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Supreme Court RoundUP: Pivotal Cases for the Clean Air Act

How greenhouse gases and Best Available Control Technology could shape the regulatory landscape—and the environment.

Fortnightly Magazine - December 2006

just days after the Fourth Circuit’s decision, the D.C. Circuit resolved a challenge to the validity of the PSD rules in New York v. EPA .19 In addition to addressing revisions to those rules that EPA had adopted in 2002, 20 the D.C. Circuit addressed an issue that previously was raised in a challenge to the 1980 rules and had been held in abeyance for the past 25 years. Specifically, industry had raised a concern about the emissions increase aspect of the definition of “modification” back in 1980, but suspended its challenge pending an EPA agreement to revisit that issue in further rulemaking. 21

EPA finally resolved the issue in the 2002 rule, deciding to stick with its definition based on annual emissions; 22 the D.C. Circuit subsequently allowed industry to revive its challenge. 23 In considering that challenge, the D.C. Circuit decided that EPA had not actually adopted the existing NSPS definition of “modification” for PSD purposes. 24 As to the Fourth Circuit’s holding just days before in Duke Energy —that Congress required the regulatory definitions to be the same—the D.C. Circuit held that industry had waived that argument, and so upheld EPA’s rules as valid. 25

United States v. Cinergy Corp ., an enforcement case similar to Duke Energy , was certified for appeal to the United States Court of Appeals for the Seventh Circuit in October 2005. 26 In an August 2006 decision, the Seventh Circuit held that the Fourth Circuit ruled incorrectly in Duke Energy ,27 thus creating a clear split between the courts of appeals. Specifically, the Seventh Circuit found that EPA is free to adopt different emissions increase tests for the definition of “modification,” even if the statutory PSD definition cross-references the NSPS definition. 28 Moreover, the Seventh Circuit found that reliance on an the statutory cross-reference was beyond the power of the courts of appeals to consider because it involved the validity of EPA’s rules, an issue reserved only to the D.C. Circuit. 29

The Supreme Court’s Review

In December 2005, Environmental Defense, an advocacy group that had intervened in the Duke Energy case on EPA’s side, petitioned the Supreme Court for review. (EPA actually opposed such review.) The Supreme Court has certified two questions it will consider: (1) whether the CAA’s “definition of ‘modification,’ which turns on whether there is an ‘increase’ in emissions and which applies to both the NSPS and PSD programs, rendered unlawful EPA’s longstanding regulatory test defining PSD ‘increases’ by reference to actual, annual emissions”; and (2) whether the D.C. Circuit has exclusive jurisdiction over the issue. 30

What Constitutes a Modification?

In its brief, EPA argues that the Fourth Circuit erred in ruling that the EPA lacks discretion to apply a regulatory test for PSD “modification” that differs from the NSPS test. 31 EPA contends that Congress had distinct purposes for NSPS and NSR. 32 EPA’s divergent tests for “modification,” it argues, effectuate this intent. 33 EPA further argues that the Fourth Circuit erred in holding that Congress’ cross-reference in the PSD definition of “modification” to the