Honeywell International, Inc. v. Environmental Protection Agency

705 F.3d 470, 403 U.S. App. D.C. 330, 43 Envtl. L. Rep. (Envtl. Law Inst.) 20020, 2013 WL 216025, 76 ERC (BNA) 1125, 2013 U.S. App. LEXIS 1406
CourtCourt of Appeals for the D.C. Circuit
DecidedJanuary 22, 2013
Docket10-1347, 10-1348, 10-1349, 10-1350
StatusPublished
Cited by9 cases

This text of 705 F.3d 470 (Honeywell International, Inc. v. Environmental Protection Agency) is published on Counsel Stack Legal Research, covering Court of Appeals for the D.C. Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Honeywell International, Inc. v. Environmental Protection Agency, 705 F.3d 470, 403 U.S. App. D.C. 330, 43 Envtl. L. Rep. (Envtl. Law Inst.) 20020, 2013 WL 216025, 76 ERC (BNA) 1125, 2013 U.S. App. LEXIS 1406 (D.C. Cir. 2013).

Opinions

Opinion for the Court filed by Circuit Judge KAVANAUGH, with whom Circuit Judge ROGERS joins.

Dissenting opinion filed by Circuit Judge BROWN.

KAVANAUGH, Circuit Judge:

Under the Clean Air Act, the Environmental Protection Agency administers a cap-and-trade program regulating the production and consumption of hydrochloro-fluorocarbons, a class of ozone-depleting pollutants. (We frown on excessive use of acronyms, but in a case involving a 24-letter word, we think it appropriate to use HCFCs for hydrochlorofluorocarbons.) This cap-and-trade program entails overall caps on production and consumption of various HCFCs for each year, as well as EPA-administered baseline allowances of HCFCs for each participating company. Companies are then permitted to transfer their allowances, subject to certain statutory and regulatory restrictions.

Honeywell and DuPont, whom we refer to collectively as Honeywell, complain that certain 2008 transfers made by their competitors Arkema and Solvay were deemed to permanently increase those competitors’ future baseline allowances of HCFC-22. Because there is an overall cap on HCFC-22 production, this is a zero-sum system: The increased allowances to Arkema and Solvay in turn reduced Honeywell’s market share and allowances of HCFC-22. The problem for Honeywell here is that this Court concluded in Arkema Inc. v. EPA that those permanent transfers were valid under the Clean Air Act. 618 F.3d 1, 6-9 (D.C.Cir.2010). Honeywell believes that Arkema was incorrectly decided. Absent en banc review, we must adhere to circuit precedent. And because Honeywell’s other challenges to the 2008 transfers are meritless, we deny the petitions for review.

I

The Clean Air Act gradually phases out all HCFCs over five regulatory periods spanning to 2030. See 42 U.S.C. §§ 7671d(c), 7671e(b). In the meantime, the Act regulates HCFCs through a cap- and-trade program administered by the Environmental Protection Agency. There are overall caps on production and consumption of each HCFC for each year. And for each regulatory period, EPA allots a baseline allowance for each regulated HCFC to each company participating in the cap-and-trade program. EPA has always set baseline allowances by considering historical usage of HCFCs by participating companies.

The Clean Air Act permits companies to transfer their allowances. Two kinds of transfers are permitted—interpollutant transfers and intercompany transfers. In an interpollutant transfer, a company swaps its allowance of a particular HCFC for a particular year for its allowance of a different HCFC for the same year. See 42 U.S.C. § 7671f(b)(l). In an intercompany transfer, two companies swap allowances of the same HCFC. See 42 U.S.C. § 7671f(e). Intercompany transfers may permanently affect the trading companies’ baseline allowances of that HCFC, with one company having a higher allowance [472]*472and one having a lower allowance. 76 Fed.Reg. 47,451, 47,459-60 (Aug. 5, 2011).

In 2008, EPA approved the interpollu-tant transfers at issue in this case. Arke-ma made transfers swapping its allowance of HCFC-142b for an increase in its allowance of HCFC-22. Solvay did the same.

In 2009, EPA set baseline allowances for the 2010-2014 regulatory period. EPA did not recognize the 2008 interpollutant transfers by Arkema and Solvay in setting their baseline allowances for HCFC-22. 74 Fed.Reg. 66,412, 66,419 (Dec. 15, 2009). Arkema and Solvay then challenged EPA’s rule. In Arkema Inc. v. EPA this Court held that EPA had to honor the transactions EPA previously approved and had to recognize the 2008 transfers in setting Arkema and Solvay’s baseline allowances for HCFC-22 for 2010-2014, at least so long as EPA continued to set baselines by considering the historical usage of HCFCs by participating companies. 618 F.3d 1, 6-9 (D.C.Cir.2010).

Following Arkema, EPA incorporated the 2008 transfers into the baseline allowances of HCFC-22 for 2010-2014, thereby reducing Honeywell’s HCFC-22 market share and allowances. 76 Fed.Reg. at 47,-459. Honeywell filed a petition for review in this Court, challenging the 2008 transfers that formed the basis for the new baseline HCFC-22 allowances for 2010-2014. EPA, along with intervenors Arke-ma and Solvay, respond that Honeywell lacks standing; that Honeywell’s petitions are untimely; and that our decision in Arkema forecloses Honeywell’s claims. We conclude that we have jurisdiction and that the petitions are timely. But based on Arkema, we deny the petitions on the merits.

II

The initial question is whether Honeywell has standing to challenge EPA’s approval of the 2008 interpollutant transfers by Arkema and Solvay and the transfers’ corresponding effect on the baseline allowances for the 2010-2014 period. To establish standing, Honeywell must show a cognizable injury in fact that is concrete and particularized and actual or imminent; that its injuries are fairly traceable to EPA’s allegedly unlawful conduct; and that a favorable ruling will likely remedy its injuries. Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992).

Honeywell has suffered an injury in fact. The decrease in Honeywell’s market share and in allowances of HCFC-22 is a concrete and particularized injury. Honeywell’s injury is fairly traceable to the now-permanent 2008 interpollutant transfers by Arkema and Solvay because the injury would not have occurred but for the 2008 transfers. See Duke Power Co. v. Carolina Environmental Study Group, Inc., 438 U.S. 59, 74-75, 98 S.Ct. 2620, 57 L.Ed.2d 595 (1978); LaRoque v. Holder, 650 F.3d 777, 789 (D.C.Cir.2011); Community Nutrition Institute v. Block, 698 F.2d 1239, 1247 (D.C.Cir.1983) (“A plaintiff need only make a reasonable showing that ‘but for’ defendant’s action the alleged injury would not have occurred.”). And because Honeywell’s market share and allowances of HCFC-22 would not have decreased but for the now-permanent 2008 transfers, invalidating the 2008 transfers would remedy Honeywell’s injuries. Honeywell has therefore satisfied all of the requirements of standing.

EPA relatedly suggests that Honeywell’s challenge is untimely. We disagree. Although many challenges to EPA action under the Clean Air Act must be filed within 60 days from the date that the notice appears in the Federal Register, challenges “based solely on grounds arising after” the expiration of the 60-day period are permitted so long as they are [473]*473filed within 60 days of the new grounds. 42 U.S.C.

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705 F.3d 470, 403 U.S. App. D.C. 330, 43 Envtl. L. Rep. (Envtl. Law Inst.) 20020, 2013 WL 216025, 76 ERC (BNA) 1125, 2013 U.S. App. LEXIS 1406, Counsel Stack Legal Research, https://law.counselstack.com/opinion/honeywell-international-inc-v-environmental-protection-agency-cadc-2013.