## Facts

- The Environmental Protection Agency (EPA) promulgated New Source Performance Standards (NSPS) for new coal-fired steam electric generating units under Clean Air Act (CAA) § 111, as amended in 1977, after notice-and-comment rulemaking.
- The NSPS set sulfur dioxide (SO₂) limits requiring no more than 1.2 lbs./million BTU and generally 90% sulfur removal.
- The rule included a variable (“sliding scale”) compliance option: units emitting below 0.6 lbs./million BTU were required to remove only 70% of sulfur.
- The NSPS also imposed a particulate-matter emission limit of 0.03 lbs./million BTU.
- Environmental organizations and some state entities challenged aspects of the standards as insufficiently stringent and procedurally flawed; utilities and coal interests challenged the standards as beyond statutory authority, not achievable, and procedurally defective.
- Petitioners also alleged improper ex parte contacts between EPA and the White House and members of Congress during the rulemaking, including some communications not placed in the public docket.

## Issues

1. Whether CAA § 111 authorizes EPA to adopt a variable or sliding-scale SO₂ standard rather than a single uniform percentage-reduction requirement.
2. Whether EPA reasonably found that the 90% SO₂ removal requirement and the particulate limit were achievable using “adequately demonstrated” control technology, considering cost and energy impacts.
3. Whether EPA provided adequate notice and opportunity to comment given late-emerging reliance on dry flue-gas desulfurization (dry scrubbing) and coal washing.
4. Whether ex parte communications with the White House, Congress, and regulated parties, including incomplete docketing, required invalidation of the rule.

## Decision

- The court largely upheld the NSPS and denied the petitions for review.
- The court held EPA had statutory authority under CAA § 111 to adopt the sliding-scale SO₂ approach and reasonably explained its choice.
- The court upheld the 90% SO₂ removal requirement and the particulate limit as supported by the record and consistent with § 111’s technology-forcing character.
- The court found no notice-and-comment violation because the final rule was a logical outgrowth of the proposal and the record gave interested parties a fair opportunity to comment on dry scrubbing and coal washing.
- The court declined to invalidate the rule based on ex parte contacts, while emphasizing that record materials and communications that affect the basis of the rule should be placed in the docket; any docketing lapses were not shown to be prejudicial.

## Legal Principles

- CAA § 111 affords EPA discretion to define “standards of performance,” including variable standards, if grounded in the “best system of emission reduction” adequately demonstrated and explained with reference to statutory factors (cost, non-air impacts, and energy).
- Section 111 permits technology-forcing standards: EPA may set limits that require projected technological improvement, so long as the agency reasonably forecasts achievability based on record evidence and provides a reasoned explanation.
- For numerical emission limits, courts review whether EPA identified a control technology adequately demonstrated and whether the limit reasonably reflects expected performance under anticipated operating conditions.
- In informal rulemaking, policy input from the President and other elected officials is not per se improper; the constraint is that the final rule must be justified on the public record and through reasoned decisionmaking.
- To preserve fairness and reviewability, significant factual materials or arguments that influence the basis of a rule should be included in the rulemaking docket; nondocketed communications warrant relief only upon a showing of prejudice.

## Conclusion

The D.C. Circuit sustained EPA’s coal-fired power plant NSPS, approving a sliding-scale SO₂ standard and stringent, technology-forcing SO₂ and particulate limits, and held that high-level political contacts during informal rulemaking do not invalidate a rule absent prejudice where the agency’s final decision is adequately supported and explained on the administrative record.


Sierra Club v. Costle, 657 F.2d 298 (D.C. Cir. 1981)