State ex rel. Darwin v. U.S. Envtl. Prot. Agency

• Decision Date: 03 April 2017
• Docket Number: No. 14-73394, No. 14-73384, No. 14-73386,No. 14-73368,14-73368
• Citation: 852 F.3d 1148
• Parties: State of ARIZONA, EX REL. Henry R. DARWIN, Director, Arizona Department of Environmental Quality, Petitioner, v. U.S. ENVIRONMENTAL PROTECTION AGENCY; Scott Pruitt, Administrator, United States Environmental Protection Agency, Respondents. CalPortland Company, Petitioner, v. U.S. Environmental Protection Agency, Respondent. Phoenix Cement Company, an enterprise division of the Salt River Pima-Maricopa Indian Community, Petitioner, v. U.S. Environmental Protection Agency, Respondent. ASARCO LLC, Petitioner, v. U.S. Environmental Protection Agency, Respondent.
• Court: U.S. Court of Appeals — Ninth Circuit

852 F.3d 1148

State of ARIZONA, EX REL. Henry R. DARWIN, Director, Arizona Department of Environmental Quality, Petitioner,

v.U.S. ENVIRONMENTAL PROTECTION AGENCY; Scott Pruitt, Administrator, United States Environmental Protection Agency, Respondents.

CalPortland Company, Petitioner,

v.U.S. Environmental Protection Agency, Respondent.

Phoenix Cement Company, an enterprise division of the Salt River Pima-Maricopa Indian Community, Petitioner,

v.U.S. Environmental Protection Agency, Respondent.

ASARCO LLC, Petitioner,

v.U.S. Environmental Protection Agency, Respondent.

No. 14-73368

No. 14-73384

No. 14-73386

No. 14-73394

United States Court of Appeals, Ninth Circuit.

Argued and Submitted June 21, 2016, San Francisco, California

Filed April 3, 2017

Carroll McGuffey III (argued) and Justin Wong, Troutman Sanders LLP, Atlanta, Georgia; Paul L. Gale, Troutman Sanders LLP, Irvine, California; Peter S. Glaser, Troutman Sanders LLP, Washington, D.C.; James T. Skardon, Assistant Attorney General, Environmental Enforcement Section; Mark Brnovich, Attorney General; Office of the Attorney General, Phoenix, Arizona; for Petitioner State of Arizona.

Albert H. Acken (argued) and Fredric D. Bellamy, Ryley Carlock & Applewhite, Phoenix, Arizona, for Petitioner CalPortland Company.

Mark W. DeLaquil (argued) and Andrew M. Grossman, Baker & Hostetler LLP, Washington, D.C.; George A. Tsiolis, Englewood, New Jersey; for Petitioner Phoenix Cement Company.

Eric L. Hiser (argued) and Trevor J.L. Burggraff, Jorden Bischoff & Hiser PLC, Scottsdale, Arizona; George A. Tsiolis, Englewood, New Jersey; for Petitioner ASARCO LLC.

Samara M. Spence (argued), Trial Attorney; John C. Cruden, Assistant Attorney General; Environment and Natural Resources Division, United States Department of Justice, Washington, D.C.; Matthew C. Marks and M. Lea Anderson, EPA Office of General Counsel, Washington, D.C.; Charlotte Withey, EPA Office of Regional Counsel, Region IX, San Francisco, California; for Respondents.

Before: Marsha S. Berzon, Jay S. Bybee, and John B. Owens, Circuit Judges.

OPINION

BYBEE, Circuit Judge:

In the late 1970s, Congress declared it a "national goal" to improve air visibility in federal parks and forests. 42 U.S.C. § 7491(a)(1) ; see also 40 C.F.R. § 81.400 et seq . (listing all national parks, national monuments, and wilderness areas Congress sought to protect). To achieve that goal, Congress sought to reduce emissions of various pollutants through a new regulatory scheme codified in Section 169A of the Clean Air Act (CAA). 42 U.S.C. § 7491(b). That scheme required each state with emissions impacting protected federal lands to create a State Implementation Plan (SIP) describing how the state intended to make reasonable progress toward the national visibility goal. Id. §§ 7410(a), 7491(b)(2). If the state submitted either a deficient SIP or none at all, the CAA required the EPA to promulgate its own plan—called a Federal Implementation Plan (FIP)—to force compliance with Congress's mandate. Id. § 7410(c)(1).

This extensive litigation arose when Arizona—a state containing twelve wilderness areas subject to Section 169A, see 40 C.F.R. § 81.403 —clashed with the EPA over its SIP submitted in 2011. Although the SIP listed proposals to manage and reduce emissions from various industrial sources operated within the state, the EPA determined that Arizona could do better in improving visibility. The EPA disapproved certain aspects of Arizona's SIP and issued its own FIP that imposed enhanced emission-control measures.

The EPA's actions spawned a series of legal challenges from Arizona and several private companies subject to EPA regulation (collectively, Petitioners). We have rejected most of those challenges in two prior decisions, concluding that the EPA acted within its authority when it disapproved portions of Arizona's SIP that it deemed problematic. Arizona ex rel. Darwin v. EPA (Arizona I ), 815 F.3d 519, 524 (9th Cir. 2016) ; Phoenix Cement Co. v. EPA , 647 Fed.Appx. 702, 704–05 (9th Cir. 2016). All that remains before us now are Petitioners' objections to several sections of the EPA's most recent FIP—those issued to replace certain rejected portions of Arizona's SIP—which Petitioners claim constitute invalid agency action.

We hold that several of Petitioners' objections to the FIP are not properly before us because they were not first presented to the EPA during the notice-and-comment period. See 42 U.S.C. § 7607(d)(7)(B) ("Only an objection to a rule or procedure which was raised with reasonable specificity during the period for public comment (including any public hearing) may be raised during judicial review."). As to the remaining objections that are ripe for our consideration, we conclude that the EPA's emission-control measures are not arbitrary or capricious and thus constitute valid agency rulemaking. Accordingly, we dismiss in part and deny in part the consolidated petitions for review.¹

I. REGULATORY BACKGROUND

In the twentieth century, our nation experienced a significant degradation of visibility in its most treasured wilderness areas. See Regional Haze Regulations, 64 Fed. Reg. 35,714, 35,715 (July 1, 1999). The air pollution, Congress found, was "primarily" due to the emission of "[sulfur dioxide], oxides of nitrogen, and particulate matter" from poorly regulated industrial sources. Id. (citing H.R. Rep. No. 95-294, at 204 (1977)). To tackle the problem, Congress adopted Section 169A of the CAA, and the EPA promulgated implementing regulations to require states to improve visibility by adopting certain emission controls. 42 U.S.C. § 7491(b)(2). Two categories of such emission controls are relevant to the issues before us: "best available retrofit technology" (BART) and what the EPA sometimes refers to as "reasonable progress" (RP) controls. 42 U.S.C. § 7491(b)(2)(A)–(B), (g)(1)–(2) ; 40 C.F.R. § 51.308(f)(3) ; Promulgation of Air Quality Implementation Plans; Arizona; Regional Haze and Interstate Visibility Transport Federal Implementation Plan, 79 Fed. Reg. 52,420, 52,447, 52,463 (Sept. 3, 2014) [hereinafter Final FIP].

A. Best Available Retrofit Technology

BART is a term of art used to describe technology that can be installed on an industrial source to control its emissions or make those emissions cleaner. 42 U.S.C. § 7491(b)(2)(A), (g)(2). Congress directed BART to be implemented on older stationary sources that "emit[ ] any air pollutant which may reasonably be anticipated to cause or contribute to any impairment of visibility" in protected federal lands. Id. § 7491(b)(2)(A) ; see also 40 C.F.R. § 51.301 (defining a "BART-eligible source" as an "existing stationary facility" built between 1962 and 1977 that "has the potential to emit 250 tons per year or more of any air pollutant"). If there are such sources within a regulated state, the state must not only "submit an implementation plan containing emission limitations representing BART," 40 C.F.R. § 51.308(e), but do so for each pollutant those sources emit, id. § 51.301.

In determining the appropriate BART to install, states must engage in a cost-benefit analysis by balancing five factors: "[1] the costs of compliance, [2] the energy and non-air quality environmental impacts of compliance, [3] any existing pollution control technology in use at the source, [4] the remaining useful life of the source, and [5] the degree of improvement in visibility which may reasonably be anticipated to result from the use of such technology." 42 U.S.C. § 7491(g)(2). Because the balancing is source specific, it could lead a state to adopt stringent BART regulations, none at all, or something in between. See Final FIP, 79 Fed. Reg. at 52,447 (recognizing that cost-benefit analyses could reasonably lead to various degrees of BART regulations). If the EPA is dissatisfied with a state's BART determination, it can issue a FIP containing its own cost-benefit analysis in accordance with Section 169A. 42 U.S.C. § 7410(c)(1).

B. Reasonable Progress Controls

Similar to BART, RP controls serve to limit emissions of harmful pollutants that degrade visibility in protected wilderness areas. Although RP controls, as such, are not mentioned in Section 169A, they are an outgrowth of Congress's mandate to make "reasonable progress toward meeting the national [visibility] goal." 42 U.S.C. § 7491(b)(2). The EPA has construed that mandate as requiring each regulated state to establish reasonable progress goals (RPGs) that depend on how much of that state's current haze would have to be eliminated each year to achieve natural, pristine conditions by the year 2064. 40 C.F.R. § 51.308(d)(1)(i)(B). If a state believes that it is unable to conform with the year-to-year reduction rate—or the "glidepath," as it is known in regulatory nomenclature—its SIP must explain why achieving the rate is not reasonable, while its proposed RPGs are. Id. § 51.308(d)(1)(ii).²

After a state calculates its RPGs, it must determine whether to implement RP controls to reach those RPGs. See id. § 51.308(d). In making that determination, the state may take into account existing control measures—including BART—as well as the visibility impact of controls established through other programs under the CAA. See id. § 51.308(d)(1). If the existing control measures do not cut it, the state must consider four factors to determine whether additional measures are warranted: "[1] the costs of compliance, [2] the time necessary for compliance, and [3] the energy and non-air quality environmental impacts of compliance, and [4] the remaining useful life of any existing source subject to such requirements." 42 U.S.C. § 7491(g)(1) ; see also 40 C.F.R. § 51.308(d)(1)(i)(A). Should a state fail to conduct an accurate balancing, the EPA can correct the state's errors in a FIP. 40 C.F.R. § 51.308(d)(1)(v) ; see also 42 U.S.C. § 7410(c)(1).

One characteristic of RP controls is worth emphasizing: they apply not just to some but to all pollutant-emitting stationary sources...