New York v. Environmental Protection Agency

In 1977, Congress amended the Clean Air Act (CAA) to strengthen regulations that protected air quality. The amendments directed that both newly constructed major stationary sources and existing major stationary sources undertaking modifications must obtain preconstruction permits through the new-source review (NSR) process. An existing major stationary source was subject to the NSR provisions if it made a modification. A modification was defined in the CAA as any physical change or change in the method of operation of a stationary source that increases the amount of any air pollutant emitted by the source. The CAA did not specify the means of how to calculate emissions. The 1977 amendments included that to determine whether a change increased emissions, the source was required to calculate its baseline level of actual emissions. In 1980, the Environmental Protection Agency (EPA) (defendant) issued a rule that defined increased emissions to be the average rate, in tons per year, the unit actually emitted pollutants during the two-year period that preceded the change and was representative of the normal source operation. In 2002, the EPA issued a new rule that reinterpreted the term “increases” by adopting a new calculation for baseline emissions. Instead of calculating the average rate of emissions during the preceding two years before the change, the source could select any consecutive 24-month period within the 10 years preceding the change. The EPA stated that this change was made because the complexities and burden of the 1980 rule made it difficult for industry participants to comply and because the 1980 rule may not have been the most accurate and representative measure of emissions. Government and environmental petitioners challenged the 2002 rule and argued that the reinterpretation of the statutory term “increases” was impermissible because it allowed sources to increase their emissions above their more recent levels without triggering NSR requirements. The EPA argued that its interpretation was permissible because it is entitled to deference to construe ambiguous terms.