Ass'n of Irritated Residents v. U.S. Envtl. Prot. Agency

• Decision Date: 23 June 2015
• Docket Number: No. 13–73398.,13–73398.
• Citation: 790 F.3d 934
• Parties: ASSOCIATION OF IRRITATED RESIDENTS, a California non-profit corporation, Petitioner, v. U.S. ENVIRONMENTAL PROTECTION AGENCY; Gina McCarthy, in her official capacity as Administrator of the U.S. Environmental Protection Agency; Jared Blumenfeld, in his official capacity as Regional Administrator for region IX of the U.S. Environmental Protection Agency, Respondents, Foster Poultry Farms; Foster Farms LLC; Dairy Cares; San Joaquin Valley Unified Air Pollution Control District; Air Coalition Team, Respondents–Intervenors.
• Court: U.S. Court of Appeals — Ninth Circuit

790 F.3d 934

ASSOCIATION OF IRRITATED RESIDENTS, a California non-profit corporation, Petitioner

v. U.S. ENVIRONMENTAL PROTECTION AGENCY; Gina McCarthy, in her official capacity as Administrator of the U.S. Environmental Protection Agency; Jared Blumenfeld, in his official capacity as Regional Administrator for region IX of the U.S. Environmental Protection Agency, RespondentsFoster Poultry Farms; Foster Farms LLC; Dairy Cares; San Joaquin Valley Unified Air Pollution Control District; Air Coalition Team, Respondents–Intervenors.

No. 13–73398.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted Feb. 10, 2015.

Filed June 23, 2015.

Brent Newell (argued), Center on Race, Poverty & the Environment, Oakland, California; Sofia Parino, Center on Race, Poverty & the Environment, San Francisco, California, for Petitioners.

Robert Dreher, Acting Assistant Attorney General, and Simi Bhat (argued), Environmental Defense Section, Environmental & Natural Resources Division, United States Department of Justice, Washington, D.C.; Jefferson Wehling, United States Environmental Protection Agency, Region IX, Office of Regional Counsel, San Francisco, California; Scott Jordan, United States Environmental.

Protection Headquarters, Office of General Counsel, Washington, D.C., for Respondents.

Philip M. Jay (argued), Rissa A. Stuart, and Ann M. Grottveit, Kahn, Soares & Conway, LLP, Sacramento, California, for Respondent–Intervenor Air Coalition Team.

David E. Cranston and Sedina L. Banks, Greenberg Glusker Fields Claman & Machtinger LLP, Los Angeles, California, for Respondent–Intervenor Dairy Cares.

Timothy S. Bishop (argued), Mayer Brown LLP, Chicago, Illinois; Carmine R. Zarlenga, Michael B. Kimberly, and Matthew A. Waring, Mayer Brown LLP, Washington, D.C., for Respondents–Intervenors Foster Farms, LLC and Foster Poultry Farms, Inc.

Catherine T. Redmond, Special Advisory Counsel, and Annette Ballatore–Williamson (argued), District Counsel, San Joaquin Valley Unified Air Pollution Control District, Fresno, California, for Respondent–Intervenor San Joaquin Valley Unified Air Pollution Control District.

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

Before: MARY M. SCHROEDER, Senior Circuit Judge, BARRY G. SILVERMAN, Circuit Judge, and MARVIN J. GARBIS, Senior District Judge.^*

OPINION

GARBIS, District Judge:

Petitioner, Association of Irritated Residents (“AIR”), petitions this court for review of the United States Environmental Protection Agency's (“EPA”) promulgation of 40 C.F.R. § 52.245, a regulation that revised the scope of a previous EPA decision. The EPA promulgated the regulation under § 110(k)(6) of the Clean Air Act (“CAA,” “Act”), an error-correcting provision, after the Agency determined that it had mistakenly approved certain New Source Review rules in 2004 as part of California's State Implementation Plan.

This case requires the court to address two matters. First, this court must decide whether the EPA reasonably determined that it made the error. This court holds that the EPA was not arbitrary, nor did it abuse its discretion in correcting its prior approval of the New Source Review rules after it learned that California law, specifically Senate Bill 700, did not authorize the San Joaquin Air Control District to require new source permits or emissions offsets for minor agricultural sources. Because those rules conflicted with state law, they should not have been incorporated into the State Implementation Plan in 2004; thus, the EPA did not act improperly in correcting its prior approval.

Second, as a matter of first impression, this court must decide whether § 110(k)(6) of the CAA grants the EPA authority to amend retroactively its approval of the 2004 New Source Review rules. Petitioner argues that the other enumerated actions in § 110(k) strictly limit the EPA's methods of revising an error. Using the standard set forth in Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984), we find that § 110(k)(6) does not clearly speak to the issue at hand. In light of this ambiguity, the EPA reasonably interpreted § 110(k)(6)'s requirement that the EPA “revise such [erroneous] action as appropriate” to encompass a retroactive limitation of its previous approval. Accordingly, we deny the petition for review.

I. Background

A. The Clean Air Act

Congress enacted the CAA amendments in 1970 “to protect and enhance the quality of the Nation's air resources so as to promote the public health and welfare and the productive capacity of its population.” 42 U.S.C. § 7401(b)(1). At that time, Congress also created the EPA and charged it with setting National Ambient Air Quality Standards (“NAAQS”) for various harmful air pollutants at levels necessary to protect the public health and welfare. 42 U.S.C. §§ 7408, 7409. The EPA must designate areas for each NAAQS as attainment (it meets the EPA-set pollutant level), nonattainment (it does not meet the EPA-set pollutant level), or unclassifiable. 42 U.S.C. § 7407(d)(1). The EPA is charged with assuring compliance with environmental laws and taking enforcement action against violations. See 42 U.S.C. § 7413(a), (b).

Under the CAA, the EPA works with the states pursuant to a model of cooperative federalism to achieve the statute's environmental goals. Vigil v. Leavitt, 381 F.3d 826, 830 (9th Cir.2004). The Act delegates to the states “primary responsibility for assuring air quality” within their respective boundaries and requires each state to develop a State Implementation Plan (“SIP”), “which will specify the manner in which [the NAAQS] will be achieved and maintained.” 42 U.S.C. § 7407(a). In California's San Joaquin Valley, the San Joaquin Valley Unified Air Pollution Control District (the “District”) promulgates and enforces regulations to meet the standards set by the EPA. A state submits its SIP to the EPA for review and approval whenever the NAAQS are updated. 42 U.S.C. § 7410(a). Once an adequate SIP (one that meets the Act's requirements) is approved by the EPA, it has “the force and effect of federal law.” Safe Air for Everyone v. EPA, 488 F.3d 1088, 1091 (9th Cir.2007). The CAA requires states to give the EPA “necessary assurances” that state law authorizes the air control districts to carry out any rules contained in the SIP. 42 U.S.C. § 7410(a)(2)(E).

In 1977, Congress enacted the CAA's New Source Review (“NSR”) program “to strengthen the safeguards that protect the nation's air quality.” New York v. EPA, 413 F.3d 3, 10 (D.C.Cir.2005). The NSR program requires new and modified major sources,¹ in non-attainment areas, to acquire construction permits, install Best Available Control Technology (“BACT”), and purchase offsets from other sources (emission reductions).

42 U.S.C. §§ 7502(c), 7503(a). A minor source is subject to the EPA regulations, although it is not required to have NSR permits for all construction activities. A minor source is not subject to offset requirements unless the state chooses to establish them as part of the SIP.

B. California's Implementation of the Clean Air Act

California's Central Valley, which includes the San Joaquin Valley, has, and at all times relevant hereto, had, a major air pollution problem. In 2004, the EPA designated the San Joaquin Valley as a non-attainment area for the 8–hour ozone standard. See 69 Fed.Reg. 23,858, 23,889 (Apr. 30, 2004).

Ground-level ozone (aka smog) forms when volatile organic compounds (“VOCs”) react with nitrogen oxides in the presence of heat and sunlight during the summer. Ozone pollution causes serious health problems, including damaging lung tissue and exacerbating asthma

and other respiratory diseases. 69 Fed.Reg. at 23,859 –60.

The District estimated that, even with air pollution controls, confined animal facilities were among the largest sources of VOCs in the Valley. Nevertheless, California's former California Health & Safety Code § 42310(e) exempted agricultural operations, including those that would be considered major sources under the CAA, from the NSR permit obligations until 2003. Due to this blanket exemption, the EPA would not accept the District's proposed NSR Rules to the SIP because California could not “give necessary assurances” that it had authority under state law to carry out the SIP. See 68 Fed.Reg. 37,746, 37,747 (June 25, 2003).

In order to avoid sanctions and loss of federal highway funding, the California legislature passed Senate Bill 700 (“SB 700”) in September 2003, which removed the blanket exemption that had previously excused all agricultural sources from the CAA's NSR requirements. California state law then required major agricultural sources to meet the pollution controls required by the CAA and the proposed NSR Rules. However, SB 700 retained narrow exemptions² that excused certain minor agricultural sources from NSR permitting and offset requirements.

Around this same time, the EPA considered District Rules 2020 and 2201 (the “2004 NSR Rules”), which the District had submitted in 2002 to the EPA for approval. The 2004 NSR Rules required new source permits and offset requirements for all new and modified stationary sources of air pollution, whether major or minor. See 68 Fed.Reg. 7,330, 7,331 (Feb. 13, 2003). In evaluating the 2004 NSR Rules, the EPA failed to realize that the Rules conflicted with SB 700, which continued to exempt certain minor agricultural sources. The EPA approved the 2004 NSR Rules—sans exemptions for minor agricultural sources—which became effective on June 16, 2004. See 69 Fed.Reg. 27,837 (May 17, 2004).

Beginning in 2005, AIR filed three citizen suits³ in the Eastern District of California against dairy farms that were minor agricultural sources under the CAA. See Assoc. of Irritated Residents v. C & R Vanderham Dairy, No. 0501593, 2005 WL 5671665 (E.D.Cal. Dec. 15, 2005) (“Vanderham ”); Assoc. of Irritated Residents v. Fred Schakel Dairy, No. 05–00707, 2005 WL 6459128 (E.D...