Nance v. E.P.A.

Decision Date18 May 1981
Docket Number77-3356,Nos. 77-3058,77-3374 and 79-7261,77-3305,77-3301,s. 77-3058
Citation645 F.2d 701
Parties, 11 Envtl. L. Rep. 20,526 Marcus L. NANCE et al., Petitioners, v. ENVIRONMENTAL PROTECTION AGENCY, Respondent. Northern Cheyenne Tribe et al., Intervenors. THERMAL ENERGY, INC. et al., Petitioners, v. ENVIRONMENTAL PROTECTION AGENCY, Respondent. Northern Cheyenne Tribe et al., Intervenors. AMAX COAL COMPANY, Petitioners, v. ENVIRONMENTAL PROTECTION AGENCY, Respondent. Northern Cheyenne Tribe et al., Intervenors. CROW INDIAN TRIBE, MONTANA, Petitioner, v. ENVIRONMENTAL PROTECTION AGENCY, Respondent. Northern Cheyenne Tribe, Intervenor. WESTMORELAND RESOURCES, Petitioner, v. ENVIRONMENTAL PROTECTION AGENCY, Respondent. Northern Cheyenne Tribe, Intervenor. WESTMORELAND RESOURCES, Petitioner, v. ENVIRONMENTAL PROTECTION AGENCY, Respondent. Northern Cheyenne Tribe, Intervenor.
CourtU.S. Court of Appeals — Ninth Circuit

Bruce M. Brown, Brown & Huss, Miles City, Mont., on brief, for Nance.

Jack L. Smith, Denver, Colo., on brief, for Thermal Energy, Inc.

Gary L. Green, Dwason, Nagel, Sherman & Howard, Denver, Colo., on brief, for Amax Coal Co. Thomas K. Schoppert (argued), Lynaugh, Fitzgerald & Skaggs, Billings, Mont., on brief, for Crow Tribe.

George J. Miller, Philadelphia, Pa., on brief, for Westmoreland.

Charles W. Hingle, Lynaugh, Fitzgerald & Skaggs, Billings, Mont., James W. Moorman, Nancy Long, Angus Macbeth, Washington, D. C., on brief; Earl Salo, Bruce J. Terris, Washington, D. C., argued, for appellee EPA.

David R. Sturges, David Mastbaum, Denver, Colo., on brief, for intervenor.

Frederick E. Watson, San Francisco, Cal., William E. Murane, Holland & Hart, Denver, Colo., James R. Bieke, Shea & Gardner, Washington D. C., argued for appellant.

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

Before TANG, SCHROEDER and NELSON, Circuit Judges.

NELSON, Circuit Judge:

In this case, petitioners challenge the approval by the Environmental Protection Agency (EPA) of the Northern Cheyenne Tribe's redesignation of its reservation from Class II to Class I air quality standards. The major issue presented can be rather simply described. When an agency takes administrative action expressly on the then correct assumption that the action will not affect the rights of various parties, some of whom actively intervene in the proceedings, and immediately after such action becomes final a law is passed which causes the administrative action to have a potential direct effect of the sort it was previously expressly asserted it would not have, is such administrative action thereby rendered arbitrary and capricious or otherwise invalid?

We hold that the EPA's action was not arbitrary or capricious and, therefore, affirm the Agency's approval of the Northern Cheyenne Tribe's redesignation of its reservation from Class II to Class I air quality standards. Further, we affirm the denial by the EPA of the petition by Westmoreland Resources to vacate EPA approval of the redesignation and to remand the redesignation question to the Northern Cheyenne for reconsideration. Petitioners assert numerous other flaws in the proceedings which, they contend, require this court to overturn the EPA action. For reasons given below we are compelled to reject these contentions.

Statement of Facts

The facts are particularly crucial in this case because of the importance of the timing of the various events. Pursuant to the decision in Sierra Club v. Ruckelshaus, 344 F.Supp. 253 (D.D.C.1972), aff'd 4 Envir.Rep. 1815 (D.C.Cir.), aff'd by an equally divided court sub. nom. Fri v. Sierra Club, 412 U.S. 541, 93 S.Ct. 2770, 37 L.Ed.2d 140 (1973), the EPA promulgated regulations (PSD regulations) designed to prevent the significant deterioration of the air quality in areas cleaner than required by the national secondary air quality standards. 40 C.F.R. § 52.21 (1975). These PSD regulations were published on December 5, 1974. Under these regulations, all areas of the country which had cleaner air than required by the national standards were to be designated as Class I, Class II, or Class III. All clean air areas were initially designated as Class II, under which a moderate amount of deterioration of air quality would be allowed, but procedures were provided by which such areas could be redesignated Class I, under which very little deterioration and hence very little development is allowed, or Class III, under which the quality of the air in the area may deteriorate to the national secondary air quality standards. Specific procedures were provided by which an Indian Tribe governing body could redesignate its reservation from Class II to either Class I or III. 40 C.F.R. § 52.21(c) (1975).

The Tribal Council of the Northern Cheyenne Tribe, Intervenors in this action, decided on May 3, 1976, to request the EPA administrator to reclassify the reservation from Class II to Class I. On May 13, the Tribe advised the EPA of the proposed redesignation, and formally confirmed its proposal by letter dated July 9, 1976. After notifying various federal, state, and local officials, as well as certain citizens' groups, the Tribe began preparation of a report which was to discuss the social, environmental, and economic effects of the proposed redesignation. Volume I of this report, "The Northern Cheyenne Air Quality Redesignation Report and Request," was issued on December 11, 1976, and comprised well over 200 pages. Following distribution of this report to various agencies and interested parties, and notification of a public hearing on the proposed redesignation, such hearing was held in Lame Deer, Montana, on January 17, 1977. On March 7, 1977, the Tribe formally submitted its proposal for redesignation to the EPA, accompanied by a final report, the hearing transcript, and written comments and responses.

EPA regulations then in force required the agency to take action on such a redesignation proposal within 90 days, 40 C.F.R. § 52.21(c)(3)(vi) (1975), in this case by June 5, 1977. On April 29, 1977, EPA published notice that it intended to approve the redesignation of the Northern Cheyenne Reservation to Class I, and solicited comments on such redesignation through May 31, 1977. On June 10, 1977, the EPA Administrator announced that the time for receiving public comments would be extended until June 30, 1977. On August 5, 1977, the Administrator published his approval of the redesignation, effective immediately, which was accompanied by a 51-page "EPA Support Document" detailing the reasons for such approval. 42 Fed.Reg. 40695 (1977).

Petitioners assert the following grounds for overturning the action of the EPA in this case: (1) The decision of the Cheyenne Tribe to redesignate the reservation as a Class I area and the EPA's subsequent approval of that proposal were arbitrary and capricious insofar as they failed to consider the effects of such redesignation on strip mining; (2) The redesignation was ineffective because of lack of publication prior to the enactment of the 1977 Clean Air Act Amendments, and hence the purported redesignation was not ratified by those amendments; (3) The EPA violated its own regulations in failing to obtain the Secretary of the Interior's approval of the redesignation on behalf of Indian trust lands affected, or, in the alternative, the EPA breached the United States' trust obligations to the Indians; (4) The Cheyenne Tribe support document was insufficient under the EPA's regulations; (5) The Clean Air Act did not authorize the delegation to Indian Tribes of the power to redesignate their reservations, and if it did so authorize, it was unconstitutional; (6) The redesignation effected a taking of the petitioner's coal mining interests without due process and without just compensation in violation of the fifth amendment to the Constitution; (7) The delegation to the Indian governing bodies of redesignation authority which affected land use outside the reservation area violated the tenth amendment to the Constitution.

Standard of Review

Judicial review of the Administrator's action in this case is governed by section 10(e) of the Administrative Procedure Act, 5 U.S.C. § 706(2)(A)-(D). Under this section, we must determine whether the EPA's approval of the redesignation proposal by the Northern Cheyenne is invalid as arbitrary, capricious, or an abuse of discretion, id. § 706(2)(A), or unconstitutional, id. § 706(2)(B), or in excess of legislative authority, id. § 706(2)(C), or procedurally defective, id. § 706(2)(D). With respect to review under the "arbitrary and capricious" standard, the reviewing court is limited to deciding whether there has been a clear error of judgment by the agency and whether the agency action was based on a consideration of the relevant factors. Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402, 416, 91 S.Ct. 814, 823, 28 L.Ed.2d 136 (1970).

I

Were the Northern Cheyenne's Decision to Redesignate and the

EPA's Approval of that Proposal Arbitrary and Capricious

Petitioner's primary complaint is that it was arbitrary and capricious for the Northern Cheyenne Tribe to redesignate its reservation, and subsequently for the EPA to approve such redesignation, without considering the impact of the redesignation on strip mining in the surrounding area.

It is undisputed that under the regulations in effect at the time the redesignation was proposed, only 19 sources of pollution were subject to permit procedures, and that these sources did not include strip mines. In a meeting sometime before the end of October, 1976, EPA representatives assured the Coordinator of the Northern Cheyenne Research Project that sources not specifically covered by the regulation would not be affected. On October 29, 1976, the Coordinator wrote to the EPA Regional Administrator:

In a recent meeting with representatives of your...

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