CINCINNATI (CN) — The Commonwealth of Kentucky urged a Sixth Circuit panel Wednesday to overturn the Environmental Protection Agency's denial of its interstate pollution reduction plan and claimed the agency violated federal guidelines when it altered screening thresholds.
Kentucky petitioned the appeals court for review after the EPA denied its Clean Air Act state implementation plan, or SIP, submitted Jan. 11, 2019, and sought to impose a federal implementation plan with stricter limits on ozone and other pollutants.
The state plan was based on modeling data from 2018 — the most up to date at the time — but Kentucky claims the EPA denied its plan based on data released in September 2021 and failed to give it an opportunity to update its proposal before seeking to implement the federal plan.
Specifically, the threshold for certain pollutants was changed from one part-per-billion to 1% under the Good Neighbor provision of the Clean Air Act. Although the 1% standard has been used in the past, Kentucky claimed it was not told until after it submitted its plan.
According to Kentucky's brief to the appeals court, at least 11 other states had similar experiences and successfully petitioned for appellate stays to allow them to fully litigate their claims.
"It's administrative law 101 that agencies must follow Congress' instructions and make reasoned decisions," the commonwealth says in its brief. "So too are the principles that agencies must provide fair warning to regulated parties about what is required of them and thus that agencies need to give a reasoned explanation if they reverse a prior policy. EPA broke each of these ground rules in disapproving Kentucky's SIP."
In its brief, the government argues Kentucky's petition should have been heard before the D.C. Circuit Court because the standards used to deny the state plan are "nationally applicable."
"The disapproval applies to 21 states ... and is based on many legal, policy and technical determinations of nationwide scope or effect," officials wrote in the brief.
Attorney Jarrod Bentley from the Kentucky Energy and Environment Cabinet criticized the federal agency's approval process.
"It is fundamentally unfair to keep moving the line, and that is what we have here," Bentley told the panel.
U.S. Circuit Judge Eric Murphy, a Trump appointee, asked why the EPA's alteration of compliance standards was not harmless error. He labeled Kentucky's submission "rather conclusory" and devoid of meaningful analysis.
Bentley emphasized the commonwealth followed the EPA's specific instructions to use certain modeling data and the one part-per-billion standard to ensure its plan met requirements.
Solicitor General Matthew Kuhn from the Kentucky Attorney General's Office argued on behalf of the commonwealth.
U.S. Circuit Judge Raymond Kethledge questioned him about venue.
"If they are using the same 1% standard, why isn't that of nationwide effect?" the George W. Bush appointee asked, referring to state plans.
"This involves 21 states; it is regional," Kuhn answered. "If you take this determination as nationwide, the exception will swallow the general rule."
Attorney Jeffrey Hammons argued on behalf of the EPA and latched on to Murphy's comments about Kentucky's state implementation plan submission.
"Putting aside Kentucky's challenges to the updated modeling," Hammons said, "EPA still had a reasonable basis to disapprove under the previous standards. Their submission was entirely conclusory."
"Isn't it egregious that EPA tells them specifically to use one part-per-billion and then says, 'no, use 1%'?" Kethledge asked the government's attorney. "How is that not capricious?"
"I completely understand the concerns, and it is a tough issue," Hammons said. "After EPA reviewed all the submissions, it determined it might be a bad idea to use the higher threshold."
Several states and the City of New York filed briefs as amici in support of the federal government, and attorney Claiborne Walthall from the New York Attorney General's Office argued on their behalf Wednesday.
"Are you defending the EPA's flip-flopping?" Murphy asked.
"Our point is that the one part-per-billion threshold does not make sense," the attorney said. "It would be a major inequitable shift. Too much is being made of the purported unfairness of the process."
Claiborne emphasized the costs New York and other "downwind" states face when "upwind" states refuse to do their share and control air pollution.
"If everyone says, 'my contribution is too small,' all it does is push pollution to downwind states, who are already controlling their emissions," he said.
In his rebuttal time, Kuhn reiterated that the EPA's bait-and-switch tactics render the approval process procedurally unfair.
"It's made approving a SIP an impossible task," he said.
Senior U.S. Circuit Judge Danny Boggs, a Ronald Reagan appointee, rounded out the panel.
No timetable has been set for the court's decision.
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