DC Circuit Provides Split Guidance on Wehrum Memo

In an August 20 opinion, the U.S. Court of Appeals for the District of Columbia Circuit ruled 2-1 that an EPA guidance document (the “Wehrum Memo”) providing that “major” sources of toxics air emissions can be reclassified as “area” sources if they reduce their emissions below the “major” source threshold is unreviewable in court because it is not a final agency action. Writing for the majority, Judge Robert Wilkins stated that the issue is governed by the two-prong test established by the 2016 Supreme Court opinion in United States Army Corps of Engineers v. Hawkes Co.  To be reviewable in court, an agency action must (1) be the consummation of the agency’s decision-making process, and (2) be one through which rights have been determined or legal consequences will flow. The Wehrum Memo easily meets the first requirement because it clearly states the agency’s unequivocal position on allowing reclassification of major sources to area sources. However, the court ruled, the Wehrum Memo does not have any direct and appreciable legal consequence:  no permit applicant can rely on it in an application, and a State permitting agency that refuses to adhere to the guidance would face no penalty or liability. If a permit issuer relies on or fails to rely on, the Wehrum Memo in a permitting decision, that decision can be challenged in court.

In her dissent, Judge Judith Rogers argued that the decision is contrary to D.C. Circuit precedent in which “the court has repeatedly held that guidance documents, which on their face bind enforcement officials to apply a certain standard or interpretation under the CAA, including in the Title V context, are final actions subject to review.” Judge Rogers would hold that the Wehrum Memo is a final agency action because it has “the telltale signs of finality—it presents an unequivocal interpretation of requirements under the CAA; it is binding on its face; and it altered the legal regime by providing an opportunity for ‘major sources’ that take enforceable limits on their potential to emit below the ‘major source’ thresholds to reclassify as ‘area sources’ at any time.”

For more information on the D.C. Circuit’s ruling or on Title V air permitting, contact Steve O’Day or Phillip Hoover.