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EPA Can Reconsider Rulemaking without Vacatur in Clean Air Act Citizen Suit, Sixth Circuit Holds

That federal agencies enjoy numerous advantages in defending against legal challenges to their administrative decision-making is a fact of administrative law.  But these advantages extend beyond the favorable standards of review that typically apply to their decisions.  An agency can, for example, sometimes short circuit what might be a meritorious appeal by seeking a “voluntary remand” from the Court, thereby potentially affording itself more control over any reconsideration while avoiding creating unfavorable precedent.  As a reminder of this, the Sixth Circuit recently held that EPA was entitled to reconsider one of its Clean Air Act (CAA) rulemakings, namely its decision to remove the air nuisance rule (ANR), a broad standard that generally prohibited nuisance emissions that endangered the “health, safety, or welfare of the public,” from Ohio’s State Implementation Plan (SIP), without the Court vacating EPA’s underlying decision.  Sierra Club et al. v. EPA, No. 21-3057, 2023 WL 1873168, at * 1 (6th Cir. Feb. 10, 2023).   

The case related to EPA’s authority to revise SIPs that it had already approved.  Under the CAA, EPA has the authority to establish national air quality standards (NAAQS) for certain pollutants.  42 U.S.C. §§ 7408, 7409; 40 C.F.R. §§ 50.4-50.19.  Every state is required to develop a SIP in order to achieve, maintain, and enforce the standards set forth in those NAAQS.  42 U.S.C. §§ 7410(a)(1), (a)(2)(a).  If EPA approves a SIP after a public notice and comment period, it becomes enforceable in federal court, along with all of the state regulations that are included in that SIP.  42 U.S.C. § 7604.  The CAA also provides procedures for amending SIPs.  42 U.S.C. §§ 7410(l), 7410(k)(5), 7410(k)(6), 7501(l).  In order to amend a SIP directly, EPA must show that an error existed when the SIP was initially approved, and justify its decision to modify the SIP to the state and the public.  42 U.S.C. § 7410(k)(6).

In 2020, EPA amended Ohio’s SIP directly after finding that the ANR lacked a sufficient nexus to NAAQS implementation, maintenance, and enforcement, and therefore, had been included in Ohio’s SIP in error.  Sierra Club, No. 21-3057, 2023 WL 1873168, at * 4.  Following that decision, environmental groups including the Sierra Club (Petitioners) filed a challenge in the Sixth Circuit.

As a threshold issue, EPA challenged Petitioners’ standing to challenge the revision of the SIP but the Court rejected this as a basis for dismissing the appeal.  Central to the Court’s analysis on the standing issue was the fact that Petitioners’ challenge involved alleged harm to their “procedural rights.”  The Court explained that procedural rights are unique in that a person “who has been accorded a procedural right to protect his concrete interests can assert that right without meeting all the normal standards for redressability and immediacy,” as is otherwise typical for establishing Article III standing.   Lujan v. Defs. of Wildlife, 504 U.S. 555, 572 n.7 (1992).

Apart from standing, EPA argued in the alternative that its decision should be voluntarily remanded without vacatur to allow for further development and review of the administrative record over a one year period.  The Court granted that request, finding that voluntary remand was preferable from a judicial economy standpoint, and that vacatur of the underlying decision was inappropriate.  Sierra Club, No. 21-3057, 2023 WL 1873168, at **9-11.  Specifically, the Court applied the Allied-Signal factors, which include the “seriousness of the agency error and the disruptive consequences of vacatur,” and found that while the first factor weighed against and the second weighed in favor, on balance, vacatur was not indicated because EPA may be able to justify its decision on remand in a relatively limited review period.  Id. (citing Allied-Signal, Inc. v. U.S. Nuclear Regul. Comm'n, 988 F.2d 146, 150-51 (D.C. Cir. 1993)).

The Court noted that there is currently a circuit split regarding whether courts must address the merits of an agency’s action to permit a vacatur on remand, but determined that it did not need to reach that issue to render its decision in this case.  Id.  Environmental practitioners may be wise to track this circuit split, including any developments in the prerequisites for obtaining vacatur of a rulemaking in the Administrative Procedure Act context.