Fighting ‘Good Neighbors': Traveling Ozone Litigation Explained

Critical standards that govern the annual spread of one of the EPA’s top-priority air pollutants could be on the chopping block as litigation brought by states and industry proceeds in courts across the US.

There’s a lot at stake should the so-called “Good Neighbor” program be halted for years or tossed entirely, which challengers say is what should happen to rules they argue are flawed and too troublesome to implement. The two-part program is being challenged in a thicket of cases across regional circuits, the US Court of Appeals for the District of Columbia Circuit, and the US Supreme Court.

But the Environmental Protection Agency insists the program was crafted on well-trod legal authority, and is crucial toward mitigating air and climate pollution that’s worsened in recent years.

Not only do ozone standards limit the spread of one of the most toxic pollutants in ambient air from power plants and other sources, mitigating the precursor chemicals through state air quality plans also ticks away at greenhouse gases that contribute to global warming.

The EPA estimates that the action, which stems pollution from selected “upwind” states that travels to “downwind” states, would cut nitrogen oxides 70% by 2026.

1. What’s New With This Rule?

The Clean Air Act gives the EPA authority to set levels for six pollutants in the ambient air known to harm human health.

Under those National Ambient Air Quality Standards, states submit their own plans that are supposed to be regularly reviewed by the agency and deemed acceptable or not to meet compliance. Those plans must also ensure that states are not contributing to wandering pollution in other parts of the US.

The new interstate ozone program under this authority targets 23 states, which would be responsible for installing control technology to help meet 2015 ozone levels. New Western states were added to the roster as well as non-power plant sources such as cement and glass manufacturing.

Two separate rulemakings were finalized for the new program, which also relies on an emissions trading regimen. The first February 2023 rule denies the air plans of 21 states, and the second—from March 2023—imposes a Federal Implementation Plan (FIP) in their place.

2. Where Does The Legal Brawl Stand?

Litigation over the program is being waged on multiple regional fronts, challenging both the State Implementation Plan (SIP) rejections and the federal alternative plan.

The legal challenges over the SIP rejections are scattered across appellate courts, and some petitioners have been successful in halting the implementation of the SIP rejections—which are required under the Clean Air Act before the EPA can issue a federal alternative.

Arkansas, Kentucky, Louisiana, Mississippi, Missouri, Texas, Minnesota, Nevada, Oklahoma, and Utah have managed to obtain temporary stays of their SIP rejection. Some industry groups, including power and cement producers, are also launching lawsuits against the EPA.

The Justice Department has been trying to push these regional SIP battles to the D.C. Circuit, where the government is also fighting lawsuits challenging the national federal alternative plan.

So far, regional circuits have not punted the SIP suits to Washington, D.C. But a panel at the D.C. Circuit has refused to freeze the Federal Implementation Plan, prompting Ohio, Indiana, and West Virginia to seek an emergency stay from the US Supreme Court.

3. Why Are States and Industry Opposed?

With this scattering of SIP stay orders, the EPA cannot take the necessary step of imposing its federal alternative plan until a patchwork of courts decide whether the rule can proceed to completion.

Good Neighbor critics argue that disapproving the state plans flies against cooperative federalism by stemming state rights to have their own air plans evaluated before a federal plan is instated.

In Kentucky’s motion for a stay—which echoes the arguments of other states in similar cases—state attorneys said the EPA “ignored” part of the Clean Air Act in scrapping the state’s SIP before a full evaluation.

“EPA disapproved Kentucky’s SIP even though Kentucky prepared it like EPA had instructed,” according to the motion. “EPA’s rush to impose a FIP violates Kentucky’s sovereignty and will irreparably harm Kentucky by causing electrical-grid instability and higher electric prices.”

4. What’s Next?

The EPA has pivoted in its implementation of the final Good Neighbor program, at least while litigation rages at the circuits.

According to an interim rule released in June, the agency temporarily froze the Good Neighbor program in Arkansas, Kentucky, Louisiana, Missouri, and Texas where courts had halted SIP rejections. The EPA added Alabama, Minnesota, Nevada, Oklahoma, and Utah to that list in August.

The agency, so far, has managed to defend its FIP from being stalled for states without a SIP rejection stay order, but emergency petitions are currently pending before the Supreme Court that could stop the whole program in its tracks entirely during litigation. Justices’ decision on whether or not to grant an emergency stay is briefed and due any day.