Natural Resources Defense Council, Inc. v. Gorsuch, 81-2208

Citation685 F.2d 718,222 U.S.App.D.C. 268
Decision Date17 August 1982
Docket NumberNo. 81-2208,81-2208
Parties, 222 U.S.App.D.C. 268, 12 Envtl. L. Rep. 20,942 NATURAL RESOURCES DEFENSE COUNCIL, INC., Citizens for a Better Environment, Inc., Northwestern Ohio Lung Association, Inc., Petitioners, v. Anne M. GORSUCH, Administrator, U. S. Environmental Protection Agency, American Petroleum Institute, et al., American Iron and Steel Institute, Rubber Manufacturers Association, Inc., General Motors Corporation, Alabama Power Company, et al., Chemical Manufacturers Association, Intervenors.
CourtUnited States Courts of Appeals. United States Court of Appeals (District of Columbia)

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

David D. Doniger, Washington, D. C., for petitioners.

Jose R. Allen, Atty., Dept. of Justice, Boston, Mass., of the bar of the Supreme Court of Mass., pro hac vice by special leave of Court for respondent. David E. Menotti, Associate Gen. Counsel, Lydia N. Wegman, Asst. Gen. Counsel, Eric Smith, Atty., EPA, Donald Stever and Nancy Bryson, Attys., Dept. of Justice, Washington, D. C., were on the brief for respondent.

Patricia A. Barald, Washington, D. C., with whom Theodore L. Garrett, Washington, D. C., for Chemical Mfrs. Ass'n, Charles F. Lettow, Janet L. Weller and Michael A. Wiegard, Washington, D. C., for Rubber Mfrs. Ass'n, Michael J. Halloran, San Francisco, Cal., for Chevron, U.S.A., Inc., Louis E. Tosi and William L. Patberg, Toledo, Ohio, for General Motors Corp., Robert A. Emmett and William B. Peterson, Washington, D. C., for American Iron and Steel Institute, et al., Henry V. Nickel, Washington, D. C., for Alabama Power, et al., and Stark Ritchie and David T. Deal, Washington, D. C., for American Petroleum Institute were on the joint brief for the intervenors. Edmond B. Frost, Washington, D. C., also entered an appearance for intervenor Chemical Mfrs. Ass'n. Peter S. Everett, Washington, D. C., also entered an appearance for intervenors, Alabama Power Co., et al. Julius J. Hollis, Detroit, Mich., also entered an appearance for intervenor General Motors Corp. Walter R. Allan, San Francisco, Cal., also entered an appearance for intervenor American Petroleum Institute, et al.

Before MIKVA and GINSBURG, Circuit Judges, and WILLIAM J. JAMESON, * Senior United States District Judge for the District of Montana.

Opinion for the Court filed by Circuit Judge GINSBURG.

GINSBURG, Circuit Judge:

This case involves a dispute between the Environmental Protection Agency ("EPA"), supported by industry intervenors, and petitioning environmental associations concerning EPA's application of a "bubble concept" 1 to a discrete Clean Air Act (or "Act") scheme, the new source review requirements for areas in which air quality does not meet federal standards ("nonattainment areas"). 2 The controversy centers on the appropriate definition of the word "source" for the purpose of implementing the statutory scheme. Under EPA's current, bubble concept regulation, effective October 14, 1981, 3 source means an entire plant. Under the regulation previously in force, 4 an individual piece of process equipment within the plant ranked as a source. EPA changed its definition of source expressly to cut back substantially the coverage of nonattainment area new source review. 5

In ruling upon EPA's regulatory change, we do not write on a clean slate. Our course is marked by two prior decisions in which panels of this court determined the applicability vel non of the bubble concept to distinct Clean Air Act programs. In Alabama Power Co. v. Costle, 636 F.2d 323 (D.C.Cir.1979), the court held EPA must employ the concept in the Act's Prevention of Significant Deterioration ("PSD") regime, a scheme designed to maintain air quality in clean air areas; in ASARCO, Inc. v. EPA, 578 F.2d 319 (D.C.Cir.1978), the court ruled out application of the concept to national new source performance standards ("NSPSs") which the Act directs EPA to set with a view to enhancing air quality. In each case the court focused on the purpose Congress envisioned for the particular program at issue. ASARCO declared the bubble concept impermissible when the congressional objective was improvement, rather than simply preservation, of existing air quality. See 578 F.2d at 327-29; see also id. at 330 (Leventhal, J., concurring) (challenged regulations would contravene congressional policy contemplating that modification of a facility would bring about air quality improvement). Alabama Power held the concept "precisely suited" to the congressional design when the intent was "to preserve (existing) air quality," rather than to improve it. 636 F.2d at 402.

Congress, EPA does not dispute, intended the new source review requirements to operate not simply as a quality-maintaining scheme but specifically to promote the cleanup of nonattainment areas. 6 We are therefore impelled by the force of our precedent in Alabama Power and ASARCO to hold that EPA's regulatory change, its employment of the bubble concept to shrink to relatively small size mandatory new source review in nonattainment areas, is impermissible. 7

I. Background
A. The Statutory Framework

Congress substantially redesigned the Clean Air Act in 1970 amendments 8 to better " 'protect and enhance the quality of the Nation's air resources.' " 9 The amendments established a comprehensive federal-state program to control existing and new sources of air pollution. 10 Central to the new design, Congress charged EPA to prescribe national ambient air quality standards ("NAAQSs"), 11 and required all states to adopt, and submit to EPA for approval, State Implementation Plans ("SIPs") that provide for the timely attainment of the NAAQSs. 12

By 1976, it was clear that many regions of the country had failed to attain the primary NAAQSs within the statutory deadline, and remained distant from those national standards. In light of this shortfall, EPA endeavored to clarify, in an interpretive rule, the circumstances in which new sources of pollution would be permitted in areas where an ambient standard had not been achieved. EPA Interpretative Ruling of December 21, 1976 ("Offset Ruling"), 41 Fed.Reg. 55524 (1976); see S.Rep.No.127, supra note 12, at 55. 13 Congress, however, "(b)eliev(ed) that a statutory clarification of the question (was) needed," id., and therefore added to its 1977 Clean Air Act Amendments, 14 Part D to Title I of the Act. 15

Part D required states with nonattainment areas to submit revised SIPs not later than January 1, 1979. 42 U.S.C. § 7502 note (Supp. IV 1980). These revised SIPs must demonstrate that the primary NAAQSs will be attained "as expeditiously as practicable," but not later than December 31, 1982, or "if the State demonstrates to the satisfaction of the Administrator ... that such attainment is not possible in an area with respect to either (ozone or carbon monoxide (or both) ), ... not later than December 31, 1987." Id. § 7502(a). The SIPs must also "provide for the implementation of all reasonably available control measures as expeditiously as practicable." Id. § 7502(b)(2). Until the NAAQSs are attained, "reasonable further progress" towards the standards must occur in each intervening year. Id. § 7502(b)(3). 16

At the heart of the present dispute are two features of Congress' 1977 alterations: the Part D permit program, id. § 7502(b)(6), and the prohibition of major new construction in nonattainment areas lacking a SIP that meets the Part D requirements ("construction moratorium"), id. § 7410(a)(2)(I). Part D mandates that SIPs establish a permit program "for the construction and operation of new or modified major stationary sources" in nonattainment areas. Id. § 7502(b)(6). 17 States may issue a permit for construction or modification 18 of a major 19 source only if four conditions are met. First, the increased emissions from the proposed source must not exceed the allowance for growth identified and quantified in the SIP pursuant to 42 U.S.C. § 7502(b)(5) or, alternatively, the applicant must obtain sufficient reductions in emissions in the nonattainment area to offset the increased emissions from the proposed source. Id. § 7503(1). Second, the proposed source must comply with the "lowest achievable emission rate (LAER)." 20 Id. § 7503(2). Third, the applicant must demonstrate that all other major sources in the state under its control are in compliance (or are on a schedule for compliance) with applicable emissions limitations. Id. § 7503(3).

Finally, no permit may be issued unless the state is carrying out the applicable implementation plan for the nonattainment area in which the proposed source is to be located. Id. § 7503(4). If the nonattainment area lacks an EPA-approved SIP that meets Part D's requirements, the "construction moratorium" becomes operative and "no major stationary source (that would emit the nonattainment pollutant(s) ) shall be constructed or modified in (the) area." Id. § 7410(a)(2)(I). 21

B. EPA's Regulations

Part D, dense as it is, does not explicitly define what Congress envisioned as a "stationary source" to which the permit process and construction moratorium should apply. Nor is the issue squarely addressed in the legislative history. By regulation, EPA has twice attempted to provide a clear-cut answer. The response it gave on August 7, 1980, rested on the notion that Congress intended new source review to be "an important tool in the drive towards attainment of ambient air quality standards," 45 Fed.Reg. 52676, 52697 (1980) ("1980 Regulations"); EPA therefore designed its definition to subject to review more new construction projects in areas with unhealthy air than in areas where the legislative objective was simply to prevent significant deterioration of healthy air. On October 14, 1981, EPA, upon reconsideration, dramatically altered its "source" definition. This time, the agency focused on the "regulatory burdens and complexities" the 198...

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