Clean Air Council v. E. Scott Pruitt , 862 F.3d 1 ( 2017 )

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Decided July 3, 2017
No. 17-1145
CLEAN AIR COUNCIL, ET AL.,
PETITIONERS
v.
E. SCOTT PRUITT, ADMINISTRATOR, ENVIRONMENTAL
PROTECTION AGENCY AND ENVIRONMENTAL PROTECTION
AGENCY,
RESPONDENTS
AMERICAN PETROLEUM INSTITUTE, ET AL.,
INTERVENORS
On Emergency Motion For A Stay Or,
In the Alternative, Summary Vacatur
Susannah L. Weaver, Sean H. Donahue, David Doniger,
Meleah Geertsma, Tim Ballo, Joel Minor, Adam Kron, Peter
Zalzal, Alice Henderson, Vickie Patton, Tomás Carbonell,
Andres Restrepo, Joanne Marie Spalding, Ann Brewster
Weeks, and Darin Schroeder were on the emergency motion
for a stay or, in the alternative, summary vacatur and reply to
responses in opposition to emergency motion for a stay or, in
the alternative, summary vacatur.
2
Jeffrey H. Wood, Acting Assistant Attorney General, U.S.
Department of Justice, and Benjamin Carlisle, Attorney, were
on EPA’s opposition to petitioners’ emergency motion for a
stay or, in the alternative, summary vacatur.
William L. Wehrum, Felicia H. Barnes, Stacy R. Linden,
John Wagner, Samuel B. Boxerman, Joel F. Visser, Sandra Y.
Snyder, James D. Elliott, Shannon S. Broome, Charles H.
Knauss, and John R. Jacus were on the industry intervenor-
respondents’ response in opposition to petitioners’ emergency
motion for a stay or, in the alternative, summary vacatur.
Before: TATEL, BROWN, and WILKINS, Circuit Judges.
Opinion for the Court filed PER CURIAM.
Dissenting Opinion filed by Circuit Judge BROWN.
PER CURIAM: Petitioners, a group of environmental
organizations, challenge the Environmental Protection
Agency’s decision to stay implementation of portions of a final
rule concerning methane and other greenhouse gas emissions.
For the reasons set forth in this opinion, we conclude that EPA
lacked authority under the Clean Air Act to stay the rule, and
we therefore grant petitioners’ motion to vacate the stay.
I.
In June 2016, EPA Administrator Gina McCarthy issued a
final rule establishing “new source performance standards” for
fugitive emissions of methane and other pollutants by the oil
and natural gas industries. 81 Fed. Reg. 35,824 (June 3, 2016).
3
The methane rule took effect on August 2, 2016, id., and
required regulated entities to conduct an “initial monitoring
survey” to identify leaks by June 3, 2017, 40 C.F.R.
§ 60.5397a(f).
After EPA published the rule, several industry groups—
including the American Petroleum Institute (API), the Texas
Oil and Gas Association (TXOGA), and the Independent
Petroleum Association of America (IPAA)—filed
administrative petitions seeking reconsideration under section
307(d)(7)(B) of the Clean Air Act (CAA). 42 U.S.C.
§ 7607(d)(7)(B); see also 82 Fed. Reg. 25,731 (June 5, 2017).
That provision sets forth the circumstances under which EPA
must reconsider a rule. It provides that “[i]f the person raising
an objection can demonstrate to the Administrator that [1] it
was impracticable to raise such objection within [the notice and
comment period] . . . and [2] if such objection is of central
relevance to the outcome of the rule, the Administrator shall
convene a proceeding for reconsideration of the rule . . . .” 42
U.S.C. § 7607(d)(7)(B) (emphasis added). The statute also
provides that the “effectiveness of the rule may be stayed
during such reconsideration, however, by the Administrator or
the court for a period not to exceed three months.” Id. The
industry associations argued that CAA section 307(d)(7)(B)
required EPA to reconsider the final rule because several of its
provisions “were not included in the proposed rule and . . . [they
were therefore unable] to raise an objection during the public
comment period.” See, e.g., API, Request for Administrative
Reconsideration of EPA’s Final Rule “Oil and Natural Gas
Sector: Emission Standards for New, Reconstructed, and
Modified Sources,” at 1 (Aug. 2, 2016) (“API Reconsideration
4
Request”). They also sought a stay “pending reconsideration.”
Id.
By letter dated April 18, 2017, the Administrator, now
Scott Pruitt, stated that EPA “[found] that the petitions have
raised at least one objection to the fugitive emissions
monitoring requirements” that warrants reconsideration “under
307(d)(7)(B) of the CAA.” Letter from E. Scott Pruitt to
Howard J. Feldman, Shannon S. Broome, James D. Elliott, &
Matt Hite, Convening a Proceeding for Reconsideration, at 2
(Apr. 18, 2017). Accordingly, the Administrator announced,
“EPA is convening a proceeding for reconsideration” of two
specific provisions of the methane rule. Id. The letter also
stated that “EPA intend[ed] to exercise its authority under CAA
section 307 to issue a 90-day stay of the compliance date” for
the fugitive emissions requirements. Id.
On June 5—just two days after the deadline for regulated
parties to conduct their first emissions surveys and begin
repairing leaks, see 40 C.F.R. § 60.5397a(f)—EPA published
a “[n]otice of reconsideration and partial stay” in the Federal
Register, 82 Fed. Reg. at 25,730. Relying on CAA section
307(d)(7)(B), EPA granted reconsideration on four aspects of
the methane rule: (1) the decision to regulate low-production
wells, (2) the process for proving compliance by “alternative
means,” (3) the requirement that a professional engineer certify
proper design of vent systems, and (4) the decision to exempt
pneumatic pumps from regulation only if a professional
engineer certified that it was “technically infeasible” to route
such pumps “to a control device or a process.” 82 Fed. Reg. at
25,731–32. In addition, the notice “stay[ed] the effectiveness
of the fugitive emissions requirements, the standards for
5
pneumatic pumps at well sites, and the certification by a
professional engineer requirements” for 90 days “pending
reconsideration.” 82 Fed. Reg. at 25,732. The notice explained
that the stay had gone into effect on June 2, 2017—that is, three
days before the notice was published in the Federal Register.
82 Fed. Reg. at 25,731.
On June 16, EPA published a notice of proposed
rulemaking (NPRM) announcing its intention to extend the stay
“for two years” and to “look broadly at the entire 2016 Rule”
during “the reconsideration proceeding.” 82 Fed. Reg. 27,645
(June 16, 2017). Comments on that NPRM are due July 17, or
if any party requests a hearing, by August 9. Id.
After EPA suspended implementation of the methane rule,
six environmental groups—Environmental Defense Fund,
Natural Resources Defense Council, Environmental Integrity
Project, Earthworks, Clean Air Council, and Sierra Club—filed
in this court an “emergency motion for a stay or, in the
alternative, summary vacatur.” According to Environmental
Petitioners, EPA’s stay violates CAA section 307(d)(7)(B)
because “all of the issues Administrator Pruitt identified could
have been, and actually were, raised (and extensively
deliberated) during the comment period.” Environmental
Petitioners’ Mot. 5 (emphasis in original). EPA opposes the
motion, as do intervenors, a group of oil and gas associations
including API, IPAA, and TXOGA. Together, they argue that
we lack jurisdiction to review the stay, and that even if it were
justiciable, the stay is lawful. We consider these arguments in
turn.
6
II.
We begin with jurisdiction. Both EPA and Industry
Intervenors argue that an agency’s decision to grant
reconsideration of a rule is unreviewable because it does not
constitute “final action” under 42 U.S.C. § 7607(b)(1). EPA
Opp. 8; Intervenors’ Opp. 6. Industry Intervenors argue that for
the same reason we lack jurisdiction to review the stay.
Intervenors’ Opp. 8.
It is true that an agency’s decision to grant a petition to
reconsider a regulation is not reviewable final agency action.
See Portland Cement Association v. EPA, 665 F.3d 177, 185
(D.C. Cir. 2011) (noting that review is available “if
reconsideration is denied” (emphasis added)). To be “final,”
agency action must “mark the consummation of the agency’s
decisionmaking process” and “be one by which rights or
obligations have been determined, or from which legal
consequences will flow.” Bennett v. Spear, 520 U.S. 154, 177–
78 (1997) (citations and internal quotation marks omitted). By
itself, EPA’s decision to grant reconsideration, which merely
begins a process that could culminate in no change to the rule,
fails this test.
The imposition of the stay, however, is an entirely different
matter. By staying the methane rule, EPA has not only
concluded that section 307(d)(7)(B) requires reconsideration,
but it has also suspended the rule’s compliance deadlines.
EPA’s stay, in other words, is essentially an order delaying the
rule’s effective date, and this court has held that such orders are
tantamount to amending or revoking a rule. As we explained in
a very similar situation, where an agency granted an application
7
for interim relief from a safety standard while it reconsidered
that standard: “In effect, the Administrator has granted a
modification of the mandatory safety standard for the entire
period of time that the petition is pending. There is no
indication that the Secretary intends to reconsider this decision
or to vacate the grant of interim relief. Thus, the Secretary’s
decision represents the final agency position on this issue, has
the status of law, and has an immediate and direct effect on the
parties. Therefore, we have no difficulty concluding that the
Secretary has issued a final decision . . . .” International Union,
United Mine Workers of America v. Mine Safety & Health
Administration, 823 F.2d 608, 614–15 & n.5 (D.C. Cir. 1987)
(citation omitted); see also Environmental Defense Fund, Inc.
v. Gorsuch, 713 F.2d 802, 813 (D.C. Cir. 1983) (“[S]uspension
of the permit process . . . amounts to a suspension of the
effective date of regulation . . . and may be reviewed in the
court of appeals as the promulgation of a regulation.”); Council
of Southern Mountains, Inc. v. Donovan, 653 F.2d 573, 579
nn.26 & 28 (D.C. Cir. 1981) (rejecting the argument that the
court lacked jurisdiction to review an order “defer[ring] the
implementation of regulations”).
In addition to “mark[ing] the consummation of . . . [EPA’s]
decisionmaking process” with respect to the final rule’s
effective date, the stay also affects regulated parties’ “rights or
obligations.” Bennett, 520 U.S. at 178 (citation and internal
quotation marks omitted). Absent the stay, regulated entities
would have had to complete their initial monitoring surveys by
June 3 and repair any leaks within thirty days. See 40 C.F.R.
§ 60.5397a(f), (h). Failure to comply with these requirements
could have subjected oil and gas companies to civil penalties,
citizens’ suits, fines, and imprisonment. See 42 U.S.C.
8
§ 7413(b)-(d) (providing for civil and criminal penalties for
failure to comply with emissions rules); id. § 7604(a)
(authorizing citizens’ suits for alleged violations of emissions
standards); 40 C.F.R. § 19.4 (establishing the schedule of fines
for CAA violations). The stay—which EPA made retroactive
to one day before the June 3 compliance deadline—eliminates
that threat, see 82 Fed. Reg. at 25,731, and thus relieves
regulated parties of liability they would otherwise face.
The dissent draws a sharp distinction between the denial of
a stay, which would have required regulated entities to comply
with the rule, and the imposition of the stay, which erased that
obligation. As the dissent sees it, only forced compliance has
“obvious consequences” for regulated parties. Dissent at 5. But
this one-sided view of final agency action ignores that, by
staying the rule’s effective date and its compliance duties, EPA
has determined “rights or obligations . . . from which legal
consequences will flow.” Bennett, 520 U.S. at 178. The
dissent’s view is akin to saying that incurring a debt has legal
consequences, but forgiving one does not. A debtor would beg
to differ.
The dissent also stresses that EPA’s proceedings
concerning the methane rule are ongoing. Dissent at 3; see 82
Fed. Reg. at 27,645; 82 Fed Reg. 27,641 (June 16, 2017). But
as we have explained, “the applicable test is not whether there
are further administrative proceedings available, but rather
whether the impact of the order is sufficiently final to warrant
review in the context of the particular case.” Friedman v. FAA,
841 F.3d 537, 542 (D.C. Cir. 2016) (quoting Environmental
Defense Fund, Inc. v. Ruckelshaus, 439 F.2d 584, 591 (D.C.
Cir. 1971)). Here, because the stay relieves regulated parties of
9
any obligation to meet the June 3 deadline—indeed EPA has
proposed to extend the stay for years, see 82 Fed. Reg. at
27,645—the “order is sufficiently final to warrant review,”
Friedman, 841 F.3d at 542. Cf. Ciba-Geigy Corp. v. EPA, 801
F.2d 430, 436 (D.C. Cir. 1986) (“Once the agency publicly
articulates an unequivocal position . . . and expects regulated
entities to alter their primary conduct to conform to that
position, the agency has voluntarily relinquished the benefit of
postponed judicial review.”).
EPA’s argument that courts have no authority to review
CAA section 307(d)(7)(B) stays is also at odds with the
statute’s language. Section 307(d)(7)(B) authorizes not only
the Administrator, but also courts to stay a final rule. 42 U.S.C.
§ 7607(d)(7)(B) (authorizing “the Administrator or the court”
to issue a three-month stay). Given that Congress granted this
court the power to enter a stay, it seems quite anomalous that it
did not also confer upon us the lesser power to review the
Administrator’s decision to issue a stay.
Indeed, EPA’s reading would have the perverse result of
empowering this court to act when the agency denies a stay but
not when it chooses to grant one. Under section 307(d)(7)(B),
if EPA had granted reconsideration but declined to impose a
stay, the industry groups could have come to this court seeking
a stay. See Mexichem Specialty Resins, Inc. v. EPA, 787 F.3d
544, 558 (D.C. Cir. 2015) (declining to grant a stay during the
pendency of a reconsideration proceeding because petitioners
had failed to demonstrate irreparable harm). Yet, in EPA’s
view, where, as here, it grants reconsideration and imposes a
stay, we have no power to hear the case. Nothing in section
307—or any other provision cited by the parties or the
10
dissent—suggests that this court’s jurisdiction turns on whether
EPA grants as opposed to denies a stay.
EPA and Industry Intervenors argue that Environmental
Petitioners’ motion amounts to a collateral attack on the
underlying reconsideration proceeding. See also Dissent at 4.
But CAA section 307(d)(7)(B) expressly links EPA’s power to
stay a final rule to the two requirements for mandatory
reconsideration, i.e., that it was “impracticable to raise” an
objection during the public comment period and the objection
is “of central relevance to the outcome of the rule.” Only when
these two conditions are met does the statute authorize the
Administrator to stay a lawfully promulgated final rule.
Accordingly, to determine whether the stay was lawful—that
is, to assess EPA’s final action—we must consider whether the
agency met the statutory requirements for reconsideration. In
other words, although absent a stay we would have no authority
to review the agency’s decision to grant reconsideration,
because EPA chose to impose a stay suspending the rule’s
compliance deadlines, we must review its reconsideration
decision to determine whether the stay was authorized under
section 307(d)(7)(B).
III.
Environmental Petitioners seek two types of relief: a
“judicial stay” of EPA’s administrative stay, and in the
alternative, “summary disposition and vacatur” of EPA’s stay
“because the stay is clearly unlawful.” Environmental
Petitioners’ Mot. 1. To consider the former, we would have to
assess Environmental Petitioners’ motion under the four-factor
standard for a stay pending judicial review: “(1) whether the
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stay applicant has made a strong showing that he is likely to
succeed on the merits; (2) whether the applicant will be
irreparably injured absent a stay; (3) whether issuance of the
stay will substantially injure the other parties interested in the
proceeding; and (4) where the public interest lies.” Nken v.
Holder, 556 U.S. 418, 434 (2009) (citation omitted).
For reasons explained below, however, we agree with
Environmental Petitioners that the 90-day stay was
unauthorized by section 307(d)(7)(B) and was thus
unreasonable. Accordingly, we have no need to consider the
criteria for a stay pending judicial review. Cf. United States
Association of Reptile Keepers, Inc. v. Zinke, 852 F.3d 1131,
1135 (D.C. Cir. 2017) (“When . . . the ruling under review rests
solely on a premise as to the applicable rule of law, and the
facts are established or of no controlling relevance, we may
resolve the merits even though the appeal is from the entry of
a preliminary injunction.” (citation and internal quotation
marks omitted)). We shall therefore vacate the stay as
“arbitrary, capricious, [and] in excess of statutory . . .
authority.” 42 U.S.C. § 7607(d)(9)(A), (C).
A.
Defending the stay, EPA repeatedly invokes its “broad
discretion” to reconsider its own rules. EPA Opp. 6. Agencies
obviously have broad discretion to reconsider a regulation at
any time. To do so, however, they must comply with the
Administrative Procedure Act (APA), including its
requirements for notice and comment. 5 U.S.C. § 553; see
Perez v. Mortgage Bankers Association, 135 S. Ct. 1199, 1206
(2015) (“[T]he D.C. Circuit correctly read § 1 of the APA to
12
mandate that agencies use the same procedures when they
amend or repeal a rule as they used to issue the rule in the first
instance.”). As we have explained, “an agency issuing
a legislative rule is itself bound by the rule until that rule is
amended or revoked” and “may not alter [such a rule]
without notice and comment.” National Family Planning and
Reproductive Health Association, Inc. v. Sullivan, 979 F.2d
227, 234 (D.C. Cir. 1992).
EPA argues that it nonetheless has “inherent authority” to
“issue a brief stay” of a final rule—that is, not to enforce a
lawfully issued final rule—while it reconsiders it. See EPA
Opp. 6, 10, 13. This argument suffers from two fundamental
flaws.
First, EPA cites nothing for the proposition that it has such
authority, and for good reason: as we have made clear, it is
“axiomatic” that “administrative agencies may act only
pursuant to authority delegated to them by Congress.” Verizon
v. FCC, 740 F.3d 623, 632 (D.C. Cir. 2014) (alteration and
citations omitted); see Natural Resources Defense Council v.
Abraham, 355 F.3d 179, 202 (2d Cir. 2004) (rejecting the
contention that the Department of Energy had “inherent power”
to suspend a duly promulgated rule where no statute conferred
such authority and contrasting the Energy Policy and
Conservation Act with the reconsideration provision in the
Clean Air Act at 42 U.S.C. § 7607(d)(7)(B)). Accordingly,
EPA must point to something in either the Clean Air Act or the
APA that gives it authority to stay the methane rule, and as we
explain below, the only provision it cites—CAA section
307(d)(7)(B)—confers no such authority.
13
Second, when EPA granted reconsideration and imposed
the stay of the methane rule, it did not rely on its so-called
inherent authority. See Securities & Exchange Commission v.
Chenery Corp., 332 U.S. 194, 196 (1947) (“[A] reviewing
court . . . must judge the propriety of [agency] action solely by
the grounds invoked by the agency” when it acted). Instead,
EPA expressly acted “pursuant to section 307(d)(7)(B) of the
CAA,” 82 Fed. Reg. at 25,732, which clearly delineates when
stays are authorized. As noted above, that section empowers
EPA to stay a final rule if a petitioner demonstrates
impracticability and central relevance, the two requirements for
mandatory reconsideration.
EPA insists that “the statutory text [of section 307] suggests
that Congress did not intend to cabin EPA’s authority to issue
a stay to only those circumstances where EPA is mandated to
convene reconsideration proceedings . . . .” EPA Opp. 12
(emphasis in original). The language of section 307(d)(7)(B) is
to the contrary: it authorizes the agency to grant a stay during
“such reconsideration,” a term that quite obviously refers back
to the reconsideration that EPA “shall” undertake when
someone presents an objection of “central relevance” that was
“impracticable” to raise during the period for public comment.
42 U.S.C. § 7607(d)(7)(b).
B.
Under CAA section 307(d)(7)(B), then, the stay EPA
imposed is lawful only if reconsideration was mandatory.
Accordingly, the question before us is whether the industry
groups that sought a stay of the methane rule met the two
requirements for mandatory reconsideration.
14
The parties disagree about the appropriate standard of
review for considering this issue. EPA argues that its view of
whether it was “impracticable” to object during the notice and
comment period is subject to arbitrary and capricious review.
See EPA Opp. 5. For their part, Environmental Petitioners
argue that “[l]imited deference on these notice questions makes
sense” because “EPA has no greater expertise than this [c]ourt
in determining whether a certain issue was impracticable to
raise during the comment period.” Environmental Petitioners’
Reply 7 (internal quotation marks omitted). We need not
resolve this dispute, however, because EPA’s decision to stay
the methane rule was arbitrary and capricious—that is,
unlawful even under the more deferential standard.
We begin—and ultimately end—with impracticability.
Environmental Petitioners and EPA agree that this issue turns
on whether industry groups had an opportunity to raise their
objections during the comment period, which in turn depends
on whether the NPRM provided adequate notice of the final
methane rule. This case hinges, then, on whether the final rule
was a logical outgrowth of the NPRM. A final rule is the
“logical outgrowth” of a proposed rule if “interested parties
should have anticipated that the change was possible, and thus
reasonably should have filed their comments on the subject
during the notice-and-comment period.” CSX Transportation,
Inc. v. Surface Transportation Board, 584 F.3d 1076, 1080
(D.C. Cir. 2009) (citation and internal quotation marks
omitted). A final rule “fails the logical outgrowth test” if
“interested parties would have had to divine the agency’s
unspoken thoughts, because the final rule was surprisingly
distant from the proposed rule.” Id. (citations and alterations
omitted).
15
EPA granted reconsideration and stayed the emissions
standards on four grounds: (1) industry groups had no
opportunity to object to provisions concerning “low production
well sites,” (2) the final rule included a process for
demonstrating “alternative means” of compliance that was not
in the NPRM, (3) without adequate notice or consideration of
costs, the final rule required “certification by a professional
engineer” that regulated entities had a proper closed vent
system, and (4) without adequate notice, the final rule
predicated an exemption from regulation for “well site
pneumatic pumps” on a professional engineer’s certification
that “it is technically infeasible to route the pneumatic pump to
a control device or a process.” 82 Fed. Reg. at 25,731–32. An
examination of the record demonstrates that each of these
statements is inaccurate and thus unreasonable.
Low-Production Wells
The final rule subjects low-production wells to fugitive
emissions requirements. 81 Fed. Reg. at 35,856. After EPA
promulgated the rule, industry groups petitioned for
reconsideration, arguing that the agency should have exempted
such wells from regulation. See, e.g., API Reconsideration
Request, at 12. One group, IPAA, also argued that the low-
production well provision conflicted with EPA’s definition of
when an existing well site has been “modifi[ed].” IPAA,
Request for Administrative Reconsideration, at 6 (Aug. 2,
2016) (“IPAA Reconsideration Request”).
When EPA granted reconsideration and imposed the stay,
however, it invoked a wholly different rationale: acting
pursuant to CAA section 307(d)(7)(B), EPA concluded that
16
“the final rule differs significantly from what was proposed in
that it requires these well sites to comply with the fugitive
emissions requirements based on information and [a] rationale
not presented for public comment during the proposal stage.”
82 Fed. Reg. 25,731. EPA, in other words, justified the stay on
the ground that the final rule failed the logical outgrowth test.
Although it is true that the NPRM for the final methane rule
proposed to exclude low-production well sites, EPA and
Industry Intervenors ignore the fact that the notice went on to
solicit comment on whether such an exclusion would be
warranted. The NPRM states: “To more fully evaluate the
exclusion, we solicit comment on the air emissions associated
with low production wells . . . . [W]e solicit comment on the
relationship between production and fugitive emissions over
time.” 80 Fed. Reg. 56,639 (Sept. 18, 2015). The NPRM also
states that EPA “solicit[s] comment on whether [it] should
include low production well sites for fugitive emissions and if
these types of well sites are not excluded, should they have a
less frequent monitoring requirement.” Id. (emphasis added).
Many regulated entities responded with comments,
including the industry groups that later sought reconsideration.
See, e.g., API, Comments on EPA’s NSPS for the Oil and
Natural Gas Sector, at 103 (Dec. 4, 2015) (“API Comments”).
API, for instance, submitted extensive comments on low-
production wells, noting its support for an exemption and
clarifying that “fugitive emissions [from such wells] do not
correlate to production.” Id.
Responding to these comments in the final rule, EPA
explained that it had decided not to exempt low-production
17
wells because, among other reasons, “[i]n discussions with us,
stakeholders indicated that well site fugitive emissions are not
correlated with levels of production, but rather based on the
number of pieces of equipment and components.” 81 Fed. Reg.
at 35,856. The final rule thus responded directly to comments
and information EPA now claims it was impracticable for
industry groups to have presented.
Perhaps sensing the flimsiness of its claim that regulated
entities had no opportunity to comment on low-production
wells, EPA argues that the stay was also warranted because the
low-production well provision is inconsistent with the rule’s
definition of well “modification.” EPA Opp. 17–18. As noted
above, this was one of IPAA’s arguments for reconsideration.
See supra 15. It was not, however, the rationale on which EPA
relied when it granted reconsideration and stayed the rule. EPA
cannot now justify its action on a rationale it failed to invoke
when it imposed the stay. See Chenery, 332 U.S. at 196.
Alternative Means of Compliance
The final rule permits regulated entities to demonstrate that
they comply with emissions regulations by alternative means,
and thus, ought not be subject to the rule. Specifically, the rule
provides that regulated entities may “submit an application
requesting that the EPA approve certain state requirement [sic]
as ‘alternative means of emission limitations’ under the
NSPS . . . .” 81 Fed. Reg. at 35,871. The rule then lays out the
process for filing such applications. Id.; see also 40 C.F.R.
§ 60.5398a.
18
After the rule was promulgated, TXOGA requested
reconsideration of the process “for determining State
Equivalency,” i.e., the alternative-means process.
Administrative Petition for Reconsideration by the Texas Oil
and Gas Association, No. EPA-HQ-OAR-2010-0505, at 2–3
(Aug. 2, 2016). EPA granted this request and stayed the rule on
the ground that the alternative-means “process and criteria
were included in the [final] 2016 Rule without having been
proposed for notice and comment.” 82 Fed. Reg. at 25,731.
In the NPRM, however, EPA expressly solicited
“comments on criteria we can use to determine whether and
under what conditions all new or modified well sites operating
under corporate fugitive monitoring programs can be deemed
to be meeting the equivalent of the NSPS standards . . . .” 80
Fed. Reg. at 56,638. The NPRM continued: “We also solicit
comment on how to address enforceability of such alternative
approaches . . . .” Id. (emphasis added). In response, industry
groups commented on the issue, and API specifically requested
a “streamlined approval process” for deeming regulated
entities compliant by alternative means. API Comments at 138.
The final rule adopted just such a process.
Here, too, the final rule was a logical outgrowth of the
NPRM. No regulated entity had to “divine the agency’s
unspoken thoughts,” CSX Transportation, 584 F.3d at 1080
(alteration omitted), in order to comment on the “alternative
means” approval process. To the contrary, we know that
affected parties anticipated the final rule because they
expressly requested a streamlined approval process and
commented on its contours.
19
Vent System Certification
The final rule requires regulated entities to obtain
“certification by a qualified professional engineer [PE] that the
closed vent system is properly designed . . . .” 81 Fed. Reg. at
35,871. API sought reconsideration on the grounds that “[t]he
provisions [for] PE certification were not included in the
proposed rule” and API was therefore unable “to raise an
objection during the public comment period.” API
Reconsideration Request, at 1. Agreeing with API, EPA
granted reconsideration because the agency “had not analyzed
the costs associated with the PE certification requirement”
before promulgating the rule, making it “impracticable for
petitioners to provide meaningful comments during the
comment period on whether the improved environmental
performance this requirement may achieve justifies the
associated costs and other compliance burden[s].” 82 Fed.
Reg. at 25,732.
Yet again, even a brief scan of the record demonstrates the
inaccuracy of EPA’s statements. The NPRM “request[s]
comment as to whether [EPA] should specify criteria by which
the PE verifies that the closed vent system is designed to
accommodate all streams routed to the facility’s control
system . . . .” 80 Fed. Reg. at 56,649. In the very next line, the
NPRM “request[s] comment as to what types of cost-effective
pressure monitoring systems can be utilized to ensure” proper
design of closed vent systems. Id. The NPRM also includes a
lengthy discussion of the “costs and benefits” of the rule. Id. at
56,596–97.
 20
In response, industry groups submitted many comments on
the PE certification requirement. API itself commented that
requiring a PE to review vent system design was “unnecessary”
because “[o]il and natural gas company engineering staff . . .
are able to design systems effectively.” API Comments at 48–
49. API also expressed concern about the burden the PE
requirement would impose on regulated parties, id. at 49, and
argued that the certification requirement was an effort to shift
the cost of enforcement from EPA to the industry, id. at 48.
Separately, IPAA commented that the entire rule’s “increased
record-keeping and reporting requirements” imposed
unreasonable costs on regulated parties. IPAA & American
Exploration & Production Council, Comments for Three
Regulatory Proposals, at 28 (Dec. 4, 2015).
These comments demonstrate that industry groups had an
opportunity to express their views on PE certification of vent
systems, including the rule’s costs. As noted above, the NPRM
not only sought comment on types of “cost-effective” measures
for vent system design, 80 Fed. Reg. at 56,649, but it also
included an analysis of the entire rule’s costs and benefits, id.
at 56,596–97. Had commenters been concerned about the cost
of PE certification of vent systems, they could have argued that
the cost-benefit analysis failed to address that specific
provision of the regulation. It was thus entirely practicable for
industry groups to lodge their objections to the PE certification
requirement during the comment period.
Pneumatic Pumps
Finally, the 2016 rule exempts well-site pneumatic pumps
from the final rule so long as a professional engineer has
21
certified that it is “technically infeasible to capture and route
pneumatic pump emissions to a control device or process . . . .”
81 Fed. Reg. at 35,850. The rule explained that this exemption
would not apply to “entirely new” facilities because
“circumstances that could otherwise make control of a
pneumatic pump technically infeasible at an existing location
can be addressed in the site’s design and construction.” Id.
In its petition for reconsideration, IPAA objected to the idea
that a professional engineer must certify “technical
infeasibility,” arguing that the final rule “added a variety of
requirements associated with ‘technical infeasibility’ that were
not purposed [sic] or even mentioned in the proposed rule.”
IPAA Reconsideration Request at 7. API mounted a similar
objection to the pneumatic pump exemption, arguing that it had
“no opportunity to comment” on the distinction between new
construction sites (known as “greenfield” sites) and older
emissions sites (“brownfield” sites). See API Reconsideration
Request at 2.
Embracing these arguments, EPA granted reconsideration
on the ground that it had never “propose[d] or otherwise
suggest[ed] exempting well site pneumatic pumps from
emission control based on such [PE] certification.” 82 Fed.
Reg. at 25,732. EPA added that the specific details of the
exemption, including the distinction between old and new sites,
“were included . . . without having been proposed for notice
and comment.” Id.
After proposing that a professional engineer certify
regulated entities’ closed vent systems, the NPRM states that
operators of oil and natural gas facilities must also “connect the
22
pneumatic pump affected facility through a closed vent system
. . . .” 80 Fed. Reg. at 56,649, 56,666. In response, API
submitted extensive comments on the challenges of connecting
pneumatic pumps to “an existing control device.” API
Comments at 78. API explained that given the design of many
existing sites, the pneumatic pump requirement was “not
technically feasible.” Id. Accordingly, API expressly requested
that EPA “provide [an] exclusion in the rule such that routing
a pneumatic pump affected source to an existing control device
or closed vent system is not required if it is not technically
feasible . . . .” Id. (emphasis added). The comment continued:
“If needed, EPA could provide provisions in the rule for an
operator to make an engineering determination that an existing
control device cannot technically handle the additional gas
from a pneumatic pump affected source exhaust, document this
determination, and make such a determination available for
inspection by EPA or other competent authority.” Id. (emphasis
added). API, in other words, proposed precisely the technical
infeasibility language EPA adopted in the final rule, suggested
that an engineer certify technical infeasibility, and justified its
proposed exemption based on a lengthy description of why
existing sites were not designed to “handle” EPA’s proposal.
Id.
Given this, it was perfectly logical for EPA to adopt an
exception to its proposed rule that requires a professional
engineer’s certification of infeasibility, and to limit that
exception to sites that had already been designed in a way that
made compliance infeasible. The record thus belies EPA’s
claim that no industry group had an opportunity to comment on
the “scope and parameters” of the pneumatic pump exemption.
EPA Opp. 22.
23
IV.
The administrative record thus makes clear that industry
groups had ample opportunity to comment on all four issues on
which EPA granted reconsideration, and indeed, that in several
instances the agency incorporated those comments directly into
the final rule. Because it was thus not “impracticable” for
industry groups to have raised such objections during the notice
and comment period, CAA section 307(d)(7)(B) did not require
reconsideration and did not authorize the stay. EPA’s decision
to impose a stay, in other words, was “arbitrary, capricious,
[and] . . . in excess of [its] . . . statutory . . . authority.” 42
U.S.C. § 7607(d)(9)(A), (C). We shall therefore grant
Environmental Petitioners’ motion to vacate the stay.
We emphasize, however, that nothing in this opinion in any
way limits EPA’s authority to reconsider the final rule and to
proceed with its June 16 NPRM. Although EPA had no section
307(d)(7)(B) obligation to reconsider the methane rule, it is
free to do so as long as “the new policy is permissible under
the statute . . , there are good reasons for it, and . . . the agency
believes it to be better.” FCC v. Fox Television Stations, Inc.,
556 U.S. 502, 515 (2009).
So Ordered.
BROWN, Circuit Judge, dissenting: My colleagues are
quick to claim we have jurisdiction to hear this motion, but I
disagree. While we presumptively possess jurisdiction over
“final agency action,” the Administrative Procedure Act
deprives us of jurisdiction when, inter alia, “agency action is
committed to agency discretion by law.” See 5 U.S.C. §
701(a)(2). The Court acknowledges EPA’s decision to grant
reconsideration “is not reviewable final agency action” as it
“merely begins a process that could culminate in no change to
the rule.” Op. 6. The Court further claims the Clean Air Act
provision at issue here “expressly links EPA’s power to stay a
final rule to the two requirements for mandatory
reconsideration . . . .” Id. at 10. Indeed it does. See 42
U.S.C. § 7607(d)(7)(B) (“Such reconsideration shall not
postpone the effectiveness of the rule. The effectiveness of
the rule may be stayed during such reconsideration, however,
by the Administrator or the court for a period not to exceed
three months.”). 1 Nevertheless, the Court concludes EPA’s
1
It is far from clear that designating the judiciary as an alternative
forum to seek a stay, as the statute does, makes EPA action on stays
subject to judicial review. But see Op. 9. The text’s obvious
reading is to give private parties power to seek a stay without having
to ask the agency. Given the statutory context, this makes sense; an
agency may not want to reconsider its rule, let alone stay its
implementation to facilitate an undesired reconsideration. By
establishing the judiciary as an alternative, the statute ensures stays
result from factual warrant and not simply because the agency wills
one. Even if the statute could be read to authorize judicial review
of agency action on stays, there is no basis to conclude review
extends beyond denied stays. A denied stay in this statutory
context—reconsideration based on new grounds or grounds
“impracticable” to raise during rulemaking—might be judicially
reviewable for the same reason the denial of such reconsideration
petitions are reviewable. Cf. Sendra Corp. v. Magaw, 111 F.3d 162,
166 (D.C. Cir. 1997) (“An agency’s denial of a petition . . . for
reconsideration is not itself subject to judicial review if the petition
alleges only ‘material error’ in the agency’s original decision. . . . On
2
decision to stay the rule pending reconsideration is subject to
judicial review, claiming the stay is “final agency action” “with
respect to” complying with the rule. See Op. 7. It also
characterizes the stay as “essentially an order delaying the
rule’s effective date.” Id. at 6. But hitting the pause button is
the antithesis of ending the matter. The Court presumes a
certain outcome from EPA’s reconsideration, one that a stay
alone gives us no basis to presume. A stay is, of course,
“final” as to whether one must comply with the rule during
reconsideration—just as a trial court’s evidentiary
determination is “final” until the time for appeal ripens. That
some agency action resolves itself does not render it “final.”
If it did, every interlocutory action that leaves compliance to
the discretion of the regulated party would justify judicial
review. The stay is “essentially” nothing but a stay, and it
does not qualify as “final agency action” under the two-part
inquiry set forth by the Supreme Court.
As EPA’s stay here is “of a[n] . . . interlocutory nature,” it
cannot satisfy the first element of “final agency action:”
consummation of the agency’s decision-making process. See
Bennett v. Spear, 520 U.S. 154, 177–78 (1997); see also
Reliable Automatic Sprinkler Co., Inc. v. Consumer Prod.
Safety Comm’n, 324 F.3d 726, 731 (D.C. Cir. 2003) (“Agency
action is considered final to the extent it imposes an obligation,
denies a right, or fixes some legal relationship.”). Here,
EPA’s ninety-day stay is limited to specific requirements
within the rule that are among the subjects of reconsideration—
the other hand, if an agency denies a petition for reconsideration
alleging ‘new evidence’ or ‘changed circumstances,’ the agency’s
denial is reviewable as a final agency action . . . .”). But, EPA
granting a stay does not present the same risk of agency short shrift
toward reconsideration. Nothing about the text or its context
justifies importing a new purpose into the statute to authorize judicial
review of granted stays.
3
requirements for fugitive emissions, pneumatic pump
standards, and certification requirements for professional
engineers. See Pet’r Attach. 4–5. A temporary stay
facilitates reconsidering these discrete issues; it does not
resolve them. This is not the kind of agency action considered
“final.” Cf. Reliable, 324 F.3d at 731 (“The agency’s conduct
thus far amounts to . . . a statement of the agency’s intention to
make a preliminary determination . . . and a request for
voluntary corrective action.”). The Environmental Petitioners
will be able to raise their arguments regarding the alleged
harms of revisiting EPA’s rule during the reconsideration
process, and once again during the litigation that will surely
follow EPA’s reconsideration. With these available avenues,
it belies the virtue of “final agency action” to include an
agency’s intermediate stay within the standard’s ambit. See
id. at 733 (“So long as Reliable retains the opportunity to
convince the agency that it lacks jurisdiction over Reliable’s
sprinkler heads, it makes no sense for a court to intervene. It
conserves both judicial and administrative resources to allow
the required agency deliberative process to take place before
judicial review is undertaken.”); Ciba-Geigy Corp. v. U.S.
EPA, 801 F.2d 430, 436 (D.C. Cir. 1986) (“Judicial review at
[this] stage improperly intrudes into the agency’s
decisionmaking process. It also squanders judicial resources
since the challenging party still enjoys an opportunity to
convince the agency to change its mind.”).
The Court relies on a series of pre-Bennett cases to equate
EPA’s stay with instances where this court has reviewed an
agency amending or revoking a rule. See Op. 7. None of
these cases are apposite. 2 And while Int’l Union, United Mine
2
Environmental Defense Fund, Inc. v. Gorsuch, 713 F.2d 802 (D.C.
Cir. 1983) holds “an agency decision which effectively suspends the
implementation of important and duly promulgated standards . . .
4
Workers of Am. v. Mine Safety & Health Admin., 823 F.2d 608
(D.C. Cir. 1987) may seem analogous, it does not involve the
sort of neutral, time-limited stay involved here. 3
constitutes rulemaking subject to notice and comment . . . .” Id. at
816 (citing Council of the Southern Mountains, Inc. v. Donovan, 653
F.3d 573 (D.C. Cir. 1981) and Nat. Res. Def. Council, Inc. v. EPA,
683 F.2d 752 (3d Cir. 1982) as “stand[ing] for the [same]
proposition”). It is not credible to suggest that, absent submitting
its stay pending reconsideration through notice and comment
rulemaking, EPA’s action is ultra vires and thereby subject to
judicial review.
3
The question in Int’l Union was the following: Whether an
administrative law judge could order the Mine Safety & Health
Administration to grant a party “interim relief” from a mine-safety
standard while that party awaited a decision on whether it could
receive a “mine-specific exemption from [the] mandatory standard.”
See 823 F.3d at 610–12. Exemptions were only granted when the
agency determined “an alternative method” to the mandatory
standard could “guarantee no less than the same measure of
protection” afforded by the standard “at all times.” See id. at 611.
But subjecting a particular regulated entity to a different compliance
standard via an exemption is not the same as staying a rule pending
its reconsideration—that exemption alters the status quo (the
mandatory rule) as to one party, while here, staying the rule
preserves the status quo (no rule in effect) as to everyone. Further,
in the exemption context, the “interim relief” is akin to an injunction;
an ALJ is ordering the agency not to enforce the existing standard as
to the exemption-petitioning party, and ordering the petitioning
party to comply with an interim standard. See id. at 612–13. In the
context of this stay, however, EPA is not ordering anyone to do
anything. The agency is merely announcing that it has decided to
allocate its resources towards reconsideration rather than enforcing
the rule. Despite the Court’s contrary intimations, enjoining
conduct is not the same action as issuing a stay. Cf. Nken v. Holder,
556 U.S. 418, 428–29 (2009) (“A stay pending appeal certainly has
some functional overlap with an injunction . . . . Both can have the
practical effect of preventing some action before the legality of that
5
In contrast to our precedent, the Court’s opinion concludes
a particular administrative proceeding has innumerable final
agency actions, including intermediate decisions. No
authority supports this proposition. The majority contends
Friedman v. FAA, 841 F.3d 537 (D.C. Cir. 2016) does, Op. 8–
9, but Friedman was sui generis; it spoke only to the “specific
facts presented,” a “constructive denial of Friedman’s
application for a first class [medical] certificate.” 841 F.3d
at 541. Here, unlike in Friedman, the agency has not placed
Environmental Petitioners in an indefinite “holding pattern”
preventing “any explicitly final determination.” Cf. id. at 542.
Rather, EPA has authorized a time-limited stay during which it
will proceed through the rule reconsideration process—a
process where, as mentioned above, the Environmental
Petitioners are free to voice their objections and then sue the
agency if they disagree with the agency’s actions. Cf. Ciba-
Geigy, 801 F.2d at 437 (finding “final agency action” when
EPA’s action, unlike the stay here, “gave no indication that [its
position was] subject to further agency consideration or
possible modification”). This is a far cry from an agency
“clearly communicat[ing] it will not reach a determination on
a petitioner’s submission . . . [while] simultaneously refus[ing]
to deny the petitioner’s submission.” Friedman, 841 F.3d at
542.
As a rule of decision, the Court’s unbounded reading of
Friedman creates a peculiar backdoor: The Court insists,
correctly, EPA’s decision to reconsider the rule is within the
agency’s discretion. But if the stay is not, and the stay is tied
action has been conclusively determined. But a stay achieves this
result by temporarily suspending the source of authority to act—the
order or judgment in question—not by directing an actor’s
conduct.”).
6
up with the reconsideration authority, deeming the stay “final
agency action” allows the Court to review the basis for
reconsideration itself. See Op. 10. Certainly, the rule of law
would benefit from the judiciary shedding its unfortunate
sheepishness towards reviewing agency action. But that noble
goal does not absolve us from “carefully consider[ing] why and
when we are meant to” review agency action. See AKM LLC
v. Sec’y of Labor, 675 F.3d 752, 769 (D.C. Cir. 2012) (Brown,
J., concurring). Yes, the “reflex of deference” can be
dangerous. Id. But so is an aneurysm of activism that
enlarges a doctrine by engorging judicial prerogatives to the
point of rupturing the separation of powers. See Santa Monica
Beach, LTD. v. Superior Court, 968 P.2d 993, 1040 (Cal. 1999)
(Brown, J., dissenting) (“Judicial review is properly conceived
in narrow terms. It is not a license to supersede the exercise
of power by a coordinate branch which acts well within
constitutional boundaries.”). If an intermediate stay is the
consummation of an agency’s decision-making, we have
conflated the agency preserving the status quo, i.e., forestalling
the rule’s requirements in order to reconsider them, with the
agency completing a course of action, i.e., ordering
compliance. In my view, this is erroneous.
Turning to the second element of “final agency action,” the
Court establishes nothing by asserting the stay creates obvious
consequences for the regulated parties. See, e.g., Op. 8.
Agency actions of various kinds, “final” or not, come with
consequences. The relevant question is whether the
consequences have a “legal force or practical effect” beyond
“the disruptions that accompany” the agency making a decision
to “initiate proceedings.” See Fed. Trade Comm’n v.
Standard Oil Co. of Cal., 449 U.S. 232, 241, 243 (1980).
Here, EPA’s unreviewable decision to reconsider its rule
is akin to an agency making “a precatory finding of [a] ‘reason
7
to believe’” legal action is warranted. Cf. Reliable Automatic
Sprinkler Co. v. Consumer Prod. Safety Comm’n, 173 F.
Supp.2d 41, 44 (D.D.C. 2001) (quoting Standard Oil Co., 449
U.S. at 234). The stay—designed so EPA can devote
resources to reconsidering the rule rather than enforcing it, and
so industry can avoid implementing changes that
reconsideration may later obviate—is subsidiary to the
reconsideration itself. If “final agency action” cannot
encompass the decision to reconsider the rule, “it cannot
possibly encompass the . . . steps that the [agency] has taken to
date” to facilitate reconsideration. See id. at 44. EPA is not
compelling compliance here. If a regulated entity wants to
comport its conduct to the requirements of the stayed rule, it is
free to do so. By issuing the stay, all the EPA has indicated it
that it will not, legally or practically, enforce the rule under
reconsideration. The stay’s consequences therefore do not
impose legal or practical requirements on anyone—separating
them from the kind of consequences encompassed by “final
agency action.” Cf. Reliable, 324 F.3d at 735 (“The discovery
orders in ARCO were legally binding orders, whereas here,
there is no order, only the possibility of Reliable having to
defend itself at an enforcement hearing if Reliable does not
undertake certain voluntary action, and if the agency decides to
proceed against it.”).
The Court is thus in error to claim Ciba-Geigy. See Op.
9. Ciba-Geigy was a “comply-or-else” case; “the next step
was not further adjudication, but an enforcement action in
federal court.” CSX Transp., Inc. v. Surface Transp. Bd., 774
F.3d 25, 32 (D.C. Cir. 2014) (explaining Ciba-Geigy). Here,
Environmental Petitioners are not presented with agency
conduct demonstrating EPA will take no additional action.
EPA’s stay does not ask anyone to alter their conduct, so
“judicial review must wait.” See id. That Petitioners are
anxious to see their victory implemented and impatient with
8
delay does not make EPA’s action final. It may be annoying,
disappointing, ill-advised, even unlawful, but that does not
transform a stay to facilitate reconsideration into “final agency
action.”
Without either element of the “final agency action” inquiry
satisfied, I cannot conclude EPA’s stay falls within our
jurisdictional reach. Section 7607(d)(7)(B) renders a stay a
mere means to facilitate a decision we lack the authority to
review. Accordingly, I would dismiss the Environmental
Petitioners’ motion on the grounds that we lack jurisdiction to
review EPA’s stay, and not reach the remaining issues. As the
Court does otherwise, I respectfully dissent from the Court’s
decision to grant the motion and vacate EPA’s stay.