A U.S. Environmental Protection Agency rule that clamps down on a single-source polluter — a coal-fired power plant wafting sulfur dioxide across the Delaware River — has survived federal court scrutiny.

The U.S. Court of Appeals for the Third Circuit found the EPA reasonably interpreted a Clean Air Act provision allowing restriction of polluters that "contribute significantly to nonattainment" of any air-quality standard or interfere with another state's air-quality implementation plan.

The EPA may "take immediate action when downwind states are affected by air pollution from upwind sources," the court held July 12 in a precedential ruling, GenOn REMA LLC v. EPA.

The Portland Generating Station fronts the river in Upper Mount Bethel Township, Pa., less than 500 feet from Knowlton Township in Warren County. Sulfur dioxide emissions from its two coal-fueled generator units, dating back to 1958 and 1962, are carried by prevailing winds into New Jersey, where they allegedly cause respiratory and pulmonary disease, acid rain and other woes.

In 2006, New Jersey filed a notice of litigation against the EPA for failing to respond to the state Department of Environmental Protection's objection to a permit granted to the plant, and then sued for injunctive relief in federal court in Trenton, to no avail.

The next year, the state sued plant owner Reliant Energy Mid-Atlantic Power Holdings. (Reliant later merged with Houston-based GenOn, which in turn merged with NRG Energy of Princeton last year.)

Attorney General Anne Milgram, along with her Connecticut counterpart, claimed unauthorized plant modifications increased pollution output.

According to a report by Environmental Integrity Project, a nonprofit public interest group, the plant was among the top five nationwide for sulfur dioxide emissions per megawatt.

The litigation dragged on in the Eastern District of Pennsylvania, ending only recently.

In the meantime, New Jersey officials used another strategy. In September 2010, the DEP filed a regulatory petition with the EPA under Section 126(b) of the federal Clean Air Act, asking for an order restricting the facility's emissions.

The state claimed the cross-border pollution interfered with its implementation plan and caused violations of air-quality standards in Warren, Sussex, Morris and Hunterdon counties.

In 2011, the EPA found violations of interstate air pollution transport strictures, took public comments and ultimately issued a final rule granting the DEP's petition.

The EPA allowed the plant to remain open but ordered it to reduce sulfur dioxide emissions by 60 percent within a year and 81 percent within three years.

It was the first time the agency imposed restrictions on a singular pollution source.

GenOn appealed to the Third Circuit, which has statutory authority to review EPA decisions.

The company challenged the agency's authority to impose a single-source rule, claiming it clashed with Clean Air Act provisions allowing state-created implementation plans.

New Jersey could not file a valid Section 126(b) petition until Pennsylvania had a chance to finalize its pending plan in connection with new, stricter federal sulfur dioxide standards imposed in 2010, GenOn contended.

Circuit Judges Julio Fuentes, Michael Chagares and Maryanne Trump Barry denied the petition for review, finding it "reasonable for the EPA to interpret Section 126(b) to be an independent mechanism for enforcing interstate pollution control."

Fuentes, writing for the panel, said the legislative history of Section 126(b), enacted in 1977, "demonstrates that Congress viewed the Federal government as continuing to play an essential role in the fight against interstate pollution despite the fact that the states are the primary actors for implementing" air-quality standards.

Fuentes took no stock in GenOn's argument that the EPA rule was arbitrary and capricious because it didn't require similar pollution reductions from New Jersey sources.

The outcome of GenOn's appeal became less meaningful to the company in May, when it settled New Jersey's 2007 suit by agreeing to stop burning coal completely by 2015.

Even so, the decision "has significant implications for future state actions against plants," says GenOn's counsel, William Bumpers of Baker Botts in Washington, D.C. He says he disagrees with the court's conclusions but declines further comment.

The EPA said of the ruling: "We are pleased that the court has upheld this important EPA regulation and concurred with EPA's legal and technical determinations. The Petition will ensure public health in New Jersey is protected and the national air quality standards for SO2 [sulfur dioxide] are met in a timely way."

A spokesman for the state Attorney General's Office, an intervenor in the case, declines comment.

David Gialanella is a reporter for the New Jersey Law Journal, a Legal affiliate.