Opening Brief by Petitioner Murray Energy Corporation
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USCA Case #14-1112 Document #1527224 Filed: 12/15/2014 Page 1 of 87 ORAL ARGUMENT NOT YET SCHEDULED No. 14-1112 & No. 14-1151 No. 14-1112: IN RE MURRAY ENERGY CORPORATION Petitioner. No. 14-1151: MURRAY ENERGY CORPORATION Petitioner, v. UNITED STATES ENVIRONMENTAL PROTECTION AGENCY and REGINA A. MCCARTHY, Administrator, United States Environmental Protection Agency Respondents. On Petition for Writ of Prohibition & On Petition for Judicial Review OPENING BRIEF OF PETITIONER Geoffrey K. Barnes J. Van Carson Wendlene M. Lavey John D. Lazzaretti Robert D. Cheren SQUIRE PATTON BOGGS (US) LLP 4900 Key Tower 127 Public Square Cleveland, Ohio 44114 (216) 479-8646 [email protected] December 15, 2014 Counsel for Murray Energy Corporation USCA Case #14-1112 Document #1527224 Filed: 12/15/2014 Page 2 of 87 PARTIES, RULINGS, AND RELATED CASES Pursuant to Circuit Rule 28(a)(1), Petitioner states as follows: I. PARTIES, INTERVENORS, AND AMICI Case No. 14-1112 Petitioner: Murray Energy Corporation Intervenor for Petitioner: National Federation of Independent Business Movant-Intervenors for Petitioner: Utility Air Regulatory Group, State of West Virginia, State of Alabama, State of Alaska, State of Indiana, State of Kansas, Commonwealth of Kentucky, State of Louisiana, State of Nebraska, State of Ohio, State of Oklahoma, State of South Dakota, and State of Wyoming Amici Curiae for Petitioner: State of West Virginia, State of Alabama, State of Alaska, Commonwealth of Kentucky, State of Nebraska, State of Ohio, State of Oklahoma, State of South Carolina, and State of Wyoming Respondents: United States Environmental Protection Agency and Gina McCarthy, Administrator, United States Environmental Protection Agency Movant-Intervenors for Respondent: Environmental Defense Fund, Natural Resources Defense Council, and Sierra Club - i - USCA Case #14-1112 Document #1527224 Filed: 12/15/2014 Page 3 of 87 Amici Curiae for Respondent: State of New York, State of California, State of Connecticut, State of Delaware, State of Maine, State of Maryland, Commonwealth of Massachusetts, State of New Hampshire, State of New Mexico, State of Oregon, State of Rhode Island, State of Vermont, State of Washington, and District of Columbia Movant-Amici Curiae for Respondent: City of New York, Environmental Defense Fund, Natural Resources Defense Council, Sierra Club, Clean Wisconsin, Michigan Environ- mental Council, and Ohio Environmental Council Case No. 14-1151 Petitioner: Murray Energy Corporation Movant-Intervenors for Petitioner: State of West Virginia, State of Alabama, State of Alaska, State of Indiana, State of Kansas, Commonwealth of Kentucky, State of Louisiana, State of Nebraska, State of Ohio, State of Oklahoma, State of South Dakota, and State of Wyoming Respondents: United States Environmental Protection Agency and Gina McCarthy, Administrator, United States Environmental Protection Agency - ii - USCA Case #14-1112 Document #1527224 Filed: 12/15/2014 Page 4 of 87 Movant-Intervenors for Respondent: Environmental Defense Fund, Natural Resources Defense Council, and Sierra Club RULINGS UNDER REVIEW The petition for an extraordinary writ, No. 14-1112, seeks a writ prohibiting EPA’s ultra vires rulemaking styled Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units, 79 Fed. Reg. 34,830 (June 18, 2014). The petition for review, No. 14-1151, seeks judicial review of an EPA legal conclusion embodied and announced in the initiation of EPA’s ultra vires rulemaking styled Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units, 79 Fed. Reg. 34,830 (June 18, 2014). RELATED CASES West Virginia v. EPA, No. 14-1146 (petition to review EPA settlement). - iii - USCA Case #14-1112 Document #1527224 Filed: 12/15/2014 Page 5 of 87 DISCLOSURE STATEMENT Pursuant to Federal Rule of Appellate Procedure 26.1 and D.C. Circuit Rule 26.1, Petitioner provides the following disclosure: Murray Energy Corporation is a corporation organized and existing under the laws of the State of Ohio. No publicly-held corporation holds an ownership interest of 10 percent or more of Murray Energy Corporation. Murray Energy Holdings Co. is Murray Energy Corporation’s parent corporation. Murray Energy Corporation is the largest privately-owned coal company in the United States and the fifth largest coal producer in the country, employing approximately 7,500 workers in the mining, processing, trans- portation, distribution, and sale of coal. In 2014, Murray Energy Corporation expects to produce 65 million tons of coal from twelve active coal mining complexes in six States. Murray Energy Corporation also owns two billion tons of proven or probable coal reserves in the United States. - iv - USCA Case #14-1112 Document #1527224 Filed: 12/15/2014 Page 6 of 87 CONTENTS INTRODUCTION ......................................................................................1 ISSUES........................................................................................................2 STATEMENT OF THE CASE....................................................................3 I. In 2012, EPA Promulgated a National Emission Standard for Power Plants under Section 112 of the Clean Air Act. ..........................3 II. EPA Now Seeks to Mandate State-by-State Standards for Existing Power Plants under Section 111(d) of the Act. ........................6 III. Murray Energy Corporation Petitions for Judicial Review and an Extraordinary Writ to Stop EPA’s Unlawful Actions.......................7 JURISDICTION .........................................................................................8 SUMMARY .............................................................................................. 10 STANDING.............................................................................................. 12 ARGUMENT............................................................................................ 15 I. Section 111(d) Prohibits EPA From Mandating State-by-State Emission Standards for Existing Sources That Are Already Subject to a Section 112 National Emission Standard.......................... 15 A. The Clean Air Act Expressly Prohibits Regulating Sources under Both Section 111(d) and Section 112, as EPA Has Repeatedly Conceded. .................................................................... 15 B. Section 111(d) Sensibly Protects Existing Sources From Double Regulation Under Standards that Each Seek to Independently Maximize Emission Reductions. .............................. 19 C. The Act’s Evolution Since 1970 Shows the Import and Purpose of the Section 111(d) Restriction. ....................................... 21 1. The 1970 Clean Air Act Amendments Created a State-by-State Existing Source Standards Program and a Limited National Standards Program Only for Extremely Hazardous Emissions............................................ 21 - v - USCA Case #14-1112 Document #1527224 Filed: 12/15/2014 Page 7 of 87 2. The 1977 Amendments Required States to Maximize Emission Reductions at Existing Sources in Light of Costs. .................................. 23 3. The 1990 Clean Air Act Amendments Significantly Expanded the National Standards Program and Retained the State-by-State Existing Source Standards Program Only for Source Categories Not Regulated Under the National Standards Program.............................................. 24 II. EPA Wrongly Ignores the Text of Section 111(d) and Erroneously Claims There Are Dueling “Versions” of the Statute.......................... 29 A. The Code Accurately Reflects the Text of Section 111(d). ................ 29 B. EPA Wrongly Asks this Court to Disregard the Current Text of Section 111(d) as Determined by the Office of Law Revision Counsel.......................................................................................... 34 III. The Relief Sought by the Petitions Is Available Now.......................... 38 A. This Court Can and Should Issue a Writ Prohibiting EPA From Doubly Regulating Power Plants..................................................... 39 1. This Court Can Issue a Writ Prohibiting Ultra Vires Agency Action When It Is Necessary or Appropriate To Do So. ................................... 39 2. A Writ Is Necessary and Appropriate Under these Extraordinary Circumstances. ............................................................................... 41 B. This Court Cand and Should Hold Unlawful and Set Aside EPA’s Erroneous Legal Conclusion that It Can Doubly Regulate Existing Sources Under Sections 111(d) and 112 of the Clean Air Act............ 45 1. EPA Has Concluded that It Has the Authority to Mandate the Double Regulation of Sources under Sections 111(d) and 112.................. 45 2. EPA’s Legal Conclusion Is Final Action under the Clean Air Act. ........... 48 CONCLUSION......................................................................................... 58 - vi - USCA Case #14-1112 Document #1527224 Filed: 12/15/2014 Page 8 of 87 AUTHORITIES CASES Allen v. Wright 468 U.S. 737 (1984) ........................................................................... 13 Am. Elec. Power Co. v. Conn. 131 S.Ct. 2527 (2011)....................................................................17–18 Am. Petroleum Inst. v. SEC 714 F.3d 1329 (D.C. Cir. 2013)........................................................... 33 Amgen, Inc. v. Smith 357 F.3d 103 (D.C. Cir. 2004)............................................................ 14 Appalachian