TEXAS NRG v. UNITED STATES ENVIRONMENTAL PROTECTION AGENCY (2024)

United States Court of Appeals, Fifth Circuit.

State of TEXAS; Texas Commission on Environmental Quality; Public Utility Commission of Texas; Luminant Generation Company, L.L.C.; Big Brown Power Company, L.L.C.; Luminant Mining Company, L.L.C.; Big Brown Lignite Company, L.L.C.; Luminant Big Brown Mining Company, L.L.C.; Southwestern Public Service Company; Coleto Creek Power, L.L.C.; NRG Texas Power, L.L.C., Petitioners, v. UNITED STATES ENVIRONMENTAL PROTECTION AGENCY; Michael S. Regan, in his official capacity as Administrator of The United States Environmental Protection Agency, Respondents.

No. 16-60118

Decided: December 17, 2024

Cameron Fraser, Office of the Texas Attorney General, Austin, TX, Ryan Baasch, Office of the Attorney General, Consumer Protection Division, Austin, TX, Kellie Elizabeth Billings-Ray, Assistant Attorney General, Office of the Attorney General, Environmental Protection & Administrative Law Division, Austin, TX, Lanora Christine Pettit, Office of the Texas Attorney General, Office of the Solicitor General, Austin, TX, Jesse Clayton Smith, Office of the Attorney General of Texas, Environmental Protection Division, Austin, TX, for Petitioners Texas, Texas Commission on Environmental Quality, Public Utility Commission of Texas. Philip Stephen Gidiere, III, Esq. (argued), Balch & Bingham, L.L.P., Birmingham, AL, Daniel Jude Kelly, Associate General Counsel, Stephanie Zapata Moore, General Counsel, Vistra Energy Corporation, Dallas, TX, David Welles Mitchell, Senior Counsel, Vistra Corporation, Irving, TX, for Petitioners Luminant Generation Company, L.L.C., Big Brown Power Company, L.L.C., Luminant Mining Company, L.L.C., Big Brown Lignite Company, L.L.C., Luminant Big Brown Mining Company, L.L.C., Coleto Creek Power, L.L.C. Debra Jezouit, Baker Botts, L.L.P., Washington, DC, for Petitioner Southwestern Public Service Company. Aaron Michael Streett, Matthew Lynn Kuryla, Esq., Baker Botts, L.L.P., Houston, TX, for Petitioner NRG Texas Power, L.L.C. Michael J. Nasi, Danica Lynn Milios, Jackson Walker, L.L.P., Austin, TX, for Intervenors Balanced Energy for Texas, Texas Mining and Reclamation Association. C. Frederick Beckner, III, Sidley Austin, L.L.P., Washington, DC, for Intervenors Texas Association of Business, Bay City Chamber of Commerce & Agriculture, Baytown Chamber of Commerce, Cedar Park Chamber of Commerce, Clear Lake Area Chamber of Commerce. Eugene Marc Trisko, Esq., Law Offices of Eugene M. Trisko, Berkeley Springs, WV, for Intervenor Local Union 2337 of the International Brotherhood of Electrical Workers. Rachel Dorothy Martinez, Sue Chen, Jessica O'Donnell, U.S. Department of Justice, Environment & Natural Resources Division, Washington, DC, Daniel Pinkston, Esq., Senior Litigation Attorney, U.S. Department of Justice, Environmental Defense Section, Denver, CO, for Respondents. Michael Christopher Soules, Earthjustice Legal Defense Fund, Washington, DC, Matthew Gerhart (argued), Sierra Club, Environmental Law Program, Denver, CO, Elena Kathryn Saxonhouse, Joshua Smith, Sierra Club, Environmental Law Program, Oakland, CA, for Intervenor Sierra Club. Michael Christopher Soules, Earthjustice Legal Defense Fund, Washington, DC, Matthew Gerhart, Sierra Club, Environmental Law Program, Denver, CO, for Intervenor National Parks Conservation Association.

PUBLISHED ORDER

Respondents United States Environmental Protection Agency and Michael S. Regan, in his official capacity as Administrator of the United States Environmental Protection Agency (“EPA”), seek an order vacating: (1) EPA's disapprovals of portions of the regional haze state implementation plans submitted by Texas and Oklahoma, and (2) the issuance of federal implementation plans establishing a long-term strategy and reasonable progress goals for Texas, and reasonable progress goals for Oklahoma. See Federal Implementation Plan for Regional Haze, 81 Fed. Reg. 296 (Jan. 5, 2016) (to be codified at 40 C.F.R. pt. 52) (“Final Rule”). EPA asserts that because key documents in the administrative record are no longer in EPA's possession, the administrative record does not contain statutorily required information necessary for judicial review of the Final Rule, nor can the Final Rule be explained or defended. As such, EPA concedes that the Final Rule should be vacated.

Because EPA concedes that the administrative record lacks key evidence to support the Final Rule, any explanation for EPA's actions in the Final Rule would run “counter to the evidence before the agency.” Tex. Oil & Gas Ass'n v. EPA, 161 F.3d 923, 933 (5th Cir. 1998) (quoting Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43, 103 S.Ct. 2856, 77 L.Ed.2d 443 (1983)). Therefore, absent record evidence that EPA admits is key in adjudicating the Final Rule, EPA's Final Rule is arbitrary and capricious and must be vacated. See Texas v. EPA, 829 F.3d 405, 424–25 (5th Cir. 2016); 5 U.S.C. § 706(2)(A); Data Mktg. P'ship, LP v. U.S. Dep't of Lab., 45 F.4th 846, 859–60 (5th Cir. 2022).

IT IS ORDERED that Respondents’ opposed motion to vacate agency actions is GRANTED, and EPA's Final Rule is VACATED.

Per Curiam:

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