Cal. Cmty. Against Toxics v. Envtl. Prot. Agency
Opinion of the Court
Wilkins, Circuit Judge.
This case asks us to determine the nature of an agency action, an inquiry that - paradoxically - is quotidian but abstruse. When we are confronted with agency action, the litany of questions is by now very well-rehearsed: Is it final? Is it ripe? Is it a policy statement? Is it an interpretive rule? Is it a legislative rule? Despite the clarity of these questions, however, predictable answers have eluded courts and commentators. See, e.g., Perez v. Mortg. Bankers Ass'n. , --- U.S. ----,
The agency action before us is a 2018 memorandum ("Wehrum Memo") that William L. Wehrum, Assistant Administrator for the Environmental Protection Agency's ("EPA") Office of Air and Radiation, issued to all Regional Air Division Directors. The Wehrum Memo declares that the plain language of § 112 of the Clean Air Act ("Act" or "CAA"),
Petitioners are the State of California and a group of environmental organizations whose citizens and members, respectively, breathe the air in the vicinity of regulated sources. EPA is the Respondent, and a group of industry organizations have joined as Intervenor. Petitioners contend that we can and should review the Wehrum Memo because it is final agency action and prudentially ripe. Moreover, Petitioners argue, the Wehrum Memo is a legislative rule, and it is therefore procedurally defective under the Administrative Procedure Act ("APA"),
For the reasons explained herein, we hold that the Wehrum Memo is not final agency action, and we dismiss the petitions for lack of subject matter jurisdiction under the Act. We express no opinion as to whether the Wehrum Memo is prudentially ripe, an interpretive rule or a legislative rule, or on the merits of its interpretation of § 112. In holding that the Wehrum Memo is not final, we emphasize two points. First, when assessing the nature of an agency action (including whether it is final), courts should resist the temptation to define the action by comparing it to superficially similar actions in the caselaw. Rather, courts should take as their NorthStar the unique constellation of statutes and regulations that govern the action at issue. Second, although all legislative rules are final, not all final rules are legislative, and the finality analysis is therefore distinct from the test for whether an agency action is a legislative rule.
I.
Because they share a progenitor, a reliable approach to understanding a James Baldwin novel is to compare it, according to a set of criteria, to another *632work in his oeuvre. Indeed, a thematic reading of Giovanni's Room is sure to inform such a reading of The Fire Next Time , and vice versa. Not so, however, with respect to the broad set of phenomena we categorize as agency action. Because few, if any, of them are governed by the exact same combination of statutes and regulations, it is a mistake to assume - even if they appear facially similar - that they can lend each other definition through comparison, or that they are decipherable under a common rubric. Rather, to ascertain the nature of an agency action, courts should ground the analysis in the idiosyncratic regime of statutes and regulations that govern it. We have great sympathy for the desire to develop a one-size-fits-all heuristic. See, e.g., Nat'l Min .,
Accordingly, we turn first to the CAA provisions and EPA regulations that govern the Wehrum Memo.
Congress enacted the CAA,
Whether EPA classifies a source as major or area has major consequences for both sources of hazardous air pollutants, which must comply with emissions standards, and regulatory beneficiaries, who live, work, recreate - and thus regularly breathe the air - near sources of hazardous air pollutants. For major sources, the Act requires EPA to establish stringent emissions caps that result in "the maximum degree of reduction in emissions ... (including a prohibition on such emissions, where achievable)."
Of course, emissions caps are of little use if sources do not comply with them. Presumably in recognition of this, Congress enacted Title V of the CAA,
But what if a state permitting authority issues or denies a permit application on a ground that a regulated source, or a regulatory beneficiary believes contravenes the Act? Congress apparently foresaw this circumstance, too. Indeed, Title V provides a detailed administrative process that dictates exactly when and how regulated sources and regulatory beneficiaries may seek EPA review of a state permitting authority's action, and, ultimately, judicial review of EPA action. See
Importantly, for reasons that will become clear, § 7661d specifies: (1) that "[n]o objection shall be subject to judicial review until the Administrator takes final action to issue or deny a permit under this subsection,"
With an understanding of the major statutory provisions and some of the regulations that govern the Wehrum Memo, we now provide fuller descriptions of the Wehrum Memo's predecessor, the Seitz Memo, and the Wehrum Memo itself. Where appropriate, we take care to note additional applicable CAA provisions and EPA regulations.
In 1995, without providing notice and comment, John Seitz - then Director of EPA's Office of Air Quality Planning and Standards - issued a memorandum to "clarify when a major source of [hazardous air pollutants] can become an area source" under § 112. J.A. 232 (underline in original). A major source may reclassify to an area source by limiting its potential to emit to below the major source threshold, the Seitz Memo concluded, only until the first date on which it must comply with a MACT standard or any other substantive regulatory requirement under the Act.
On January 25, 2018, however, EPA announced it was reversing course. That day, William L. Wehrum, Assistant Administrator for EPA's Office of Air and Radiation, and "principal adviser to the Administrator in matters pertaining to air and radiation programs,"
II.
Before explaining why the Wehrum Memo is not final agency action, we take a moment to clarify the proper test for finality. In this Court, its contours have become blurred amidst the "considerable smog," Ass'n. of Flight Attendants v. Huerta ,
Subsuming the finality analysis within the test for whether a rule is legislative is not always inappropriate; if a rule is legislative it has the force and effect of law, and a legislative rule is thus necessarily final. As the Supreme Court has twice reminded us within the last five years, however, if a rule is final it is not necessarily legislative, and therefore the finality analysis is distinct from the test for whether an agency action is a legislative rule.
In United States Army Corps of Engineers v. Hawkes Co. , --- U.S. ----,
Perez , too, makes clear that the finality analysis is distinct from the test for whether a rule is legislative. There, the Court affirmed the "longstanding recognition that interpretive rules do not have the force and effect of law." Perez ,
As commentators explain, maintaining an independent finality analysis is not merely a theoretical nicety; it has several salutary effects in practice. For example - as Perez alludes to, see
Having clarified the proper test for finality, we now apply it to the Wehrum Memo. Consistent with the interpretive method we endorse herein, we hew closely to the CAA provisions and EPA regulations appertaining thereto.
Our first question is whether the Wehrum Memo "mark[s] the consummation of [EPA's] decisionmaking process." Hawkes ,
Because the Wehrum Memo satisfies Bennett's first prong, we ask next whether it has "direct and appreciable legal consequences." Hawkes ,
For reasons now explained, we hold that the Wehrum Memo does not have a single direct and appreciable legal consequence.
Hawkes instructs that whether an agency action has direct and appreciable legal consequences is a " 'pragmatic' " inquiry. Id. at 1815 (quoting Abbott Labs. v. Gardner ,
Quite recently, in Valero Energy Corporation v. EPA ,
Assessing the Wehrum Memo under Hawkes and in accordance with Valero , we find that it is not final. True, it unequivocally declares that major sources, at such time that they limit their potential to emit to below the major source threshold, "will no longer be" subject to MACT standards. J.A. 1. Viewed within the context of the Act, however, the Wehrum Memo is all bark and no bite. As Respondent averred twice at oral argument, neither EPA nor any regulated source can rely on the Wehrum Memo within the Title V permitting process or in any other proceeding. Oral Arg. 50:15-50:27, 1:01:13-1:01:50. In other words, as Respondent concedes, although the Wehrum Memo forecasts EPA's position as to § 112, it has no independent legal authority. In addition, under the Act and EPA regulations, a state permitting authority that refuses to comply with the Wehrum Memo faces no penalty or liability of any sort. Further still, the instant matter does not present a circumstance *638where the action at issue may be legally consequential because its binds agency staff and affected parties have no means (outside of judicial review) by which to challenge it. To the contrary, the Act contains clear provisions pursuant to which: (1) a state permitting authority can refuse to apply the Wehrum Memo and seek judicial review if EPA issues a permit over its refusal,
Accordingly, although the Wehrum Memo, in no uncertain terms, forecasts EPA's definitive interpretation of § 112, it has no direct and appreciable legal consequences: neither EPA nor regulated sources can rely on it as independently authoritative in any proceeding; state permitting authorities face no penalty or liability of any sort in ignoring it; and state permitting authorities and regulatory beneficiaries have clear statutory avenues by which to challenge a permitting decision adopting the reasoning of the Wehrum Memo and seek judicial review if EPA fails to sustain their challenges. Under § 7661d(c), if a state permitting authority refuses to issue a permit allowing a major source to reclassify as an area source, and EPA subsequently issues such a permit following the reasoning of the Wehrum Memo, judicial review is appropriate. Under § 7661d(b)(2), if EPA, following the reasoning of the Wehrum Memo, denies a petition from any person asking the agency to object to a state permitting authority's issuance of a permit that allows a major source to reclassify as an area source, judicial review is appropriate. Indeed, because Congress specified that "[n]o objection shall be subject to review until the Administrator takes final action to issue or deny a permit under this subsection," § 7661d(c), we would contravene Congressional intent if we were to hold that a memo that merely forecasts a future objection is final agency action and subject to judicial review at this time.
The dissent insists that the Wehrum Memo satisfies Bennett 's second prong because it "altered the legal regime." Dis. Op. 647. Indeed, the dissent forewarns, the Wehrum Memo "commands, orders, and dictates [to]" EPA employees,
While the question is not free from doubt, we respectfully disagree. As noted above, we must remain laser focused on whether the Wehrum Memo gives "rise to 'direct and appreciable legal consequences.' " Hawkes ,
* * *
Before concluding, we note that we have twice had occasion to ask whether an EPA guidance document that implicated the Act's Title V permitting process was final agency action: first in Appalachian Power Co. v. EPA ,
In Appalachian Power , at issue was a nineteen-page guidance document relating to certain monitoring requirements for Title V sources. Appalachian Power ,
*640In National Environmental , the guidance document before us explained that, due to a decision of the Sixth Circuit, EPA was altering a certain interpretation of its regulations only for Title V sources located within the Sixth Circuit's jurisdiction. Nat'l Envtl .,
Appalachian Power and National Environmental are thus, contrary to what the dissent suggests, see Dis. Op. 641-42, distinct from the instant matter in a crucial respect. In those cases, we held that the guidance documents at issue were final under § 7607(b)(1), without reference to § 7661d, because EPA and state permitting authorities wielded them to effectuate legal consequences. In Appalachian Power , we found that the guidance at issue required state permitting authorities to take at least two specific actions and that EPA did not deny that state permitting authorities used it to coerce regulated sources to adopt a stricter monitoring method. In National Environmental , we found that EPA cited the guidance, within a binding FIP approval, as the sole authority in support of a legal conclusion. By contrast, the Wehrum Memo does not require any entity or person to do anything, and EPA concedes that it has not, will not, and cannot rely on it in any proceeding. Accordingly, unlike in Appalachian Power and National Environmental , we have no basis to conclude, without reference to § 7661d, that we have jurisdiction over the guidance before us under § 7607(b)(1). We note, in addition, that in Appalachian Power , we found that we would lack jurisdiction over challenges to permitting decisions applying the guidance at issue. Here, however, any party entitled to review under § 7661d that wishes to challenge an application of the Wehrum Memo in this Court will be so heard, since the Wehrum Memo's principal conclusion is nationally applicable. See § 7607(b)(1).
In sum, we find that the Wehrum Memo - assessed within the context of the Act and EPA regulations - is not final agency action, and we dismiss the petitions for lack of subject matter jurisdiction under the Act. The Wehrum Memo marks the consummation of EPA's decisionmaking process as to when a major source may reclassify to an area source under § 112. But the Wehrum Memo does not have direct and appreciable legal consequences: it does not require anyone to do anything; neither EPA nor regulated sources can rely on it in any proceeding; state permitting authorities face no penalty or liability in ignoring it; state permitting authorities and regulatory beneficiaries have clear statutory avenues by which to challenge it and seek judicial review if EPA refuses to heed their challenges; and any such challenges, if so desired, will be heard in this Court.
III.
To conclude, we note that we are under no illusion that this opinion will be the *641Rosetta Stone of understanding the nature of agency action. Developing this area of the law is indeed an "important continuing project." Nat'l Min . Ass'n ,
So ordered.
As we have observed, the Act does not provide any parameters for setting GACT standards, but its legislative history describes GACT as " 'methods ... [that] are commercially available and appropriate for application ... considering economic impacts and the technical capabilities of firms to operate and maintain the emissions control systems.' " U.S. Sugar Corp. v. EPA ,
Dissenting Opinion
On February 8, 2018, EPA formally announced in the Federal Register that "the plain language of the definitions of 'major source'... and of 'area source' in Section 112 of the [Clean Air Act] compels the conclusion that a major source becomes an area source at such time that the source takes an enforceable limit on its potential to emit [ ] hazardous air pollutants [ ] below the major source thresholds ...."
I.
Section 7607(b)(1) provides that this court shall have jurisdiction to review nationally applicable "final action taken" by the Administrator of EPA.
The Supreme Court has "characterized the special judicial review provision of the CAA,
A.
The court has repeatedly held that judicial review is available pursuant to Section 7607(b)(1) for guidance documents that bind EPA officials on how to make Title V permitting decisions.
In Appalachian Power Co. v. EPA ,
Also, in National Environmental Development Ass'n's Clean Air Project v. EPA ,
Similarly, in the context of review of state implementation plans required by the CAA, the court held in Natural Resources Defense Council ,
In sum, the court has repeatedly held that guidance documents, which on their face bind enforcement officials to apply a certain standard or interpretation under the CAA, including in the Title V context, are final actions subject to review pursuant to Section 7607(b)(1).
The Wehrum Memorandum states the law that EPA officials must apply in Title V permitting. Addressed to EPA Regional Air Division Directors, the Wehrum Memorandum "provides firm guidance to enforcement officials about how to handle permitting decisions." Nat. Envmtl. Dev. ,
Under the statutory scheme, state permitting authorities are subject to the statutory interpretation announced in the Wehrum Memorandum stating EPA's unequivocal position. The Wehrum Memorandum directs EPA enforcement officials to send the memorandum to the States and thereby, in light of the Federal Register Notice, puts States doubly on notice that EPA's interpretation of Section 112 has changed, effective immediately. Given the text, structure, and purpose of the CAA, state permitting authorities are not free to ignore EPA's new interpretation of Section 112. The statutory scheme is based on a partnership between federal and state governments, whereby EPA sets federal standards and States develop implementation plans to set emissions limitations and standards to conform to these federal standards. Appalachian Power ,
In sum, by announcing an unequivocal interpretation of which federal standards apply to which sources under the CAA, "EPA expects States to fall in line." Appalachian Power ,
Therefore, under this court's precedent issuance of the Wehrum Memorandum is final action subject to judicial review pursuant to Section 7607(b)(1) because it provides *644EPA's unequivocal interpretation on the reclassification of "major sources," thereby binding EPA enforcement officials.
B.
Contrary to the court's conclusion, the Wehrum Memorandum is final action under the two-prong Bennett v. Spear test.
Second, the Wehrum Memorandum is an action "from which legal consequences will flow" because it announces a binding change in the legal regime. Bennett ,
The court's recent decision in Valero Energy Corp. v. EPA ,
EPA's contrary position, that the Wehrum Memorandum is not final because it has no immediate impact or direct legal consequences for specific sources, misstates the finality test. "The test for finality ... is not so narrow - it is met if 'the action [is] one by which rights or obligations have been determined, or from which legal consequences will flow.' " Harris v. FAA ,
Additionally, the opportunity for judicial review at a later time has no direct bearing on the availability of pre-enforcement review of the Wehrum Memorandum. Section 7661d provides for judicial review under Section 7607 of an Administrator's objection or denial of a petition to object to a specific Title V permit for a specific source. 42 U.S.C. § 7661d(b). Petitioners are not challenging a source-specific objection. Instead, they seek review of a generally applicable guidance document pursuant to Section 7607(b), which provides for judicial review of such a general guidance document that is a "final action."
Furthermore, Congress's express purpose in enacting the CAA was "to promote *646the public health and welfare and the productive capacity of [the Nation's] population."
Notably, irrelevant to the finality inquiry is the fact that the Wehrum Memorandum is deregulatory rather than regulatory. This is the fallacy underlying the court's efforts to distinguish our precedent on the basis that the Wehrum Memorandum does not require anyone to do anything. See Op. 640. Although the Supreme Court and this court have regularly been confronted with challenges to regulatory actions as too strong or too weak and held that agency actions that require parties to take certain actions or expose parties to penalties are final, see, e.g. , Hawkes,
Further, the Supreme Court has held that legal consequences can flow from the "denial of a safe harbor." Hawkes ,
For these reasons, the Wehrum Memorandum is final action, reviewable pursuant to Section 7607(b)(1). It is an agency action with the telltale signs of finality - it presents a unequivocal interpretation of requirements under the CAA; it is binding on its face; and it altered the legal regime by providing an opportunity for "major sources" that take enforceable limits on their potential to emit below the "major source" thresholds to reclassify as "area sources" at any time. "Once the agency publicly articulates an unequivocal position ... and expects regulated entities to alter their primary conduct to conform to that position, the agency has voluntarily relinquished the benefit of postponed judicial review." Ciba-Geigy Corp. v. EPA ,
II.
The question remains whether the Wehrum Memorandum is an agency action ripe for review. To decide whether an agency's action is ripe for review, courts generally consider the "fitness of the issues for judicial decision" and the "hardship to the parties of withholding court consideration." Ohio Forestry ,
The same is true here. Whether EPA was required, as petitioners contend, to promulgate the Wehrum Memorandum through notice-and-comment rulemaking and whether EPA's statutory interpretation in the Wehrum Memorandum is proper will not turn on the specifics of any particular permit. EPA has announced that "a major source that takes an enforceable limit on its [potential to emit] ... no matter when the source may choose to take measures to limit its [potential to emit] ... will not be subject thereafter to those requirements applicable to the source as a major source under CAA section 112." Wehrum Memorandum at 4 (emphasis added). Its guidance is national in scope, as the court looks only to the face of an agency action to determine whether the action is nationally applicable. Dalton Trucking, Inc. v. EPA ,
*648actions such as the Wehrum Memorandum be reviewable in this court pursuant to
In any event, petitioners' challenges are fit for judicial review because they present purely legal issues. See Nat. Envtl. Dev. ,
III.
The APA requires that a legislative rule, which carries the "force and effect of law," Ass'n of Flight Attendants-CWA, AFL-CIO v. Huerta ,
That is the situation here. The Wehrum Memorandum makes its legal effect clear; it "reads like an edict," Flight Attendants ,
Accordingly, I would grant the petitions for review and vacate the Wehrum Memorandum, and I respectfully dissent.
Reference
- Full Case Name
- CALIFORNIA COMMUNITIES AGAINST TOXICS, Et Al., Petitioners v. ENVIRONMENTAL PROTECTION AGENCY and Andrew Wheeler, Administrator, U.S. Environmental Protection Agency, Respondents Air Permitting Forum, Et Al., Intervenors
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- 32 cases
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