Sierra Club v. U.S. E.P.A., 01-60537.

• Citation: 314 F.3d 735
• Decision Date: 11 December 2002
• Docket Number: No. 01-60537.,01-60537.
• Parties: SIERRA CLUB, Clean Air and Water Inc.; Community In-Powerment Development Association, Petitioners, v. UNITED STATES ENVIRONMENTAL PROTECTION AGENCY; Christine T. Whitman, Administrator, United States Environmental Protection Agency, Respondents.
• Court: United States Courts of Appeals. United States Court of Appeals (5th Circuit)

314 F.3d 735

SIERRA CLUB, Clean Air and Water Inc.; Community In-Powerment Development Association, Petitioners, v. UNITED STATES ENVIRONMENTAL PROTECTION AGENCY; Christine T. Whitman, Administrator, United States Environmental Protection Agency, Respondents.

No. 01-60537.

United States Court of Appeals, Fifth Circuit.

December 11, 2002.

Marc Stephen Chytilo (argued), Santa Barbara, CA, Adam Lawrence Babich, Tulane Law Clinic, New Orleans, LA, for Petitioners.

Christopher Boyd Peak (argued), U.S. Dept. of Justice, Environmental Defense Section, Christine T. Whitman, U.S. E.P.A., Washington, DC, Manisha Dilip Patel, U.S. E.P.A., Dallas, TX, for Respondents.

F. Walter Conrad, Jr., Jacob Scott Janoe, Matthew Lynn Kuryla, Baker Botts, Houston, TX, David Andrew Savage, Baker Botts, Austin, TX, for E.I. Dupont De Nemours & Co., Entergy Gulf States Inc., Exxonmobil Oil Corp. and Motiva Enterprises, Intervenors.

John Stephen Carow, Austin, TX, for State of Texas and Texas Natural Resource Conservation Com'n, Intervenors.

Patricia T. Barmeyer, L. Joseph Loveland, Randall J. Butterfield, King & Spalding, Atlanta, GA, for State of Georgia, Amicus Curiae.

Donald James Trahan, Louisiana Dept. of Environmental Quality, Legal Dept., Baton Rouge, LA, for State of Louisiana, Amicus Curiae.

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

Before DeMOSS, STEWART and DENNIS, Circuit Judges.

DeMOSS, Circuit Judge:

Sierra Club, Inc., Clean Air and Water, Inc., and Community In-Powerment Association (collectively the "Petitioners"), are appealing the Environmental Protection Agency's (EPA) final action at 66 Fed.Reg. 26,914 (May 15, 2001) (codified at 40 C.F.R. pt. 52), which they contend contravenes the Clean Air Act (CAA), 42 U.S.C. §§ 7401-7671q. The final action approved the State Implementation Plan (SIP) submitted by the State of Texas for the Beaumont-Port Arthur (Beaumont) area and extended the ozone attainment deadline for that area. Petitioners also are appealing the EPA's determination that no additional control measures were required in the Beaumont area to satisfy the statutory requirement for implementation of Reasonably Available Control Measures (RACM). The EPA's final action is AFFIRMED in part, REVERSED in part, and REMANDED.

I. FACTUAL AND PROCEDURAL BACKGROUND

A. Regulatory Background.

The CAA establishes a comprehensive program for improving air quality throughout the nation. Under the CAA, the EPA is charged with identifying air pollutants that endanger the public health and welfare. Id. § 7408. The EPA also is charged with formulating National Ambient Air Quality Standards (NAAQS), which specify those pollutants' maximum permissible concentrations in the ambient air. Id. § 7409. In 1979, the EPA promulgated a one-hour NAAQS for ozone, which still remains at 0.12 parts per million based on a one-hour average. See 40 C.F.R. § 50.9.

Under the CAA, states must adopt SIPs specifying emission limitations applicable to pollution sources in order to maintain and enforce each NAAQS. 42 U.S.C. § 7410(a). SIPs are submitted to the EPA, which may approve, conditionally approve, or disapprove the SIPs in full or in part. Id. § 7410(k). Significantly, the CAA has a provision that requires SIPs to contain provisions regulating emissions that "contribute significantly to nonattainment in, or interfere with maintenance by, any other State with respect to any such national primary or secondary ambient air quality standard." Id. § 7410(a)(2)(D)(i)(I). In addition, as noted in the challenged final action, the EPA has interpreted 42 U.S.C. § 7410(a)(2)(A) as incorporating a similar requirement that an upwind area be prohibited from contributing significantly to nonattainment in a downwind area within the same state. See 66 Fed.Reg. 26,917.

Under 42 U.S.C. § 7511a, ozone attainment areas are classified according to the severity of air pollution. The classifications are: "marginal," "moderate," "serious," "severe," or "extreme." 42 U.S.C. § 7511a(a)-(e). Each classification has a specified date for attainment of the ozone NAAQS and the programs that States must adopt in their SIPs to attain the NAAQS by reducing emissions of volatile organic compounds and nitrogen oxides, which are precursors to the formation of ozone. Id. §§ 7511, 7511a-7511d. Under the CAA, the following dates were established for the NAAQS to be achieved: (1) November 15, 1993, for marginal areas; (2) November 15, 1996, for moderate areas; (3) November 15, 1999, for serious areas; (4) November 15, 2005, for severe areas; (5) November 15, 2007, for severe-17 areas;¹ and (6) November 15, 2010, for extreme areas. Id. § 7511(a)(1). Under section 7511(a)(5), the State may apply for two one-year attainment date extensions that the EPA can approve if it makes specific determinations regarding air quality and state compliance with SIP requirements.

In addition, all nonattainment area plans must provide for implementation of "all reasonably available control measures [RACM] as expeditiously as practicable." Id. § 7502(c)(1). The EPA must review each submitted plan. Id. § 7410(k). If the plan is approved, in whole or in part, the approved provisions become federally enforceable. Id. §§ 7413, 7604. If the plan is not approved, or is determined to be incomplete, the State may be subject to sanctions and eventually federally imposed clean air measures. Id. §§ 7410(c), 7509.

B. The Extension Policy at Issue in this Case.

On March 25, 1999, the EPA issued a notice of interpretation of the CAA entitled "Extension of Attainment Dates for Downwind Transport Areas." 64 Fed. Reg. 14,441 (Mar. 25, 1999). In this extension policy, the EPA interpreted the CAA as allowing for the extension of attainment dates for ozone nonattainment areas classified as either "moderate" or "serious" and that are downwind of areas that transport ozone and interfere with their ability to attain required ozone levels. Id. at 14,441-42. According to the EPA, it was seeking to "harmonize the attainment demonstration and attainment date requirements for downwind areas affected by transport both with the graduated attainment date scheme and the schedule for achieving reductions in emissions from upwind areas." Id. at 14,443.

In the extension policy, the EPA explained that an area's attainment date would be considered for extension if it: (1) has been identified as a downwind area "affected by transport from either an upwind area in the same State with a later attainment date or an upwind area in another State that significantly contributes to downwind nonattainment"; (2) has submitted an approvable attainment demonstration with any "necessary, adopted local measures," which indicates it will attain the one-hour NAAQS "no later than the date that the reductions are expected from upwind areas under the final [nitrogen oxides] SIP Call and/or the statutory attainment date for upwind nonattainment areas"; (3) has adopted "all applicable local measures required under the area's current classification and any additional measures necessary to demonstrate attainment," given that the reductions occurred as required in upwind areas; and (4) will "implement all adopted measures as expeditiously as practicable, but no later than the date by which the upwind reductions needed for attainment will be achieved." Id.

If an area satisfies the above guidelines, it would not be reclassified or "bumped-up" if it failed to attain by its original attainment date under section 7511(b)(2). The reasoning for this is that the EPA concluded that Congress did not intend for downwind areas to be "penalized by being forced to compensate for transported pollution by adopting measures that are more costly and onerous and/or which will become superfluous once upwind areas reduce their contribution to the pollution problem." Id. at 14,444. Nevertheless, downwind areas are still responsible for implementing local controls sufficient to bring about attainment, except for the transported pollution. Id.

C. EPA's Application of the Extension Policy to the Beaumont Area.

The Beaumont area is classified as a moderate ozone nonattainment area. See 40 C.F.R. § 81.344. Therefore, under 42 U.S.C. § 7511(a)(1), its original attainment date was November 15, 1996. However, as a result of the pollution traveling from the upwind area of Houston/Galveston, the EPA applied its extension policy that resulted in a new attainment date of November 15, 2007, for the Beaumont area. This date coincides with the Houston/Galveston area's November 15, 2007, attainment date. 66 Fed.Reg. 26,914. The EPA established the new attainment date for the Beaumont area after concluding that, based on extensive modeling submitted by the State of Texas, it will not reach the required attainment level unless the Houston/Galveston area also attains necessary ozone standards. Id. at 26,915-23. In other words, requiring local reductions in the Beaumont area earlier than the Houston/Galveston area's attainment date would not accelerate attainment in the Beaumont area because of the Houston/Galveston area's pollution contributions and the need for upwind emissions reductions.

Petitioners now appeal the EPA's application of the extension policy to the Beaumont area. Petitioners also appeal the EPA's determination that 42 U.S.C. § 7502(c)(1) does not compel the implementation of any additional control measures beyond those already contained in the Beaumont area's attainment demonstration SIP.

II. STANDARD OF REVIEW

This Court's role in reviewing the adequacy of the EPA's final action is governed by the Administrative Procedure Act, 5 U.S.C. § 706. Section 706(2) provides that a reviewing court shall "hold unlawful and set aside agency action, findings, and conclusions found to be — (A) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." See also Texas Office of Pub. Util. Counsel v. Federal...