In EME Homer City Generation LP v. EPA, a federal court vacated the EPA’s Cross State Air Pollution Rule (CSAPR), which would have required 28 states, including Wisconsin, to significantly curtail sulfur dioxide and nitrogen oxide emissions.

The U.S. Court of Appeals for the District of Columbia Circuit ruled that the CSAPR exceeds the EPA’s statutory authority under the Clean Air Act (CAA), and ordered the agency to continue administering the remanded 2005 Clean Air Interstate Rule (CAIR) while it promulgates a “valid replacement.”

The two judge majority that vacated the rule said they were not commenting on the “wisdom or policy merits” of the rule. They cited two legal reasons for vacating the rule.

First, the court said the rule may require upwind states to reduce their emissions by more than their “significant contributions” to a downwind state’s nonattainment, violating the CAA’s “good neighbor” provisions.

“The Transport Rule includes or excludes an upwind State based on the amount of that upwind State’s significant contribution to a nonattainment area in a downwind State. That much is fine,” the court wrote. “But under the Rule, a State then may be required to reduce its emissions by an amount greater than the ‘significant contribution’ that brought it into the program in the first place. That much is not fine.”

Second, the court said the EPA erroneously issued federal implementation plans (FIPs) when it should have allowed states the opportunity to issue state plans (SIPs).

In her dissent, Judge Judith Rogers said the court did not have the jurisdiction to reach the majority’s conclusions. She said EPA’s two-step approach to defining “significant contribution” was not raised in public comments during the rulemaking process, so the EPA was “blindsided by arguments raised for the first time in this court.”

The dissent is a roadmap for an appeal, which the EPA can make to the same judges, to the circuit en banc, or to the Supreme Court. If the EPA chooses not to appeal, it is back to the drawing board, where it must administer the CAIR rule, which the court has previously remanded for deficiencies.

This post origionally appeared on the Great Lakes Legal Foundation’s Regulatory Watch blog.