Reno-Sparks Indian Colony v. U.S. E.P.A., 02-71503.

• Decision Date: 16 July 2003
• Docket Number: No. 02-71503.,02-71503.
• Citation: 336 F.3d 899
• Parties: RENO-SPARKS INDIAN COLONY; Great Basin Mine Watch, Petitioners, v. UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, Respondent, Newmont USA Limited, d/b/a Newmont Mining Corporation; State of Nevada, Division of Environmental Protection, Respondents-Intervenors.
• Court: U.S. Court of Appeals — Ninth Circuit

336 F.3d 899

RENO-SPARKS INDIAN COLONY; Great Basin Mine Watch, Petitioners, v. UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, Respondent, Newmont USA Limited, d/b/a Newmont Mining Corporation; State of Nevada, Division of Environmental Protection, Respondents-Intervenors.

No. 02-71503.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted February 10, 2003.

Filed July 16, 2003.

COPYRIGHT MATERIAL OMITTED

Roger Flynn, Bradley A. Bartlett, Western Mining Action Project, Boulder, Colorado, for the petitioners.

Andrew J. Doyle, United States Department of Justice, Environment & Natural Resources Division, Washington, D.C., for the respondent.

Marcy G. Glenn, Denise W. Kennedy, Holland & Hart, L.L.P., Denver, Colorado; William J. Frey, Deputy Attorney General, Carson City, Nevada, for the respondents-intervenors.

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

Before: CANBY, O'SCANNLAIN, and W. FLETCHER, Circuit Judges.

CANBY, Circuit Judge.

This appeal presents the question whether the Clean Air Act program to prevent deterioration of air quality is administered in Nevada: (1) in large air quality planning units encompassing all or nearly all of the state, or (2) in more than 250 smaller units designated by the State. The importance of the issue arises from the fact that certain pollution controls go into effect for a unit when a major pollution source applies for a permit within that unit. If the unit is very large, then a major source almost certainly has already applied, and new minor sources are subject to the controls in issue. If the unit is but one of hundreds in the State, then many units are not subject to the controls because no major pollution source is located within the unit. Minor sources are then free to begin operating there without the special pollution controls.

Petitioners Reno-Sparks Indian Colony and Great Basin Mine Watch (collectively "Reno-Sparks") contend that a mine that proposes to operate near the Colony is subject to the controls in issue because the relevant unit is the entire State or nearly so. The EPA issued a rule, however, stating that Nevada is divided into more than 250 units and has been so divided since 1978. See "Designations of Areas for Air Quality Planning Purposes; State of Nevada; Technical Correction," 67 Fed.Reg. 12474 (Mar. 19, 2002) ("2002 Nevada Rule"). Reno-Sparks now challenges that 2002 Nevada Rule on the grounds that (1) it is arbitrary, capricious and not in accordance with the law, in violation of the Administrative Procedure Act ("APA"), see 5 U.S.C. § 706; and (2) it was issued without following the APA's notice and comment procedures, see 5 U.S.C. § 553.

The 2002 Nevada Rule purports to clarify that, in the table listing Nevada's Clean Air Act designations for various airborne pollutants, codified at 40 C.F.R. § 81.329, the terms "rest of state" and "entire state" do not refer to a single baseline area for Clean Air Act purposes but to more than 250 distinct hydrographic areas, each of which constitutes its own separate baseline area. Because we conclude that the EPA acted reasonably in promulgating the Rule, we deny Reno-Sparks' petition for review.

I

A. Clean Air Act

The Clean Air Act, 42 U.S.C. § 7401 et seq. establishes national ambient air quality standards (NAAQS) for a number of different airborne pollutants, including particulate matter (formerly described as total suspended particulate, or TSP, and now regulated as PM-10, or particulate matter with a diameter of ten micrometers or less), sulfur dioxide and nitrogen oxide. See 42 U.S.C. §§ 7408-7409.

In 1977, Congress amended the Act to provide for the achievement, maintenance, and enforcement of these national air quality standards. The amendments created three levels of classification for the different planning areas within a state. Areas were classified as "nonattainment" if they fell below the national air quality standards, and were classified as "attainment" if they exceeded national standards. Areas in which there was not enough data to determine whether they were in attainment or nonattainment were deemed "unclassifiable."

For attainment or unclassifiable areas, Congress established the Prevention of Significant Deterioration (PSD) program, which seeks to maintain air quality in pristine areas by governing the permissible increments of pollution increases in each planning area beyond that area's baseline pollution level.¹ 42 U.S.C. §§ 7470-7474. The permissible pollution levels established by the PSD program typically are stricter than the NAAQS levels. It is this PSD program and its enhanced pollution controls that are at issue in this appeal.

The planning areas of each state that are designated as attainment, nonattainment or unclassifiable, are known as "baseline areas." See 40 C.F.R. § 52.21(b)(15)(i). In order to determine the allowable amount of incremental pollution increase permitted in each attainment or unclassifiable area, a baseline concentration must be established. The baseline concentration of pollution is defined as the ambient concentration level existing on the minor source baseline date. See 40 C.F.R. § 52.21(b)(13)(i). That minor source baseline date for a particular baseline area is established when a major stationary source or major modification located in that baseline area submits an application for a permit under the appropriate regulations. See 40 C.F.R. § 52.21(b)(14)(ii).

The PSD limitations on pollution increases are not triggered for a baseline area until that area's baseline date, and therefore the area's baseline concentration, has been established. If the baseline concentration for a baseline area has not been triggered, then entities that are not considered major stationary sources of pollution can operate in that area subject only to the NAAQS standards rather than the more stringent PSD standards. As a result, the smaller, and hence more numerous, the baseline areas are, the less likely it is that a major source has applied for a permit within any one area, thereby establishing a baseline date. Consequently, the more baseline areas a state has, the more likely it is that a minor pollution source can find an area in which to operate where it is not subject to the requirements of the PSD program.

B. Nevada's Regulatory History

The 1977 amendments to the Clean Air Act required states to submit proposed boundaries and designations for each baseline area to the EPA for approval. See 42 U.S.C. § 7410. The EPA was free to adopt the state's designations, or it could redesignate on its own accord. In 1977, Nevada submitted its proposed list of individual baseline areas as well as proposed designations for each area. Nevada recommended that the boundaries for baseline areas correspond to individual hydrographic areas,² on the theory that air flow tends to follow water flow, and that the masses of air over any particular hydrographic area were therefore likely to share similar characteristics. The proposal identified and listed 14 air basins, which were subdivided into 254 sub-basins that corresponded to the state's 254 separate hydrographic areas.³ Each of the 254 areas was identified and numbered separately on a 1971 map of Nevada's Division of Natural Resources that was submitted to the EPA as part of Nevada's proposal.

In 1978, the EPA issued a rule establishing the official designations and baseline areas for all states, including Nevada. See 43 Fed.Reg. 8962 (Mar. 3, 1978). The EPA's list contained designations for TSP, sulfur dioxide, photochemical oxidants, and carbon monoxide. The EPA created a separate chart for each pollutant, in which it classified the state's different baseline areas as attainment, nonattainment, or unclassifiable. In the charts, each nonattainment area was listed separately. In the chart for TSP, each area that could not be classified also was listed separately. 43 Fed.Reg. at 9012-13. In the charts for sulfur dioxide and TSP, where the rest of the state was considered to be in attainment, all remaining areas were condensed onto a single line that was labeled "rest of state" or "whole state."⁴ Id. Similarly, in the charts for photochemical oxidants, nitrogen oxide, and carbon monoxide, where all remaining areas were considered unclassifiable, those areas were listed on a single line with the label "rest of state." Id. The EPA's initial designations for Nevada were listed in the Code of Federal Regulations. See 40 C.F.R. § 81.329 (1978); 43 Fed Reg. at 9012-13. Nothing in the listings stated that Nevada's proposed unit boundaries were being rejected or amended.

In 1987, the EPA replaced the listed particulate pollutant TSP with PM-10. In doing so, the EPA stated that it was adopting the same baseline areas for PM-10 that it had used previously for TSP. See 58 Fed.Reg. 31622, 31630 (June 3, 1993).

In 1990, Congress passed another set of amendments to the Clean Air Act, which led to a new series of rules issued by the EPA. As part of that rulemaking, the EPA promulgated a new regulation pertaining to its designation charts, upon which Reno-Sparks heavily relies, stating:

Designated areas which are listed below as attainment ("Better than national standards") or unclassifiable ("Cannot be classified") for total suspended particulate (TSP), sulfur dioxide (SO2), and nitrogen dioxide (NO2), represent potential baseline areas or portions of baseline areas which are used in determining compliance with maximum allowable increases (increments) in concentrations of the respective pollutants for the prevention of significant deterioration of air quality (PSD). With respect to areas identified as "Rest of State" it should be assumed that such reference comprises a single area designation for PSD baseline area purposes. However, for PM-10, the use of the term "Rest of State" is an interim measure to designate as unclassifiable all locations not originally designated...