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28 United States District Court Northern District of California UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA

SIERRA CLUB, et al.
,

Plaintiff s ,

v.
REGINA MCCARTHY , in her official capacity as Administrator of the United States Environmental Protection Agency,

Defendant

. Case No. 13

- cv

- 03953

- SI

ORDER GRANTING JOINT MOTION TO APPROVE AND ENTER CONSENT DECREE AND DENYING O THER MOTIONS AS MOOT Re: Dkt. Nos. 120, 149

Now before the Court is the parties’ joint motion to approve and e nter a proposed consent
decree , as well as objections thereto . For the reasons set forth in this order, the Court GRANTS the joint motion and OVERRULES the objections. The Court DENIES all other pending motions

as moot.

SUMMARY
Plaintiffs Sierra Club and the Natural Resources Defense Council and defendant Regina McCarthy, Administrator of the Environmental Protection Agency (“EPA”) , have jointly moved the Court to approve and enter a proposed consent decree. The proposed consent decree would fully resolve plaintiffs’ claims under the Clean Air Act, 42 U.S. C. §§ 7401

- 7671q, against
defendant based on EPA’s fai lure to promulgate designations for the 2010 revised primary sulf ur dioxide (“ SO 2 ”) nation al ambient air quality standard . The prop osed consent decree sets forth mandatory deadlines for EPA to issue de signations for all areas of the country that remain undesignated

. The Court finds that the proposed consent decree is procedurally and substantively fair and Case3:13-cv-03953-SI Document162 Filed03/02/15 Page1 of 202

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28 United States District Court Northern District of California reasonable. A number of states have objected to the proposed consent decree, arguing that where

the EPA has failed to promulgate air quality designations by the statutory deadline, the Clean Air
Act requires that the EPA issue “uncla ssifiable” designations for undesignated areas . As set forth in this order, the Court finds that these objection s lack merit, and that the Clean Air Act does not compel “unclassifiable” designations

. In a “deadline suit” such as this, the appropriate remedy is to set a binding schedule for the EPA to make all remaining designations, while preserving EPA’s
discretio n to determine , based on available information, whether an area is in “attainment” or
“nonattainment” with the revised sulfur dioxide air quality standard, or whether the area is
“unclassifiable

. ”
The S tates also object that the proposed consent decree i mproperly incorporates the EPA’s proposed Data Requirements Rule for the 1

- Hour Sulfur Dioxide ( SO 2 ) Primary National Ambient Air Quality Standard (NAAQS), 79 Fed. Reg. 27,446 (May 13, 2014). The proposed Data Requirements Rule, if adopted, would require state air agencies to provide to EPA data to characterize current air quality in areas with large sources of SO 2 emissions using either additional air quality monitoring or modeling. The Court finds that the proposed consent decree is independent of the proposed Data Requirements Rule, and that the deadlines contained in the proposed consent decree are not dependen t on the Rule’s promulgation.
The Court also finds that the proposed consent decree is procedurally fair. A notice of the

p roposed consent dec ree was published in the Federal Register on June 2, 2014, and the record
reflects that 133 public comments were submitted and considered

. Prior to the public comment process, there were extensive, arms

- length negotiations between the parties, with the pa rticipation of the intervening states, regarding a possible remedy in this case. The intervening states have had the opportunity to file objections to the proposed consent decree, and the Court has also permitted the filing of several amicus briefs. The Court has carefully considered all of these filings, and the record in this case, in reaching the conclusion that the proposed consent decree meets the standards for court approval. Case3:13-cv-03953-SI Document162 Filed03/02/15 Page2 of 203

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28 United States District Court Northern District of California BACKGROUND

I. Statutory background
Pursuant to Title I of the Clean Air Act, the EPA is required to set national ambient air quality standards (“NAAQS”) for certain air pollutants. 42 U.S.C. § 7409. A NAAQS sets the maximum permissible concentration of the pollutant in the ambient air. Id

. Primary NAAQS are
set at levels “ requisite to protect the public health,” with a sufficient margin of safety. Id

. § 7409(b)(1). Secondary NAAQS are set at levels “requisite to protect public welfare from any known or anticipated adverse effects associated with the presence of such air p ollutant in the
ambient air.” Id . § 7409(b)(2).
Within one year after the EPA establishes or revises a NAAQS, each state is required to
submit to the EPA a list identifying the state’s initial recommended designations for all areas
within the state

. Id

. § 7407(d)(1)(A). Pursuant to the C lean Air Act , states may mak e three types of designations: (1) “attainment” for areas that comply with the NAAQS , (2) “nonattainment” for

areas which do not meet the NAAQS , and (3) “unclassifiable” for “any area that cannot be
cl assified on the basis of available information as meeting or not meeting” the NAAQS

. Id

. EPA is required to promulgate designations in response to the states’ recommendations w ithin two years after EPA promulgates or revises a NAAQS. Id . § 7407(d)(1)(B) . EPA can extend this deadline “up to one year in the event the Administrator has insufficient information to promulgate
the designations.” Id

. § 7407( d)(1)(B)(i). In promulgating designations, EPA m a y make any
modifications “the Administrator deems nece ssary” to a state’s recommended designations. Id

. § 7407(d)(1)(B)(ii). If EPA modifies a state’s designation, the age ncy must provide the state with a minimum of 120 days notice and an opportunity to show why the agency’s proposed
modification is incorre ct before EPA issues final designations. Id

. Air quality designations determine what type of federally

- required implementation plan is appropriate for each area and what permitting standards apply. See, e.g ., 42 U.S.C. § 7410 (general implementation pl anning requirements), § 7475 (permitting requirements for “attainmen t” and “unclassifiable” areas), § 7503 (permitting requirements for “nonattainment” areas). If an area is undesignated, or designated “attainment” or “unclassifiable,” the state is requir ed to Case3:13-cv-03953-SI Document162 Filed03/02/15 Page3 of 204

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28 United States District Court Northern District of California develop a “state implementation plan” that provides for implementation, maintenance and

enforcement of the new or revised NAAQS. Id . § 7410(a)(1)

- (2). If an area is designated “nonattainment,” there are additional planning requirements and stricter new source review permitting requirements. Id . §§ 7502

- 7503, 7514

- 7514a(b)(1). On June 2, 2010, EPA revised the primary sulf ur dioxide ( SO 2 ) air quality standard to
establish a new 1

- hour SO 2 NAAQS at a level of 75 parts per billion. “Primary Nation al Ambient Air Quality Standard for Sulfur Dioxide; Final Rule,” 75 Fed. Reg. 35,520, 35,525/1

- 27/3 (June 22, 2010) ; 40 C.F.R. § 50.17(a)

- (b). In the preamble to that rule , EPA noted that implementation of the NAAQS is complicated because of the “unique s ource specific impacts of SO 2 emissions , ” the complexity of defining the appropriate methods fo r determining area designations, and the “potential for substantial SO 2 emissions reductions as a result of national and regional rules” that were then underway. Id . at 35,550/2

- 3. EPA also expl ained that the SO 2 monitoring network is limited, and t hat after considering public comments EPA “intend[ed] to use a hybrid analytic approach that would combine the use of monitoring and modeling to assess co mpliance wit h the
new 1

- hour SO 2 NAAQS.” Id . at 35,551. Over the next several years, EPA continued to analyze different approaches to implementing the revised NAAQS. See generally Dkt. 95 at 7: 16

- 11:11 (discussing process) ; Dkt. 97

- 3 (“Next Steps for Area Designations and Implementation of the Sulfur Dioxide National Ambient Air Quality Standard”) (February 6, 2013). Pursuant to Section 107(d)(1)(A) of the Clean Air Act , 42 U.S.C. § 7404(d)(1)(A), the
states’ recommended designat ions regarding the revised SO 2 NAAQS were due on June 2, 2011. The intervening states submitted their designations by the June 2, 2011 deadline. 1 EPA granted itself the permitted one

- year extension, under which it was required to publish air qual ity designations by June 2, 2013. In granting itself the extension of time to promulgate designations, EPA noted the uncertainty as to what “analytic approach sources , states, and EPA will consistently and cooperatively use” to make the designations. 77 Fed. Reg. 46,295, 46,297/2

- 3 (Aug. 3, 2012)

1 According to the EPA, “states have been reporting updated monitoring data to EPA since their recommended designations were submitted in 2011, which in some cases was necessary in order to obtain a full three

- calendar years of monitored data that did not y et exist ‘as of’ June 2013.” Dkt. 104 at 10:16

- 19. Case3:13-cv-03953-SI Document162 Filed03/02/15 Page4 of 205

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28 United States District Court Northern District of California (“ Extension of Deadline for Promulgating Designations for the 2010 Primary Sulfur Dioxide

National Ambient Air Quality Standard”). In August 2013, the EPA promulgated “nonattainment” designations for 29 areas i n 16

states where three full calendar years of air quality monitoring data showed violations of the standard. “Air Quality Designations for the 2010 Sulfur Dioxide ( SO 2 ) Primary National Ambient Air Quality Standard,” 78 Fed. Reg. 47,191 (Aug. 5, 2013) (“2 013 Designations Rule " )

. For the remaining undesignated areas of the country, the preamble of the 2013 Designations Rule stated:

In separate future actions, the EPA intends to address the designations for all other areas for which the agency is not yet pr epared to issue designations and that are consequently not addressed in this final rule. With input from a diverse group of stakeholders, EPA has developed a comprehensive implementation strategy for the future SO 2 designations actions that focuses
resourc es on identifying and addressing unhealthy levels of SO 2 in areas where people are most likely to be exposed to violations of the standard. 78 Fed. Reg. at 47,193/3. In response to the 2013 Designations Rule, some commenters criticized
EPA for its “deferr al” of designations. See EPA, Responses to Significant Comments on the State and Tribal Designation Recommendations for the 2010 Sulfur Dioxide National Ambient Air Quality Standards (NAAQS), at 7 (July 2013), EPA

- HQ

- OAR

- 2012

- 02 33

- 0354 (excerpts
available at Dkt. 91

- 5 and Dkt. 154

- 2 ). In a section of the EPA 's r esponses titled “Not Yet Taking
Action on Areas With No M onitored Violation,” EPA stat ed that it is “not at this time reaching any final conclusions about areas that do not have violating monitors” and that “[o]bjections to EPA’s not yet addressing other areas are outside the scope of this final action.” Id . at 5, 7. EPA
also stated that it “is not yet taking any final action regarding other areas,” and that “[i]t is therefore not necessary for EPA to respond to the points raised by these comments regarding other
areas that are not addressed in this initial action.” Id . at 5. In a separat e but related regulatory action, in May 2014 EPA published a proposed Data Requirements Rule which, if promulgated, would direct state air agencies to characterize air quality in those locations defined in the rule as priority areas using the state agency’ s choice of either additional air quality monitoring or modeling, and to submit such data to EPA to support further designations. See Data Requirements Rule for the 1

- Hour Sulfur Dioxide ( SO 2 ) Primary Case3:13-cv-03953-SI Document162 Filed03/02/15 Page5 of 206

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28 United States District Court Northern District of California National Ambient Air Quality Standard (NAAQS), 79 Fed. Reg. 27,446 (May 13, 2014). A final

Data Requirements Rule has not yet been promulgated.

II. This litigation and proposed consent decree On August 26, 2013, plaintiffs Sierra Club and the Natural Resources Defense Council filed this complaint under the citizen suit provision of the Clean Air Act, 42 U.S.C. § 7604(a)(2), seeking to compel defendant to perform her non

- discretionary duty under the Clean Air Act to promulgate and publish designations identifying all areas of the nation that meet or fail to meet the
revised SO 2 NAAQS, as well as all areas of the nation where information is inadequate to make a designation. On October 3, 2013, Si erra Club also filed a protective petition for review of the 2013 Designations Rule. See Sierra Club v. EPA , D.C. Cir. Case No. 13

- 1262, Doc. #1515525 (Environmental Petitioners’ Motion to Deconsolidate Case No. 13

- 1262 and Hol d It in Abeyance).
Dkt. 154 , Ex. A at 5

- 6 (Sierra Club Mot ion to Deconsolidate Petition, describing protective filing). In the petit ion for review, Sierra Club stated the issue presented as “whether EPA acted illegally and arbitrarily by failing to include sulfur dioxide designatio ns for all areas of the country
in the final action at issue here.” Id . at 6. That petition has been stayed. Dkt. 161 at 10:3

- 9. In this action, plaintiffs moved for summary judgment on liability, which defendant di d not dispute. I n an order filed Dec ember 6, 2013, the Court found as a matter of law that defendant "is
in violation of her non

- discretionary duty under the Clean Air Act, 42 U.S.C. § 7407(d)(1)(B), (d)(2)(A) to promulgate and publish designations for all areas of each state for the standar d no later than three years from promulgation of the standard

. " Dkt. 79 at 3:18

- 20. In the same order, the Court granted two motions for permissive intervention filed by the Commonwealth of Kentucky Energy and Environment Cabinet, the State of Louisiana Department of Environmental Quality, and the states of North Carolina, North Dakota, Arizona, Nevada and Texas (collectively “the States”). O n January 15, 2014, North Carolina filed a complaint in intervention to “compel
the Administrator of the U.S. Envi ronmental Protection Agency (‘Administrator’ or ‘EPA’), to take action mandated by the Clean Air Act, 42 U.S.C. § 7401 et seq . (‘CAA’) to designate areas
within North Carolina as nonattainment or attainment/unclassifiable for the revised National Case3:13-cv-03953-SI Document162 Filed03/02/15 Page6 of 207

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28 United States District Court Northern District of California Ambient A ir Quality Standard ( ' NAAQS ' ) for sulfur dioxide ( SO 2 ). ” Intervenor Compl. ¶ 1, Dkt.

83 . As with plaintiffs’ complaint in this case, North Carolina’s complaint was filed pursuant to
the C lean Air Act ' s citizen suit provision, 42 U.S.C. § 7604(a). The other interv enor states did not file a complaint in intervention.
The Court di rected the parties and interveno r states to meet and conf er regarding a possible remedy

. The parties and the S tates engaged in settlement di scussions, including at least ten group
settlem ent conference calls and exchanges of settlement proposals. Dkt. 121

- 1 ¶¶ 6

- 8. EPA also had separate settlement discussions with certain of the states and with the plaintiffs. Id . ¶¶ 10

- 11. The general approach adopted in the proposed consent decree, w hich requires EPA to complete designations in three phases, was proposed and discussed in the group settlement negotiations. Id

. ¶ 8. After the parties reached an impasse in their negotiations , they filed extensive briefing on competing proposals for a r emedy. During the briefing process, EPA and plaintiffs reached a tentative settlement agreement, and on May 19, 2014, EPA and plaintiffs lodged the proposed consent decree with the Court. The Court then granted EPA’s motion to stay these proceedings
unti l August 1, 2014, pending the public comment process regarding the proposed consent decree

. A notice of the proposed consent decree was published in the Federal Register on June 2, 2014, seeking comment on the proposed decree. 79 Fed. Reg. at 31,325. On e hundred and thirty three public comments were filed, including many by the intervenor states and amici in this case. On August 8, 2014, the parties filed a joint motion to approve and enter the proposed
consent decree. Dkt. 124. North Carolina filed a brief opposing approval, and a separate opposition brief was filed collectively by the Commonwealth of Kentucky, Energy and Environment Cabinet, the Louisiana Department of Environmental Quality, and the s tate s of Arizona, Nevada, North Dakota, and Texas. Dkt. 127. The Court also permitted a micus filings by
the s tates of Nebraska, Alabama, Alaska, Arkansas, Georgia, Indiana, Kansas, Louisiana, Ohio, Oklahoma, South Carolina, South Dakota, West Virginia, and Wyoming , as well as the National
Environm ental Development A ssociation’s Clean Air Project (“NEDA/CAP”) and the Texas SO 2 Working Group . Dkt. 135, 148. The proposed consent decre e would require EPA to issue all remaining designations Case3:13-cv-03953-SI Document162 Filed03/02/15 Page7 of 208

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28 United States District Court Northern District of California according to a three

- phase schedule that applies nationwide. Proposed Consent Decree at ¶¶ 1

- 3 ,

Dkt. 120

- 2 . First, within 16 months of the entry of the consent decree , EPA would sign for publication designations for those areas that , based on air quality monitoring in the preceding three full calendar years, have m onitored violatio ns of the revised SO 2 standard

. Id . ¶ 1(a). By the same date, EPA would issue designations for areas that “ contain any stationary source that has not been ‘announced for retirement’ . . . and that, according to the data in EPA’s Air Mark ets Database, either (1) emitted more than 16,000 tons of SO 2 in 2012 , or (2) emitted more than 2,600
tons of SO 2 and had an annual average emission rate of at least 0.45 lbs SO 2 /M mbtu or higher in
2012

. ” Id . ¶ 1(b)

- (c). EPA states that “ the areas that fall within paragraph 1(b) contain the largest
sources of SO 2 emissions in the country and may have SO 2 levels that cause areas to exceed the
standard. ” Dkt. 121 at 8:1

- 2.
Second , by December 31, 2017, EPA would sign for pub lication desig nations “for remaining undesignated areas in which, by January 1, 2017, states have not installed and begun operating a new SO 2 monitoring network meeting EPA specifications referenced in EPA’s anticipated rulemaking [the Data Requirements Rule ] directing states to collect and analyze additional information regarding SO 2 emissions concentrations

. ” Id . ¶ 2. In the final round, by December 31, 2020, EPA would sign for publication designations for all remaining undesignated

areas. Id . ¶ 3. The proposed dec ree provides that it does not “limit or modify the discretion accorded EPA by the CAA and by general principles of administrative law, including the discretion to alter, amend or revise any response and/or final action contemplated by [the proposed

consent decree].” Id . ¶ 7. The proposed consent decree would establish binding deadlines even if the Data Requirements Rule is not adopted. However, if the Data Requirements Rule is adopted, the data collection process proposed in the rule could be used to supp ort EPA’s designations under
the consent decree.

LEGAL STANDARD Approval of a proposed consent decree is within t he discretion of the Court. United States v. Oregon , 913 F.2d 576, 580 (9th Cir. 1990). A court reviews a consent decree to determine Case3:13-cv-03953-SI Document162 Filed03/02/15 Page8 of 209

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28 United States District Court Northern District of California whet her it is “fundamentally fair, adequate and reasonable.” Id . The Court must evaluate both the

procedural and substantive fairness of the consent decree. United States v. Chevron , 380 F. Supp. 2d 1104, 1110

- 11 (N.D. Cal. 2004). In addition, while a consent decree “must conform to applicable laws . . . [it] need not impose all the obligations authorized by law.” United States v. Oregon , 913 F.3d at 580.
The Court’s review of the proposed consent decree is informed by the public policy favoring settlement. See United States v. Comunidades Unidas Contra La Contaminacion , 204 F.3d 275, 280 (1st Cir. 2000). “This deference is particularly strong where the decree has been negotiated by the Department of Justice on behalf of an agency like the EPA which is an expert in
its field.” Chevron , 380 F. Supp. 3d at 1111. However, when reviewing a proposed consent decree, the Court must independently evaluate its terms and avoid giving a “ru bber stamp approval.” United States v. Montrose Chem. Corp. of Cal ., 50 F.3d 741, 747 (9th Cir. 1995) (quoting City of Detroit v. Grinnell Corp ., 495 F.2d 448, 462 (2d Cir. 1974)). In applying the “fair, adequate and reasonable” standard, courts examin e both procedural
and substantive fairness. See United States v. Cannons Engineering Corp ., 899 F.2d 79, 86 (1st Cir.1990). With regard to procedural fairness, courts determine whether the negotiation process was “fair and full of adversarial vigor.” Uni ted States v. Telluride Co ., 849 F. Supp. 1400, 1402 (D. Colo. 1994) (citations and internal quotations omitted). If the decree was the product of “good faith, arms

- length negotiations,” it is “presumptively valid and the objecting party has a heavy
burde n of demonstrating the decree is unreasonable.” United States v. Oregon , 913 F.2d at 581. However, “the district court must ensure that the agreement is not . . . a product of collusion . . .”).
United States v. Colorado , 937 F.2d 505, 509 (10th Cir.1 991) With respect to substantive fairness, it is not the duty of the court to determine whether “the settlement is one which the court itself might have fashioned, or considers ideal.” Cannons , 899 F.2d at 84; see also BP Exploration , 167 F. Supp. 2d at 10 50 (stating that court should refrain from “substitut[ing] its judgment for that of the parties”). Instead, the “court’s approval is nothing more than an amalgam of delicate balancing, gross approximations and rough justice.” Oregon , 913 F.2d at 581 (inte rnal quotations omitted). “The court need only be satisfied that the decree Case3:13-cv-03953-SI Document162 Filed03/02/15 Page9 of 201 0

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28 United States District Court Northern District of California represents a reasonable factual and legal determination.” Id . (internal quotation omitted).

DISCUSSION
I. Jurisdiction
Plaintiffs filed this action pursuant to the C lean Air Act ’s citizen sui t provision, 42 U.S.C. § 7604(a)(2). That provision authorizes “any person” to commence a civil action in district court “against the Administrator where there is an alleged failure of the Administrator to perform any act or duty under this chapter which is not discretionary with the Administrator.” Id . The parties
and the intervenor states assert that this Court has jurisdiction over this lawsuit pursuant to the citizen suit provision because plaintiffs seek to compel the Administrator to perform her no n

discretionary duty to issue designations for the remaining areas in the country. On September 12, 2014, non

- parties Texas SO 2 Worki ng Group and NEDA/CAP sought leave, which the Court granted, to file an amicus brief arguing that this Court lacks jurisd iction
over this action. Amici contend that the EPA’s 2013 Designations Rule includes EPA’s “decision to defer” the remaining area designations for the revised SO 2 NAAQS, and that this decision is a final agency action that may only be challenged in the C ourt of Appeals for the District of Columbia Circuit pursuant to the C lean Air Act ’s judicial review provision, 42 U.S.C. § 7607(b). That provision states, inter alia , that challenges to any “nationally applicable regulations promulgated, or final action taken, by the Administrator under [the C lean Air Act ] may be filed only in the United States Court of Appeals for the District of Columbia.” Id . § 7607(b)(1). In addition, “[w]here a final decision by the Administrator defers performance of any nondiscretionary statutory ac tion to a later time, any person may challenge the deferral pursuant to [7607(b)(1)].” Id . § 7607(b)(2). Under the C lean Air Act , jurisdiction for review of final agency actions and jurisdiction to compel nondiscretionary agency action are mutually exclusive. Env tl. Def. Fund v. Costle , 448 F. Supp. 89, 92

- 93 (D.D.C. 1978).

T he Clean Air Act provides for ju risdiction in the circuit courts of appeal only for “‘final” agency actions. Portland Cement Ass’n v. EPA , 665 F.3d 177, 193 (D.C. Cir. 2011). In order to be a “final agency action,” the action must meet two conditions. Bennett v. Spear , 520 U.S. 154, Case3:13-cv-03953-SI Document162 Filed03/02/15 Page10 of 2011

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28 United States District Court Northern District of California 177

- 78 (1997). First, the action must “mark the ‘consummation’ of the agency’s decisionmaking

process

— it m ust not be of a merely tentative or interlocutory nature.” Id . Second, “the action must be one by which ‘rights or obligations have been determined,’ or from which ‘legal consequences will flow.’” Id . at 178 (citations omitted). Amici argue that this c ase is similar to
Maine v. Thomas , 874 F.2d 883 (1st Cir. 1989), in which the First Circuit held that an EPA rulemaking stating that the agency would engage in further agency action to promulgate regulations amounted to a “final action taken,” and thus tha t the district court lacked jurisdiction over a citizen suit to compel EPA to issue the regulations. Id . at 891. At issue was EPA’s decision to defer promulgating regional haze regulations pursuant to § 169 of the C lean Air Ac t , 42 U.S.C. § 7491. Id . at 885

- 86. T he EPA stated in the preambl e to the regional haze rulemaking that:

Future phases will extend the visibility program by addressing more complex problems such as regional haze and urban plumes. We will propose and promulgate future phases when improvement in moni toring techniques provides more data on source

- specific levels of visibility impairment, regional scale models become refined, and our scientific knowledge about the relationships between emitted air pollutants and visibility impairment improves. 45 Fed. Reg. 80,084, 80,086 (Dec. 2, 1980). The First Circuit held that the rulemaking, referred to as “Phase 1,” was a final agency action because,

EPA announced Phase 1 as a regulatory scheme, fully explained and defended in the text setting out the re gulations. Furthermore, the administrative proceedings had directly addressed the possibility that regional haze rules and orders might be delayed. To mince no words, the decision to defer constituted a fully developed part of the final action taken on the statutory mandate. . . . [T]he final action taken has legal effect and establishes procedural requirements, such as substantive conditions and consequent deadlines, f or establishing future phases.

Maine , 874 F.2d at 887

- 88. The parties respond that EPA ’s 2013 Designations Rule is a final agency action only with respect to the 29 areas that were designated in that rule. The parties contend that the statement in the preamble that "[i] n separate future actions, the EPA intends to address the designations f or all other areas for which the agency is not yet prepared to issue designations and that are consequently not addressed in this final rule," 78 Fed. Reg. at 47,193/3 , does not reflect the culmination of any decisionmaking process with respect to the unde signated areas , and simply Case3:13-cv-03953-SI Document162 Filed03/02/15 Page11 of 2012

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28 United States District Court Northern District of California recognized that the 2013 Designations Rule did not include designations for all areas of the

country and that EPA’s design ations process would continue. 78 Fed. Reg. 47,197

- 205 (setting forth the revisions to 40 C.F.R. Part 81, Subpart C). The parties argue that, unlike Maine v.
Thomas , where “the decision to defer constituted a fully developed part of the final action taken on the statutory mandate,” here the 2013 Designations Rule did not contain any analysis of the s tates’

re commendations regarding the undesignated areas , nor did EPA address the available information concerning emissions levels in those areas. The parties argue that the 2013 Designations Rule did not include any proposals regarding intended future designation s for areas outside the scope of the 2013 Designations Rule, nor did it contain a schedule for future action. The parties contend that this case is more similar to Portland Cement Association v. EPA , 665 F.3d 177 (D.C. Cir. 2011) ( per curiam ). In Portla nd Cement , environmental groups filed a petition for review in the D.C. Circuit challenging EPA’s failure to regulate greenhouse gas s es
from cement facilities as part of a rule establishing emissions standards for such faci lities under
the Clean Air Act. Id

. at 182. In the preamble to the challenged rule, EPA stated that it did “not yet have adequate information about greenhouse gas emissions to set a standard,” and that it was “working towards a proposal for greenhouse gas standards,” which it would issue after obt aining
additional information. Id . at 184. The D.C. Circuit held that these “explicitly tentative and
conditional statements

— which expressed certainty only as to EPA’s decision to continue the process of studying greenhouse gases” could not “pos sibly be considered ‘final.’” Id . at 193.
The Court concludes that the preamble statement in the 2013 Designations Rule is not a final agency action, and thus that this Court has jurisdiction over this case. As an initial matter,
the Court notes that "[w] hile preamble statements may in some unique cases constitute binding, final agency action susceptible to judicial review, this is not the norm. " Natural Res. Def. Council
v. EPA , 559 F.3d 561, 564

- 65 (D.C. Cir. 20 09) (internal citation omitted) ; see a lso American
Petroleum Institute v. E.P.A. , 684 F.3d 1342 , 1354 (D.C. Cir. 2012 ) (holding preamble statement that permit applicants "will initially be required" to meet certain standards " could reasonably be
read to mean the EPA intends in the future to es tablish such a requirement, in which case the statement falls short of being the consummation of the agency' s decisionmaking process. "). Case3:13-cv-03953-SI Document162 Filed03/02/15 Page12 of 2013

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28 United States District Court Northern District of California Here, t he preamble statement does not represent the consummation of any agency

decisionmaking or alter the status quo

. Unlike in Maine , where "the decision to defer constituted a fully developed part of the final action taken on the statutory mandate," the administrative record for the 2013 Designations Rule does not contain any anal ysis for the undesignated areas, nor does it contain an analysis of the decision to defer promulgating designations. See generally 78 Fed. Reg. 47,191; Dock et ID No. EPA

- HQ

- OAR

- 2012

- 0233 at www.regulations.gov

. The
administrative record shows that in responding to public comments submitted in connection with EPA's notice of proposed designations, EPA repeatedly stated that it was "not yet taking any final action regarding other areas [aside from the 29 areas designated as "nonattainment"] . . . and EPA has neither proposed action for those areas nor taken final action for them in this round of designations." Dkt. 154

- 2 at 5 (Responses to Significant Comments on the State and Tribal Designation Recommendations for the 2010 Sulfur Dioxide National Amb ient Air Quality Standards (NAAQS), at 7 (July 2013), EPA

- HQ

- OAR

- 2012

- 0233

- 0354). Like the “explicitly
tentative and conditional statements” in Portland Cement “which expressed certainty only as to EPA’s decision to continue the process of studying greenhouse gases,” EPA’s statement in the preamble to the 2013 rule was simply an indication that EPA was “not yet prepared to address” the undesignated areas, and th at EPA will “continue to work” with stakeholders to obtain the data to assist in preparing those designations. 78 Fed. Reg. at 47,191/3, 47,193/3

- 94/1. Both the language
of the preamble statement and the context of the entire 2013 Designations Rule demons trate that
the preamble statement is of an interlocutory nature, and not a “consummation of the agency’s decisionmaking process.” American Petroleum Institute , 684 F.3d at 1354 (" By ack nowledging it had not yet, but ' w[ould] need to[,] ... carefully evalu ate[ ]' the effect of the new NAAQS on the permitting process, the EPA made clear it was not making a final decision. "); c f. Nat’l Ass’n of
Home Builders v. Norton , 415 F.3d 8, 14 (D.C. Cir. 2005) (“An agency’s past characterization of its own action, whil e not decisive, is entitled to respect in a finality analysis.”).

II. Approval of the consent decree
The intervenor and amici states raise a number of objections to the proposed consent Case3:13-cv-03953-SI Document162 Filed03/02/15 Page13 of 2014

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28 United States District Court Northern District of California decree, and they contend that the proposed consent decree lacks subst antive and procedural

fairness. For the reasons set forth below, the Court concludes that the proposed consent decree is fair and reasonable, both procedurally and substantively, and consistent with the Clean Air Act and other applicable law.
The central dispute between the parties and the intervenor and amici states is whether EPA’s failure to promulgate area designations by the statutory deadline requires EPA to promulgate “unclassifiable” designations for all undesigna ted areas, or whether EPA may, as set
forth in the proposed consent decree, have additional time to complete the designation process and issue “attainment,” “nonattainment,” or “unclassifiable” designations based upon the data before the agency . The States argue the proposed consent decre e violates Section 107(d)(1)(B) , which provides, Upon promulgation or revision of a national ambient air quality

standard, the Administrator shall promulgate the designations of all areas . . . as expeditiously as practicable, but in no case later than 2 y ears from the date of promulgation of the new or revised national ambient air quality standard. Such period may be extended for up to one year in the event the Administrator has insufficient information to promulgate the designations. 42 U.S.C. § 7407(b)( ii). The States argue that the statute allows EPA no more than three years from the date it finalizes a new NAAQS to complet e the area designation process, and that the proposed consent decree improperly allows EPA additional time to complete that process. The
States argue that “ EPA does not have to designate the remaining areas ‘unclassifiable’ because it missed the deadline. EPA must designate the areas ‘unclassifiable’ because it lacks the data it
needs to make an y other de signation.” Dkt. 135 at 6:13

- 16.
North Carolina cite s Sierra Club v. E.P.A. , 762 F.3d 971 (9 th Cir. 2014) , for the proposition that when EPA misses a deadline, the “same standards apply both before and after the
deadline and EPA does not ‘ possess [] th e power ’ now that it has missed the deadline, ‘to resolve
the matter as it sees fit.’” Dkt. 124 at 8:7

- 9 (quoting Sierra Club , 762 F.3d at 981). In Sierra
Club , Avenal Power Center applied to the EPA for a permit to build and operate a power plant.
Alth ough the Clean Air Act imposed a duty on EPA to either grant or deny the permit application within one year, EPA failed to do so. After the deadline passed but before EPA took final action Case3:13-cv-03953-SI Document162 Filed03/02/15 Page14 of 2015

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28 United States District Court Northern District of California on the permit application, EPA promulgated more stringent air qual ity standards. Avenal sued

EPA, seeking to compel EPA to issue the permit under the old standards that would have applied if EPA had issued the permit by the statutory deadline. After initially stating that the Clean Air Act required EPA to apply the reg ulations in effect at the time of the permitting decision, EPA changed course and granted the permit under the old standards , asserting that it had “grandfathering authority.” The Sierra Club brought suit challenging EPA’ s action, and t he Ninth
Circuit he ld "[t]he plain language of the statute . . . clearly requires EPA to apply the regulations in effect at the time of the permitting decision. " Id . at 979. The sections of the Clean Ai r Act interpreted in Sierra Club ar e different from those at issue in this case

. However, relevant here, in rejecting the EPA's contention that it had the authority to issue the permit under the old standards, the Ninth Circuit stated,

Nothing in the statute precludes EPA from enforcing current NAAQS and BACT requirements even if it unreasonably delays taking action on a Permit. Moreover, the Clean Air Act is not silent about the consequences of such delay. “Congress has directly spoken to [that] precise issue”

— namely, by providing a private right of action to compel timely action. Chevron [ U.S.A., Inc. v. Natural Resources Defense Council, Inc ., 467 U.S. 837, 842 (1984)]. Under 42 U.S.C. § 7604(a)(2): Except as provided in subsection (b) of this section, any person may commence a ci vil action on his own behalf . . . against the Ad ministrator where there is alleged a failure of the Administrator to perform any act or duty under this chapter which is not discretionary with the Administrator. Avenal Power, of course, availed itself of this remedy and brought suit in the D.C. district court. That court, correctly in our view, did not find the appropriate remedy to be issuance of the Permit without regard to the newly

- promulgated regulations. Ins tead, it simply ordered the agency to come to a final decision. See Avenal Power Ctr., LLC v. EPA , 787 F.Supp.2d 1, 4

– 5 (D.D.C. 2011).
Id . at 980

- 81 (internal footnote omitted). The Ninth Circuit also noted,

We find Brock v. Pierce Cnty ., 476 U.S. 253, 25 6, 106 S.Ct. 1834, 90 L.Ed.2d 248 (198 6), instructive in this regard. In Brock , a since

repealed provision of the Comprehensive Employment and Training Act required the Secretary of Labor to issue a final determination as to the misuse of certain funds wi thin 120 days after receipt of a complaint alleging misuse. Id . Although the statute used mandatory language requiring the Secretary to investigate and issue formal findings, it did not specify consequences for the Secretary' s failure Case3:13-cv-03953-SI Document162 Filed03/02/15 Page15 of 2016

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28 United States District Court Northern District of California to act. Id . at 258

– 5 9, 106 S.Ct. 1834. The Court rejected the argument that the 120

– day period was a statute of limitations that barred the Secretary from taking further action on the complaint after the 120

– day period expired, reasoning: “We would be most reluctant to conclu de that every failure of an agency to observe a procedural requirement voids subsequent agency action, especially when important public rights are at stake.” Id . at 260, 106 S.Ct. 1834. And the Court then concluded, instead: “When, as here, there are less drastic remedies available for failure to meet a statutory deadline, courts should not assume that Congress intended the agency to lose its power to act.” Id . (footnote omitted). The appropriate relief, the Court noted, was an orde r compelling the agency to act. Id . at 260 n. 7, 106 S.Ct. 1834.
Id . at 981 n.5. Thus, rather than supporting the States' position, Sierra Club holds that the appropriate relief in a deadline suit is to compel the agency to act, rather than ordering a partic ular
substantive ou tcome

. S ee also Kennecott Copper Corp. Nev. Mines Div., McGill Nev. v. Costle , 572 F.2d 1349, 1354 (9th Cir. 1978) (holding EPA had non

- discretionary duty to make a decision about state’s revision of its CAA state implementation plan, but that EPA “retain s a good deal of discretion as to the content of that decision”); Frey v. EPA , 751 F.3d 461, 469 (7th Cir. 2014) (" Our review of the EPA's actions is limited.

. . . to allow review only of whether the EPA followed required decision

- making procedures.

. . . The substance of the EPA's decisions, on the other hand, is at least partly discretionary, and therefore beyond the scope of these citizen suit provisions. "). North Carolina also asserts that the proposed consent decree would allow EPA to avoid
ha ving to make "unclassifiable" designations. However, the proposed consent decree preserves EPA's discretion to make designations of "nonattainment," "attainment," or "unclassifiable" based upon the information before the EPA , and nothing in the proposed co nsent decree precludes EPA from ultimately issuing "unclassifiable" designations.
The States of Nebraska et a l ., cite an EPA brief in Mississippi Commission on Environmental Quality v. EPA , Case. No. 12

- 1309 (and consolidated cases), 2013 WL 6529643 (filed Mar. 20, 2014), and Catawba County, N.C. v. E PA , 571 F.3d 20, 26 (D.C. Cir. 2009), to argue that the Clean Air Act "requires an unclassifiable designation when the available information does not permit a finding of attainment or nonatta inment." D kt. 135 at 6:20

- 7:2. A t
issue in those c ases was whether specific air

- quality designations were flawed or not supported by Case3:13-cv-03953-SI Document162 Filed03/02/15 Page16 of 2017

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28 United States District Court Northern District of California data . Neither case stands for the proposition that the EPA must issue "unclassifiable" designations

in circumstances where, as is the situa tion here , EPA has repeatedly explained that there was uncertainty as to how to best characterize SO 2 emissions for purposes of implementing the revised
SO 2 standard, and EPA was working with the states, tribes, and other entities to address that issue
bef ore reviewing t he information before the EPA. Contrary to the states' arguments, the EPA has not stated that it lacks sufficient information to issue designations for the remaining areas, but
rather that because of the uncertainty regarding how to best ch aracterize emissions, it was "not yet prepared to issue designations." 78 Fed. Reg. 47,191. Here, although Section 107(d)(1)(B) uses mandatory language requiring EPA to promulgate air

- quality designations no later than two years from the date of promulgation of the
new or revised national ambient air quality standard, the Clean Air Act does not specify what happens in the event that EP A misses a designation deadline. The Court finds it significant that Congress did not pres cribe a default consequence for violation of the deadline, as it did in ot he r places in the Clean Air Act. See 42 U.S.C. §§ 7407(d)(1)(C) (discussing designations of nonattainment by operation of law for particular areas); § 7410(k)(1)(B) (stating that if EPA fails to make a determination that a state implementation plan fails to meet minimum criteria by the statutory deadline, the plan is deemed by operation of law to meet such criteria); § 7545(o)(2)(A)(i), (iv) (requiring that EPA promulgate renewable f uel regulations by August 8, 2006, but providing that “[i]f the Administrator does not promulgate regulations under clause (i), the percentage of renewable fuel in gasoline . . . shall be 2.78 percent for calendar year 2006”).
Under Sierra Club and Brock , the appropriate remedy in a “deadline” case such as this is to require EPA to issue designations pursuant to a schedule, not to mandate that EPA iss ue any particular designation. The States also contend that the proposed consent decree does far more th an set a binding and enforceable schedule for EPA to complete remaining designatio ns, and that it establishes duties and obligations beyond EPA’s authority. The States assert that paragraph 1(b) of the proposed consent decree intrudes on EPA’s discretion in making designations, such that “designations can be based on the mere presence of very specific and large emitting source s of Case3:13-cv-03953-SI Document162 Filed03/02/15 Page17 of 2018

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28 United States District Court Northern District of California SO 2 in a certain area.” Dkt. 127 at 11:25

- 12:6. However, p aragraph 1(b) does not affect EPA’s

discretion to determine the part icular designation for an area, and instead only provides that
certain areas con taining large sources of SO 2 pollution are required to be designated by EPA within 16 months of entry of the decree. The States also assert that the proposed consent decree “d iscard[s]” the “work that the Intervenor States completed to make their initial designations” or “may” render the work “stale.”
Dkt. 124 at 18

- 19; Dkt. 127 at 15:3

- 5. However, the States do not cite any language in the proposed consent decree that renders invalid or obsolete the earlier information prov ided by the
States. T he parties state that the initial recommendations and accompanying information submitted by the states remain in the administrative r ecord for consideration by EPA. See Dkt.
132 at 6:4

- 6. Further, in making designations pu rsuant to the decree, EPA must comply with the statutory procedure for promulgating designations based on state recommendations, which
includes notifying states of any intended modifications to their recommendations n o later than 120 days before the date of promulgation and allowing them an opportunity to demonstrate why any designation is inappropriate. See 42 U.S.C. § 7404(d)(1)B)(ii). The intervenor States also argue that the proposed consent decree improperly deprives them of their claims. However, to the extent that the States are concerned about the effect of this litigation on other pending cases, the parties state that "[a]ny decision by this Court to enter the proposed consent decree would not, in and of i tself, result in the dismissal of the Plaintiff

Interv enors' claims in those suits. That is, if the Court enters the proposed consent decree here, those parties will still be free to pursue earlier deadlines in those actions (with respect to remaining
unde signated areas within their states)." Dkt. 132 at 12:16

- 20. With respect to the intervenors' claims in this case, only North Carolina has filed a complaint in intervention, and that complaint requests that the Court "[i]ssue a mandatory injunction requir ing the Administrator to perform her mandatory duties by a certain date set by the Court." Dkt. 83 at 6. Thus, rather than depriving North Carolina of its claims, the proposed consent decree provides North Carolina with the relief sought, namely a bindin g schedule to issue all remaining designations.
The remainder of the States' substantive objections relate to the pr oposed Data Case3:13-cv-03953-SI Document162 Filed03/02/15 Page18 of 2019

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28 United States District Court Northern District of California Requirements Rule. The States assert that paragraph s 2 and 3 of the proposed consent decree

“dictate the mechanism that States m ust use in colle cting new data for EPA.” Dkt. 127 at 11:15

- 17. However, those paragraph s only set a deadline for issuing designations for those areas in which, by January 1, 2017, states have not installed and begun operating a new SO 2 monitoring
network , and a later deadline for all remaining undesignated areas. Similarly, although the States may need to supplement and update their previous submissions if the Data Requirements Rule is adopted, that would be a consequence of the Data Requirements Rule, n ot the proposed consent
decree. The States also complain that the proposed consent decree "violates the Administrative Procedure Act ('APA') and undermines the [Data Requirements Rule] rule

- making process." Dkt.
135 at 8:15

- 16. However, the States do not explain how the pro posed consent decree violates the APA, 5 U.S.C. § 553, which applies to age ncy "rule making, " and does not apply to promulgation of air quality designations. See 5 U.S.C. § 551(4

- )(5)(defining "rule making" and "rule"); 42
U.S.C. § 7407(d)(2)(B) ("Promulg ation or announcement of a designation under paragraph (1) . . . Shall not be subject to the provisions of sections 553 through 557 of Title 5 (relating to notice and comment)."). The Court also finds that the proposed consent decree does not undermine th e separate Data Requirements Rule process, as the proposed consent decree is independent of the
Data Requirements Rule process. T he proposed consent decree was subject to public comment, and the Data Requirements Rule has been subject to its own separate public rule

- making process. Finally, the States assert that the proposed consent decree was procedurally unfair because
a number of the amici states did not participate in settlement negotiations, and the EPA and plaintiffs had settlement negotiations that did not involve the intervenor States. North Carolina
also asserts that the settlement is collusive. The Court finds that these objections lack merit. With regard to the amici states, with the exception of the State of Louisiana (which is also an interv enor) , it is undisputed that none of the

a mici States sought to become parties to this action. The a mici States do not cite any authority for the proposition that they should have been invited to participate in settlement discussions in order to assure procedural fairness

. The Court also notes that t he State of Louisiana, through the Counsel for the Louisiana Department of Environmental Quality, participated in the discussions Case3:13-cv-03953-SI Document162 Filed03/02/15 Page19 of 2020

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28 United States District Court Northern District of California held by the parties between mid

- December 2013 and mid

- May 2014. See Dkt. 121

- 1 at ¶¶ 4

- 8.

T he record shows that the proposed consent decree is result of adversarial negotiation s conducted over approximately six months, during which the seven state interve nors participated in
at least ten settlement calls with the parties. Dkt. 121

- 1 ¶¶ 6

- 8. Although the intervenor states complain that EPA and plaintiffs had separate negotiations that resulted in the proposed consent decree, that fact does not mean that the proposed consent de cree lacks procedural fairness. T he intervenor states also had separate negotiations with EPA that did not include plaintiffs. Id

. ¶¶ 10

- 11. Further, the approach taken in the proposed consent decree was discussed in the group settlement negotiations that in cluded the intervenor states. Id

. ¶ 8. Importantly, t he proposed consent decree was subject to public comment, and both the amici and intervenor states participated in that process. 78, Fed. Reg. at 31,325; Dkt. 126

- 2. Finally, there is no support
whatsoever for North Carolina's a ssertion that the proposed consent decree is "a collusive attempt"
to secure an il legal remedy.

CONCLUSION For the reasons set forth above, the Court concludes that the proposed consent decree is fair and reasonable, both procedurally and substantively, and consistent with the Clean Air Act, and other applicable law. Accordingly, the Court GRANTS the parties' joint motion to approve and enter the proposed consent decree.

IT IS SO ORDERED

.

Dated: March 2 , 2015

______________________________________ SUSAN ILLSTON United States District Judge Case3:13-cv-03953-SI Document162 Filed03/02/15 Page20 of 20