News Releases

Industry Associations Prevail In Fifth Circuit Appeal Challenging EPA Decision

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DALLAS, August 15, 2012 -- On August 13, 2012, the U.S. Court of Appeals for the Fifth Circuit vacated the Environmental Protection Agency’s 2010 disapproval of the Texas Flexible Permits Program.

The State enacted the Program and submitted it to EPA for approval as a revision to Texas’s State Implementation Plan (“SIP”) in 1994. In challenging the EPA’s decision, Baker Botts L.L.P. represented a group of industry associations including the U.S. Chamber of Commerce, National Association of Manufacturers, American Petroleum Institute, American Chemistry Council, Texas Association of Business, and Texas Oil and Gas Association. The State of Texas was also a petitioner.

As the majority opinion observed, EPA’s disapproval, which came more than 16 years after the statutory deadline, threatened to “unravel” approximately 140 state-issued permits and subject companies that had relied on the permits to threat of enforcement action. The Court held, however, that in disapproving the Program, the EPA not only was “16 years tardy” but also exceeded its statutory authority and acted arbitrarily and capriciously.

The court concluded that EPA “based its disapproval on demands for language and program features of the EPA’s choosing, without basis in the Clean Air Act or its implementing regulations.” In particular, the court held that disapproval based on EPA’s purported concern that the Program allowed circumvention of Clean Air Act (“CAA”) provisions for major new source review (“NSR”) was arbitrary and capricious because the Program affirmatively requires compliance with Major NSR. Given the absence of any EPA finding that the Program would interfere with attainment of national air quality standards or any other requirement of the CAA, the court decided that it owed no deference to EPA on this issue.



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