United States Court of Appeals, District of Columbia Circuit
November 9, 2017
Petitions for Review of a Final Action of the United States
Environmental Protection Agency
S. Pew argued the cause and filed the briefs for
William L. Wehrum, Felicia H. Barnes, Todd E. Palmer, Valerie
L. Green, Cameron F. Field, Howard L. Gilberg, Jean M.
Flores, Jeffrey S. Longsworth, Charles M. Denton, and Roger
J. Marzulla were on the joint briefs for Industry
R. Bowers, Attorney, U.S. Department of Justice, argued the
cause for respondents. With her on the brief were Sonya J.
Shea, Attorney, and Sonja L. Rodman and Scott J. Jordan,
Attorneys, U.S. Environmental Protection Agency.
Felicia H. Barnes argued the cause for Industry
respondent-intervenors. With her on the joint brief were
William L. Wehrum Jr., Todd E. Palmer, Valerie L. Green,
Cameron F. Field, Jeffrey S. Longsworth, and Charles M.
S. Pew was on the brief for Environmental
Before: Rogers and Millett, Circuit Judges, and Sentelle,
Senior Circuit Judge.
Sentelle, Senior Circuit Judge.
consolidated proceeding, we consider petitions for review of
an Environmental Protection Agency ("EPA") final
rule entitled "NESHAP for Brick and Structural Clay
Products Manufacturing; and NESHAP for Clay Ceramics
Manufacturing," 80 Fed. Reg. 65, 470 (Oct. 26, 2015)
("Brick/Clay Rule"), and its partial denial of
reconsideration of that rule, 81 Fed. Reg. 31, 234 (May 18,
No. 15-1487, petitioners Sierra Club and Natural Resources
Defense Council (collectively, "Environmental
Petitioners") contend that the EPA erred in its use of
health-based standards for acid gas emissions, failed to
properly explain its methodology in setting maximum
achievable control technology-based standards, and improperly
allowed brick plants to meet alternative emissions floors. In
Case Nos. 15-1492, 15-1493, 15-1496, and 16-1179, the Brick
Industry Association, the Tile Council of North America,
Inc., and the Kohler Company (collectively, "Industry
Petitioners") contend that the EPA made multiple errors
in its methodology in the Brick/Clay Rule.
the EPA moved to sever and hold in abeyance the Industry
Petitioners' petition for review while it reconsiders the
Brick/Clay Rule. Industry Petitioners supported the motion;
the Environmental Petitioners opposed the motion to hold the
entire case in abeyance but not EPA's motion to sever and
hold in abeyance the Industry Petitioners' petition.
See Unopposed Mot. at 2, Doc. No. 1703072 (Filed
Nov. 3, 2017). We deferred consideration of the motion
pending oral argument. We now deny the motion and consider
this case on its merits. For the reasons stated below, we
deny Industry Petitioners' petition for review and grant
in part that of the Environmental Petitioners and remand the
Brick/Clay Rule to the agency for further proceedings
consistent with this opinion.
the Clean Air Act ("CAA"), the EPA regulates all
major and area sources of hazardous air pollutants. 42 U.S.C.
§ 7412(d)(1). There are 189 hazardous air pollutants
subject to regulation under the CAA, including hydrogen
chloride, hydrogen fluoride, chlorine, and heavy metals such
as mercury. Id. § 7412(b)(1). During the
regulatory process, the EPA identifies categories of sources
that generate hazardous air pollutants, and then sets
emissions limits for each major source category. Id.
§ 7412(c)(1)-(2), (d)(1).
found that kilns emit hazardous acid gases, primarily
hydrogen chloride (HCl), hydrogen fluoride (HF), and chlorine
(Cl2). 80 Fed. Reg. at 65, 473. Each of these acid
gas pollutants causes health issues, such as asthma,
respiratory problems, skin irritation, burns, low blood
pressure, and, in severe cases, death. Regulatory Impact
Analysis: Final Brick and Structural Clay Products NESHAP at
4-28 to 4-30, Docket # EPA-HQ-OAR-2013-0291-0665 (July 2015).
Kilns also emit heavy metal pollutants, such as mercury,
lead, arsenic, and other particulate matter. 80 Fed. Reg. at
65, 473. Heavy metal pollutants also cause health issues,
such as neurological damage, respiratory harm, and cancer,
and threaten the natural environment. Regulatory Impact
Analysis at 4-27 to 4-33, Docket # EPA-HQ-OAR-2013-0291-0665.
the EPA listed brick and ceramic kilns as a major source of
hazardous air pollutants, it was required to regulate them.
42 U.S.C. § 7412(e)(1)(E). In 2003, the EPA first
undertook the regulation of kiln emissions under the CAA. 68
Fed. Reg. 26, 690 (May 16, 2003) ("2003 Rule"). In
2007, this Court held that the 2003 Rule did not comply with
the CAA and vacated it. Sierra Club v. EPA, 479 F.3d
875, 876 (D.C. Cir. 2007) (per curiam) ("Sierra
I"). In 2012, Sierra Club brought suit against the
EPA to force it to promulgate regulations to replace the
vacated 2003 Rule. Sierra Club v. EPA, 850 F.Supp.2d
300, 301 (D.D.C. 2012). In 2014, after years of data
collection, the EPA proposed a new rule to replace the
vacated standards for kiln emissions. 79 Fed. Reg. 75, 622
(Dec. 18, 2014). On October 26, 2015, the EPA published the
final Brick/Clay Rule. 80 Fed. Reg. at 65, 470. Industry
Petitioners then submitted a petition for reconsideration of
the Brick/Clay Rule, which the EPA denied in relevant part.
81 Fed. Reg. 31, 234 (May 18, 2016).
Brick/Clay Rule and the EPA's partial denial of
reconsideration are the subjects of the petitions in this
consolidated case. The Brick/Clay Rule applies to brick,
clay, and tile kilns. The emissions standards for brick and
structural clay products, such as clay pipe and roof tile,
are published in the Brick/Clay Rule and codified at 40
C.F.R. pt. 63, subpt. JJJJJ. 80 Fed. Reg. at 65, 520. The
emissions standards for clay ceramic products, such as
pressed tile and sanitaryware (e.g., toilets and sinks), are
published within the Brick/Clay Rule, titled the National
Emissions Standards for Hazardous Air Pollutants for Clay
Ceramic Manufacturing ("Clay NESHAP"), codified at
40 C.F.R. pt. 63, subpt. KKKKK. 80 Fed. Reg. at 65, 543.
the Brick Industry Association petitions for review of the
Brick/Clay Rule as applicable to the brick industry and for
review of the EPA's denial of reconsideration of the
Brick/Clay Rule. The Kohler Company petitions for review of
the Clay NESHAP. The Tile Council of North America petitions
for review of certain provisions of the Clay NESHAP
applicable to the subcategory of ceramic tile manufacturing
("Tile NESHAP"). Finally, the Environmental
Petitioners petition for review of the Brick/Clay Rule as
applicable to all the Industry Petitioners. Industry
Petitioners intervened on behalf of the EPA in response to
the Environmental Petitioners' petition; the
Environmental Petitioners intervened on behalf of the EPA in
response to the Industry Petitioners' petitions.
Clean Air Act Framework for Emissions Standards
governs the setting of emissions standards using technology
and health thresholds. 42 U.S.C. § 7412(d). When these
types of limits are not feasible, the EPA may substitute
alternative methods to limit emissions such as operational
controls. Id. § 7412(h).
Maximum Achievable Control Technology Emissions
1990 amendments to the CAA directed the EPA to issue
emissions limits using technology-based standards, called
"Maximum Achievable Control Technology"
("MACT"). MACT standards require the "maximum
degree of [emissions] reductions" that the EPA
"determines is achievable." 42 U.S.C. §
7412(d)(2); see Sierra I, 479 F.3d at 877. The
emissions standards for new sources must be no "less
stringent than the emission control that is achieved in
practice by the best controlled similar source." 42
U.S.C. § 7412(d)(3). Congress adopted this MACT-based
scheme because the EPA's previous use of health-based
standards had been "problematic," because of
uncertainty over which pollutants pose a health risk.
NRDC v. EPA, 529 F.3d 1077, 1079 (D.C. Cir. 2008).
establishing a MACT emissions standard, the EPA defines a
minimum stringency requirement, or "floor," based
on emissions levels achieved by existing sources. 42 U.S.C.
§ 7412(d)(3)(A), (B); Sierra I, 479 F.3d at
877. For categories and subcategories of existing emissions
sources composed of thirty or more individual sources, the
EPA sets the MACT floor using "the average emission
limitation achieved by the best performing 12 percent of the
existing sources (for which the Administrator has emissions
information)." 42 U.S.C. § 7412(d)(3)(A). If there
are fewer than thirty individual sources, the EPA sets the
MACT floor using "the average emission limitation
achieved by the best performing 5 sources." Id.
§ 7412(d)(3)(B). The EPA may set more stringent
standards than the MACT floor if the more stringent standard
is achievable considering cost and other factors.
Id. § 7412(d)(2); U.S. Sugar Corp. v.
EPA, 830 F.3d 579, 594-95 (D.C. Cir. 2016) (per curiam)
("U.S. Sugar"), cert. denied sub
nom. American Mun. Power v. EPA, 137 S.Ct. 2296
Alternatives to MACT Standards
the EPA may use a health threshold rather than MACT standards
for "pollutants for which a health threshold has been
established." 42 U.S.C. § 7412(d)(4); see U.S.
Sugar, 830 F.3d at 623-24. Such a health-based standard
must include an "ample margin of safety." 42 U.S.C.
§ 7412(d)(4). Additionally, if the EPA determines it is
"not feasible" to prescribe either a health- or
technology-based emissions standard the agency may promulgate
a design, equipment, work-practice, or operational standard.
Id. § 7412(h).
Brick/Clay Rule, the EPA set MACT standards to regulate heavy
metal emissions from kilns and health thresholds to regulate
acid gas emissions. 80 Fed. Reg. at 65, 471.
Heavy Metal Emissions
chose to regulate heavy metal emissions in the Brick/Clay
Rule using MACT standards under § 7412(d)(1). 80 Fed.
Reg. at 65, 471. In setting the brick MACT floor, the EPA set
separate standards for particulate matter (which it used as a
surrogate for nonmercury hazardous metals) and mercury, with
subcategories for large tunnel and small tunnel brick kilns.
Id. at 65, 530-31. Additionally, the EPA provided
"alternative equivalent limits" for heavy metal
emissions from brick kilns. Id. at 65, 474, 65, 485.
There were more than thirty individual sources for each
category, so the best twelve percent of performers were used
to set the brick MACT floor. Id. at 65, 485.
Clay NESHAP sets separate MACT standards for subcategories of
floor tile, wall tile, and sanitaryware that are heavy metal
emissions sources. Id. at 65, 478. In response to an
EPA information request, Kohler activated a decommissioned
emissions scrubber at its South Carolina Kiln 10 ("Kiln
10"), and that data was used as one of the best
performing sources in setting the corresponding MACT floor.
See id. at 65, 510; see also 81 Fed. Reg.
at 31, 235. The Tile NESHAP regulates emissions for a
subcategory of ceramic tile plants and has separate
dioxin/furan and mercury emissions standards. 80 Fed. Reg. at
65, 554. Because fewer than thirty sources exist for each
category of clay and tile kilns, the average of the five best
performers was used to set the clay and tile MACTs. See
id. at 65, 504 n.102, 65, 510.
Industry and Environmental Petitioners challenge the
EPA's methods of setting various MACT floors as unlawful
and arbitrary. We will address the background of those
methods in further detail with respect to the individual
petitions for review.
Acid Gas Emissions
regulates hazardous acid gas emissions for new and existing
brick tunnel kilns and all ceramics kilns except for
sanitaryware shuttle kilns in the Brick/Clay Rule using
health thresholds under § 7412(d)(4). 80 Fed. Reg. at
65, 471, 65, 474, 65, 478. Environmental Petitioners contend
that EPA's choice of health thresholds over a MACT
standard means that kiln facilities largely will not need to
add more pollution controls. Environmental Petitioners
challenge EPA's use of health thresholds and the methods
it used to set the thresholds as contrary to the CAA. We will
address the background of the EPA's reasoning in setting
the health thresholds in the context of the Environmental
Petitioners' petition for review.
Standard of Review
final rule is subject to judicial review under 42 U.S.C.
§ 7607(b)(1). We will set aside an EPA action under the
CAA if it is "arbitrary, capricious, an abuse of
discretion, or otherwise not in accordance with law." 42
U.S.C. § 7607(d)(9)(A). We review EPA's
interpretation of the CAA under the two-step framework of
Chevron U.S.A., Inc. v. NRDC, Inc., 467 U.S. 837
(1984). We first determine if Congress has "directly
spoken to the precise question at issue." Id.
at 842. If so, then we must "give effect to the
unambiguously expressed intent of Congress."
Id. at 843. If, however, "the statute is silent
or ambiguous with respect to the specific issue," we
defer to the EPA's interpretation of the CAA so long as
it "is based on a permissible construction of the
these standards, we review in turn the Environmental
Petitioners' and the Industry ...