Utility Air Regulatory Group v. E.P.A.

• Decision Date: 28 February 2003
• Docket Number: No. 01-1204.,01-1204.
• Citation: 320 F.3d 272
• Parties: UTILITY AIR REGULATORY GROUP, Petitioner, v. ENVIRONMENTAL PROTECTION AGENCY, Respondent. Clean Air Implementation Project, Intervenor.
• Court: U.S. Court of Appeals — District of Columbia Circuit

320 F.3d 272

UTILITY AIR REGULATORY GROUP, Petitioner, v. ENVIRONMENTAL PROTECTION AGENCY, Respondent Clean Air Implementation Project, Intervenor.

No. 01-1204.

United States Court of Appeals, District of Columbia Circuit.

Argued September 6, 2002.

Decided February 28, 2003.

COPYRIGHT MATERIAL OMITTED

On Petition for Review.

Lauren E. Freeman argued the cause for the petitioner. Mel S. Schulze was on brief.

Christopher S. Vaden, Attorney, United States Department of Justice, argued the cause for the respondent. Gregory B. Foote and Kerry E. Rodgers, Attorneys, United States Environmental Protection Agency, were on brief. Kent E. Hanson, Attorney, United States Department of Justice, entered an appearance.

William H. Lewis, Jr., and Michael A. McCord were on brief for the intervenor.

Before: EDWARDS, HENDERSON, and ROGERS, Circuit Judges.

Opinion for the court filed by Circuit Judge KAREN LeCRAFT HENDERSON.

KAREN LeCRAFT HENDERSON, Circuit Judge:

The petitioner, the Utility Air Regulatory Group (UARG), a trade association whose members include inter alia individual electric utilities, seeks review and vacatur of the interpretation given by the Environmental Protection Agency (EPA or Agency) to its State Operating Permit Program regulations, 40 C.F.R. § 70.6(c)(1), and Federal Operating Permit Program regulations, 40 C.F.R. § 71.6(c)(1). According to the EPA, the regulations authorize, pursuant to Title V of the Clean Air Act (CAA), 42 U.S.C. §§ 7661 et seq., permit issuing authorities to enhance the conditions included in operating permits issued to facilities that release air pollutants, viz. by imposing emission monitoring requirements on a case-by-case basis to "assure compliance" with federal emission standards. 42 U.S.C. § 7661c(a); 40 C.F.R. §§ 70.6(c)(1), 71.6(c)(1). UARG asserts that the EPA's interpretation — which it says is manifested in at least two permit-specific orders as well as an Agency permit instruction manual — effectively, and without required notice and comment, amends operating permit rules the EPA promulgated in 1992 and 1996. Alternatively, UARG asserts, the Agency's interpretation of 40 C.F.R. §§ 70.6(c)(1) and 71.6(c)(1) is unauthorized under the CAA. For the following reasons, we dismiss the petition because UARG lacks standing. In any event, the issue raised by UARG is not ripe for judicial review.

I.

UARG's petition for review is one of various industry groups' challenges to the EPA's implementation of the 1990 amendments to Title V of the Clean Air Act. See, e.g., Appalachian Power v. EPA, 208 F.3d 1015, 1019 (D.C.Cir.2000); Clean Air Implementation Project v. EPA, 150 F.3d 1200, 1204 (D.C.Cir.1998). Title V of the CAA and its implementing regulations govern the operating permit issuing process for stationary sources of air pollution. 42 U.S.C. §§ 7661 et seq.; 40 C.F.R. parts 70, 71.¹ Under Title V, a regulated source of air pollution cannot operate without obtaining an operating permit from the appropriate state or local authority that administers an EPA-approved implementation plan (or from the EPA if no EPA-approved plan exists). 42 U.S.C. § 7661a(a). Although the state or local authority may approve a new permit or a permit submitted for modification or renewal, it must first submit the permit to the EPA for its review. Id. § 7661d. The EPA may "object to [the] issuance" of the permit within 45 days; if it does object, "the permitting authority may not issue the permit" unless the permit is "revised to meet the objection." Id. § 7661d(b)(3), (c).

Parts 70 and 71 of the EPA's "Air Programs" regulations establish the "minimum elements" of a Title V permit program, including provisions specifying the contents of each permit. 40 C.F.R. §§ 70.6, 71.6. Under the EPA's rules, each permit must specify the permit's duration, the emission limitations and standards applicable to the source of air pollution, monitoring and "measures to assure compliance" (including record keeping and reporting) with the conditions and terms of the permit. 40 C.F.R. §§ 70.6(a)(1)-(3), (c), 71.6(a)(1)-(3), (c).

Because emission standards and monitoring requirements differ depending on the particular source of air pollution, the terms and conditions of each permit also vary. For some sources, in addition to restricting the amount of emitted pollutants, the permit imposes periodic monitoring, testing and recordkeeping requirements.² The monitoring and testing requirements ensure that sources continuously comply with emission standards. For other sources no EPA or state-approved standard imposes periodic monitoring or testing; instead, the EPA regulation requires the state or other permit authority to add monitoring and testing conditions sufficient to monitor compliance with the permit. 40 C.F.R. § 70.6(a)(3)(i)(B); see Appalachian Power, 208 F.3d at 1019 (explaining that section 70.6(a)(3)(i)(B) requires periodic monitoring if no periodic monitoring requirement exists).

Before the EPA employed the interpretation under challenge, it had read 40 C.F.R. § 70.6(a)(3)(i)(B)³ to authorize the inclusion of supplemental monitoring and testing conditions in a permit even if an EPA or state-approved periodic monitoring or testing requirement was already in place. In 1998 the EPA issued a document entitled Periodic Monitoring Guidance for Title V Operating Permits Programs (Guidance), which interpreted 40 C.F.R. § 70.6(a)(3)(i)(B) to require a permit issuer, if existing requirements failed to "yield reliable data from the relevant time period that are representative of the source's compliance," to impose stricter monitoring and testing conditions. Appalachian Power, 208 F.3d at 1019-20 (describing EPA's view of 40 C.F.R. § 70.6(a)(3)(i)(B) articulated in Guidance). In Appalachian Power, however, electric utilities as well as associations representing the chemical and petroleum industries successfully challenged the EPA's interpretation as an impermissible broadening of the EPA's regulation. Id. at 1028. We concluded the Guidance effectively, and invalidly, amended 40 C.F.R. § 70.6(a)(3)(i)(B) without complying with the rulemaking requirements of the CAA, 42 U.S.C. § 7607(d). Id.

Since Appalachian Power, in two permit-related adjudications and in the promulgation of its Instruction Manual for Permit Application Forms, the EPA has used a "separate `sufficiency' requirement" imposed by other regulations (sections 70.6(c)(1) and 71.6(c)(1)) to reach the same interpretation this court rejected in Appalachian Power. PacifiCorp's Jim Bridger and Naughton Electric Utility Steam Generating Plants, Petition No. VIII-00-1 at 18, at http://www.epa.gov/region07/programs/artd/air/title5/t5memos/woc020.pdf (Nov. 18, 2000) (order denying in part and granting in part petition challenging state operating permit) (PacifiCorp Order), Joint Appendix (JA) at 288; see Fort James Camas Mill, Petition No. X-1999-1, at 7 (Dec. 22, 2000) (order denying in part and granting in part petition to object to state operating permit) (Fort James Camas Mill Order), JA 29; Instruction Manual for Permit Application Forms at 23 (Jan. 2001) (Manual), JA 36. According to the petitioner, the EPA now interprets section 70.6(c)(1) (as well as section 71.6(c)(1)) to mandate, "[w]here the applicable requirement already requires periodic testing or instrumental or non-instrumental monitoring," that a permit issuer conduct "sufficiency reviews of periodic testing and monitoring in applicable requirements, and enhancement of that testing or monitoring through the permit as necessary to be sufficient to assure compliance with the terms and conditions of the permit." PacifiCorp Order at 18-19.<sup>4</sup> For example, in PacifiCorp, where a quarterly monitoring requirement was required by existing standards, the EPA determined the quarterly monitoring to be too "infrequent" to "`assure compliance,'" and, using section 70.6(c)(1), conditioned issuance of the permit on additional monitoring. PacifiCorp Order at 19.⁵

UARG challenges the EPA's interpretation of sections 70.6(c)(1) and 71.6(c)(1), maintaining that it resurrects the interpretation we rejected in Appalachian Power; that is, it results in the same impermissible broadening of the rule. UARG points out that the regulatory history, the same history applicable to section 70.6(a)(3)(i)(B), does not indicate that section 70.6(c)(1) was meant to impose a separate regulatory standard requiring a permit issuer to conduct sufficiency reviews. See also Appalachian Power, 208 F.3d at 1026-27 ("The short of the matter is that the regulatory history EPA offers fails to demonstrate that § 70.6(a)(3)(i)(B) initially had the broad scope the Guidance now ascribes to it."). Alternatively, UARG argues that the EPA's interpretation results in a regulation unauthorized by the CAA.

II.

"[B]efore we reach the merits of any claim, we must first assure ourselves that the dispute lies within the constitutional and prudential boundaries of our jurisdiction." La. Envtl. Action Network v. Browner, 87 F.3d 1379, 1382 (D.C.Cir. 1996). A court must confine itself "to adjudicating `actual cases' and `controversies,'" Allen v. Wright, 468 U.S. 737, 750, 104 S.Ct. 3315, 3324, 82 L.Ed.2d 556 (1984), and in the administrative context, should avoid "premature adjudication ... until an administrative decision has been formalized and its effects felt in a concrete way by the challenging parties." Abbott Labs. v. Gardner, 387 U.S. 136, 148-49, 87 S.Ct. 1507, 1515, 18 L.Ed.2d 681 (1967). For UARG, this means that UARG has standing to challenge the EPA's interpretation, and, if so, that the controversy is ripe for us to review. Because UARG petitions on behalf of its members, it has standing only if "at least one of its members would have standing to sue in his own right," Sierra Club v. EPA, 292 F.3d 895, 898 (D.C.Cir.2002) (citing Hunt v. Wash. State Apple Advertising Comm'n, 432 U.S. 333, 342-43, 97 S.Ct. 2434, 2440-41, 53 L.Ed.2d 383...