DC Circuit: EPA Toxic Chemical Reclassification Rule Faces Invalidation

• The D.C. Circuit Court of Appeals heard arguments challenging the EPA's 2020 rule on toxic chemical emissions, appearing likely to strike it down.
• The EPA's rule allows industrial facilities to emit up to 10 tons of one or 25 tons of multiple hazardous chemicals annually, potentially loosening MACT standards.
• Environmental groups argue the rule undermines Section 112 of the Clean Air Act and allows increased pollution from substances like mercury and arsenic.
• The court's decision will be influenced by the Supreme Court's *Loper Bright Enterprises v. Raimondo* ruling, which curtailed judicial deference to agency interpretations.
• A ruling against the EPA could reinstate stricter MACT standards, requiring industrial facilities to adjust their emission controls for hazardous air pollutants.

Compliance officers at industrial facilities should closely monitor the D.C. Circuit's final decision on this DC Circuit EPA toxic chemical reclassification.

A three-judge panel of the D.C. Circuit Court of Appeals recently heard arguments in a significant challenge to the Environmental Protection Agency's (EPA) 2020 reclassification rule concerning toxic chemical emissions. The court appeared poised to invalidate the new EPA hazardous air pollutant standards, which were enacted in January 2020. These regulations permit thousands of industrial facilities to increase their emissions of dangerous substances, including mercury and arsenic.

Environmental advocacy groups, represented by a coalition including the Sierra Club, brought the challenge, asserting that the EPA's new standards undermine protections established under Section 112 of the Clean Air Act. The core of their argument is that the rule allows industrial polluters to emit up to 10 tons of a single hazardous chemical or 25 tons of multiple hazardous chemicals annually, effectively loosening previous controls. This DC Circuit EPA toxic chemical reclassification has drawn sharp criticism for potentially increasing environmental risks.

Sanjay Narayan, an attorney for the Sierra Club, contended that the EPA's 2020 rule enables facilities to circumvent "Maximum Achievable Control Technology" (MACT) standards, thereby leading to an increase in toxic pollution. He highlighted that under the EPA's reclassification, a polluter emitting 9.9 tons of mercury would still be deemed compliant. Narayan emphasized the extreme danger posed by substances like mercury, dioxins, arsenic, and cyanide, even in minute quantities.

The rule, as interpreted by Narayan, stipulates that if a source's emissions fall below the 10 or 25-ton major source threshold after complying with a MACT standard, then the MACT standard no longer applies to that source. This provision allows facilities to cease compliance with stringent MACT requirements as long as their emissions remain below the specified threshold. The environmental groups argue this fundamentally alters the regulatory landscape for hazardous air pollutants.

U.S. Circuit Judge Gregory Katsas, a Donald Trump appointee, indicated that a central question in the case revolves around the definition of a "major source" of pollution and the extent of the EPA's discretion under the Clean Air Act to permit more lenient emission controls. Narayan argued that while the EPA can differentiate between major and "area sources," an area source should not be permitted to cease compliance with emission standards. He maintained that allowing this would impede the complete elimination of toxic chemical pollution, a primary objective of the Clean Air Act.

Laura Glickman, representing the EPA, countered that the agency's final reclassification rule accurately interprets the statute. She pointed to Congress's use of the present tense in Section 112's definition of a major source – "emits or has the potential to emit" – to argue that the definition reflects a source's current emissions. Glickman defined a major source as one emitting or having the potential to emit 10 tons per year of a single hazardous air pollutant or 25 tons per year or more of multiple hazardous air pollutants, with an area source being anything that does not meet this definition. U.S. Circuit Judge Robert Wilkins, a Barack Obama appointee, questioned how the EPA's stance aligns with Congress's apparent intent to prevent "significant deterioration of air quality" through the Clean Air Act. Glickman asserted that Congress possessed the means to prevent any regulatory backsliding but chose not to include such provisions.

Crucially, Judge Katsas noted that the panel, operating in a post-*Chevron* deference environment, is not obligated to defer to the EPA's interpretation of its authority under the Clean Air Act. The Supreme Court's 2024 decision in *Loper Bright Enterprises v. Raimondo* significantly curtailed *Chevron* deference, which previously allowed executive agencies broad latitude with limited judicial review. Narayan agreed, stating that the EPA had overstepped its authority by reclassifying these sources without adequate justification.

The potential striking down of the EPA's 2020 rule by the D.C. Circuit carries significant implications for environmental protection and industrial compliance. If the court rules against the EPA, it could lead to the reinstatement of stricter Maximum Achievable Control Technology (MACT) standards for facilities that were reclassified under the challenged rule. This would necessitate immediate adjustments to emission controls for hazardous air pollutants like mercury and arsenic, impacting thousands of industrial polluters.

Compliance officers at industrial facilities should closely monitor the D.C. Circuit's final decision on this DC Circuit EPA toxic chemical reclassification. A ruling against the EPA could reinstate more stringent MACT standards, requiring prompt modifications to emission control strategies to avoid non-compliance. The outcome of this Clean Air Act Section 112 challenge will not only shape EPA hazardous air pollutant standards but also further define the boundaries of agency discretion in the wake of the *Loper Bright Enterprises v. Raimondo* impact on judicial review.

Compliance officers at industrial facilities should closely monitor the D.C. Circuit's final decision on the EPA's 2020 toxic chemical reclassification rule, as a ruling against the EPA could reinstate stricter MACT standards, necessitating immediate adjustments to emission controls for hazardous air pollutants like mercury and arsenic to avoid non-compliance.

Source: Original reporting via Courthouse News Service