agency determined that it had proper authority to do so.
Judge Wilkins disagreed with the majority's interpretation of the word “replace.” He Page 78 | Top of Articleconcluded that the term is ambiguous and would instead review whether the agency's interpretation of the term was reasonable. Because he thought the interpretation was reasonable, he would have denied the petition.
National Association of Manufacturers v. Department of Defense
Although the precise issue being litigated before the U.S. SUPREME COURT was procedural in National Association of Manufacturers v. Department of Defense, 138 S. Ct. 617, 199 L. Ed. 2d 501 (2018), the underlying subject matter controlled most of the media coverage about the case: the definition of “water” under the CLEAN WATER ACT, 33 U.S.C. § 1251 et seq. (the “Act').
The precise question before the Court was limited to whether the U.S. Circuit Court of Appeals for the Sixth Circuit erred in holding that it had jurisdiction to analyze a 2015 Clean Water Rule under the Obama administration. The new rule did not actually issue or deny a permit, but rather defined the waters that fall within the scope of the Act. A unanimous Supreme Court, in an opinion written by Justice SONIA SOTOMAYOR, ruled that the Sixth Circuit had erred. The Court reversed the appellate circuit decision and remanded the case back to federal district court for adjudication on the merits. In this case, “adjudication on the merits” included challenges to the new rule's definition of “waters of the United States” under the Act.
The adoption of a new definition of “water” under the operative “waters of the United States” language in the Clean Water Act had significant consequences for private landowners: the new definition was much broader in geographic reach, subjecting significantly more private property to federal control. In fact, the rule's new definition would cover virtually all waters of the United States, including every tributary of “navigable water,” and also include the 100-year floodplain that covered millions of stream miles, isolated pools and potholes, and, on a case-by-case basis, any water within 4,000 feet of a tributary.
A short review of relevant statutes and regulations is necessary to understand the issue. The Clean Water Act prohibits the “discharge of any pollutant by any person” (with specific circumstantial exceptions), into the NAVIGABLE WATERS of the United States, 33 U.S.C. § 1311(a). A “discharge of a pollutant” includes “any addition of any pollutant to navigable waters from any point source,” § 1362(12). “Navigable waters” is further defined by statute as “the waters of the United States,” § 1362(7). One of the exceptions to the general prohibition requires that before any pollutants are discharged from any point source into the navigable waters of the United States, a National Pollutant Discharge Elimination System (NPDES) permit must first be obtained from the EPA. The other possible exception involves a program administered by the Army Corps of Engineers.
Under the purview of the Act, the EPA and the Army Corps can limit or prohibit the use of any water or project, subject to jurisdiction, and impose fines for enforcement up to $37,500 a day for violations. The EPA, upon determining that a violation has occurred, may issue a compliance order or initiate a civil enforcement action in court.
A party may challenge a final action by the EPA in federal district court, under the Administrative Procedure Act (APA), 5 U.S.C. § 500 et seq. The APA provides for judicial review of “final agency action for which there is no other adequate remedy in a court,” 5 U.S.C. § 704.
But there are seven categories of EPA actions under the Act for which review of the action goes directly (and exclusively) to a federal court of appeals. Most have to do with “approving or promulgating any effluent limitation or other limitation” under certain sections of the Act, 33 U.S.C. § 1369(b)(1)(E). And one category, as relevant here, involves review of actions “issuing or denying any permit under section 1342,” 33 U.S.C. § 1369 (b)(1)(F).
The National Association of Manufacturers and a bevy of other companies, individuals (ranchers, farmers, etc.), and property owners challenged the new definition in several federal district courts across the country. Even though, in separate actions in different states, they were all impacted by and therefore challenging the rule's new definition of “waters of the United States” (WOTUS Rule), the underlying actions that EPA took in their individual cases differed. Others, to protect their cases, filed simultaneously in both district and appeals courts in Page 79 | Top of Articlecase the district court cases were dismissed for lack of jurisdiction. The government held the position that all such cases must be brought first in a court of appeals. Specifically, the government argued that the WOTUS Rule fell under 33 U.S.C. § 1369(b)(1)(E)and(F), triggering direct review of the APPELLATE courts.
The Sixth and Eighth Circuit Courts of Appeals disagreed, triggering review by the Supreme Court. All nine justices of the Supreme Court agreed: The Sixth Circuit erred in holding that, as an appellate court, it had direct jurisdiction over the matter, specifically under 33 U.S.C. § 1369(b)(1)(E)and(F). But the Supreme Court found neither of these categories granting direct and exclusive review applied to the WOTUS Rule challenge.
First, subparagraph (E) granted exclusive jurisdiction to review any EPA action “in approving or promulgating any effluent limitation or other limitation under section 1311, 1312, 1316, or 1345.” 33 U.S.C. § 1369 (b)(1) (E). The WOTUS Rule was not an “effluent limitation,” defined by the Act as “any restriction … on quantities, rates, and concentrations” of certain pollutants. It also did not qualify as an “other limitation” under subparagraph (E).
Likewise, the Court found no relevance to subparagraph (F), which granted direct and exclusive jurisdiction to appellate circuits for review of any EPA action “in issuing or denying any permit under Section 1342.” 33 U.S.C. § 1369 (b)(1)(E).
The government had further argued that initial review in appellate circuits “promotes the important goal of national uniformity with regard to broad regulations.” The Court, while acknowledging “logical force” in that argument, noted that “Congress did not pursue that end at all costs.” Finally, the government had argued that there was a presumption favoring court of appeals review of administrative actions. Again, the Court rejected that argument, clearly not applicable here, by the very specific language in the statute, limiting initial review to the seven categories.
The court remanded the case to the federal district courts, instructing those courts to flesh out arguments pro and con regarding the constitutionality and the practicality of the broader definition of “waters of the United States.”