Exxon Mobil Corp v. U.S. Envtl. Protect Agency

• Decision Date: 26 April 2000
• Docket Number: No. 99-70945,99-70945
• Citation: 217 F.3d 1246
• Parties: (9th Cir. 2000) EXXON MOBIL CORPORATION, Petitioner, v. UNITED STATES ENVIRONMENTAL PROTECTION AGENCY; CAROL BROWNER, Administrator of the United States Environmental Protection Agency, Respondents
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1246

217 F.3d 1246 (9th Cir. 2000)

EXXON MOBIL CORPORATION, Petitioner, v. UNITED STATES ENVIRONMENTAL PROTECTION AGENCY; CAROL BROWNER, Administrator of the United States Environmental Protection Agency, Respondents.

No. 99-70945

U.S. Court of Appeals for the Ninth Circuit

Argued and Submitted April 26, 2000--San Francisco, California

Filed July 7, 2000

Craig E. Stewart, San Francisco, California, for the petitioner.

Eileen T. McDonough, Department of Justice, Washington, D.C., for the respondents.

Petition for Review of Final Agency Action; EPA-CRF-Part 52

Before: James R. Browning, Betty B. Fletcher and Arthur L. Alarcon, Circuit Judges

B. FLETCHER, Circuit Judge:

The Petitioners challenge the final rule by the Environmental Protection Agency ("EPA") approving oxygenated fuel standards set by the revised Nevada State Implementation Plan ("SIP"). The EPA ruling approved a SIP amendment revising a Clark County, Nevada regulation requiring all gasoline sold in the wintertime to have an oxygen content of at least 3.5 percent. The Petitioners claim that the EPA misconstrued section 211(m) of the Clean Air Act, that the county should not have been allowed to require a minimum oxygen content of more than 2.7 percent and that the county's regulation is preempted under section 211(c)(4) of the Clean Air Act. We affirm the EPA's ruling.

FACTUAL BACKGROUND

Clark County, Nevada is a serious non-attainment area for carbon monoxide ("CO"). In the wintertime, weather inversions trap the CO emissions in the Las Vegas Valley and substantially worsen the region's non-attainment for CO. In 1988, Clark County began an oxygenated fuel program in the wintertime to reduce the level of CO emissions. Initially, the county required all fuel sold to consist of 2.5 percent oxygen with a 2.6 percent level required after the first year of the program. In 1991, the county increased the requirement to 2.7 percent oxygen for wintertime fuel. Nonetheless, Clark County remained a non-attainment area for CO emissions. During the winters of 1994-95 and 1995-96, retailers in Clark County voluntarily decided to sell only gasoline with an oxygen content of 3.5 percent. In September of 1997, the county amended its plan to require a 3.5 percent minimum oxygen content for wintertime gasoline sold between October 1 and March 31.

In August 1998, the state of Nevada submitted Clark County's 1997 oxygenated fuel regulations to the EPA for approval as a SIP revision. The EPA proposed a rule approving the revision and the EPA received only one comment on the proposed rule, from the Western States Petroleum Association ("WSPA"). The WSPA argued that the states were barred from adopting a minimum oxygen requirement other than 2.7 percent. The EPA responded to this argument in its final rule, issued June 2, 1999.

The EPA's final rule explained that the Clean Air Act compelled the states in non-attainment areas to require that gasoline contain a minimum oxygen level of 2.7 percent but allowed the states to choose a higher minimum oxygen content. The EPA pointed out that neither the text of the statute nor the legislative history demonstrated that Congress intended to prevent the states from adopting higher requirements and that such a prohibition would conflict with the general structure of the Clean Air Act by limiting the ability of states to meet the National Ambient Air Quality Standards ("NAAQS"). Following the issuance of this final rule, Chevron U.S.A. Inc., Exxon Mobil Corporation and Mobil Oil Corporation brought this action seeking review of the EPA's determination¹.

ANALYSIS

We have jurisdiction to review the EPA's action under 42 U.S.C. S 7607(b)(1). In reviewing a final action by the EPA, we reverse only if it is arbitrary, capricious, or contrary to law or if it exceeds the statutory jurisdiction, authority, or limitations. Abramowitz v. United States Environmental Protection Agency, 832 F.2d 1071, 1074-75 (9th Cir. 1987). In reviewing an agency's interpretation of a statute which it administers, we ask whether the intent of Congress is clear and, if not, whether the agency's construction is permissible. Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842-43 (1984).

I. INTERPRETING THE 1990 AMENDMENTS TO THE CLEAN AIR ACT

The key question is whether the EPA's approval of the Clark County regulations was a permissible construction of the Clean Air Act. The petitioners claim that the 1990 amendments to the Act adopted a nationwide minimum oxygenated fuel content of 2.7 percent for non-attainment areas and that the statute does not give states the authority to adopt a higher minimum.

The "starting point for interpreting a statute is the language of the statute itself." Consumer Product Safety Commission v. GTE Sylvania, Inc., 447 U.S. 102, 108 (1980). The Clean Air Act, as amended in 1990, sets out oxygenated gasoline requirement for CO non-attainment areas in section 7545:

Each plan revision under this subsection shall contain provisions to require that any gasoline sold, or dispensed, to the ultimate consumer in the carbon monoxide non-attainment area or sold or dispensed directly or indirectly by fuel refiners or marketers to persons who sell or dispense to ultimate consumers, in the larger of

(A) the Consolidated Metropolitan Statistical Area (CMSA) in which the area is located, or

(B) if the area is not located in a CMSA, the Metropolitan Statistical Area in which the area is located, be blended, during the portion of the year in which the area is prone to high ambient concentrations of carbon monoxide to contain not less than 2.7 percent oxygen by weight (subject to a testing tolerance established by the Administrator). The portion of the year in which the area is prone to high ambient concentrations of carbon monoxide shall be as deter mined by the Administrator, but shall not be less than 4 months.

42 U.S.C. S 7545(m)(B)(2)

In its final rule, the EPA interpreted this section of the statute to create a floor but not a ceiling for non-attainment areas in terms of the oxygen content of gasoline: "the better reading of section 211(m)(2) is that, at a minimum, states must require that gasoline contain 2.7% oxygen by weight, and that states could satisfy this by requiring gasoline to contain 2.7% oxygen or by setting any higher requirement such as 3.1% oxygen content, or 3.5% oxygen content." 64 F.R. 29753, 29574 (June 2, 1999).

In interpreting the intent of Congress it is essential to consider the statute as a whole. See King v. St. Vincent's Hospital, 502 U.S. 215, 221 (1991); Fort Ord Toxics Project, Inc. v. California Environmental Protection Agency, 189 F.3d 828, 832 (9th Cir. 1999). The Petitioners argue that the placement of the oxygenated fuel requirement in the statute's comprehensive scheme for federal regulation of fuel and fuel additives makes it less likely that Congress intended to give the states flexibility in this matter. The Petitioners also point to the waiver provision of section 211(m)(3), which allowed states to permit oxygen requirements lower than 2.7 percent, as evidence that Congress did not intend to allow a higher minimum.

In addition, the Petitioners argue that the EPA's interpretation does not take into account the credit provisions of section 211(m)(5), which they claim will be eviscerated if states are allowed to adopt higher oxygen standards for gasoline. Finally, the Petitioners claim that the fact that section 211(m)(7) of the Act requires states to adopt a 3.1 percent minimum oxygenated gasoline standard in serious non-attainment areas for CO by a certain date is evidence that Congress did not intend the states to adopt higher minimum requirements. Petitioners have waived their right to judicial review of these final two arguments as they were not made before the administrative agency, in the comment to the proposed rule, and there are no exceptional circumstances warranting review. See Johnson v. Director, Office of Workers' Compensation Programs, 183 F.3d 1169, 1171 (9th Cir. 1999).

As to the remaining claims, the overall scheme of section 211 relies on the states through the State Implementation Plans ("SIPs") to regulate oxygenated fuel. Section 211(m) is unique among the provisions of section 211 in that it invokes state rather than federal authority to regulate gasoline. States are required to revise their SIPs to incorporate oxygenated fuel regulations designed to meet the NAAQS. Section 7410 of the Clean Air Act states that any "state may revise an applicable implementation plan approved under this subsection to suspend or revoke any such program included in such plan, provided that such plan meets the requirements of this section." The Supreme Court, in interpreting the mandate of the SIP requirements, determined that Congress did not limit state authority to regulate pollution. Union Electric Co. v. EPA, 427 U.S. 246, 265 (1976). Finally, the waiver provisions in section 211(m)(3) have no bearing on the proper interpretation of 211(m)(2) because the concern of maintaining an adequate supply of oxygenated fuel is not affected by whether the oxygen level is 2.7 percent or 3.5 percent.

The Clean Air Act also contains another provision regarding oxygenated fuel which allows for such minimum oxygen content as is necessary for the attainment of the NAAQS. Two statutory sections which overlap should be construed consistently. Department of Revenue of Oregon v. ACF Industries, Inc., 510 U.S. 332, 340-41 (1994). Statutory constructions which render other provisions superfluous are disfavored. Hohn v. United States, 524 U.S. 236, 249 (1998). The provision, entitled "Serious Areas: Oxygenated Gasoline," states that:

Within 2 years after November 15, 1990, the State shall submit a revision to require that gasoline sold, supplied, offered for sale or supply, dispensed, trans ported or introduced into commerce in the larger of

(i) the...