Federal Court Overturns EPA Air Quality Standards

Published July 1, 1999

The U.S. Court of Appeals for the District of Columbia Circuit has struck down one of the most controversial Environmental Protection Agency regulations in many years. The court put a halt, at least for now, to the agency’s attempt to toughen ambient air quality standards for ozone and particulate matter.

Ruling on a lawsuit brought by several industry groups (led by the American Trucking Association), three states (Ohio, Michigan, and West Virginia), and Representative Tom Bliley (R-Virginia) and Senator Orrin Hatch (R-Utah), the court concluded that EPA’s issuance of the standards represented “an unconstitutional delegation of legislative power.”

Under the non-delegation doctrine relied on by the court, EPA may not so loosely interpret a statute that it becomes an unconstitutional delegation of legislative power. In other words, the court determined that EPA was making law rather than implementing it.

The court concluded that EPA did not properly use the authority Congress delegated to it under Sections 108 and 109 of the Clean Air Act when it attempted in 1997 to toughen the National Ambient Air Quality Standards (NAAQS) for atmospheric ozone and particulate matter (PM).

Specifically, the agency set limits for atmospheric ozone and PM 2.5 without offering “intelligible principles” to explain why the chosen standards would better protect human health than any other standard. EPA had claimed the new standards would prevent as many as 15,000 premature deaths and 350,000 cases of aggravated asthma each year.

The court remanded to EPA, but did not vacate, the July 1997 eight-hour ground-level ozone standard, directing the agency to establish a better scientific basis for the 0.08 parts per million standard. The court also ruled that EPA must consider the benefits as well as the harms associated with ground-level ozone.

The court chose not to vacate the ozone standard, saying “the standard is unlikely to engender costly compliance activities” because “the 1990 amendments extended the time for nonattainment areas to comply with the [old] .12 ppm ozone NAAQS,” which “preclude the EPA from requiring areas to comply either more quickly or with a more stringent ozone NAAQS.”

The court did, however, vacate the older standard covering particulate matter of 10 micrometers or smaller, saying EPA will “have to change the standard when it corrects the arbitrarily chosen PM[10] indicator.” The court also requested a briefing on the July 1997 standard for particulates that are 2.5 micrometers or smaller.

A Bittersweet Victory?

For more than 25,000 Americans who commented during the development of the air quality standards–including governors, mayors, and thousands of businesses–the court’s decision is considered a major victory. Many heralded the court’s application of the non-delegation doctrine, saying it signals the resurrection of a potentially valuable tool for challenging unelected executive branch regulators.

Yet the margin of victory was much thinner than many reports would lead one to believe. Absent the application of the little-known and infrequently used non-delegation doctrine by two of the judges, Stephen F. Williams and Douglas H. Ginsburg, the outcome would likely have been quite different. Judge David S. Tatel strongly dissented from the non-delegation portion of the ruling.

Federal regulators prevailed on many fronts, and a close read of the decision demonstrates how close EPA came to locking its new standards in place. The court’s reasoning makes it abundantly clear that legislative loopholes and exemptions matter. For example,

  • When Congress passed the National Environmental Policy Act (NEPA), designed to hold regulators accountable for the environmental impact of proposed rules and regulations, it specifically exempted actions taken under the Clean Air Act. The exemption meant EPA was not required under NEPA to prepare an Environmental Impact Statement for its proposed air quality standards.
  • Petitioners had argued that the Unfunded Mandates Reform Act of 1995 (UMRA) requires EPA to prepare a Regulatory Impact Statement, and to choose the least burdensome from a range of alternative permissible national air quality standards. The appeals court was unable to provide relief on this point, however, because of a weakness in UMRA’s judicial review language UMRA provides, in part, that “the inadequacy or failure to provide a RIS . . . shall not be used as a basis for staying, enjoining, invalidating, or otherwise affecting an agency rule.”
  • Petitioners further argued that EPA improperly certified that the revised standards would not have a significant impact on a substantial number of small entities. But the basis for that complaint–the Regulatory Flexibility Act (RFA)–requires only that the impact analysis consider the impact on small entities that will be directly subject to the rule-making. The fact that the rules will have a broader, indirect impact on small entities cannot be considered by the court. Nothing in the Small Business Regulatory Enforcement and Fairness Act of 1996, which amended RFA, did anything to close this loophole.

The circuit court’s May 14 ruling is likely to be appealed to the Supreme Court, and the victory against EPA’s strict clean air standards may be short-lived.

Regardless of its ultimate fate, the ruling may prove most valuable for pointing out the real weaknesses in Congress’ regulatory accountability laws. The court determined that EPA was largely obeying the laws Congress had enacted. To clarify its position on regulatory accountability, Congress must look carefully for ways to close the statutory loopholes made so obvious by the appellate court’s decision; cast a more critical eye toward the newest round of regulatory accountability legislation it is now considering, and exercise increased vigilance over new initiatives proposed by federal agencies.

Angela Antonelli is director of The Heritage Foundation’s Thomas A. Roe Institute for Economic Policy Studies. She can be reached at 202/608-6220; e-mail [email protected]. The full text of the Circuit Court of Appeals’ decision is available on the Internet at http://www.ll.georgetown.edu/Fed-Ct/Circuit/dc/opinions/97-1440a.html.