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Case number 15-1487, et al.

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Sierra Club and Natural Resources Defense Council petitioners versus Environmental Protection Agency, et al.

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Mr. Kew for the environmental petitioners.

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Ms.

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Bowers for the respondent APA.

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Ms.

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Felicia Bars for the industrial interveners.

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Just to provide the court with some guidance here, are you going to devote this opening argument to the merits of your challenges and then, consistent with a language in our most recent order, respond to whatever is said by

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other counsel regarding abeyance.

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I'm just trying to order, have an understanding of how you'll present your case.

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I think that makes sense.

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I'm happy to answer any questions the court might have on abeyance, but unless the court has me right now, I'll start by addressing the merits.

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The first issue I'd like to address is EPA's treatment of the potential for cancer from the pollutants for which it set standards under Section 112D4 of the Clean Air Act.

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Ninety-nine percent of Rick Gilm's hazardous emissions is made up of three hazardous air pollutants.

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That's chlorine gas, hydrogen chloride, and hydrogen fluoride.

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Based on nothing more than a lack of evidence about whether these pollutants cause cancer, EPA asserts that a health threshold has been established for them under Section 112B4 of the Act.

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Are you blending the question of carcinogen with the question of health threshold being established?

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That sentence seemed to refer to both.

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I meant, I'm sorry, Your Honor, I meant to just address cancer right now and to address other health effects.

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You seem to be leading over to the other question.

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Maybe I misunderstood you.

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I'm not sure after reading your brief and thinking about it and reading it, what is it you say would be enough to establish that there's not a carcinogenic property to the chemical?

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Well, I think- You say in the brief and you say here that they haven't proved it's not.

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Proving a negative is not something that we normally would be motivated to do under any circumstance.

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If you just don't have any evidence of positive, why isn't that enough to establish their word?

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Your Honor, it's certainly possible if, you know, the EPA conducted substantial studies and determined in these studies there's no evidence of cancer.

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It could have concluded that these pollutants aren't carcinogenic.

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But we're not asking for some... When they looked at what was out there and found nobody had ever found carcinogenic properties, why isn't that enough?

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They could give them the standard of review we have in administrative law.

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Well, a couple reasons, Your Honor.

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First, they didn't actually find that they don't cause cancer.

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They didn't classify.

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What they actually found is that none of these... That's what I'm saying, is how do you determine that something doesn't cause cancer?

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There's no evidence that it does.

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Why isn't that...

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Well, EPA's guidance in the record explains how it can be done.

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Page 695 and 696, EPA says there can be convincing evidence in both animals and humans that a pollutant, an agent, he calls it, but it's a pollutant, is not carcinogenic.

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And the agency goes on to outline how that kind of evidence can be marshaled and presented.

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And in fact, the EPA itself has, on the basis of that kind of evidence, which based on robust data, as the agency says,

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has reached a conclusion for other pollutants that there is no cause for human health hazard concern about cancer.

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So we're happy with that kind of conclusion.

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EPA has made it in the past.

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EPA knows how to do it.

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It's written the guidance on how to do it.

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That's all we're asking for.

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But here, EPA has something very different.

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What EPA says here about these pollutants is that not one of them has been classified with respect to carcinogenicity.

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And that the only evidence it has is old, in fact, decades old.

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It's limited, as the agency says.

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It's unreliable.

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And with respect to one of these three pollutants, hydrogen fluoride, it's equivocal.

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It isn't unreliable.

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That's not the term they use.

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Well, Your Honor, it's a term they use with respect to one of them in the drug appendix.

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I thought this term was alone.

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Of low confidence?

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Of low confidence?

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Yeah, of low confidence.

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They do use that term with respect to the non-cancer threshold, but with respect to the data that they had for cancer, they describe it among other things as unreliable.

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So essentially, that's the difference.

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What EPA has when it actually determines that a pollutant is a human.

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It's established that a pollutant doesn't cause cancer.

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It has convincing evidence.

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And it says that it doesn't cause cancer.

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Here, EPA has never said that.

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All it says is that we don't have evidence one way or the other.

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They try to spin it as saying we don't have affirmative evidence of carcinogenicity.

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But the truth is they don't have evidence one way or the other.

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And they admit that by saying these pollutants haven't been classified.

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What EPA is saying as a statutory matter, I think, is important.

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EPA is equating the absence of evidence with an established threshold.

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The agency's interpretation of the statute is, first of all, it agrees that it has to.

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So you now are leaving a pure address of the cross-genic and going over into the general

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ability to operate under K2 or whatever the numbers are there that says it's an established tilt.

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Well, I don't mean to be your honor.

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I'm still, at least, I believe I'm still talking about, I'm trying to still talk about cancer.

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I don't mean to start talking about the other two things yet.

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The point I would like to make is that by equating an absence of evidence with an established health threshold EPA grains, the term, the statutory term, established health threshold of meaning,

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and punches a hole in the most fundamental requirement in the Clean Air Act for hazardous air pollutants, which is if the listed hazardous air pollutants will be subject to technology-based standards that reduce emissions by the maximum degree that's possible.

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Congress wanted Section 112B4 to be a limited exception to that requirement, not to eviscerate it.

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But if EPA is allowed to switch the burden of proof,

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so that it can decline to technology-based standards any time it doesn't know that a hazardous air pollutant causes cancer instead of having to establish that it does not cause cancer to proceed under Section 112B4.

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The agency can do this for many other pollutants as well.

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There are 122 out of 187 hazardous air pollutants listed in section 112b that are in exactly the same situation as these three.

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EPA doesn't know one way or another whether they cause cancer, and EPA doesn't dispute that under its interpretation of the act, it would be free to do exactly the same thing for those pollutants as it is doing for these three.

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You know, it isn't inherently the case that they would be wrong if they did this.

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You argue that if you've won your case, why don't you say, well, there's a lot of others out there that aren't established because of genetic easement.

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Okay, so that may be the case, and so maybe they can do the same thing with those.

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That doesn't say that it's unlawful for them to do that.

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Well, I guess I'd like to make a few points.

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That's a non sequitur, I think.

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Well, if I can, I'd like to make a few points about the language of the statute, as well as Congress's intent.

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And the first point, to start with the language, is that Congress referred to an established health threshold.

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That is very specific language, unlike other language that Congress used.

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And I'm sorry to interrupt you.

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I'm not very sorry, but I'm going to interrupt you.

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You can win on the health standard, established health standard, without winning on carcinogen, can't you?

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Yes, Your Honor.

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It's not the same.

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OK, thank you.

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Excuse me, go ahead.

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I seem to keep running into times when I think you're bleeding the one end to the other.

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Excuse me, go ahead.

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I would like to stick with cancer, to make a few points.

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One point on EPA's statutory interpretation is that EPA agrees that a pollutant cannot be carcinogenic to proceed under Section 112E4.

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That's at page 23 of the brief.

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on page 24 of their brief, they say that EPA doesn't have to conclude that a pollution isn't carcinogenic.

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That defies the plain meaning of what an established health threshold means.

[00:09:44] Speaker 08:
Well, because it's not the statute that requires non-carcinogenicity, if that's actually a word.

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And it's their regulation.

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And so do we know that the word establish

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Is the operative word for purposes of determined non-carcinogenic status or is it just, could it be a different, is it a different standard in the regulation?

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Have they conceded that word established and the statute requires them to establish that it is not carcinogenic for purposes of compliance with the regulation?

[00:10:23] Speaker 03:
No, I think there is some disagreement over the meaning of what establishes it.

[00:10:26] Speaker 08:
So what's the standard under their regulation by which they have to determine that it is not carcinogenic?

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But if I can go back to the beginning of that question, I think they do agree that it's statutory that they can't be carcinogenic, because there's a requirement for an established health threshold.

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And what EPA is saying is that because there is no safe level of exposure to a carcinogen,

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to establish a health threshold for a pollutant, that pollutant can't be a carcinogen.

[00:10:52] Speaker 08:
Right, but there could be, if we know it's carcinogenic, right, that works.

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If there is debate about whether it's carcinogenic, you could probably find just about anything clear to be carcinogenic.

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on the website these days, right?

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There has to be some measure of judgment on this.

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And so what is the standard for determining that something is not sufficiently, there's sufficient evidence that it's not carcinogenic, sufficient reliable evidence that it's not carcinogenic.

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We can't establish it with 100% certainty, but there's sufficient reliable evidence

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for us to then determine that that plus no other health effects as the statute requires us to look at is sufficient.

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Or does it have to be established in scientific literature under the regulation?

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I think it has to be established

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not just under the regulation, but also under the statute, it needs to be established that it doesn't cause cancer.

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And if it didn't have to be established that it didn't cause cancer, there would have to be a health threshold.

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They would have to be establishing a health threshold below it, which it didn't cause cancer.

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Even if they didn't agree that for cancer that has to be zero, they would still have to establish some level

[00:12:09] Speaker 08:
No, but say something is only carcinogenic at absolutely high volumes, constant exposure and infrequent exposure or very diluted exposure is not carcinogenic.

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They could factor that in, right?

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They could proceed assuming other statutory requirements are met.

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to say that to set a health threshold for that, could they not?

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Even though it would be carcinogenic in some circumstances?

[00:12:37] Speaker 03:
I think I agree with you, Your Honor, that the EPA doesn't have to resolve every last molecule of scientific uncertainty.

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It just has to do with what it's already done for other rules.

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And again, EPA says in the record there can be

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convincing evidence based on human and animal studies that a pollutant is not carcinogenic.

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That's at page 695 and 696.

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We're not asking for something that goes beyond that.

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We're just saying that EPA has to make a determination.

[00:13:00] Speaker 08:
You want them to use the same standard they use elsewhere.

[00:13:03] Speaker 03:
Right, or perhaps there could even be another standard and EPA could adopt that and explain that.

[00:13:07] Speaker 08:
That's what I'm trying to get at.

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What could the other standard be?

[00:13:09] Speaker 03:
Well, I'm not sure what the other standard could be, but the distinction I'm trying to draw here is that here, EPA hasn't made any claim that these pollutants don't cause cancer and neither has any other scientific or regulatory body.

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Is there any evidence that they do?

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Well, I'm not aware of the evidence.

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And frankly, I think the problem is that it has to be.

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So there's nothing in the record that says they do.

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Well, with respect to hydrogen fluoride, it's actually equivocal.

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There is something in the record that suggests that hydrogen fluoride does.

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But we're not trying to make the case that they do.

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I think the statutory point we're making is that Congress intended these pollutants to be regulated under technology-based standards and put the burden of proof on EPA to move over into what?

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That's also consistent with the origins of the statute, not just the language of the statute, but the origins of the statute.

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Congress amended, as this Court has noted several times, Congress amended the Clean Air Act in 1990 and rewrote the hazardous air pollutant provisions.

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precisely because the previous risk-based discretionary approach hadn't worked.

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And it was especially concerned about cancer, and it wanted to make sure that the scientific uncertainty that had stopped BPA from regulating hazardous air pollutants before didn't stop it now.

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In fact, that's what the U.S.

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Sugar Court noted at the beginning of its opinion just last year.

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And so for EPA to say that because it's uncertain, it doesn't have to set technology-based standards turns that statute on its head.

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What it's really claiming is that it's not enough for a pollutant to be hazardous to be regulated under technology-based standards.

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It has to be hazardous, and somebody has to prove it's carcinogenic.

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That's not what Congress intended.

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Even if there were, and I guess I'd just like to make one point on step two and go on to the record-based argument, for EPA to claim that the same Congress that undisputedly made clear that a pollutant can't be carcinogenic, proceed under section 112.24, because EPA agrees on that point, didn't care whether EPA knew whether a pollutant was carcinogenic, that doesn't make any sense.

[00:15:22] Speaker 03:
And EPA doesn't explain that position anywhere in the record.

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Even if these words didn't exist, even if EPA were just based on a record agreement that the pollutant can't be carcinogenic for EPA to proceed, EPA would still have a burden to proceed to demonstrate with substantial evidence that that's true.

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This court has held that over and over again in the prior air toxics cases under Section 112D3, and it's just as true for Section 112D4.

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And nowhere does EPA go forward with that affirmative demonstration.

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EPA just says, because we don't know, we can assume that this gluten doesn't cause cancer.

[00:16:04] Speaker 08:
If I can just make a... What about the more general health threshold?

[00:16:07] Speaker 08:
What do you understand an ample margin of safety to be?

[00:16:11] Speaker 03:
My understanding here is that there is no ample margin of safety.

[00:16:15] Speaker 08:
What does that phrase mean?

[00:16:18] Speaker 03:
Well, I think that it means that a margin of safety that addresses risks that have not already been addressed and considered.

[00:16:26] Speaker 03:
That's a fairly old case, but there's an environmental defense fund case, I believe, in 1978.

[00:16:31] Speaker 03:
It's a Clean Water Act case, but it discusses the term ample margin of safety and contrasts it to what an adequate margin of safety is in other parts of the Clean Air Act.

[00:16:41] Speaker 02:
Don't you actually have a much better case on this than you do on the car synergy question?

[00:16:46] Speaker 03:
Your Honor, I think the car synergy question is really strong.

[00:16:48] Speaker 02:
You seem to think so, but I'm not sure that that's the need that you want to die in.

[00:16:55] Speaker 02:
amplitude, I'm not sure that I see where EPA has done something we can defer to on that one.

[00:17:03] Speaker 02:
I'll ask them about it, but you seem to want to spend all your time on the carcinogen, which may not be useful.

[00:17:09] Speaker 02:
Okay, well, we'll certainly move on, Your Honor.

[00:17:12] Speaker 03:
Well, you're out of time.

[00:17:14] Speaker 06:
Go ahead.

[00:17:15] Speaker 03:
Thank you.

[00:17:17] Speaker 03:
There are two points in the nine questions.

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And first, it's precisely because EPA is relying on low-confidence studies and data and analysis that it says only that it doesn't expect these pollutants.

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It doesn't expect that there will be adverse effects under its threshold.

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And I'm saying that not expected is different than established.

[00:17:37] Speaker 03:
The terms are not synonyms.

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Even industry interveners agree that what a threshold is is a level below which adverse health effects don't occur.

[00:17:47] Speaker 03:
To move on to the adequate margin of safety analysis, it is undisputed that EPA's rule allows exposures right up to the threshold it determined.

[00:17:59] Speaker 03:
That can't be what Congress meant by directing the EPA to consider the threshold with an ample margin of safety.

[00:18:07] Speaker 03:
And the EPA essentially argues that

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its decision not to provide any identifiable margin of safety at all should be overlooked because it thinks the conservatives, the assumptions that it used to develop the threshold in the first place are conservative.

[00:18:23] Speaker 03:
That doesn't address the statutory issue, which is that Congress wanted both a threshold and a margin of safety.

[00:18:31] Speaker 03:
And in any event, and I don't want to go into the details, I realize I'm writing out of time, but the allegedly conservative assumptions aren't even conservative.

[00:18:41] Speaker 03:
I don't know if the court wants me to address the technology-based standards.

[00:18:47] Speaker 06:
Very briefly.

[00:18:52] Speaker 03:
There are two issues on the standards for all the other pollutants.

[00:18:57] Speaker 03:
And one of those is EPA's use of small data sets.

[00:19:01] Speaker 03:
The court has already held in an accurate case that the upper prediction limit formula that EPA applied here is flawed, that's the court's word, with respect to small data sets, because it produces demonstrably irrational results, absurd results even.

[00:19:18] Speaker 03:
EPA following that one needed to explain, either explain why the upper prediction limit works or come up with something else.

[00:19:25] Speaker 03:
And it didn't do either one of those things.

[00:19:28] Speaker 03:
The last point I'd like to make is that even if that could be overlooked, the idea that EPA can set three different standards.

[00:19:34] Speaker 08:
Well, just back up on that.

[00:19:36] Speaker 08:
What was before was I said, you've got to explain how you can rely on this when you've got such a low data set.

[00:19:44] Speaker 08:
And they say this time we gave you the explanation for how we were doing it.

[00:19:48] Speaker 08:
So why isn't that consistent with our cases?

[00:19:51] Speaker 08:
And then what we have to grapple with is not what old cases said, but whether the explanation here was sufficient.

[00:19:57] Speaker 08:
So why don't you tell me why the explanation here wasn't sufficient?

[00:19:59] Speaker 03:
The explanation doesn't go to why the UPL works.

[00:20:03] Speaker 03:
DPA doesn't even claim that the UPL works.

[00:20:05] Speaker 03:
What the explanation is, is yes we know it doesn't work, we know we can't rely on it, but we can figure out for each and every rule we can come up with some approach, we have come up with some approach that allows us to tell which of these 34 standards that had small data sets are defective and which ones aren't.

[00:20:21] Speaker 03:
And there's no way in the record to tell actually.

[00:20:23] Speaker 08:
Well, they have to be able to do something when they have small data sets.

[00:20:26] Speaker 08:
So what are they supposed to do?

[00:20:27] Speaker 03:
Well, one thing they could certainly do is collect more data.

[00:20:31] Speaker 03:
This record held in the US Sugar case, if EPA needs more data, it certainly has the power to be collected.

[00:20:36] Speaker 03:
But we're not trying to tell them to do it.

[00:20:38] Speaker 08:
We've got a small set.

[00:20:39] Speaker 08:
I mean, there's just only one.

[00:20:40] Speaker 08:
There's nowhere else to fish, right?

[00:20:42] Speaker 03:
Well, there is, Your Honor.

[00:20:43] Speaker 03:
EPA has authority under Section 114 of the Clean Air Act to ask for data.

[00:20:47] Speaker 03:
It has authority to ask for testing and get more data.

[00:20:50] Speaker 03:
So get more data from the companies themselves.

[00:20:52] Speaker 03:
If you get more data, another reason it has such small data sets is that it chopped this category up into so many different categories.

[00:20:58] Speaker 03:
If it hadn't done that, it would have more data for each category.

[00:21:01] Speaker 03:
And then beyond that, there's nothing in the act that says EPA has to use this upper prediction limit.

[00:21:06] Speaker 03:
The court said it can, but it didn't say it has to.

[00:21:09] Speaker 03:
This is the same situation very much as this mental and recycling case, where EPA wanted to use its technology-based approach and then complained that it wasn't working very well.

[00:21:18] Speaker 03:
And the court said nothing requires EPA to use this technology-based approach in the first place.

[00:21:23] Speaker 03:
If it's not working, it needs to devise another one.

[00:21:26] Speaker 06:
All right.

[00:21:27] Speaker 03:
Thank you, Your Honor.

[00:21:31] Speaker 06:
Council for Respondents.

[00:21:44] Speaker 06:
Morning.

[00:21:45] Speaker 05:
Good morning and may I please support Kate Bowers here on behalf of the United States EPA.

[00:21:50] Speaker 06:
I think you have to bring the mic closer.

[00:21:52] Speaker 05:
Is this better?

[00:21:56] Speaker 05:
Yes.

[00:21:56] Speaker 05:
Great.

[00:21:57] Speaker 05:
Good morning.

[00:21:58] Speaker 05:
I'm Kate Powers, here on behalf of the United States Environmental Protection Agency.

[00:22:02] Speaker 05:
With me at Council's table are Sonia Shea, also from the Department of Justice, and Scott Jordan from the EPA Office of General Counsel.

[00:22:10] Speaker 05:
My plan is to also start by addressing the issues raised by the environmental petitioners.

[00:22:14] Speaker 05:
And then at the end of my time, I'd be happy to discuss the abeyance question, if that's OK.

[00:22:19] Speaker 06:
I think if you want to keep your voice up.

[00:22:20] Speaker 06:
Yes.

[00:22:21] Speaker 05:
I'll do that.

[00:22:21] Speaker 05:
I apologize, Your Honor.

[00:22:23] Speaker 05:
I'd be happy to address abeyance questions after.

[00:22:25] Speaker 05:
No, we got that.

[00:22:27] Speaker 04:
Sure.

[00:22:27] Speaker 05:
All right I'll start with the with the carcinogenicity issue since I think this is a point where we would all benefit from a little bit of clarification about what the statute says and doesn't say and what EPA did.

[00:22:41] Speaker 08:
So let's start your regulation right your regulation not even the statute says it has to be not carcinogenic right doesn't that mean someone has to decide that it's not carcinogenic?

[00:22:52] Speaker 05:
Well, to back up for a minute, there are two considerations that go into determining whether a pollutant can be a threshold pollutant.

[00:23:04] Speaker 08:
Well, I just want to, again, not the statute, but your regulation says it has to be non-carcinogenic.

[00:23:11] Speaker 08:
And so I guess I just have a direct question to you.

[00:23:14] Speaker 08:
And to be non-carcinogenic, doesn't someone

[00:23:21] Speaker 08:
You, someone else, have to decide that it was not, that it is not carcinogenic.

[00:23:29] Speaker 05:
As a practical matter, there are

[00:23:33] Speaker 05:
a handful, I'm aware of, I think, two occasions where EPA has actually classified a pollutant as not carcinogenic or not likely to be carcinogenic.

[00:23:44] Speaker 05:
That's two out of the 187 listed haves.

[00:23:46] Speaker 08:
No, all right, so you're able to classify things as either not carcinogenic or not likely carcinogenic, and is that what the regulation, isn't that what the, I'm not gonna say, isn't that exactly what the regulation requires you to do?

[00:23:58] Speaker 05:
There's no overarching regulation beyond what EPA has set out in this rule and in prior rules where it considered promulgating a health-based standard.

[00:24:06] Speaker 05:
But the practice that EPA has consistently applied in its analysis.

[00:24:11] Speaker 08:
I don't understand what you mean by there's no.

[00:24:12] Speaker 08:
Your position is, and it's in your briefing here, is that to be listed, it has to be non-carcinogenic.

[00:24:19] Speaker 08:
And the EPA is in the business of determining things are not carcinogenic or not likely to be carcinogenic.

[00:24:27] Speaker 08:
And isn't that what your regulation, your regulatory position requires you to do?

[00:24:36] Speaker 05:
Well, EPA has to be able to say that for purposes of setting a health-based emission standard, yes, that a pollutant is not carcinogenic.

[00:24:45] Speaker 08:
OK.

[00:24:46] Speaker 08:
Did you say that in this case?

[00:24:48] Speaker 05:
I believe EPA said, I can pull up the exact language.

[00:24:52] Speaker 08:
Did you say that it's not or not likely carcinogenic in this case?

[00:24:56] Speaker 05:
Well, it's a little bit different for each of the three polices.

[00:24:59] Speaker 08:
Did you do it for any one of them in this case?

[00:25:02] Speaker 05:
EPA, let me, I can pull up the exact language if that's the easiest thing to do.

[00:25:09] Speaker 05:
But EPA did not issue a conclusive statement that to a level of scientific proof.

[00:25:16] Speaker 08:
I'm not scientific, I'm saying nobody's, I guess you can't point me to anybody who has said even that these things are not likely to be carcinogenic.

[00:25:25] Speaker 08:
Is that right?

[00:25:26] Speaker 08:
Am I just right in understanding the record that you can't point me to someone, anyone who has said that these are not likely to be carcinogenic?

[00:25:34] Speaker 05:
What EPA said in the record was that no scientific body had classified these pollutants as known, likely, or suspected carcinogens.

[00:25:42] Speaker 08:
That just says that nobody else has done the job either.

[00:25:44] Speaker 08:
I guess I'm, one more time.

[00:25:47] Speaker 08:
At any point did anybody say that any one of these three is not likely to be carcinogenic?

[00:25:54] Speaker 05:
EPA did not make a formal classification.

[00:25:57] Speaker 05:
What EPA pointed to was negative carcinogenicity data.

[00:26:03] Speaker 05:
So what EPA looked at was for each of these three pollutants, what were the studies that were available on cancer risk?

[00:26:10] Speaker 05:
And for each of the pollutants to varying degrees, there were studies that indicated that there was not a risk of cancer.

[00:26:19] Speaker 05:
There was not conclusive proof, which, as I think this court recognizes, is not something that is

[00:26:24] Speaker 05:
that is necessarily possible.

[00:26:25] Speaker 08:
So then why didn't EPA just make a fine and leave these are not likely to be carcinogenic?

[00:26:30] Speaker 05:
Because the weight of the evidence would not have been sufficient to support that judgment.

[00:26:35] Speaker 08:
Right.

[00:26:35] Speaker 08:
So didn't you just confess them that you don't have substantial evidence that these things are not carcinogenic?

[00:26:43] Speaker 05:
EPA believed in this rule that it had sufficient evidence for purposes of setting the health standard that the pollutants were not carcinogenic.

[00:26:52] Speaker 08:
But making that actual... You have substantial evidence?

[00:26:54] Speaker 08:
You just told me they couldn't make that determination because they didn't have enough evidence.

[00:26:58] Speaker 08:
I'm not understanding what the substantial evidence of non-carcinogenicity is that your own rule requires.

[00:27:06] Speaker 05:
Well, the rule doesn't specify what kind of determination EPA has to make in terms of the weight of the evidence.

[00:27:12] Speaker 08:
So what do you tell me?

[00:27:13] Speaker 08:
What is it then?

[00:27:14] Speaker 05:
Well, so there are these weight of the evidence classifications where EPA may group a pollutant after it,

[00:27:21] Speaker 05:
does a full toxicity assessment as either a known, likely suspected carcinogen, definitely not a carcinogen, not likely a carcinogen, or this middle category where there's not enough data to make a conclusive determination as to either carcinogenicity or non-carcinogenicity.

[00:27:39] Speaker 05:
And it's in that middle group that we find ourselves here.

[00:27:42] Speaker 02:
And in that case- Is being in the middle group good enough to qualify for this method of non-tech-based

[00:27:50] Speaker 02:
Analysis or decision making?

[00:27:52] Speaker 05:
Well, what EPA does in that particular case and what it did here is do a case-by-case evaluation to pull up the studies that other, that either EPA or other agencies have done.

[00:28:03] Speaker 02:
And when it gets through with those, it's mainly in the middle group, good enough?

[00:28:07] Speaker 05:
In this particular case, with respect to these three pollutants, EPA concluded yes.

[00:28:15] Speaker 08:
So normally when an agency has a regulation,

[00:28:20] Speaker 08:
And its plain text says it will do something, and it doesn't do it.

[00:28:24] Speaker 08:
It's not a sufficient answer to say, in this case, for this day, this ticket, good one day, one way only, we're not doing that.

[00:28:36] Speaker 05:
But there's no requirement that EPA conduct a full weight of the evidence assessment.

[00:28:43] Speaker 08:
There's a big world between those two options, right?

[00:28:46] Speaker 08:
I think all we're asking is if you've got, we're not, no one's really given us what your standard is.

[00:28:54] Speaker 08:
You said we don't, this is a, you didn't say we determined not likely using our test for what not likely is or that you're interpreting the language of your regulation a certain way.

[00:29:05] Speaker 08:
Your position is, as I understand it, that we don't know.

[00:29:09] Speaker 08:
We don't have enough evidence to decide this question, even though our regulation requires us to decide it.

[00:29:17] Speaker 05:
Well, the regulation requires EPA to decide, but not necessarily to affirmatively prove or to classify a pollutant into one of the different... Did you decide that this was not likely carcinogenic?

[00:29:30] Speaker 08:
Did you decide that?

[00:29:32] Speaker 05:
No, not in that exact language.

[00:29:35] Speaker 08:
Well, what language did you make that judgment in different language?

[00:29:40] Speaker 05:
EPA stated in the rule, based on the negative carcinogenicity and on the EPA's knowledge of how the different pollutants react in the body and their likely mechanism of action, the EPA could consider them to be threshold pollutants.

[00:29:53] Speaker 08:
That's not making the finding at all.

[00:29:56] Speaker 08:
That's just hopping right over the carcinogenicity determination.

[00:30:01] Speaker 05:
But that finding in the context of the rule comes at the conclusion of a pretty extensive consideration of studies of carcinogenicity that turned up no evidence of cancer risk.

[00:30:13] Speaker 02:
Is that going to carry the day for you if there's enough in the record that the EPA didn't make the decision, never made the decision on carcinogenicity?

[00:30:20] Speaker 02:
Is it good enough to say there is evidence in the record that would support a finding of non-carcinogenicity?

[00:30:29] Speaker 02:
Is that good enough?

[00:30:31] Speaker 05:
Well, there certainly is evidence in the record.

[00:30:33] Speaker 02:
Whoa, whoa, whoa.

[00:30:33] Speaker 02:
Did I ask you that?

[00:30:36] Speaker 02:
Did I ask you whether or not it was in there?

[00:30:37] Speaker 02:
I asked you whether having evidence in the record is good enough if there's not an expressed decision to that effect.

[00:30:44] Speaker 05:
Well, it's certainly our position, Your Honor, that EPA was not required to make the expressed decision.

[00:30:50] Speaker 02:
Well, doesn't that make us into a fact-finder then if the threshold required by the relative and the statute is to not be a carcinogen

[00:30:59] Speaker 02:
And the EPA has not made a decision.

[00:31:03] Speaker 02:
By what you tell us, the EPA has not made a decision on whether or not it's across.

[00:31:08] Speaker 02:
Aren't you asking us to be fact-founders then in order to get us to a firm?

[00:31:15] Speaker 05:
No, Your Honor, we would not ask the court to serve in that role.

[00:31:18] Speaker 02:
In that case, shouldn't we send it back and ask the EPA to make a decision?

[00:31:26] Speaker 05:
If the court

[00:31:28] Speaker 08:
Well, I thought you told me earlier that one of the reasons they didn't make the decision is they didn't think there was even enough, the evidence in this record was not sufficient enough to support that judgment, so they couldn't even just do it on this record is what you told me a few minutes ago, right?

[00:31:45] Speaker 05:
EPA believed that there was enough evidence of non-carcinogenicity to support threshold.

[00:31:52] Speaker 08:
I got that.

[00:31:52] Speaker 08:
You're just, we're at the predicate question that comes before that as to carcinogenicity.

[00:31:58] Speaker 08:
And you did tell me earlier that the reason they didn't make that specific determination is that while there were studies here, they didn't consider it to be sufficient to make that determination.

[00:32:10] Speaker 08:
I'm just asking what you told me earlier.

[00:32:11] Speaker 08:
If I misunderstood it, that's why I asked you about substantial evidence, because you said it wasn't sufficient for them to make that judgment.

[00:32:18] Speaker 05:
It wasn't sufficient for EPA to, in the context of this rulemaking, make a weight of the evidence classification.

[00:32:25] Speaker 05:
But that's not, that's a, typically a multi-year process that just, it serves a, certainly there's overlap, Your Honor, but the multi-year process of doing a weight of the evidence classification and a full toxicity assessment is just not something that EPA was contemplating in the scope of setting standards here.

[00:32:48] Speaker 02:
Can I ask, unless my colleagues have more on this, if you move to the question of the ample margin, where has the EPA told us what the margin is and why that's there?

[00:33:02] Speaker 05:
Sure.

[00:33:04] Speaker 05:
To answer briefly and then to elaborate, EPA did not quantify what an ample margin of safety would be either in this case or generally.

[00:33:14] Speaker 05:
EPA didn't have and wasn't obligated to provide that kind of global definition of an ample margin of safety, but what EPA did say in the rule

[00:33:24] Speaker 05:
is that it was expressly setting out to set the health-based emission limits at a level that at least assures that for the sources in the controlled category or subcategory, persons exposed to emissions of the pollutant would not experience the adverse health effects on which the threshold is based.

[00:33:42] Speaker 02:
The statute ever requires an ample margin of safety when established in the standard.

[00:33:48] Speaker 05:
That's correct.

[00:33:50] Speaker 02:
I didn't hear you tell me how the EPA had complied with the language of the statute.

[00:33:55] Speaker 02:
You may have told me the EPA did another good thing, but Congress decided what's the good thing they have to do.

[00:34:03] Speaker 05:
Congress decides, but at the same time, your honor, Congress did not define what an ample margin of safety would be quantified.

[00:34:11] Speaker 02:
Therefore, we would call that a Chevron question that Congress lets open for the agency to determine.

[00:34:15] Speaker 02:
That's exactly right.

[00:34:16] Speaker 02:
And in order to affirm on a Chevron analysis, we have to have the agency doing something that we can affirm.

[00:34:23] Speaker 02:
If we can't read the record and tell what EPA meant by an ample margin, what they understood the statute to mean by an ample margin, how can we denounce it, too?

[00:34:33] Speaker 05:
EPA did explain in the rule, however, that in the context of providing an ample margin of safety, it calculated the emission limits in such a way that people exposed to emissions would not experience the adverse health effects even if the emissions reached the threshold level.

[00:34:51] Speaker 08:
And in both the proposed and particularly in the... So it sounds like the threshold level

[00:34:58] Speaker 08:
won't harm them, but you're not, you have to have a, the statute requires a cushion.

[00:35:01] Speaker 05:
Right.

[00:35:02] Speaker 08:
So when it seems to me that in fact what you're saying is that there is no cushion because what all you found was that right at that threshold we don't think it's gonna happen.

[00:35:14] Speaker 05:
But the EPA did provide a cushion, Your Honor, and that's fully explained in the rule.

[00:35:19] Speaker 05:
EPA made several conservative assumptions in the context of its modeling in order to calculate the emissions limitations.

[00:35:28] Speaker 08:
Those conservative assumptions were all things that could happen in the world.

[00:35:33] Speaker 08:
You think they're unlikely, but they could all happen.

[00:35:37] Speaker 05:
That is a possibility.

[00:35:39] Speaker 08:
Okay, so if it's possible that people could be exposed right at this threshold level, then we're back to no cushion.

[00:35:48] Speaker 05:
But all of the assumptions taken together would generate a scenario in which EPA was comfortable with the

[00:35:56] Speaker 05:
on likelihood that exposure would in fact happen at the threshold level.

[00:36:01] Speaker 02:
That sounds like you're telling us how EPA maybe could have found an ample margin here, but it still doesn't apply.

[00:36:07] Speaker 02:
We can't use the argument of counsel to post-hoc to justify what the agency didn't find.

[00:36:13] Speaker 02:
And it doesn't appear that the agency made a finding of an ample margin of safety, does it?

[00:36:19] Speaker 05:
It did, though, Your Honor.

[00:36:20] Speaker 02:
And the response to comments is... I asked you to quote me where it did, and what you voted me

[00:36:39] Speaker 05:
I don't want to waste the Court's time by looking for the specific language.

[00:36:44] Speaker 05:
But what I can tell you, Your Honor, is that that discussion did come up specifically in the response to comments regarding the ample margin of safety.

[00:36:51] Speaker 02:
I do believe that it's... And that's where the agency responded in terms of the conservative assumptions.

[00:36:55] Speaker 05:
That's correct, Your Honor.

[00:36:57] Speaker 05:
And the agency believed that the conservative assumptions taken together in the modeling that it set up would provide that ample margin of safety.

[00:37:05] Speaker 05:
to require the agency to actually quantify, would it be a 90% likelihood, or would the exposures be 10% below?

[00:37:15] Speaker 05:
That simply goes beyond what's actually contained in the statute.

[00:37:20] Speaker 08:
Well, we have to have something to decide that it's ample, right?

[00:37:24] Speaker 08:
Ample has to have meaning.

[00:37:25] Speaker 08:
And unless we know, just to say, well, we were conservative, conservative doesn't mean it won't happen.

[00:37:34] Speaker 08:
It certainly means it could very well.

[00:37:35] Speaker 08:
It could happen.

[00:37:36] Speaker 05:
The conservative assumptions mean that EPA was not envisioning a scenario in which the exposure would happen at the threshold level.

[00:37:47] Speaker 05:
That was the purpose of the assumptions.

[00:37:48] Speaker 08:
Well, was it one of them?

[00:37:49] Speaker 08:
You didn't think that it would happen.

[00:37:51] Speaker 08:
That's the whole point of the thresholds, right?

[00:37:53] Speaker 08:
That's people will go up to the thresholds.

[00:37:56] Speaker 08:
That someone wouldn't be subjected to it for 24 hours a day.

[00:38:01] Speaker 08:
Was that one of them?

[00:38:03] Speaker 08:
Yes, that's right.

[00:38:03] Speaker 08:
Okay, so is that even rational?

[00:38:07] Speaker 08:
If somebody's in a nursing home nearby, they don't get out, they don't have a lot of mobility, they're gonna be there 24 hours a day.

[00:38:15] Speaker 08:
But that just doesn't seem like a very conservative one at all to think that people won't live in a certain area or be in a certain area for 24 hours a day.

[00:38:25] Speaker 05:
You're correct, Your Honor, that there is certainly a possibility.

[00:38:29] Speaker 08:
Not a possibility.

[00:38:30] Speaker 08:
This happens all the time every day.

[00:38:31] Speaker 08:
That's not even conservative, I don't think.

[00:38:35] Speaker 05:
I'm not aware of information on the record, Your Honor, that identifies specifically what the demographics are like at the particular receptors where emissions are coming from.

[00:38:45] Speaker 08:
That would be a problem.

[00:38:45] Speaker 08:
That wouldn't.

[00:38:46] Speaker 05:
So I can't speak to that with more specificity.

[00:38:53] Speaker 05:
If the court has no other questions on the health-based standards, can turn quickly to the question of the upper prediction limit.

[00:39:06] Speaker 08:
Why isn't the obvious thing to do when you have small data sets just to get more, either to get more information from the companies or to repeat tests more frequently so that you have more data instead of going good enough for government work?

[00:39:23] Speaker 05:
That is an option that's available to EPA, Your Honor.

[00:39:25] Speaker 05:
That's correct.

[00:39:26] Speaker 08:
Why wouldn't that be the reasonable thing to do, then, if you're trying to justify application of this UPL to small data sets?

[00:39:36] Speaker 05:
It would be one way to address the uncertainty that's inherent in the UPL at small sample sizes.

[00:39:42] Speaker 05:
But what EPA was able to do and what it fully explained in the limited data sets and memos in the record is how

[00:39:51] Speaker 05:
is how application of the UPL methodology to sample sizes as small as three does still allow a reasonable inference as to the average emission levels of the best performing source or sources.

[00:40:03] Speaker 08:
Did one of the tunnel counts involve only two data points?

[00:40:08] Speaker 05:
I believe one of the sources involved two data points, and for that one, EPA.

[00:40:13] Speaker 08:
And you agree that's too little.

[00:40:15] Speaker 05:
EPA determined that the UPL methodology was not appropriate for sample sizes that small.

[00:40:20] Speaker 05:
So in that particular case, EPA then selected the next best performing source and calculated the amount.

[00:40:26] Speaker 08:
But then that could have you not using the best performer instead of just doing repeat studies.

[00:40:32] Speaker 05:
Well, it might not be the best performer, but the second best one was the best one for which the administrator had available emissions and information.

[00:40:39] Speaker 08:
Instead of getting information from the one that is actually at issue,

[00:40:45] Speaker 08:
Shouldn't do that first?

[00:40:46] Speaker 08:
Doesn't the statute require that?

[00:40:49] Speaker 05:
Well, I don't believe the statute specifically sets out what level of data gathering is necessary in order for EPA to evaluate these floors.

[00:41:00] Speaker 05:
And that's something that the court has acknowledged as recently as in U.S.

[00:41:03] Speaker 05:
Sugar, that EPA has wide deference to determine when it has enough data in order to set the max standards.

[00:41:13] Speaker 05:
Here, because EPA was able to

[00:41:16] Speaker 05:
determined that the application of the UPL methodology to limited data sets allowed with enough certainty in most cases to reasonably infer the emissions levels of the best performing sources.

[00:41:28] Speaker 05:
Beyond that, EPA developed a case by case further evaluative process to make sure that the calculated emissions levels were reasonable.

[00:41:38] Speaker 05:
When EPA then applied that process to the UPL calculations in this particular rule,

[00:41:45] Speaker 05:
The outcome there was reasonable.

[00:41:51] Speaker 05:
If the court doesn't have further questions on the substantive issues, I'd be happy now to turn to the matter of abeyance.

[00:41:59] Speaker 05:
As the court knows from the letter that we submitted last Friday, EPA is now proceeding to reconsider the aspects of the rule that were challenged by the industry petitioners.

[00:42:10] Speaker 05:
The EPA has set out a time frame for that reconsideration process.

[00:42:16] Speaker 05:
And the agency's positions on these issues may change from the positions that were taken in our brief.

[00:42:22] Speaker 08:
Here's one thing I'm worried about, and that is this rule was supposed to be out in 2000, right?

[00:42:29] Speaker 08:
And, right?

[00:42:30] Speaker 08:
The statute required a rule by, or standards by 2000.

[00:42:33] Speaker 05:
That's right.

[00:42:34] Speaker 08:
And under your scenario, we're now gonna be 19 years past that.

[00:42:40] Speaker 08:
And I get, you know, in an ordinary course, the time frame might be adequate, but we're not in the ordinary course here.

[00:42:47] Speaker 08:
We are pushing two decades after the statutory deadline was set.

[00:42:56] Speaker 08:
Why is the time frame you proposed reasonable?

[00:42:58] Speaker 08:
And I get that you're only talking about two years out of that almost 20, but it's the same EPA for all 20 years.

[00:43:06] Speaker 08:
Why is that time frame acceptable under these circumstances?

[00:43:12] Speaker 08:
Don't you have some duty to act with exceptional urgency?

[00:43:17] Speaker 05:
EPA certainly aims to act as expeditiously as it can.

[00:43:21] Speaker 05:
The rulemaking process is going to involve review of statutory interpretations, policies, scientific data, potentially the submission of... Well, you've already presumably done some of that when you decided that their claims were valid.

[00:43:33] Speaker 08:
And in other cases, EPA has been able to move faster when it's...

[00:43:38] Speaker 08:
long past statutory limits far less aggressively than it has, egregiously than it has here.

[00:43:45] Speaker 08:
So I'm just really concerned about this time frame.

[00:43:49] Speaker 08:
We really are winking at an egregious violation of the statutory deadline.

[00:43:55] Speaker 05:
Understood, Your Honor.

[00:43:56] Speaker 05:
The agency believed that this was a reasonable amount of time, given the amount of information.

[00:44:00] Speaker 08:
Yeah, reasonable, and it might be reasonable.

[00:44:02] Speaker 08:
The question is whether it's expedition.

[00:44:04] Speaker 08:
Is that the best the agency can do?

[00:44:06] Speaker 05:
At the time the letter was issued, yes.

[00:44:10] Speaker 08:
That's the absolute level best the agency could do?

[00:44:13] Speaker 08:
That's what you're telling me?

[00:44:14] Speaker 06:
I don't know, Your Honor.

[00:44:16] Speaker 06:
That's why our order was very specific.

[00:44:20] Speaker 06:
We want to know.

[00:44:22] Speaker 06:
The industry has a lot of this information.

[00:44:24] Speaker 06:
The decision has already been made that some of or maybe all of the industry challenges are worth reconsidering, correct?

[00:44:35] Speaker 06:
That's right.

[00:44:36] Speaker 06:
So industry has the information you need.

[00:44:41] Speaker 06:
It's in its own interest to give that information to the agency.

[00:44:46] Speaker 06:
So this is not as though the agency is starting a square one, developing statutory interpretation analysis, developing data sets, developing scientific methods, et cetera.

[00:45:01] Speaker 06:
So that's why the two years doesn't seem like

[00:45:06] Speaker 06:
The agency is acting as expeditiously as possible.

[00:45:10] Speaker 06:
So the question is, why is all this time needed?

[00:45:18] Speaker 05:
Your Honor, I don't have more specific details for you about- Well, that's why we issued the order, all right?

[00:45:25] Speaker 06:
So that you and your colleagues would be on notice.

[00:45:30] Speaker 06:
that we do want to know specifically what new studies need to be done, what data don't you have.

[00:45:38] Speaker 06:
Now, we're not trying to run the agency, but it seems that in this particular case, looking at the allegations that are made in the industry brief, why is two more years required?

[00:45:57] Speaker 05:
I apologize, Your Honor, that I'm not going to be able to walk you through with more detail today.

[00:46:02] Speaker 06:
So who can?

[00:46:03] Speaker 06:
Is somebody at council table in a position to provide us this information?

[00:46:07] Speaker 06:
Can you introduce them at the beginning?

[00:46:09] Speaker 06:
There's somebody here from EPA.

[00:46:11] Speaker 05:
I don't think that EPA is in a position today to be able to walk through what specific new information it plans to either solicit or receive.

[00:46:20] Speaker 06:
How did you know you could do it in two years?

[00:46:26] Speaker 05:
I don't know, Your Honor, what specifically went into that calculation.

[00:46:30] Speaker 06:
How could you tell the court then that the agency had a duty to act as expeditiously as possible?

[00:46:39] Speaker 05:
Our understanding was that EPA needed that amount of time in order to assess the large.

[00:46:44] Speaker 06:
So can EPA tell us why?

[00:46:46] Speaker 05:
We would be happy to submit something additional as quickly as possible.

[00:46:52] Speaker 06:
Well, we're trying to move this case forward.

[00:46:55] Speaker 06:
And we have the letter from the administrator.

[00:46:59] Speaker 06:
And we have the industry allegations, not allegations, contentions.

[00:47:07] Speaker 06:
We have the administrator's letter saying these are serious concerns that need to be addressed.

[00:47:14] Speaker 06:
So what did you think our order meant when we said be prepared to address with specificity

[00:47:22] Speaker 06:
whether an additional period of abeyance is appropriate.

[00:47:30] Speaker 06:
Specificity.

[00:47:33] Speaker 05:
I apologize, Your Honor, that I'm not able to provide specific information about a reconsideration process that EPA is only just beginning now.

[00:47:46] Speaker 08:
What do you mean only just beginning?

[00:47:47] Speaker 08:
You told us in the letter that you have apparently already studied

[00:47:53] Speaker 08:
the concerns raised by industry and made a determination that they're valid and require revisiting the rule.

[00:48:00] Speaker 08:
So how much process has already, how much process went into that?

[00:48:04] Speaker 08:
What's already been done?

[00:48:05] Speaker 05:
I believe that EPA reviewed the issues that the industry petitioners raised.

[00:48:10] Speaker 08:
Reviewed the issues or reviewed evidence?

[00:48:13] Speaker 08:
The issues don't require doing anything more than reading the brief.

[00:48:16] Speaker 05:
I believe that EPA reviewed the issues and determined that it should begin the formal reconsideration process in the school.

[00:48:21] Speaker 08:
Did it review any evidence yet?

[00:48:23] Speaker 05:
I don't know, Your Honor.

[00:48:25] Speaker 08:
So review the issues.

[00:48:28] Speaker 08:
So you haven't done any legwork, but determined that there's a change has to be made.

[00:48:32] Speaker 08:
I would have thought some of the homework would have been done when you decide that a change needs to be made, that they're valid enough to require changing the rules.

[00:48:39] Speaker 05:
I don't have the details about what specifically was before the administrator and others at EPA when the decision was made to initiate reconsideration here.

[00:48:51] Speaker 06:
I mean, your brief was filed April 28th of this year.

[00:48:55] Speaker 06:
So somebody's been looking at these issues in order to file that brief.

[00:49:03] Speaker 05:
Yes, the final briefs were filed in April.

[00:49:05] Speaker 05:
The proof briefs had been filed in January.

[00:49:10] Speaker 06:
did not notify the court in April that we should not proceed on the basis of the brief that was filed later in April.

[00:49:27] Speaker 05:
Your Honor, we notified the court as soon as EPA decided that it would give these issues further review.

[00:49:33] Speaker 05:
And again, when EPA decided that it would begin reconsideration proceedings.

[00:49:38] Speaker 05:
We regret that that decision was not made sooner.

[00:49:42] Speaker 05:
We understand.

[00:49:42] Speaker 06:
No, I understand entirely that a new administration needs time to figure out what it wants to do.

[00:49:49] Speaker 06:
It is now November 9.

[00:49:57] Speaker 06:
industry has been knocking on EPA's doors to let it know it wants done.

[00:50:06] Speaker 06:
And here on November 9th, we still have no information.

[00:50:21] Speaker 06:
And you're representing the agency.

[00:50:26] Speaker 06:
And you're saying counsel from EPA cannot provide any information?

[00:50:31] Speaker 05:
I'm not aware of more specific information that counsel from EPA would be able to provide today.

[00:50:37] Speaker 06:
Can counsel from EPA make that representation?

[00:50:44] Speaker 01:
I'm Scott Jordan from the Office of General Counsel.

[00:50:48] Speaker 01:
I can clarify a couple things, maybe a bit more information, but I'm not sure I'm ultimately going to satisfy everything you've asked.

[00:50:54] Speaker 01:
A couple things to clarify.

[00:50:56] Speaker 01:
So October 1st, the Administrator decided that we would be reviewing this rule on all the issues.

[00:51:01] Speaker 01:
It's October 1st, that was when that letter came out.

[00:51:03] Speaker 08:
And what happened?

[00:51:05] Speaker 08:
that led to that decision October 1st.

[00:51:08] Speaker 08:
All we told here was they looked at the issues.

[00:51:10] Speaker 08:
I assume that what you're going to tell me when they decided something was valid, they've actually already done some factual study and got new information or additional information to decide that.

[00:51:23] Speaker 01:
I was not personally involved in those briefings.

[00:51:24] Speaker 01:
I do know that there was a series of briefings up through the management chain that ended with the administrator and the decision that we saw in the letter.

[00:51:33] Speaker 01:
And following that, that review then began or continued.

[00:51:39] Speaker 01:
By a week or so ago, we had the initial decision with respect to the environmental group issues that there would be no further review of those.

[00:51:45] Speaker 08:
I'm just trying to understand what the letter said.

[00:51:46] Speaker 08:
It doesn't just say we're looking at it and we want time to look at it.

[00:51:49] Speaker 08:
It says we've looked and we've made a determination

[00:51:53] Speaker 08:
that these claims are valid, and we're going to have to.

[00:51:56] Speaker 01:
That's what I want to clarify, because I think what we said, the letter said that after initial review, we decided that we needed to do further reconsideration.

[00:52:04] Speaker 01:
We have not reached the point where we've concluded that any of these issues are valid and will necessarily result in a change.

[00:52:10] Speaker 02:
So what's that initial?

[00:52:11] Speaker 02:
They're not confessing error.

[00:52:13] Speaker 02:
I know agencies don't generally do that, but you're not doing that.

[00:52:16] Speaker 02:
We've not reached a point at which is there anything if we decided the case on the present record, is there anything that would prevent the agency administration from going ahead and reconsidering anyway?

[00:52:26] Speaker 02:
When you still be able to do that.

[00:52:28] Speaker 01:
Right, Your Honor.

[00:52:29] Speaker 02:
But as we've argued, we deny your motion, we haven't taken away from you the ability to do exactly what it is you want to do.

[00:52:35] Speaker 02:
We simply put something in place

[00:52:41] Speaker 01:
we are and i'll make one point and i may handle and this back to department justice attorney point we are making is that you know this is under review at this point it would be speculative to decide to predict anything about how the rule would be changed other than that it may be changed and this is a point where i'll hand it back to you what i'm saying is that if we deny your motion it still might be changed you can go back and have a reconsider another rulemaking

[00:53:09] Speaker 02:
agencies can do that.

[00:53:11] Speaker 02:
They're not locked in for the entire future of mankind.

[00:53:15] Speaker 02:
I don't see what we're taking away from you if we deny your motion.

[00:53:19] Speaker 01:
Well, guys, I would just make the suggestion that, as we've argued in our motion, that it would be more in the interest of the Court's resources and judicial economy not to be reviewing a rule that's under review.

[00:53:35] Speaker 06:
Could I ask counsel one other question, if I may?

[00:53:39] Speaker 06:
In terms of our concern about the length of time, who within the agency is the unit or division that would be able to provide that type of information?

[00:53:53] Speaker 06:
Well, I think ultimately... I mean, I know the administrator and the deputy, but in terms of giving those high officials

[00:54:04] Speaker 06:
the information they need to make a representation to the court.

[00:54:09] Speaker 06:
Who within the department?

[00:54:12] Speaker 06:
Do we know?

[00:54:13] Speaker 01:
Well, what I do know is that the letter announced the time frame that came from the administrator.

[00:54:19] Speaker 01:
The question is, is it possible to do it in shorter time?

[00:54:22] Speaker 01:
I mean, that's certainly an issue we could take back.

[00:54:25] Speaker 01:
But again, the agency has to balance the many different things it has to do.

[00:54:29] Speaker 01:
One thing I will point out, which may have been overlooked here, is this isn't a question of putting a rule on the books two years from now.

[00:54:36] Speaker 01:
There's a rule on the books.

[00:54:38] Speaker 01:
But what question is, is whether we're going to be revising it in some way.

[00:54:49] Speaker 02:
That's correct.

[00:54:51] Speaker 01:
Even after court's decision, we would be obviously subject to whatever decision you make and comply with that, but that would not prevent us from further reconsidering these issues.

[00:55:04] Speaker 06:
All right, anything further?

[00:55:06] Speaker 06:
No, thank you, Your Honor.

[00:55:07] Speaker 06:
Thank you.

[00:55:16] Speaker 06:
Yes.

[00:55:18] Speaker 06:
Council for the Industry.

[00:55:23] Speaker 06:
Perhaps you can provide some information.

[00:55:27] Speaker 07:
the court.

[00:55:28] Speaker 07:
I think we should dive right into talking about the advance issue.

[00:55:32] Speaker 07:
So the first thing I want to point out, Judge Mullett, you were concerned about, you know, this rule being in place.

[00:55:38] Speaker 07:
There's two important things.

[00:55:39] Speaker 07:
One is that the compliance date is December of 2018.

[00:55:41] Speaker 07:
Nothing that has happened so far has changed that deadline.

[00:55:45] Speaker 06:
Industry has... But as a practical matter, we hear all the time from industry.

[00:55:49] Speaker 06:
It needs time.

[00:55:51] Speaker 06:
Correct.

[00:55:53] Speaker 06:
to plan, et cetera.

[00:55:56] Speaker 06:
So December is right around the corner.

[00:55:57] Speaker 06:
Yes, we're very concerned about that.

[00:56:00] Speaker 07:
Excuse me?

[00:56:02] Speaker 06:
I think we were saying the same thing.

[00:56:04] Speaker 07:
Yes.

[00:56:04] Speaker 07:
Yes, we are with you that we have a vested interest in this going as quickly as possible.

[00:56:12] Speaker 08:
So why are you on a decision now on your claims?

[00:56:14] Speaker 08:
That'll give you a year to get ramped up in case they don't do anything.

[00:56:18] Speaker 08:
And next year, because next year, all they're not even promising is saying they hope to have a proposed rule, revised rule by next fall, which won't eliminate the existing obligations.

[00:56:33] Speaker 08:
It'll be due right around the same time.

[00:56:39] Speaker 08:
I don't understand.

[00:56:40] Speaker 08:
Are you planning to get a stay?

[00:56:41] Speaker 08:
Has the agency given you a stay as long as they're revising this?

[00:56:44] Speaker 08:
They have not.

[00:56:45] Speaker 08:
Well, I mean, you all agreed to this.

[00:56:46] Speaker 08:
So I'm trying to understand how to reconcile your statements about being so acutely concerned about legal deadlines that are pending out there and your willingness for this just to stretch out.

[00:56:59] Speaker 07:
Well, we believe that the agency here should be making the decision in the first instance.

[00:57:04] Speaker 07:
Judge Santel, you'd made the point, you know, well, if we issue a decision, that won't prevent the agency from revising the rulemaking.

[00:57:11] Speaker 07:
That's true.

[00:57:13] Speaker 07:
And also, I think that there's an important consideration

[00:57:16] Speaker 07:
it wouldn't be in the interest of this court or in the parties here to have a case that's ultimately mooted.

[00:57:23] Speaker 07:
You know, a lot of these issues here are Chevron 2 issues, right?

[00:57:27] Speaker 08:
And so if the agency changes their mind... Just to be clear, it's not gonna be mooted because under their own time frame, our decision ain't gonna take two years.

[00:57:38] Speaker 07:
But the time for appeal, Your Honor, if the time for appeal has not yet run.

[00:57:43] Speaker 07:
From our decision?

[00:57:44] Speaker 07:
Correct.

[00:57:45] Speaker 07:
There is case law, I'm happy to provide to Your Honor, that if the facts, if there's no longer a case or controversy at the time.

[00:57:54] Speaker 08:
No, I understand that, but we're talking at least two years.

[00:57:59] Speaker 08:
It doesn't take two years for us to rule in your 90 days on cert petition time to run.

[00:58:05] Speaker 07:
Well, I mean, those are the facts that would lay out.

[00:58:08] Speaker 07:
I mean, that's nothing that anyone here can speak definitively to.

[00:58:14] Speaker 06:
Looking at the issues that industry has raised in its brief, are you in a position to explain to the court why two years is needed?

[00:58:26] Speaker 07:
I don't know specifically what the agency has in mind.

[00:58:29] Speaker 07:
Role-making takes a long time.

[00:58:31] Speaker 07:
Two years actually isn't very long when you look at, you know, OMB review, proposed final rule, notice and comment, response to comments.

[00:58:39] Speaker 06:
So what new studies does industry think need to be conducted?

[00:58:45] Speaker 07:
I think that for the second issue, I think that we would want EPA to reassess the data, include more data.

[00:58:53] Speaker 07:
I don't know that a lot of new studies really need to be done.

[00:58:56] Speaker 07:
A lot of this has to do with their legal interpretations and the way that they evaluated existing data.

[00:59:08] Speaker 08:
Is there any reason you guys couldn't give them whatever information?

[00:59:11] Speaker 08:
Have you already given them whatever information they need from your perspective?

[00:59:15] Speaker 08:
As far as I'm aware, I mean, we're very happy to, I mean, as you've already have, from the prior proceeding, there's already a full agency record, and I assume during this months-long process that led to this October 1 letter, you may have provided them additional information.

[00:59:32] Speaker 08:
But I take it there's nothing else that industry thinks it needs to provide for a decision to be made.

[00:59:37] Speaker 07:
Right, right.

[00:59:38] Speaker 07:
And this court's function is to decide cases or controversies between parties seeking their assistance.

[00:59:45] Speaker 06:
Did you hear Judge Millett's question to you?

[00:59:48] Speaker 06:
I want to be sure I understand your answer to it.

[00:59:53] Speaker 07:
Her last question, as to whether we provided all relevant information?

[00:59:58] Speaker 07:
Yes.

[00:59:59] Speaker 07:
Yes, I did hear it.

[01:00:01] Speaker 07:
I'm not aware that there are important studies or additional factual findings that need to be made.

[01:00:07] Speaker 06:
And you saw our order asking for specificity.

[01:00:11] Speaker 07:
Right.

[01:00:12] Speaker 06:
So your representation on behalf of your clients is that the agency has all the data it needs, that what we're talking about is either statutory interpretation or we're talking about interpretation of data it already has.

[01:00:26] Speaker 07:
Right, exactly.

[01:00:27] Speaker 07:
And it's just a question of the agency's bandwidth, which is something we don't have any control over.

[01:00:32] Speaker 06:
The agency's bandwidth meaning what?

[01:00:37] Speaker 06:
number of employees will dedicate to this task.

[01:00:41] Speaker 07:
Right, in addition to its other obligations, it's the other deadlines it's under.

[01:00:47] Speaker 07:
We will do everything we can to

[01:00:50] Speaker 07:
assist the agency to do this as quickly as possible and at a certain point we can't do anything more.

[01:00:56] Speaker 08:
I'm very confused about your agreement to a deadline that comes a year after, or not a deadline, a proposed final rule that comes a year after, almost a year after your compliance deadline under the existing rule.

[01:01:10] Speaker 08:
Why aren't you

[01:01:12] Speaker 08:
demanding that they act in time for you not to have to expend an enormous amount of money complying with the existing rule.

[01:01:21] Speaker 08:
I don't understand that position at all, that aspect of your position at all.

[01:01:25] Speaker 07:
Well, I think that we can, we would prefer to find a way to work with the agency cooperatively and get this done as quickly and as well as possible.

[01:01:33] Speaker 08:
Well, this is going to be a rule-making process.

[01:01:34] Speaker 08:
It's not just going to be, I hope it's not going to be just industry.

[01:01:37] Speaker 08:
Of course not.

[01:01:39] Speaker 08:
So, you should want a time frame for this transparent public process that is about a quarter of the time that they've proposed.

[01:01:48] Speaker 07:
Well, I think, Your Honor, at this point, we're happy that they are opening the reconsideration process.

[01:01:55] Speaker 07:
But in the meantime, you're still planning to come in compliance with the existing rule by December 2018.

[01:01:59] Speaker 07:
Yes, that is the law.

[01:02:02] Speaker 02:
Is there anything that would prevent us from, legally, from deciding to deny your motion and deciding this case on the brief with respect to your petitions?

[01:02:12] Speaker 07:
Well, I think that it would be

[01:02:15] Speaker 07:
disadvantageous for you to decide it without the opportunity for oral argument.

[01:02:19] Speaker 02:
What did you understand my question today?

[01:02:23] Speaker 07:
I thought you were asking.

[01:02:23] Speaker 07:
Is there anything preventing us from deciding our issues on the briefs?

[01:02:27] Speaker 02:
That's what I was asking.

[01:02:29] Speaker 02:
Did you give me a yes or no to that?

[01:02:30] Speaker 07:
I did not.

[01:02:32] Speaker 02:
Will you give me a yes or no to that?

[01:02:35] Speaker 07:
I don't think that anything would prevent you.

[01:02:36] Speaker 07:
I mean, oral argument isn't technically required, but I think that it would be in your interest.

[01:02:44] Speaker 07:
Would you like to speak more about the abeyance or can I speak briefly about it?

[01:02:52] Speaker 06:
Yes, let me just be clear though.

[01:02:55] Speaker 06:
What did you have in mind addressing other than abeyance?

[01:02:59] Speaker 07:
I wanted to speak about the environmental petitioners issues.

[01:03:03] Speaker 06:
Is there anything new that is not in your brief?

[01:03:08] Speaker 07:
Well, I wanted to clarify something.

[01:03:11] Speaker 06:
What did you want to clarify?

[01:03:13] Speaker 07:
Judge Millett, you keep speaking about EPA's regulation.

[01:03:18] Speaker 07:
It's my understanding that there's not a specific regulation setting out how to do the 112D4 analysis.

[01:03:26] Speaker 07:
You have statements in the preamble.

[01:03:29] Speaker 06:
I don't think that's the basis on which the discussion proceeded.

[01:03:34] Speaker 06:
Anything further?

[01:03:39] Speaker 07:
I guess I would just like to leave you all that safe doesn't mean no risk, and that with threshold pollutants, finding out that there's a very low probability that that threshold would ever be reached is a margin of safety, because below the threshold would be no effects, and that is quite exceptional.

[01:04:03] Speaker 06:
Well, you're familiar with January.

[01:04:07] Speaker 06:
Mm-hmm.

[01:04:07] Speaker 06:
All right.

[01:04:08] Speaker 07:
Thank you.

[01:04:31] Speaker 06:
All right, Council, we'll give you a minute or two here.

[01:04:33] Speaker 03:
Thanks, Your Honor.

[01:04:35] Speaker 03:
I don't know if the Court has any questions for me on the subject of abeyance, but if not, I really only wanted to address one point on the merits.

[01:04:43] Speaker 06:
All right.

[01:04:45] Speaker 03:
That point goes to the upper prediction limit.

[01:04:47] Speaker 03:
And I think counsel may have been understood, it may have sounded like she was saying that EPA had confidence in the upper prediction limit formula for small data sets and was using it case by case evaluation to confirm that.

[01:05:02] Speaker 03:
That's not what the record indicates.

[01:05:04] Speaker 03:
EPA doesn't claim that it knows that formula will generate rational results in any instance.

[01:05:13] Speaker 03:
What it has is 34 different standards based on a formula it knows to be flawed.

[01:05:19] Speaker 03:
And that formula is the only way it has in measuring their actual emissions.

[01:05:22] Speaker 03:
So because the formula doesn't work, it has no way of checking its analysis.

[01:05:27] Speaker 03:
It still says it did this case-by-case analysis and somehow eyeballed the results.

[01:05:32] Speaker 03:
And somehow that eyeballing makes the results reasonable.

[01:05:35] Speaker 03:
That's the same kind of assertion that EPA has made in so many prior air toxics cases where it offers assertions that its results are reasonable rather than demonstrating it.

[01:05:44] Speaker 03:
And I can just give a quick example.

[01:05:46] Speaker 03:
So there are 29 floors that EPA didn't change.

[01:05:49] Speaker 03:
And there's nothing in the record that shows how any one of those floors actually reflects what the best sources achieve.

[01:05:55] Speaker 03:
There's just EPA's statement that it thinks its approach to eyeballing the results and checking them is reasonable.

[01:06:02] Speaker 03:
Thank you.

[01:06:06] Speaker 06:
We will take the cases under advice.