U.S. Supreme Court's American Trucking Opinion: The Decision and its Potential Effects on the Solid Waste Industry

Laura LaValle

On February 27, 2001, the U.S. Supreme Court issued its decision in Whitman v. American Trucking Associations, Inc., 121 S. Ct. 903 (2001). The Court upheld the revised National Ambient Air Quality Standards (NAAQS) for ozone and particulate matter issued by the U.S. Environmental Protection Agency (EPA) pursuant to Section 109(d)(1) of the Clean Air Act (CAA). This section requires EPA to review and, if necessary, revise NAAQS every five years.

The American Trucking Associations, Inc., other industry representatives and several states (together referred to as "Respondents") filed suit against the EPA in 1997 in the District of Columbia Circuit Court of Appeals. challenging the revised standards. This article contains a summary of the Supreme Court's decision and discussion of the impact of the decision, particularly as it relates to implementation of the revised "8-hour" ozone standard with respect to the solid waste industry.

The revised 8-hour ozone NAAQS is based on the average value of monitor readings taken over 8-hour periods. Areas violate the revised 8-hour ozone standard when the three-year average of the fourth-highest daily maximum 8-hour ozone concentrations equals or exceeds 85 parts per billion (ppb). 40 CFR § 50.10 and Appendix I to 40 CFR Part 50. An area violates the original "1-hour" ozone NAAQS when the highest daily 1-hour reading at any one monitor equals or exceeds 125 ppb more than three times during any consecutive three-year period. 40 CFR § 50.9 and Appendix H to 40 CFR Part 50.

The Supreme Court's Opinion

• Justice Antonin Scalia wrote the opinion for a unanimous court. The decision contained four key holdings:
• implementation costs may not considered in setting NAAQS;
• the Clean Air Act (CAA) does not unconstitutionally delegate legislative power to the EPA with regard to setting NAAQS;
• the Court of Appeals had jurisdiction to make a determination regarding an EPA-issued memorandum regarding implementation of the 8-hour ozone NAAQS in areas whose ozone levels currently exceed the original "one-hour" ozone standard; and
• EPA's interpretation of the CAA regarding how to implement the revised ozone NAAQS was unreasonable.

The Court directed EPA to develop a reasonable interpretation of the nonattainment implementation provisions insofar as they apply to the revised ozone NAAQS.

As noted above, the Supreme Court held that EPA may not consider implementation costs in setting NAAQS. CAA § 109(b)(1) requires EPA to set NAAQS that are "requisite to protect the public health" with "an adequate margin of safety." 42 U.S.C. § 7409(b)(1). The Court found that this directive, which contains no reference to costs, unambiguously bars costs from being considered in the standard-setting process. Respondents argued that "public health" should be read broadly to account for negative health effects that would result from the economic damage to industry from the implementation of a very stringent standard (e.g., health losses due to unemployment or loss of an industry's services). In concluding that Congress "does not hide elephants in mouseholes," the Supreme Court held that cost is a factor that is "both so indirectly related to public health and so full of potential for canceling the conclusions drawn from direct health effects that it would surely have been expressly mentioned in §§ 108 and 109 had Congress meant it to be considered." 121 S. Ct. at 909-10. The opinion notes that other CAA provisions take into account these broader concerns regarding indirect public health impacts, which allow costs to be factored into decisions relating to implementing, as opposed to setting, the standards.

Second, the Supreme Court overturned the lower court's determination that the directive to EPA to set NAAQS was an unconstitutional delegation of Congressional lawmaking authority. The Court of Appeals' decision was based upon a finding that Congress had failed to provide an "intelligible principle" to which the EPA must conform in setting standards. In rejecting the lower court's assertion that Congress must provide a "determinate criterion" for setting the standards, the Supreme Court found that the requirement that EPA set NAAQS at the level that is "requisite" (that is, neither higher nor lower than is necessary) to protect public health fits within the scope of administrative agency discretion permitted by its previous decisions. Id. at 914.

In its third holding, the Court rejected EPA's argument that the Court of Appeals did not have jurisdiction to make a determination regarding an EPA-issued memorandum concerning the method of implementing the 8-hour ozone NAAQS in areas where ozone levels currently exceed the existing standard, because the memorandum did not constitute final agency action ripe for review. EPA issued the implementation policy memorandum at issue as the "final decision on the primary standard" in the 1997 preamble to the 8-hour ozone NAAQS. 62 Fed. Reg. 38873 (1997). The Supreme Court held that this memorandum constituted a "consummation of the agency's decision making process," and was therefore final agency action subject to review. 121 S.Ct. at 914-16.

Lastly, the Supreme Court held that EPA's policy for implementing the 8-hour ozone standard was unlawful. The CAA is ambiguous regarding how its differing implementation provisions in Part D, Subparts 1 and 2 are to be reconciled. Subpart 1 contains nonattainment provisions applicable to every air contaminant for which a NAAQS exists. Subpart 2, added to the CAA in 1990, prescribes rules applicable to specific air contaminants, including ozone, and eliminates regulatory discretion that Subpart 1 allows. EPA's implementation policy stated that Subpart 2 would continue to apply in areas that have not yet attained the existing 1-hour ozone standard, and that upon attainment of the 1-hour ozone NAAQS, Subpart 2 would no longer apply. At that point Subpart 1 would govern the area's implementation of the 8-hour standard. The Supreme Court held that EPA could not construe the CAA in a manner that completely disregards textually applicable provisions intended to limit its discretion. 121 S.Ct. at 918-19.

The Court indicated that EPA is to "develop a reasonable interpretation" of the nonattainment implementation provisions." Id. At 919. Aside from indicating that Subpart 2 cannot be disregarded, the Court provided no guidance regarding how EPA is to formulate a lawful interpretation. The Court also remanded the case to the Court of Appeals without indicating what issue or issues are the subject of the remand. Given that it appears that the method of implementing the 8-hour ozone standard remains the only open question in the Court's decision, remand appears to be solely to allow the Court of Appeals to assist in setting out a plan to implement this standard.

Expanded Nonattainment Areas

Though the details of how the 8-hour ozone standard will be implemented are yet to be determined, it is clear that implementation of that standard pursuant to the Supreme Court's decision will have an impact on the solid waste industry, particularly with respect to the expanded universe of facilities that will become subject to nonattainment requirements. Currently, there are many solid waste facilities located on property within nonattainment areas under the 1-hour ozone standard. Designation of new areas as "out of compliance" with the 8-hour standard will increase the number of solid waste facilities subject to rigorous nonattainment requirements, including requirements for new emissions, stringent control technology requirements, and State Implementation Plan (SIP) requirements designed to bring those nonattainment areas into compliance with the 1-hour ozone NAAQS.

Because of the additional requirements, limitations and costs imposed on facilities located in or proposed for nonattainment areas, the boundaries of the new nonattainment areas will be the subject of early debate among local entities, individual states and EPA. Early last year, EPA issued guidance to the states regarding how the 8-hour ozone nonattainment areas would be determined. EPA requested that states submit their recommendations regarding those boundaries by June 2000. Now that the standard has been upheld, EPA can issue its formal recommendations. These recommendations will trigger a 120-day consultation period, after which EPA is authorized to make formal designations. 42 U.S.C. § 7407(d)(1)(B)(ii).

SIP Strategies Impacting the Solid Waste Industry

Once the nonattainment area boundaries are set, the primary outstanding variable that will determine the new standard's impact on solid waste facilities will be the emission control strategies adopted by each state into their respective SIPs to bring nonattainment areas into compliance with the standard. EPA's implementation policy to date states that the 8-hour standard will replace the 1-hour standard, but the 1-hour standard and those emission control measures adopted pursuant to the 1-hour standard will continue to apply to areas not attaining it for an interim period to ensure an effective transition to the new 8-hour standard. To this point there has been no indication from EPA regarding whether this policy position will change. Given the practical difficulties of making the transition to the new standard in existing nonattainment areas, it is not likely that this position will change.

With regard to 8-hour ozone nonattainment areas not currently in violation of the 1-hour ozone NAAQS, states will make choices from among a wide spectrum of emission control methods. Given that the 8-hour ozone standard is measured differently than the 1-hour ozone standard, it is possible that the emission control strategies adopted will need to be somewhat different than those that have been adopted to attain the 1-hour standard. It is also possible that, in areas in which 8-hour ozone nonattainment areas will border existing 1-hour nonattainment areas, as is expected in the Dallas/Fort Worth area and several other locations, states may find that it is feasible to simply extend the same or similar emission control strategies implemented to attain the 1-hour standard into the new nonattainment areas.

The Texas Response

Solid waste facilities in the Dallas/Fort Worth and Houston/Galveston 1-hour ozone nonattainment areas have been directly affected by several emission control measures adopted within the past year in connection with efforts to achieve compliance with the 1-hour standard. One such measure requires persons in those areas who own or operate certain non-road diesel engines greater than 50 horsepower, including solid waste facilities owners and operators, to phase into their fleets engines that meet the stringent federal "Tier 2" and even more stringent "Tier 3" emission control standards at rates faster than such engines must be incorporated into fleets nationwide pursuant to EPA requirements in 40 CFR Part 89. 30 TEX. ADMIN. CODE § 114.410-.419 (2001); 30 TEX. ADMIN. CODE § 114.470-.479. Compliance with these requirements will have a direct financial impact on solid waste facilities given that it accelerates the natural turnover of expensive heavy-duty equipment such as compactors, excavators and tractors.

Another measure adopted in Texas is a ban on the operation of certain heavy-duty diesel construction equipment during morning hours during the summer ozone season. 30 TEX. ADMIN. CODE § 114.432-.439 (2001); 30 TEX. ADMIN. CODE § 114.482-.489 (2001). In the Houston/Galveston area, persons are prohibited from operating such equipment between 6:00 a.m. and noon from April 1 through October 31. The theory behind this requirement is that by delaying the release of ozone-forming nitrogen oxides, those emissions are less likely to mix with other ozone-forming compounds until after the time of day when optimum ozone formation conditions exist. The state adopted the measure despite receipt of comments regarding the major social and economic costs and the limited, if any, environmental benefit associated with implementation of such a lengthy work disruption. Resulting costs and difficulties for solid waste management facilities include the need for complete restructuring of collection and landfill operations, a heightened potential for nuisance problems experienced by landfill neighbors from night lights, noise and odors during evening hour operations, and the need to purchase additional trucks and landfill equipment to handle an increased level of activity during limited work hours. The accelerated fleet replacement rule and morning construction ban are examples of control measures that could also be applied in 8-hour ozone nonattainment areas in Texas and elsewhere.

With the details regarding 8-hour ozone standard nonattainment boundaries and control strategies still "up in the air," it is important for owners and operators of solid waste facilities or proposed solid waste facilities at risk of being included in an 8-hour ozone nonattainment area to keep informed regarding what their local leaders, their state environmental agency and EPA are doing with respect to implementation of the new standard. Proactive participation in the implementation process can enable an individual company or industry group to prevent or significantly minimize the impact of a nonattainment designation. Accordingly, those owners and operators in potential 8-hour ozone nonattainment areas should participate in the implementation process as necessary individually, through a representative organization, or otherwise, to ensure that the areas included and the control strategies adopted are effective yet fair and reasonable as they are applied to solid waste facilities in furtherance of the goal of achieving compliance with the 8-hour ozone standard.

Laura LaValle is an associate with the law firm of Lloyd, Gosselink, Blevins, Rochelle, Baldwin & Townsend, P.C., in Austin, Texas. She practices environmental and administrative law, primarily in the areas of air quality and solid and hazardous waste. Laura previously served as an Assistant Attorney General of Texas. She can be reached at (512) 322-5800 or at llavalle@lglawfirm.com.