December 24, 2008
Continuing its run of decisions unfavorable to the EPA, the DC Circuit
announced its decision Friday in Sierra Club v. EPA, __ F.3d __, 2008 WL
5264663 (DC Cir. 2008) to strike down EPA’s long standing NESHAP regulations
regarding start up, shut down and malfunction events (“SSM”). EPA regulations
required facilities to have plans to minimize emissions during SSM and to report
their compliance with those plans, in recognition that existing controls would
not be effective during SSM. Yet the court treated this requirement as an
“exemption” from emissions limitations requirements rather than an emissions
control program in and of itself. The court’s decision has the extraordinary
impact of exposing sources subject to NESHAP regulations to liability for
failing to comply with NESHAP limitations during unavoidable SSM events, when
such compliance may well be impossible. Despite the breadth of this impact, the
court strained to reach its conclusion, subjecting it to a stinging dissent and
perhaps rehearing.
EPA adopted regulations for SSM for NESHAP sources in 1994 following the
strengthening of the Hazardous Air Pollution (“HAP”) requirements in the 1990
Clean Air Act Amendments. EPA modeled these rules on existing SSM regulations
for stationary sources, which imposed a “general duty” to minimize emissions
during SSM. The EPA strengthened the NESHAP rules by requiring the development
of a written plan for minimizing emissions during SSM and incorporation of the
SSM plan into a Title V permit.
In 2002, EPA issued rules intended to modify the SSM Plan requirement, both
by no longer requiring it to be incorporated into the permit and by modifying
the source’s obligation to present the plan to the permit issuing authority or
have it available for public inspection. Court challenges by environmental
organizations forced EPA to modify these regulations several times, culminating
in rules adopted in 2006 which continued to take the SSM plans out of the Title
V permit itself, but required that SSM Plans be maintained at the facility for
inspection. The environmental groups appealed, challenging not only the 2006
final regulation but the 1994 regulations establishing the SSM exemption.
In voiding the NESHAP SSM regulations, the court made several extraordinary
leaps. First, the court’s decision to assert jurisdiction over the 1994 SSM
regulation disregarded the statutory requirement that challenges to EPA rules be
filed within 60 days of the rule’s adoption and long standing jurisprudence that
discourages review of long standing rules. The court held that by modifying
requirements for SSM Plans, the EPA constructively reopened the underlying SSM
requirements. Yet, the EPA is always modifying various rules based on experience
or new data. As the Dissent pointed out, subjecting existing regulations to
challenges just because of subsequent modifications would create “intolerable”
instability. Plainly the court could have voided the 2006 rules, leaving the
original SSM requirements in place, but chose not to do so.
Second, the Court’s basis for voiding the SSM regulations required a strained
reading of the CAA and one which had neither been argued nor briefed by any of
the parties. The Court held that the statutory direction to adopt emissions
limitations for NESHAP sources and the general definition of “emissions
limitation” required EPA to adopt limits which applied continuously and thus
forbade the adoption of what the court termed an “exemption” for SSM. The Court
further held that EPA could only seek to apply “exemptions” under authority of a
separate statutory section which explicitly allowed easing standards when strict
compliance is not possible but which EPA had not specifically included in any of
its prior discussions. Yet, by characterizing the SSM regulations as an
“exemption” from control requirements rather than a specific method to minimize
emissions during periods when emissions control systems may be ineffective, the
court’s evaluation focused on whether the CAA specifically allows “exemptions”
to NESHAP emissions limitations rather than whether the EPA has the authority to
evaluate appropriate control requirements during different operating scenarios.
The court’s reading effectively dismissed statutory language which appeared to
allow for work standards or other practices which would not necessarily result
in continuous compliance and dismissed EPA’s claim of discretion to consider
these for failing to cite the exact statutory section.
The far reaching and immediate impact of the court’s decision assures that
EPA will seek a stay and rehearing en banc. While environmental groups
have challenged these SSM regulations, the operational reality is that no source
has the ability to assure continuous compliance during SSM. The extent and
nature of NESHAP SSM Plans to minimize emissions during such events and to
document compliance with the general duty requirement is obviously subject to
extensive debate, but the concept of not insisting on strict compliance with
emissions limits during SSM dates to the early days of the CAA. The court’s
decision flies in the face of this logic and history and exposes numerous
sources throughout the country to needless and unavoidable liability.