Arizona Public Service Co. v. Envtl. Protcetion Agency

• Decision Date: 05 May 2000
• Docket Number: 98-1207,Nos. 98-1196,98-1203,98-1206,98-1208,s. 98-1196
• Citation: 211 F.3d 1280
• Parties: (D.C. Cir. 2000) Arizona Public Service Company, Petitioner v. Environmental Protection Agency, Respondent State of Michigan, et al., Intervenors
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 1280

211 F.3d 1280 (D.C. Cir. 2000)

Arizona Public Service Company, Petitioner v. Environmental Protection Agency, Respondent

State of Michigan, et al., Intervenors

Nos. 98-1196, 98-1203, 98-1206, 98-1207, 98-1208

United States Court of Appeals FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued January 27, 2000

Decided May 5, 2000

[Copyrighted Material Omitted]

[Copyrighted Material Omitted]

On Petitions for Review of an Order of the Environmental Protection Agency

Thomas Sayre Llewellyn argued the cause for petitioner Arizona Public Service Company. With him on the briefs were Michael B. Wood and George Y. Sugiyama.

Henry V. Nickel argued the cause for petitioners National Association of Manufacturers, et al. and Intervenors State of Michigan and Central and South West Services, Inc. With him on the briefs were David S. Harlow, John B. Weldon, Jr., Brian J. Renaud, Jennifer M. Granholm, Attorney General for the State of Michigan, and John Fordell Leone, Assistant Attorney General for the State of Michigan. Norman W. Fichthorn, Cynthia H. Evans, Roy S. Belden, Janice S. Amundson, Donald D. Skypeck, Harold P. Quinn, Jr., and Thomas L. Casey, Solicitor General for the State of Michigan, entered appearances.

Thomas A. Lorenzen and Cynthia A. Drew, Attorneys, United States Department of Justice, argued the cause for respondent. With them on the briefs were Lois Schiffer, Assistant Attorney General, Anthony F. Guadagno and Michael W. Thrift, Attorneys, United States Environmental Protection Agency.

Jill E. Grant argued the cause for intervenors Gila River Indian Community, et al. With her on the brief were William W. Quinn and Jeanette Wolfley. Reid P. Chambers entered appearances.

Before: Edwards, Chief Judge, Ginsburg and Rogers, Circuit Judges.

Opinion for the Court filed by Chief Judge Edwards.

Opinion concurring in part and dissenting from Part II.A. filed by Circuit Judge Ginsburg.

Edwards, Chief Judge:

In 1990, Congress passed a compendium of amendments to the Clean Air Act ("CAA" or "the Act"). This case concerns those amendments that specifically address the power of Native American nations (or "tribes") to implement air quality regulations under the Act. Petitioners challenge the Environmental Protection Agency's ("EPA" or "the Agency") regulations, promulgated in 1998, implementing the 1990 Amendments. See Indian Tribes: Air Quality Planning and Management, 63 Fed. Reg. 7254 (1998) (to be codified at 40 C.F.R. pts. 9, 35, 49, 50, and 81) ("Tribal Authority Rule"). Petitioners' principal contention is that EPA has granted too much authority to tribes.

Petitioners' primary challenges focus on two issues. The first is whether Congress expressly delegated to Native American nations authority to regulate air quality on all land within reservations, including fee land held by private landowners who are not tribe members. The second is whether EPA has properly construed "reservation" to include trust lands and Pueblos.

Petitioners also raise several other challenges to the Tribal Authority Rule. They argue: (1) that EPA violated the Act in authorizing tribes to administer programs affecting nonreservation "allotted lands" and "dependent Indian communities"; (2) that EPA unlawfully declined to accept public comments on applications to regulate by Native American nations; (3) that EPA improperly held that the 1990 Amendments abrogated preexisting contracts under which tribes agreed not to regulate certain privately-held land; and (4) that EPA improperly interpreted the 1990 Amendments to exempt Native American nations from certain of the Act's judicial review requirements.

We find petitioners' challenges to be mostly meritless. We hold that the Agency did not err in finding delegated authority to Native American nations to regulate all land within reservations, including fee land owned by nonmembers. We also uphold EPA's construction of "reservation" to include trust lands and Pueblos. Likewise, we reject the challenge to the Agency's decision to exempt Native American nations from some of the Act's judicial review requirements. Petitioners' complaint regarding the adequacy of public comment on tribal applications is moot. And petitioners' claim that EPA has abrogated preexisting agreements not to regulate is unripe for review, as is one of petitioners' arguments challenging the Agency's decision on the Act's judicial review requirements.

I. BACKGROUND

A. Statutory Background

The Act establishes a framework for a federal-state partnership to regulate air quality. The provisions of the 1990 Amendments under review, fairly read, constitute an attempt by Congress to increase the role of Native American nations in this partnership. There are three areas of regulation under the Act particularly relevant to this case.

First, the Act grants states primary responsibility for assuring that air quality meets national standards. See 42 U.S.C. S 7407(a) (1994). States meet this burden by submitting state implementation plans ("SIPs") that "provide[ ] for implementation, maintenance, and enforcement" of these standards. Id. S 7410(a)(1) (1994). SIPs must be approved by the Agency before they may be federally enforced. In 1990, S 7410 was amended to authorize Native American nations to submit tribal implementation plans ("TIPs") "applicable to all areas ... located within the exterior boundaries of the reservation." Id. S 7410(o).

Second, the Act permits states and Native American nations to "redesignate" lands pursuant to the Act's Prevention of Significant Deterioration ("PSD") program. See id. S 7474(a), (c) (1994). Under the PSD program, land is classified as Class I, II, or III. The land's classification determines the maximum allowable increase over the baseline by which concentrations of sulfur dioxide and other particulate matter shall not be exceeded. See id. S 7473 (1994). Land may, under certain circumstances, be redesignated as Class I, II, or III. See id. S 7474(a). Since 1977, Native American nations have had authority to redesignate land "within the exterior boundaries of reservations." Id. S 7474(c).

Finally, under Title V of the Act, states must develop a comprehensive permitting program applicable to major air pollution sources. See id. S 7661a (1994). The Agency must approve the permitting program; if none is approved, EPA must promulgate a permitting program that will be federally enforceable. See id. S 7661a(d)(3). One of the requirements for approval is that the program provide for judicial review of permitting actions. See id. S 7661a(b)(6), (7). Petitioners claim that the Agency has improperly interpreted the 1990 Amendments to give Native American nations the possibility of exemption from some portions of the judicial review requirements.

Importantly, the 1990 Amendments added language to the Act granting EPA the "author[ity] to treat Indian tribes as States under this chapter," id. S 7601(d)(1)(A) (1994), provided tribes meet the following requirements:

(A) the Indian tribe has a governing body carrying out substantial governmental duties and powers;

(B) the functions to be exercised by the Indian tribe pertain to the management and protection of air re-sources within the exterior boundaries of the reservation or other areas within the tribe's jurisdiction; and

(C) the Indian tribe is reasonably expected to be capable, in the judgment of the Administrator, of carrying out the functions to be exercised in a manner consistent with the terms and purposes of this chapter and all applicable regulations.

Id. S 7601(d)(2).

The 1990 Amendments also directed EPA to promulgate regulations "specifying those provisions of this chapter for which it is appropriate to treat Indian tribes as States." Id. If the Agency "determines that the treatment of Indian tribes as identical to States is inappropriate or administratively infeasible," EPA may announce other ways for the Agency to administer the program "so as to achieve the appropriate purpose." Id. S 7601(d)(4).

B. The Challenged Rule

On August 25, 1994, EPA proposed rules to implement the 1990 Amendments. See Proposed Tribal Authority Rule, 59 Fed. Reg. 43,956 (1994) (proposed Aug. 25, 1994). On February 12, 1998, after receiving and responding to public comments, EPA issued the final Tribal Authority Rule. See Tribal Authority Rule, 63 Fed. Reg. at 7254. The Agency first found that the 1990 Amendments constitute a delegation of federal authority to regulate air quality to Native American nations within the boundaries of reservations, regardless of whether the land is owned by the tribes. See id. The Agency read the statute to support this "territorial view of tribal jurisdiction," authorizing a "tribal role for all air resources within the exterior boundaries of Indian reservations without distinguishing among various categories of on reservation land." Id. EPA believed that this "territorial approach ... best advances rational, sound, air quality management." Id. at 7255. Thus, the Agency determined that Congress delegated to tribes the authority to regulate air quality in areas within the exterior boundaries of a reservation.

The Act does not define "reservation" for the purposes of tribal regulation. EPA interpreted "reservation" to include "trust lands that have been validly set apart for the use of a tribe even though the land has not been formally designated as a reservation." Id. at 7258. The Agency explained that this interpretation was consistent with the Supreme Court's definition of "reservation" in Oklahoma Tax Commission v. Citizen Band Potawatomi Indian Tribe of Oklahoma, 498 U.S. 505 (1991). EPA held that it would decide on a case-bycase basis whether other types of land may be considered "reservations" under the Act. See Tribal Authority Rule, 63 Fed. Reg. at 7258.

For areas not within a "reservation," the Agency determined that a tribe would be allowed to regulate such areas if the tribe could demonstrate...