On October 5, 2012, the Environmental Protection Agency (“EPA”) filed a petition with the U.S. Court of Appeals for the District of Columbia requesting en banc rehearing of its ruling on the EPA’s Cross State Air Pollution Rule (“CSAPR”).  The court, in a three judge panel, vacated CSAPR in a 2-1 decision on August 21, 2012 (“August 21 Order”).

CSAPR was finalized in July 2011 as a replacement for the Clean Air Interstate Rule (“CAIR”).  On December 30, 2011, the D.C. Circuit stayed the rule two days before it was set to go into effect, ordering the EPA to continue administering the previously promulgated CAIR until a final decision could be made on the merits of the rule.  In the August 21 Order, the panel held that CSAPR exceeded the EPA’s statutory authority under the Clean Air Act (“CAA”) in two ways: (1) the court determined that CSAPR may require upwind states to reduce their emissions by more than their own significant contributions to a downwind state’s nonattainment, contrary to the statute, and (2) the court found that the EPA lacked authority to implement the required emissions reductions through Federal Implementation Plans (“FIPs”), rather than affording the states an initial opportunity to implement the reductions through State Implementation Plans (“SIPs”).  SIPs are plans the states are required to submit that prohibit emissions that “contribute significantly” to the inability of other states to attain or maintain the national ambient air quality standards, due to pollution from “upwind” states traveling to and affecting “downwind” states.  If a state fails to submit an SIP, the EPA can then make a finding of failure to submit, which allows the EPA to create a FIP.

In requesting en banc review, the EPA argued that the court’s decision was inconsistent with court precedent and that the court lacked jurisdiction to make its ruling.  Specifically, the EPA claimed in its petition that the court erred in holding that the states are not required to submit SIPs until the EPA defines their level of contribution.  The EPA contended that this ruling was not relevant to the CSAPR, but rather pertained to the EPA’s finding of failures to submit a SIP or disapproval of a SIP, and as such, was not before the court.  Further, the EPA argued that the court exceeded its role in statutory interpretation.  The EPA claimed that the court was wrong to interpret the CAA as exempting states from submitting a SIP until the EPA determined the level of contribution from the state because by doing so, the court rewrote provisions of the CAA that were clear and unambiguous.

Additionally, the EPA argued that the court erred in allowing the Petitioners – which included various companies and a number of states – to raise a statutory claim that the EPA had exceeded its statutory authority.  The EPA stated that this argument was not raised during the rulemaking process, nor did Petitioners raise this argument in their brief.  

The August 21 Order was the result of 45 separate appeals from several companies, industry and environmental groups, and 15 states.  In order for the court to grant a full review, a majority of the eight judges must agree to rehearing.  If the court agrees to the rehearing, the court can decide the case on the current briefing, request a new round of briefing, or request a full en banc oral argument. 

A copy of the petition is available here.