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 complaint.
    • 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 trade system.
    • 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 downwind State.
    • 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 themselves.