## Facts

- EPA, acting under Clean Air Act § 211, issued a final rule tightening lead limits for gasoline produced by “small refineries” and narrowing eligibility for that status.
- The rule revised the “small refinery” definition by adding: (a) a past-production cap (no more than 10,000 barrels/day in any calendar quarter since July 1981), and (b) a past-ownership exclusion (not owned by a major refiner after July 1981).
- The past-production element had been raised during the comment period; the past-ownership element first appeared in the final rule.
- The rule imposed an interim lead limit on small refiners of 1.90 grams per gallon effective November 1, 1982 (for production within “historic” levels), and a final limit of 1.10 grams per gallon effective July 1, 1983.
- EPA justified the near-immediate interim compliance burden in part by assuming a rapid emergence of an inter-refinery lead-credit trading market.
- Small refiners petitioned for review, arguing inadequate notice and arbitrary, unsupported decisionmaking; during the case, the court stayed the past-ownership requirement as to one petitioner but denied a stay of the interim standard.

## Issues

1. Whether the interim 1.90 grams-per-gallon lead standard for small refiners, effective almost immediately, was a logical outgrowth of the proposal and adopted with adequate notice under notice-and-comment requirements.
2. Whether the past-ownership requirement in the “small refinery” definition was adequately noticed and reasonably explained, and thus could lawfully appear for the first time in the final rule.
3. Whether EPA’s reliance on an assumed, untested lead-credit trading market provided sufficient record support under arbitrary-and-capricious review.
4. Whether Clean Air Act § 211(f)(5) limited the court’s authority to stay or vacate the challenged provisions.

## Decision

- The court partially vacated the rule.
- The court vacated the interim 1.90 grams-per-gallon standard as applied to small refiners for inadequate notice and insufficient record support.
- The court vacated the past-ownership requirement in the “small refinery” definition for lack of adequate notice and reasoned explanation; it was not a logical outgrowth of the proposal.
- The court did not set aside the past-production requirement on notice grounds because it was within the range of options made apparent during the comment process.
- The court held that Clean Air Act § 211(f)(5) did not bar relief because it applies to § 211(f) regulations, not to rules promulgated under other parts of § 211.
- In crafting relief, the court stated that vacatur would not reinstate a prior, more stringent standard; EPA could issue a temporary replacement consistent with procedural requirements.

## Legal Principles

- A final rule adopted through informal rulemaking must be a logical outgrowth of the notice of proposed rulemaking; regulated parties must have a fair opportunity to anticipate and comment on the substance of the final requirements.
- Notice must be meaningful: an agency may not impose a materially more immediate or burdensome compliance obligation in the final rule without adequate warning during the comment process.
- When an agency relies on market mechanisms to justify stringent, near-term compliance, it must support the assumption with evidence in the administrative record; speculative, untested assumptions may render the rule arbitrary or inadequately reasoned.
- Statutory limits on judicial stays are construed by their terms; a stay-limitation provision tied to a particular statutory subsection does not restrict relief for rules issued under different statutory authority.

## Conclusion

The court enforced notice-and-comment constraints by vacating EPA’s surprise interim lead limit and an unannounced past-ownership eligibility screen for “small refinery” status, while upholding the procedurally foreseeable past-production element and confirming that § 211(f)(5) did not restrict the court’s remedial authority for the type of § 211 rule at issue.


Small Refiner Lead Phase-Down Task Force v. EPA, 705 F.2d 506 (D.C. Cir. 1983)