Environmental Defense, Inc. v. E.P.A.

• Decision Date: 11 December 2007
• Docket Number: No. 06-1164.,06-1164.
• Citation: 509 F.3d 553
• Parties: ENVIRONMENTAL DEFENSE, INC., et al., Petitioners v. ENVIRONMENTAL PROTECTION AGENCY and Stephen L. Johnson, Administrator, Respondents.
• Court: U.S. Court of Appeals — District of Columbia Circuit

509 F.3d 553

ENVIRONMENTAL DEFENSE, INC., et al., Petitioners v. ENVIRONMENTAL PROTECTION AGENCY and Stephen L. Johnson, Administrator, Respondents.

No. 06-1164.

United States Court of Appeals, District of Columbia Circuit.

Argued October 19, 2007.

Decided December 11, 2007.

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

Robert E. Yuhnke argued the cause for petitioners. With him on the briefs was Joanne M. Spalding.

David J. Kaplan, Attorney, U.S. Department of Justice, argued the cause for respondents. With him on the brief was John C. Cruden, Deputy Assistant Attorney General.

Before: GINSBURG, Chief Judge, and ROGERS and BROWN, Circuit Judges.

Opinion for the Court filed by Circuit Judge ROGERS.

ROGERS, Circuit Judge:

Environmental Defense, Inc., the Natural Resources Defense Council, and the Sierra Club petition for review of a final rule promulgated by the Environmental Protection Agency to regulate "hot spot" analyses undertaken as part of the transportation conformity determinations required by the Clean Air Act ("CAA"). See PM_2.5 and PM₁₀ Hot Spot Analyses in Project-Level Transportation Conformity Determinations for the New PM_2.5 and Existing PM₁₀ National Ambient Air Quality Standards ("Final Rule"), 71 Fed.Reg. 12,468, 12,470-74 (Mar. 10, 2006) (to be codified at 40 C.F.R. pt. 93). Petitioners seek a remand of sections 93.116 and 123(b) of the Final Rule on the ground that they fail to implement the conformity conditions in CAA §§ 176(c)(1)(A) and (B)(iii). Petitioners also seek vacatur of EPA's decision to withdraw a previously announced emissions model from use in "hot spot" analyses on the ground that EPA failed to give prior adequate notice or opportunity for comment.¹ We grant the petition in part and deny it in part. Because petitioners fail to show that EPA's interpretation of CAA § 176(c)(1)(A) is unreasonable or that EPA failed to give adequate notice and opportunity for comment prior to withdrawing the model, we deny the petition as to those contentions. However, if "any area" properly means "a local area" under CAA § 176(c)(1)(B)(i) and (B)(ii), then it is arbitrary and capricious not to define the term similarly in (B)(iii) or not to explain why the term there means something different. We therefore grant the petition and remand the Final Rule for EPA either to interpret (B)(iii) in harmony with (B)(i) and (B)(ii) or to explain why it need not do so.

I.

Pursuant to the CAA, EPA has established National Ambient Air Quality Standards ("NAAQS") that regulate air contaminants, including particulate matter measuring less than ten micrometers ("PM₁₀") and less than 2.5 micrometers ("PM_2.5"). The states, in turn, have prepared State Implementation Plans ("SIPs") to "provide [] for implementation, maintenance, and enforcement of [NAAQS] in each air quality control region (or portion thereof). . . ." CAA § 110(a)(1), 42 U.S.C. § 7410(a)(1). See generally Envtl. Def. Fund v. EPA ("EDF II"), 167 F.3d 641, 643-46 (D.C.Cir.1999); S. Coast Air Quality Mgmt. Dist. v. EPA, 472 F.3d 882, 886-87 (D.C.Cir.2006). The CAA requires that states be divided into specific areas, which are rated "nonattainment" if air quality standards do not comply with the NAAQS, "attainment" if they do, or "maintenance" if they have passed from nonattainment to attainment status. CAA §§ 107(d)(1)(A)(I)-(ii); 3(E), 42 U.S.C. §§ 7407(d)(1)(A)(I)-(ii); (3)(E).

The federal conformity rule, first adopted in 1977, prohibited federal agencies from assisting, supporting, or approving transportation activities that do not conform to a state's SIP. See Criteria and Procedures for Determining Conformity to State or Federal Implementation Plans, 58 Fed.Reg. 62,188, 62,189 (Nov. 24, 1993). State-designated metropolitan planning organizations ("MPOs") for certain urban areas, as required by the federal highway law,² could not approve transportation activities that did not conform to a SIP. Id. In the years after adoption of the conformity rule, EPA and the U.S. Department of Transportation ("DOT") engaged in inconclusive discussions about whether individual transportation projects that were part of broader transportation plans implementing SIP requirements could be approved without further assessments. EPA argued for additional assessments to evaluate whether individual projects would affect the attainment of NAAQS in SIP areas. See, e.g., Letter from Jennifer Joy Wilson, Assistant Adm'r for External Affairs, EPA & Don R. Clay, Acting Assistant Adm'r for Air and Radiation, EPA, to Robert E. Farris, Administrator, Federal Highway Administration, DOT (Nov. 8, 1988).

In 1990, Congress amended the CAA's conformity provisions, requiring EPA and DOT jointly to promulgate transportation regulations. As amended, Section 176(c)(1)³ sets forth conformity requirements for all activities:

Conformity to an implementation plan means—

(A) conformity to an implementation plan's purpose of eliminating or reducing the severity and number of violations of the national ambient air quality standards and achieving expeditious attainment of such standards; and

(B) that such activities will not —

(i) cause or contribute to any new violation of any standard in any area;

(ii) increase the frequency or severity of any existing violation of any standard in any area; or

(iii) delay timely attainment of any standard or any required interim emission reductions or other milestones in any area.

42 U.S.C. § 7506(c)(1) (emphases added).

The EPA first invoked its authority under § 176(c)(4), 42 U.S.C. § 7506(c)(4), to promulgate regulations applicable to transportation projects, in 1993. In relevant part, those regulations required federal agencies and MPOs to conduct an analysis of the impact of a transportation project upon carbon monoxide and PM₁₀ pollution at the local level in nonattainment and maintenance areas. See 40 C.F.R. § 93.101 (1993). Such an analysis thus provides information concerning pollutant levels "on a scale smaller than the entire nonattainment or maintenance area, including, for example, congested roadway intersections . . . ." Id. The rule required only a qualitative approach for PM₁₀ "until EPA releases [quantitative] modeling guidance on this subject and announces in the Federal Register that these requirements are in effect." Id. §§ 93.131(d), 51.454(d) (1993); see also id. § 93.123(b)(4).

In November 2003 EPA proposed to amend these conformity regulations by adopting criteria and procedures for PM_2.5 and revising the hot spot rule for PM_10. Notice of Proposed Rulemaking ("NPRM"), 68 Fed.Reg. 62,690, 62, 712 (Nov. 5, 2003). On December 13, 2004, EPA issued a supplementary proposal setting forth a number of hot spot options for PM_2.5. Supplemental Notice of Proposed Rulemaking ("Supplemental NPRM"), 69 Fed.Reg. 72,140, 72,144-45 (Dec. 13, 2004), and for PM_10, id. at 72,149-50. EPA proposed to require only a qualitative analysis for PM_2.5 in the first instance, as it had done for PM_10. Id. at 72,145.

Ultimately EPA revised the existing hot spot regulation as regards PM₁₀ and imposed the same criteria for PM_2.5. Final Rule, 71 Fed.Reg. at 12,470-71 (amending 40 C.F.R. § 93.116). The new hot spot regulation, which applies in nonattainment and maintenance areas regardless of the SIP, 40 C.F.R. § 93.116, now provides that a new transportation project:

must not [1] cause or contribute to any new localized CO, PM_10, and/or PM_2.5 violations or [2] increase the frequency or severity of any existing CO, PM_10, and/or PM_2.5 violations in CO, PM₁₀ and PM_2.5 nonattainment and maintenance areas. This criterion is satisfied . . . if it is demonstrated that . . . no new local violations will be created and the severity or number of existing violations will not be increased as a result of the project.

Final Rule, 71 Fed.Reg. at 12,510 (codified at 40 C.F.R. § 93.116(a)).

During the rulemaking, Petitioners commented that proposed § 93.116(a) violated CAA §§ 176(c)(1)(A) and (B)(iii). They posited that by including only two of the four statutory conformity conditions, the proposed rule failed to require any finding that the project be consistent with the SIP's aim of eliminating all emissions violations and that the project's emissions not delay timely attainment and interim progress in meeting emission milestones. EPA, in response, rejected the view that the "hot spot" regulation supplants existing transportation conformity regulations, maintaining instead that the latter already require transportation projects to be "consistent with the emissions projections and control measures in the SIP." Final Rule, 71 Fed.Reg. at 12,482. According to EPA, the purpose of "hot spot" regulations is limited to preventing an increase in the severity or frequency of local violations of emissions standards, reflecting the mandate of CAA §§ 176(c)(1)(B)(i) and B(iii); EPA rejected a construction of CAA §§ 176(c)(1)(A) and (B)(iii) that would require new individual projects to reduce emissions as opposed to preventing any new violations or worsening of existing violations. See id.

EPA also announced in the Final Rule that a previously established quantitative emissions model, MOBILE6.2, while potentially appropriate for quantitative analyses of PM_2.5 at the regional level, was not appropriate for PM_2.5 or PM₁₀ hot-spot analyses. Id. at 12,500. Previously, EPA had stated that MOBILE6.2 "must be used in all PM_2.5 conformity analyses, until [it is] replaced by newer approved methods or models." Notice of Availability ("NOA"), 69 Fed.Reg. 28,830, 28,832 (May 19, 2004). Upon releasing MOBILE6.2, EPA had explained that the release did not trigger any requirement quantitatively to analyze PM₁₀ emissions under the hot spot rule. Id.

II.

Petitioners challenge EPA's amendment to the "hot spot" conformity regulation, 40 C.F.R. § 93.116, contending that it unlawfully ignores the requirements of CAA §§ 176(c)(1)(A) and (B)(iii). Petitioners...