[Federal Register Volume 81, Number 149 (Wednesday, August 3, 2016)]
[Rules and Regulations]
[Pages 51102-51114]
[FR Doc No: 2016-17899]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 56

[EPA-HQ-OAR-2014-0616; FRL-9949-79-OAR]
RIN 2060-AS53

Amendments to Regional Consistency Regulations

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: The Environmental Protection Agency (EPA) is promulgating
revisions to its Regional Consistency regulations to more clearly
address the implications of adverse federal court decisions that result
from challenges to locally or regionally applicable actions.
Specifically, the EPA is introducing a narrow procedural exception
under which an EPA Regional office no longer needs to seek Headquarters
concurrence to diverge from national policy in geographic areas covered
by such an adverse court decision. The revisions will help to foster
overall fairness and predictability regarding the scope and impact of
judicial decisions under the Clean Air Act (CAA or Act).

DATES: This final rule is effective on September 2, 2016.

ADDRESSES: The EPA has established a docket for this action under
Docket ID No. EPA-HQ-OAR-2014-0616. All documents in the docket are
listed on the http://www.regulations.gov Web site. Although listed in
the index, some information is not publicly available, i.e.,
confidential business information or other information whose disclosure
is restricted by statute. Certain other material, such as copyrighted
material, will be publicly available only in hard copy. Publicly
available docket materials are available electronically in http://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: For further general information on
this rulemaking, contact Mr. Greg Nizich, Office of Air Quality
Planning and Standards, U.S. Environmental Protection Agency (C504-03),
Research Triangle Park, NC 27711, by phone at<PHONE_NUMBER>, or by
email at<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:
    Regulated entities. The Administrator determined that this action
is subject to the provisions of CAA section 307(d). See CAA section
307(d)(1)(V) (the provisions of CAA section 307(d) apply to ``such
other actions as the Administrator may determine). These are amendments
to existing regulations and could affect your facility if a CAA-related
ruling by a federal court affects your operations.

I. General Information

A. Does this action apply to me?

    Entities potentially affected directly by this final rulemaking
include the EPA and any state/local/tribal governments implementing
delegated EPA programs. Entities potentially affected indirectly by
this final rule include owners and operators of sources of air
emissions that are subject to CAA regulations.

B. Where can I get a copy of this document and other related
information?

    In addition to being available in the docket, an electronic copy of
this notice will be posted at: https://www.epa.gov/nsr/nsr-regulatory-actions. Upon publication in the Federal Register, only the published
version may be considered the final official version of the notice, and
will govern in the case of any discrepancies between the Federal
Register published version and any other version.

C. How is this document organized?

    The information presented in this document is organized as follows:

I. General Information
    A. Does this action apply to me?
    B. Where can I get a copy of this document and other related
information?
    C. How is this document organized?
II. Background for Final Rulemaking
III. Final Revisions to the Regional Consistency Regulations and
Response to Significant Comments
    A. What are the final revisions to the 40 CFR part 56 Regional
Consistency regulations?
    B. What is the basis for the EPA's approach?
IV. Environmental Justice Considerations
V. Statutory and Executive Order Reviews
    A. Executive Order 12866: Regulatory Planning and Review and
Executive Order 13563: Improving Regulation and Regulatory Review
    B. Paperwork Reduction Act (PRA)
    C. Regulatory Flexibility Act (RFA)
    D. Unfunded Mandates Reform Act (UMRA)
    E. Executive Order 13132: Federalism
    F. Executive Order 13175: Consultation and Coordination With
Indian Tribal Governments
    G. Executive Order 13045: Protection of Children From
Environmental Health and Safety Risks
    H. Executive Order 13211: Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use
    I. National Technology Transfer and Advancement Act
    J. Executive Order 12898: Federal Actions To Address
Environmental Justice in Minority Populations and Low-Income
Populations
    K. Congressional Review Act (CRA)
    L. Judicial Review
VI. Statutory Authority

II. Background for Final Rulemaking

    On August 19, 2015, the EPA proposed revisions to the Regional
Consistency regulations. The preamble to the proposal provided a
history of the Regional Consistency regulations, as well as a
discussion of a recent D.C. Circuit Court decision, National
Environmental Development Association's Clean Air Project v. EPA, 752
F.3d 999 (D.C. Cir. 2014), that led to the EPA's proposed revisions to
alter the agency's internal process to address court decisions having
local or regional applicability. See 80 FR 50252-54, August 19, 2015.
This discussion addressed the basis for the proposed changes and our
rationale for why we believe the revisions are necessary. This final
rulemaking notice does not repeat that discussion, but refers
interested readers to the preamble of the proposed rule for this
background.
    The 60-day public comment period for the proposed rule was extended
15 days in response to commenters' requests and closed on November 3,
2015. In Section III of this document, we briefly summarize the
revisions and summarize and respond to significant comments.

III. Final Revisions to the Regional Consistency Regulations and
Response to Significant Comments

A. What are the final revisions to the 40 CFR part 56 Regional
Consistency regulations?

    In this action, we are making three specific revisions to the
general consistency policy reflected in the Regional Consistency
regulations, 40 CFR part 56, to accommodate the implications of
judicial decisions addressing locally or regionally applicable actions.
First, we are revising 40 CFR 56.3 to add a provision to acknowledge an
exception to the ``policy'' of uniformity to provide that a decision of
a federal court adverse to the EPA that arises from a challenge to
locally or regionally applicable actions will not automatically apply
uniformly nationwide. This ensures that only decisions of the U.S.
Supreme Court and decisions of the United States Court of Appeals for
the D.C. Circuit Court that arise from challenges to ``nationally
applicable regulations . . . or final action'' will apply uniformly to
the challenged regulations or action nationwide in all instances.\1\
Second, we are revising 40 CFR 56.4 to add a provision to clarify that
the EPA Headquarters offices' employees will not need to issue
mechanisms or revise existing mechanisms developed under 40 CFR 56.4(a)
to address federal court decisions adverse to the EPA arising from
challenges to ``locally or regionally applicable'' actions. Lastly, we
are revising 40 CFR 56.5(b) to clarify that EPA Regional offices'
employees will not need to seek Headquarters office concurrence to
diverge from national policy or interpretation if such action is
required by a federal court decision adverse to the EPA arising from
challenges to locally or regionally applicable actions.\2\
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    \1\ While a decision of the United States Court of Appeals for
the D.C. Circuit in cases involving ``nationally applicable'' action
applies nationwide as a general proposition, the EPA notes that in
particular cases there may be questions as to the precise contours
of the decision that applies nationwide. For example, there may be
questions as to the effect of dicta or other subsidiary analysis in
the court's decision, or (typically in non-rulemaking contexts)
questions arising out of the limited nature of the agency action
under review itself. The EPA believes that specific questions such
as these are best addressed on a case-by-case basis, and are not
intended to be addressed in this action.
    \2\ As discussed in Section III.B of this preamble, we are
revising in this final rule the proposed revisions to 40 CFR 56.5(b)
in response to public comment.
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B. What is the basis for the EPA's approach?

    In the proposed rule, we explain in detail why the revisions are
reasonable and consistent with general principles of common law and the
CAA. See 80 FR 50254. We summarize those discussions in Sections
III.B.1 through 6 of this document.
1. The Revisions Are Consistent With General Principles of Common Law
a. Summary of the EPA's Position
    As explained more fully in the proposed rule, federal courts are
courts of limited jurisdiction and only have the authority to hear and
decide cases granted to them by Congress. A court of appeals generally
hears appeals from the district courts located within its circuit, and
the circuit is delineated by the states it contains. As a general
matter, while an opinion from one circuit court of appeals may be
persuasive precedent, it is not binding on other courts of appeals. See
Hart v. Massanari, 266 F.3d 1155, 1172-73 (9th Cir. 2001).
    By revising the regulations in part 56 to fully accommodate
intercircuit nonaquiescence, the EPA is acting consistently with the
purpose of the federal judicial system by allowing the robust
percolation of case law through the circuit courts until such time as
U.S. Supreme Court review is appropriate.\3\ As the U.S. Supreme Court
has noted, preventing the government from addressing an issue in more
than one forum ``would substantially thwart the development of
important questions of law by freezing the first final decision
rendered on a particular legal issue.'' United States v. Mendoza, 464
U.S. 154, 160 (1984). In light of this important function, the U.S.
Supreme Court has sought to preserve government discretion to
relitigate an issue across different circuits. Id. at 163. Thus, though
circuit conflict may undermine national uniformity of federal law to
some degree for some period of time, it also advances the quality of
decisions interpreting the law over time. See generally Atchison,
Topeka & Santa Fe Ry. Co. v. Pena, 44 F.3d 437, 446 (7th Cir. 1994) (J.
Easterbrook, concurring) (agencies and courts balance whether ``it is
more important that the applicable rule of law be settled'' or ``that
it be settled right'') (internal quotation and citation omitted).
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    \3\ As discussed in the proposed rule preamble, the revisions
apply to decisions of the district courts as well as circuit courts.
80 FR 50258. The jurisdiction of district courts is even more
limited than that of circuit courts.
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b. Response to Comments
(1) Summary of Comments
    Various commenters stated that intercircuit nonaquiescence is
inappropriate or bad policy. One commenter stated that the EPA's
preference for pursuing intercircuit nonacquiescence to promote
judicial resolution is not the appropriate approach. The commenter said
that the current Regional Consistency regulations allow for judicial
appeals, but also ensure uniformity pending the resolution of
conflicting court opinions. The commenter also noted that it is
uncertain whether ultimate resolution of circuit splits will ever occur
under the proposed revisions. The commenters cited to the EPA's
reference to the U.S. Supreme Court's review of EDF v. Duke, 549 U.S.
561, 581 (2007) as evidence that the EPA can do what the D.C. Circuit
advised in NEDACAP, which is to request review of an adverse decision
and put regulated entities on notice that the EPA disagreed with the
lower court's decision.
    A couple of commenters noted that some courts, as well as law
review articles and legal commentary, have taken an unfavorable view of
the doctrine of intercircuit nonacquiescence. The commenters state that
the EPA failed to account for the criticisms in its proposal notice.
They also took the position that the doctrine is particularly ill-
suited for the CAA and its myriad of regulations.
    Another commenter stated that the EPA's proposal to follow
intercircuit nonacquiescence is an attempt to refuse to adjust policies
in the face of clear, adverse judicial decisions. The commenter
suggested that if the EPA disagrees with a court over a matter of
enormous import, then the issue should either be elevated to the U.S.
Supreme Court or addressed in rulemaking reviewable by the D.C.
Circuit.
    One commenter argued that intercircuit nonacquiescence is not the
only path to judicial resolution. Rather, following an adverse decision
the EPA could apply a policy change nationwide and allow the various
circuits courts to review that new interpretation, while maintaining
consistency in the meantime.
(2) EPA Response
    The EPA disagrees with the commenters; the approach advocated by
these commenters would grant every court unlimited nationwide
jurisdiction. Rather than being merely persuasive, a decision in one
circuit thus would become binding precedent in other circuits; such a
result is inconsistent

with the court system established by Congress and years of case law.
Robust review by a variety of courts, to allow for percolation of an
issue before it reaches the U.S. Supreme Court, leads to a more
thorough analysis of an issue.
    In response to those commenters who claim the EPA failed to account
for arguments against intercircuit nonacquiescence, the EPA disagrees.
The fact that the EPA reaches a different conclusion regarding the
benefits of intercircuit nonacquiescence does not mean that the EPA has
failed to consider all sides of the argument. Moreover, as explained
more fully in Section III.B.2 of this document, the EPA's position
recognizes the unique aspects of CAA Sec.  307(b) and its specific
placement of review of nationally applicable regulations and policies
in the D.C. Circuit.
    The EPA has reviewed the case law and law review articles cited by
the commenters and notes that some of the commenters appear to confuse
the concept of intracircuit nonacquiescence, which involves an agency
not following a court decision even within the circuit which issued the
decision, and intercircuit nonacquiescence, which involves an agency
following a court decision in the circuit that issued the decision, but
not in other circuits. Some of the cases and law review articles cited
by commenters in support of their arguments against intercircuit
nonacquiescence involved intracircuit nonacquiescence. See, e.g.,
Johnson v. U.S. R.R. Retirement Board, 969 F.2d 1082, 1090 (D.C. Cir.
1992), cert. denied, 507 U.S. 1029 (1993) (involving the intracircuit
nonacquiescence of the Retirement Board); Lopez v. Heckler, 713 F.2d
1432, 1434 (9th 1983) (involving intracircuit nonacquiescence of the
Secretary of Health and Human Resources); Holden v. Heckler, 584 F.
Supp. 463 (NE. Ohio 1984) (involving the Secretary of Health and Human
Resources failure to follow Sixth Circuit precedent); Diller &
Morawetz, Intracircuit Nonacquiescence and the Breakdown of the Rule of
Law, 881 Yale L.J. 801 (1990) (analyzing intracircuit nonacquiescence);
Coen, The Constitutional Case Against Intracircuit Nonacquiescence, 75
Minn. L. Rev. 1339 (1991) (same).\4\ Upon close reading, many of the
materials cited by commenters support the EPA's revisions. For example,
the D.C. Circuit stated that:
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    \4\ Most of the majority or concurring opinions cited by
commenters in support of their argument against intercircuit
nonacquiescence were written before the U.S. Supreme Court decided
Mendoza in 1984 and thus did not benefit from the Court's reasoning
in that case. See, e.g., in May Dep't Stores Co. v. Williamson, 549
F.2d 1147 (8th Cir. 1977) (concurring opinion cited); Goodman's
Furniture Co. v. United States Postal Serv., 561 F.2d 462 (3rd Cir.
1977) (concurring opinion cited). At least one of the cases cited
does not appear to involve nonacquiescence whatsoever. Finnegan v.
Matthews, 641 F.2d 1340 (9th Cir. 1981).

[o]rdinarily, of course, the arguments against intercircuit
nonacquiescence (which occurs when an agency refuses to apply the
decision of one circuit to claims that will be reviewed by another
circuit) are much less compelling than the arguments against
intracircuit nonacquiescence. Although the decision of one circuit
deserves respect, we have recognized that ``it need not be taken by
the Board as the law of the land.'' Givens v. United States R.R.
Retirement Bd., 720 F.2d 196, 200 (D.C. Cir. 1983). When the Board's
position is rejected in one circuit, after all, it should have a
reasonable opportunity to persuade other circuits to reach a
contrary conclusion. And there is an additional value to letting
important legal issues ``percolate'' throughout the judicial system,
so the Supreme Court can have the benefit of different circuit court
opinions on the same subject. See, e.g., United States v. Mendoza,
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464 U.S. 154, 160, 78 L. Ed. 2d 379, 104 S. Ct. 568 (1984).

Johnson, 969 F.2d at 1093. And two legal scholars cited by commenters
recognize that:

[t]he judicial branch is structured to ensure uniformity and
stability of legal standards within each regional circuit while
permitting disuniformity among the circuits . . . . As long as
parties can discern which circuit law applies to any given conduct,
the parties can shape their action to conform to legal standards.
Furthermore, permitting circuits to independently examine issues
contributes to resolution of important legal questions on a national
basis. Accordingly, each circuit remains completely free to accept
or reject the reasoning of other courts of appeals. This mixture of
uniformity and diversity strikes a balance that permits legal issues
to receive independent examination by a number of courts, while at
the same time maintaining a unitary rule of law in any given
geographic location.

Diller & Morawetz, infra, 881 Yale L.J. at 805 (citations omitted). See
also, Coen, infra, 775 Minn. L. Rev. at fn. 23 (``The legality of
intercircuit nonacquiescence is widely accepted.''). Notably, these
revisions accommodate intercircuit nonacquiescence while rejecting
intracircuit nonacquiescence by providing that an EPA Regional office
impacted by an adverse court decision should follow that decision, even
if that results in an EPA Regional office acting contrary to otherwise
applicable national policy.

    While some commenters stated that intercircuit nonacquiescence is
particularly ill-fitted to the CAA because of its myriad of
regulations, the EPA concludes that it is the vast array of regulations
which makes these revisions appropriate. A facility may already have to
track compliance with a variety of CAA regulations, and the revisions
allow that facility to presume that the national interpretation or
policy applicable to those regulations will continue to apply to it,
unless a court with jurisdiction over the facility issues a court
decision or the EPA undertakes appropriate procedures to change that
national interpretation or policy. It arguably would be more burdensome
on regulated entities to track not only the national interpretation of
all the regulations and policies that apply to their facilities, but
also all the court decisions across the country regarding those
regulations or policies. These revisions to the Regional Consistency
rule are intended to provide, as much as possible, a stable policy
environment for facilities.
    The approach suggested by one commenter that the EPA could provide
uniformity by applying an adverse court decision nationally, without
otherwise changing the underlying national policy or interpretation, is
not feasible when different circuits issue different interpretations.
When circuit splits occur, the EPA would have to apply different
interpretations in the conflicting circuits; the only question is which
interpretation applies in those circuits that had not ruled on the
issue. The final revisions to the Regional Consistency regulations
answer this question by establishing the presumption that the EPA will
continue to apply the national policy nationwide, except for those
geographic areas impacted by the adverse decision. However, the
approaches set forth by commenters fail to address the situation when a
second court addresses an issue already ruled on by another court, and
issues a conflicting decision. The EPA's final revisions account for
this possibility by maintaining national policies nationwide, except in
those limited geographic areas covered by adverse court decisions. A
particular advantage of these revisions is that they can be implemented
in a predictable and straightforward manner regardless of the number of
lower court decisions or the potential conflicts among those decisions.
    To the extent commenters are concerned that circuit splits would
never be resolved by the U.S. Supreme Court, this possibility is not
caused by, or unique to, the revised Regional Consistency regulations.
First, as noted in the proposed rule, the U.S. Supreme Court is more
likely to grant review if such a split between two or more circuits
occurs. 80 FR 50255. Second,

when the EPA successfully maintains its position before a court, the
entity challenging that position may seek further review. Finally, the
public will still have the option to file a petition with the EPA
requesting a change in the nationally applicable regulations or policy
in the event that EPA declines to change national policy in response to
an adverse ruling in a lower court. Assuming statutory timing and other
jurisdictional prerequisites are met, the EPA's final response to that
petition may be challenged in the D.C. Circuit, which is, under the
CAA, the appropriate venue for obtaining a nationally applicable court
decision on the national policy. See, e.g., Oljato Chapter of Navajo
Tribe v. Train, 515 F.2d 654 (D.C. Cir. 1975).
    We disagree with the commenter who stated that the revisions are an
attempt by the EPA to ignore adverse decisions.\5\ Quite the contrary,
the final revisions clearly establish a mechanism whereby the EPA
Regions located in the geographic area(s) covered by an adverse
decision may and should begin following that decision in those
geographic areas immediately, without having to seek concurrence from
Headquarters. The revisions also recognize that the EPA may, as
appropriate, change national policy in response to an adverse decision.
But until the EPA undertakes the appropriate process to effectuate that
change, national policy continues to apply elsewhere nationwide.
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    \5\ The Duke case is more complicated than the commenters
acknowledge, and is not a clean example of how the EPA can merely
seek U.S. Supreme Court review of an adverse decision. In fact, the
EPA did not ask the U.S. Supreme Court to review the Fourth
Circuit's decision in Duke. Rather, the EPA objected to the petition
for certiorari submitted by environmental petitioners, on the
grounds that the petitioners had not identified either a square
circuit court split, or a sufficient reason for U.S. Supreme Court
review. See Brief of the United States in Opposition (05-548). Only
once the U.S. Supreme Court granted review, did the EPA successfully
argue to the Court that the Fourth Circuit's decision was in error.
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2. The Revisions Are Consistent With the CAA Judicial Review Provisions
a. Summary of the EPA's Position
    Revisions ensure that the Regional Consistency regulations are in
harmony with the CAA's judicial review provisions at section 307(b).
The ability of the various courts of appeals to hear appeals of
decisions of the EPA is specifically addressed in the statute. In 1977,
at the same time it added the directive for the EPA to promulgate what
would ultimately become the Regional Consistency regulations, Congress
amended the Act to ensure that the D.C. Circuit Court, and no other
circuit courts, would review nationally applicable regulations. By
placing review of nationally applicable decisions in the D.C. Circuit
Court alone, Congress struck the balance between the countervailing
values of improved development of the law on the one hand and national
uniformity on the other. At the same time, Congress left the door open
to intercircuit conflicts by granting jurisdiction over locally or
regionally applicable final actions to the regionally-based courts of
appeal. These revisions maintain the balance that Congress struck in
CAA section 307(b)(1). There is nothing in the language or intent of
CAA Sec.  301(a)(2) that trumps the clear statutory directive of CAA
Sec.  307(b)(1) establishing which courts have jurisdiction over which
final agency actions.
b. Response to Comments
(1) Summary of Comments
    A few commenters suggested that if the EPA is concerned about local
court decisions impacting national policy, the EPA should have those
cases transferred to the D.C. Circuit for decision. The commenters
stated that CAA Sec.  307(b)(1) requires final actions ``of nationwide
scope or effect'' be heard by the D.C. Circuit. The commenters
contended that this provision, in combination with the existing
Regional Consistency regulations, is enough to ensure fairness and
uniformity in the application of policies nationwide.
    One commenter stated that intercircuit nonacquiescence is in
conflict with CAA Sec.  307(b)(1), through which Congress tried to
prevent the very intercircuit conflicts that the proposed revisions
will allow. The commenter noted that if locally and regionally
applicable actions with nationwide scope and effect are properly heard
by the D.C. Circuit, there should be relatively few situations where a
circuit court addresses an issue that can create inconsistency in the
interpretation or implementation of CAA requirements. Another commenter
contended that CAA Sec.  307(b) does not stand for the proposition that
the EPA can ignore decisions of non-D.C. Circuit courts simply because
they arose in the context of a permitting decision. In fact, they
maintain, CAA Sec.  301 stands for the opposite proposition.
(2) EPA Response
    The EPA agrees that CAA Sec.  307(b)(1) requires final actions ``of
nationwide scope or effect'' be heard by the D.C. Circuit. This may
include regional rulemaking that the EPA has identified and designated
as having national scope and effect. However, when the EPA is applying
regulations of nationwide scope to a particular circumstance, another
appropriate circuit court should hear that decision of local or
regional impact.
    We agree with commenters that if the D.C. Circuit were the only
court to rule on the reasonableness of the EPA's interpretation of its
national regulations, there would be very little need for intercircuit
nonacquiescence because the only action being reviewed by the court
would be the EPA's application of that interpretation to the facts of
the case. However, sometimes a court other than the D.C. Circuit (or
U.S. Supreme Court) renders an adverse decision that rejects the EPA's
interpretation of nationally applicable regulations in a manner that
could be argued to have general rather than merely case-specific
implications. This can happen, for example, where the court does not
merely find that the facts do not support the EPA's application of
national policy, but instead finds fault with the national policy
itself. The Sixth Circuit decision in Summit Petroleum Corp. v. U.S.
EPA, 690 F3d 733 (6th Cir. 2012) is the quintessential example of a
final action of local or regional application; in the context of
reviewing that local action, the Sixth Circuit rejected the EPA's
longstanding interpretation of the applicable national regulations.
Revisions to the Regional Consistency regulations will minimize, not
exacerbate, the disruption to the smooth implementation of the CAA
caused by locally or regionally applicable circuit court decisions by
limiting their applicability to those areas covered by the circuit
court, and leaving national policy in place in the rest of the country.
Parties that agree with the decision of the regional circuit and
believe it should be followed nationally are, of course, free to
advocate that position to the EPA (and, if necessary, reviewing courts)
in specific cases arising in other circuits. Revisions merely make
clear that EPA will not automatically be bound to follow locally or
regionally applicable circuit court decisions in cases arising in other
circuits.
    It would be contrary to the division of responsibility among the
circuit courts that Congress established in CAA Sec.  307(b) for the
EPA to eliminate their review by moving any case that could potentially
affect national policy to the D.C. Circuit. Such an approach also would
disrupt the timeline for review created by the CAA. Challenges to
nationally applicable regulations must

be filed within 60 days of the regulations being published in the
Federal Register. Treating any challenge to each and every application
of those regulations as challenges to the underlying regulations that
must be heard by the D.C. Circuit would either render those challenges
untimely (to the extent they occur outside the 60-day window) and thus
require their dismissal, or render the 60-day window superfluous by
allowing challenges to the regulations any time they are applied. See,
e.g., Sierra Club de Puerto Rico, et al. v. EPA, 815 F.3d 22 (D.C. Cir.
2016) (dismissing a challenge to a 1980 regulation as untimely because
the purported after-arising ground involved the mere application of
that old regulation). Neither result is consistent with the judicial
review provisions established in CAA Sec.  307(d). In fact, given the
clear language of Sec.  307(b), it is not clear whether a court would
transfer a challenge to a decision of local or regional nature to the
D.C. Circuit. See, e.g., Dalton Trucking, Inc. v. United States EPA,
808 F.3d 875 (D.C. Cir. 2015) (finding that the D.C. Circuit was not
the proper court to hear a challenge to a preemption waiver for
California because the waiver decision did not have national
applicability, nor did the EPA make or publish a finding that the
decision was based on a determination of nationwide scope or effect).
Finally, sometimes adverse decisions arise in the context of
enforcement cases, which must be heard in particular district courts,
and then any appeal must be heard by the circuit court with
jurisdiction over that district court. Thus, the EPA simply cannot
ensure that all court decisions potentially involving review of
national policy are heard in the D.C. Circuit.
    Finally, the EPA is not ignoring decisions of other circuits by
revising the Regional Consistency regulations. Rather, these revisions
help to ensure that we are clearly following the applicable law of the
circuit in the geographic areas covered by the decision. But the EPA
also is respecting the judicial review provisions of the CAA by
limiting decisions reviewing locally or regionally applicable actions
to those locations and regions covered by the circuit court.
3. The Revisions Are Consistent With CAA Section 301
a. Summary of the EPA's Position
    The revisions also are consistent with CAA Sec.  301. As described
in the proposed rule, Sec.  301(a)(2) requires the EPA Administrator to
develop regulations to ``assure fairness and uniformity'' of agency
actions. Notably, there is nothing in the text of CAA Sec.  301(a)(2)
or its limited legislative history that suggests Congress intended to
either upset the balance Congress struck when establishing judicial
review provisions in CAA Sec.  307, or disrupt the general principles
of common law that have allowed for the percolation of issues up
through the various circuit courts, as discussed previously. Section
301(a)(2) of the Act does not specifically address how the agency
should respond to adverse court decisions.
    In addition, the text of CAA Sec.  301(a)(2)(A) necessitates a
balance between uniformity and fairness; however, promoting either one
of these attributes does not always guarantee maximizing the other
attribute in all circumstances. These revisions would ensure the EPA
has the flexibility to maintain that balance, as appropriate.
b. Response to Comments
(1) Summary of Comments
    Several commenters maintained that the EPA's proposed amendments to
the Regional Consistency regulations are inconsistent with the clear
and unambiguous language of CAA Sec.  301(a)(2). The commenters stated
that this provision requires the EPA to promulgate rules establishing
``general applicable procedures and policies for Regional officers and
employees . . . to follow'' that are designed to ``assure fairness and
uniformity in the criteria, procedures, and policies'' applied by the
EPA Regional offices. The commenters contended that the EPA's proposed
rule codifies an impermissible exception to uniformity in the form of
intercircuit nonacquiescence.
    A few commenters pointed to the legislative history associated with
the passage of CAA Sec.  301(a)(2) and noted that Congress clearly
intended there to be national consistency in implementing core CAA
programs. One commenter noted that Congress's directive in CAA Sec.
301 was particularly critical in the prevention of significant
deterioration (PSD) and new source review (NSR) permitting programs, as
well as other national standards (e.g., New Source Performance
Standards (NSPS) and National Emission Standards for Hazardous Air
Pollutants).
    A few commenters also stated that even if CAA Sec.  301 were
ambiguous, the EPA's proposed amendments to the Regional Consistency
regulations are unreasonable. The commenters noted that the D.C.
Circuit vacated the EPA's Summit memorandum based on the language in
the EPA regulations, which essentially is exactly the same as the
statutory language and mandate requiring fairness and uniformity. Thus,
the commenters concluded, the court has already found that the
statutory language establishes a national uniformity mandate. One
commenter additionally noted that the fact that court decisions are not
expressly addressed by CAA Sec.  301(a)(2) does not create ambiguity;
the statute requires the EPA to maintain consistency.
    Two commenters noted that the D.C. Circuit has recognized the call
for uniformity as well in Kennecott Corp. v. EPA, 684 F.2d 1007 (D.C.
Cir. 1982). One commenter stated that the EPA's reliance on Air
Pollution Control Dist. v. EPA, 739 F.2d 1071 (6th Cir. 1984) in the
proposal is misplaced because the case involved a different issue. The
commenter maintained that the case does not support the EPA in ignoring
the plain language of CAA Sec.  301(a)(2) to promote ``fairness and
uniformity.'' The commenter noted that the court in Air Pollution
Control Dist. expressed a ``strong preference to achieve an
interpretation of the Act which is consistent among the several
circuits.'' Id. at 1094.
    One commenter stated that the EPA's proposal is inconsistent with
CAA Sec.  301(a)(1), which provides that the Administrator may delegate
authority when it is ``necessary or expedient.'' The commenter stated
that if the Administrator delegates her authority to Regional
Administrators who make inconsistent decisions, the delegation would
not be expedient and therefore would violate CAA Sec.  301(a)(1). The
commenter further maintained that the EPA incorrectly stated in the
proposal notice that the current Regional Consistency regulations that
require regional officials to ``seek concurrence'' from Headquarters
could result in inconsistent policies among Regional offices. Proposal
at 50258. According to this commenter, this existing mechanism ensures
consistency and does not condone variation between Regional offices.
    Two commenters argued that the EPA's proposal to incorporate
intercircuit nonacquiescence into the Regional Consistency regulations
creates ``irrationality'' in the rulemaking process. The commenters
argue that by allowing her delegatees (e.g., Regional Administrators)
to act in an inconsistent manner is tantamount to the Administrator
acting inconsistently, which is impermissible.
(2) EPA Response
    The EPA disagrees with the commenters who state that the revision
to the Regional Consistency regulations

is inconsistent with CAA Sec.  301(a)(2). On its face, CAA Sec.
301(a)(2) does not impose a standalone requirement to attain
uniformity. While CAA Sec.  301(a)(2)(C) directs the EPA to create
mechanisms for identifying and standardizing various criteria, there is
nothing to suggest that such standardization requires exact duplication
by all EPA Regions in all circumstances, including Regional office
responses to court decisions.
    As noted earlier, CAA Sec.  301(a)(2) does not specifically discuss
whether the fairness and uniformity objectives must be applied to all
court decisions. Instead, the provision requires the EPA to establish
procedures that apply to its Regional office officials and employees,
but it does not address whether or how the EPA should address judicial
decisions in those procedures. Congress also did not include language
that would expressly prohibit the EPA from promulgating regulations
that accommodate intercircuit nonacquiescence. To the extent that
Congress prioritized judicially-created uniformity, this was expressed
in CAA Sec.  307(b)(1)--which allows for regional divergence among
circuit courts--not in CAA Sec.  301(a)(2)(A).
    The EPA disagrees with commenters who claim that the amendments to
the Regional Consistency regulations violate CAA Sec.  301(a)(1). This
provision provides authority to the Administrator to delegate her
powers and duties to any EPA officer or employee as ``[s]he may deem
necessary or expedient.'' This delegation is ``expedient'' if it is
``suitable for achieving a particular end in a given circumstance'' or
``characterized by concern with what is opportune.'' Expedient,
Merriam-Webster Dictionary (2015). Given the immense quantity and
breadth of tasks assigned to the Administrator through the CAA and
other statutes the EPA is charged with administering, delegation of the
Administrator's authorities is both necessary and expedient in many
circumstances to efficiently protect the environment and public health.
Further, in amending the Regional Consistency regulations, the EPA is
introducing only a narrow procedural exception to deal with federal
court decisions adverse to EPA regarding locally or regionally
applicable actions that may affect consistent application of national
programs, policy, and guidance. The EPA does not agree that it is
``irrational'' for the agency to act differently in different regional
actions when that difference is necessitated by an adverse local or
regional court decision, whether the action is taken by the EPA
Regional Administrators or by the Administrator herself.
    As commenters admit, in NEDACAP, the D.C. Circuit explicitly did
not address whether the CAA allows the EPA to adopt different standards
in different circuits. NEDACAP at 1011. While the NEDACAP decision
relied heavily on the general policy statements contained in 40 CFR
56.3 of the existing regulations--which broadly endorse the fair and
uniform application of criteria, policy, and procedures by EPA Regional
office employees--nothing in those general statements or any other
provisions of the regulations mandates that the EPA adopt nationwide
the interpretation of the court that first addresses a legal matter.
The lack of such a mandate supports the focused revisions in this
rulemaking that are a natural extension of the agency's existing
regulations.
    As commenters noted, the D.C. Circuit cited to CAA Sec.  301(a)(2)
in Kennecott. 684 at 1014, fn. 18. However, this statutory provision
was not central to the case, so the court's mention of the provision
was dicta. The D.C. Circuit described the EPA's ability to prescribe in
advance criteria that states must use in making a specific type of
determination. The EPA's ability to require states to follow certain
rules is not in question in this rulemaking. The court also stated that
establishing criteria to implement a particular CAA program ``on an ad
hoc incremental basis'' would not amount to ``fairness and uniformity''
described in CAA Sec.  301(a)(2). The EPA is not attempting to create
ad hoc rules on how to implement programs. Rather, in taking this final
action, the EPA is creating a clear and uniform presumptive approach
and standard agency process to follow in light of adverse local and
regional court decisions. This is the opposite of an ad hoc approach.
    As the EPA noted in the proposal notice, Air Pollution Control
Dist. rejected the claim that CAA Sec.  301(a)(2) establishes a
substantive standard that requires similar or uniform emission
limitations for all sources. 739 F.2d 1071, 1085 (6th Cir. 1984).
Although that case addressed a different issue than the content of this
rulemaking, specifically whether CAA Sec.  301(a)(2) required the EPA
to implement similar or uniform emission limitations for each source
within a particular area, the decision does support the overall concept
that CAA Sec.  301(a)(2) does not impose a standalone requirement to
attain uniformity.
    Further, the EPA believes that the quote used by the petitioner in
that case from page 1094 of the decision has been taken out of context.
The court made a certain substantive ruling in Air Pollution Control
District on an issue unrelated to this rulemaking. In making that
decision, the court was seeking to keep its decision consistent with
those of other circuit courts. A court's decision to make a holding
consistent with other courts' prior decisions or to create a circuit
split is outside the purview of this rulemaking and this agency. It may
be a factor that weighs into how a court comes to a decision, but does
not speak to how the agency should treat national policy in light of an
adverse court decision with regional or local applicability, nor does
it speak to the issue of whether it is appropriate for the EPA to
create a narrow exception to the procedure established in the Regional
Consistency regulations for adverse local and regional court decisions.
    There is nothing in the limited legislative history of CAA Sec.
301(a)(2) that counsels against the revision the EPA is making through
this final action. The legislative history quoted by the commenter
discusses one particular instance of regional inconsistency that, at
least in part, motivated Congress to implement the regional consistency
language of CAA Sec.  301(a). This situation, which involved the use of
different air quality models in different regions for the purpose of
implementing the PSD permitting program, is far removed from the case
of an adverse court decision of local or regional scope. Further, the
legislative history surrounding passage of CAA Sec.  307(b) indicates
that Congress intended to advance the objective of even and consistent
national application of certain EPA regulations that are national in
scope. At the same time, Congress left the door open to intercircuit
conflicts by granting jurisdiction over locally or regionally
applicable ``final actions'' to the regionally-based courts of appeals.
The EPA has found, and commenters have pointed to, nothing in the
legislative history to suggest that at the same time, Congress intended
for the Regional Consistency provisions to somehow upset this careful
balance and require the EPA to apply a locally or regionally applicable
decision in all EPA Regions in order to maintain consistency.
    The revisions further the overall goal of consistency and clarity
by specifically identifying the possibility of potential differing
actions across the EPA Regions, especially where multiple courts have
already addressed an issue in different ways, and standardizing a
response that can be followed by all the EPA Regions, such that the EPA
Regions

only have to apply local and regional decisions issued by courts in
those geographic areas over which the court has jurisdiction.
    No commenter has explained in any detail why the NSR, NSPS or
NESHAP programs are uniquely situated such that it would be
inappropriate to finalize the narrow exception to the Regional
Consistency regulations to deal with locally or regionally applicable
federal court decisions. While some programs (such as NSR and NSPS)
create national standards and others are administered through EPA-
approved state implementation plans (SIPs), all portions of the CAA are
federal law and apply nationwide. The explanation for the revisions
provided in the proposal and final rule preambles apply equally to all
criteria, procedures, and policies, and the commenter has failed to
provide a reasoned explanation why certain programs should be
considered differently. The EPA also notes that it is at times
impossible to maintain complete consistency in the face of adverse
court decisions. By revising the regulations, the EPA accommodates the
possibility that a split in the circuits could preclude the EPA from
complying with both court decisions at once, as illustrated by the
following example outlined in the proposal notice. In a case involving
a permit issued in New York, the Second Circuit upholds the EPA's
longstanding position and, in doing so, confirms that the EPA's
interpretation is compelled by the Act under Step One of Chevron. As a
result, the EPA continues to apply its longstanding interpretation,
consistent with the Second Circuit's decision, in a permit issued in
Alabama, an Eleventh Circuit state. In an appeal of that permit,
however, the Eleventh Circuit holds that not only is the EPA's
interpretation not compelled by the CAA, it is prohibited by the CAA.
There are now two court decisions with conflicting Chevron Step One
holdings--how could the EPA apply both of those decisions uniformly
across the country? While the U.S. Supreme Court could review the
issue, it might not. And even if the U.S. Supreme Court eventually
resolved the conflict, there could be a multi-year period during which
both decisions would remain applicable case law. See, e.g., discussion
of Duke in Section 4.b.(2) of this document. This revision acknowledges
and addresses those instances in which the EPA may not be able to
comply with two, conflicting decisions at the same time.
4. The Revisions Will Foster Overall Fairness and Predictability
a. Summary of the EPA's Position
    Specifically accommodating intercircuit nonacquiescence in the
Regional Consistency regulations also fosters fairness and
predictability in the implementation of the CAA overall. As discussed
earlier, the revisions ensure that national policy continues to apply
unless there is an affirmative nationwide and deliberate change in the
EPA's rules or policies, or an adverse court decision applies only in
those states/areas within the jurisdiction of that court, with the
exception of the D.C. Circuit court reviewing final agency actions of
national applicability. Under the revised Regional Consistency
regulations, a source subject to the CAA needs to know and follow only
the law in the circuit where it is located, and the law of the D.C.
Circuit Court and the U.S. Supreme Court. It would not be required to
follow every CAA case in every court across the country to ensure
compliance with the Act. While a source remains free to advocate for a
change in the agency's national policy based on the results of a
regional circuit court decision, unless and until the agency agrees to
make such a change, the national policy will continue to apply except
in the circuit where the adverse decision was issued.
b. Response to Comments
(1) Summary of Comments
    A few commenters stated that the EPA's proposal, if finalized,
would harm businesses due to different regulatory requirements applying
to different facilities based on their location. For example, industry
argues it will face uneven application and enforcement of CAA
requirements, and incur increased compliance costs as they try to
address regulatory ambiguity and confusion. One commenter stated that
the proposed revisions would not ensure ``fairness'' as required in CAA
Sec.  301(a)(2). One commenter argued that the proposed revisions will
have a chilling effect on new projects or improvements. One commenter
noted that limiting the regulatory amendments to local or regional
court decisions does not help because many of these decisions actually
have nationwide impact.
    One commenter cautioned that finalization of the proposed
amendments to the Regional Consistency regulations will lead to
increased litigation over venue, since decisions by the D.C. Circuit
will apply nationwide, while decisions of district courts and other
circuit courts would not be required to apply nationwide. Multiple
commenters further noted that the rule change may also lead to
additional litigation in multiple circuits to expand the impact of a
single regional or local court decision. The commenters believe this
will lead to greater burdens on litigants and strains on judicial
resources.
    One commenter stated that a lack of national uniformity would
create confusion and implementation issues given that the geographic
boundaries of the EPA's Regional offices do not match the boundaries of
the federal circuit courts and that a single EPA Region may have to
apply two different standards based on court decisions and their
jurisdictions.
(2) EPA Response
    The EPA believes in the overall importance of uniformity and
fairness in the application of criteria, procedures, and policies
across the various EPA regions in most instances. As the EPA explained
when the Regional Consistency regulations were first finalized, the
``intended effect'' of these regulations was ``to assure fair and
consistent application of rules, regulations and policy throughout the
country by assuring that the action of each individual EPA Regional
office is consistent with one another and national policy'' (45 FR
85400). These revisions merely identify a specific circumstance under
which an EPA Regional office no longer needs to seek Headquarters
concurrence to diverge from national policy, and confirms that national
policy otherwise continues to apply.
    CAA Sec.  301(a)(2) focuses on promoting fairness and uniformity.
The EPA believes that predictability is an important element of
fairness and also a worthwhile objective to achieve in carrying out its
mission. The changes made to the Regional Consistency regulations
foster predictability by ensuring that, unless there is an affirmative
nationwide and deliberate change in the EPA's rules or policies, lower
court decisions would apply only in those areas within the jurisdiction
of the lower court, with the exception of the D.C. Circuit Court
reviewing final agency actions of national applicability, consistent
with CAA Sec.  307(b)(1). The EPA may choose to initiate a change in
national policy at any time, including in light of an adverse court
decision, but the agency is bound to follow appropriate procedures in
order to do so.
    If the revisions to the Regional Consistency regulations had
already been in place at the time of the Summit

decision, a memorandum from EPA Headquarters like the one challenged in
the NEDACAP decision would not have been necessary because EPA Regions,
states, and other potentially affected entities would have had
certainty and predictability regarding the application of such a
judicial decision--they would have known that this type of permit-
specific, local and regional decision would only apply in the areas
under the jurisdiction of the Sixth Circuit (unless and until the
agency expressly decides to make a change to its national policy after
consideration of the decision). Accordingly, it would have been clear
to everyone that the EPA Regions would not be bound to apply the
findings of the Summit decision in states outside the Sixth Circuit,
and could continue to apply the longstanding practice that had not been
successfully challenged in other federal circuit courts in their
regions or decided nationally by the D.C. Circuit or U.S. Supreme
Court.
    The EPA acknowledges that under the revisions finalized, some
facilities may be subject to different regulatory requirements based on
their location. Some difference in governing rules is inherent in our
federal judiciary system where district and circuit courts are limited
to a definitive jurisdiction. The federal judicial system was designed
to allow numerous, and sometimes conflicting, decisions until such time
as the U.S. Supreme Court rules on an issue. The structure of the
federal judicial system also sometimes results in increased litigation,
as issues are considered by multiple courts. As noted previously, this
rule simply changes the internal procedure followed by the agency in
light of an adverse court decision; thus, these revisions, which are
consistent with the federal judicial system, will not singlehandedly
lead to increased litigation. One commenter noted that following this
rulemaking, litigants may wish to challenge the venue of litigation
more often to try to ensure cases are heard by the D.C. Circuit so that
judicial outcomes apply nationwide. The EPA believes it is appropriate
for venue to be challenged if the litigation is not brought in the
appropriate court according to CAA Sec.  307(b)(1). Under the CAA
specifically, the drafting of CAA Sec.  307(b) indicates that Congress
intended to leave the door open to intercircuit conflicts by granting
jurisdiction over locally or regionally applicable ``final actions'' to
the regionally-based courts of appeals.
    Further, sometimes court decisions reviewing a regulation or
statute are reversed on appeal. In other cases, a court decision may
contain a ruling that arguably calls into question a national rule in
the context of a source-specific action, which is inconsistent with CAA
Sec.  307(b)(1), as explained in the proposal notice. When either
outcome occurs, intercircuit nonacquiescence allows the EPA to limit
the impact of the court's ruling while it undertakes other actions. For
example, as outlined in the proposal notice, in Duke, 549 U.S. 561
(2007), the U.S. Supreme Court reversed the Fourth Circuit's implicit
invalidation of the EPA's regulations in the context of an enforcement
action. In that case, the U.S. Supreme Court found that the court of
appeals had been too rigid in its insistence that the EPA interpret the
term ``modification'' in its PSD regulations in the same way that the
agency interpreted the term under the NSPS program. Id. at 572-577.
While it is true that the U.S. Supreme Court eventually reversed the
lower court, there was a 2-year period during which the Fourth
Circuit's decision remained in place. Under the commenter's proposed
approach, the EPA arguably would have been required to follow that
later-reversed Fourth Circuit interpretation of its regulations
nationwide during that 2-year period, even though the interpretation
``read those PSD regulations in a way that seems to [the Supreme Court]
too far a stretch for the language used.'' Id. at 577.
    The EPA disagrees that the amendments made to the Regional
Consistency regulations are poor public policy. It is generally
acceptable to apply a circuit court or District Court decision only
within the jurisdiction of the court. A standard that specifically
allows for intercircuit nonacquiescence for all CAA decisions other
than those issued by the D.C. Circuit Court in response to challenges
of nationwide actions would provide a uniform standard for the EPA's
application of court decisions that could be anticipated by those who
implement the regulations and the regulated community.
    The EPA acknowledges that the EPA Regional office boundaries do not
align with the boundaries of circuit courts. However, the EPA Regional
offices and Headquarters will endeavor to make clear the states,
tribes, or local jurisdictions that are impacted by an adverse court
decision. The EPA notes that, consistent with past practice, in certain
instances the EPA Regions are already applying different policies
across their states based on prior court decisions See, e.g.,
discussion of follow on to Sierra Club decision in Section 5.b.(2) of
this document.
5. The Revisions Are a Reasonable Revision to the 40 CFR part 56
Regulations and Maintain the EPA's Ability To Exercise Discretion
a. Summary of the EPA's Position
    In the proposed rule, we noted that the Regional Consistency
regulations already allowed for some variation between the EPA Regional
offices. Specifically, the original version of 40 CFR 56.5(b) provided
that regional officials should ``seek concurrence'' from the EPA
Headquarters with respect to any interpretations of the Act, rule,
regulation, or guidance that ``may result in inconsistent application
among the Regional offices.'' Thus, the Regional Consistency
regulations have always contained a mechanism by which an EPA Regional
office could diverge from national policy if doing so was required by
an adverse court decision (i.e., by seeking Headquarters concurrence).
The revisions simplify the process by establishing the presumption that
national policy will continue to apply nationwide, but that an EPA
Regional office impacted by an adverse court decision could diverge
from that national policy without Headquarters concurrence to the
extent required by the adverse court decision. In fact, the revisions
further the overall goals of the existing Regional Consistency
regulations by specifically identifying the possibility of potential
differing actions across the EPA regions, especially where multiple
courts have already addressed an issue in different ways, and
standardizing a response that can be followed by all the regions, such
that EPA regions only have to apply local and regional decisions issued
by courts in those areas over which the court has jurisdiction.
    Nonetheless, as noted previously, the revisions do not hinder the
EPA's ability to respond to an adverse court decision by revising a
national policy or interpretation, following appropriate procedures,
either on the agency's own initiative or in response to a request from
a regulated entity or other interested party. The EPA recognizes that
national policy can be influenced by insights and reasoning from
judicial decisions and these revisions are not an indication that the
agency will ignore persuasive judicial opinions issued in cases
involving ``locally or regionally applicable'' actions. Such opinions
may address issues of nationwide importance and could, in appropriate
circumstances, lead the agency to adopt new national policy.

b. Response to Comments
(1) Summary of Comments
    Some commenters stated that there would be no predictability under
the EPA's proposal. One commenter expressed concern that the EPA
Regional offices not covered by an adverse decision could choose to
follow the adverse decision versus national policy. Another commenter
also noted that the EPA's goal of promoting predictability is
irrelevant because CAA Sec.  301(a)(2) requires consistency, not
predictability.
    A couple of commenters stated that the EPA's proposed revision of
the Regional Consistency regulations goes against 35 plus years of
implementing the existing regulations. The commenters also argued that
it is inconsistent with the position the EPA has taken in various
rulemakings and historic practice, citing statements by a former EPA
General Counsel.
    Numerous commenters stated that the proposed amendments to the
Regional Consistency regulations would allow the EPA too much
discretion in deciding whether certain court decisions will apply on a
national scale. They stated that there would be no guarantee that
further judicial review would resolve conflicting decisions, citing to
currently conflicting decisions on application of the statute of
limitations to construction permitting as an example. Commenters
expressed concern that this could lead to the EPA applying arbitrary
and unspecified factors to determine when judicial decisions will be
applied nationally. Several commenters suggested that the EPA should
establish criteria it would use to determine when it will not change
its national policy and when it will in the face of an adverse court
decision. Commenters recommended that the EPA withdraw the rule, or, if
it proceeds, provide clear criteria to identify when intercircuit
nonacquiescence will be applied.
    One commenter recommended that the Regional Consistency regulations
only follow intercircuit nonacquiescence (1) Until three circuit courts
have resolved the legal issue; (2) in circumstances of significant
importance and impact on protection of human health and the
environment; and (3) when documented in a written memorandum or
directive signed by the Assistant Administrator for the Office of Air
with concurrence of the General Counsel. Another commenter recommended
that the EPA revise the Regional Consistency regulations to state that
the agency will revisit a national policy whenever a court determines
that it is arbitrary, capricious or otherwise unlawful. Further, the
commenter offered that in such circumstances the EPA should consider
whether to issue guidance clarifying what the EPA's policy will be
going forward and undertake a rulemaking to effectuate that agency
policy.
    One commenter suggested that if the EPA does finalize the proposed
amendments to the Regional Consistency regulations, the EPA should
retain requirements ``that (1) EPA Headquarters issue or revise
mechanisms to address federal court decisions of local or regional
applicability, see 40 CFR 56.4, and (2) the EPA Regional offices seek
concurrence from the EPA Headquarters to act inconsistently with
national EPA policy or interpretation if such action is required by a
federal court decision of local or regional applicability. See CFR
56.5.'' The commenter indicated these mechanisms promote certainty,
predictability, and fairness for regulated entities. Another commenter
suggested that the EPA Regional offices should still be required to
seek the Office of General Counsel's concurrence when they believe they
are bound by an adverse court decision which requires them to deviate
from national policy. A separate commenter expressed concern that the
proposed revisions would allow a region to deviate from national policy
without Headquarters concurrence that such deviation was required by a
court decision.
    A couple of commenters argued that the EPA should allow notice and
comment on agency determinations that it would depart from these final
Regional Consistency regulations and apply certain judicial decisions
more broadly on a case-by-case basis. One commenter recommended that
``regional consistency determination[s]'' be published in the Federal
Register. Another commenter stated that the EPA should define
``fairness'' and ``uniformity'' in the regulations.
(2) EPA Response
    The EPA disagrees with the commenters' characterization of this
action. The final revisions authorize an EPA region to diverge from
national policy only to the extent that the EPA Region must do so in
order to act consistently with a decision issued by a federal court
that has direct jurisdiction over the EPA Region's action. The EPA
regions outside of that court's jurisdiction would still be required to
follow national policy or seek Headquarters concurrence to deviate from
that policy. This is the same procedure established under the original
Regional Consistency regulations.
    The EPA further disagrees with commenters' statement that these
final revisions go against the agency's past practice. Following the
Summit decision, consistent with the Regional Consistency regulations,
EPA Regions 4 and 5 could have sought Headquarters concurrence to
deviate from national policy in order to follow the directive of the
Sixth Circuit. In fact, EPA Region 4 did utilize this provision
following the Sixth Circuit decision in Sierra Club v. EPA, 781 F.3d
299 (6th Cir. 2015), cert. denied 2016 U.S. LEXIS 2221 (March 28,
2016), which held that the EPA was not permitted to approve a
redesignation request without first approving reasonably available
control measures into the state SIPs. This decision went against the
EPA's longstanding interpretation that where an area is attaining the
NAAQS, these measures that are designed to bring areas into attainment
are ``inapplicable'' under CAA Sec.  107(d)(3)(E)(ii) for purposes of
evaluating a redesignation. Following that decision, officials in EPA
Region 4 sought and received concurrence from EPA Headquarters to
follow the requirements of the Sierra Club decision, which are
inconsistent with the EPA's national policy, in states falling within
the jurisdiction of the Sixth Circuit. See 80 FR 56418 (September 18,
2015).\6\ If the EPA were to adopt the commenters' position, the agency
would have to apply the decision of the Sixth Circuit nationwide.
---------------------------------------------------------------------------

    \6\ Memorandum from Heather Toney, EPA Region 4 Administrator to
Anna Marie Wood, Director, EPA/OAQPS/AQPD, Regional Consistency
Concurrence Request--Redesignation Actions in Kentucky and
Tennessee, July 20, 2015. Docket ID No. EPA-R04-OAR-2014-0031.
---------------------------------------------------------------------------

    Thus, the Regional Consistency regulations have never required
absolute uniformity between the EPA Regional offices. Rather, the
Regional Consistency regulations have always acknowledged that certain
EPA Regions may in some instances act differently from others, and
these final revisions simply identify and authorize differences in a
specific limited circumstance--when necessitated by a federal court
decision reviewing an action of local or regional applicability.
Accordingly, the EPA does not view finalization of this rule as a
significant shift in the practical outcomes. Rather, the EPA is
changing the internal procedure followed by the agency in light of an
adverse court decision.
    A couple commenters claimed that the revisions to the Regional
Consistency regulations are inconsistent

with statements made by a former EPA General Counsel. These comments of
a former EPA General Counsel were made in the context of a discussion
of the intracircuit nonacquiescence practices of other agencies, which
is different from intercircuit nonacquiescence as explained in Section
III.B.1 of this document. See S. Estreicher & R. Revesz,
Nonacquiescence by Federal Administrative Agencies, 98 Yale L. J. 679,
717 (February 1989) (surveying approaches of other federal agencies
after describing the intracircuit nonacquiescence policies of the
Social Security Administration and National Labor Relations Board).
    The EPA considered the suggestions of several commenters to add
regulatory text defining the parameters under which the agency would be
required to re-evaluate its national policy following adverse court
decisions. In response, we note that the EPA carefully reviews each
adverse court decision. The types of factors advocated by the
commenters (e.g., the reasoning for the adverse court decision, the
number of adverse court decisions) generally are factors considered by
the EPA as it develops its response to any given adverse court
decision, including any reconsideration of the relevant national policy
or interpretation. This case-by-case approach is best because it allows
the EPA to consider the individual merits of each decision and the
appropriate course of action rather than apply a rigid formula.
Nonetheless, it would be counterproductive to codify any specific
parameters in regulatory text that must be applied in any and all
circumstances.
    We also are not requiring that a Regional office obtain
Headquarters concurrence regarding whether an adverse court decision
requires that Regional office to deviate from otherwise applicable
national policy. A key purpose of the revisions is to establish the
presumption that national policy remains national policy, and thus the
Regional offices are already required to follow national policy to the
extent allowed by an adverse court decision applicable to the Regional
office's actions. Of course a Regional office is always free to discuss
the scope of a court decision with Headquarters, but revisions do not
require a Regional office seek concurrence before acting consistent
with an adverse court decision applicable to the action being
undertaken by the Regional office.
    Contrary to the concerns of some commenters, the final revisions
will not allow the EPA to act arbitrarily in determining how to respond
to an adverse court decision. Nothing in the final revisions alters the
requirement that the EPA act in a reasonable, non-arbitrary manner at
all times. Moreover, the final revisions already provide clear criteria
regarding when the EPA will apply intercircuit nonacquiescence by
establishing the presumption that national policy will not change in
response to any given adverse decision.\7\ In other words, national
policy will remain unchanged until such time as the agency changes it
through the appropriate method. That presumption does not provide the
EPA unlimited discretion, but does retain the discretion to determine
national policy granted the EPA by Congress through the CAA.
---------------------------------------------------------------------------

    \7\ Except, of course, decisions issued by the D.C. Circuit when
reviewing rules of national applicability, or the U.S. Supreme
Court.
---------------------------------------------------------------------------

    The public is always free to petition the EPA to change regulations
and national policy if it believes that the agency is inappropriately
maintaining national policy in the face of numerous adverse court
decisions. If a party believes that the EPA's position is no longer
viable, it may petition the agency to change that position, and the
party may then seek to challenge the EPA's final response to that
petition if the party believes the EPA's final response is
unreasonable, so long as the party meets all the usual statutory and
jurisprudential requirements for such a challenge. For rules of
national applicability, such challenges would be, appropriately, in the
D.C. Circuit. See, e.g., Oljato, infra. Thus, the existing system
already contains sufficient safeguards to ensure that the EPA continues
to act in a reasonable manner, and additional regulatory text is not
necessary.
    Thus, as noted earlier, the EPA is not adding regulatory text
establishing specific parameters or criteria that would govern how the
agency would act in light of adverse court decisions. Nor is the EPA
establishing new procedures that would apply if and when the EPA does
reconsider national policy. As always, if the EPA does revisit national
policy, it will follow the applicable procedures. For example, if the
agency is changing regulatory text, it will undertake the appropriate
notice and comment process. If, however, the EPA is merely issuing an
interpretive rule without changing the regulations themselves, then
consistent with the Administrative Procedure Act and U.S. Supreme Court
case law, the EPA is not bound to follow a notice and comment process.
5 U.S.C. 553(b)(3)(A); Perez v. Mortgage Bankers Ass'n, 135 S. Ct. 1199
(2015).
6. The Revisions Are Otherwise Reasonable
    The EPA received other miscellaneous comments that do not fall
under the previous discussions, which are responded to in Sections 6.a
and b.
a. Response to Comments That the EPA Was Under No Obligation To
Promulgate Revisions to the Regional Consistency Regulations in
Response to NEDACAP
(1) Summary of Comments
    Several commenters stated that the EPA should withdraw the proposal
and leave the Regional Consistency regulations in place as currently
written. A couple of commenters noted that the proposed amendments to
the Regional Consistency regulations are not necessary because the EPA
is under no obligation to undertake the rulemaking action. Commenters
stated that while the EPA purported in the proposal notice to undertake
the rulemaking in response to the NEDACAP decision, that court did not
in any way require the EPA to undertake this rulemaking. In fact, the
court applied the regulations when vacating the EPA's Summit
memorandum.
    Several commenters stated that the court's suggestion in NEDACAP
that the EPA could amend the Regional Consistency regulations is not
equivalent to that court's endorsement of such an approach under CAA
Sec.  301(a)(2). The commenters note that the D.C. Circuit expressly
did not rule on ``whether the [Clean Air Act] allows the EPA to adopt
different standards in different circuits'' in the NEDACAP opinion. 752
F.3d at 1011. Further, one commenter detailed that in NEDACAP, the D.C.
Circuit held that the ``fair and uniform'' language of the existing
Regional Consistency regulations, which is parallel to the language in
CAA Sec.  301(a)(2), establishes a national regulatory uniformity
requirement.
    One commenter noted that the EPA has other ways to respond to the
court's decision in NEDACAP. In an example, the commenter cited the
EPA's response to conflicting decisions regarding the benzene NESHAP
and ``federal enforceability.'' The commenters also stated that if the
EPA stopped ``continuously seeking to expand the reach of its
regulations through such guidance'' the agency could avoid adverse
decisions like that in the Sixth Circuit regarding the Summit
permitting decision.
(2) EPA Response
    The EPA has not taken the position that it is required by the D.C.
Circuit's

opinion in NEDCAP to undertake revisions to the Regional Consistency
regulations. We agree that the EPA has discretion in deciding whether
or not to undertake the revisions being finalized. The EPA also
recognizes that the court's suggestion that the EPA could revise the
Regional Consistency regulations is not necessarily a judicial
endorsement of the specific revisions being finalized, although it is
unlikely that the court would make such a suggestion if any changes to
the regulations to address intercircuit nonacquiescence would be in
conflict with the statute.
    Contrary to statements made by commenters, the EPA does not
``continuously seek[ ] to expand the reach of its regulations through [
] guidance.'' Rather, the EPA issues guidance in an effort to better
inform the regulated community and the public regarding the
requirements of CAA regulations.
    For the reasons set forth here and in the proposed rule, these
revisions to the Regional Consistency regulations are an effective way
to address the implications of adverse court decisions rendered by
courts reviewing actions of local or regional applicability. While the
EPA does have other options available to it, the EPA has determined
that these revisions to the Regional Consistency regulations most
effectively address the issue presented by an adverse court decision
involving an action or local or regional applicability.\8\ The
revisions also accommodate the EPA's proper and longstanding
application of the doctrine of intercircuit nonacquiescence in future
cases, while eliminating the need to undertake lengthy, narrowly
focused rulemakings or seek review of all lower courts' adverse
decisions by the U.S. Supreme Court.
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    \8\ With respect to the comments referencing the EPA's past
practice with issuing guidance following conflicting court
decisions, the examples cited are inapposite. The comment refers to
the EPA's response to court decisions regarding application of the
benzene NESHAP, citing U.S. v. Hoescht Celanese Corp., 128 F3d. 216,
224 (4th Cir. 1997). However this case does not discuss this topic;
it merely involves one court's opinion on whether a company had fair
notice of the EPA's interpretation of a regulation. In addition, the
cited guidance regarding ``federal enforceability'' was not issued
to reconcile inconsistent circuit court decisions regarding the same
term. First, the guidance was originally issued before any adverse
decisions from the D.C. Circuit. Second, the policy laid out in the
guidance was extended in response to D.C. Circuit decisions
consistently interpreting the term ``federal enforceability''; first
decision was cited as the basis for the second and third opinions.
The only ``inconsistency'' in the decisions was whether the D.C.
Circuit vacated the underlying rule pending remand or not.
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b. Response to Miscellaneous Comments
(1) Summary of Miscellaneous Comments
    One commenter contended that the EPA failed to acknowledge the
difference between an EPA action involving interpretation of a national
regulation applied to a particular facility and an EPA action
addressing a SIP provision. In the context of SIP provisions, the
commenter stated that, ``to the extent not prohibited by the CAA, the
EPA should (and must) allow inconsistencies in particular SIP
provisions as between states.''
    Another commenter supported the EPA's proposed addition to CAA
Sec.  56.5(b) insofar as it will ensure that the EPA Regional offices
not subject to a court decision will continue to act consistently with
existing national policy. However, the commenter believes that the
proposed revision to CAA Sec.  56.5(b) does not clearly accomplish
this. The commenter contended that the existing and proposed regulatory
text should be harmonized to make clear that, after an adverse court
decision issued by a court reviewing a locally or regionally applicable
action, continued application of national policy by the EPA Regional
offices that are not subject to that court's jurisdiction does not
require concurrence from EPA Headquarters, notwithstanding any
inconsistency with the actions taken by the EPA Region(s) bound by the
court's decision.
(2) EPA Response
    The EPA agrees with the commenter that states are accorded great
discretion under CAA Sec.  110 in determining how to meet CAA
requirements in SIPs. However, states are obligated to develop SIP
provisions that meet fundamental CAA requirements. The EPA has the
responsibility to review SIP provisions developed by states to ensure
that they in fact meet fundamental CAA requirements. The Regional
Consistency regulations generally establish certain mechanisms with the
goal of ``identifying, preventing, and resolving regional
inconsistencies'' (45 FR 85400). For the EPA Headquarters office
employees, the regulations do this by targeting particular aspects of
the Act that have the potential to present consistency problems--
including any rule or regulation proposed or promulgated which sets
forth requirements for the preparation, adoption, and submittal of
state implementation plans.
    We concur with the comment that the EPA Regional offices not
covered by an adverse court decision should continue to follow existing
national policy. We looked at the proposed revisions to 40 CFR 56.5(b),
as well as the revised language provided by the commenters. We agree
that the revision to 40 CFR 56.5(b) suggested by the commenter more
clearly expresses that the exception to seeking Headquarters
concurrence applies only to the EPA regions that must diverge from
agency policy due to an adverse court decision with jurisdiction over
the EPA region's actions. We have thus changed the regulatory text
accordingly.

IV. Environmental Justice Considerations

    This action finalizes a rule revision that provides procedural
direction to the EPA Regions and Headquarters offices in implementing
court decisions of a limited scope (i.e., those having local or
regional applicability). The EPA did not conduct an environmental
analysis for this rule because this rule will not directly affect the
air emissions of particular sources. Because this rule will not
directly affect the air emissions of particular sources, it does not
affect the level of protection provided to human health or the
environment. Therefore, this action will not have potential
disproportionately high and adverse human health or environmental
effects on minority, low-income or indigenous populations.

V. Statutory and Executive Order Reviews

A. Executive Order 12866: Regulatory Planning and Review and Executive
Order 13563: Improving Regulation and Regulatory Review

    This action is not a significant regulatory action and was
therefore not submitted to the Office of Management and Budget (OMB)
for review.

B. Paperwork Reduction Act (PRA)

    This action does not impose any new information collection burden.
The final rule will not create any new requirements for regulated
entities, but rather provides procedural direction to the EPA Regions
and Headquarters offices in implementing national programs potentially
affected by adverse court decisions of a limited scope (i.e., those
having local or regional applicability).

C. Regulatory Flexibility Act (RFA)

    I certify that this action will not have a significant economic
impact on a substantial number of small entities under the RFA. In
making this determination, the impact of concern is any significant
adverse economic impact on small entities. An agency may

certify that a rule will not have a significant economic impact on a
substantial number of small entities if a rule relieves regulatory
burden, has no net burden or otherwise has a positive economic effect
on the small entities subject to the rule. This final rule will not
impose any requirements directly on small entities. The EPA and any
state/local governments implementing delegated EPA programs are the
only entities affected directly by this final rule. Other types of
small entities are also not directly subject to the requirements of
this rule.

D. Unfunded Mandates Reform Act (UMRA)

    This action does not contain any unfunded mandate of $100 million
or more as described in UMRA, 2 U.S.C. 1531-1538, and does not
significantly or uniquely affect small governments. The action imposes
no enforceable duty on any state, local or tribal governments or the
private sector.

E. Executive Order 13132: Federalism

    This action does not have federalism implications. It will not have
substantial direct effects on the states, on the relationship between
the national government and the states, or on the distribution of power
and responsibilities among the various levels of government. This final
rule revises regulations that apply to the EPA, and any delegated
state/local governments, only, and would not, therefore, affect the
relationship between the national government and the states or the
distribution of power and responsibilities among the various levels of
government.

F. Executive Order 13175: Consultation and Coordination With Indian
Tribal Governments

    This action does not have tribal implications, as specified in
Executive Order 13175. It will not have substantial direct effects on
tribal governments, on the relationship between the federal government
and Indian tribes or on the distribution of power and responsibilities
between the federal government and Indian tribes, as specified in
Executive Order 13175. This final rule only provides procedural
direction to EPA Regions and Headquarters offices in implementing court
decisions of a limited scope (i.e., those having local or regional
applicability). Thus, Executive Order 13175 does not apply to this
action.

G. Executive Order 13045: Protection of Children From Environmental
Health Risks and Safety Risks

    The EPA interprets Executive Order 13045 as applying only to those
regulatory actions that concern environmental health or safety risks
that the EPA has reason to believe may disproportionately affect
children, per the definition of ``covered regulatory action'' in
section 2-202 of the Executive Order. This action is not subject to
Executive Order 13045 because it does not directly involve an
environmental health risk or safety risk.

H. Executive Order 13211: Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use

    This action is not subject to Executive Order 13211 (66 FR 28355,
May 22, 2001), because it is not a significant regulatory action under
Executive Order 12866.

I. National Technology Transfer and Advancement Act

    This action does not involve technical standards.

J. Executive Order 12898: Federal Actions To Address Environmental
Justice in Minority Populations and Low-Income Populations

    The EPA believes that this action does not have disproportionately
high and adverse human health or environmental effects on minority
populations, low-income and/or indigenous peoples, as specified in
Executive Order 12898 (59 FR 7629, February 16, 1994).
    The documentation for this decision is contained in Section IV of
this document titled, ``Environmental Justice Considerations.''

K. Congressional Review Act (CRA)

    This action is subject to the CRA, and the EPA will submit a rule
report to each House of the Congress and to the Comptroller General of
the United States. This action is not a ``major rule'' as defined by 5
U.S.C. 804(2).

L. Judicial Review

    Under CAA Sec.  307(b)(1), petitions for judicial review of any
nationally applicable regulation, or any action the Administrator
``finds and publishes'' as based on a determination of nationwide scope
or effect must be filed in the United States Court of Appeals for the
District of Columbia Circuit within 60 days of the date the
promulgation, approval, or action appears in the Federal Register. This
action is nationally applicable, as it revises the rules governing
procedures regarding regional consistency in 40 CFR part 56. As a
result, petitions for review of this final action must be filed in the
United States Court of Appeals for the District of Columbia Circuit by
October 3, 2016. Filing a petition for reconsideration by the
Administrator of this final action does not affect the finality of this
action for the purposes of judicial review nor does it extend the time
within which a petition for judicial review must be filed, and shall
not postpone the effectiveness of this action.

VI. Statutory Authority

    The statutory authority for this action is provided by section 301
of the CAA as amended (42 U.S.C. 7601).

List of Subjects in 40 CFR Part 56

    Environmental protection, Air pollution control.

    Dated: July 21, 2016.
Gina McCarthy,
Administrator.

    For the reasons stated in the preamble, title 40, chapter I, part
56 of the Code of Federal Regulations is amended as follows:

PART 56--REGIONAL CONSISTENCY

0
1. The authority citation for part 56 continues to read as follows:

    Authority: Sec. 301(a)(2) of the Clean Air Act as amended (42
U.S.C. 7401).

0
2. Section 56.3 is amended by adding paragraph (d) to read as follows:

Sec.  56.3  Policy.

* * * * *
    (d) Recognize that only the decisions of the U.S. Supreme Court and
decisions of the U.S. Court of Appeals for the D.C. Circuit Court that
arise from challenges to ``nationally applicable regulations . . . or
final action,'' as discussed in Clean Air Act section 307(b) (42 U.S.C.
7607(b)), shall apply uniformly, and to provide for exceptions to the
general policy stated in paragraphs (a) and (b) of this section with
regard to decisions of the federal courts that arise from challenges to
``locally or regionally applicable'' actions, as provided in Clean Air
Act section 307(b) (42 U.S.C. 7607(b)).
* * * * *

0
3. Section 56.4 is amended by adding paragraph (c) to read as follows:

Sec.  56.4  Mechanisms for fairness and uniformity--Responsibilities of
Headquarters employees.

* * * * *
    (c) The Administrator shall not be required to issue new mechanisms
or revise existing mechanisms developed

under paragraphs (a) of this section to address the inconsistent
application of any rule, regulation, or policy that may arise in
response to the limited jurisdiction of either a federal circuit court
decision arising from challenges to ``locally or regionally
applicable'' actions, as provided in Clean Air Act section 307(b) (42
U.S.C. 7607(b)), or a federal district court decision.
* * * * *

0
4. Section 56.5 is amended by revising paragraph (b) to read as
follows:

Sec.  56.5  Mechanisms for fairness and uniformity--Responsibilities of
Regional Office employees.

* * * * *
    (b) A responsible official in a Regional office shall seek
concurrence from the appropriate EPA Headquarters office on any
interpretation of the Act, or rule, regulation, or program directive
when such interpretation may result in application of the act or rule,
regulation, or program directive that is inconsistent with Agency
policy. However, the responsible official in a Regional office will not
be required to seek such concurrence from the appropriate EPA
Headquarters office for actions that may result in inconsistent
application if such inconsistent application is required in order to
act in accordance with a federal court decision:
    (1) Issued by a Circuit Court in challenges to ``locally or
regionally applicable'' actions, as provided in Clean Air Act section
307(b) (42 U.S.C. 7607(b)), if that circuit court has direct
jurisdiction over the geographic areas that the Regional office
official is addressing, or (2) Issued by a district court in a specific
case if the party the Regional office official is addressing was also a
party in the case that resulted in the decision.
* * * * *
[FR Doc. 2016-17899 Filed 8-2-16; 8:45 a.m.]
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