Sierra Club v. EPA ( 1996 )


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  •                                   PUBLISH
    UNITED STATES COURT OF APPEALS
    Filed 11/13/96
    TENTH CIRCUIT
    SIERRA CLUB; WASATCH CLEAN AIR
    COALITION,
    Petitioners,
    No. 95-9541
    v.
    UNITED STATES ENVIRONMENTAL
    PROTECTION AGENCY,
    Respondent,
    ----------------------
    STATE OF UTAH,
    Intervenor.
    Appeal from an Order of
    The United States Environmental Protection Agency
    Munir R. Meghjee (Robert B. Wiygul, Sierra Club Legal Defense Fund, Denver,
    Colorado, and Robert W. Adler, Salt Lake City, Utah, with him on the briefs),
    Sierra Club Legal Defense Fund, Denver, Colorado, for Petitioners.
    David A. Carson, (Lois J. Schiffer, Assistant Attorney General, Environment &
    Natural Resources Division; Kevin W. McLean and Kendra H. Sagoff, Office of
    General Counsel, United States Environmental Protection Agency, Washington,
    D.C.; Jonah M. Staller, Office of Regional Counsel, United States Environmental
    Protection Agency, Denver, Colorado, with him on the brief), United States
    Department of Justice, Environment & Natural Resources Division, Denver,
    Colorado, for Respondent.
    Fred G. Nelson (Jan Graham, Attorney General; Denise Chancellor, Assistant
    Attorney General with him on the brief), Assistant Attorney General, Salt Lake
    City, Utah, for Intervenor.
    Before BRORBY, GODBOLD * and McWILLIAMS, Circuit Judges.
    BRORBY, Circuit Judge.
    The Sierra Club and Wasatch Clean Air Coalition ("Petitioners") seek
    judicial review of a final agency action in accordance with the Clean Air Act (the
    "Act"), 
    42 U.S.C. § 7607
    (b)(1) (1994). Specifically, Petitioners challenge the
    Environmental Protection Agency's decision to exempt Salt Lake and Davis
    Counties, Utah (the "Counties") from selected Clean Air Act "nonattainment area"
    requirements without first redesignating the Counties as an "attainment area"
    pursuant to 
    42 U.S.C. § 7407
    (d)(3)(E)(i)-(v) (1994). Petitioners contend the
    Environmental Protection Agency's decision is unreasonable and contrary to the
    plain meaning of the Clean Air Act, and therefore must be set aside under both
    the first and second steps of Chevron USA, Inc. v. Natural Resources Defense
    Council, Inc., 
    467 U.S. 837
     (1984).
    *
    The Honorable John C. Godbold, Senior Circuit Judge for the Eleventh
    Circuit, sitting by designation.
    -2-
    Having thoroughly reviewed the administrative record and considered the
    parties' arguments, we uphold the Environmental Protection Agency's Clean Air
    Act interpretation and deny the Petitioners' request to set aside the Environmental
    Protection Agency's July 18, 1995 final decision entitled "Determination of
    Attainment of Ozone Standard for Salt Lake and Davis Counties, Utah, and
    Determination Regarding Applicability of Certain Reasonable Further Progress
    and Attainment Demonstration Requirements."
    NATURE OF THE CASE
    The Clean Air Act, 
    42 U.S.C. §§ 7401
     - 7671q (1994) establishes a
    program, jointly administered by the federal government and the states, to
    "protect and enhance the quality of the Nation's air resources so as to promote the
    public health and welfare and productive capacity of its population." 
    42 U.S.C. § 7401
    (b)(1). Toward that end, the Act requires the Environmental Protection
    Agency to establish primary and secondary National Ambient Air Quality
    Standards for certain pollutants such as ozone. 1 Pursuant to the Act, areas failing
    to meet the National Ambient Air Quality Standard for ozone are designated as
    1
    The National Ambient Air Quality Standard for ozone is 0.12 ppm not to
    be exceeded more than 3 times in a three year period at any one monitoring
    station. 
    40 C.F.R. § 50.9
     & App. H (1995).
    -3-
    "nonattainment" areas, which must develop a State Implementation Plan with
    sufficient control measures to attain and maintain the ozone standard. 
    42 U.S.C. § 7410
    .
    In 1977, Salt Lake and Davis Counties, Utah, failed to meet the National
    Ambient Air Quality Standards for ozone. Accordingly, the Counties were
    designated as a nonattainment area and submitted a State Implementation Plan to
    the Environmental Protection Agency. Amendments to the Clean Air Act in 1990,
    which further classified ozone nonattainment areas according to the severity of air
    pollution (e.g., marginal, moderate, serious, severe, and extreme), 
    42 U.S.C. § 7511
    , resulted in the Counties being reclassified as a "moderate nonattainment
    area." 
    40 C.F.R. § 81.345
     (1995). Moderate nonattainment areas are subject to
    the requirement of 42 U.S.C. §§ 7511a(b)(1)(A)(i) and 7502(c)(9). Section
    7511a(b)(1)(A)(i), 2 referred to as the "fifteen percent reasonable further progress
    2
    Section 7511a(b)(1)(A)(i) states in relevant part:
    § 7511a. Plan submissions and requirements
    (b) Moderate Areas
    (1) Plan provisions for reasonable further progress
    (A) General rule
    (i) By no later than 3 years after
    November 15, 1990, the State shall submit a
    revision to the applicable implementation
    plan to provide for volatile organic
    compound emission reductions, within 6
    -4-
    plan" and the "attainment demonstration" provision, requires moderate
    nonattainment areas to continue "reasonable further progress" toward attaining
    National Ambient Air Quality Standards. This goal is achieved by requiring the
    area to submit a plan providing for a fifteen percent reduction in volatile organic
    compounds. Additionally, § 7511a(b)(1)(A)(i) requires the submitted plan
    provide for such specific annual emission reductions sufficient to demonstrate the
    area will attain the National Ambient Air Quality Standards by the statutory
    deadline. Section 7502(c)(9) provides further future compliance assurance by
    requiring moderate and other nonattainment areas to submit a plan with specific
    "contingency measures" to be implemented if the area fails to attain, or fails to
    make reasonable further progress toward attaining, the National Ambient Air
    Quality standards by the statutory deadline.
    By the end of summer 1992 the Counties had collected the requisite three
    years after November 15, 1990, of at least
    15 percent from the baseline emissions,
    accounting for any growth in emissions
    after 1990. Such plan shall provide for
    such specific annual reductions in emissions
    of volatile organic compounds and oxides
    of nitrogen as necessary to attain the
    national primary ambient air quality
    standard for ozone by the attainment date
    ....
    -5-
    years of ambient monitoring data to demonstrate attainment of the ozone standard.
    In fact, the data demonstrates the Counties have attained the ozone standard since
    1991. 3 Accordingly, in 1993, the State of Utah submitted an application to the
    Environmental Protection Agency requesting that Salt Lake and Davis Counties
    be redesignated as an "attainment" area pursuant to 
    42 U.S.C. § 7407
    (d)(3). The
    Environmental Protection Agency and the State of Utah continue to work toward
    the completion of the redesignation process.
    Pending completion of the redesignation process, and based on air quality
    data collected from 1992 to 1994, the Environmental Protection Agency issued a
    direct final rule and a final rule, 4 which is the basis of Petitioners' challenge. 60
    3
    This improvement largely is attributed to the implementation of state air
    quality plans in the 1980's that reduced motor vehicle emissions and applied
    reasonably available control technology to the point sources of ozone precursor
    pollutants. Ozone is formed through the interaction of volatile organic
    compounds, nitrogen oxides, carbon monoxide and sunlight. The sources of these
    ozone precursor pollutants include facilities that handle petroleum products,
    combustion sources, petroleum fuel powered engines and biogenic sources.
    4
    A direct final rule becomes effective without further administrative
    action, unless adverse comments are received within the time limit specified in
    the proposed rule. If adverse comments are received, the Environmental
    Protection Agency withdraws its direct final rule and issues a final rule that
    addresses those comments. In this case, the Environmental Protection Agency
    received comments from the Sierra Club and one other commenter. The
    Environmental Protection Agency therefore withdrew its direct final rule and,
    after considering the comments, issued its final rule.
    -6-
    Fed. Reg. 30,217 (1995) (proposed rule); 
    60 Fed. Reg. 30,189
     (direct final rule).
    In its final rule, without redesignating the area as an attainment area, the
    Environmental Protection Agency determined that because the Counties had
    attained the National Ambient Air Quality Standards the "fifteen percent
    reasonable further progress plan" and the "attainment demonstration"
    requirements of § 7511a(b)(1)(A)(i) and the "contingency measures" requirement
    of § 7502(c)(9) were inapplicable. 60 Fed. Reg. at 36, 723. In addition, the State
    of Utah would not be subject to Clean Air Act sanctions for failure to submit plan
    revisions addressing these requirements. 5 Petitioners challenge this final rule,
    asserting that the fifteen percent reasonable further progress plan, attainment
    demonstration, and contingency measures requirements are mandatory absent
    formal redesignation to attainment area status.
    ANALYSIS
    5
    Any state failing to satisfy Clean Air Act requirements is subject to
    federal sanctions in the form of stricter requirements for siting new or modified
    pollution sources, or a prohibition on the approval of federal highway funds. 
    42 U.S.C. § 7509
    . The Environmental Protection Agency is authorized to impose
    sanctions eighteen months after finding a state has failed to submit required State
    Implementation Plan elements. This eighteen-month "sanctions clock" is turned
    off if and when the deficiency is corrected, or when an area is redesignated to
    attainment. See 
    42 U.S.C. §§ 7509
    (a), 7505a(c).
    -7-
    The issue for our determination is whether the Environmental Protection
    Agency correctly determined that 
    42 U.S.C. §§ 7502
    (c)(9) and 7511a(b)(1)(A)(i),
    do not apply to areas which are attaining the ozone standard, but which have not
    yet been redesignated as attainment areas. This Court will set aside the
    Environmental Protection Agency's determination only if it is arbitrary,
    capricious, or otherwise not in accordance with law. 
    5 U.S.C. § 706
    (2)(A)
    (1994). Where, as here, the issue turns on the Environmental Protection Agency's
    interpretation of a statute it administers, our analysis is dictated by Chevron USA,
    Inc. v. Natural Resources Defense Council, Inc., 
    467 U.S. 837
     (1984). Applying
    Chevron, we first determine whether the statute is unambiguous -- i.e., whether
    Congress directly has spoken to the precise question at issue. Chevron, 
    467 U.S. at 842-43
    ; Marshall v. Chater, 
    75 F.3d 1421
    , 1428 (10th Cir. 1996). If
    congressional intent is clear, we must give effect to that intent. If, however, the
    statute is ambiguous or silent on the issue in question, we must proceed to the
    second step of the Chevron analysis and determine whether the agency's
    determination is based on a permissible construction of the statute. If the
    agency's construction is reasonable, we will defer to the agency's interpretation.
    Chevron, 
    467 U.S. at 842-44
    ; Marshall, 
    75 F.3d at 1428
    .
    A.     Plain Language
    -8-
    Petitioners first contend the Environmental Protection Agency's final rule
    exempting the Counties from the fifteen percent volatile organic compound
    reduction, attainment demonstration and contingency measures requirements is
    contrary to the plain meaning of the Clean Air Act and must be set aside under the
    first step of the Chevron analysis. We disagree.
    Petitioners' plain language argument is circuitous and difficult to
    summarize. However, Petitioners appear to build from the premise that each of
    the provisions at issue must be read individually and literally to give full effect to
    any mandatory language included in those provisions. It is true a literal reading
    of the first sentence of 42 U.S.C. § 7511a(b)(1)(A)(i), in isolation, does mandate
    that a state with a moderate nonattainment area "shall submit a revision to the
    applicable implementation plan to provide for volatile organic compound
    emission reductions ... of at least 15 percent from baseline emissions." That
    provision goes on, however, to state that "[s]uch plan shall provide for such
    specific annual reductions in emissions of volatile organic compounds and oxides
    of nitrogen as necessary to attain the national primary ambient air quality
    standard for ozone." Id. (emphasis added). Moreover, the provision is captioned
    "Plan provisions for reasonable further progress." The phrase "reasonable further
    progress" is defined as "such annual incremental reductions in emissions of the
    -9-
    relevant air pollutant as are required by this part or may reasonably be required by
    the Administrator for the purpose of ensuring attainment of the applicable
    national ambient air quality standard." 6 
    42 U.S.C. § 7501
    (1) (emphasis added).
    The plain language of 
    42 U.S.C. § 7502
    (c)(9) similarly refers to contingency
    measures to be taken if an area "fails to make reasonable further progress, or to
    attain the national primary ambient air quality standard." When read as a whole
    to properly understand the statutory context, see Urban v. King, 
    43 F.3d 523
    , 526
    (10th Cir. 1994), these two provisions fail to clearly require areas that have
    attained the ozone standard but have not yet been redesignated to attainment
    status to make further emission reductions. The language instead suggests
    Congress intended the fifteen percent volatile organic compound reduction
    requirement and the contingency measures requirement to apply only when
    necessary to attain the relevant ozone standard.
    At best, Petitioners' complex plain language argument establishes that some
    ambiguity may exist as to Congress' intent . We therefore move on to consider
    whether the Environmental Protection Agency's construction of the two provisions
    at issue is a permissible one.
    6
    This definition applies for "the purposes of ... part" D of Title I of the
    Clean Air Act, which includes 42 U.S.C. § 7511a(b)(1)(A)(i). Id.
    -10-
    B.     The Environmental Protection Agency's Interpretation
    Petitioners contend that even if the Environmental Protection Agency's
    statutory interpretation does not violate the plain statutory language, the agency's
    interpretation is unreasonable as it creates internal inconsistencies in the
    Environmental Protection Agency's application of the Act and circumvents the
    Clean Air Act 's preventive approach. The Environmental Protection Agency's
    rationale for its determination is set forth fully in the final rule being challenged,
    
    60 Fed. Reg. 36,723
     (1995), and in the May 10, 1995 memorandum from John
    Seitz, Director, Office of Air Quality Planning and Standards to the various
    regional air quality directors. In essence, the Environmental Protection Agency
    reasons that the purpose of the fifrteen percent volatile organic compound
    reduction requirement, the attainment demonstration requirement and the
    contingency measures requirement is to ensure reasonable further progress toward
    and timely attainment of the National Ambient Air Quality Standard for ozone. If
    an area can demonstrate via three years of monitoring data that it has in fact
    attained the ozone standard, the purpose of those requirements has been fulfilled
    and plan provisions outlining additional measures to achieve attainment would
    have little meaning. Moreover, air quality controls designed to surpass the
    applicable ozone standard would be both costly and unnecessary.
    -11-
    1.    Programmatic Consistency.
    Petitioners argue it is inconsistent for the Environmental Protection Agency
    to apply some ozone nonattainment area requirements (e.g., the application of
    reasonable available control technology to stationary sources and the
    implementation of a motor vehicle inspection and maintenance plan), but not
    others (e.g., the fifteen percent volatile organic compound reduction and
    contingency measures). Instead, they would have the Environmental Protection
    Agency rigidly apply all ozone nonattainment area requirements unless and until
    an area is formally redesignated to attainment status. Petitioners contend there is
    no basis for distinguishing the provisions since each requirement "has the same
    substantive effect -- to reduce emissions of pollutants so that the [National
    Ambient Air Quality Standard] is attained both now and in the future."
    The Environmental Protection Agency consistently has rejected this all or
    nothing approach. Shortly after the Clean Air Act Amendments of 1990, the
    Environmental Protection Agency published a General Preamble for the
    Implementation of Title I of the Clean Air Act Amendments of 1990. 
    57 Fed. Reg. 13,498
     (1992). In that preamble, the Environmental Protection Agency
    determined certain general nonattainment plan requirements do not apply in
    evaluating a request for redesignation to attainment under circumstances where
    -12-
    (1) an area has in fact monitored attainment of the standard, and (2) those
    requirements are expressly linked by statutory language with the notion of
    reasonable further progress. See 57 Fed. Reg. at 13,564. The Environmental
    Protection Agency reasoned that when an area requests redesignation to
    attainment status,
    at a minimum, the air quality data for the area must show that the
    area has already attained [the National Ambient Air Quality
    Standards]. Showing that the State will make [reasonable further
    progress] towards attainment will, therefore, have no meaning at that
    point.
    57 Fed. Reg. at 13,564. In other words, once the standards are obtained,
    requirements related to the demonstration of reasonable further progress toward
    attainment serve no purpose. Any additional or future air quality protection is left
    to the operation of other Clean Air Act provisions.
    The determination to exempt Salt Lake and Davis Counties from analogous
    ozone-specific nonattainment plan requirements is a logical extension of the
    Environmental Protection Agency's original, general interpretation of the 1990
    Clean Air Act Amendments. We afford deference to the Agency's interpretation
    under these circumstances. New Mexico Envtl. Improvement Div. v. Thomas, 
    789 F.2d 825
    , 831-32 (10th Cir. 1986) (the court will defer to an agency's statutory
    interpretation when such an interpretation is contemporaneous with the
    -13-
    legislation's enactment and has been consistently adhered to by the agency over
    time).
    Consistent with its interpretation of the general reasonable further progress
    provisions, the Environmental Protection Agency exempted the Counties from the
    §§ 7511a(b)(1)(A)(i) and 7502(c)(9) requirements because the statutory language
    imposing those requirements is directly linked to the notion of reasonable further
    progress toward attainment. Here again, the stated purpose of "reasonable further
    progress" is to ensure attainment by the applicable attainment date. If a moderate
    ozone nonattainment area has in fact already attained the ozone standard, it would
    make little sense to require a state to demonstrate the area will make reasonable
    progress toward attainment.
    Not all ozone nonattainment area provisions are semantically connected to
    reasonable further progress requirements. For obvious reasons, the application of
    those provisions (i.e., the application of reasonable available control technology
    to stationary sources and the implementation of a motor vehicle inspection and
    maintenance plan, 42 U.S.C. §§ 7511a(b)(2), 7511a(b)(4)) continues to fulfill
    important Clean Air Act objectives whether or not an area has attained the ozone
    standard. Accordingly, the Environmental Protection Agency affords no relief
    -14-
    from those requirements based on actual attainment.
    We do not find the Environmental Protection Agency's interpretation to
    create programmatic inconsistency. Nor do we find anything in the structure or
    language of the nonattainment area provisions at issue that contradicts the
    Environmental Protection Agency's longstanding interpretation. In sum, the
    Petitioners' uncompromising reading of the ozone nonattainment area
    requirements lacks the textual support necessary to overcome the Environmental
    Protection Agency's pragmatic construction.
    2.    The Redesignation Process.
    Petitioners assert that the redesignation process outlined at 42 U.S.C.
    § 7407d(3)(E) represents the exclusive means by which an area may be
    redesignated from nonattainment to attainment status. Thus, Petitioners argue,
    the Environmental Protection Agency is not authorized to make any factual
    determination of attainment outside the formal redesignation process.
    The Environmental Protection Agency may redesignate an area from
    nonattainment to attainment in accordance with the provisions of 
    42 U.S.C. § 7407
    (d)(3)(E). Notably, this process involves more than a simple determination
    -15-
    the area has attained the relevant National Ambient Air Quality Standards. In
    addition to that factual determination, the Environmental Protection Agency must
    (1) fully approve the State Implementation Plan; (2) determine that the
    improvement in air quality is due to permanent and enforceable reductions in
    emissions resulting from implementation of the State Implementation Plan and
    other required reductions; (3) fully approve a maintenance plan under 42 U.S.C.
    § 7505a; and (4) determine that the State has met all applicable requirements
    under 
    42 U.S.C. § 7410
     with respect to State Implementation Plans generally, and
    under part D with respect to State Implementation Plan provisions for
    nonattainment areas. 
    42 U.S.C. § 7407
    (d)(3)(E). Before an area may be
    redesignated to attainment, the State also must adopt and submit maintenance
    plans that (1) provide for maintenance of the National Ambient Air Quality
    Standards for at least ten years after redesignation, and (2) include additional
    measures as necessary to ensure the area remains in attainment. 42 U.S.C.
    § 7505a. The State further is required to revise its maintenance plan eight years
    after redesignation to cover a second ten-year period after the first ten-year
    maintenance plan expires. 7 42 U.S.C. § 7505a(b).
    7
    Accordingly, the Environmental Protection Agency intends that the
    maintenance plans will ensure that population growth and other changes in a
    redesignated area over a twenty-year period do not lead to a violation of the
    relevant National Ambient Air Quality Standards.
    -16-
    The Environmental Protection Agency has made it abundantly clear its
    determination to exempt the Counties from certain reasonable further progress
    and attainment demonstration requirements is not a de facto redesignation to
    attainment status. 60 Fed. Reg. at 36,723. As discussed above, the redesignation
    process involves more than a factual determination that monitoring data
    establishes attainment with the applicable standard. All redesignation criteria at
    
    42 U.S.C. § 7407
    (d)(3)(E) remain in full force and effect and must be satisfied
    before the Environmental Protection Agency will approve the Counties' pending
    redesignation request. Moreover, if the Counties violate the ozone National
    Ambient Air Quality Standards prior to their redesignation to attainment status,
    the exemption from certain attainment demonstration and reasonable further
    progress requirements will no longer apply, and the Counties will have to submit
    plan revisions pursuant to 
    42 U.S.C. §§ 7502
    (c)(9) and 7511a(b)(1)(A)(i). In
    addition, if the Counties violate the ozone standards prior to redesignation, they
    would be "bumped-up" from moderate nonattainment status to serious
    nonattainment status pursuant to 
    42 U.S.C. § 7511
    (b)(2), and would then have to
    satisfy the more stringent requirements imposed on serious ozone nonattainment
    areas. See 42 U.S.C. § 7511a(c)(2)(b). Under these circumstances, the
    Petitioners' argument that the Environmental Protection Agency is somehow
    circumventing the formal redesignation process is unavailing. The Environmental
    -17-
    Protection Agency has convincingly demonstrated it is not circumventing the
    redesignation process and the State of Utah is not without incentive to complete
    this process.
    3.   Statutory Purpose.
    Finally, Petitioners argue the Environmental Protection Agency's Clean Air
    Act interpretation is unreasonable as it fails to satisfy the Clean Air Act's purpose
    to protect public health. In this context, the Petitioners emphasize their concern
    that the Environmental Protection Agency is failing to ensure the Counties will
    continue to attain the applicable ozone standards in the future by creating a
    "limbo" between attainment and nonattainment status "that deprives citizens of
    the contingent protections against future declines in air quality."
    We remain unpersuaded by this argument. As discussed above, the
    provisions at issue are directly linked to reasonable further progress toward
    attainment of the ozone National Ambient Air Quality Standards, not beyond. To
    date, the Utah State Implementation Plan's existing air quality control measures
    and other applicable federal requirements (e.g., the motor vehicle control
    program) have resulted in enforceable emission reductions within the Counties --
    reductions which in turn have resulted in attainment of the ozone standard for
    -18-
    over five years. Should those existing control measures and requirements prove
    inadequate to prevent future violations, the Environmental Protection Agency will
    require the Counties to implement additional control measures within a reasonable
    time. Recall that the Environmental Protection Agency's determination to exempt
    the Counties from limited ozone nonattainment area requirements is really no
    more than a suspension of those requirements for so long as the area continues to
    attain the standard or until the area is formally redesignated to attainment status.
    The Environmental Protection Agency summarized the flaw in Petitioners'
    argument best:
    The [Counties have] attained the primary ozone standard, a standard
    designed to protect public health with an adequate margin of safety
    (see section 109(b)(1)). [The Environmental Protection Agency 's]
    action does not relax any of the requirements that have led to the
    attainment of the standard. Rather, its action has the effect of
    suspending requirements, for additional pollution reductions, above
    and beyond those that have resulted in the attainment of the health-
    based standard.
    60 Fed. Reg. at 36,727. Under these circumstances, Petitioners' presumption that
    the Counties will violate ozone standards in the future and that "Utahns will be
    required to breathe for a protracted period unhealthy air while Utah develops
    controls that should have been in place earlier" seems disingenuous.
    CONCLUSION
    -19-
    We conclude the Environmental Protection Agency has reasonably
    interpreted and applied the Clean Air Act to preserve the Act's objective of
    achieving the health-based ozone standard while at the same time avoiding the
    imposition of costly emission control requirements that are unnecessary to meet
    that objective. Accordingly, we uphold the Environmental Protection Agency's
    "Determination of Attainment of Ozone Standard for Salt Lake and Davis
    Counties, Utah, and Determination Regarding Applicability of Certain Reasonable
    Further Progress and Attainment Demonstration Requirements" and deny the
    Petition for Review.
    -20-