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Allied Local & Reg'l Mfrs. Caucus v. EPA

ELR Citation: 30 ELR 20723
Nos. No. 98-1526, 215 F.3d 61/50 ERC 1847/(D.C. Cir., 06/16/2000)

The court holds that U.S. Environmental Protection Agency (EPA) regulations limiting the content of volatile organic compounds (VOCs) in architectural coatings and paints under the Clean Air Act (CAA) are lawful. The court first holds that nothing in the CAA unambiguously requires EPA to analyze the reactivity of each VOC on an individual basis, and that EPA's more categorical approach is a reasonable interpretation of the CAA's reactivity-related requirements. CAA §183(e)(2)(a) directs EPA to study VOC emissions from any combination of commercial products, not individually. Further, CAA §183(e)(2)(a) requires EPA to submit a report to Congress on commercial VOC emissions within three years, but if EPA studied the reactivity of each VOC individually, 166 years of testing would be required. EPA also complied with CAA §183(e)(2)(B)(iii)'s requirement to consider highly reactive VOCs when it established criteria for consumer and commercial products. Likewise, the possibility that some compounds were regulated that should have been exempted, and that architectural coatings as a category were given priority regulation when they should have been regulated in a later group, does not render EPA's methodology inconsistent with the CAA's command to account for VOC emissions on a reactivity basis. The court next holds that EPA reasonably considered, and discounted, the phenomenon of negative reactivity because the phenomenon was too rare and unpredictable to warrant changes in the regulatory structure. The court also holds that EPA has the authority under the CAA to regulate the manufacture and sale of coating products nationwide and not just in nonattainment areas. EPA reasonably concluded that emissions in attainment areas can contribute to nonattainment in adjoining nonattainment areas. In addition, the court holds that EPA's decision to control VOC emissions through the regulation of VOC content is reasonable, and that EPA took into consideration the requisite factors for establishing criteria for regulating consumer and commercial products.

The court then holds that it lacks jurisdiction to review the petitioners' challenge under the Regulatory Flexibility Act (RFA), 5 U.S.C. §603(a). RFA §611(a) specifically lists the sections of the RFA subject to judicial review, and §603 is not on the list. Nevertheless, the court holds that EPA complied with the overall requirement that an agency's decisionmaking be neither arbitrary nor capricious. EPA responded to significant points raised during the public comment period, and it considered significant alternatives to the course it ultimately chose. The court further holds that EPA did not violate the Unfunded Mandates Reform Act. Judicial review under the Act is limited to the preparation of a cost-benefit analysis, but such an analysis is not triggered unless a regulation will result in $100 million in expenditures in a year. Here, EPA reasonably estimated that the VOC regulations will have a total cost of only $32 million per year. Last, the court holds that the regulation does not exceed Congress' authority under the U.S. Commerce Clause. VOC emissions concern the interstate transport of ozone and have an economic effect on the national economy.

Counsel for Petitioners
William M. Smiland
Smiland & Khachigian
One Bunker Hill
601 W. 5th St., 7th Fl., Los Angeles CA 90071
(213) 891-1010

Counsel for Respondent
Scott J. Jordan
Environment and Natural Resources Division
U.S. Department of Justice, Washington DC 20530
(202) 514-2000

Before Ginsburg and Tatel, JJ.