A coalition of state and industry groups failed in the latest legal bid to derail implementation of the U.S. Environmental Protection Agency's rules limiting greenhouse gas emissions.

A divided panel from the U.S. Court of Appeals for the D.C. Circuit ruled that the groups, including the states of Texas and Wyoming, the Utility Air Regulatory Group and National Mining Association, lacked standing to challenge EPA rules related to permitting requirements.

Because the petitioners "failed to establish that the [challenged] Rules caused them ‘injury in fact,’ much less injury that could be redressed by the Rules’ vacatur…’ we must dismiss the petitions for lack of jurisdiction,” wrote Judge Judith Rogers [PDF], who was joined by Judge David Tatel. Judge Brett Kavanaugh dissented.

Last year, the D.C. Circuit upheld EPA regulations limiting emissions of greenhouse gases. The issue before the court now involves implementation at the state level.

Under the Clean Air Act, states control air pollution within their borders by adopting “State Implementation Plans,” or SIPs. These plans include a permitting requirement for large construction projects, setting emission limits and requiring the proposed facility to use “the best available control technology” for each pollutant.

EPA directed the states to revise their plans to include greenhouse gases as a pollutant by January 2, 2011.

Thirteen states, including Texas and Wyoming, lagged in doing so. Moreover, Texas told EPA in a letter that it had “no intention” of revising its plan because it disagreed with EPA’s regulation of greenhouse gases, according to the majority opinion.

EPA warned the laggard states that it would “immediately” issue a finding of failure to submit and impose a federal implementation plan that would allow EPA to step in and act as a supplemental permitting authority.

Doing so would actually be better for the states than if the EPA did nothing, the agency argued. That’s because according to the EPA, once greenhouse gases became an official pollutant under the Clean Air Act, that automatically and “unambiguously” meant construction permits going forward must address those emissions along with other pollutants. Without a revised state plan, no new construction permits could be issued.

Texas and Wyoming failed to meet the deadline, and the EPA imposed federal plans for both states.

In the suit, the petitioners didn’t dispute that that had to revise their plans to incorporate greenhouse gases. “Instead, they challenge the method and timing by which EPA required [plan] revisions,” Rogers wrote, and argued that they should have three years to update their plans.

Kavanaugh in his dissent was convinced they were right. “In my view, this case is straightforward. The relevant EPA regulation plainly gives States three years to revise their [plans]whenever new pollutants, like greenhouse gases, are regulated,” he wrote.

But Rogers and Tatel disagreed, writing that he “reaches this conclusion ignoring the plain text of the [Clean Air Act]. Consequently his reasoning is flawed.”

Anytime a new pollutant is added under the Clean Air Act, it’s “self-executing,” and applies automatically to permitting requirements for major new projects, “irrespective of the applicable” state plan, they held.

They also point out that “Congress had determined federal [plan] oversight was necessary to prevent States from improperly competing for industry by adopting more permissive pollution controls.”

They continued, “The same rationale explains why Congress made [the Clean Air Act] self-executing for newly regulated pollutants: otherwise, States would have a perverse incentive to delay incorporating new pollutants into revised [plans] in order to compete for industry in the interim.”

Further, the EPA’s rules didn’t hurt the states or industry groups, the majority found. To the extent that there were any injuries, they “were caused by the [Clean Air Act], not the challenged rules: vacatur of the rules would not restore either State’s ability to issue necessary…permits with greenhouse gas requirements for construction of major emitting facilities but would result in a construction moratorium until they submitted revised [plans] that EPA approved,” Rogers wrote.

Baker & Hostetler partner David Rivkin Jr. argued the cause for the State of Texas, and Wyoming was represented by Nancy Vehr, a lawyer in the state’s Office of the Attorney General. Hunton & Williams partner Henry Nickel argued the case for the non-state petitioners.

Department of Justice lawyers Madeline Fleisher and Matthew Oakes represented the EPA.

This article originally appeared as a post on The BLT: The Blog of Legal Times.