California Sues EPA for Waiver Decision:

Yesterday, California sued the U.S. Environmental Protection Agency for failing to rule quickly enough on the Golden State's request for a waiver of Clean Air Act preemption of its greenhouse gas emission standards for new motor vehicles sold in the state. The state's complaint is here. As a legal matter, there is not much to the suit. Politically, however, the suit makes sense as an effort to maintain pressure on the Bush Administration to approve California's waiver request.

California's legal claim is that the EPA has unreasonably delayed action on the waiver request. Yet the Bush Administration has pledged the EPA will make a decision by the end of the year -- in less than two months. Assuming the EPA keeps to this schedule, the suit will be rendered moot by EPA action. Yet even were the EPA not about to act, there would be little force to California's claim.

Suppose, for instance, the Administration had not set a deadline for the EPA's decision, would California's claim be any stronger? I don't think so -- at least not yet. As a general matter, it is very difficult to prevail in an “unreasonable delay” suit. Unless an agency had failed to meet a specific statutory deadline, courts are reluctant to order them to act. If an agency can offer a plausible reason for failing to act more promptly, and the delay has not been excessive, judicial review will be fairly deferential.

In this particular case, California would have a difficult claim to make because the EPA has an explanation for its delay. Specifically, the EPA could argue that, until earlier this year, the agency was awaiting resolution of the Massachusetts v. EPA litigation concerning the applicability of the Clean Air Act to greenhouse gases. As the EPA had maintained it lacked authority to regulate greenhouse gases under the Act, and that this view could have precluded the agency from issuing a waiver of preemption, it can argue that it has only had several months to consider the petition, and public comment, in light of the Supreme Court's Massachusetts decision. Given the somewhat glacial pace of agency action, it is hard to argue that seven months is an unreasonable delay justifying judicial intervention.

Does this mean the lawsuit is pointless? Not at all. As I suggested above, filing suit is a way for California to increase political pressure on the Bush Administration to approve the waiver. Given that approval is likely (but not certain, for some of the reasons I discussed in these posts and this paper), it is simply smart politics for California to place pressure on the Administration. Also, if for some reason the EPA does not meet the announced timetable -- an eventuality which could strengthen California's legal hand -- the suit will already be in motion. Indeed, by filing now, California makes it more difficult for EPA to let the timetable slip.

EPA Denies California's Waiver Request:

Earlier today, the EPA denied California's request for a waiver of preemption under the Clean Air Act for California's regulation of greenhouse gas emissions from new motor vehicles. Based upon the EPA release, the passage of a federal energy bill that will impose more stringent automobile fuel economy standards is one of the justifications for rejecting the waiver. There is no question that California will challenge this decision in federal court (see here). Whether or not California succeeds will largely depend upon how well the Bush Administration defends its decision. As I've argued before (see also here), I think that there are reasonable legal arguments supporting a denial of a waiver. Nonetheless, I am surprised by the Bush Administration's decision.

I hope to have more to say about this decision once I have read the formal decision. In the meantime, here is news coverage from the Los Angeles Times and New York Times. Here, also, is Governor Schwarzenegger's response.

EPA's Decision to Deny California's Waiver Request:

In my view, the EPA’s decision to deny California’s application for a waiver of preemption under the Clean Air Act for the state’s greenhouse gas emission controls for new motor vehicles was good law, if questionable policy. The EPA’s conclusion that California was not entitled to a waiver of preemption is utterly defensible under the Clean Air Act. Assuming the agency adequately explained the basis for its conclusion, I find no legal fault with the EPA. This does not mean that the agency’s decision made for good policy, however. Assuming that the agency’s action was not compelled by the statutory text, I also believe that the EPA could have adopted an alternative reading of the act under which the waiver could have been granted. Insofar as I favor giving states greater leeway to experiment in environmental policy, granting California’s waiver would have made for good policy – and would have been preferable to adoption of the federal energy legislation recently passed by Congress and signed into law.

In announcing the denial of California’s waiver application for waiver of preemption, the EPA explained that the Bush Administration was “moving forward with a national solution to reduce greenhouse gas emissions from motor vehicles.” Explicit in the agency announcement was a preference (shared by the auto industry) for uniform federal emission standards for motor vehicles. The agency also cited the newly enacted federal energy legislation that will increase federal fuel economy standards (and thereby reduce carbon dioxide emissions) over the coming decades (albeit at a slower rate than would have been required under the California rules.

EPA Administrator Stephen Johnson explained that federal uniformity is preferable to “a confusing patchwork of state rules.” This is the rationale for federal preemption of state standards in the first place. The invocation of a “patchwork” is a bit inapposite here, however, as there would be no “patchwork” of variable rules from state to state, as approval of California’s request would still have left states with only two choices: adopt the California rules or settle for the federal floor. The word “patchwork” implies that each state could choose its own standard, making each jurisdiction different from all the others, much like the panels of a patchwork quilt are highly varied. A better metaphor would have been that of a checkerboard, or some other dichromatic distribution.

The Administration’s stated preference for a uniform standard clearly motivated its decision, but it is not a legally sufficient basis for denying a waiver under the Clean Air Act. Rather, the law is quite specific as to what factors are to be considered when evaluating a waiver request. Under Section 209(b)(1), California must first make a threshold determination that its proposed standards “will be in the aggregate, at least as protective of public health and welfare as applicable Federal standards.” Once such a determination has been made, Section 209(b) provides that the EPA must deny the waiver request if it finds that (a) California’s threshold determination was “arbitrary and capricious”; (b) California “does not need such State standards to meet compelling and extraordinary conditions; of (c) California’s proposed standards and enforcement measures are inconsistent with other Clean Air Act requirements. An EPA finding that any one of these three criteria is met is grounds for denying California’s waiver request.

Of these, only one finding is potentially at issue: Whether California needs its own greenhouse gas emission controls on motor vehicles “to meet compelling and extraordinary conditions.” Although I have not yet seen the formal petition denial, the EPA announcement suggests that this was the legal basis for rejecting the request (and distinguishing this waver request from the dozens of such requests that the EPA has approved in the past).

California’s current waiver request is distinct from all prior requests. Previous waiver petitions covered pollutants that predominantly impacted local and regional air quality. Greenhouse gases are fundamentally global in nature, which is unlike the other air pollutants covered by prior California waiver requests. These gases contribute to the challenge of global climate change affecting every state in the union. Therefore, according to the criteria in section 209 of the Clean Air Act, EPA did not find that separate California standards are needed to “meet compelling and extraordinary conditions.”
As I have explore at some length in this paper, the EPA would appear to be on strong legal ground in reaching this conclusion. Given the global nature of climate change, California cannot claim that it needs these measures (or any other emission controls) “to meet compelling or extraordinary conditions.” Nothing California does to control greenhouse gas emissions from new motor vehicles will mitigate the threat of climate change to the state in any meaningful way.

Prior waivers were granted when California sought to control emissions that contributed to the Golden State’s particularly severe urban air pollution problems. In these cases, California could claim that state-specific measures were necessary components of state-level plans to meet federal air quality standards within the state. California’s extreme air pollution problems were the “compelling or extraordinary conditions,” and the measures were “needed” to “meet” these conditions insofar as they would facilitate California achieving its goal of reducing instate air pollution.

Global climate change presents a different type of problem, however. It is a global phenomenon caused by the accumulation of greenhouse gases throughout the global atmosphere. Unlike with ambient air pollution, such as soot or smog, a local jurisdiction has no control over local emission concentrations because the relevant gases disperse throughout the atmosphere. Nor do local jurisdictions have any control over ambient temperature, as global climate change is a consequence of the global accumulation of greenhouse gases.

California policy makers sought to get around this problem by pointing to anticipated California-specific effects of global warming, such as local sea-level rise. It is certainly true that California will face certain consequences of climate change that will not be faced by all other states. It is even conceivable (though hardly demonstrated) that California is uniquely threatened by climate change to a greater extent than any other state. This does not matter, however, as California cannot claim that its proposed vehicle emission controls are necessary to meet these concerns, as they will not achieve any meaningful protection for the state. No matter how much California wishes to be a climate policy pathbreaker, that is insufficient to meet the language of the Act under this interpretation.

I readily admit that there is some ambiguity in the language of 209(b), and there are reasonable interpretations of this language that could justify approving California’s waiver request. The problem for California, however, is that insofar as this language is ambiguous, federal courts are required to defer to the EPA’s reasonable interpretation under “step two” of the familiar Chevron analysis. Thus, provided that the agency has dotted its “i"s and crossed its “t”s in the formal decision, adequately explaining the basis for its interpretation and its resulting conclusions, the waiver denial should survive the inevitable legal challenge from California and other states that wanted to adopt more stringent vehicle emission controls.

To be clear, my point here is not that the EPA was required to deny California’s CAA waiver request, nor am I making a specific prediction about future litigation over this decision. Rather I am making the more modest claim that the language of Section 209(b) could well be interpreted in a way that would justify, if not compel, the agency’s decision, and hold up in court.

Alternative Views of the EPA Waiver Decision:

My interpretation of the Act and relevant language places me at odds with some of the folks cited in this Washington Post story about the EPA's decision to deny California a waiver of Clean Air Act preemption. For example:

"By refusing to grant California's waiver request for its new motor vehicle standards to control greenhouse gas emissions, the administration has ignored the clear and very limited statutory criteria upon which this decision was to be based," said S. William Becker, executive director of the National Association of Clean Air Agencies, which represents officials in 48 states. "Instead, it has issued a verdict that is legally and technically unjustified and indefensible."

EPA's lawyers and policy staff had reached the same conclusion, said several agency officials familiar with the process. In a PowerPoint presentation prepared for the administrator, aides wrote that if Johnson denied the waiver and California sued, "EPA likely to lose suit."

If he allowed California to proceed and automakers sued, the staff wrote, "EPA is almost certain to win."

That advocates on one side of the issue seek to spin the statutory language in one way or the other does not surprise me. Industry and environmental advocates do this all the time, particularly when they expect the issue to end up in court. Hyperbolic assertions ab out “clear” statutory text are common in this context.

I am also not troubled by the reference to internal agency conclusions. In my experience, the legal judgments of the career attorneys in the Justice Department’s Environmental and Natural Resources Division tend to be more objective than those in the agency itself. The EPA’s record in federal court is not a particularly good one, in either this administration or its recent predecessors. The agency has a long record of adopting legal interpretations that do not hold up in court, despite the assurances of career agency personnel. In this case, I suspect the agency staff thought the waiver should be approved, perhaps because they had approved so many waiver requests from the past and seek greater regulation of greenhouse gases, and allowed this view to color their interpretation of the Act.

As I noted in my other post, however, my argument is not that the agency will necessarily win when this decision is challenged in federal court. It is possible that the agency did not adequately defend what is an utterly defensible legal conclusion. It is also possible that a reviewing court will get the question wrong, perhaps due to the atmospherics created by other recent climate change decisions, including the Supreme Court’s rejection of EPA’s position on climate change in Massachusetts v. EPA. I will not make an actual prediction until I’ve read the EPA’s formal decision and the legal briefs filed for and against the decision.

For a slightly different take on the EPA’s decision, and eventual legal challenge, See John Bonine’s Daily Kos diary and Jamison Colburn’s post on Dorf on Law. For other views contrary to mine, be sure to check out the numerous relevant posts on the Warming Law blog as well.

What Next for Federal GHG Emission Rules?

Does the new energy legislation and the EPA's decision to deny California a waiver under the Clean Air Act have any effect on the federal government's plans to adopt federal controls on vehicular emissions of greenhouse gases? Perhaps. A key provision in the new energy bill requires an increase in automotive fuel economy over the coming decades. One effect of these standards will be a reduction in automotive emissions of carbon dioxide. Given the effect of this provision, it might provide the Administration with a convenient excuse not to proceed with federal GHG emission regulations in response to Massachusetts v. EPA.

Is this just speculation? Maybe not. The tail end of this Washington Post story on the denial of California’s waiver request contains this little tidbit:

When asked whether the energy law represents the administration's full response to the challenge of global warming, [EPA Administrator Johnson] replied, "Certainly for motor vehicles this is a comprehensive solution."
Given this reply, I would not be at all surprised were the EPA’s response to Mass v. EPA nothing more than the adoption of regulations that track the fuel economy requirements of the new energy legislation, but achieve no additional reductions. If so, this is another EPA decision on climate change policy that could end up back in court.

UPDATE: The LA Times reports the Administration is reconsidering its obligation to set federal greenhouse gas emission standards for new motor vehicles in light of the new energy legislation. While I would be surprised were the administration to do nothing at all, I would not be at all surprised to see the EPA issue federal emission controls that track the fuel economy requirements of the new energy law, and this would achieve the same result as doing nothing at all.

Does It Matter EPA Staff Opposed Waiver Decision?

Several news outlets report that EPA career staff recommended that Administrator Stephen Johnson approve California’s waiver request. According to these accounts, the “unanimous opinion” of EPA legal and technical staff supported the waiver request. Does this matter? Some bloggers think so. I don’t. Agency expertise is important, but it is not the end-all-be-all of agency decision-making, and it is no substitute for politically accountable policy decisions by political appointees.

If EPA staff argued that the unambiguous language of the Clean Air Act obligated the EPA to grant California’s waiver request, I think they were simply wrong on the merits, for the reasons I have outlined in prior posts. I think there is some ambiguity in the relevant Clean Air Act language, which gave the agency some wiggle room, but (if anything) the language supports Johnson’s decision to deny the waiver. In my view, neither Section 209 of the Act or the EPA's prior waiver decisions dictated a different result.

If the EPA staff were arguing that, in their view, the agency should grant the waiver either because (a) their preferred interpretation of the relevant statutory language required granting the waiver, or (b) they believed granting the waiver was better environmental policy, then there was nothing improper with Johnson adopting a different conclusion. Insofar as the Clean Air Act grants the EPA some discretion in how to interpret the Act’s requirements or whether to grant the waiver request, it vests the ultimate decision-making authority in the hands of political appointees, like Johnson, not career staff. In such circumstances, the policy views of EPA career staff are only relevant to the extent an Administrator wishes to take their counsel. If we disagree with the Administrator's conclusion, it is because we prefer a different policy, not because the Administrator failed to follow the lead of agency staff.

Community Rights Counsel’s Tim Dowling suggests the opposition of EPA career staff should influence judicial review of the case, and lessen the degree of deference a reviewing court shows the EPA’s decision. Dowling writes:

the whole concept of deference is rooted in the idea that courts will defer to the technical expertise of the agency. Here, Johnson reportedly made his decision in the face of a contrary, unanimous recommendation by his technical and legal staff. So there’s a genuine question whether the usual justifications for deference obtain in this case.
I disagree. Under Chevron and its progeny, the legal argument for deference is not agency expertise, but the delegation of policy-making discretion to administrative agencies. This rationale should be unaffected by the views of agency staff.

Under Chevron, where the relevant statutory language is clear, the statute controls, period. Where a statute is ambiguous, however, courts are to defer to the implementing agency’s any reasonable interpretation offered by the implementing agency. While the existence of agency expertise may be the reason Congress chose to delegate such authority to administrative agencies, for purposes of judicial review, what matters is whether there was a delegation of interpretive authority to an administrative agency. And, as Chevron’s progeny make quite explicit, where statutory language is ambiguous, courts are to presume that Congress sought to delegate interpretive authority to the relevant implementing agency.

One consequence of this rationale is that it is not particularly relevant whether career agency staff believe that one interpretation of ambiguous statutory language is preferable to another. So long as the relevant statutory language is ambiguous, and both interpretations are permissible constructions of the relevant language, the head of the agency is free to prefer either interpretation, for whatever reason, and Chevron deference is owed. Therefore, so long as the EPA’s interpretation of the Clean Air Act was based upon a permissible construction of Section 209 (the waiver provision), a reviewing court should provide full Chevron deference to the EPA’s interpretation, irrespective of the views offered by agency staff.

California Sues EPA Over Waiver Denial:

California filed suit against the Environmental Protection Agency challenging the EPA's denial of a waiver of preemption under the Clean Air Act for the state's greenhouse gas emission regulations. Here's coverage in the Washington Post and New York Times.

One interesting aspect of the suit, discussed here on the Warming Law Blog, is that California filed suit in the U.S. Court of Appeals for the Ninth Circuit, rather than in the D.C. Circuit. Most assume the Ninth Circuit would be more receptive to California's arguments, but most also assumed the suit would be filed in D.C., so what gives? According to the Sacremento Bee:

Generally, decisions by federal agencies must be challenged in the District of Columbia Court of Appeals, which tends to be more conservative than the 9th Circuit.

But lawyers backing California argue the state isn't constrained to file in Washington, D.C., because the Dec. 19 ruling left out key language stating that the decision was "of national scope and impact."

"They did not put that boilerplate in, so we can challenge it anywhere," said attorney David Bookbinder of the Sierra Club, which has worked with the state to defend the emissions law.

Was this a deliberate choice by the EPA or an oversight? A third option: EPA legal staff working who drafted the Administrator's letter to EPA knowingly left it out, and none of the political appointees caught it. In any event, seeing this suit in the Ninth adds an interesting twist.