## Facts

- The Clean Air Act establishes the Prevention of Significant Deterioration (PSD) program to protect air quality in attainment and unclassifiable areas, including national parks and similar areas.
- EPA promulgated PSD regulations for nitrogen oxides (NOx) in 1988; the D.C. Circuit remanded those regulations in 1990 for further agency action.
- In response, EPA issued a new final rule in 2005 governing PSD treatment of NOx, codified in 40 C.F.R. §§ 51.166 and 52.21.
- Environmental Defense petitioned for review of the 2005 rule, arguing EPA’s revisions weakened or misconstrued statutory PSD protections and failed to comply with the 1990 remand.
- The case came to the D.C. Circuit on direct review of EPA’s final rule under the Clean Air Act’s judicial-review provisions.

## Issues

1. Whether EPA’s 2005 PSD NOx rule complied with the D.C. Circuit’s prior remand instructions concerning NOx PSD regulations.
2. Whether EPA reasonably interpreted the Clean Air Act’s PSD provisions in regulating NOx, including PSD applicability criteria and related thresholds or increment mechanisms.
3. Whether the 2005 rule was arbitrary, capricious, or otherwise contrary to law under the applicable administrative-law standard of review.

## Decision

- The court denied the petition for review and upheld EPA’s 2005 PSD NOx rule.
- The court found EPA followed the court’s 1990 remand directives concerning the prior NOx PSD regulations.
- The court concluded EPA’s approach reflected a reasonable interpretation of the Clean Air Act’s PSD provisions and was entitled to judicial deference.
- A separate concurrence agreed with denying the petition but provided additional reasoning without altering the judgment.

## Legal Principles

- On direct review of a final EPA rule under the Clean Air Act, the court sets aside agency action only if it is arbitrary, capricious, or contrary to law.
- When statutory PSD provisions leave interpretive discretion, a reasonable agency construction receives deference.
- An agency rulemaking issued on remand will be upheld when the agency reasonably addresses the court-identified deficiencies and provides a reasoned explanation grounded in the administrative record, including technical judgments within the agency’s competence.

## Conclusion

The D.C. Circuit upheld EPA’s 2005 PSD regulations for NOx because EPA complied with the court’s earlier remand and reasonably implemented the Clean Air Act’s PSD scheme, warranting deference and resulting in denial of Environmental Defense’s petition for review.


Environmental Defense v. EPA, 489 F.3d 1320 (D.C. Cir. 2007)