Michigan Enviromental Quality v. Browner

• Decision Date: 22 June 2000
• Docket Number: 98-3400,Nos. 98-3399,s. 98-3399
• Citation: 230 F.3d 181
• Parties: (6th Cir. 2000) Michigan Department of Environmental Quality (98-3399); Michigan Manufacturers Association (98-3400), Petitioners, v. Carol Browner, EPA Administrator; United States Environmental Protection Agency, Respondents. Argued:
• Court: U.S. Court of Appeals — Sixth Circuit

Page 181

230 F.3d 181 (6th Cir. 2000)

Michigan Department of Environmental Quality (98-3399); Michigan Manufacturers Association (98-3400), Petitioners, v. Carol Browner, EPA Administrator; United States Environmental Protection Agency, Respondents.

Nos. 98-3399, 98-3400

UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT

Argued: June 22, 2000

Decided and Filed: August 24, 2000^*

On Petition for Review of an Order of the Environmental Protection Agency. No. 63 FR 8573-0; 40 CFR Part 52.

Gary L. Finkbeiner, OFFICE OF THE ATTORNEY GENERAL, NATURAL RESOURCES DIVISION, Lansing, Michigan, Stacy L. Johnson, Honigman, Miller, Schwartz & Cohn, Detroit, MI, Rhonda L. Ross, WARNER, NORCROSS & JUDD, Southfield, Michigan, Steven C. Kohl, HOWARD & HOWARD, Bloomfield Hills, Michigan, for Petitioners.

Martin F. McDermott, UNITED STATES DEPARTMENT OF JUSTICE, ENVIRONMENT & NATURAL RESOURCES DIVISION, Washington, D.C., Louise C. Gross, UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, OFFICE OF REGIONAL COUNSEL, REGION V, Chicago, Illlinois, for Respondent.

Before: SILER and CLAY, Circuit Judges; STAFFORD, District Judge^**.

OPINION

SILER, Circuit Judge.

Petitioners Michigan Department of Environmental Quality ("MDEQ") and Michigan Manufacturers Association ("Manufacturers") appeal the Environmental Protection Agency's ("EPA") decision under the Clean Air Act ("CAA"), 42 U.S.C. §§ 7401-7671q, disapproving revisions to a state implementation plan ("SIP") submitted by the State of Michigan. The question presented for review is whether the EPA, charged by Congress to determine whether SIPs provide for attainment and maintenance of national ambient air quality standards ("NAAQS"), properly disapproved a Michigan SIP revision that permitted an automatic exemption for a source that violates emissions standards if that violation results from startup, shutdown, or malfunction and meets certain other criteria¹. As set forth below, we AFFIRM the EPA's decision.

Under the CAA, Congress requires states to obtain and maintain NAAQS promulgated by the EPA. See Train v. NRDC, 421 U.S. 60, 64 (1975). Section 110 of the CAA focuses on SIPs and ensures that levels of certain "criteria" pollutants in the ambient air do not exceed specified healthful levels. For each criteria pollutant, EPA promulgates NAAQS sufficient to protect the public health with an adequate margin of safety and to protect the public welfare. See 42 U.S.C. § 7409(b).

For each NAAQS, states are required to develop a SIP providing for "implementation, maintenance and enforcement" of the NAAQS within the states' borders. See 42 U.S.C. § 7410(a)(2)(C). Although the states are given broad authority to design programs, the EPA has the final authority to determine whether a SIP meets the requirements of the CAA. EPA must disapprove a state's proposed SIP that would interfere with any requirement concerning the state's attainment and maintenance of NAAQS for certain airborne pollutants. See CAA § 101(b)(1); 42 U.S.C. § 7401(b).

Pursuant to its statutory responsibilities, EPA has issued regulations and guidance interpreting and clarifying the SIP requirements specified under section 110. Since 1977, the EPA has interpreted all excess emissions as "violations" of the applicable standards for which "notices of violations" could, but not necessarily would, issue. 42 Fed. Reg. 21,472 (April 27, 1977). Under this "enforcement discretion" approach, a regulator retains discretion to bring an enforcement action following a violation, depending on the surrounding circumstances. Id.

The EPA elaborated on this approach in 1982 and 1983, when Kathleen Bennett, then EPA Assistant Administrator for Air, Noise and Radiation, issued two memoranda explaining the agency's policy on excess emissions. Together, the memoranda explain that excess emissions must be deemed violations because "any emissions above the allowable [standard] may cause or contribute to violations of the national ambient air quality standards." But a source exceeding the amount allowed under a SIP would not necessarily be assessed a penalty if the exceedance was due to a malfunction, provided that the state required the "commencement of a proceeding to notify the source of its violation and to determine whether enforcement action should be undertaken." With regard to excess emissions during startup and shutdown, the Bennett Memoranda noted that because such occurrences are part of a source's normal operations, they "should be accounted for in the planning, design and implementation of operating procedures" for the source's process and control equipment.

In 1996, MDEQ submitted a revision of Michigan's SIP to the EPA for review and approval. See 42 U.S.C. § 7410. The request included proposed Rules 912, 913 and 914 regulating the startup, shutdown and malfunction ("SSM") of air emission sources. Rule 912 requires that a source be operated "consistent with good air pollution control practices for minimizing emissions during periods of abnormal conditions, startup, shutdown and malfunction" and contains notice and reporting requirements during such episodes. However, Rules 913 and 914 permit excess emissions resulting from SSM if certain notice, reporting and other requirements are met. Although petitioners contend that "Rules 913 and 914 do not provide automatic exemptions from an enforcement action by the state," the proposed rules fail to authorize the state regulatory agency, MDEQ, to review and require revisions to a source's written emission minimization plan for normal startups or shutdowns.

In 1997, the EPA proposed to disapprove Michigan's SIP revision containing the SSM rules. The EPA found that the rules violated CAA requirements because the state regulatory agency was not authorized to review and require revisions to a source's plan and the rules permitted automatic exemptions for violations of emission standards, contrary to EPA policy. Further, the EPA found that proposed Rule 913(d)'s definition of "malfunction" was too broad because it failed to limit malfunctions to failures that are "infrequent" and "not reasonably preventable." The EPA also stated that Michigan's air pollution control bypass provisions, embodied in Rules 913(3)(b) and 914(4)(b), were broader than permitted by the Act. Finally, the alternate emission limitations for startup and shutdowns in Rule 914(4)(d) could impermissibly allow relaxations of CAA requirements, including "new source review" limitations, new source performance standards, and toxic requirements. In its final action in 1998, the EPA disapproved the submitted rules based on the above reasons.

The EPA's disapproval of Michigan's SIP revision is final agency action subject to judicial review in the courts of appeals under CAA section 307(b)(1). See 42 U.S.C. § 7607(b)(1). Under Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842-43 (1984), this court reviews the EPA's interpretation of the CAA under a two-step process: first, "if Congress has directly spoken to the precise question at issue... the court... must give effect to the unambiguously expressed intent of Congress." Id. Second, if Congress has been silent or ambiguous about the "precise question at issue," then a reviewing court must defer to the agency's statutory interpretation if it is "reasonable." Id. at 842-43. Further, this court is "not [to] substitute its judgment for that of the agency," Motor Vehicle Mfrs. Ass'n v. State Farm Mutual Auto Ins. Co., 463 U.S. 29, 43 (1983), but rather shows great deference to the statutory interpretation given by the EPA and the officers charged with the CAA's administration. See Navistar Int'l Transp. Corp. v. EPA, 941 F.2d 1339, 1341-42 (6th Cir. 1991).

Petitioners contend that the EPA wrongfully interpreted section 110 of the CAA as requiring that all excess emissions due to SSM are...