California Communities Against Toxics v. EPA , 934 F.3d 627 ( 2019 )

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued April 1, 2019 Decided August 20, 2019
No. 18-1085
CALIFORNIA COMMUNITIES AGAINST TOXICS, ET AL.,
PETITIONERS
v.
ENVIRONMENTAL PROTECTION AGENCY AND ANDREW
WHEELER, ADMINISTRATOR, U.S. ENVIRONMENTAL
PROTECTION AGENCY,
RESPONDENTS
AIR PERMITTING FORUM, ET AL.,
INTERVENORS
Consolidated with 18-1095, 18-1096
On Petitions for Review of Action of the
United States Environmental Protection Agency
Sanjay Narayan argued the cause for Environmental
Petitioners. With him on the briefs were James S. Pew, Tomás
E. Carbonell, Vickie Patton, Surbhi Sarang, John Walke, Emily
Davis, Thomas Zimpleman, and Keri N. Powell.
Kavita P. Lesser, Deputy Attorney General, Office of the
Attorney General for the State of California, argued the cause
2
for petitioner State of California. With her on the briefs were
Xavier Becerra, Attorney General, David A. Zonana, Deputy
Attorney General, and Jonathan Wiener, Deputy Attorney
General.
Eric Grant, Attorney, U.S. Department of Justice, argued
the cause for respondents. On the brief were Jeffrey Bossert
Clark, Assistant Attorney General, Jonathan D. Brightbill,
Deputy Assistant Attorney General, and Scott Jordan,
Attorney, U.S. Environmental Protection Agency.
Shannon S. Broome argued the cause for intervenors-
respondents Air Permitting Forum, et al. With her on the briefs
were Charles H. Knauss, Leslie Sue Ritts, Makram B. Jaber,
and Andrew D. Knudsen.
David M. Friedland, Leslie A. Hulse, Felicia H. Barnes,
Steven P. Lehotsky, Michael B. Schon, and amici curiae
American Chemistry Council, et al. in support of respondents.
Before: ROGERS and WILKINS, Circuit Judges, and
SILBERMAN, Senior Judge.
Opinion for the Court filed by Circuit Judge WILKINS.
Dissenting Opinion filed by Circuit Judge ROGERS.
This case asks us to determine the nature of an agency
action, an inquiry that – paradoxically – is quotidian but
abstruse. When we are confronted with agency action, the
litany of questions is by now very well-rehearsed: Is it final? Is
it ripe? Is it a policy statement? Is it an interpretive rule? Is it a
legislative rule? Despite the clarity of these questions,
however, predictable answers have eluded courts and
commentators. See, e.g., Perez v. Mortg. Bankers Ass’n., 135
3
S. Ct. 1199, 1204 (2015) (describing the question of how to
distinguish between legislative and interpretive rules as “the
source of much scholarly and judicial debate”); Ticor Title Ins.
Co. v. FTC, 814 F.2d 731, 745 (D.C. Cir. 1987) (opinion of
Williams, J.) (characterizing the law governing finality and
ripeness as “chaotic”); Ronald M. Levin, Rulemaking and the
Guidance Exemption, 70 ADMIN L. REV. 264, 348 (2018) (“The
standard view among commentators is that [distinguishing
between legislative and nonlegislative rules] is exceptionally
perplexing and incoherent.”). Indeed, the nature of agency
action, it seems, is too often in the eye of the beholder. We
resolve the instant matter, therefore, with our eye toward the
“continuing project” of clarifying this “byzantine” area of the
law. Nat’l Min. Ass’n v. McCarthy, 758 F.3d 243, 246 (D.C.
Cir. 2014).
The agency action before us is a 2018 memorandum
(“Wehrum Memo”) that William L. Wehrum, Assistant
Administrator for the Environmental Protection Agency’s
(“EPA”) Office of Air and Radiation, issued to all Regional Air
Division Directors. The Wehrum Memo declares that the plain
language of § 112 of the Clean Air Act (“Act” or “CAA”), 42
U.S.C. § 7412, compels the conclusion that a source of toxic
emissions classified as “major” can reclassify to an “area
source,” and thereby ease its regulatory burden, at any time
after it limits its potential to emit to below the major source
threshold. J.A. 1. The Wehrum Memo states that it supersedes
a prior 1995 EPA memorandum (“Seitz Memo”) issued by
John Seitz, then Director of EPA’s Office of Air Quality
Planning and Standards, which interpreted § 112 to mean that
once EPA classifies a source as major, that source can never
reclassify to area source status, even if it limits its potential to
emit to below the major source threshold. Id.
4
Petitioners are the State of California and a group of
environmental organizations whose citizens and members,
respectively, breathe the air in the vicinity of regulated sources.
EPA is the Respondent, and a group of industry organizations
have joined as Intervenor. Petitioners contend that we can and
should review the Wehrum Memo because it is final agency
action and prudentially ripe. Moreover, Petitioners argue, the
Wehrum Memo is a legislative rule, and it is therefore
procedurally defective under the Administrative Procedure Act
(“APA”), 5 U.S.C. § 551 et seq., because EPA failed to provide
notice and comment before issuing it, see id. § 553. But even
if we hold that the Wehrum Memo is an interpretive rule (for
which notice and comment is not required, see id.), Petitioners
contend that we still must vacate it because EPA’s
interpretation of § 112 is incorrect. Respondent and Intervenor
retort that this Court lacks jurisdiction over the Wehrum Memo
because it is not final agency action. Alternatively, they argue,
we should not review it because it is not prudentially ripe. If,
however, we find the Wehrum Memo final and ripe,
Respondent and Intervenor assert, we must deny the petitions
because it is an interpretive rule and is thus procedurally sound,
and its interpretation of § 112 is correct.
For the reasons explained herein, we hold that the Wehrum
Memo is not final agency action, and we dismiss the petitions
for lack of subject matter jurisdiction under the Act. We
express no opinion as to whether the Wehrum Memo is
prudentially ripe, an interpretive rule or a legislative rule, or on
the merits of its interpretation of § 112. In holding that the
Wehrum Memo is not final, we emphasize two points. First,
when assessing the nature of an agency action (including
whether it is final), courts should resist the temptation to define
the action by comparing it to superficially similar actions in the
caselaw. Rather, courts should take as their NorthStar the
unique constellation of statutes and regulations that govern the
5
action at issue. Second, although all legislative rules are final,
not all final rules are legislative, and the finality analysis is
therefore distinct from the test for whether an agency action is
a legislative rule.
I.
Because they share a progenitor, a reliable approach to
understanding a James Baldwin novel is to compare it,
according to a set of criteria, to another work in his oeuvre.
Indeed, a thematic reading of Giovanni’s Room is sure to
inform such a reading of The Fire Next Time, and vice versa.
Not so, however, with respect to the broad set of phenomena
we categorize as agency action. Because few, if any, of them
are governed by the exact same combination of statutes and
regulations, it is a mistake to assume – even if they appear
facially similar – that they can lend each other definition
through comparison, or that they are decipherable under a
common rubric. Rather, to ascertain the nature of an agency
action, courts should ground the analysis in the idiosyncratic
regime of statutes and regulations that govern it. We have great
sympathy for the desire to develop a one-size-fits-all heuristic.
See, e.g., Nat’l Min., 758 F.3d at 251 (“. . . all relevant parties
should instantly be able to tell whether an agency action is a
legislative rule, an interpretive rule, or a general statement of
policy . . . .”). But this desire is perhaps misplaced, since, as we
once said of interpretation itself, agency action is “a chameleon
that takes its color from its context.” American Min. Congress
v. EPA, 995 F.2d 1106, 1111 (D.C. Cir. 1993).
Accordingly, we turn first to the CAA provisions and EPA
regulations that govern the Wehrum Memo.
Congress enacted the CAA, 42 U.S.C. § 7401 et seq., to
“protect and enhance the quality of the Nation’s air
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resources . . . . ” Id. § 7401(b)(1). Toward this end, § 112
requires EPA to regulate “Hazardous Air Pollutants,” i.e. toxic
emissions such as chloroform. Id. § 7412. Congress
established an initial list of hazardous air pollutants, id.
§ 7412(b)(1), but the Act requires EPA to curate it, deleting or
adding hazardous air pollutants over time according to certain
criteria, id. § 7412(b)(2)-(3). Based on this list, the Act
mandates EPA to create a second list of categories of sources
of hazardous air pollutants, id. § 7412(c), like asphalt
processing plants and industrial dry-cleaning facilities, see
Revision of Source Category List under Section 112 of the
Clean Air Act, 70 Fed. Reg. 37819-01 (June 30, 2005).
Importantly, the Act distinguishes between “major” and “area”
sources. Id. § 7412(a)(1)-(2). According to the Act’s
definitional provisions, a major source means any source
within a listed category that “emits or has the potential to emit
considering controls, in the aggregate, 10 tons per year or more
of any [listed hazardous air pollutant] or 25 tons per year or
more of any combination of [listed hazardous air pollutants].”
Id. § 7412(a)(1). Area source means “any stationary source of
[hazardous air pollutants] that is not a major source.” Id.
§ 7412(a)(2).
Whether EPA classifies a source as major or area has
major consequences for both sources of hazardous air
pollutants, which must comply with emissions standards, and
regulatory beneficiaries, who live, work, recreate – and thus
regularly breathe the air – near sources of hazardous air
pollutants. For major sources, the Act requires EPA to establish
stringent emissions caps that result in “the maximum degree of
reduction in emissions . . . (including a prohibition on such
emissions, where achievable).” Id. § 7412(d). EPA refers to
these emissions limitations as “Maximum Achievable Control
Technology” (“MACT”) standards. J.A. 1. The Act mandates
that MACT standards be “no less stringent than the emission
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control that is achieved in practice by the best controlled
similar source.” Id. § 7412(d)(3). By contrast, for area sources,
EPA need not set emissions caps at all, save under limited
circumstances. See id. § 7412(c)(3). Moreover, where the
agency chooses to cap emissions for an area source, it may set
emissions limits based on “Generally Available Control
Technology” (“GACT”) standards, which are far more lenient
than their MACT counterparts.1
Of course, emissions caps are of little use if sources do not
comply with them. Presumably in recognition of this, Congress
enacted Title V of the CAA, 42 U.S.C. § 7661 et seq., which
makes it unlawful for a source subject to regulations under the
Act – including GACT or MACT standards under § 112 – to
operate without a permit, see id. § 7661a(a). Specifically,
within a year of becoming subject to an obligation under the
Act, Title V requires a source to submit a permit application
and compliance plan to a state permitting authority. Id.
§ 7661b(b)-(c). In addition, a source must certify its
compliance annually and submit to inspection, monitoring, and
reporting requirements. Id. § 7661c(a)-(c). A source may apply
to modify its permit, 40 C.F.R. § 70.7(e), and state permitting
authorities must provide for public comment and a hearing on
all permit applications that they receive, 42 U.S.C. §
7661a(b)(6).
But what if a state permitting authority issues or denies a
permit application on a ground that a regulated source, or a
1
As we have observed, the Act does not provide any parameters for
setting GACT standards, but its legislative history describes GACT
as “‘methods . . . [that] are commercially available and appropriate
for application . . . considering economic impacts and the technical
capabilities of firms to operate and maintain the emissions control
systems.’” U.S. Sugar Corp. v. EPA, 830 F.3d 579, 595 (D.C. Cir.
2016) (quoting S. REP. NO. 101-228, at 171 (1989)).
8
regulatory beneficiary believes contravenes the Act? Congress
apparently foresaw this circumstance, too. Indeed, Title V
provides a detailed administrative process that dictates exactly
when and how regulated sources and regulatory beneficiaries
may seek EPA review of a state permitting authority’s action,
and, ultimately, judicial review of EPA action. See id. § 7611d.
The process works as follows. First, state permitting authorities
must submit to EPA all proposed operating permits. Id.
§ 7611d(a)(1). If any permit contains a provision that the
Administrator determines is not in compliance with the Act, the
Administrator must object in writing, and provide a statement
of reasons for the objection, within forty-five days after
receiving a copy of the proposed permit. Id. § 7661d(b)(1). If,
within ninety days of an EPA objection, a permitting authority
fails to submit a revised permit that satisfies the objection, the
Administrator must issue or deny the permit in accordance with
the Act. Id. § 7661d(c). Notably, refusing to revise a permit to
conform with an EPA objection does not expose a permitting
authority to any sort of penalty or liability whatsoever. If the
Administrator does not object in writing within forty-five days
of receiving a proposed permit, any person – including a
regulated source or a regulatory beneficiary – may, within
sixty days after EPA’s forty-five-day objection period expires,
petition the Administrator to object. Id. § 7661d(b)(2). The
Administrator must grant or deny such a petition within sixty
days after it is filed. Id.
Importantly, for reasons that will become clear, § 7661d
specifies: (1) that “[n]o objection shall be subject to judicial
review until the Administrator takes final action to issue or
deny a permit under this subsection,” id. § 7661d(c); and (2)
that the Administrator’s denial of a petition to object “shall be
subject to judicial review under section 7607,” id.
§ 7661d(b)(2). In turn, § 7607 contains the Act’s umbrella
judicial review provision, which confers jurisdiction in the
9
appropriate circuit for regionally applicable final action of the
Administrator and in this Court for, inter alia, final action of
the Administrator that is “nationally applicable.” Id.
§ 7607(b)(1).
With an understanding of the major statutory provisions
and some of the regulations that govern the Wehrum Memo,
we now provide fuller descriptions of the Wehrum Memo’s
predecessor, the Seitz Memo, and the Wehrum Memo itself.
Where appropriate, we take care to note additional applicable
CAA provisions and EPA regulations.
In 1995, without providing notice and comment, John
Seitz – then Director of EPA’s Office of Air Quality Planning
and Standards – issued a memorandum to “clarify when a
major source of [hazardous air pollutants] can become an area
source” under § 112. J.A. 232 (underline in original). A major
source may reclassify to an area source by limiting its potential
to emit to below the major source threshold, the Seitz Memo
concluded, only until the first date on which it must comply
with a MACT standard or any other substantive regulatory
requirement under the Act. Id. at 236. The Seitz Memo referred
to this policy as “once in, always in.” Id. In other words, under
the Seitz Memo, once EPA classifies a source as major under
§ 112 and its first compliance date passes, the source is
ineligible to reclassify as an area source, even if it takes an
enforceable limit on its potential to emit to below the major
source threshold. Despite EPA’s stated intention to do so, see
J.A. 234, the agency never formalized the Seitz Memo through
notice and comment rulemaking. Nevertheless, the Seitz Memo
has remained in effect for nearly twenty-five years.
On January 25, 2018, however, EPA announced it was
reversing course. That day, William L. Wehrum, Assistant
Administrator for EPA’s Office of Air and Radiation, and
10
“principal adviser to the Administrator in matters pertaining to
air and radiation programs,” 40 C.F.R. § 1.41, issued a four-
page memo to the agency’s Regional Air Division Directors; it
announced that EPA would no longer interpret § 112 in
accordance with the Seitz Memo. Indeed, the Wehrum Memo
explains, the agency cannot interpret § 112 in accordance with
the Seitz Memo because the statute’s plain-language “compels
the conclusion” that a major source becomes an area source at
such time when it takes an enforceable limit on its potential to
emit to below the major source threshold. J.A. 1. Congress, the
Wehrum Memo argues, placed no “temporal limitations” on
when a major source is eligible to reclassify as an area source.
Id. at 3. Accordingly, the Wehrum Memo declares that when
a source previously classified as major limits its potential to
emit to below the major source threshold, it “will no longer be
subject either to the major source MACT or other major source
requirements that were applicable to it as a major source under
CAA section 112.” Id. at 1. In addition, the Wehrum Memo
states that it “supersedes” the Seitz Memo, id., and it instructs
that “[t]he Regional offices should send this memorandum to
states within their jurisdiction,” id. at 4.
II.
Before explaining why the Wehrum Memo is not final
agency action, we take a moment to clarify the proper test for
finality. In this Court, its contours have become blurred amidst
the “considerable smog,” Ass’n. of Flight Attendants v. Huerta,
785 F.3d 710, 717 (D.C. Cir. 2015), enshrouding the related
but separate analysis of whether an agency action is a
legislative rule. In Flight Attendants, for example, we framed
the finality inquiry as asking whether an action is “non-
binding” or a “binding legislative rule,” Flight Attendants, 785
F.3d at 716, and we held that the guidance document at issue
was nonfinal because it was “not a legislative rule carrying the
11
‘force and effect of law,’” id. (quoting Perez, 135 S. Ct. at
1204). Likewise, in National Mining, we opined that in order
to analyze whether an action is final, we must first “take a step
back” and analyze whether the rule is a legislative rule,
interpretive rule, or general statement of policy. Nat’l Min.
Ass’n, 758 F.3d at 251-52. The most important factor in this
analysis, we continued, is whether an action has “actual legal
effect,” id. at 252, and we held that the action at issue did not
and was therefore unreviewable, id. at 252-53.
Subsuming the finality analysis within the test for whether
a rule is legislative is not always inappropriate; if a rule is
legislative it has the force and effect of law, and a legislative
rule is thus necessarily final. As the Supreme Court has twice
reminded us within the last five years, however, if a rule is final
it is not necessarily legislative, and therefore the finality
analysis is distinct from the test for whether an agency action
is a legislative rule.
In United States Army Corps of Engineers v. Hawkes Co.,
136 S. Ct. 1807 (2016), the Court affirmed that the two-prong
test in Bennett v. Spear, 520 U.S. 154 (1997), remains finality’s
touchstone, see Hawkes, 136 S. Ct. at 1813 (quoting Bennett,
520 U.S. at 177-78) (“First, the agency action must mark the
consummation of the agency’s decisionmaking process . . . .
And second, the action must be one by which rights or
obligations have been determined, or from which legal
consequences will flow.”). In Hawkes, the question of whether
the agency action at issue was the consummation of the
agency’s decisionmaking process was not in dispute.
Accordingly, the Court’s analysis focused on whether the
action satisfied the second prong of Bennett. Notably, in
undertaking this inquiry, the Court neither asked whether the
action at issue had the force and effect of law nor made a single
mention of legislative rules. Rather, the Court’s inquiry
12
focused on whether the action at issue gave “rise to ‘direct and
appreciable legal consequences.’” Hawkes, 136 S. Ct. at 1814(quoting Bennett, 520 U.S. at 178).
Perez, too, makes clear that the finality analysis is distinct
from the test for whether a rule is legislative. There, the Court
affirmed the “longstanding recognition that interpretive rules
do not have the force and effect of law.” Perez, 135 S. Ct. at
1208 (internal citations omitted). Accordingly, overruling
Paralyzed Veterans of Am. v. D.C. Arena L.P., 117 F.3d 579(D.C. Cir. 1997), the Court held that the APA does not require
an agency to provide notice and comment in amending an
interpretive rule, even if the new rule deviates significantly
from its predecessor. Id. at 1206. In so holding, the Court
reassured regulated entities and regulatory beneficiaries that
they are not without recourse should an agency – perhaps to
evade notice and comment – repudiate a longstanding
interpretive rule by way of a second interpretive rule. Id. at
1209. In such a circumstance, the Court explained, an affected
party can seek judicial review pursuant to the APA. Id. Because
only final agency action is reviewable under the APA, see 5
U.S.C. § 704, Perez thus affirms that interpretive rules can be
final, and, by implication, that the test for finality is
independent of the analysis for whether an agency action is a
legislative rule rather than an interpretive rule.
As commentators explain, maintaining an independent
finality analysis is not merely a theoretical nicety; it has several
salutary effects in practice. For example – as Perez alludes to,
see 135 S. Ct. at 1209 – maintaining a finality analysis that is
distinct from the test for whether a rule is legislative permits
courts to review nonlegislative rules and thus safeguards
against agencies evading both judicial review and notice and
comment by acting via nonlegislative rules. See William Funk,
Final Agency Action After Hawkes, 11 N.Y.U. J. L. & LIBERTY
13
285, 304 (2017). This is especially important when viewed
from the perspective of regulatory beneficiaries, who are
generally not parties to enforcement actions, and, therefore,
may only be able to challenge nonlegislative rules via judicial
review. See Nina A. Mendelson, Regulatory Beneficiaries and
Informal Agency Policymaking, 92 CORNELL L. REV. 397, 420-
24 (2007).
Having clarified the proper test for finality, we now apply
it to the Wehrum Memo. Consistent with the interpretive
method we endorse herein, we hew closely to the CAA
provisions and EPA regulations appertaining thereto.
Our first question is whether the Wehrum Memo “mark[s]
the consummation of [EPA’s] decisionmaking process.”
Hawkes, 136 S. Ct. at 1813 (quoting Bennett, 520 U.S. at 177-
78). It does. Notably, neither Respondent nor Intervenor offer
substantive argument to the contrary. They were smart to save
their ink. The Wehrum Memo unequivocally states that the
plain language of § 112 “compels” the legal conclusion that
qualifying major sources can reclassify at such time that they
take an enforceable limit on their potential to emit to below the
major source threshold. J.A. 1. In other words, the Wehrum
Memo does not advance what EPA believes is a reasonable
interpretation of § 112; it advances what EPA believes is the
only permissible interpretation of the statute. Moreover, no
mere subordinate issued the Wehrum Memo. Far from it. The
Assistant Administrator for the Office of Air and Radiation
issued it. As discussed, under EPA regulations, he is the
“principal advisor to the Administrator in matters pertaining to
air and radiation,” see 40 C.F.R. § 1.41, and, as we have held
previously with respect to the Assistant Administrator for the
Office of Air and Radiation, nothing within EPA’s regulations
provides us “reason to question his authority to speak for the
EPA.” Her Majesty the Queen in Right of Ontario v. EPA, 912
14
F.2d 1525, 1532 (D.C. Cir. 1990) (internal citations omitted).
Cf. Soundboard Ass’n. v. FTC, 888 F.3d 1261, 1267-69 (D.C.
Cir. 2018), cert denied 139 S. Ct. 1544, 2019 WL 1590248(Apr. 15, 2019) (Federal Trade Commission (“FTC”) staff
opinion letter not consummation of agency’s decisionmaking
process because FTC regulations expressly delineated between
Commission advice and staff advice and provided petitioners
opportunity to seek opinion from Commission itself).
Moreover, EPA published notice of the Wehrum Memo, and
reiterated its principal conclusion, in the Federal Register. See
83 Fed. Reg. 5543-01 (Feb. 8, 2018). Accordingly, the
Wehrum Memo can only reasonably be described as EPA’s last
word on when a major source can reclassify to an area source
under § 112.
Because the Wehrum Memo satisfies Bennett’s first prong,
we ask next whether it has “direct and appreciable legal
consequences.” Hawkes, 136 S. Ct. at 1814 (quoting Bennett,
520 U.S. at 178). Petitioners argue that it does because it
creates a new right – i.e. it allows major sources unable to
reclassify to area sources under the Seitz Memo to so
reclassify. Cal. Pet’rs’ Br. 17-20. Respondent counters that the
Wehrum Memo does not change the rights of regulated
sources. EPA Br. 26-28. Whether or not a regulated source has
the right to reclassify, Respondent contends, is only determined
within the Title V permitting process. Id. (citing 42 U.S.C. §
7661d).
For reasons now explained, we hold that the Wehrum
Memo does not have a single direct and appreciable legal
consequence.
Hawkes instructs that whether an agency action has direct
and appreciable legal consequences is a “‘pragmatic’” inquiry.
Id. at 1815 (quoting Abbot Labs. v. Gardner, 387 U.S. 136, 149
15
(1967)). In characterizing the inquiry as pragmatic, we do not
take the Court to be encouraging some sort of common-sense
approach. Quite the opposite. We take it as counseling lower
courts to make Bennett prong-two determinations based on the
concrete consequences an agency action has or does not have
as a result of the specific statutes and regulations that govern
it. Thus, in Hawkes, the Court held, in part, that the agency
determination at issue had direct and appreciable legal
consequences because, under the applicable statutes and
regulations, if petitioners failed to heed the determination they
did so at the risk of significant criminal and civil penalties. Id.And the cases Hawkes relies on as past examples of the
“pragmatic approach [the Court] has long taken to finality”
hold similarly. Id. (citing and quoting Sackett v. EPA, 566 U.S.
120, 126 (2012) (holding that agency action at issue satisfied
Bennett prong-two because, under the relevant statutes and
regulations, it appeared to expose petitioners to double
penalties in a future enforcement proceeding and to limit their
ability to obtain a certain type of permit); Abbot Labs., 387 U.S.
at 152 (holding that action at issue had a “sufficiently direct
and immediate” impact on petitioners, such that judicial review
was appropriate, because, under the governing statutes and
regulations, noncompliance risked “serious criminal and civil
penalties”); Frozen Food Express v. United States, 351 U.S.
40, 44 (1956) (same)).
Quite recently, in Valero Energy Corporation v. EPA, No.
18-1028, 2019 WL 2587837 (D.C. Cir. June 25, 2019), we
affirmed this approach. At issue there, like here, was whether
an EPA guidance document that declared the agency’s
interpretation of a statute was final under the Act. We held that
it was not. Assessing it within the context of the Act, we
emphasized that: (1) the guidance imposed no obligations,
prohibitions, or restrictions; (2) it put no party to the choice
between costly compliance and the risk of a penalty of any sort;
16
(3) EPA acknowledged at oral argument that the guidance had
no independent legal authority; and (4) that the Act provided
regulated parties a statutory mechanism by which to challenge
any EPA action that was premised on the statutory
interpretation that the guidance advanced. Valero, 2019 WL at
*3-5.
Assessing the Wehrum Memo under Hawkes and in
accordance with Valero, we find that it is not final. True, it
unequivocally declares that major sources, at such time that
they limit their potential to emit to below the major source
threshold, “will no longer be” subject to MACT standards.
J.A. 1. Viewed within the context of the Act, however, the
Wehrum Memo is all bark and no bite. As Respondent averred
twice at oral argument, neither EPA nor any regulated source
can rely on the Wehrum Memo within the Title V permitting
process or in any other proceeding. Oral Arg. 50:15-50:27,
1:01:13-1:01:50. In other words, as Respondent concedes,
although the Wehrum Memo forecasts EPA’s position as to
§ 112, it has no independent legal authority. In addition, under
the Act and EPA regulations, a state permitting authority that
refuses to comply with the Wehrum Memo faces no penalty or
liability of any sort. Further still, the instant matter does not
present a circumstance where the action at issue may be legally
consequential because its binds agency staff and affected
parties have no means (outside of judicial review) by which to
challenge it. To the contrary, the Act contains clear provisions
pursuant to which: (1) a state permitting authority can refuse to
apply the Wehrum Memo and seek judicial review if EPA
issues a permit over its refusal, id. § 7661d(c); and (2) a
regulatory beneficiary can petition EPA to object to a state
permitting authority’s application of the Wehrum Memo and
seek judicial review if EPA denies the petition, id. §
7661d(b)(2).
17
Accordingly, although the Wehrum Memo, in no uncertain
terms, forecasts EPA’s definitive interpretation of § 112, it has
no direct and appreciable legal consequences: neither EPA nor
regulated sources can rely on it as independently authoritative
in any proceeding; state permitting authorities face no penalty
or liability of any sort in ignoring it; and state permitting
authorities and regulatory beneficiaries have clear statutory
avenues by which to challenge a permitting decision adopting
the reasoning of the Wehrum Memo and seek judicial review
if EPA fails to sustain their challenges. Under § 7661d(c), if a
state permitting authority refuses to issue a permit allowing a
major source to reclassify as an area source, and EPA
subsequently issues such a permit following the reasoning of
the Wehrum Memo, judicial review is appropriate. Under
§ 7661d(b)(2), if EPA, following the reasoning of the Wehrum
Memo, denies a petition from any person asking the agency to
object to a state permitting authority’s issuance of a permit that
allows a major source to reclassify as an area source, judicial
review is appropriate. Indeed, because Congress specified that
“[n]o objection shall be subject to review until the
Administrator takes final action to issue or deny a permit under
this subsection,” § 7661d(c), we would contravene
Congressional intent if we were to hold that a memo that
merely forecasts a future objection is final agency action and
subject to judicial review at this time.
The dissent insists that the Wehrum Memo satisfies
Bennett’s second prong because it “altered the legal regime.”
Dis. Op. 12. Indeed, the dissent forewarns, the Wehrum Memo
“commands, orders, and dictates [to]” EPA employees, id. at 4,
and “state permitting authorities are subject to” the statutory
interpretation it advances, id. Said differently, according to the
dissent, because of the Wehrum Memo, sources subject to
MACT standards that limit their potential to emit to below the
major source threshold are now “assured that they will be
18
subject to decreased regulation with EPA’s support.” Id. at 12
(emphasis added).
While the question is not free from doubt, we respectfully
disagree. As noted above, we must remain laser focused on
whether the Wehrum Memo gives “rise to ‘direct and
appreciable legal consequences.’” Hawkes, 136 S. Ct. at 1814(quoting Bennett, 520 U.S. at 178), and when viewed in its
specific regulatory context, it does not. “[M]ajor sources must
comply with technology-based emission standards requiring
the maximum degree of reduction in emissions EPA deems
achievable, . . . [and] [i]n order to obtain an operating permit
under title V of the [CAA], major sources must comply with
extensive monitoring, reporting and record-keeping
requirements. Nat'l Min. Ass'n v. U.S. E.P.A., 59 F.3d 1351,
1353 (D.C. Cir. 1995). Major sources must obtain a permit in
order to operate, and unless and until that permit is amended or
set aside, the stringent requirements set forth therein must be
complied with while that equipment is operational. The
Wehrum Memo itself does not revoke or amend a single
permit. As acknowledged by the Ohio environmental
authorities in materials cited by petitioners, “[i]f you want to
take advantage of the new guidance [in the Wehrum Memo],
you will need to submit an application to modify your current
permit.” Environmental Pet’rs’ Br., Standing Addendum 0198.
Assuredly, although the Wehrum Memo advises EPA
employees of the agency’s position as to § 112, it does not bind
state permitting authorities or assure regulated entities of the
ability to reclassify. As EPA concedes, EPA Br. 21, 25, in
receiving such an application to modify a permit, a state
permitting authority may – with total impunity – ignore the
Wehrum Memo and deny the application. It is true that the
Administrator must issue a revised permit over the state
permitting authority’s protest if he or she believes that the
statute so requires, § 7661d(c), but in such a case, the statute
19
explicitly provides the state permitting authority a mechanism
by which to seek judicial review of the Administrator’s action.
Id. Regardless of whether Congress generally intended to
allow pre-enforcement review of guidance documents under
some circumstances in the CAA, here, as described above,
Congress specifically directed that judicial review shall not be
available until the Title V permit amendment process reaches a
conclusion, see §§7661d(b)(2), 7661d(c). Congress’ explicit
understanding of finality in this specific statutory context
controls our consideration of the instant guidance document,
which pertains to that same permit amendment process.
***
Before concluding, we note that we have twice had
occasion to ask whether an EPA guidance document that
implicated the Act’s Title V permitting process was final
agency action: first in Appalachian Power Co. v. EPA, 208
F.3d 1015, 1021 (D.C. Cir. 2000), then in National
Environmental Development Ass’n v. EPA, 752 F.3d 999 (D.C.
Cir. 2014). In each, we found that the guidance at issue was
final. A brief analysis of our reasoning in those cases
demonstrates why the Wehrum Memo is not.
In Appalachian Power, at issue was a nineteen-page
guidance document relating to certain monitoring requirements
for Title V sources. Appalachian Power, 208 F.3d at 1019-20.
In assessing our jurisdiction over the guidance, we did not
consider § 7611d. Instead, we framed our jurisdiction solely in
terms of § 7607(b)(1). See id. at 1021 n. 10 (“Our jurisdiction
extends to ‘any . . . nationally applicable . . . final action taken
by,’ the EPA ‘Administrator.’”) (quoting 42 U.S.C.
§ 7607(b)(1))). We predicated our holding that the guidance
was final on the following findings. First, we found that it
required state permitting authorities to: (1) “review their
20
emission standards and the emission standards EPA has
promulgated to determine if the standards provide enough
monitoring;” and (2) “insert additional monitoring
requirements as terms or conditions of a permit . . . if they
believe existing requirements are inadequate, as measured by
EPA’s multi-factor, case-by-case analysis set forth in the
Guidance.” Id. at 1022. Second, we found that EPA did not
dispute petitioners’ assertion that state permitting authorities
were relying on EPA’s guidance in insisting that regulated
sources utilize a monitoring method that was more burdensome
than the monitoring method set out under existing EPA
regulations. Id. at 1023 & n.17. Finally, we found that a
challenge to an individual permit applying the guidance would
not be heard in this Court, presumably because we felt any such
challenge would have only regional implications. Id. at 1023 n.
18.
In National Environmental, the guidance document before
us explained that, due to a decision of the Sixth Circuit, EPA
was altering a certain interpretation of its regulations only for
Title V sources located within the Sixth Circuit’s jurisdiction.
Nat’l Envtl., 752 F.3d at 1003. As in Appalachian Power, in
assessing our jurisdiction over the guidance, we asked only
whether it was final under § 7607(b)(1) and made no mention
of § 7661d. Id. at 1006. In holding that it was final, we found
that the “finality and legal consequences” of the guidance
“were made plain” when EPA “relied on [it]” in approving a
Federal Implementation Plan (“FIP”) “involving a company
located outside the jurisdiction of the Sixth Circuit.” Id. at 1007
(citing 78 Fed. Reg. 17836, 17842 & n. 10 (March 22, 2013)).
Indeed, within the FIP approval – which is a final, legislative
rule carrying the force and effect of law – EPA cited the
guidance as the sole authority for the legal conclusion that
certain regulations applied to certain sources located outside of
21
the Sixth Circuit’s jurisdiction. See 78 Fed. Reg. 17836, 17842
& n.10 (March 22, 2013)
Appalachian Power and National Environmental are thus,
contrary to what the dissent suggests, see Dis. Op. 2-3, distinct
from the instant matter in a crucial respect. In those cases, we
held that the guidance documents at issue were final under §
7607(b)(1), without reference to § 7661d, because EPA and
state permitting authorities wielded them to effectuate legal
consequences. In Appalachian Power, we found that the
guidance at issue required state permitting authorities to take at
least two specific actions and that EPA did not deny that state
permitting authorities used it to coerce regulated sources to
adopt a stricter monitoring method. In National Environmental,
we found that EPA cited the guidance, within a binding FIP
approval, as the sole authority in support of a legal conclusion.
By contrast, the Wehrum Memo does not require any entity or
person to do anything, and EPA concedes that it has not, will
not, and cannot rely on it in any proceeding. Accordingly,
unlike in Appalachian Power and National Environmental, we
have no basis to conclude, without reference to § 7661d, that
we have jurisdiction over the guidance before us under
§ 7607(b)(1). We note, in addition, that in Appalachian Power,
we found that we would lack jurisdiction over challenges to
permitting decisions applying the guidance at issue. Here,
however, any party entitled to review under § 7661d that
wishes to challenge an application of the Wehrum Memo in this
Court will be so heard, since the Wehrum Memo’s principal
conclusion is nationally applicable. See § 7607(b)(1).
In sum, we find that the Wehrum Memo – assessed within
the context of the Act and EPA regulations – is not final agency
action, and we dismiss the petitions for lack of subject matter
jurisdiction under the Act. The Wehrum Memo marks the
consummation of EPA’s decisionmaking process as to when a
22
major source may reclassify to an area source under § 112. But
the Wehrum Memo does not have direct and appreciable legal
consequences: it does not require anyone to do anything;
neither EPA nor regulated sources can rely on it in any
proceeding; state permitting authorities face no penalty or
liability in ignoring it; state permitting authorities and
regulatory beneficiaries have clear statutory avenues by which
to challenge it and seek judicial review if EPA refuses to heed
their challenges; and any such challenges, if so desired, will be
heard in this Court.
III.
To conclude, we note that we are under no illusion that this
opinion will be the Rosetta Stone of understanding the nature
of agency action. Developing this area of the law is indeed an
“important continuing project.” Nat’l Min. Ass’n, 758 F.3d at
251. Nonetheless, today we humbly submit our contribution
toward clarifying this somewhat gnarled field of jurisprudence.
In ascertaining the nature of an agency action, we emphasize,
courts should look first to the matrix of statutes and regulations
governing that specific action. In addition, we offer a gentle
reminder that the finality analysis is sui generis, separate and
distinct from the test for whether an agency action is a
legislative rule.
So ordered.
ROGERS, Circuit Judge, dissenting: On February 8, 2018,
EPA formally announced in the Federal Register that “the plain
language of the definitions of ‘major source’. . . and of ‘area
source’ in Section 112 of the [Clean Air Act] compels the
conclusion that a major source becomes an area source at such
time that the source takes an enforceable limit on its potential
to emit [] hazardous air pollutants [] below the major source
thresholds . . . .” 83 Fed. Reg. 5543 (Feb. 8, 2018) (emphasis
added). “In such circumstances, a source that was previously
classified as major . . . will no longer be subject either to the
major source [maximum achievable control technology] or
other major source requirements that were applicable to it as a
major source under CAA section 112.” Id. Further, EPA stated
this guidance memorandum “supersedes” the prior guidance in
the May 1995 Seitz memorandum barring such
reclassifications. Id. The guidance memorandum referred to
in the Federal Register Notice was issued under the signature
of William L. Wehrum, EPA Assistant Administrator for the
Office of Air and Radiation. Petitioners now seek pre-
enforcement review of the Wehrum Memorandum pursuant to
42 U.S.C. § 7607(b)(1), contending that the guidance
memorandum is a legislative rule issued without notice and
comment.
I.
Section 7607(b)(1) provides that this court shall have
jurisdiction to review nationally applicable “final action taken”
by the Administrator of EPA. 42 U.S.C. § 7607(b)(1). The
term “final action” in Section 7607(b)(1) is synonymous with
“final agency action” in the Administrative Procedure Act
(“APA”), 5 U.S.C. § 704. Whitman v. Am. Trucking Ass’ns,
Inc., 531 U.S. 457, 478 (2001). The finality inquiry itself is
governed by the test articulated in Bennett v. Spear, 520 U.S.
154 (1997). Sackett v. EPA, 566 U.S. 120, 126–27 (2012). An
agency action is final if: (1) the action marks the
“consummation of the agency’s decisionmaking process,” and
2
(2) the action is one “by which rights or obligations have been
determined, or from which legal consequences will flow.”
Bennett, 520 U.S. at 177–78 (internal quotation marks and
citation omitted) (emphases added).
The Supreme Court has “characterized the special judicial
review provision of the CAA, 42 U.S.C. § 7607(b), as one of
those statutes that specifically provides for ‘preenforcement’
review.” Whitman, 531 U.S. at 479 (citing Ohio Forestry
Ass’n, Inc. v. Sierra Club, 523 U.S. 726 (1998)). In addressing
ripeness, the Court has pointed out that the CAA “permit[s]
‘judicial review directly, even before the concrete effects
normally required for APA review are felt.’” Id. at 479–80
(quoting Lujan v. National Wildlife Federation, 497 U.S. 871,
891 (1990)). This court, in turn, recognized that “Congress has
emphatically declared a preference for immediate review with
respect to Clean Air Act rulemaking,” NRDC v. EPA, 643 F.3d
311, 320 (D.C. Cir. 2011) (internal quotations and citations
omitted), which is what petitioners contend the Wehrum
Memorandum is. So understood, the statutory scheme not only
allows but encourages pre-enforcement review of final actions
such as the Wehrum Memorandum.
A.
The court has repeatedly held that judicial review is
available pursuant to Section 7607(b)(1) for guidance
documents that bind EPA officials on how to make Title V
permitting decisions.
In Appalachian Power Co. v. EPA, 208 F.3d 1015, 1020
(D.C. Cir. 2000), the court considered a guidance document
instructing that a source’s Title V permit must include periodic
monitoring requirements to ensure compliance with certain
federal or state standards. The guidance document thus
reflected “a position [EPA] plans to follow in reviewing State-
3
issued permits” and “a position EPA officials in the field are
bound to apply.” Id. at 1022. The court explained that the
guidance document had legal consequences for both
enforcement officials and regulated entities because it “reads
like a ukase. It commands, it requires, it orders, it dictates.”
Id. at 1023. The court held that the guidance document was a
final action over which the court had jurisdiction pursuant to
Section 7607(b). Id. at 1022–23 & n.10.
Also, in National Environmental Development Ass’n’s
Clean Air Project v. EPA, 752 F.3d 999, 1007 (D.C. Cir. 2014),
this court held that a guidance document on how EPA would
determine whether groups of activities qualified as a “single
stationary source” or multiple sources in Title V permits was a
final action. The guidance document had legal consequences,
the court explained, because it “provides firm guidance to
enforcement officials about how to handle permitting
decisions” and “compels agency officials” to apply certain
permitting standards. Id. (emphasis in original). The court
held that the guidance was “final agency action that is subject
to judicial review” pursuant to Section 7607(b)(1). Id. at 1006–
07.
Similarly, in the context of review of state implementation
plans required by the CAA, the court held in Natural Resources
Defense Council, 643 F.3d at 320, that a guidance document
that “definitively interpreted” a provision of the CAA “altered
the legal regime” because it required EPA officials to consider
alternatives to a specific program when reviewing state
implementation plans. The court explained that the guidance
“binds EPA regional directors and thus qualifies as final.” Id.In sum, the court has repeatedly held that guidance
documents, which on their face bind enforcement officials to
apply a certain standard or interpretation under the CAA,
4
including in the Title V context, are final actions subject to
review pursuant to Section 7607(b)(1).
The Wehrum Memorandum states the law that EPA
officials must apply in Title V permitting. Addressed to EPA
Regional Air Division Directors, the Wehrum Memorandum
“provides firm guidance to enforcement officials about how to
handle permitting decisions.” Nat. Envmtl. Dev., 752 F.3d at
1007. By its express terms, the Wehrum Memorandum
unequivocally provides the interpretation of Section 112 that is
to be applied by EPA employees. See NRDC, 643 F.3d at 320.
The Wehrum Memorandum explains that the plain text of
Section 112 “compels the conclusion that a major source
becomes an area source at such time that the source takes an
enforceable limit on its potential to emit . . . below major
source thresholds.” Wehrum Memorandum at 1 (emphasis
added). Referencing its legal consequences, the Wehrum
Memorandum instructs that upon taking such a limit on its
potential to emit below the major source thresholds, a source
“will not be subject thereafter to those requirements applicable
to the source as a major source under CAA section 112.” Id. at
4 (emphasis added). Like the guidance document in
Appalachian Power, 208 F.3d at 1023, the Wehrum
Memorandum “reads like a ukase.” It commands, orders, and
dictates without caveats or disclaimers about the binding nature
of its statutory interpretation. Compare id., with Nat. Mining
Ass’n v. McCarthy, 758 F.3d 243, 252–53 (D.C. Cir. 2014). It
expressly “supersedes” EPA’s prior interpretation, stating that
the Seitz Memorandum is withdrawn, “effective immediately.”
Wehrum Memorandum at 1.
Under the statutory scheme, state permitting authorities
are subject to the statutory interpretation announced in the
Wehrum Memorandum stating EPA’s unequivocal position.
The Wehrum Memorandum directs EPA enforcement officials
5
to send the memorandum to the States and thereby, in light of
the Federal Register Notice, puts States doubly on notice that
EPA’s interpretation of Section 112 has changed, effective
immediately. Given the text, structure, and purpose of the
CAA, state permitting authorities are not free to ignore EPA’s
new interpretation of Section 112. The statutory scheme is
based on a partnership between federal and state governments,
whereby EPA sets federal standards and States develop
implementation plans to set emissions limitations and
standards to conform to these federal standards. Appalachian
Power, 208 F.3d at 1019. “Typically, EPA delegates to the
States its authority to require companies to comply with federal
standards.” Id. The terms and conditions in permits issued
under Title V incorporate the applicable federal standards for
individual sources. Id. Reinforcing that States must act in
conformity with the Wehrum Memorandum, the CAA
prohibits the Administrator of EPA from approving a state
implementation plan under Title V except “to the extent that
the program meets the requirements of [the CAA].” 42 U.S.C.
§ 7661a(d)(1). If a State proposes to issue an individual permit
that does not comply with the CAA requirements, then the
Administrator “shall” object. Id. § 7661d(b)(1). The
Administrator is authorized to modify an individual permit. Id.
§ 7661d(e). The CAA even contemplates that a state permitting
authority can be sanctioned for not adequately administering
and enforcing a program. Id. § 7661a(i).
In sum, by announcing an unequivocal interpretation of
which federal standards apply to which sources under the CAA,
“EPA expects States to fall in line.” Appalachian Power, 208
F.3d at 1023. Through the Wehrum Memorandum, EPA has
instructed its employees that the plain text of the CAA includes
no temporal limitation on the reclassification of “major
sources.” By publicly announcing an unequivocal statement
that the plain text of the CAA “compels” its conclusion, EPA
6
has given States their “marching orders” to allow
reclassification of major sources. Id. And States have heeded
EPA’s direction. See, e.g., Kuiken Decl. ¶¶ 6, 11 & Att.;
McCloud Decl. ¶¶ 6, 10 & Att.; Gharrity Decl. Att. (Ohio EPA
publication providing guidance to regulated entities treating the
Wehrum Memorandum as binding); see also Standing Add. 43,
45, 48, 52–53, 57, 275.
Therefore, under this court’s precedent issuance of the
Wehrum Memorandum is final action subject to judicial review
pursuant to Section 7607(b)(1) because it provides EPA’s
unequivocal interpretation on the reclassification of “major
sources,” thereby binding EPA enforcement officials.
B.
Contrary to the court’s conclusion, the Wehrum
Memorandum is final action under the two-prong Bennett v.
Spear test. 520 U.S. at 177–78. First, the Wehrum
Memorandum marks the consummation of EPA’s
decisionmaking process with respect to its interpretation of
whether Section 112 of the CAA allows major sources to
reclassify as area sources at any time. The Wehrum
Memorandum is unequivocal — if a major source “takes an
enforceable limit on its potential to emit . . . below the major
source thresholds,” the CAA “compels” that the source can
reclassify as an area source at that time. Wehrum
Memorandum at 1. It states the official position of the EPA
Administrator; in signing the guidance memorandum, the
Assistant Administrator for the Office of Air and Radiation was
acting on behalf of the Administrator. See 40 C.F.R. § 1.41;
Her Majesty the Queen in Right of Ontario v. EPA, 912 F.2d
1525, 1532 (D.C. Cir. 1990). Addressed to the Regional Air
Division Directors, it instructs the Regional offices on what
Section 112 of the CAA “compels,” and to “send this
memorandum to states within their jurisdiction.” Id. at 4. By
7
Federal Register Notice, EPA announced to the public it had
abandoned its prior interpretation and now concluded the plain
text of Section 112 imposed no temporal limit on
reclassifications by “major sources.” 83 Fed. Reg. at 5543.
Regardless of whether EPA may change its position in the
future, see, e.g., Gen. Elec. Co. v. EPA, 290 F.3d 377, 380
(D.C. Cir. 2002); Appalachian Power, 208 F.3d at 1022, the
Wehrum Memorandum marks EPA’s unequivocal statutory
interpretation of whether “major sources” may, at any time,
reclassify under the CAA upon limiting their potential to emit
hazardous pollutants.
Second, the Wehrum Memorandum is an action “from
which legal consequences will flow” because it announces a
binding change in the legal regime. Bennett, 520 U.S. at 178(emphasis added); see also U.S. Army Corps of Engineers v.
Hawkes Co., 136 S. Ct. 1807, 1814–15 (2016); NRDC, 643
F.3d at 319–20; Indep. Equip. Dealers Ass’n v. EPA, 372 F.3d
420, 427 (D.C. Cir. 2004); Appalachian Power, 208 F.3d at1020–21. The Wehrum Memorandum alters the legal regime
by changing the regulatory requirements for any “major
source” that “takes an enforceable limit on its potential to emit
. . . below major source thresholds.” Wehrum Memorandum at
1. Those sources now have the opportunity to reclassify as area
sources at any time by limiting their potential to emit below
major source thresholds and thereafter will not be subject to the
more onerous major source requirements, such as the
Maximum Achievable Control Technology standards.
The court’s recent decision in Valero Energy Corp. v.
EPA, 927 F.3d 532 (D.C. Cir. 2019) reaffirms that legal
consequences will flow from the Wehrum Memorandum.
There, the court held legal consequences did not flow from a
guidance document that interpreted EPA’s duty to conduct
“periodic reviews” of renewable fuel standards under 42
8
U.S.C. § 7545(o)(11) and explained how EPA’s prior actions
fulfilled any statutory duty to conduct periodic reviews. Id. at
535. The document did not purport bind EPA to its
interpretation and had no identifiable effect on the regulated
community. Id. at 536–37. Here, in contrast, the Wehrum
Memorandum announces a binding interpretation that has an
identifiable effect on major sources that take enforceable limits
on their potential to emit below major source thresholds.
EPA’s contrary position, that the Wehrum Memorandum
is not final because it has no immediate impact or direct legal
consequences for specific sources, misstates the finality test.
“The test for finality . . . is not so narrow — it is met if ‘the
action [is] one by which rights or obligations have been
determined, or from which legal consequences will flow.’”
Harris v. FAA, 353 F.3d 1006, 1011 (D.C. Cir. 2004) (quoting
Bennett, 520 U.S. at 178) (emphasis added). The court’s
suggestion that the Wehrum Memorandum is “all bark and no
bite,” Op. 16, ignores its plain text as well as the second clause
of the second prong of the Bennett v. Spear test. With EPA’s
blessing, legal consequences will flow from the Wehrum
Memorandum no later than when “major sources” take
enforceable limits on their potential to emit below “major
source” thresholds and obtain new or modified Title V permits.
Indeed, such legal consequences have already occurred; EPA
acknowledged that at least two “major sources” in Indiana have
reclassified as area sources as of filing of the briefs in the
instant appeal, and the Sierra Club has identified numerous
other “major sources” that are eligible to reclassify. Resp’t’s
Br. 29; Kuiken Decl. ¶ 6 & Att.; McCloud Decl. ¶ 5 & Att.
Additionally, the opportunity for judicial review at a later
time has no direct bearing on the availability of pre-
enforcement review of the Wehrum Memorandum. Section
7661d provides for judicial review under Section 7607 of an
9
Administrator’s objection or denial of a petition to object to a
specific Title V permit for a specific source. 42 U.S.C.
§ 7661d(b). Petitioners are not challenging a source-specific
objection. Instead, they seek review of a generally applicable
guidance document pursuant to Section 7607(b), which
provides for judicial review of such a general guidance
document that is a “final action.” Id. § 7607(b)(1). The two
provisions for judicial review serve different purposes.
Judicial review of national standards at the start of the
regulatory process can ensure that Congress’s intent is being
carried out before States and the regulated community must
take costly implementing actions, while later enforcement
review can ensure compliance with terms and conditions in
individual permits. Nothing in the text, structure, purpose, or
legislative history of the CAA indicates the availability of
review of a decision in a source-specific Title V proceeding
under Section 7661d would preclude pre-enforcement review
of a general guidance document under Section 7607(b). That
both exist in the CAA is a rational approach for complex
legislation where Congress intended to bring about significant
changes to the status quo impacting the environment, the
public, and entities emitting hazardous air pollutants. See
Appalachian Power, 208 F.3d at 1017; see generally Hon.
Henry A. Waxman, An Overview of the Clean Air Act
Amendments of 1990, 21 ENVTL. L. 1721, 1723, 1742 (1991).
Put otherwise, the provision of judicial review of Title V permit
decisions “in one section of a long and complicated statute” is
hardly sufficient to overcome Congress’s decision to provide
pre-enforcement review. See Sackett, 132 S. Ct. at 1373. Not
only does nothing in the text of Section 7661d override the
provision for pre-enforcement review under Section 7607(b),
the Supreme Court has acknowledged the CAA encourages
pre-enforcement judicial review. See Whitman, 531 U.S. at
479 (quoting Ohio Forestry, 523 U.S. at 737); see also NRDC,
643 F.3d at 320.
10
Furthermore, Congress’s express purpose in enacting the
CAA was “to promote the public health and welfare and the
productive capacity of [the Nation’s] population.” 42 U.S.C.
§ 7401(b)(1). Delaying the opportunity for judicial review
until individual source permit enforcement proceedings could
effectively squelch the opportunity for regulatory beneficiaries
to obtain judicial review of an agency’s position. See Nina A.
Mendelson, Regulatory Beneficiaries and Informal Agency
Policymaking, 92 CORNELL L. REV. 397, 420–24 (2007)
(“Mendelson”). Title V does provide regulatory beneficiaries
the opportunity to file a petition to object and to seek judicial
review of denial of a petition to object in individual permitting
proceedings. 42 U.S.C. § 7661d(b)(2). Yet requiring
regulatory beneficiaries to monitor and to file petitions in
individual permit proceedings throughout the United States
requires resources that may constrain beneficiaries’ ability to
seek judicial review. See Mendelson at 451–52. Pre-
enforcement judicial review of a nationally applicable
guidance document, in contrast, is more accessible for
regulatory beneficiaries. Precluding pre-enforcement review
would impose a burden Congress has not required.
Notably, irrelevant to the finality inquiry is the fact that the
Wehrum Memorandum is deregulatory rather than regulatory.
This is the fallacy underlying the court’s efforts to distinguish
our precedent on the basis that the Wehrum Memorandum does
not require anyone to do anything. See Op. 21. Although the
Supreme Court and this court have regularly been confronted
with challenges to regulatory actions as too strong or too weak
and held that agency actions that require parties to take certain
actions or expose parties to penalties are final, see, e.g.,
Hawkes, 136 S. Ct. at 1814–15; Sackett, 566 U.S. at 126; Nat.
Mining Ass’n, 758 F.3d at 252; CSI Aviation Servs., Inc. v.
DOT, 637 F.3d 408, 412–13 (D.C. Cir. 2011), the focus of the
11
inquiry has been on whether the legal regime has changed. The
Wehrum Memorandum changed the legal regime by enabling
certain regulated entities to become subject to decreased
regulation — an opportunity not clearly available under the
CAA, much less under EPA’s prior interpretation. Prior to
EPA’s issuance of guidance, enforcement officials had
discretion to interpret the CAA as either allowing or
prohibiting “major source” reclassification after the first
compliance date. See NRDC, 643 F.3d at 319–20. Now that
discretion has been withdrawn as regulated “major sources” are
eligible to be reclassified at any time upon taking emissions
limitations.
Further, the Supreme Court has held that legal
consequences can flow from the “denial of a safe harbor.”
Hawkes, 136 S. Ct. at 1814. In Scenic America, Inc. v. DOT,
836 F.3d 42, 56 (D.C. Cir. 2016), this court recognized that
legal consequences would flow from a guidance document that
created a safe harbor whereby digital billboard permits would
not be denied on the basis of violating certain standards. And
in determining whether a document was a “rule” under the
Toxic Substance Control Act in General Electric, 290 F.3d at384–85, this court held that a guidance document that “appears
to bind [EPA] to accept applications using a total toxicity factor
of 4.0 (mg/kg/day)-1” imposed binding obligations, explaining
that “if the language of the document is such that private parties
can rely on it as a norm or safe harbor by which to shape their
actions, it can be binding as a practical matter.” Id. at 383(quoting Robert A. Anthony, Interpretive Rules, Policy
Statements, Guidances, Manuals, and the Like—Should
Federal Agencies Use Them to Bind the Public?, 41 DUKE L.J.
1311, 1328–29 (1992)). The Wehrum Memorandum creates a
safe harbor for “major sources” by removing a prior barrier to
reclassification — those sources that take an enforceable limit
on their potential to emit below the “major source” threshold
12
are assured that they will be subject to decreased regulation
with EPA’s support. This safe harbor has a “clear legal effect
on regulated entities.” See Scenic America, 836 F.3d at 56.
For these reasons, the Wehrum Memorandum is final
action, reviewable pursuant to Section 7607(b)(1). It is an
agency action with the telltale signs of finality — it presents a
unequivocal interpretation of requirements under the CAA; it
is binding on its face; and it altered the legal regime by
providing an opportunity for “major sources” that take
enforceable limits on their potential to emit below the “major
source” thresholds to reclassify as “area sources” at any time.
“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.” Ciba-
Geigy Corp. v. EPA, 801 F.3d 430, 436 (D.C. Cir. 1986).
II.
The question remains whether the Wehrum Memorandum
is an agency action ripe for review. To decide whether an
agency’s action is ripe for review, courts generally consider the
“fitness of the issues for judicial decision” and the “hardship to
the parties of withholding court consideration.” Ohio Forestry,
523 U.S. at 733 (quoting Abbott Labs. v. Gardner, 387 U.S.
136, 149 (1967)). In Appalachian Power, 208 F.3d at 1023
n.18, the court held that a guidance document that reflected
EPA’s settled position regarding periodic monitoring
requirements in Title V permits was ripe for review because the
propriety of EPA’s statutory interpretation would “not turn on
the specifics of any particular permit.” Id. EPA’s guidance
document was “national in scope and Congress clearly
intended this court to determine the validity of such EPA
actions,” see 42 U.S.C. § 7607, yet “[a] challenge to an
13
individual permit would not be heard in this court,”
Appalachian Power, 208 F.3d at 1023 n.18.
The same is true here. Whether EPA was required, as
petitioners contend, to promulgate the Wehrum Memorandum
through notice-and-comment rulemaking and whether EPA’s
statutory interpretation in the Wehrum Memorandum is proper
will not turn on the specifics of any particular permit. EPA has
announced that “a major source that takes an enforceable limit
on its [potential to emit] . . . no matter when the source may
choose to take measures to limit its [potential to emit] . . . will
not be subject thereafter to those requirements applicable to the
source as a major source under CAA section 112.” Wehrum
Memorandum at 4 (emphasis added). Its guidance is national
in scope, as the court looks only to the face of an agency action
to determine whether the action is nationally applicable.
Dalton Trucking, Inc. v. EPA, 808 F.3d 875, 881 (D.C. Cir.
2015); Am. Road & Trans. Builders Ass’n v. EPA, 705 F.3d
453, 456 (D.C. Cir. 2013). Any objection or denial of a petition
to object to a Title V permit would apply solely to the specific
source applying for the Title V permit; inclusion of a general
statutory interpretation that may apply as precedent in future
Title V permit proceedings would not render the action
nationally applicable under 42 U.S.C. § 7607(b)(1). See Sierra
Club v. EPA, 926 F.3d 844, 849–50 (D.C. Cir. 2019).
Concluding that petitioners’ challenges are not ripe until the
Wehrum Memorandum is applied in an individual Title V
permit proceeding would frustrate Congress’s intent that
“nationally applicable” actions such as the Wehrum
Memorandum be reviewable in this court pursuant to 42 U.S.C.
§ 7607(b)(1). Under the court’s approach, challenges would
instead be directed to appropriate regional courts. See Op. 16–
17; see e.g., Sierra Club, 926 F.3d at 847–50.
14
In any event, petitioners’ challenges are fit for judicial
review because they present purely legal issues. See Nat. Envtl.
Dev., 752 F.3d at 1008; Gen. Elec., 290 F.3d at 380. Whether
Section 112 of the CAA allows “major sources” to reclassify
as “area sources” at any time upon taking enforceable limits on
their potential to emit is a question of statutory interpretation
that will not benefit from further factual development. See
Ohio Forestry, 523 U.S. at 733. Given EPA’s conclusion that
the plain text “compels” the interpretation in the Wehrum
Memorandum, this is not a circumstance in which judicial
review would hinder EPA’s effort to refine its position. See id.
at 735. Nor will petitioners’ claims under the APA be affected
by further factual development. See Gen. Elec., 290 F.3d at
380. In view of Congress’s stated preference for immediate
review under the CAA, NRDC, 643 F.3d at 320, the court need
not consider hardship to the parties of delaying review, see
Cement Kiln Recycling Coal. v. EPA, 493 F.3d 207, 215 (D.C.
Cir. 2007); Gen. Elec., 290 F.3d at 381. As noted, the CAA is
a statute that “permit[s] judicial review directly, even before
the concrete effects normally required for APA review are
felt.” Whitman, 531 U.S. at 479 (quoting Lujan v. Nat’l
Wildlife Fed’n, 497 U.S, 871, 891 (1990)).
III.
The APA requires that a legislative rule, which carries the
“force and effect of law,” Ass’n of Flight Attendants-CWA,
ARL-CIO v. Huerta, 785 F.3d 710, 716 (D.C. Cir. 2015)
(quoting Perez v. Mortgage Bankers Ass’n, 135 S. Ct. 1199,
1204 (2015)), must be promulgated pursuant to notice-and-
comment rulemaking. Id. To determine whether agency action
carries the force and effect of law, the court generally looks to
the actual legal effect (or lack thereof) of the agency action,
paying particular attention to the express words used in the
document. Flight Attendants, 785 F.3d at 717; Nat. Mining,
15
758 F.3d at 252. “[A] document that reads like an edict is likely
to be binding, while one riddled with caveats is not.” Flight
Attendants, 785 F.3d at 717. The court also considers whether
the action was published in the Federal Register or the Code of
Federal Regulations, and whether the action has binding effects
on the agency or private parties. Ctr. for Auto Safety v. Nat.
Highway Traffic Safety Admin., 452 F.3d 798, 806–07 (D.C.
Cir. 2006) (citing Molycorp, Inc. v. EPA, 197 F.3d 543, 545
(D.C. Cir. 1999)); see also Flight Attendants, 785 F.3d at 717;
Nat. Mining, 758 F.3d at 252. An agency’s adoption of a
binding norm that could not be properly promulgated absent
the notice-and-comment rulemaking required by the APA
“obviously would reflect final agency action.” Ctr. for Auto
Safety, 452 F.3d at 804; see also Flight Attendants, 785 F.3d at
716. When an agency action is final because it creates a
binding norm that alters the legal regime, the question of
whether the action is a legislative rule is “easy.” NRDC, 643
F.3d at 320.
That is the situation here. The Wehrum Memorandum
makes its legal effect clear; it “reads like an edict,” Flight
Attendants, 785 F.3d at 717, instructing regional offices that
the “unambiguous language” of Section 112 of the CAA
“compels” “major source” reclassifications. Wehrum
Memorandum at 1, 3. The document itself contains no
disclaimers or caveats. Upon taking an enforceable limit on
their potential to emit “below major source thresholds,” major
sources “will not be subject thereafter” to “major source”
regulations. Id. at 4 (emphasis added). EPA’s Federal Register
Notice announced the new interpretation and binds EPA to the
changed legal regime. As such, the Wehrum Memorandum is
a legislative rule that failed to conform to the APA’s notice-
and-comment requirement. Cf. Gen. Elec., 290 F.3d at 385.
16
Accordingly, I would grant the petitions for review and
vacate the Wehrum Memorandum, and I respectfully dissent.