EPA Rulemaking May Be Inconsistent

Environmental Defense v. Duke Energy Corp.

In the 1970s Congress passed the New Source Performance Standards (NSPS) and Prevention of Significant Deterioration (PSD) amendments to the Clean Air Act, governing modified, as well as new, stationary sources of air pollution. The term “modification” is defined in NSPS as “any physical change in, or change in the method of operation of, a stationary source which increases the amount of any air pollutant emitted by such source or which results in the emission of any air pollutant not previously emitted.” This definition is included in the PSD’s definition of “construction” of a new facility, to which that act applies. To put the problem simply, under NSPS the EPA defines “modification” by reference to kilograms of carbon per hour, and under PSD by reference to kilograms per year. The consequence of this disparity is that an increase in hours of production would trigger NSPS requirements but not PSD requirements.[1] Duke Energy fell into this very trap, and the lower court held that PSD must be read with the assumption that pre-modification production hours be maintained. This case concerns whether the EPA must conform its PSD regulations on “modification” to their NSPS counterparts, in light of the Act’s restrictions on judicial review of EPA regulations in the Clean Air Act – that is, whether the EPA’s construction of a statutory term must be uniform.

In Rown Cos v. United States the Court held against various definitions of the term “wages” in tax law. However, “[m]ost words have different shades of meaning and consequently may be variously construed, not only when they occur in different statutes, but when used more than once in in the same statute or even in the same section.” For example, in Robinson v. Shell Oil, the term “employee” was held to have different meanings depending on the section of Title VII in which it is found. The Court synthesizes these two opinions into the principle that a court should rely on “a manifest ‘congressional concern for the interest of simplicity and ease of administration.’” In fact, it suggests that if Congress intended that the terms be defined identically it should have explicitly so required. Incidentally, the regulatory scheme that Congress intended to codify included at least three different definitions of this term.

The statute itself suggests this interpretation in its requirement that there be both a modification and a resulting increase in emissions, and in its preamble where it notes that requiring companies to obtain a permit merely when changing hours of operation would “severely and unduly hamper the ability of any company to take advantage of favorable market conditions.” This purpose indicates that where hours are increased as part of a construction program (a “modification”) this increase does not fall into the exception mentioned above. Since the appeals court “interpreted” these provisions out of conformity with the legislative scheme that court was engaged in judicial review (reaching the validity of the enactments) prohibited when such review “could have been obtained” in the Court of Appeals for the District of Columbia within 60 days of EPA rulemaking.

Thomas, concurring (?), believes that a word, when repeated, and especially when cross-referenced, should be presumed to mean the same thing each time, and that those who would hold otherwise have “the burden of stating why our general presumption does not control the outcome here.”

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[1] In 1980 EPA regulations limited PSD to “any physical change in or change in the method of operation of a major stationary source that would result in a significant net emissions increase of any pollutant…” A mere increase in hours of operation or in production rate does not trigger the Clean Air Act requirements under NSPS because emissions are measured in kilograms per hour. Under PSD a permit for modification is only required if that modification is a major one, measured in annual output