United States Court of Appeals,

Sixth Circuit.

MICHIGAN DEPARTMENT OF ENVIRONMENTAL

QUALITY (98-3399); Michigan Manufacturers

Association (98-3400), Petitioners,

v.

Carol BROWNER, EPA Administrator; United States

Environmental Protection

Agency, Respondents.

Nos. 98-3399, 98-3400.

Argued: June 22, 2000

Decided and Filed: Aug. 24, 2000 [FN*]

FN* This decision was originally issued as an

"unpublished decision" filed on August 24, 2000.

On September 27, 2000, the court designated the

opinion as one recommended for full-text

publication.

Michigan Department of Environmental Quality (MDEQ)

and manufacturers' association sought review of

Environmental Protection Agency (EPA) decision, under

the Clean Air Act (CAA), disapproving revisions to state

implementation plan (SIP). The Court of Appeals, Siler,

Circuit Judge, held that EPA reasonably determined that SIP

revisions did not meet CAA requirements due to proposed

exclusions from emission limitations for sources in certain

startup, shutdown, or malfunction situations.

Affirmed.

West Headnotes

[1] Administrative Law and Procedure 669.1

15Ak669.1 Most Cited Cases

Issues that were not sufficiently raised by petitioners during

agency's comment period were waived for purposes of

appellate review, in action challenging agency decision.

[2] Environmental Law 683

149Ek683 Most Cited Cases

(Formerly 199k25.15(9) Health and Environment)

Pursuant to Chevron, Court of Appeals reviews

interpretation by Environmental Protection Agency (EPA)

of the Clean Air Act (CAA) under a two- step process: first,

if Congress has directly spoken to the precise question at

issue, the court must give effect to the unambiguously

expressed intent of Congress, and, second, if Congress has

been silent or ambiguous about the precise question at issue,

then reviewing court must defer to the agency's statutory

interpretation if it is reasonable. Clean Air Act, § 101 et

seq., 42 U.S.C.A. § 7401 et seq.

[3] Statutes 219(1)

361k219(1) Most Cited Cases

In reviewing agency's interpretation of statute, Court of

Appeals is not to substitute its judgment for that of the

agency, but rather shows great deference to the statutory

interpretation given by the agency and the officers charged

with the statute's administration.

[4] Environmental Law 261

149Ek261 Most Cited Cases

(Formerly 199k25.6(2) Health and Environment)

Determination of Environmental Protection Agency (EPA)

that state's proposed revisions to its state implementation

plan (SIP) did not meet requirements of Clean Air Act

(CAA) was reasonable, based on EPA's conclusion that

revision would excuse source compliance from applicable

emission limitations in certain startup, shutdown, or

malfunction situations but would provide no means for state

to enforce national ambient air quality standards (NAAQS).

Clean Air Act, § 110, 42 U.S.C.A. § 7410.

[5] Environmental Law 258

149Ek258 Most Cited Cases

(Formerly 199k25.6(2) Health and Environment)

Although the Clean Air Act (CAA) grants states

considerable latitude, it nonetheless subjects the states to

strict minimum compliance requirements, adherence with

which must be determined by the Environmental Protection

Agency (EPA). Clean Air Act, § 101 et seq., 42 U.S.C.A. §

7401 et seq.

*182 Gary L. Finkbeiner (argued and briefed), Office of the

Attorney General, Natural Resources Division, Lansing, MI,

Stacy L. Johnson, Honigman, Miller, Schwartz & Cohn,

Detroit, MI, Rhonda L. Ross (briefed), Warner, Norcross &

Judd, Southfield, MI, Steven C. Kohl (argued and briefed),

Howard & Howard, Bloomfield Hills, MI, for Petitioners.

Martin F. McDermott (argued and briefed), United States

Department of Justice, Environment & Natural Resources

Division, Washington, DC, Louise C. Gross (briefed),

United States Environmental Protection Agency, Office of

Regional Counsel, Region V, Chicago, IL, for Respondent.

*183 Before: SILER and CLAY, Circuit Judges;

STAFFORD, District Judge [FN**].

FN** The Honorable William H. Stafford, United

States District Judge for the Northern District of

Florida, sitting by designation.

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OPINION

SILER, Circuit Judge.

[1] Petitioners Michigan Department of Environmental

Quality ("MDEQ") and Michigan Manufacturers

Association ("Manufacturers") appeal the Environmental

Protection Agency's ("EPA") decision under the Clean Air

Act ("CAA"), 42 U.S.C. §§ 7401-7671q, disapproving

revisions to a state implementation plan ("SIP") submitted

by the State of Michigan. The question presented for review

is whether the EPA, charged by Congress to determine

whether SIPs provide for attainment and maintenance of

national ambient air quality standards ("NAAQS"), properly

disapproved a Michigan SIP revision that permitted an

automatic exemption for a source that violates emissions

standards if that violation results from startup, shutdown, or

malfunction and meets certain other criteria. [FN1] As set

forth below, we AFFIRM the EPA's decision.

FN1. Petitioners also argued that the EPA

approved similar rules in other states and the EPA's

rulemaking violates the Regulatory Flexibility Act,

5 U.S.C. §§ 601-612 (2000). However, petitioners

failed to sufficiently raise these issues during the

comment period and thus have waived them for

purposes of appellate review.

Under the CAA, Congress requires states to obtain and

maintain NAAQS promulgated by the EPA. See Train v.

NRDC, 421 U.S. 60, 64, 95 S.Ct. 1470, 43 L.Ed.2d 731

(1975). Section 110 of the CAA focuses on SIPs and

ensures that levels of certain "criteria" pollutants in the

ambient air do not exceed specified healthful levels. For

each criteria pollutant, EPA promulgates NAAQS sufficient

to protect the public health with an adequate margin of

safety and to protect the public welfare. See 42 U.S.C. §

7409(b).

For each NAAQS, states are required to develop a SIP

providing for "implementation, maintenance and

enforcement" of the NAAQS within the states' borders. See

42 U.S.C. § 7410(a)(2)(C). Although the states are given

broad authority to design programs, the EPA has the final

authority to determine whether a SIP meets the requirements

of the CAA. EPA must disapprove a state's proposed SIP

that would interfere with any requirement concerning the

state's attainment and maintenance of NAAQS for certain

airborne pollutants. See CAA § 101(b)(1); 42 U.S.C. §

7401(b).

Pursuant to its statutory responsibilities, EPA has issued

regulations and guidance interpreting and clarifying the SIP

requirements specified under section 110. Since 1977, the

EPA has interpreted all excess emissions as "violations" of

the applicable standards for which "notices of violations"

could, but not necessarily would, issue. 42 Fed. Reg. 21,472

(April 27, 1977). Under this "enforcement discretion"

approach, a regulator retains discretion to bring an

enforcement action following a violation, depending on the

surrounding circumstances. Id.

The EPA elaborated on this approach in 1982 and 1983,

when Kathleen Bennett, then EPA Assistant Administrator

for Air, Noise and Radiation, issued two memoranda

explaining the agency's policy on excess emissions.

Together, the memoranda explain that excess emissions

must be deemed violations because "any emissions above

the allowable [standard] may cause or contribute to

violations of the national ambient air quality standards." But

a source exceeding the amount allowed under a SIP would

not necessarily be assessed a penalty if the exceedance was

due to a malfunction, provided that the state required the

"commencement of a proceeding to notify the source of its

violation and to determine whether enforcement action

should be undertaken." With regard to excess emissions

during startup and shutdown, the Bennett Memoranda noted

that *184 because such occurrences are part of a source's

normal operations, they "should be accounted for in the

planning, design and implementation of operating

procedures" for the source's process and control equipment.

In 1996, MDEQ submitted a revision of Michigan's SIP to

the EPA for review and approval. See 42 U.S.C. § 7410.

The request included proposed Rules 912, 913 and 914

regulating the startup, shutdown and malfunction ("SSM")

of air emission sources. Rule 912 requires that a source be

operated "consistent with good air pollution control

practices for minimizing emissions during periods of

abnormal conditions, startup, shutdown and malfunction"

and contains notice and reporting requirements during such

episodes. However, Rules 913 and 914 permit excess

emissions resulting from SSM if certain notice, reporting

and other requirements are met. Although petitioners

contend that "Rules 913 and 914 do not provide automatic

exemptions from an enforcement action by the state," the

proposed rules fail to authorize the state regulatory agency,

MDEQ, to review and require revisions to a source's written

emission minimization plan for normal startups or

shutdowns.

In 1997, the EPA proposed to disapprove Michigan's SIP

revision containing the SSM rules. The EPA found that the

rules violated CAA requirements because the state

regulatory agency was not authorized to review and require

revisions to a source's plan and the rules permitted

automatic exemptions for violations of emission standards,

contrary to EPA policy. Further, the EPA found that

proposed Rule 913(d)'s definition of "malfunction" was too

broad because it failed to limit malfunctions to failures that

are "infrequent" and "not reasonably preventable." The EPA

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also stated that Michigan's air pollution control bypass

provisions, embodied in Rules 913(3)(b) and 914(4)(b),

were broader than permitted by the Act. Finally, the

alternate emission limitations for startup and shutdowns in

Rule 914(4)(d) could impermissibly allow relaxations of

CAA requirements, including "new source review"

limitations, new source performance standards, and toxic

requirements. In its final action in 1998, the EPA

disapproved the submitted rules based on the above reasons.

[2][3] The EPA's disapproval of Michigan's SIP revision is

final agency action subject to judicial review in the courts of

appeals under CAA section 307(b)(1). See 42 U.S.C. §

7607(b)(1). Under Chevron U.S.A., Inc. v. Natural

Resources Defense Council, Inc., 467 U.S. 837, 842-43, 104

S.Ct. 2778, 81 L.Ed.2d 694 (1984), this court reviews the

EPA's interpretation of the CAA under a two-step process:

first, "if Congress has directly spoken to the precise question

at issue ... the court ... must give effect to the

unambiguously expressed intent of Congress." Id. Second, if

Congress has been silent or ambiguous about the "precise

question at issue," then a reviewing court must defer to the

agency's statutory interpretation if it is "reasonable." Id. at

842-43, 104 S.Ct. 2778. Further, this court is "not [to]

substitute its judgment for that of the agency," Motor

Vehicle Mfrs. Ass'n v. State Farm Mutual Auto. Ins. Co.,

463 U.S. 29, 43, 103 S.Ct. 2856, 77 L.Ed.2d 443 (1983), but

rather shows great deference to the statutory interpretation

given by the EPA and the officers charged with the CAA's

administration. See Navistar Int'l Transp. Corp. v. EPA, 941

F.2d 1339, 1341-42 (6th Cir.1991).

[4] Petitioners contend that the EPA wrongfully interpreted

section 110 of the CAA as requiring that all excess

emissions due to SSM are violations of the CAA. Further,

petitioners claim that CAA unequivocally grants states the

primary responsibility for regulating air emissions, and that

the EPA cannot mandate specific emission limitations by

disapproving otherwise appropriate state rules. They claim

the proposed rules are appropriate because they administer

the air program *185 through specifying standards of

performance and other requirements.

The Supreme Court explained the review process as

follows:

Under § 110(a)(2), the Agency is required to approve a

state plan which provides for the timely attainment and

subsequent maintenance of ambient air standards, and

which also satisfies that section's general requirements.

The Act gives the Agency no authority to question the

wisdom of a State's choices of emission limitations if they

are part of a plan which satisfies the standards of §

110(a)(2).... Thus, so long as the ultimate effect of a

State's choice of emission limitations is compliance with

the national standards for ambient air, the State is at

liberty to adopt whatever mix of emission limitations it

deems best suited to its particular situation.

[5] Train, 421 U.S. at 79, 95 S.Ct. 1470. Although the CAA

grants states considerable latitude, it "nonetheless subjects

the states to strict minimum compliance requirements,"

adherence with which must be determined by the EPA.

Union Electric Co. v. EPA, 427 U.S. 246, 256-57, 96 S.Ct.

2518, 49 L.Ed.2d 474 (1976). The CAA prohibits the EPA

from approving a revision that would interfere with

attainment or any other applicable CAA requirement. See 42

U.S.C. § 7410(k)(3) and (1). The EPA has issued the

Bennett Memoranda and stated that it interprets the CAA as

disallowing a broad exclusion from source compliance with

emission limitations in SIPs during SSM periods. Under the

EPA's statutory interpretation, such an exclusion is

inconsistent with the purpose of the CAA's criteria pollutant

provisions, which mandate that the NAAQS be attained and

maintained. Thus, the EPA's deference to a state is

conditioned on the state's submission of a plan "which

satisfies the standards of § 110(a)(2)" and which includes

emission limitations that result in compliance with the

NAAQS. Train, 421 U.S. at 79, 95 S.Ct. 1470.

Given the deference we owe to the EPA's decision, we

cannot say that EPA's interpretation of section 110 of the

CAA through the Bennett Memoranda is unreasonable.

Under that interpretation, SIPs cannot provide broad

exclusions from compliance with emission limitations

during SSM periods. Michigan's proposed rules jeopardize

ambient air quality, the EPA found, because the rules

excuse compliance from applicable emission limitations and

provide no means for the state to enforce the NAAQS.

Petitioners' reliance on Bethlehem Steel v. Gorsuch, 742

F.2d 1028 (7th Cir.1984), and Florida Power and Light Co.

v. Costle, 650 F.2d 579 (5th Cir.1981), is therefore

misplaced. In Bethlehem Steel, the court ruled the EPA

could not approve part of a state's proposed SIP while

disapproving another in a way that made the regulation

incorporated into the SIP more stringent than the state

intended. That is not the case here. Further, in Florida

Power, that court held that the EPA could not require the

state to convert its state limitations on relief into a federally

enforceable SIP revision. Here the EPA disapproved

Michigan's entire SIP revision based upon its conclusion

that the proposed rules eliminate the possibility of

enforcement by allowing automatic exemptions for excess

emissions resulting from SSM if the source meets certain

other criteria. Although petitioners argue that "the CAA

does not specify any SSM requirements under Section 110,"

this argument ignores the EPA's Bennett Memoranda which

clearly state that the EPA will not approve state rules that

excuse excess emissions during SSM.

Further, petitioners fail to offer evidence that Michigan's

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proposed rules will not interfere with the attainment and

maintenance of the NAAQS. The record reflects no analysis

of the rules' impact on NAAQS because the state did not

submit such a demonstration. In addition, although the CAA

gives states primary responsibility to develop SIPs to

maintain NAAQS, Congress requires the EPA to determine

whether a SIP meets the requirements *186 of the Act. The

EPA reasonably concluded that Michigan's proposed SIP

revision did not meet the requirements of the CAA.

AFFIRMED.

230 F.3d 181, 31 Envtl. L. Rep. 20,096, 2000 Fed.App.

0361P

END OF DOCUMENT

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