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2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF CALIFORNIA

ASSOCIATION OF IRRITATED RESIDENTS, an unincorporated association Plaintiff,

v. C&R VANDERHAM DAIRY, a California Proprietorship, and RICK VANDERHAM and CORRIE VANDERHAM, owners and operators, CORRIE VANDERHAM DAIRY, INC., a California corporation, AG RESOURCES, LLC, a California limited liability company,

Defendants. 1:05-CV- 01593 OWW SMS

MEMORANDUM DECISION AND ORDER GRANTING PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT ON THE FOLLOWING ISSUES 1. DEFENDANTS FAILURE TO OBTAIN AN AUTHORITY TO CONSTRUCT PERMIT 2. DEFENDANTS FAILURE TO INSTALL BEST AVAILABLE CONTROL TECHNOLOGY (“BACT”) 3. DEFENDANTS’ FAILURE TO PURCHASE OFFSETS ALL IN VIOLATION OF THE CALIFORNIA STATE IMPLEMENTATION PLAN (“SIP”)

1. INTRODUCTION Plaintiffs’ Association of Irritated Residents (“AIR”) filed a complaint against Defendants C&R Vanderham Dairy alleging violations of the Federal Clean Air Act (“CAA”), 42 U.S.C. §§ 7401 et. seq. Plaintiffs move for summary judgment arguing that C&R Vanderham Dairy has violated and continues to violate California’s State Implementation Plan (“SIP”) by violating of San Joaquin Air Quality Management District (“District”) Rules 2010 and 2201. Defendants oppose the motion. /// Case 1:05-cv-01593-OWW-SMS Document 160 Filed 09/25/2007 Page 1 of 621

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 2 2. PROCEDURAL BACKGROUND A. Plaintiffs’ Motion for Summary Judgment Plaintiffs filed their First Amended Complaint (“FAC”) on October 21, 2006. (Doc. 58, First Amended Complaint, Filed October 21, 2006.) Plaintiffs then filed a motion for summary judgment on April 19, 2007. (Doc. 92, Memorandum in Support of Motion for Summary Judgement by AIR, Filed April 19, 2007.) In support of their motion for summary judgment, Plaintiffs filed the Declaration on Avinash Kar. (Doc. 84, Declaration of Avinash Kar , Filed April 6, 2007.) On may 4, 2007 Defendants opposed Plaintiffs’ motion and submitted their response to Plaintiffs’ statement of facts. (Doc. 96, Opposition, May 4, 2007.; Doc. 97, Defendants’ Reply to AIR’s Separate Statement of Undisputed Facts, Filed May 4, 2007.) In support of their opposition Defendants also submitted the Declaration of David R. Albers. (Doc. 98, Declaration of David R. Albers, Filed May 4, 2007) Plaintiffs replied to Defendants opposition on May 14, 2007. (Doc. 100, Plaintiffs’ Reply, Filed May 14, 2007.) Plaintiffs’ motion for summary judgment was heard on May 21, 2007. At Defendants’ request, Defendants were given leave to file a supplemental brief on the matter. Defendants filed their supplemental brief on May 29, 2007. (Doc. 113, First Amended Supplemental Brief.) Plaintiffs replied with their own supplemental brief on June 5, 2007. (Doc. 119, Plaintiffs Supplemental Brief.) B. Defendants Cross Motion for Summary Judgment On June 15, 2007 Defendants filed a cross motion for summary Case 1:05-cv-01593-OWW-SMS Document 160 Filed 09/25/2007 Page 2 of 621

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 3 judgment. (Doc. 123, Motion for Summary Judgment.) On July 23, 2007 Plaintiffs filed a motion to strike and opposition to Defendants’ cross motion for summary judgment. (Doc. 139.) On July 23, 2007 Defendants replied. (Doc. 143.)

3. FACTUAL AND LEGAL BACKGROUND A. Defendants Vanderham Dairy Defendants C&R Vanderham operate the dairy facility owned by Corrie Vanderham Dairy, Inc. Rick Vanderham and Corrie Vanderham Dairy, Inc. are partners in the C&R Vanderham Dairy. The C & R Vanderham Dairy is located in Kern County, which is

w i t h i n t h e San Joaquin Valley Air basin. As an operating dairy farm, it generates certain emissions. As a result, it is subject to regulation by the Air District. On April 29, 2005, Defendant Ag Resources, LLC entered into a site improvement construction agreement with Vander Weerd General C o n s t r u c t i o n , I n c . t o b u i l d t h e C & R V a n d e r h a m D a i r y . T h e dairy was constructed to limit the project size to one thousand three hundred twenty (1,320) milk cows, one hundred ninety-five (195) dry cows, four hundred eighty-six (486) heifers aged over fifteen (15) months, three hundred seventy-eight (378) heifers aged seven (7) to fourteen (14) months, one hundred sixty-two heifers four (4) to six (6) month and one hundred twenty (120) calves. This information was provided to the Air District. (Doc. 98, Albers Declaration, Ex. “A”, “F”, “G” a n d “H”, Filed May 4, 2007.) The correspondence between defendants and the Air District shows that the dairy would in fact be constructed in such a way as to limit the cow numbers to those levels. On or about July 15, 2005, construction of the dairy Case 1:05-cv-01593-OWW-SMS Document 160 Filed 09/25/2007 Page 3 of 621

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 4 facility began. The dairy was completed in June 2006, and the C & R Vanderham Dairy became operational at that time. At the time construction began, the Air District used an emission factor of 12.8 pounds of VOC per cow head per year. In August 2005, the Air District changed the emission factor to 19.3 pounds of VOC per cow head per year. Since construction of the dairy began in July 2005, the District used the 12.8 pounds per cow head factor. A permit to operate was issued to the C & R Vanderham Dairy in April 2007. (Doc. 98, Albers Declaration, Ex “C.”) B. The Clean Air Act The general purpose of the CAA is to enhance the nation’s air quality resources for the benefit of public health. The CAA requires the United States Environmental Protection Agency (“EPA”) to set National Ambient Air Quality Standards (“NAAQS”) for certain pollutants. The CAA requires states to designate areas within its boundaries as “attainment” areas if the air quality meets the NAAQS for a particular criteria pollutant. Areas where the air quality does not meet the NAAQS for a particular criteria pollutant are designated as “non attainment” areas for that pollutant. Non attainment areas are required to adopt state implementation plans (“SIP”) to achieve the NAAQS by the applicable attainment date. The CAA requires that a SIP shall “require permits for the construction and operation of new or modified major stationary sources anywhere in the non attainment area.” A preconstruction permit is a New Source Review (“NSR”) permit. The San Joaquin Valley Air Pollution Control District is the state agency with primary responsibility for developing the Case 1:05-cv-01593-OWW-SMS Document 160 Filed 09/25/2007 Page 4 of 621

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 5 SIP for the San Joaquin Valley. Cal. Health & Safety Code §§ 40600-40606. “Although states retain significant flexibility in establishing the details of these plans, the CAA, and EPA regulations, outline many required features.” Safe Air for Everyone v. EPA, 475 F.3d 1096, 1100 (9th Cir. 2007). “Among them is the mandate that state plans provide for regular revisions to reflect evolving air quality conditions and standards.” Id. The revisions need not completely recast provisions of the SIP. Id. The CAA allows for the submission and review of piecemeal amendments that deal “with discrete SIP provisions, leaving most of the plan untouched.” Id. The EPA must determine that the SIP meets the requirements under the CAA before the SIP becomes effective. Id.; See also, 42 U.S.C. § 7410(k)(3). “The EPA must also approve the plan amendments and ‘shall not approve a revision of a plan if the revision would interfere with any applicable requirement concerning attainment and reasonable further progress or any other applicable requirement of the CAA.” Id; See also, 42 U.S.C. § 7410(l). C. SB 700 Former California Health & Safety Code § 42310(e) (“section 42310(e)”) exempted “any equipment used in agricultural operations in the growing of crops or the raising of fowl or animals” from the obligation to obtain a permit. Cal. Health & Safety Code § 42310(e) (2003). After EPA found that the agricultural equipment exemption in section 42310(e) conflicted with the Act’s permitting requirements, 67 Fed. Reg. 35990 (May 22, 2002); 68 Fed. Reg. 37746 (June 23, 2003), the California Case 1:05-cv-01593-OWW-SMS Document 160 Filed 09/25/2007 Page 5 of 621

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 6 Legislature passed Senate Bill 700 (“SB 700”), which took effect January 1, 2004, and removed the agricultural exemption from Health & Safety Code § 42310(e). Cal. Health & Safety Code § 42310(b); SB 700 § 11, 2003-2004 Sess. (Cal. 2003). Among other things, SB 700 required agricultural sources’ compliance with already-adopted rules and preserved the authority of an air district to regulate agricultural sources pursuant to rules adopted before January 1, 2003. SB 700 § 2, 2003-2004 Sess. (Cal. 2003); Cal. Health & Safety Code § 39011.5. “[F]rom the express language of the statute, § 39011.5 intended to make District rules applicable to stationary agricultural sources and did not intend to limit the authority of districts to comply with [Clean Air Act] requirements.” Association of Irritated Residents v. Fred Schakel Dairy , No. 1:05:CV-00707-OWW-SMS (E.D. Cal. Dec. 2, 2005) (related case) (Order on Defendants’Motion to Dismiss, at 18 (Docket # 36)). However, SB 700 also contained § 42301.16(c) in its provisions. This section created a narrower exemption under state law to the requirement of obtaining an ATC permit for non major stationary sources that emit below a 12.5 VOC ton/year threshold. D. Correspondence From the District to C& R Vanderham Dairy On July 25, 2005 C&R Vanderham Dairy received a letter from David Warner, Director of Permit Services at the District which stated, “Pursuant to Senate Bill 700 and District Rule 2201... all agricultural operations including confined animal feeding operations that commenced construction after January 1, 2004 with emissions greater than one half the major threshold levels (12.5 tons of VOC) are required to obtain an ATC permit.” The letter Case 1:05-cv-01593-OWW-SMS Document 160 Filed 09/25/2007 Page 6 of 621

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 7 proceeds to state that “the District has issued a draft report which outlines a new emissions factor of 20.6 lbs/head/year based on the latest studies and scientific papers. This new report indicates that emissions from dairies were very likely to have been significantly underestimated.” The letter concludes that “the District cannot condone the proposed construction activities [of Vanderham dairy] until the emission factor issue is settled on August 1, 2005 since permits may be required for the proposed dairy. If C&R Vanderham Dairy continues with the construction, they proceed at their own risk.” (Doc. 141, Request for Judicial Notice, Ex. 1, Filed July 23, 2007) Mr. Warner then sent another letter on December 12, 2005 that stated, “based on all the information provided to the District regarding [C&R Vanderham’s] construction activities, the determination was made that your dairy commenced construction prior to the date that the District started requiring Authority to Construct (“ATC”) permits. Your dairy is therefore considered an existing operation and no ATC is required.” (Doc. 10, Defendants Request for Judicial Notice, Filed February 14, 2006.) However, the letter also states that “the emissions from [the] dairy will exceed the new permitting levels, a permit to operate is required for [the] dairy.” The letter proceeds to state that Defendants submitted an application for an operating permit on October 31, 2005 which served as a temporary permit to Operate until the final permit was granted. E. Allegations in the Complaint Plaintiffs assert three claims. Plaintiffs allege that Defendants violated the plain language of the EPA approved SIP Case 1:05-cv-01593-OWW-SMS Document 160 Filed 09/25/2007 Page 7 of 621

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 8 and its approved versions of District Rules 2010 and 2201. Plaintiffs now seek summary adjudication of the following: 1. Defendants failed to obtain an ATC permit 2. Defendants failed to install BACT at emissions units that exceed thresholds and 3. Defendants failed to purchase offsets when Vanderham exceeded thresholds (Doc. 1, Complaint, Filed December 15, 2005.) Rule 2010 states: “Any person building, altering, or replacing any operation, article, machine, or equipment... the use of which may cause the issuance of air contaminants... shall first obtain authorization for such construction from an Air Pollution Control Officer (“APCO”). An authority to construct shall remain in effect until the Permit to Operate the source operation for which the application was filed is granted or denied, or the application is canceled...” (Doc.84-2, Kar Declaration, Rule 2010 - amended December 17, 1992, Filed April 6, 2007.) Rule 2201 applies to “all new stationary sources and all modifications to existing stationary sources which are subject to the District permit requirements and after construction emit or may emit one or more affected pollutants.” District Rule 2201, § 2.0. Section 3.25 defines a “major source” as the following:“For each pollutant, a Stationary Source with postproject emissions or a post-project Stationary Source Potential to Emit (SSPE2), equal to or exceeding one or more of the following threshold values Section 3.25.1 of Rule 2201 states: For determining major source, status, fugitives shall only be included for calculating the air pollutant post-project emissions or SSPE2 if the source is included in the list of source categories identified in the major source definition in 40 CFR Part 70.2, or when determining if a stationary source is a major air toxics source as defined in Rule 2520. Case 1:05-cv-01593-OWW-SMS Document 160 Filed 09/25/2007 Page 8 of 621

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 9

Table 3-2, Major Source Emissions Thresholds

Pollutant Threshold (Pounds Per Year) VOC 50,000 NOx 50,000 CO 200,000 PM10 140,000 SOx 140,000 Lastly, Section 4.1 of Rule 2201 states that Best Available Control Technology (“BACT”) requirements shall be triggered on a pollutant by pollutant basis and on an emissions unit-by emissions unit basis.” The rule further states that BACT shall be required for the following actions: “4.1.1 Any new emissions unit or relocation from one

Stationary Source to another of an existing emissions unit with a Potential to emit exceeding 2.0 pounds in any one day; 4.1.2 Modification to an existing emissions unit

with a valid Permit to Operate resulting in an Adjusted Increase in Permitted Emissions (AIPE) EXCEEDING 2.0 pounds in any one dayl; 4.1.3 Any new or modified emissions unit, in a

stationary source project, which results in a Title I Modification as defined by in this rule. An agricultural source is required to purchase offsets if post project Stationary Source Potential to Emit (“SSPE2") is above 20,000 pounds or 10 tons of VOC per year. Rule 2201 § 4.5. F. Timeline of Relevant Events September 17, 1998 San Joaquin Valley Unified Air Pollution Control District (“District”) adopts Rule 2020 (Exemptions) that exempts “any equipment used in agricultural operations in the growing of crops or the raising of fowl or animals” from obtaining an authority to construct permit. 66 Fed. Reg. 37587, 37587 (July 19, 2001). Case 1:05-cv-01593-OWW-SMS Document 160 Filed 09/25/2007 Page 9 of 621

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 10 July 23, 1999 EPA approves Rule 2010 (Permits Required) as part of the State Implementation Plan. 64 Fed. Reg. 39920 (July 23, 1999). September 14, 1999 Corrie Vanderham applies to Kern County for a conditional use permit for the C&R Vanderham Dairy. PSUF ¶ 33. July 19, 2001 The U.S. Environmental Protection Agency (“EPA”) disapproves Rule 2020 because the exemption for agricultural equipment in Rule 2020 is inconsistent with the Clean Air Act. 66 Fed. Reg. 37587, 37589-90 (July 19, 2001). December 19, 2002 The District adopts an amended version of Rule 2020 that eliminates the agricultural equipment exemption. 68 Fed. Reg. 7330, 7335 (Feb. 13, 2003). January 1, 2004 EPA finds that California’s State Implementation Plan is substantially inadequate and requires California to revise the State Implementation Plan by removing the agricultural equipment exemption in Cal. Health & Safety Code § 42310(e) (2003). 68 Fed. Reg. 37746 (June 25, 2003). June 16, 2004 Effective date of Senate Bill 700, which amended Cal. Health & Safety Code § 42310(e) to remove the agricultural equipment exemption. SB 700 § 11, 2003-2004 Sess. (Cal. 2003). August 24, 2004 Effective June 16, 2004, EPA approves the December 19, 2002 versions of Rule 2020 and 2201 (New and Modified Stationary Source Review) as part of the State Implementation Plan. 69 Fed. Reg. 27837 (May 17, 2004). April 29, 2005 Ag Resources, LLC enters into “Site Improvement Construction Agreement” to build a freestall dairy “for C&R Vanderham Dairy” at current site. Ag Resources owned the site at the time. PSUF ¶ 25. July 15, 2005 Letter from Defendants’ counsel to the District stating that C&R Vanderham Dairy is developing a dairy project, that the dairy will produce 12.4 tons of VOC per year, and is under construction. PSUF ¶ 29. July 29, 2005 Vanderham obtains building permits for milking barn, freestall structures, shade structures, hoof trimming shade, hay barn structures, and commodity barn. PSUF ¶ 35. Case 1:05-cv-01593-OWW-SMS Document 160 Filed 09/25/2007 Page 10 of 621

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 11 September 20, 2005 AIR mails 60-day notice of intent to sue to Rick Vanderham, Corrie Vanderham, and C&R Vanderham Dairy. PSUF ¶ 17. October 28, 2005 Rick Vanderham files application with District for Permit to Operate to be issued to C&R Vanderham Dairy. PSUF ¶ 26. December 15, 2005 AIR files Complaint (Docket # 1). February 2, 2006 Corrie Vanderham Dairy, Inc. enters into agreement to purchase C&R Vanderham Dairy property from Ag Resources, LLC. PSUF ¶ 23. February 14, 2006 Vanderham files motion to dismiss for lack of subject matter jurisdiction for failure to exhaust administrative remedies (Docket # 11). June 15, 2006 Court denies Vanderham’s motion to dismiss for lack of subject matter jurisdiction for failure to exhaust administrative remedies (Docket # 36). July 7, 2006 Vanderham files motion to dismiss for failure to state a claim upon which relief can be granted (Docket # 37). July 10, 2006 AIR mails 60-day notice of intent to sue to Corrie Vanderham Dairy, Inc. PSUF ¶ 18. August 29, 2006 AIR mails 60-day notice of intent to sue to Corrie Vanderham Dairy, Inc., and Ag Resources, LLC. PSUF ¶ 19. September 13, 2006 Court denies Vanderham’s motion to dismiss for failure to state a claim upon which relief can be granted (Docket # 50). October 31, 2006 AIR files First Amended Complaint (Docket # 58). G. Undisputed Facts i. San Joaquin Valley Air Basin The EPA designated the San Joaquin Valley a serious nonattainment area for the federal eight-hour ozone standard. (PSUF No. 5.) The San Joaquin Valley Air Basin includes all of San Joaquin, Stanislaus, Merced, Madera, Fresno, Kings, Tulare, and Case 1:05-cv-01593-OWW-SMS Document 160 Filed 09/25/2007 Page 11 of 621

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 12 the Valley portions of Kern County, as defined by District Rule (“Rule”)1020 § 3.44. (PSUF No. 6.) ii. Health Effects of VOC VOCs react with oxides of nitrogen (“NOx”) in the presence of heat and sunlight to form ground-level ozone. (PSUF No. 1.) A document prepared jointly by the California Air Resources Board and the American Lung Association states that ozone pollution damages lung tissue, damages crops and vegetation, exacerbates asthma, reduces lung capacity, increases respiratory and cardiovascular hospital admissions, and increases school and work absenteeism. It also states that recent research suggests a causal connection between ozone pollution and asthma. (PSUF No. 3.) EPA statements confirm that ozone damages lung tissue, reduces lung function, exacerbates respiratory ailments such as asthma, increases hospital admissions, reduces productivity, and is a significant health concern, particularly for children and people with respiratory ailments. (PSUF No. 4.) iii. District Rules Vanderham admits that the District rules, including Rules 2010 and 2201, are “emission standards or limitations” as defined by 42 U.S.C. §§ 7604(f), 7604(k), which define an “emission standard or limitation” to include any standard or limitation approved as part of the State Implementation Plan (“SIP”). (PSUF No. 8.) Vanderham did not obtain an Authority to Construct (“ATC”) permit from the District. (PSUF No. 36.) In August 2005, the District established a VOC emission Case 1:05-cv-01593-OWW-SMS Document 160 Filed 09/25/2007 Page 12 of 621

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 13 factor for dairies of 19.3 pounds per cow per year. (PSUF No. 49.) The District is responsible for determining what Best Available Control Technology (“BACT”) is on a case by case basis. (PSUF No. 50.) The District has not undertaken a BACT analysis for the C&R Vanderham Dairy. (PSUF No. 52.) iv. AIR AIR is an unincorporated association that advocates for clean air and environmental health in the San Joaquin Valley. (PSUF No. 10.) On September 20, 2005, AIR mailed a 60-day notice of intent to sue to Rick Vanderham, Corrie Vanderham, and C&R Vanderham Dairy for failure to comply with Rules 2010 and 2201. (PSUF No. 17.) On July 10, 2006, AIR mailed a 60-day notice of intent to sue to Corrie Vanderham Dairy, Inc. (PSUF No. 18.) iv. Vanderham Dairy The C&R Vanderham Dairy emits VOC from manure decomposition, enteric processes (cow digestion), and feed decomposition. (PSUF No. 2.) The C&R Vanderham Dairy is located near Shafter in the Valley portion of Kern County. (PSUF No. 7.) EPA approved the December 17, 1992 version of Rule 2010 and the December 19, 2002 version of Rule 2201 as part of the SIP. (PSUF No. 9.) C&R Vanderham Dairy is a general partnership between Corrie Vanderham Dairy,Inc., and Rick Vanderham. (PSUF No. 11.) Case 1:05-cv-01593-OWW-SMS Document 160 Filed 09/25/2007 Page 13 of 621

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Corrie Vanderham Dairy, Inc. is a California corporation. (PSUF No. 12.) Ag Resources, LLC is a California limited liability company. (PSUF No. 13.) Rick Vanderham is an individual within the meaning of the Clean Air Act. (PSUF No. 14.) Corrie Vanderham is an individual within the meaning of the Clean Air Act. (PSUF No. 15.) The Vanderham defendants are persons within the meaning of the Clean Air Act. (PSUF No. 16.) On August 29, 2006, AIR mailed a 60-day notice of intent to sue to Corrie Vanderham Dairy, Inc., and Ag Resources, LLC. (PSUF No.19. ) Corrie Vanderham is the president of Corrie Vanderham Dairy, Inc. (PSUF No. 20.) The C&R Vanderham Dairy partnership operates the dairy. (PSUF No. 21.) Corrie Vanderham Dairy, Inc., owns the C&R Vanderham Dairy infrastructure and property, and leases them to the C&R Vanderham Dairy partnership. (PSUF No. 22.) Corrie Vanderham Dairy, Inc. purchased the C&R Vanderham Dairy property from Ag Resources, LLC on February 2, 2006. (PSUF No. 23.) Ag Resources, LLC, purchased the property from John Ohanesson on April 15, 2003. (PSUF No. 24.) On April 29, 2005, Ag Resources, LLC entered into a “Site Improvement Construction Agreement” with Vander Weerd General Construction, Inc. to build a freestall dairy “for C&R Vanderham Case 1:05-cv-01593-OWW-SMS Document 160 Filed 09/25/2007 Page 14 of 621

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 15 Dairy” at the site at which the C&R Vanderham Dairy has been constructed and which Ag Resources owned at the time. (PSUF No. 25.) On October 28, 2005, Vanderham applied for a Permit to Operate for the C&R Vanderham Dairy, and identified the milking barn, cow housing, solid manure handling, and liquid manure management as “equipment” for which it sought a permit to operate. (PSUF No. 26.) The Application for Permit to Operate also lists “land application” in the waste handling category of operations and equipment and identifies “feed storage/commodity barns” and “silage piles” as “other dairy equipment.” (PSUF No. 27.) Rick Vanderham signed the Application for the Permit to Operate as the applicant. (PSUF No. 28.) In a July 15, 2005 letter to Mr. Sheraz Gill at the District, Vanderham’s counsel David Albers represented to the District that his law firm “represent[s] C & R Vanderham Dairy, which is developing a new dairy project.” The letter stated that the project would be built for 1320 milk cows, 195 heifers, 486 heifers over 15 months, 378 heifers aged 7 to 14 months, 162 heifers 4 to 6 months, and 120 calves. Id. According to the letter, which used a worksheet downloaded from the District website, the dairy would produce 24,861.9 pounds or 12.4 tons per year of VOC. The worksheet attached to the letter used an emission factor of 12.8 pounds per head per year for milk cows. The letter indicated that the dairy was under construction. (PSUF No. 29.) Rick Vanderham, one of the defendants, wrote a letter to the Case 1:05-cv-01593-OWW-SMS Document 160 Filed 09/25/2007 Page 15 of 621

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 16 District on C&R Vanderham Dairy letterhead, in which he represented to the District that “we will take certain steps . . . to construct the dairy for the cattle listed in this letter.” (PSUF No. 30.) In a letter dated December 8, 2005, Mr. Albers, on behalf of “our client Rick Vanderham,” represented to the District that “the Vanderhams have agreed to construct permanent barriers . . . to limit the dairy herd size.” (PSUF No. 31.) The December 8 letter identifies that copies were sent to defendants Rick Vanderham and Corrie Vanderham. (PSUF No. 32.) A 1999 Conditional Use Permit application from the Kern County Planning Department for the defendant C&R Vanderham Dairy identifies John Ohanneson as the property owner, defendant Corrie Vanderham as the applicant, and defendant Richard Vanderham as the applicant’s individual representative. (PSUF No. 33.) On the Conditional Use Permit application, Corrie Vanderham’s interest in the property is identified as “Buyer” and under the “reason for request” section, Corrie Vanderham indicates, “I would like to build a dairy on this property” above his signature. (PSUF No. 34.) On July 29, 2005, Vanderham obtained building permits for a milk barn, two freestall barns, and two hay barns, shade structures, a hoof trimming shade, and a commodity barn at the dairy site. (PSUF No. 35.) A construction timeline submitted with Vanderham’s first motion to dismiss states that construction commenced on July 18, 2005. (PSUF No. 37.) Vanderham has constructed, or is in the process of Case 1:05-cv-01593-OWW-SMS Document 160 Filed 09/25/2007 Page 16 of 621

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 17 constructing, a milk barn, two freestall barns, two solid separation lagoons, two liquid manure storage lagoons, corrals, and the feed storage area. (PSUF No. 38.) The C&R Vanderham dairy facility contains two “freestall barns,” that will confine the milk cow herd. Each barn is 500 feet long and 107 feet wide and equipped with a system that uses wastewater from the liquid manure storage lagoons to “flush” the manure from the freestall barns twice a day. The flush system captures 80% or more of the urine and feces of the cows housed in the freestall barns and flushes the waste to the solid separation lagoons and the liquid manure storage lagoons. (PSUF No. 39.) The corrals and milk barn also utilize a flush system, except that the milk barn system uses fresh water to flush the manure to the liquid manure storage lagoon. (PSUF No. 40.) The two liquid manure storage lagoons each measure 110 feet wide and 860 feet long, together storing 108 acre-feet of liquified waste to be used for dairy flushings and to irrigate and fertilize crops on 362 acres of the project site. (PSUF No. 41.) The C&R Vanderham Dairy also contains several solid separation lagoons, which are used to remove a portion of manure solids from the liquified manure. (PSUF No.42. ) The C&R Vanderham Dairy is a stationary source of air pollution, within the meaning of the Clean Air Act and Rule 2201

. (PSUF No. 43.) It is undisputed that C&R Vanderham Dairy are a non major stationary source. Dairy farms have a specific standard industrial classification (“SIC”) designation (0241), and all activities Case 1:05-cv-01593-OWW-SMS Document 160 Filed 09/25/2007 Page 17 of 621

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 18 associated with a dairy fall under SIC code major group “02” which covers “agriculture production livestock.” (PSUF No. 44.) Vanderham admits that the cow housing and feeding areas, the milking center, the liquid manure handling area, the solid manure handling area, and the land application area are emissions units as defined by § 3.18 of Rule 2201. (PSUF No. 45.) The District also recognizes the areas listed in ¶ 45 as emissions units at a dairy. (PSUF No. 46.) The C&R Vanderham Dairy, as designed, includes the following components – each of which will hold cows, manure, or feed – located on one or more contiguous or adjacent properties: freestall barns, corrals with flushed lanes, and feed storage facilities (cow housing and feeding area), solid separation lagoons and liquid manure storage lagoons (liquid manure handling area), and milk barn (milking center). (PSUF No. 47.) The C&R Vanderham Dairy will compost manure onsite (solid manure handling area) and apply liquid and solid manure to land at the dairy site (land application area), each of which will involve manure. (PSUF No. 48.) On August 24, 2004, Kern County approved the Conditional Use Permit for C&R Vanderham Dairy, authorizing a maximum of 1,456 milk cows and 1,408 “support stock” (non-lactating or dry cows, heifers, and calves). (PSUF No. 53.) Defendants Rick Vanderham, Corrie Vanderham, and C&R Vanderham Dairy claim that the “maximum operational design for physical construction of the dairy is as follows”: 1,320 milk cows, 195 dry cows, 540 cows aged 15-25 months, 378 cows aged 7-14 months, 162 cows aged 4-6 Case 1:05-cv-01593-OWW-SMS Document 160 Filed 09/25/2007 Page 18 of 621

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months, and 120 calves aged under 3 months. (PSUF No. 54.) Blueprints for the C&R Vanderham Dairy show a maximum operational capacity at the dairy, as follows: either 1,568 milk cows (overall site plan) or 1,624 milk cows (individual freestall barn site plans), 280 dry cows, 470 cows aged 15-24 months, 348 cows aged 7-14 months, 84 cows aged 5-7 months, and 150 calves. (PSUF No. 55.) Vanderham has not purchased “emission reduction credits” or “offsets” for VOC. (PSUF No. 64.) On December 7, 2005, the Air District notified Vanderham that it had completed review of the Permit to Operate, but would not issue the Permit to Operate until the completion of construction and a District inspection of the dairy. (PSUF No. 65.) On April 3, 2007, the District issued the Permit to Operate. (PSUF No. 66.) H. Disputed Facts Plaintiffs argue that the District does not use the document “Preliminary Draft, Best Available Control Technology, Dairy Operation,” dated April 27, 2004 to determine BACT for New Source Review. (DSDF, No. 51.) Defendants argue that while the District does not use the “Preliminary Draft” for guidance, it is updated by the District and may be used for non-guidance purposes. Also, according to Plaintiffs, the C&R Vanderham Dairy will house the milk cows in the freestall barns and the support stock in corrals. (DSDF, No. 56.) Defendants dispute this by arguing Case 1:05-cv-01593-OWW-SMS Document 160 Filed 09/25/2007 Page 19 of 621

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 20 that some support stock are housed in free stall barns as well. Defendants also dispute that, dairies emit VOC from each of the emissions units at different rates based on the age of the cow and the type of housing (freestall barns for milk cows and corrals for support stock), as follows:

Emissions Factor by Type of Cow (age) (lbs/hd/year)

Emissions Unit M i l k

cows Dry Cows 1 4 -24 mths 7-14 mths 4-6 mths >3 mnths

Cow Housing and Feed 12.4 8.2 5.7 4.9 4.5 4.3 Milking Center 0.9 N/A N/A N/A N/A N/A Liquid Manure Handling2.7 1.4 1.0 0.9 0.8 0.7

Land Application 5.0 2.3 1.6 1.4 1.3 1.2

Total 21.0 11.9 8.3 72 6.6 6.2

(DSDF, No. 57.) The Potential to Emit for VOC from the cow housing and feeding emissions unit exceeds 2 pounds a day; the Potential to Emit is 76.3 lbs/day based on the maximum capacity shown by the blueprints for the C&R Vanderham Dairy and 65.2 lbs/day based on the maximum capacity provided by Vanderham. (DSDF, No. 58.) The Potential to Emit for VOC from the milking center emissions unit exceeds 2 pounds a day; the Potential to Emit is 4.0 lbs/day based on the maximum capacity shown by the blueprints for the C&R Vanderham Dairy and 3.3 lbs/day based on the maximum capacity provided by Vanderham. (DSDF, No. 59.) Case 1:05-cv-01593-OWW-SMS Document 160 Filed 09/25/2007 Page 20 of 621

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 21

The Potential to Emit for VOC from the liquid manure handling emissions unit exceeds 2 pounds a day; the Potential to Emit is 15.7 lbs/day based on the maximum capacity shown by the blueprints for the C&R Vanderham Dairy and to 13.3 lbs/day based on the maximum capacity provided by Vanderham. (DSDF, No. 60.) The Potential to Emit for VOC from the land application emissions unit exceeds 2 pounds a day; the Potential to Emit is 28.2 lbs/day based on the maximum capacity shown by the blueprints for the C&R Vanderham Dairy and to 23.8 lbs/day based on the maximum capacity provided by Vanderham. (DSDF, No. 61.) The C&R Vanderham Dairy operation’s post-project Stationary Source Potential to Emit VOC exceeds ten tons per year; Vanderham calculates the “total annual emissions” at the C&R Vanderham Dairy as 24,861.9 pounds or 12.4 tons of VOC per year, based on an outdated emission factor of 12.8 tons of VOC per head per year. (DSDF, No. 62.) The C&R Vanderham Dairy’s post-project Stationary Source Potential to Emit VOC equals 22.6 tons per year based on the maximum capacity shown by the blueprints for the C&R Vanderham Dairy and 19.2 tons per year based on the maximum capacity provided by Vanderham

. (DSDF, No. 63.) Defendant dispute facts Nos. 58-63 arguing that there is no basis for the “blueprint” capacity. However, Defendants offer no alternative calculations or any other contrary evidence. Defendants merely argue that they could not have possibly been required to install BACT since the BACT determination process is so closely tied to the ATC permitting process. Defendants also argue that District Rule 4.6.9 exempts agricultural sources from Case 1:05-cv-01593-OWW-SMS Document 160 Filed 09/25/2007 Page 21 of 621

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 22 the requirement to purchase offsets.

4. REQUESTS FOR JUDICIAL NOTICE “A judicially noticed fact must be one not subject to reasonable dispute in that it is either (1) generally known within the territorial jurisdiction of the trial court or (2) capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned.” Fed. R. Evid. 201(b) (1984). “A court shall take judicial notice if requested by a party and supplied with the necessary information.” Fed. R. Evid. 201(d) (1984). Judicially noticed facts often consist of matters of public record, such as prior court proceedings, see, e.g., Emrich v. Touche Ross & Co., 846 F.2d 1190, 1198 (9th Cir. 1988); administrative materials, see, e.g., Barron v. Reich, 13 F.3d 1370, 1377 (9th Cir. 1994); city ordinances, see, e.g., Toney v. Burris, 829 F.2d 622, 626-27 (7th Cir. 1987) (holding that federal courts may take judicial notice of city ordinances); official maps, see, e.g., Aiello v. Town of Brookhaven, 136 F. Supp. 2d 81, 86 n.8 (E.D.N.Y. 2001) (taking judicial notice of geological surveys and existing land use maps); or other court documents, see, e.g., Rothman v. Gregor, 220 F.3d 81, 92 (2d Cir. 2000) (taking judicial notice of a filed complaint as a public record). Federal courts may “take notice of proceedings in other courts, both within and without the federal judicial system, if those proceedings have a direct relation to the matters at issue.” U.S. ex rel Robinson Rancheria Citizens Council v. Borneo, Inc., 971 F.2d 244, 248 (9th Cir. 1992). Defendants request judicial notice of the following Case 1:05-cv-01593-OWW-SMS Document 160 Filed 09/25/2007 Page 22 of 621

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 23 documents: 1. Finding of Substantial Inadequacy of Implementation Plan; Call for California State Implementation Plan Revision , Proposed Rule, 68 Fed. Reg. 7327 (February 13, 2003). (Doc. 112, Defendants’ Request for Judicial Notice, Ex. A, Filed May 29, 2007; See also, Doc. 126, Defendants’ Request for Judicial Notice, Ex B, Filed June 15, 2007.) 2. Finding of Substantial Inadequacy of Implementation Plan; Call for California State Implementation Plan Revision, Final Rule , 68 Fed. Reg. 37746 (June 25, 2003). ( Id. at Ex. B; See also, Doc. 126 at Ex D.) 3. Revisions to the California State Implementation Plan, San Joaquin Valley Unified Air Pollution Control District , Proposed Rule, 68 Fed. Reg. 7330 (February 13, 2003). ( Id. at Ex. C; See also, Doc. 126 at Ex C.) 4. Revisions to the California State Implementation Plan; San Joaquin Valley Unified Air Pollution Control District , Final Rule, 69 Fed. Reg. 27837 (May 17, 2004), a true and correct copy of which is attached hereto as Exhibit “D.” ( Id. at Ex. D; See also, Doc. 126 at Ex E.) 5. San Joaquin Valley Unified Air Pollution Control District, Final Draft Staff Report: Rules 2020 and 2201 (August 17, 2006). ( Id. at Ex. E.) 6. Letter for the California Air Resources Board (“CARB”) to Brent Newell dated May 30, 2007, available at http://www.arb.ca.gov/nsr/sb288/sb288ltr1.pdf. (Doc. 150, Defendants’ Request for Judicial Notice, Ex. A, Filed July 30 2007.) 7. Notice of Deficiency for 34 Clean Air Act Operating Permit Programs in California , 67 Fed. Reg. 35990 (May 22, 2002). (Doc. 126 at Ex A.) 8. A verified complaint filed by plaintiff Association of Irritated Residents (“Plaintiff”) on or about June 18, 2004 in the action entitled Western United Dairymen, et al. v. San Joaquin Valley Unified Air Pollution Control District , et al., Superior Court of the State of California in and For the County of Fresno, Case No. 04 CE CG 01596 (the “State Action”). (Doc. 126 at Ex F.) 9. A Memorandum of Points and Authorities in Case 1:05-cv-01593-OWW-SMS Document 160 Filed 09/25/2007 Page 23 of 621

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 24

Opposition to Order to Show Cause Re: Preliminary Injunction and Stay filed by Plaintiff on or about June 18, 2004 in the State Action. (Doc. 126 at Ex G.) 10. San Joaquin Valley Unified Air Pollution Control District, Final Draft Staff Report: Amendments to Rule 2020 (Exemptions) and 2201 (August 17, 2006). (Doc. 126 at Ex H.) 11. Letter from the California Air Resources Board to the United States EPA dated November 5, 2004 available at www.arb.ca.gov/fcaa/tv/tvinfo/overview.htm. (Doc. 126 at Ex I.) 12. Opinion letter from the State of California Office of the Attorney General to the United States Environmental Protection Agency dated November 3, 2003, available at www.arb.ca.gov/fcaa/tv/tvinfo/overview.htm. (Doc. 126 at Ex J.) 13. San Joaquin Valley Unified Air Pollution Control District Rule 2010. (Doc. 126 at Ex K.) 14. San Joaquin Valley Unified Air Pollution Control District Rule 2201. (Doc. 126 at Ex H.) Plaintiffs request judicial notice of the following records: 1. Exhibit 19 is a document entitled “Ground-level Ozone: Basic Information,” The attached document is also posted on the United States Environmental Protection Agency’s web-site at http://www.epa.gov/air/ozonepollution/basic.html , last updated March 6, 2007. (Doc. 86, Plaintiffs’ Request for Judicial Notice, Filed April 6, 2007.) 2. Exhibit 20 is a document entitled “Ground-level Ozone: Health and Environment,” The attached document is also posted on the United States Environmental Protection Agency’s web-site at http://www.epa.gov/air/ozonepollution/health.html , last updated March 6, 2007. ( Id. ) 3. Exhibit 21 is a document entitled “Major Group 02: Agriculture production livestock and animal specialties.” The attached document is also posted posted on the United States Environmental Protection Agency’s web-site at http://www.osha.gov/pls/imis/sic_manual.display?id =2&tab=group , last visited Feb. 20, 2006. ( Id. ) 4. Exhibit 28 is a letter on Air District letterhead Case 1:05-cv-01593-OWW-SMS Document 160 Filed 09/25/2007 Page 24 of 621

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notifying Defendants C&R Vanderham Dairy, et al. (“Vanderham”) that the Permit to Operate will be issued on or after December 7, 2005 after Vanderham completes construction and the District conducts an inspection of the dairy facility. (Doc. 87, Plaintiffs’ Request for Judicial Notice, Filed April 6, 2007.) 5. Exhibit 29 is a document entitled “Permit to Operate,” issued on April 3, 2007. ( Id. ) Plaintiffs also seek judicial notice of a letter dated July 25, 2005 on Air District letterhead notifying Defendants that due to an imminent change in the emissions factor, Defendants proceeded in their planned construction “at their own risk.” (Doc. 146, Plaintiffs Request for Judicial Notice, Filed July 26, 2006.) There are no objections by either party to the requests for judicial notice. The records are undisputed matters of public record. All letters transmitted by a government agency on agency letterhead are self authenticating pursuant to Fed. R. Ev. 902(8). However, the contents of these exhibits may contain matters subject to dispute. A disputed fact is not the proper subject of judicial notice. The judicial notice taken here is of the existence of these documents and the fact that the documents contain the contents represented, not necessarily that opinions and information published are true. Plaintiffs’ request for Judicial Notice is GRANTED IN PART. 5. APPLICATION TO FILE AMICUS BRIEF BY MILK PRODUCERS COUNCIL Late in the evening of Friday, May 18, 2007, Milk Producers Council filed an untimely Application for leave to file an Amicus Curiae Brief on behalf of Defendants. The initial hearing on Plaintiffs’ motion for summary judgment was held on Monday, May Case 1:05-cv-01593-OWW-SMS Document 160 Filed 09/25/2007 Page 25 of 621

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 26 21, 2007. The application was filed after the close of business and did not give the parties the minimal due process opportunity to respond in any meaningful way to the issues raised in the Application. Further, the untimeliness of the application did not provide the court with sufficient time to address the request. Milk Producer Council’s application to file an Amicus Curiae Brief is DENIED WITHOUT PREJUDICE. 6. DISCUSSION A. Summary Judgment Standard Summary judgment is warranted only “if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact.” Fed. R. Civ. P. 56©; California v. Campbell , 138 F.3d 772, 780 (9th Cir. 1998).Therefore, to defeat a motion for summary judgment, the nonmoving party must show (1) that a genuine factual issue exists and (2) that this factual issue is material. Id . A genuine issue of fact exists when the non-moving party produces evidence on which a reasonable trier of fact could find in its favor viewing the record as a whole in light of the evidentiary burden the law places on that party. See Triton Energy Corp. v. Square D Co. , 68 F.3d 1216, 1221 (9th Cir. 1995); see also Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 252-56 (1986). Facts are “material” if they “might affect the outcome of the suit under the governing law.” Campbell , 138 F.3d at 782 (quoting Anderson , 477 U.S. at 248). The nonmoving party cannot simply rest on its allegations Case 1:05-cv-01593-OWW-SMS Document 160 Filed 09/25/2007 Page 26 of 621

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 27 without any significant probative evidence tending to support the complaint. Devereaux v. Abbey , 263 F.3d 1070, 1076 (9th Cir. 2001). [T]he plain language of Rule 56(c) mandates the

entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to the party's case, and on which that party will bear the burden of proof at trial. In such a situation, there can be “no genuine issue as to any material fact,” since a complete failure of proof concerning an essential element of the nonmoving party’s case necessarily renders all other facts immaterial. Celotex Corp. v. Catrell , 477 U.S. 317, 322-23 (1986). The more implausible the claim or defense asserted by the nonmoving party, the more persuasive its evidence must be to avoid summary judgment. See United States ex rel. Anderson v. N. Telecom, Inc. , 52 F.3d 810, 815 (9th Cir. 1996). Nevertheless, the evidence must be viewed in a light most favorable to the nonmoving party. Anderson , 477 U.S. at 255. A court’s role on summary judgment is not to weigh evidence or resolve issues; rather, it is to determine whether there is a genuine issue for trial. See Abdul-Jabbar v. G.M. Corp. , 85 F.3d 407, 410 (9th Cir. 1996). B. AIR Has Standing to Bring This Case The Association of Irritated Residents has standing to Case 1:05-cv-01593-OWW-SMS Document 160 Filed 09/25/2007 Page 27 of 621

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 28 prosecute Vanderham’s violations of the SIP. These violations directly affect AIR members’ health, aesthetic, and procedural interests. Organizations have standing to bring an action on behalf of their members if (1) neither the claim asserted nor the relief requested requires their members to participate directly in the lawsuit, (2) they seek to protect interests that are germane to their purpose, and (3) their members would have standing to sue individually. See United States v. San Francisco , 979 F.2d 169, 171 (9th Cir. 1992). i. AIR Members Need Not Participate Directly in the Lawsuit Direct participation of any of AIR’s members is unnecessary because AIR may bring this action. The Clean Air Act allows any “person” to bring an action to enforce an emission standard or limitation. 42 U.S.C. § 7604(a)(1). The Act defines “person” to include individuals, corporations, partnerships, and associations. 42 U.S.C. § 7602(e). AIR is an unincorporated association. Declaration of Tom Frantz (“Frantz Dec.”) ¶ 2. Thus, AIR may bring this action without the direct participation of its members. ii. AIR Seeks to Protect Interests Germane to its Purpose AIR’s mission is to advocate for clean air and environmental health in the San Joaquin Valley. Frantz Dec. ¶ 3. The interests of clean air and environmental health that AIR seeks to protect using this citizen suit fall squarely within its mission. iii. AIR’s Members Have Standing to Sue Individually Finally, AIR members have standing to bring this suit individually. To satisfy the final prong of the test, an Case 1:05-cv-01593-OWW-SMS Document 160 Filed 09/25/2007 Page 28 of 621

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 organization must show that (1) at least one of its members has suffered an injury in fact, (2) the injury is fairly traceable to Vanderham’s illegal conduct, and (3) it is likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision. Friends of the Earth, Inc. v. Laidlaw Envtl. Servs., Inc. , 528 U.S. 167, 180-81 (2000). AIR member and President of its Board of Directors, Tom Frantz, offers a standing declaration here, to establish the injury in fact prong of standing because he suffers physical, aesthetic, and procedural harm. Vanderham’s illegal conduct caused this harm, which a favorable decision from the Court will redress.

a. AIR Members Suffer Injury in Fact Physical, aesthetic, and procedural harms all satisfy the injury in fact requirement. The Ninth Circuit has held that a plaintiff “will suffer injury if compelled to breathe air less pure than that mandated by the Clean Air Act.” See, Hall v. Norton , 266 F.3d 969, 976 (9th Cir. 2001)(“evidence of a credible threat to the plaintiff’s physical well being from airborne pollutants” establishes injury in fact); See also, Natural Resources Defense Council v. EPA , 507 F.2d 905, 910 (9th Cir. 1974). Frantz resides in the San Joaquin Valley air basin, which EPA has designated nonattainment for the eight-hour ozone standard. PSUF ¶ 5; Frantz Dec. ¶ 6. The C&R Vanderham Dairy emits VOC in the San Joaquin Valley air basin. PSUF ¶¶ 2, 6, 7. VOC reacts with oxides of nitrogen emissions to form ozone. PSUF ¶ 1. Ozone has substantial adverse health effects. PSUF ¶¶ 3, 4. Frantz’s home for the last 16 years lies 2.3 miles west of the dairy. Frantz Dec. ¶ 5. Frantz breathes air that contains Case 1:05-cv-01593-OWW-SMS Document 160 Filed 09/25/2007 Page 29 of 621

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 30 ozone, which harms him. PSUF ¶¶ 3, 4; Frantz Dec. ¶ 6. For instance, Frantz suffers from breathing difficulties which are exacerbated by ozone pollution. Frantz Dec. ¶ 6. Ozone pollution causes Frantz to be concerned about his health, his family’s health, and the health of his friends and students, many of whom also live near the C&R Vanderham Dairy. Frantz Dec. ¶¶ 5, 6. Further, aesthetic harm establishes injury in fact. Laidlaw , 528 U.S. at 183; Environmental Rights Foundation v. Pacific Lumber Co. , 230 F.3d 1141, 1149 (9th Cir. 2000). Ozone pollution harms Frantz’s aesthetic interest because on most summer days, ozone haze obscures the view of the Sierra Nevada, Coastal Range, and Sierra Madre mountains from his home in Shafter. Frantz Dec. ¶ 7. Frantz has enjoyed the view of these mountains since childhood. Id. On the extremely infrequent clear days, Frantz enjoys the beauty of the San Joaquin Valley and the surrounding mountains. Id . Vanderham’s failure to obtain a preconstruction permit has also deprived AIR members, including Frantz, of procedural rights, which provide an independent basis for standing. Massachusetts v. EPA , 127 S. Ct. 1438, 1453 (2007), citing Lujan v. Defenders of Wildlife , 504 U.S. 555, 572 n.7 (1992). The “injury in fact requirements are adjusted for plaintiffs raising procedural issues in that although they must show a ‘concrete interest’ at stake, they need not show that the substantive environmental harm is imminent.” Covington v. Jefferson County , 358 F.3d 626, 641 n.21 (9th Cir. 2004). Vanderham has failed to obtain a required permit before constructing the C&R Vanderham Dairy. See Section VI, infra. Case 1:05-cv-01593-OWW-SMS Document 160 Filed 09/25/2007 Page 30 of 621

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 31 The evasion of these requirements constitutes a procedural injury to Frantz, as it removes safeguards specifically designed to ensure that environmental consequences are properly considered. Friends of the Earth v. U.S. Navy , 841 F.2d 927, 931 (9th Cir. 1988) (procedural harm where construction on project proceeded without a required permit). Moreover, Rule 2201 requires that the District provide the public with notice and opportunity to comment on tentative permitting decisions for projects like the C&R Vanderham Dairy which have a post-project Stationary Source Potential to Emit that exceeds 10 tons per year. Rule 2201 §§ 5.4, 5.5; see Section IX, infra . Frantz would have participated in the permitting decision, and has been deprived of the procedural rights to receive notice, provide comment, and otherwise participate in the District’s decision to permit the C&R Vanderham Dairy by Vanderham’s failure to obtain a permit. Frantz Dec. ¶ 8. Because the Frantz Declaration establishes a concrete interest at stake – air quality that contains unhealthy levels of ozone – these procedural failures also establish injury in fact. b. The AIR Member’s Injury in Fact is Traceable to

Vanderham’s Illegal Conduct These physical, aesthetic, and procedural harms to a member of the plaintiff organization are traceable to Vanderham’s illegal conduct. Vanderham’s dairy releases VOC into the San Joaquin Valley air basin. PSUF ¶¶ 2, 6, 7. The VOC reacts with nitrogen oxides to form ozone. PSUF ¶ 1. Ozone levels in the air basin exceed the federal health-based 8-hour ozone NAAQS and cause adverse health and aesthetic injuries. PSUF ¶¶ 3, 4; Frantz Case 1:05-cv-01593-OWW-SMS Document 160 Filed 09/25/2007 Page 31 of 621

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Cal. Health & Saf. Code § 42301.16(c) provides:

1 “Prior to requiring a permit for an agricultural source of air pollution with actual emissions that are less than one-half of any applicable emissions threshold for a major source in the 32 Dec. ¶¶ 6, 7. Thus, Frantz’s injuries are traceable to Vanderham’s failure to obtain a preconstruction permit and failure to comply with pollution control requirements.

c. Injunctive Relief and Civil Penalties Will Redress the AIR Member’s Injury in Fact Finally, a favorable order by this Court will redress the members’ injuries from Vanderham’s violations of the Clean Air Act. An order that compels Vanderham to obtain a permit, to reduce the dairy’s air pollution by installing BACT, and to buy offsets will ensure a net reduction of VOC in the Valley. An order requiring Vanderham to obtain a permit will also redress Frantz’s procedural injury. An order that imposes civil penalties will deprive Vanderham of the benefit of its violations and deter future violations of the Clean Air Act, also redressing Frantz’s injuries. Covington , 358 F.3d at 641, citing Laidlaw , 528 U.S. at 185-86. (“Redressability is satisfied . . . by the fines and penalties applicable for violations of [the Clean Air Act]”). Because Frantz has injuries in fact traceable to Vanderham’s redressable illegal conduct, he has standing to sue. The organizational plaintiff, AIR, thus meets all three Hunt criteria, and has standing. C. District Rule 2010 Governs the Permit Requirements for Agricultural Source with the Force and Effect of Federal Law The first issue is the legal question of whether the Cal. Health and Saf. Code § 42301.16(c) exemption applies to 1 Case 1:05-cv-01593-OWW-SMS Document 160 Filed 09/25/2007 Page 32 of 621

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 district, for any air contaminant, but excluding fugitive dust, a district shall, in a public hearing, make all of the following findings: (1) The source is not subject to a permit requirement pursuant to Section 40724.6 (2) A permit is necessary to impose or enforce reductions of emission of air pollutants that the district show cause or contribute to a violation of a state or federal ambient air quality standard. (3) The requirement for a source or category of sources to obtain a permit would not impose a burden on those sources that is significantly more burdensome than permits required for other similar sources of air pollution.” California’s SIP includes December 17, 1992 version of 2 District Rule 2010, as well as the December 19, 2002 version of Rules 2201 and 2020 that are also at issue in this case. 64 Fed. Reg. 39920 (July 23, 1999); 69 Fed. Reg. 27837 (May 17, 2004); 40 C.F.R. § 52.220(c)(199)(i)(D); 40 C.F.R. § 52.220(c)(311)(i)(B). 33 agricultural sources in light of San Joaquin Valley Air Pollution District’s (“District”) Rule 2010's incorporation in the California SIP. There is no dispute that under state law 2 Defendants are a non major stationary source emitting less than 12.5 tons of VOC/year. According § 42301.16(c), non major stationary sources with less than a 12.5 VOC/year emission threshold are exempt from obtaining an ATC permit. Defendants argue that the state law exemption applies to them because it was enacted prior to the EPA’s approval of the SIP, the EPA had knowledge of the exemption, and the EPA expressly referenced SB 700 in promulgating documents it used to approve the SIP. Defendants argue that they fall under the § 42301.16(c) exemption because the dairy’s actual emissions were 12.4 tons VOC per year, which is less than the rule’s threshold of 12.5 tons VOC per year. Case 1:05-cv-01593-OWW-SMS Document 160 Filed 09/25/2007 Page 33 of 621

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Rule 2010 § 3.0 provides: “Any person building, altering,

3 or replacing any operation, article, machine, or equipment... the use of which may cause the issuance of air contaminants... shall first obtain authorization for such construction from an Air Pollution Control Officer (“APCO”). An authority to construct shall remain in effect until the Permit to Operate the source operation for which the application was filed is granted or denied, or the application is canceled...” 34 Plaintiffs argue that under District Rule 2010, as incorporated into the California SIP, any agricultural source emitting air contaminants must obtain an ATC. There is no dispute that § 42301.16 was ever mentioned in the provisions of the California SIP. Plaintiffs argue, based on the plain language of the SIP that the § 42301.16(c) exemption does not apply to Defendants. Based on the plain language of the California SIP, Plaintiffs argue that District rule 2010 governs 3 the permitting the Vanderham Dairy. i. The California SIP Which was Approved By the EPA Functions as Federal Law An EPA-approved SIP is federal law and does not change unless and until EPA approves a revision requested by a state. Safe Air , 475 F.3d at 1105. States are free to revise their EPA approved SIPs, subject to certain Clean Air Act (“Act”) restrictions, but unless and until EPA approves a revision, states are “relegated to a lone option: compliance.” El Comité para el Bienestar de Earlimart v. Helliker , 416 F. Supp. 2d 912, 934 (E.D. Cal. 2006) (“ El Comité ”), quoting Friends of the Earth v. Carey , 535 F.2d 165, 178 (2nd Cir. 1976); see also Sierra Club v. TVA , 430 F.3d 1337, 1346 (11th Cir. 2005) (“If a state wants to add, delete, or otherwise modify any SIP provision, it must Case 1:05-cv-01593-OWW-SMS Document 160 Filed 09/25/2007 Page 34 of 621

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 35 submit the proposed change to EPA for approval.”). Once “a SIP is adopted by a state and approved by the EPA, it becomes controlling and must be carried out by the state” and the SIP’s “requirements and commitments become binding upon the state as a matter of federal law.” AIR v. C&R Vanderham Dairy , 435 F. Supp. 2d 1078, 1085 (E.D. Cal. 2006), citing Bayview Hunters Point Cmty. Advocates v. Metro. Transp. Comm’n , 366 F.3d 692, 695 (9th Cir. 2004) and Beentjes v. Placer County Air Pollution Control Dist. , 254 F. Supp. 2d 1159, 1162 (E.D. Cal. 2003). The Act “precludes the right of any state to ‘adopt or enforce any emission standard or limitation which is less stringent than the standard or limitation’ contained in an EPA approved SIP.” Order on Defs.’ Mot. to Dismiss (Docket 50) at 18 (emphasis added), quoting Kentucky Res. Council, Inc. v. EPA , 304 F. Supp. 2d 920, 926 (W.D. Ky. 2004); see Safe Air , 475 F.3d at 1105; 42 U.S.C. § 7416 (expressly preempting state law less stringent than an EPA-approved SIP). Where state and federal laws conflict, the state law must yield, pursuant to the Supremacy Clause. U.S. C ONST . art. VI, cl. 2; McCulloch v. Maryland , 17 U.S. 316, 436-437 (1819). Defendants fail to address the law established in Safe Air. Instead, Defendants first argue that the incorporation of rule 2020 in the SIP did not remove the agricultural exemption for agricultural sources altogether. They argue that the exemption still applies for sources whose actual emissions are less than half of the major source threshold of 12.5 tons VOC/year. Defendants assert, without any support in law that the EPA approval of the SIP cannot require the district to ignore the Case 1:05-cv-01593-OWW-SMS Document 160 Filed 09/25/2007 Page 35 of 621

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 36 state exemption of § 42301.16(c) “because the EPA states in the SIP approval that the states give the district authority to carry out the provisions of the SIP.” (Doc. 113, Supplemental Brief in Opposition to Summary Judgment, Filed May 30, 2007.) This language does not grant the states complete autonomy to determine CAA regulations without regard to federal law. The states’ authority is still subject to the conditions outlined by the State SIP. While the State of California is free to revise the EPA approved SIP, the revisions must be approved by the EPA. Until there is approval of the revisions, California is relegated to compliance. Defendants provide no evidence that the § 42301.16(c) exemption was ever expressly approved by the EPA

. Defendants instead argue that because the EPA approved the SIP after §42901.16 was enacted and because the SIP references SB 700, which included § 42901.16, the EPA must have approved the SIP subject to the exemption. However, at the August 13, 2007 hearing on the supplemental briefs to this motion, Defendants revealed that § 42301.16(c) is currently pending for approval with the EPA. This fact necessarily means that § 42301.16(c) could not have been previously approved by the SIP, either expressly or impliedly as defendants argue. Defendants also contend that EPA’s only recourse is to disprove the SIP “like it did when it found the SIP conflicted with the major source threshold.” Doc. 113, Supplemental Brief in Opposition to Summary Judgment, Filed May 30, 2007.) This argument is legally incorrect. Once the California SIP was adopted it became controlling and binding upon the State of Case 1:05-cv-01593-OWW-SMS Document 160 Filed 09/25/2007 Page 36 of 621

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 37 California as a matter of federal law. If the California SIP contains regulations for the permitting of agricultural sources, those regulations govern over any other state or district rules that may conflict on the same issue. To interpret the California SIP, we look to the plain meaning of its language. ii. Based on The Plain Meaning of California’s SIP, Defendants Were Required to Obtain an ATC Permit At the Time of Construction The recent decision in Safe Air for Everyone v. EPA speaks directly to the legal issue of whether the § 42301.16(c) exemption applies. Safe Air involved a conflict between an Idaho State regulation governing field burning and the provisions of the Idaho SIP. The original Idaho SIP was approved by the EPA in May of 1972. Safe Air , 475 F.3d at 1101. The original SIP incorporated an Idaho state regulation on open burning that included field burning as a type of allowable burning, although containing significant limitations. Id. In 1993, the EPA approved amendments to the Idaho SIP that included an Idaho air pollution regulation containing a general prohibition on open air burning and substantially changed those provisions. Id. The regulation incorporated into the SIP listed categories of allowable burning that no longer included field burning. Id. at 1102. In 2003, the EPA approved another set of amendments that only updated the open field burning regulations to reflect a recodification. Id. However, in 2005 the EPA approved amendments to the SIP that incorporated Idaho Administrative Code § 58.01.01.617 adding field burning as a category of allowed burning. Id. This amendment was the first explicit reference to those statutes in the SIP. Id. Plaintiffs submitted comments to Case 1:05-cv-01593-OWW-SMS Document 160 Filed 09/25/2007 Page 37 of 621

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Like Safe Air , Defendants also point to the legislative

4 history of SB 700 in support of their argument. However, it is the plain meaning of the SIP that governs. Safe Air , 475 F.3d at 1103. Other interpretive material such as the legislative history or an agency’s interpretation of the regulation should not be considered in light of the SIP’s plain and unambiguous meaning. Id. 38 the EPA during the 2005 rule-making process and challenged the approval of the amendments permitting field burning. Id. at 1103. The issue before the Court was whether EPA’s approval of the field burning amendment in 2005 on the premise that the pre existing Idaho SIP did not ban field burning, so that the amendment only clarified what was already the case, was legally sustainable. See , Id. at 1099. The court ruled that the EPA did not have the authority to incorporate the amendments adding field burning as a permissable category. The court rejected EPA’s arguments that in passing the amendment to the Idaho SIP it considered Idaho’s intent in drafting the SIP, conducted an examination of the state’s overall approach to field burning, considered the legislative history of Idaho’s provisions related to agricultural burning , and considered various reports and 4 plans prepared by the State and various agreements signed by the State. Safe Air , 475 F.3d at 1104. The court also rejected the EPA’s argument that its own past actions indicated it understood agricultural burning to be allowed in Idaho and the SIP did not prohibit it. Id. Instead the court applies the well-established interpretation rule to the SIP, that the first look is to the Case 1:05-cv-01593-OWW-SMS Document 160 Filed 09/25/2007 Page 38 of 621

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 According to Bayview Hunters , “a regulation should be

5 construed to give effect to the natural and plain meaning of its words.” Bayview Hunters, 366 F.3d at 698 (holding that the expected ridership increase was never described in the SIP as anything more than a target.); See also , Crown Pac v. OSHRC , 197 F.3d 1036, 1038 (9th Cir. 1999)(Because the SIP did “not on its face, require a ridership increase of 15%... by its plain language the SIP does not establish a mandatory requirement to increase transit ridership by a specified percentage weights heavily [and] weighs heavily against the conclusion that such an obligation can be imposed based upon the SIP.) 39 plain meaning of the plan. See, id. at 1103 (citing to Bayview Hunters Point Community Advocates v. Metropolitan Transportation Commission (BHPCA) , 366 F.3d 692 (9th Cir. 2004).) To determine 5 the requirements of the SIP the court examined the standards governing the interpretation of federal regulations. Id. “As a general interpretative principle, the plain meaning of regulation governs.” Id. “Other interpretative materials, such as the agency’s own interpretation of the regulation, should not be considered when the regulation has a plain meaning.” Id. “ The state’s interpretation of the regulations incorporated into the SIP, even if binding as a matter of state law, is not directly dispositive of the meaning of the SIP.” Id. “ A SIP once approved by EPA, has the force and effect of federal law.” Id. at 1105. “In accord with this general proposition, a state my not unilaterally alter the legal commitments of its SIP once EPA approves the plan.” Id. Based on this reasoning, the court determined that the EPA did not justify or explain its approach in interpreting the SIP and the approach in amending the SIP could not be reconciled with the role of SIP’s in the federal regulatory scheme. Id. at 1104. Case 1:05-cv-01593-OWW-SMS Document 160 Filed 09/25/2007 Page 39 of 621

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Per Safe Air , District Rules 2020 and 2201 also have the

6 force and effect of federal law. 40 As in Safe Air , this case involves a conflict between a California State exemption for non major agricultural sources and the provisions of the California SIP. On July 23, 1999 the EPA approves Rule 2010 as part of the SIP, making it federal law. On June 25, 2003, upon the EPA’s review of the California SIP, the EPA found that the plan is substantially inadequate and required California to revise it by removing the agricultural equipment exemption in Cal. Health & Saf. Code § 42301(e). California passed SB 700 which amended Cal. Health & Saf. Code § 42301(e) to remove the agricultural exemption. The bill was effective on January 1, 2004. However, the bill also included the passage of Cal. Health and Saf. Code § 42301.16(c) and its exemption to permitting requirements for agricultural sources that emit below 12.5 tons VOC head/year. There is no evidence that § 42301.16(c) was approved by the EPA. There is no reference to § 42301.16(c) in the California SIP. On June 15, 2004, the EPA approved the SIP which included the December 19, 2002 versions of Rule 2020 and 2201. 6 As in Safe Air , the issue is whether California’s § 42301.16(c) passed in SB 700 governs Defendants’ permitting rather than District Rule 2010, as incorporated by the California SIP. Defendants arguments are as follows: 1. The state exemption controls because the SIP approval process cannot grant the District authority to require agricultural air permits in contravention of state law since the District Case 1:05-cv-01593-OWW-SMS Document 160 Filed 09/25/2007 Page 40 of 621

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Defendants cite Bethlehem Steel Corp. v. Gorsuch , 742 F.2d

7 1028 (7th Cir. 1984.) in support of their claims. Bethlehem Steel is distinguishable because it involves a partial approval by the EPA of an air pollution control regulation that applied to the polluter’s non combustion emissions. Bethlehem Steel involved the EPA’s partial approval of a single regulation. This case involves the different issue of the EPA’s incorporation of district rules in their approval of the California SIP and how, as a result, the SIP conflicts with state exemptions for agricultural sources. In support of this argument, Defendants cite Citizens for 8 a Better Environment v. Deukmejian, 731 F.Supp 2d 1159 (E.D. Cal. 2003). The CBE Court only stated that “[s]tates may not amend a SIP through the enactment of subsequent state law.” 731 F. Supp. at 1455 n.10. The court relied on another decision which held that the “procedure set forth in Clean Air Act for obtaining modification of a SIP is [the] exclusive method by which a SIP amendment can be effected.” Id. (emphasis in original). The decision does not state the “only” limitation that can be imposed on states’ abilities to enact laws in connection with a SIP. Not only does CBE prevent a state from amending a SIP by enacting state law contrary to an EPA-approved SIP after the approval of the SIP, but CBE also prevents a state from amending a SIP at all except by following the procedures outlined in the Clean Air Act. Vanderham’s reliance on CBE is misplaced.

41 obtains its authority from the State. 7 2. States have absolute authority to enact state laws that establish how the national standards will be met before the EPA’s approval of the SIP 3. The only limitations that can be imposed on a state’s ability to enact laws in connection with a SIP is that a state cannot amend a previously approved SIP through enactment of a state law after EPA approves the SIP. 8 4. The one half major source threshold exemption was contained in a state statute almost 8 months prior to the EPA’s approval of the SIP 5. The EPA had knowledge of this statute and expressly referenced that statute in its promulgating document. In interpreting the SIP, the plain meaning of the plan Case 1:05-cv-01593-OWW-SMS Document 160 Filed 09/25/2007 Page 41 of 621

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 42 governs. Safe Air establishes that California’s interpretation of regulations incorporated into the SIP, even if binding as a matter of state law, is not directly dispositive of the meaning of the SIP. See, Safe Air, 475 F.3d at 1103. Once the EPA approved the SIP which included District Rule 2010, the rule had the same force and effect as federal law. See, Id. Accordingly, California may not unilaterally alter the legal requirements of Rule 2010 as adopted in the state SIP and approved by the EPA. Id. The ruling in Safe Air directly contravenes Defendants’ arguments that States have “absolute authority” to enact state laws that establish how NAQQS will be met before the EPA’s approval of the SIP

. A state’s authority to enact laws for non attainment areas to meet the requirements of the CAA is not absolute. State authority is subject to federal law as established by the CAA and the provisions of the SIP. See, El Comité , 416 F. Supp. at 934, quoting Carey , 535 F.2d at 178. Defendants rejoin that Safe Air was not a preemption case and does not apply here. According to Defendants, Safe Air was a case involving the narrow question of whether the EPA had misunderstood the previous SIP to allow field burning since it did not expressly prohibit it, and, as a result, went beyond the scope of its authority by incorporating Idaho Administrative Code § 58.01.01.617 in to the SIP. Defendants argue that Safe Air found the EPA misread the SIP’s prohibition on field burning and remanded to the District court to consider Plaintiffs’ objections. However, in its reasoning Safe Air expressly holds: 1. the plain meaning of the SIP governs, 2. a SIP, once approved by EPA, has the force and Case 1:05-cv-01593-OWW-SMS Document 160 Filed 09/25/2007 Page 42 of 621

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 43

effect of federal law, and 3. a state may not unilaterally alter the legal commitments of its SIP once EPA approves the plan. Safe Air , 475 F.3d at 1105. The court in Safe Air held that because the prohibitory language of the preexisting Idaho SIP plainly applies to field burning, federal law banned field burning in Idaho prior to the EPA’s 2005 approval of the SIP amendment. Id . at 1108. Similarly, because the language of Rule 2010 was adopted in the California SIP and plainly applies an ATC requirement to any agricultural source emitting VOC’s, federal law currently requires an ATC for those agricultural sources prior to construction. Based on a plain reading of the SIP, there is no ATC permit exemption for stationary sources which have actual emissions less than half the major source thresholds. iii. There Is No Clearly Expressed Administrative Intent to the Contrary and Interpreting the Plain Meaning Will Not Lead to Absurd Results.

“ The plain language of the Regulation will not control if ‘clearly expressed administrative intent is to the contrary or if such plain meaning would lead to absurd results.’” Id. “The notice requirements of the APA, 5 U.S.C. §§ 552(a)(1), 553(b) , require that some indication of the regulatory intent that overcomes plain language must be referenced in the published notices that accompanied the rulemaking process.” Id. at 1105- 1106. “Otherwise, interested parties would not have the meaningful opportunity to comment on proposed regulations that the APA contemplates because they would have had no way of knowing what was actually proposed.” Id

. at 1106. “Such a mode Case 1:05-cv-01593-OWW-SMS Document 160 Filed 09/25/2007 Page 43 of 621

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 44 of interpretation is particularly sensible under the CAA which requires that judicial challenges be filed within sixty days of [a] SIP approval.” Id. ; See also, 42 U.S.C. 7607(b)(l). “If an agency can promulgate a regulation with plain language that dictates one meaning but later interpret it according to an intent indicated neither in the regulatory language nor in the promulgation documents, parties may depend on the plain meaning of the regulation in deciding not to launch a challenge within the prescribed time limit.” Id. “If, later, the agency relies on an undisclosed intended meaning, interested parties might be foreclosed from challenging the regulation, contrary to the statutory permission to launch such challenges.” Id. at 1106- 1107. In support of their argument that they were exempt under § 42301.16(c) from obtaining a permit, Defendants further argue that the EPA had knowledge of the statute, that the statute was enacted almost eight months prior to the EPA’s approval of the SIP, and that the EPA referenced SB 700 in its final approval. As a result, the EPA must have meant to approve the exemptions in SB 700 since it referenced the bill in the SIP. This argument has no legal merit in the Ninth Circuit. Defendants have provided no persuasive authority to justify departure from the requirement that the plain language of the SIP governs. Defendants do not show any clearly expressed administrative intent that is contrary to a plain reading of the SIP. Defendants do not argue that a plain reading of the SIP would lead to absurd results. Here, the EPA’s approval of Rule 2010 in 1992 predates SB 700 by more than a decade so that the Case 1:05-cv-01593-OWW-SMS Document 160 Filed 09/25/2007 Page 44 of 621

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 45 operative version of Rule 2010 could not possibly include the provisions of SB 700. There is no indication that the public notices of proposed rulemaking to approve Rules 2020 and 2201 as part of the SIP included any discussion of SB 700 in compliance with the notice requirements of the APA. 68 Fed. Reg. 7330 (Feb 13, 2003); See also , Safe Air , 475 F.3d at 1105-1106. EPA’s passing mention of SB 700 in the final rule approving rules 2020 and 2201 does not satisfy the Safe Air criteria that the intent must be expressed in the published notices to allow for meaningful public comment on regulations. Safe Air , 475 F.3d at 1105-1106. The Ninth Circuit emphasized that the public must be made aware of the proposed contents of the SIP in order to have an opportunity to meaningfully comment on them. Id. Mentioning SB 700 in the final rule approving 2020 and 2201 after the public comment period had closed did not provide the opportunity for public comment contemplated by Safe Air. Because the EPA did not provide for public comment on SB 700 exemptions in the notices for the approval of the rules, the EPA did not express an intent to include the exemptions in the SIP. The passing reference to SB 700 in the final rule does not express an intent to include the SB 700 exemptions in the SIP. In Safe Air , Idaho law allowed field burning, but the plain language of the Idaho SIP at issue did not. The EPA argued, as Defendants in this case argue, that the approval of an Idaho anti pollution strategy in a separate rulemaking that referenced Idaho’s field burning statute demonstrated that the EPA understood field burning to be allowed by the SIP. Safe Air , 475 Case 1:05-cv-01593-OWW-SMS Document 160 Filed 09/25/2007 Page 45 of 621

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 The applicability of Rule 2010 is a legal issue that is

9 resolved by Safe Air. In the original motion for summary judgment, Defendants did not address the legal issue and instead attempted to raise triable issues of fact by producing the following evidence: 1. A December 12, 2005 letter from the District to Defendants where the District reasons that the ATC permit program came into effect after Defendants commenced construction of their dairy. Even though it is undisputed that the Dairy is a “new source” the District treated the Dairy as an existing source. 46 F.3d at 1107. n.11, 1103 n.3. Such a passing mention was not enough; the Court noted that “EPA... did not refer to the provisions on field burning when explaining its decision to approve the strategy.” Id. at 1107, n. 11. Similarly, here, although the EPA mentioned SB 700 in the final rule, it did not refer to the exemptions that Vanderham raises in either its published notices or in the final rule. See 68 Fed. Reg. 7330; 69 Fed. Reg. 27837. The Final rule noted that SB 700 removed an illegal blanket exemption for all agricultural sources from CAA requirements. 69 Fed. Reg. 27838. Such a mention of SB 700 in the final rule, approving Rules 2020 and 2201 in connection with the removal of a separate exemption, does not express an intent to nor does it provide notice about the inclusion of other exemptions. According to the plain meaning of the California SIP and its incorporation of Rule 2010, Defendants were required to obtain an ATC permit at the time of construction. It is undisputed that Defendants did not obtain an ATC permit. Motion for summary judgment on the ATC permit issue is GRANTED IN FAVOR OF PLAINTIFFS. 9 Case 1:05-cv-01593-OWW-SMS Document 160 Filed 09/25/2007 Page 46 of 621

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 2. In the “White Paper” issued by the California Air Pollution

Control Officers Association (“CAPCOA”), the admissibility of which is also in dispute in this order, which discusses post SB 700 rules. Plaintiffs moved to strike the White Paper for Defendants’ failure to properly authenticate the White Paper. According to the White Paper “agricultural sources that were in existence prior to January 1, 2004 and are now being permitted will be considered ‘grand fathered’ under NSR, which means they are not subject to review until they are modified... New agricultural sources which initiate construction or installation after January 1, 2004, may be subject to NSR if their emissions reach the applicable thresholds for a ‘major source’. The timeline for submitting permit applications, and the specific requirements that apply will be determined by the local air districts.” The White Paper is an advisory document that is not legally binding. Because the issue of Rule 2010 is a legal one, arguments surrounding the admissibility of the letter and the White Paper are moot. Further at the May 21, 2007 hearing the parties were informed that the White Paper would be considered only for the limited purpose of understanding the implementation of District Rules.

47 D. There Is No Dispute that Defendants Are in Violation of Rule 2201 for Failing to Install BACT Technology and Purchase Offsets. i. Defendants Have Violated Rule 2201 § 4.1.1 by Emitting Above the 2 lbs/day Allowable Threshold for Emissions Units Section 4.1.1 of Rule 2201 states that BACT shall be required for “any new emissions unit or relocation from one Stationary Source to another of an existing emissions unit with a potential to emit exceeding 2.0 lbs in any one day.” In their motion for summary judgment, Plaintiffs argue that Defendants potential for VOC emissions exceeds the daily allowable threshold for emissions units. Defendants contest Plaintiffs’ calculations and Plaintiffs’ use of blueprint capacity to determine the daily Case 1:05-cv-01593-OWW-SMS Document 160 Filed 09/25/2007 Page 47 of 621

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Vanderham argues that Plaintiffs’ calculations are

10 inaccurate because they are based on a new emissions factor of 19.3 lbs/VOC/head/year. According to Vanderham, the emissions threshold that applied at the time of construction was 12.8 lbs/VOC/head/year. Both emissions factors yield emissions above 2 lbs/day thus triggering the requirement to install BACT. 48 allowable thresholds. However, Defendants do not offer any evidence to rebut the sworn affidavit by Plaintiffs’ expert testifying to the accuracy of the calculations. In support of their argument, AIR provides calculations using both the emissions factors advocated by Vanderham as well 10 as their own: Table 1: VOC Emissions Per Day (lbs/day) Based on Current

Emissions Factor (19.3 lbs VOC/head/year) BACT Threshold = 2 lbs/day of VOC

Emissions Unit Vanderham Cow Count(1320 milk cows + support stock) Blueprint Capacity(1624 milk cows + support stock) Cow Housing and Feed 64.2 76.3 Milking Center 3.3 4.0 Liquid Manure Handling 13.3 15.7 Land Application 23.8 28.2

Table 2: VOC Emissions Per Day (lbs/day) Based on Old Emissions Factor (12.8 lbs/VOC/head/year) BACT Threshold = 2 lbs/day of VOC

Emissions Unit Vanderham Cow Count (1320 milk cows + support stock) Blueprint Capacity (1624 milk cows + support stock) Cow Housing and Feed 43.2 50.6 Milking Center 2.2 2.7 Case 1:05-cv-01593-OWW-SMS Document 160 Filed 09/25/2007 Page 48 of 621

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 49 Liquid Manure Handling 8.8 10.4 Land Application 15.8 18.7 Based on the evidence provided by the Plaintiffs, even using the emissions factor advocated by the Defendants, the Dairy’s VOC emission for three of the four emissions units far exceeds the 2 lbs/day threshold. Only the milking center slightly exceeds the threshold. However, Defendants dispute the calculations arguing that the emission factor they use has not been approved by the Air District or EPA. Defendants have not presented any evidence to support their arguments. Defendants also argue that AIR has not proved Vanderham’s non-fugitive emissions meet the major source threshold. Defendants misunderstand the issue. AIR has not pleaded a claim against Defendants that Vanderham is a major source. Whether Vanderham is a major source is not material to AIR’s claims. AIR claims that Vanderham has emissions units that exceed the daily VOC thresholds of 2 lbs/day. The issue is whether the Defendants’ emissions units exceed the BACT threshold of two pounds per day of VOC, not whether Vanderham, emits less than the 12.5 ton/year threshold which triggers the § 42301.16(c) exemption under state law. The exemption does not apply to Defendants in this case because it is not included in the federally approved SIP. Even viewing the evidence in a light most favorable to Defendants, there is no material issue of fact disputed that four Case 1:05-cv-01593-OWW-SMS Document 160 Filed 09/25/2007 Page 49 of 621

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Defendants filed an objection to Plaintiff’s expert

11 testimony of William Powers. The objection was filed the Friday evening before the May 21 hearing. Defendants objection was denied as untimely at the May 21, 2007 hearing on this motion. However, the parties were assured that Powers’ opinion would not be considered to the extent that it exceeded the scope of his expertise. Powers’ calculations have not been contradicted by any evidence from Defendants. Defendants have failed to provide further evidence to rebut Powers’ calculations. 50 of their emissions units exceed the 2.0 lbs/day threshold. 11 ii. There is No Triable Issue of Fact that Defendants Were Required to Install BACT Pursuant to District Rule 2201 as Incorporated in the California SIP. Rule 2201 defines BACT as the most stringent emission limitation or control technique of the following: 1. Achieved in practice for such category or class of

source; 2. Contained in any State Implementation Plan approved by the Environmental Protection Agency for such category and class of source. A specific limitation technique or control technology shall not apply if the owner of the proposed emissions unit demonstrates to the satisfaction of the APCO that such a limitation or control technique is not presently achievable; or 3. Contained in an applicable federal New Source Performance Standard; or 4. Any other emission limitation or control technique, including process and equipment changes of basic or control equipment, found by the APCO to be cost effective and technologically feasible Case 1:05-cv-01593-OWW-SMS Document 160 Filed 09/25/2007 Page 50 of 621

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 51

for such class or category of sources or for a specific source. Rule 2201 § 3.9. Potential to Emit is defined as the “maximum capacity of any emissions unit to emit a pollutant under its physical and operational design.” Rule 2201 § 3.27. The Potential to Emit from the dairy’s emissions units includes fugitive emissions. Rule 2201 § 3.19 (“Fugitive emissions shall be included in all calculations, except as provided in Section 3.24 [major modifications]”) Plaintiffs argue that C&R Vanderham Dairy has four emissions units which have a Potential to Emit more than two pounds of VOC per day and that Defendants have failed to install BACT on the four emissions units. Vanderham admits that the District rules, including Rules 2010 and 2201, are “emission standards or limitations” as defined by 42 U.S.C. §§ 7604(f), 7604(k), which define an “emission standard or limitation” to include any standard or limitation approved as part of the State Implementation Plan (“SIP”). (PSUF No. 8.) There is no dispute that the District has not undertaken a BACT analysis for the C&R Vanderham Dairy. (PSUF No. 52.). There is no dispute that C&R Vanderham Dairy is a stationary source of air pollution, within the meaning of the Clean Air Act and Rule 2201

. (PSUF No. 43.) There is also no dispute that C&R Vanderham Dairy is a non major stationary source pursuant to state law. Vanderham admits that the cow housing and feeding areas, the milking center, the liquid manure handling area, the solid manure handling area, and the land application area are emissions units as defined by § 3.18 of Rule 2201. (PSUF No. 45.) Case 1:05-cv-01593-OWW-SMS Document 160 Filed 09/25/2007 Page 51 of 621

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 52

According to Plaintiffs, Defendants cannot have installed BACT if the APCO has not determined what is cost-effective or technologically feasible for the dairy. Plaintiffs have submitted sworn testimony by District staff that states the District Staff determines BACT requirements on a case-by-case basis during the ATC permit process. (PSUF NO. 50) Plaintiffs argue that the District has not issued a permit to Defendants and has therefore not undertaken a BACT analysis. As a result, Defendants cannot have installed BACT when it constructed the Dairy. Defendants respond by arguing that they could not possibly have installed BACT without a determination of BACT by the Air District. Defendants contend the Air District determined that an ATC permit was not required but that a permit to operate was required. Accordingly, because the District issued Defendants a Permit to Operate, the District must have implicitly determined that no BACT was needed. This argument does not necessarily follow. Defendants provide no evidence from the District or by an APCO that they were not required to install BACT. Nor do Defendants offer evidence that a BACT analysis can only be undertaken alongside an ATC permit determination. Section 4.1.2 of Rule 2201 requires BACT for an existing source with a permit to operate if the source exceeds 2.0 lbs/day. It is undisputed that Defendants applied for a permit to operate on October 28, 2005 and were granted a permit on April 3, 2007. BACT analysis applies independent of the ATC permit requirement because obligations are independent and required under different rules. There is no indication in the record Case 1:05-cv-01593-OWW-SMS Document 160 Filed 09/25/2007 Page 52 of 621

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 53 whether, in practice, the District separates the permitting process from the BACT evaluation. Also, while the parties’ dispute over the calculations raises an issue of fact as to whether C&R Vanderham Dairy indeed emits more than 2.0 pounds in any one day, Defendants have provided no evidence to the contrary. Defendants’ viable argument is that it is unclear whether the Dairy can install BACT when the District has failed to conduct a BACT analysis. While, technically, the evidence shows that Defendants violated the SIP, it is unclear in the record whether they could have installed BACT without the District conducting the analysis. Plaintiffs have submitted a letter to Defendants from the Air District that states “the District cannot condone the proposed construction activities until the emission factor issue is settled on August 1, 2005, since permits may be required for the proposed dairy. If C&R Vanderham Dairy continues with the construction, they proceed at their own risk.”] Absent evidence to the contrary, which Defendants have not provided, Defendants have exceeded the allowable emissions threshold of 2 lbs/day and were required to install BACT for four of their emissions units. Plaintiffs motion for summary judgment on the BACT issue is GRANTED.

iii. There is No Triable Issue that Defendants Were Required to Purchase Offsets District Rule 2201 requires agricultural sources to purchase Case 1:05-cv-01593-OWW-SMS Document 160 Filed 09/25/2007 Page 53 of 621

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 District Rule Section 4.6 governs emissions offset

12 exemptions. According to the rules, “Emission offsets shall not be required for... agricultural sources to the extent provided by 54 offsets if their Post-Project Stationary Source Potential to Emit (“SSPE2") is above 20,000 pounds (10 tons) of VOC per year. Rule 2201 § 4.5. Plaintiffs argue that Defendants’ SSPE2 for VOC is greater than 20,000 pounds (10 tons) per year and were thus required to purchase offsets. Plaintiffs claim that according to Defendants’ own calculations C&R Vanderham Dairy’s “total annual VOC emissions” are at 24,861.9 pounds or 12.4 tons, above the offsets threshold of 10 tons a year. Vanderham’s calculations used an outdated emission factor of 12.8 pounds of VOC per head per year. The current emission factor is 19.3 pounds per head per year. Using the current emission factor, Plaintiffs’ expert places the C&R Vanderham Dairy’s SSPE2 for VOC much higher, at 22.6 tons per year based on the maximum capacity shown by the blueprints for the C&R Vanderham Dairy and at 19.2 tons per year based on the maximum capacity provided by Vanderham. By any of these measures, the C&R Vanderham Dairy has an SSPE2 greater than 10 tons per year. Therefore, Vanderham was required to purchase offsets. Defendants argue that there is a genuine issue of fact as to whether they were required to purchase offsets. Defendants dispute Plaintiffs’ calculations of C&R Vanderham Dairy’s daily VOC emissions. According to Defendants, Plaintiffs run through any number of calculations to get there and that Plaintiffs completely ignore Section 4.6.9 of Rule 2201 which exempts agricultural sources. Defendants continue to argue that 12 Case 1:05-cv-01593-OWW-SMS Document 160 Filed 09/25/2007 Page 54 of 621

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 California Health and Safety Code § 42301.18(c)...” District Rule 4.6.9 However, it is undisputed that section 4.6.9 does not exist in the EPA approved SIP, which includes the December 19, 2002 version of Rule 2201 but not the September 21, 2006 version on which Vanderham bases its argument. See 40 C.F.R. § 52.220(c)(311)(i)(B)(1). Per Safe Air , the agricultural exemption of Section 4.2.9 does not apply to Defendants. According to Plaintiffs, the number of days of violation 13 is determined by the language of the SIP. It is undisputed that Vanderham initiated construction on or after July 15, 2005. PSUF ¶¶ 29, 35, 37. Therefore, Plaintiffs seek summary judgment on at least 2,704 days of violation for the ongoing failure to install BACT at four emissions units (676 x 4) and at least 676 days of violation for the ongoing failure to purchase offsets. 55 Plaintiffs have provided no authority that requires C&R Vanderham Dairy to obtain offsets when federal law requires permits, of which offsets are a part, for only major stationary sources. It appears the exemption for ag sources does not apply as it was not included in the SIP. Defendants have not offered evidence to the contrary. Defendants have not offered contrary evidence that rebut Plaintiffs’ expert’s calculations.

D. Amount of Days in Violations According to Plaintiffs, the number of days of violation is determined by the language of the SIP. Nat’l Parks Conservation Assoc. v. TVA , 480 F.3d 410, 418 (6th Cir. 2007.) Courts interpret the SIP “based on its plain meaning when such meaning is apparent, not absurd, and not contradicted by the manifest intent of the EPA, as expressed in the promulgating documents available to the public. Safe Air , 475 F.3d at 1108. Pursuant to the SIP, Plaintiffs claim that Vanderham is liable for a total of 4,008 days of violations. 13 Case 1:05-cv-01593-OWW-SMS Document 160 Filed 09/25/2007 Page 55 of 621

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Plaintiffs calculate the number of days as the total days from July 15, 2005 through May 21, 2007, the date of oral argument on this Motion. See 42 U.S.C. § 7413(e)(2) (days of violation presumed to continue until violator establishes “continuous compliance has been achieved”). However, violations may continue past that date. Moreover, Plaintiffs seek summary judgment on 628 days of violations for the failure to obtain an ATC permit. AIR calculates the number of days as all days from July 15, 2005 through April 3, 2007, when the District issued a Permit to Operate to the C&R Vanderham Dairy

. Defendants argue that ““[a] given construction or 14 modification only occurs once. If a Permit is not obtained for that particular project then the preconstruction permit requirement of the Clean Air Act has been violated. However, the requirement to secure a pre-construction permit applies prior to construction or modification..., thus, a violation of the Clean Air Act pre-construction permit requirement is singular in nature and does not constitute an on going violation.” Niagra Mohawk 263 F. Supp. 2d at 662; See also , United States v. Campbell Soup, Co., 1997 U.S. Dist. LEXIS 3211, *5-8 (E.D. Cal. 1997). Defendants argue that because the BACT analysis is embedded in the permit process and the District determined that Defendants were not required to obtain a permit, the violation should be limited to one day. 56 Defendants alternatively argue that if violations are found, they should be limited to a single point in time because the requirement to secure a pre-construction permit applies only prior to construction. Defendants further argue that installing BACT and purchasing Offsets are functions of the Air District and are so embedded in the permit process that Defendants could not have satisfied such requirements without the Air District’s assistance. In support of their argument Defendants cite to New York v. Niagra Mohawk Power Corp ., 263 F. Supp. 2d 650, 662 (W.D.N.Y. 2003). 14 Plaintiffs argue that the violations of the SIP proven here are not limited to a single day. The number of days of violation Case 1:05-cv-01593-OWW-SMS Document 160 Filed 09/25/2007 Page 56 of 621

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 57 is determined by the language of the SIP. Nat’l Parks Conservation Assoc. v. TVA , 480 F.3d 410, 418 (6th Cir. 2007). Courts interpret the SIP “based on [the SIP’s] plain meaning when such a meaning is apparent, not absurd, and not contradicted by the manifest intent of EPA, as expressed in the promulgating documents available to the public.” Safe Air for Everyone , 475 F.3d at 1108. Plaintiffs argue that Vanderham does not address the language of the SIP it must abide by; it instead relies on authority interpreting different language in the Act. Vanderham relies on Niagara Mohawk and Campbell Soup Co. to assert that because the construction only occurs once, Vanderham’s failures to comply with law constitute only a single violation of the SIP. Opp. at 20-21. The cases do not support Vanderham’s assertion. First, Niagara Mohawk does not interpret the California SIP; rather, it interprets the language of the Act itself. 263 F. Supp. 2d at 661-62 (interpreting pre-construction permit requirement for major sources in the Act). However, AIR is suing under the SIP’s requirements. The SIP may be more stringent than the CAA, as it is here. Second, the Campbell Soup decision states that “when violation of a regulation subjects private parties to criminal or civil sanctions, a regulation cannot be construed to mean what an agency intended but did not adequately express.” 1997 U.S. Dist. LEXIS 3211, *7 (E.D. Cal. 1997). Here, Rule 2010 expressly states that an ATC “shall remain in effect until the Permit to Operate the source operation for which the application was filed is granted or denied, or the application is cancelled.” Rule 2010 § 3.0. Unlike in Campbell Case 1:05-cv-01593-OWW-SMS Document 160 Filed 09/25/2007 Page 57 of 621

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 58 Soup , by the very terms of the regulation, Vanderham’s violations here continued until its application for Permit to Operate was granted on April 3, 2007. Vanderham does not cite any authority that holds that BACT and offset violations are singular violations. The BACT provision simply states that BACT “shall be required” for any emissions unit exceeding emissions of two lbs/day of VOC. Similarly, offsets “shall be required” if the SSPE2 exceeds 10 tons a year of VOC. These requirements apply any time the thresholds are exceeded; the rule places no further restriction on their application. Thus, the requirements continue to apply, and a violation of the requirements continues until rectified. No Ninth Circuit cases assess the number of days of violations under the California SIP. The CAA 42 USC § 7413(e)(2) states the following: For purposes of determining the number of days of violation for which a penalty may be assessed under subsection (b) or (d)(1) of this section, or section 304(a) [42 U.S.C. § 7604 (a)] , or an assessment may be made under section 120 [ 42 USCS § 7420], where the Administrator or an air pollution control agency has notified the source of the violation, and the plaintiff makes a prima facie showing that the conduct or events giving rise to the violation are likely to have continued or recurred past the date of notice, the days of violation shall be presumed to include the date of such notice and each and every day thereafter until the violator establishes that continuous compliance has been achieved, except to the extent that the violator Case 1:05-cv-01593-OWW-SMS Document 160 Filed 09/25/2007 Page 58 of 621

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 59

can prove by a preponderance of the evidence that there were intervening days during which no violation occurred or that the violation was not continuing in nature. The determination of this issue depends largely on disputed issues of fact. There is no indication that, prior to this litigation, the dairy was notified by the District or an APCO that they were in violation. The summary judgment motion as to days of violation is DENIED.

7. MOTION TO STRIKE DEFENDANTS CROSS MOTION FOR SUMMARY JUDGMENT Fed. R. Civ. P. 12(f) provides that “redundant, immaterial, impertinent, or scandalous matters” may be “stricken from any pleading.” Fed. R. Civ. P. 12(f). “[O]nly pleadings are subject to motions to strike.” See Sidney-Vinstein v. A.H. Robins Co. , 697 F.2d 880, 885 (9th Cir. 1983). However, a “motion to strike” materials that are not part of the pleadings may be regarded as an “invitation” by the movant “to consider whether [proffered material] may properly be relied upon.” United States v. Crisp , 190 F.R.D. 546, 551 (E.D. Cal. 1999) (quoting Monroe v. Board of Educ. , 65 F.R.D. 641, 645 (D. Conn. 1975). Motions to strike are disfavored and infrequently granted. See Pease & Curran Ref., Inc. v. Spectrolab, Inc. , 744 F. Supp. 945, 947 (C.D. Cal. 1990), abrogated on other grounds by Stanton Road Ass'n v. Lohrey Enters. , 984 F.2d 1015 (9th Cir. 1993). Case 1:05-cv-01593-OWW-SMS Document 160 Filed 09/25/2007 Page 59 of 621

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 60 “[M]otions to strike should not be granted unless it is clear that the matter to be stricken could have no possible bearing on the subject matter of the litigation. Colaprico v. Sun Microsystems, Inc. , 758 F. Supp. 1335, 1339 (N.D. Cal. 1991) (citation omitted). A. Defendants’ Motion for Summary Judgment is Untimely and in Violation of Local Rule Local Rule 78-230(e) states: “Any counter-motion or other motion that a party may desire to make that is related to the general subject matter of the original motion shall be served and filed with the Clerk in the manner and on the date prescribed for the filing of opposition. In the event such counter-motion or other related motion is filed, the Court may continue the hearing on the original and all related motions so as to give all parties reasonable opportunity to serve and file oppositions and replies to all pending motions.” Air filed its motion on April 19, 2007. Defendants filed their Opposition on May 4, 2007. The hearing on the motion for summary judgment was held on May 21, 2007. Based on the local rule, any opposition should have been filed at least by May 7, 2007 or 14 calendar days before the May 21 hearing. At the May 21, 2007 hearing, Defendants’ request to file a supplemental brief on the sole issue of whether Rule 2010 applied to them was granted. Defendants were notified by minute order on May 21, 2007 that upon filing the supplemental briefs the matter would be deemed submitted. Defendants were not given leave to file a cross motion for summary judgment at the hearing on May 21, 2007. B. Defendants’ Motion for Summary Judgment Has No Possible Bearing on the Subject Matter of the Litigation Defendants have parlayed the opportunity to file a supplemental brief into filing an additional cross motion for Case 1:05-cv-01593-OWW-SMS Document 160 Filed 09/25/2007 Page 60 of 621

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 However, according to Safe Air , “As a general

15 interpretative principle, the plain meaning of regulation governs.” Safe Air , 475 F.3d at 1103. “Other interpretative materials, such as the agency’s own interpretation of the regulation, should not be considered when the regulation has a plain meaning.” Id. 61 summary judgment. Defendants cross motion for summary judgment raises no new argument and merely repeats, albeit at greater length, the arguments set forth in their opposition to Plaintiffs’ motion for summary judgment (Doc. 96) and in their supplemental brief (Doc. 113). Defendants’ first argument in their cross motion for summary judgment is that the EPA acknowledged that state law establishes an Air District’s permitting authority and expressly considered SB 700 when it gave final approval to Rules 2020 and 2201. In support of their argument, Defendants provide the entire legislative history of the approval process for SB 700. 15 Defendants also reiterate that the District cannot exceed the permitting authority granted to it by state law. However, Defendants have submitted no legal authority to show that Safe Air does not control this case. Defendants attempt fails to reframe the issue to one that solely involves whether the EPA’s approval of the SIP can modify or enlarge the permitting authority granted to the air district by the state of California. This, is not the issue. The first issue is whether the language of the California SIP superceded state regulations not incorporated into its provisions. The Ninth Circuit in Safe Air , a case with facts almost identical to this one, addressed the issue and held that the language of the SIP functions with the Case 1:05-cv-01593-OWW-SMS Document 160 Filed 09/25/2007 Page 61 of 621

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 62 same “force and effect” as federal law and supercedes any conflicting state law. Defendants present no new arguments or law in their untimely cross motion for summary judgment on the arguments previously addressed. Plaintiffs’ motion to strike Defendants’ cross motion for summary judgment is GRANTED.

8. CONCLUSION Motion for summary judgment on the issue of whether Defendants violated rule 2010 by failing to obtain an ATC permit is GRANTED in favor of Plaintiffs. Motion for summary judgment on the issue of whether Defendants violated Rule 2201 § 4.1.1 by failing to install BACT is GRANTED in favor of Plaintiffs. Motion for summary judgment on the issue of whether Defendants violated District Rule 2201 § 4.5 by failing to purchase offsets is GRANTED in favor of Plaintiffs. The days of Defendants’ violations cannot be determined as a matter of law.

I T I S SO ORDERED. Date d: Septem ber 24, 2007 /s/ Ol iver W. Wanger emm0d6 UNI TED STATES DI STRI CT J UDGE Case 1:05-cv-01593-OWW-SMS Document 160 Filed 09/25/2007 Page 62 of 62