Sierra Club v. U.S. Envtl. Prot. Agency

• Decision Date: 02 July 2020
• Docket Number: No. 18-9507,18-9507
• Citation: 964 F.3d 882
• Parties: SIERRA CLUB, Petitioner, v. UNITED STATES ENVIRONMENTAL PROTECTION AGENCY; Andrew Wheeler, Administrator, United States Environmental Protection Agency, Respondents, State of Utah, on behalf of the Utah Department of Environmental Quality, Division of Air Quality; PacifiCorp Energy, Respondents - Intervenors, and Air Permitting Forum, Amicus Curiae.
• Court: U.S. Court of Appeals — Tenth Circuit

964 F.3d 882

SIERRA CLUB, Petitioner,

v. UNITED STATES ENVIRONMENTAL PROTECTION AGENCY; Andrew Wheeler, Administrator, United States Environmental Protection Agency, Respondents,State of Utah, on behalf of the Utah Department of Environmental Quality, Division of Air Quality; PacifiCorp Energy, Respondents - Intervenors,andAir Permitting Forum, Amicus Curiae.

No. 18-9507

United States Court of Appeals, Tenth Circuit.

FILED July 2, 2020

Keri N. Powell, Powell Environmental Law, LLC, Decatur, Georgia (Patton Dycus, Environmental Integrity Project, Decatur, Georgia, with her on the briefs), for Petitioner.

David J. Kaplan, United States Department of Justice, Environmental Defense Section, Washington, D.C. (Jeffrey Bossert Clark, Assistant Attorney General; Jonathan D. Brightbill, Principal Deputy Assistant Attorney General; and John T. Krallman, United States Environmental Protection Agency, with him on the briefs), for Respondents.

E. Blaine Rawson, Ray Quinney & Nebeker P.C., Salt Lake City, Utah (Marie Bradshaw Durrant, PacifiCorp, Salt Lake City, Utah, with him on the briefs), for Respondent-Intervenor PacifiCorp Energy.

Sean D. Reyes, Utah Attorney General; Tyler R. Green, Utah Solicitor General; Christian C. Stephens and Marina V. Thomas, Assistant Utah Attorneys General; Salt Lake City, Utah, for Respondent-Intervenor State of Utah.

Charles H. Knauss, Hunton Andrews Kurth LLP, Washington, D.C.; and Shannon S. Broome, Hunton Andrews Kurth LLP, San Francisco, CA, for Amicus Curiae Air Permitting Forum.

Before BACHARACH, BALDOCK, and MURPHY, Circuit Judges.

BACHARACH, Circuit Judge.

This petition involves interpretation of an environmental regulation addressing the renewal of permits under Title V of the Clean Air Act. The statute and accompanying regulation allow renewal of these permits only if they ensure "compliance with" all of the "applicable requirements." 42 U.S.C. § 7661c(a) ; 40 C.F.R. 70.7(a)(1)(iv). The term "applicable requirements" is defined in the regulation, but not the statute. Envtl. Integrity Project v. EPA , 960 F.3d 236, 244 (5th Cir. 2020). The Sierra Club interprets the regulatory definition to require compliance with all existing statutory requirements; the EPA interprets the regulatory definition more narrowly, arguing that the applicability of certain requirements is determined by the state permit issued under a separate part of the Clean Air Act (Title I).

We agree with the Sierra Club's interpretation. The regulatory definition of "applicable requirements" includes all requirements in the state's implementation plan, and Utah's implementation plan broadly requires compliance with the Clean Air Act. So all of the Act's requirements constitute "applicable requirements" under the regulation.

I. The Clean Air Act's Requirements

To interpret the term "applicable requirements," we must consider the underlying statute (the Clean Air Act). Two of the statutory parts, Titles I and V, bear on the meaning of "applicable requirements" under the regulation. See Romoland Sch. Dist. v. Inland Empire Energy Ctr., LLC , 548 F.3d 738, 752 (9th Cir. 2008).

A. Title I

The Clean Air Act calls for federal and state cooperation. Texas v. EPA , 690 F.3d 670, 677 (5th Cir. 2012). For its part, the EPA sets national air quality standards and provides oversight and enforcement. 42 U.S.C. § 7409. To achieve compliance with these national air quality standards, states must develop implementation plans and submit them to the EPA for approval. Id.

These plans require many industrial sources of pollution to obtain preconstruction permits through a process called "New Source Review" (NSR). Id. § 7475(a). The states conduct NSR under their implementation plans. Id . §§ 7410(a)(2)(C), 7471.

The required NSR differs for "major" or "minor" sources of pollution. See Envtl. Integrity Project v. EPA , 960 F.3d 236, 242 (5th Cir. 2020) ("The substantive requirements for preconstruction permits differ markedly depending on whether the new source is deemed ‘major’ or ‘minor.’ "). Major NSR is required if a new or modified source would emit pollutants above certain thresholds. 42 U.S.C. §§ 7475(a), 7479(1), 7502(c)(5) ; 40 C.F.R. §§ 51.165(a)(1)(iv)(A), (1)(v)(A), 51.166(b)(1)(i), (b)(2)(i). Only minor NSR is required if emissions would fall below the applicable thresholds. 42 U.S.C. § 7410(a)(2)(C) ; 40 C.F.R. §§ 51.160 – 51.164. Minor NSR entails "only the barest of requirements." Luminant Generation Co. v. EPA , 675 F.3d 917, 922 (5th Cir. 2012).

B. Title V

Title V is designed to enhance compliance and improve enforcement. See S. Rep. No. 101-228, at 346 (1993). Under Title V, the operating permit must include the various statutory limitations on emissions that apply to a given source. 42 U.S.C. § 7661c(c). Some limitations may be self-executing; others may be source-specific and defined in other permits. Compare id . § 7411 (establishing New Source Performance Standards that are self-executing limitations on certain sources), with id . § 7475 (requiring certain sources to obtain a permit for Prevention of Significant Deterioration, which entails source-specific limitations). The Title V permit must include all applicable self-executing and source-specific limitations. Id . § 7661c(a) ; see Envtl. Integrity Project v. EPA , 960 F.3d 236, 243 (5th Cir. 2020) (stating that Title V permits must consolidate all of the information that the source needs to comply with the Clean Air Act).

States are responsible for issuing Title V permits. 42 U.S.C. § 7661a(b), (d). Before issuing a Title V permit, the state must propose the permit to the EPA. Id . § 7661d(a), (b). If the proposed permit does not comply with Title V's "applicable requirements," the EPA must object. Id. § 7661d(b)(1). If the EPA does not object, others can petition the EPA to compel it to object. Id. § 7661d(b)(2). If a petition is filed, the EPA must respond. Id. In responding, the EPA must object to the proposed permit upon a demonstration that the source failed to comply with the applicable requirements. Id.

Once Title V permits are issued, they are enforceable by the EPA and the public. Id. § 7413(a), (b) (by the EPA); id. § 7604(a)(1), (f)(4) (by the public). The EPA may enforce a Title V permit either administratively or in federal court. Id. § 7413(a), (b).

II. The Hunter Plant's Permit for Modifications

The parties’ dispute centers on the regulatory requirements for PacifiCorp's modification of an industrial plant known as the "Hunter Plant."

PacifiCorp began the NSR preconstruction permitting process in 1997 in order to modify the plant. In considering PacifiCorp's permit request, Utah determined that the modifications triggered only minor NSR requirements. This determination went unchallenged.

During the same time period, PacifiCorp was obtaining its initial Title V operating permit for the Hunter Plant. Utah ultimately issued the Title V permit in 1998, incorporating Utah's determination that the modifications required only minor NSR. Renewal of the Title V permit was required in 2003 and every five years thereafter. Id . § 7661a(b)(5)(B).

In 2001 PacifiCorp applied to renew the Title V permit, but Utah waited roughly fourteen years to act on the application.¹ When Utah finally acted, it renewed PacifiCorp's Title V permit, incorporating the requirements from the minor NSR permit. Utah sent its proposed permit to the EPA, and the EPA did not object.

The Sierra Club filed a petition to compel the EPA to object,² arguing in part that the modifications from 1997 to 1999 should have triggered major NSR requirements.

III. The Hunter Order

The EPA denied the Sierra Club's petition in 2017. In denying the petition, the EPA did not decide whether the Hunter Plant's modifications should have triggered major NSR requirements. The EPA instead focused on the meaning of the term "applicable requirements," interpreting it as a general reference to the requirements stated in the prior Title I permit:

Where a final preconstruction permit has been issued, whether it is a major or minor NSR permit, the terms and conditions of that permit should be incorporated as "applicable requirements" and the permitting authority and EPA should limit its review to whether the title V permit has accurately incorporated those terms and conditions ....

Joint App'x at 19.

Applying this definition, the EPA relied on Utah's earlier refusal to apply major NSR requirements.³ So the EPA denied the Sierra Club's petition, finding that

• the proposed permit had accurately incorporated the requirements stated in the minor NSR permit and

• any major NSR requirements were not considered "applicable requirements."

The Sierra Club then sought review of the EPA's decision, and PacifiCorp and the State of Utah intervened as respondents.

IV. Standing

As a threshold matter, PacifiCorp contends that the Sierra Club lacks Article III standing. A similar contention was lodged in a previous appeal. Sierra Club v. EPA , 926 F.3d 844 (D.C. Cir. 2019). In that appeal, the D.C. Circuit determined that the Sierra Club had standing to bring this challenge. Id. at 848–49.⁴ We agree with the D.C. Circuit on the Sierra Club's standing.

A. Necessity of Standing for Members

When an organization sues on behalf of its members, the organization must show that "its members would otherwise have standing to sue in their own right." Friends of the Earth, Inc. v. Laidlaw Envtl. Servs., Inc. , 528 U.S. 167, 181, 120 S.Ct. 693, 145 L.Ed.2d 610 (2000). An organization's members enjoy standing if

(1) [they have] suffered an "injury in fact" that is (a) concrete and particularized and (b) actual or imminent, not conjectural or hypothetical; (2) the injury is fairly traceable to the challenged action of the defendant; and (3) it is likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision.

Id. at 180–81, 120 S.Ct. 693.

B. Injury-in-Fact

In environmental suits, an injury-in-fact exists when the petitioner "use[s]...