This case involves the Clean Air Act's Good Neighbor Provision, which requires states to submit State Implementation Plans (SIPs) that prohibit emissions contributing significantly to air pollution in downwind states. Following the EPA's 2015 revision of the ozone National Ambient Air Quality Standard, Texas, Louisiana, and Mississippi submitted SIPs to address interstate transport. The EPA disapproved the SIPs of these states, along with others, citing deficiencies in their modeling and failure to meet the 'significant contribution' threshold. Texas and industry groups challenged the disapproval, arguing the EPA relied on data published after their submission and misinterpreted the statutory term 'contribute significantly.' The Fifth Circuit initially issued an opinion in March 2025 upholding the disapproval, but that opinion was withdrawn in March 2026.
The court began by addressing the impact of the Supreme Court's decision in Loper Bright Enterprises v. Raimondo, which eliminated Chevron deference and mandated that courts exercise independent judgment in interpreting statutes. The court noted that while Loper Bright requires independent statutory interpretation, it does not alter the deferential standard applied to an agency's factual findings and technical policy choices under the Administrative Procedure Act. The primary reason for the vacatur and remand was the EPA's January 30, 2026 notice of proposed rulemaking and reconsideration. In that notice, the EPA stated it had relied on '2016v3' modeling data—published after Texas submitted its SIP—to disapprove the plan. The court concluded it could no longer be confident that the original disapproval was based solely on the technical review of the data and reasoning Texas offered. The court distinguished the situation from Mississippi, where the disapproval was also vacated, and Louisiana, where no party sought rehearing. Regarding the 'one-percent threshold' argument, the court observed that Texas itself used a similar threshold in its own analysis, and the dispute ultimately centered on the scientific validity of the modeling rather than the statutory text. The court found the EPA's technical critiques of Texas's modeling, including back trajectory analysis and Direct Decoupled Method results, were not arbitrary or capricious in isolation, but the reliance on post-submission data necessitated a remand.
The EPA's disapproval of Texas's SIP is vacated, and the matter is remanded to the agency for reconsideration. The EPA must now re-evaluate Texas's plan, potentially using different modeling data or thresholds as indicated in its January 2026 notice. The disapproval of Louisiana's SIP remains denied, while the disapproval of Mississippi's SIP remains vacated and remanded. The decision leaves open the question of the specific threshold the EPA will apply in the future, as the agency is currently soliciting comments on various alternatives.
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