Appalachian Power Co. v. EPA 249 F.3d 1032 (D.C. Cir. 2001)
Some States were having problems meeting the goals set by
the Clean Air Act because pollution emitted in other States was
floating over the border and polluting their air.
Pursuant to Clean Air Act §126(b), several New
England States petitioned EPA to deal with a number of stationary
out-of-State sources that were polluting their air with NOx.
EPA did some research and agreed with the States' §126
Under §126(c), this finding triggered Federal
regulation of station sources of NOx in the upwind States.
EPA instituted a cap-and-trade system to control emissions
from the polluters (mostly power plants).
The rule affected 400 power plants in 12 States, and EPA
estimated that compliance could cost almost $1B a year!
EPA gave each State a 'cap' of emissions, and allowed
them to sell and trade pollution credits.
Industry in the effected States sued to block the cap-and
They argued that the rule was arbitrary and capricious,
technically deficient, and inconsistent with the Clean Air Act.
They argued that EPA overstepped its authority by
mandating the cap-and-trade system. They argued that all EPA can do is
set limits with their NAAQSs, but the States get to decide how they will
meet those limits in their SIPs.
Conveniently, the States were currently negotiating SIPs
with EPA (aka a 'SIP call'), so industry suggested waiting until that
process was complete before taking any independent action.
The Appellate Court upheld EPA's rulemaking.
The Appellate Court had previously found in Michigan
v. EPA (213 F.3d 663 (D.C. Cir. 2000)) that EPA had the Statutory
authority to regulate emissions in one State to control pollution in a
The Appellate Court looked to the wording of §126,
and found that it authorizes EPA to control sources directly, rather than
providing a means for EPA to encourage States to control the sources