Louisiana Environmental Action v. U.S. E.P.A.

• Decision Date: 08 September 2004
• Docket Number: No. 02-60991.,02-60991.
• Citation: 382 F.3d 575
• Parties: LOUISIANA ENVIRONMENTAL ACTION NETWORK, Petitioner, v. UNITED STATES ENVIRONMENTAL PROTECTION AGENCY and Michael O. Leavitt, Administrator, United States Environmental Protection Agency, Respondents.
• Court: U.S. Court of Appeals — Fifth Circuit

382 F.3d 575

LOUISIANA ENVIRONMENTAL ACTION NETWORK, Petitioner, v. UNITED STATES ENVIRONMENTAL PROTECTION AGENCY and Michael O. Leavitt, Administrator, United States Environmental Protection Agency, Respondents.

No. 02-60991.

United States Court of Appeals, Fifth Circuit.

September 8, 2004.

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John Timothy Suttles, Jr., Tulane University Environmental Law Clinic, Adam Lawrence Babich (argued), Tulane University School of Law, New Orleans, LA, for Petitioner.

David A. Carson (argued), U.S. Dept. of Justice, Denver, CO, Michael James Boydston, U.S. EPA, Dallas, TX, Michael O. Leavitt, U.S. EPA, Washington, DC, for Respondents.

Kyle B. Beall, Maureen Noonan Harbourt, Charles Simon McCowan, III, Kean, Miller, Hawthorne, D'Armond, McCowan & Jarman, Baton Rouge, LA, for Louisiana Chemical Ass'n, Intervenor.

Petition for Review of an Order of the Environmental Protection Agency.

Before BARKSDALE, EMILIO M. GARZA and STEWART, Circuit Judges.

CARL E. STEWART, Circuit Judge:

The Louisiana Environmental Action Network ("LEAN") petitions for review of several final rules by the Environmental Protection Agency ("EPA"), pursuant to the Clean Air Act ("CAA" or "the Act"), 42 U.S.C. § 7401, et seq., approving revisions to the state implementation plans for ozone in the Baton Rouge, Louisiana area. Previously, in Sierra Club v. EPA, 314 F.3d 735, 741 (5th Cir.2002), we held that EPA's allowance of an attainment deadline extension for a nonattainment area subverts the plain meaning of the CAA.

Arising out of the shadows of our ruling in Sierra Club, LEAN presently asserts that the EPA erroneously approved Louisiana's revised state implementation plan, as consistent with the CAA, based on criteria relevant only under the now defunct extension policy. LEAN therefore challenges, as arbitrary and capricious, the EPA's decision to approve Louisiana's revised state implementation plan attainment demonstration and Louisiana's inter-precursor trading provision. LEAN presents a separate challenge to the EPA's approval of Louisiana's substitute contingency measure consisting of emission reductions occurring outside the Baton Rouge area. For the following reasons, we deny the petition in part, and grant it in part, and remand to the EPA for further proceedings.

FACTUAL AND PROCEDURAL BACKGROUND

A. Regulatory Background

The CAA, first enacted in 1970 and extensively revised in 1977 and 1990, establishes a complex and comprehensive regulatory system to reduce air pollution nationwide. 42 U.S.C. § 7401, et seq. Under Title I of the Act, the EPA is charged with identifying air pollutants that endanger the public health and welfare. Id. §§ 7408-7409. The Act also requires the EPA to formulate national ambient air quality standards ("NAAQS"), specifying the maximum permissible air concentration of six pollutants, including a one-hour standard of 0.12 parts per million for ozone pollution. See 40 C.F.R. pt. 50.9(a).¹

In 1990, Congress responded to the problem of widespread nonattainment of the ozone NAAQS by adding "Subpart 2," 42 U.S.C. §§ 7511-7511f, which had the purpose of imposing "carefully designed restrictions on EPA discretion." Whitman v. American Trucking Ass'ns, 531 U.S. 457, 484, 121 S.Ct. 903, 149 L.Ed.2d 1 (2001). The 1990 Amendments to the Act created a classification system designating areas of the country as "attainment" or "nonattainment," based on whether or not areas were in compliance with the permissible NAAQS for ozone. 42 U.S.C. § 7407(d). If an area fails to meet the NAAQS standards, then the EPA designates the area as one of "nonattainment." Id. Nonattainment areas are further classified according to the severity of the ozone problem as "marginal," "moderate," "serious," "severe," or "extreme." Id. § 7511(a)(1).

The 1990 Amendments also specified certain measures each nonattainment area was required to take and limited the number of years each area had to achieve compliance, ranging from 1993 to 2010, depending on an area's classification. Id. § 7511(a). Under the CAA, the following time line was established for the NAAQS to be achieved: (1) November 15, 1993, for marginal areas; (2) November 15, 1996, for moderate areas; (3) November 15, 1999, for serious areas; (4) November 15, 2005, for severe areas; (5) November 15, 2007, for severe-17 areas; and (6) November 15, 2010, for extreme areas. Id. In accord with this time line, if the EPA determines that a marginal, moderate, serious, or severe area does not attain the pertinent standard, the EPA is required, by operation of law, to reclassify the area to the next higher classification. Id. § 7511(b)(2). The area's attainment date is then extended and the area is simultaneously subjected to the additional regulations applicable to the higher classification. Id.

Congress further required a permit program, designated the New Source Review ("NSR"), as a component of the CAA. Id. §§ 7475(a), 7502(c)(5), 7503. Under the NSR, Congress required that major sources of air pollution, having the potential to emit pollutants above certain thresholds, obtain permits prior to construction or modification of the source and comply with certain requirements. Id. For NSR in nonattainment areas, these requirements include complying with the Lowest Achievable Emission Rate ("LAER") and obtaining sufficient emission reductions from existing sources to offset the source's increased emissions. Id. §§ 7502(c)(5), 7503.

The CAA also established a federal-state partnership, recognizing that prevention and control of air pollution at its source is the primary responsibility of States and local governments, and delegated to the States primary responsibility for implementing the NAAQS standards. Id. §§ 7401, 7407. In accord with this partnership, each State failing to comply with NAAQS, for any air pollutant, is required to submit a plan, known as a state implementation plan ("SIP"), specifying emission limitations applicable to pollution sources and taking additional steps to attain the relevant NAAQS. Id. § 7410(a). SIPs must be designed to bring a State into compliance and also must prohibit emissions that "contribute significantly to nonattainment in, or interfere with maintenance by, any other State." Id. § 7410(a)(2)(D)(i)(I).

In areas of ozone nonattainment, a State must submit, "as expeditiously as practicable," SIP revisions to the EPA in order to attain NAAQS compliance. Id. § 7511(a)(1). The revised SIP submission must provide an attainment demonstration to show that the area will achieve the NAAQS by the area's applicable statutory deadline, id. § 7511a(c)(2)(A), and an implementation plan for any reasonably available control measures ("RACM") that will advance the attainment date. Id. § 7502(c)(1). For areas classified as serious or severe, the States must also submit Reasonable Further Progress ("Rate of Progress") SIPs demonstrating an average reduction of baseline emissions of 3% per year. Id. § 7511a(c)(2)(B). Additionally, nonattainment area SIPs must provide for the implementation of specific [contingency] measures to be undertaken if the area fails to make reasonable further progress, or to attain the NAAQS by the applicable attainment deadline. Id. § 7502(c)(9).

The SIPs, and any revisions to the SIPs, must be adopted by the State after reasonable notice and public hearing. Id. § 7410(a)(1). The EPA must then review each submitted plan. Id. § 7410(k). If the plan is approved, in whole or in part, the approved provisions become federally enforceable. Id. §§ 7413, 7604. If the plan is not approved, or is determined to be incomplete, the State may be subject to sanctions and eventually federally imposed clean air measures. Id. §§ 7410(c), 7509.

B. Present Facts

The EPA first designated the Baton Rouge area, which encompasses five parishes, as an ozone nonattainment area in 1978. 43 Fed.Reg. 8,964, 8,998 (March 3, 1978). In 1991, the EPA re-designated the Baton Rouge area as a "serious" ozone attainment area in accordance with the 1990 CAA amendments, with a statutory attainment deadline of November 15, 1999. 56 Fed.Reg. 56,694, 56,770 (Nov. 6, 1991). The Baton Rouge area is subject to ozone pollution from upwind sources outside the State of Louisiana, which have contributed to the failure of the Baton Rouge area to attain the ozone NAAQS. 67 Fed.Reg. 61,786, 61,790 (Oct. 2, 2002) (to be codified at 40 C.F.R. pts. 52 and 81). To this day, the Baton Rouge area has failed to attain the ozone NAAQS.

On November 22, 2000, LEAN brought a citizen suit against the Administrator for failure to perform a nondiscretionary act or duty. 42 U.S.C. § 7604(a)(2). Following the passing of the November 15, 1999, deadline, LEAN sought to ensure that the agency issue a determination as to whether the Baton Rouge area's failure to meet the statutory deadline for attaining the ozone standard required a reclassification to the next higher classification. On March 7, 2002, the district court entered a judgment ordering EPA to issue a determination by June 5, 2002, as to whether the Baton Rouge area had attained the applicable ozone standard. See 68 Fed.Reg. 20,077, 20,078 (April 24, 2003).

On June 24, 2002, the EPA determined that the Baton Rouge area did not attain the ozone NAAQS by the November 15, 1999, deadline for serious ozone non-attainment areas. 67 Fed.Reg. 42,688, 42,688 (June 24, 2002). In a separate rulemaking, the EPA withdrew its determination, based on its ozone extension policy, and extended the attainment date for the Baton Rouge area to November 15, 2005, while retaining Baton Rouge's status as a serious ozone non-attainment area. Id.

On December 11, 2002, in an action concerning the Beaumont-Port Arthur, Texas ozone nonattainment area, this court rejected the EPA's ozone extension policy as inconsistent with the CAA. See Sierra Club, 314 F.3d at 741. The EPA then requested a voluntary remand of its extension policy to the Baton...