This past April, the D.C. Circuit struck down the part of EPA’s cement kiln rule that would have provided an affirmative defense to civil penalties for excess emissions resulting from unavoidable malfunctions. As we noted at the time, that decision clearly had implications beyond the cement kiln rule.

Those implications were made more concrete this week when EPA issued a supplemental notice of proposed rulemaking in which it proposed to rescind its policy allowing affirmative defenses to penalties for excess emissions during startup, shutdown, or malfunction events. Moreover, EPA proposes to reject SSM affirmative defenses in existing SIPs.

EPA’s rationale is pretty straightforward:

The EPA acknowledges that its SSM Policy since the 1999 SSM Guidance has interpreted the CAA in such a way that states could in effect alter the jurisdiction of federal courts to assess monetary penalties under certain conditions through creation of affirmative defenses. In other words, even though Congress explicitly empowered federal courts to assess monetary penalties for a CAA violation, an affirmative defense could, contrary to the statute, limit the ability of a court to do so. The EPA believes that the court’s decision in NRDC v. EPA compels the Agency to reevaluate its interpretation of the CAA and its proposed action on the Petition concerning affirmative defense provisions in SIPs.

Although there has already been criticism that EPA went farther than NRDC v. EPA requires, and that EPA could have preserved some affirmative defenses, I don’t see EPA significantly changing this proposal when it goes final, and I’d certainly expect the new interpretation to survive judicial review.

EPA’s proposal states that, as a result of the new interpretation:

some sources may be required by the state to, or may have strong business reasons to, modify their physical equipment or operating practices. These changes could be aimed at improving the effectiveness of the emission control systems when operating as designed during startup and shutdown, increasing the durability of components to reduce the occurrence of malfunctions, and/or improving monitoring systems to detect and manage malfunctions promptly.

Ya think?