State of Michigan v. Environmental Protection Agency

• Decision Date: 30 October 2001
• Docket Number: No. 99-1151,99-1151
• Citation: 268 F.3d 1075
• Parties: (D.C. Cir. 2001) State of Michigan, Michigan Department of Environmental Quality, Petitioner v. Environmental Protection Agency, Respondent Navajo Nation, Intervenor Consolidated with 99-1152, 99-1153, 99-1154, 99-1155
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 1075

268 F.3d 1075 (D.C. Cir. 2001)

State of Michigan, Michigan Department of Environmental Quality, Petitioner v. Environmental Protection Agency, Respondent

Navajo Nation, Intervenor

No. 99-1151 Consolidated with 99-1152, 99-1153, 99-1154, 99-1155

United States Court of Appeals FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued September 4, 2001

Decided October 30, 2001

On Petitions for Review of a Final Rule of the Environmental Protection Agency

Henry V. Nickel argued the cause for petitioners. With him on the briefs were Lauren E. Freeman, David S. Harlow, Edmund H. Kendrick, Brian J. Renaud, Susan M. McMichael, Jennifer M. Granholm, Attorney General, State of Michigan, and John Fordell Leone, Assistant Attorney General. Richard S. Wasserstrom entered an appearance.

Cynthia A. Drew, Attorney, U.S. Department of Justice, argued the cause for respondent. With her on the brief were John C. Cruden, Acting Assistant Attorney General, Andrew J. Doyle, Attorney, Anthony F. Guadagno, Attorney, Environmental Protection Agency, and Michael W. Thrift, Attorney. Lois J. Schiffer, Assistant Attorney General, U.S. Department of Justice, and Christopher S. Vaden, Attorney, entered appearances.

Jill E. Grant was on the brief for intervenor Navajo Nation.

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

Opinion for the Court filed by Circuit Judge Sentelle.

Sentelle, Circuit Judge:

State of Michigan, et al. (hereinafter petitioners), petition this Court for review of the Environmental Protection Agency's ("EPA") 1999 revisions to the Part 71 federal operating permit program rule, 64 Fed. Reg. 8247 (Feb. 19, 1999) (codified at 40 C.F.R. pt. 71).¹ Petitioners argue that the EPA has exceeded its authority under the Clean Air Act ("CAA" or "the Act"), 42 U.S.C. 7401 et seq. (2000), in proposing to promulgate and administer a federal operating permits program for areas where EPA believes the Indian country status is in question, and in proposing to make state/tribe jurisdictional determinations on a case-by-case basis rather than through notice and comment rulemaking. Because we agree with petitioners that EPA has exceeded its authority, we grant the petition for review.

I. Background

A. The Clean Air Act and Indian Tribes

The Clean Air Act establishes an intergovernmental partnership to regulate air quality in the United States. Described as an "experiment in federalism," Virginia v. EPA, 108 F.3d 1397, 1408 (D.C. Cir. 1997) (quoting Bethlehem Steel Corp. v. Gorsuch, 742 F.2d 1028, 1036-37 (7th Cir. 1984)), the Act gives EPA responsibility for establishing National Ambient Air Quality Standards ("NAAQS"). 42 U.S.C. 7409; see also Whitman v. American Trucking Ass'ns, 531 U.S. 457, __, 121 S. Ct. 903, 907 (2001). Title V of the 1990 Clean Air Act Amendments gives states responsibility for implementing these standards. See, e.g., 42 U.S.C. §§ 7407, 7410.

As part of the 1990 Clean Air Act Amendments, Congress also authorized EPA to "treat Indian tribes as States," thus affording Indian tribes the same opportunity as states to implement the NAAQS within tribal jurisdictions under a Title V program. 42 U.S.C. 7601(d). Title V requires that states submit and obtain EPA approval of a state operating permit program ("SOP") that meets the "minimum elements" set forth under 42 U.S.C. 7661a(d) and EPA regulations promulgated pursuant to 42 U.S.C. 7661a(b). Among the requirements is that the state demonstrate that it has "adequate authority," including jurisdiction, to regulate the emission sources subject to the SOP. Id. at 7661a(d). This same requirement applies to Indian tribes seeking to enact their own implementation plan. Id. at 7601(d).

Congress recognized the unique legal status and circumstances of Indian tribes by allowing tribes to be treated as states, but not requiring them to apply to EPA to manage Clean Air Act programs. See id. at 7601(d)(1)(A). Tribes may be treated as states if: they have a governing body; the functions they are to exercise pertain to the management and protection of air resources within the tribe's jurisdiction; and the tribe is capable of carrying out these functions. See 42 U.S.C. 7601(d)(2). No tribe to date has sought to create an implementation plan. In the Tribal Authority Rule ("TAR"), EPA exercised authority under 42 U.S.C. §§ 7601(d)(2), (4) by specifying those portions of the Clean Air Act for which it deemed it appropriate to treat Indian tribes as states, and the requirements necessary for tribes to establish jurisdiction to develop Title V permitting programs. See Indian Tribes: Air Quality Planning and Management, 63 Fed. Reg. 7254 (Feb. 12, 1998) (to be codified at 40 C.F.R. pts. 9, 35, 49, 50, and 81). EPA's interpretation was upheld by this Court in Arizona Pub. Serv. Co. v. EPA, 211 F.3d 1280 (D.C. Cir. 2000), cert. denied, 121 S. Ct. 1600 (2001). Under the TAR a tribe may only develop a Title V permitting program for nonreservation areas if the tribe can demonstrate jurisdiction under federal Indian law. Therefore the TAR provides a procedure for resolving jurisdictional disputes. See 40 C.F.R. 49.9(e).

If a state fails to create an EPA-approved implementation plan, or in cases where an approved program is not being properly implemented, Congress requires EPA to "promulgate, administer, and enforce" a federal operating permit program. 42 U.S.C. §§ 7661a(d)(3), (i)(3). Further, in the absence of an EPA-approved tribal implementation program, EPA may adopt a federal implementation program. See 42 U.S.C. 7601(d)(4). However, the parties before us disagree as to the source of EPA's power to enact such a program for Indian country. The EPA claims its "authority under the CAA is based in part on the general purpose of the CAA," which was only supplemented in the Indian tribe context by 42 U.S.C. 7601(d)(4). 64 Fed. Reg. at 8251; see also 62 Fed. Reg. 13748, 13749 (proposed rule and notice) ("Today's notice makes it clear that EPA's implementation of part 71 programs in Indian country is based on EPA's overarching authority to protect air quality within Indian country, not solely on its authority to act in the stead of an Indian Tribe."). In contrast, petitioners essentially contend EPA is merely authorized to act in the shoes of the tribes--providing a federal implementation program for tribes as it would for a state that failed to develop an approved program. In any event, both sides agree that in the absence of a tribal implementation plan, EPA may provide a federal operating plan for lands under the tribe's jurisdiction.

B. Federal Indian Law

Determining tribal jurisdiction is far from straightforward and involves delicate questions involving state and tribal sovereignty. Indeed, state-tribal relations have been a concern since the time of the founding. See The Federalist No. 42 (Madison) ("What description of Indians are to be deemed members of a State, is not yet settled, and has been a question of frequent perplexity and contention in the federal councils."). Under principles of federal Indian law, "Indian country" denotes the geographic scope where "primary jurisdiction ... rests with the Federal Government and the Indian tribe inhabiting it, and not with the States." Alaska v. Native Village of Venetie Tribal Gov't, 522 U.S. 520, 527 n.1 (1998). "Indian country" is defined by statute as "all land within the limits of any Indian reservation," "all dependent Indian communities," and "all Indian allotments." 18 U.S.C. 1151 (2001). "Although this definition by its terms relates only to federal criminal jurisdiction, [the Supreme Court has] recognized that it also generally applies to questions of civil jurisdiction such as the one at issue here." Venetie Tribal Gov't, 522 U.S. at 527 (citing DeCoteau v. District County Court for Tenth Judicial Dist., 420 U.S. 425, 427 n.2 (1975)). Thus, unlike typical political boundaries, the jurisdictional boundaries of Indian tribes are not always clearly delineated, and often are determined through adjudication or other administrative proceedings. See, e.g., id. at 534; Tribal Authority Rule, 40 C.F.R. pt. 49, 63 Fed. Reg. 7254 (Feb. 12, 1998).

"[T]he test for determining whether land is Indian country does not turn upon whether that land is denominated 'trust land' or 'reservation.' Rather, we ask whether the area has been 'validly set apart for the use of the Indians as such, under the superintendence of the Government.' " Oklahoma Tax Comm'n v. Citizen Band Potawatomi Indian Tribe of Oklahoma, 498 U.S. 505, 511 (1991) (quoting United States v. John, 437 U.S. 634, 648-49 (1978)). Difficult jurisdictional questions can arise over lands that do not meet the prima facie test for "Indian country." Claims of superintendence can be controversial for lands that tribes claim to be "dependent Indian communities," where title is not held by the federal government or Indians, e.g. Venetie Tribal Gov't, 522 U.S. at 525-27, or lands outside the exterior boundaries of formally-established reservations such as lands taken into trust for tribes pursuant to the Indian Reorganization Act (25 U.S.C. 465 (2000)), for which no action was taken by treaty, Executive Order, or act of Congress to set the lands aside for the use and benefit of a tribe.

It is against this background that EPA adopted its new Part 71 rules providing for federal administration of an operating permits program in Indian country.

C. The 1999 Part 71 Rule

In 1999, EPA finalized its 1997 proposal, 62 Fed. Reg. 13748 (March 21, 1997), establishing the Part 71 federal operating permits plan throughout "Indian country unless a Tribal or State Part 70 program has been explicitly approved for the area." 64 Fed. Reg. at 8247, 8249 (codified at 40 C.F.R. 71.4(b)). The major area of contention between petitioners and EPA, and thus the issue before this Court is EPA's authority to promulgate "Part 71 programs for Indian country." Section 71.4(b) provides:

The...