Conference Summary

Discussants
Christopher DeMuth, American Enterprize Institute
C. Boyden Gray, Wilmer, Kutler & Pickering
Cass Sunstein, University of Chicago Law School
Edward Warren, Kirkland & Ellis
Carol Browner, Environmental Protection Agency
Panelist Biographies

The May 14, 1999, ruling by the Court of Appeals for the District of Columbia Circuit on the Environmental Protection Agency's 1997 ozone and particulate matter standards could have enormous implications for regulation and the delegation of powers to federal agencies. On May 27, 1999, the AEI-Brookings Joint Center for Regulatory Studies convened a panel of experts to interpret the decision.

Christopher DeMuth, American Enterprize Institute

The topic of today's panel is the May 14, 1999, decision of the Court of Appeals for the District of Columbia Circuit to vacate the EPA's new National Ambient Air Quality Standards (NAAQS) for ozone and particulate matter on constitutional grounds. The case can be seen as either about an act of executive branch usurpation or about an act of legislative branch abdication—and in actuality is some of both. The deeper problem the ruling belies is one of statutory language that remains in place in our environmental laws while science marches on. When Congress wrote the magic words "requisite to protect the public health" in 1970, it assumed that thresholds exist for most pollutants. Those thresholds divide levels that present serious health risks from those that present negligible health risks. We know now that for many pollutants that is not the case. For example, ozone appears to have some adverse consequences at any level above zero. Today's discussion will focus on whether the circuit court was correct in saying that Congress gives insufficient statutory guidance in cases such as this one and, if so, what should be done about it.

C. Boyden Gray, Wilmer, Cutler & Pickering

This was not an apocalyptic ruling, as has been suggested by some commentators. The goal of the attorneys opposing the EPA was to require the agency to meet a test for developing a standard similar to the test that has applied to the Occupational Safety and Health Administration since the U.S. Supreme Court's ruling on the agency's benzene standard in 1980 (Industrial Union Department, AFL-CIO v. American Petroleum Institute / Marshall v. American Petroleum Institute, 448 U.S. 607). In that case, the Court stated that since benzene was a nonthreshold pollutant, similar to ozone and particulate matter, there was no cutoff point at which the agency should stop lowering its standards. The Court ruled that OSHA could not simply pick a number for its standard, but instead needed to conduct a thorough risk analysis to show that a significant benefit resulted from the reduction of a significant risk. That was a key point not discussed in the dissent of the recent D.C. circuit ruling.

The implications of that ruling on the EPA's course of action are difficult to assess. If the Supreme Court supports the ruling, the EPA could argue that it should be allowed to do publicly what it already does privately—consider costs or perform significant risk analyses. I believe that the 1990 Clean Air Act Amendments in fact introduce cost considerations in setting the NAAQS and that the EPA could, if it chooses, argue that it should be allowed to consider costs. Some programs that may be vulnerable on the basis of the court's decision are the EPA's Wetlands Program, which has no congressional mandate, and the Gore tax or E-rate, which is set at the discretion of the Federal Communications Commission and does not have any clear boundaries. Last, it is important to note that the ruling and its results will not affect the continued improvement in air quality from standards that are in place and that the ruling does not affect the 1990 amendments to the Clean Air Act.

Cass Sunstein, University of Chicago Law School

This ruling, though not apocalyptic, goes beyond the benzene case. The circuit court's decision, in essence, commands agencies to develop the means to measure "a generic unit of harm" and to develop constraints for themselves when developing standards. That is dramatic because it has implications for the NAAQS under the Clean Air Act and because Congress and the courts have not required the EPA to use that type of measure before. The decision would also affect regulations under the Toxic Substances Control Act and the Federal Insecticide, Fungicide, and Rodenticide Act. Those statutes require some degree of balancing benefits and costs, and the EPA has not sharply identified the ingredients of cost-benefit analysis that should apply across the board.

The circuit court's innovation in using the nondelegation argument is that the court does not require Congress to speak with clarity, but rather requires that the EPA speak with clarity. The main problem with the Clean Air Act is its assumption that a threshold for safety exists for all pollutants. That is often a myth, and therefore the EPA must make some judgment about how safe is safe, for which the statute provides little guidance.

As for the future, the EPA will have a lot of room to maneuver under the circuit court's decision. The court clearly thinks that the identification of what makes something safe is very important and involves many ingredients that agencies should quantify. But the court basically wants ceilings and floors for standards that are not unduly wide. The Supreme Court is unlikely to accept the rationale of the circuit court, and it will be a surprise if the Court takes an innovative stance.

We should also note that the courts forged some new ground with respect to the area of health-health tradeoffs. The consideration that regulation of one risk might compound another risk is one to which courts of appeal have become increasingly attuned.

One cautionary note relates to the role of the courts in policymaking. Though Judges Williams and Ginsburg may be experts in regulatory policy, we should be concerned that the ruling may cause future delays and impose additional costs on the executive branch. One possible result is that an administrator of any agency may have to respond to remands each time a standard is revised. As a narrow policy matter, there is a lot of sense to the ruling, but its implications for the broad role of the judiciary need to be assessed carefully.

Edward Warren, Kirkland & Ellis

The nondelegation argument is stronger for the particulate matter-ozone case than for the benzene case. In the benzene case, similar indiscretion in the use of agency power may have warranted use of the nondelegation doctrine; the language of the statute was strong enough, however, to limit the standards that OSHA had set for benzene. In the particulate matter-ozone case, however, the language and interpretation of the statute gave no rationale for setting standards. We could not interpret the statute in a way that would give the EPA a reasonable stopping point on setting health standards.

The court has stated its desire for a health-based measure on which the EPA bases its standards. Although such a measure may not exist in a technical sense, earlier work done for the ozone standards contained a fairly good evaluation of the relative health benefits of different levels of the standard of that time. That evaluation led the EPA to relax the original ozone standard from .08 to .12 part per million. Such analysis has been used before and should wisely be used again.

The agency's position with respect to the risk-risk tradeoff, apart from the fact that it cannot be squared with the statutory language in any sensible way, is illustrative of the open-ended authority that the EPA was claiming in setting those standards. Without considering the beneficial effects that ozone has on screening ultraviolet radiation, the EPA could be setting a standard that does more harm than good. Thus, the court argued quite sensibly that the agency needs to take those effects into account.

For the long-term consequences of the circuit court's decision, we again should look at the example of the benzene case, which has brought about beneficial results. The significant-risk test developed by OSHA has helped the agency to focus resources on the most important risks and put society's money where it gets the most return. The new court decision will also foster rational decisionmaking and help focus resources on those issues, activities, and risks where the expenditures will do the most good.

Carol Browner, Environmental Protection Agency

This decision is extreme, radical, and illogical. If allowed to stand, it carries grave consequences for the health of Americans. After six years of working to set the NAAQS, the EPA has no doubt that they are legal, that they are warranted by the science, and that they protect the public from significant risks. The circuit court did not accept industry's argument that there was not enough science or that the EPA failed to follow the correct procedure. Rather, two judges found that Congress cannot direct agencies like the EPA to create public health standards that protect the American people, but that only Congress can do that job.

The pollution standards for soot, smog, fine particles, and ozone will provide 125 million Americans including 35 million children with public health protection. The Clean Air Act has been perhaps the most successful environmental law in our history. Since its passage in 1970, we have achieved a 31 percent reduction in air pollution, with lead levels down 97 percent and fine particle levels down 75 percent. All that progress in protecting health and improving air quality has come while the population and the economy have grown. There is a long-standing debate between some that we must choose between a healthy economy and a healthy environment. If any environmental law has proven that such is not the case, it is the Clean Air Act. The return on the clean air investment is $40 for every dollar spent.

Five presidents and fifteen Congresses have supported the public health provision of the Clean Air Act. Until now, every time the EPA has tried to strengthen public health standards, the courts have sustained the agency's decisions. Congress is free to set pollution standards yet has chosen not to do so; instead, it has directed the EPA to do the research, run the process, and set the standards. If the new standards were objectionable to Congress, why did Congress not act? Two of the parties in the lawsuit are Republican members of Congress, yet they did not introduce a bill. Instead, they went to court-away from the public's attention.

The circuit court agrees that the current standards for particulate matter and ozone leave too many people unprotected. Some people have suggested that we would fix the court's problem by conducting a cost-benefit analysis. The agency does not do so because the law does not allow that analysis. Others have argued that if more pollution in the sky brings other benefits, then the EPA should take that into account. I think that that is not what the American people or Congress had in mind. Looking to the future, the EPA will do everything possible to see the decision set aside. The work the agency did to set those standards was fully in compliance with what Congress directed. The EPA upheld the promise of the Clean Air Act.

Conference summary prepared by Irene Chan and Robert Hahn.