On January 15, 2013, the United States Court of Appeals for the District of Columbia Circuit dismissed the American Road and Transportation Builders Association’s (“American”) challenge to the United States Environmental Protection Agency’s (“EPA”) approval of California’s State Implementation Plan (“SIP”). The court’s ruling underscores both the difficulty of effectively challenging rules promulgated by administrative agencies as well as the importance of bringing timely challenges to those rules. Here, American was challenging EPA’s regulations interpreting Section 209(e) of the Clean Air Act (“CAA”). Section 209(e) preempts state governance of non-road engines. Non-road engines include internal combustion engines found in tractors, construction equipment, and watercraft.
American petitioned the EPA in 2002 to strengthen the preemptive effect of its Section 209(e) regulations. EPA denied American’s petition in 2008. American then filed suit in the D.C. Circuit attacking the denial of its petition, which the court dismissed. In 2010, American again challenged the regulations by contesting EPA’s approval of California’s revised SIP.
Under the CAA, each state submits its SIP, the state’s plan to comply with federal air quality standards, to the EPA for approval. Because California had made proposed revisions to its SIP, it was required to obtain EPA’s approval. California’s revisions called for emissions reductions from various sources, including non-road engines. After EPA proposed approving California’s revised SIP, American submitted comments asking EPA to deny California’s revisions and again requested that EPA amend its Section 209(e) regulations. Despite American’s comments, EPA approved the SIP. Thus, EPA declined reviewing its Section 209(e) regulations and characterized American’s petition as yet another attempt to salvage a favorable outcome. EPA’s decision led to American filing suit in the Ninth and D.C. Circuits to challenge the denial of its petition. The Ninth Circuit proceedings were stayed pending the outcome of the D.C. Circuit case.
In the D.C. Circuit case, American challenged EPA’s approval of California’s revised SIP while EPA argued that, under Section 307(b)(1) of the CAA, the D.C. Circuit did not have jurisdictional authority to address American’s claims. Looking at Section 307(b)(1)’s language, the court concluded that venue would be proper in one of two situations, neither of which American established. Namely, American could not demonstrate that EPA’s approval of California’s SIP was “nationally applicable” or had a “nationwide scope or effect.” In fact, the court noted that most EPA approvals of a state SIP constitute the “prototypical ‘locally or regionally applicable’ action that may be challenged only in the appropriate regional court of appeals.” Therefore, the D.C. Circuit ruled that American had to pursue its claim in the Ninth Circuit.
Similarly, the court rejected American’s claim that it was entitled to “a fresh round of judicial review” of EPA’s Section 209(e) regulations, this time on statute of limitations grounds. Section 307(b)(1) establishes a general 60-day period for challenging EPA regulations, unless the challenge is based on grounds arising after the 60-day period expires. American argued that because its latest petition was part of the comments submitted in response to EPA’s proposed approval of California’s revised SIP, EPA’s denial of the petition fell within Section 307(b)(1)’s “arising after” exception. Rejecting American’s argument, the court explained that the CAA is a statutory scheme “in which Congress specifically address[ed] the consequences of failure to bring a challenge within the statutory period.” Therefore, EPA’s denial of American’s petition did not qualify as an “arising-after” ground. Restating its decision in American Road & Transportation Builders Association v. EPA, 588 F.3d 1109 (D.C. Cir. 2009) (ARTBA I), the court ruled that American’s challenge to EPA’s 209(e) regulations was time-barred.
The D.C. Circuit’s opinion demonstrates the importance of closely watching and making timely challenges to the EPA’s administrative actions. Taft’s environmental practice group has significant experience effectively navigating administrative issues. For more information, please contact Julian Harrell or any other member of Taft’s environmental practice group.