FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

CALIFORNIA COMMUNITIES AGAINST 

TOXICS, an unincorporated

association; COMMUNITIES FOR A

BETTER ENVIRONMENT, a California

non-profit organization,

Petitioners,

v.

No. 11-71127 UNITED STATES ENVIRONMENTAL 

PROTECTION AGENCY; LISA JACKSON, OPINION

Administrator, U.S. Environmental

Protection Agency; JARED

BLUMENFELD,

Respondents,

CPV SENTINEL LLC; SOUTH COAST

AIR QUALITY MANAGEMENT DISTRICT,

Respondents-intervenors. 

On Petition for Review of a Final Rulemaking

of the United States Environmental Protection Agency

Argued and Submitted

June 5, 2012—Pasadena, California

Filed July 26, 2012

Before: Alex Kozinski, Chief Judge, Stephen S. Trott and

Sidney R. Thomas, Circuit Judges.

Per Curiam Opinion

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COUNSEL

Angela Johnson Meszaros and Timothy R. Grabiel, Law

Offices of Angela Johnson Meszaros, South Pasadena, California, for petitioner California Communities Against Toxics.

Shana Lazerow and Maya Golden-Krasner, Communities for

a Better Environment, Oakland, California, for petitioner

Communities for a Better Environment.

Ann Lyons, United States Environmental Protection Agency,

Office of Regional Counsel, San Francisco, California; Scott

Jordan, United States Environmental Protection Agency,

Office of General Counsel, Washington, D.C.; Ignacia S.

Moreno, Assistant Attorney General; and Amy J. Dona, Environmental Defense Section, Environment & Natural

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Resources Division, United States Department of Justice,

Washington, D.C., for respondents United States Environmental Protection Agency, Lisa Jackson and Jared Blumenfeld. 

Michael J. Carroll and Joshua T. Bledsoe, Latham & Watkins

LLP, Costa Mesa, California, for respondent-intervenor CPV

Sentinel, LLC.

Kurt R. Wiese, Barbara Baird, Lauren B. Nevitt and Megan

E. Lorenz, South Coast Air Quality Management District,

Diamond Bar, California, for respondent-intervenor South

Coast Air Quality Management District.

OPINION

PER CURIAM:

Two environmental groups petition for review of a final

rulemaking by the EPA. The groups and the EPA agree this

case should be remanded, so the only dispute is whether vacatur is appropriate.

Background

The Clean Air Act requires the EPA to set national ambient

air quality standards for air pollutants. 42 U.S.C. § 7409.

States are responsible for developing plans to implement

those standards. § 7410(a)(1). The states’ plans, and any revisions, must be approved by the EPA. § 7410(k). As part of the

plans, states must establish a permitting program for new polluters in areas that don’t meet the EPA’s standards.

§§ 7502(c)(5), 7503(c). Those programs must ensure any

emission increases be offset by corresponding emission

reductions. § 7503(c).

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The South Coast Air Quality Management District (“the

District”) regulates the air quality in the South Coast Air

Basin and the Riverside portions of the Salton Sea Air Basin.

Cal. Health & Safety Code § 40412; Cal. Code Regs. tit. 17,

§§ 60104, 60114. Because these areas don’t meet the EPA’s

air quality standards, the District is responsible for developing

a plan that ensures new emission increases are offset by

reductions. See 40 C.F.R. § 81.305; 42 U.S.C. § 7410(a)(1).

When reductions exceed increases, the excess reductions take

the form of “credits,” which are traded in an open market to

entities seeking to meet their offset requirements. The District

maintains a stock of these credits in an internal bank for distribution to entities like schools and hospitals. 

In 2009, California passed Assembly Bill 1318, which

requires the District to transfer credits to a soon-to-be completed power plant named Sentinel. 2009 Cal. Legis. Serv.

3402-07 (West). Since the Bill changed the state plan, the

District sought the EPA’s approval. 

Petitioners challenge the EPA’s final rule approving the

District’s revision. See Revision to the South Coast Portion of

the California State Implementation Plan, CPV Sentinel

Energy Project AB 1318 Tracking System, 76 Fed. Reg.

22,038 (Apr. 20, 2011). They allege that the EPA committed

procedural errors during the rulemaking process and that the

substance of the revised state plan violates the Clean Air Act.

Analysis

[1] We review agency action to see if it’s arbitrary and

capricious. Sacora v. Thomas, 628 F.3d 1059, 1068 (9th Cir.

2010); 5 U.S.C. § 706(2)(A). Here, the EPA has admitted that

the reasoning adopted for its final rule was flawed and voluntarily seeks remand. A federal agency may request remand in

order to reconsider its initial action. See, e.g., SKF USA Inc.

v. United States, 254 F.3d 1022, 1029 (Fed. Cir. 2001). That’s

what the EPA has done here. It seeks to explain on remand

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how credits earmarked for Sentinel meet certain regulatory

requirements, see 40 C.F.R. § 51.165(a)(3)(ii)(C)(1)(I), and to

revisit its calculations of the District’s available credits. 

[2] Generally, courts only refuse voluntarily requested

remand when the agency’s request is frivolous or made in bad

faith. SKF USA Inc., 254 F.3d at 1029. Compare Sw. Bell Tel.

Co. v. FCC, 10 F.3d 892, 896 (D.C. Cir. 1993) (discussing the

court’s previous decision to grant the agency’s request for a

remand) with Lutheran Church-Mo. Synod v. FCC, 141 F.3d

344, 349 (D.C. Cir. 1998) (refusing to remand because the

agency just wanted to avoid judicial review). Because the

EPA has recognized the merits of the petitioners’ challenges

and has been forthcoming in these proceedings, there is no

evidence that the EPA’s request is frivolous or made in bad

faith. We therefore grant the EPA’s request for remand. 

[3] That brings us to whether we must vacate the EPA’s

final rule. A flawed rule need not be vacated. See Idaho Farm

Bureau Fed’n v. Babbitt, 58 F.3d 1392, 1405 (9th Cir. 1995);

W. Oil & Gas Ass’n v. EPA, 633 F.2d 803, 813 (9th Cir.

1980). Indeed, “when equity demands, the regulation can be

left in place while the agency follows the necessary procedures” to correct its action. Idaho Farm Bureau, 58 F.3d at

1405. Even though the agency’s error was significant in Idaho

Farm Bureau, we didn’t vacate the agency’s rule because that

could have wiped out a species of snail. Id. at 1405-06. Similarly, in Western Oil and Gas, we didn’t order vacatur

because doing so would have thwarted “the operation of the

Clean Air Act in the State of California during the time the

deliberative process [was] reenacted.” 633 F.2d at 813.

[4] Whether agency action should be vacated depends on

how serious the agency’s errors are “and the disruptive consequences of an interim change that may itself be changed.”

Allied-Signal, Inc. v. U.S. Nuclear Regulatory Comm’n, 988

F.2d 146, 150-51 (D.C. Cir. 1993) (internal quotation marks

omitted).

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I. Alleged Errors

Petitioners allege two types of errors—procedural and substantive. 

A. Procedural Errors.

During the rulemaking process, the EPA didn’t disclose

certain documents in the electronic docket or list them in the

docket index. According to the petitioners, those failures violated the notice-and-comment requirements of the Administrative Procedure Act. See 5 U.S.C. § 553(c).

Agencies must “give interested persons an opportunity to

participate in the rule making through submission of written

data, views, or arguments.” 5 U.S.C. § 553(c). This means the

agency must “identify and make available technical studies

and data that it has employed in reaching the decisions to propose particular rules.” Kern Cnty. Farm Bureau v. Allen, 450

F.3d 1072, 1076 (9th Cir. 2006) (internal quotation marks

omitted). 

[5] EPA’s failure to include all documents in the electronic

docket was not an error. The E-Government Act requires

online disclosure only “to the extent practicable, as determined by the agency in consultation with the Director” of the

Office of Management and Budget. E-Government Act of

2002, Pub L. No. 107-347, § 206(d)(2), 116 Stat. 2899, 2916

(2002) (emphasis added). We defer to the EPA on what is

practicable to post on its online docket. See Heckler v.

Chaney, 470 U.S. 821, 831-32 (1985) (noting that agencies

are better equipped than courts to make certain choices, given

their expertise and their superior understanding of their own

resources and priorities). 

EPA did misstate that all documents in the docket were

listed in the index. While this might violate an interested

party’s right to meaningfully comment, see 5 U.S.C. § 553(c),

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we need not decide that here. Assuming procedural error, it

was harmless as to the petitioners because they had the documents in their possession from earlier proceedings. And,

where a party has actual notice and was able to submit its

views to the agency prior to the challenged action, no procedural harm is suffered by failure to provide notice. CalAlmond, Inc. v. U.S. Dep’t of Agric., 14 F.3d 429, 441-42 (9th

Cir. 1993); see 5 U.S.C. § 706 (“[D]ue account shall be taken

of the rule of prejudicial error.”). 

[6] Petitioners don’t dispute they had the documents in

hand; instead, they claim they had no way of knowing which

documents the EPA was reviewing. But petitioners knew that

all documents weren’t listed in the docket index before the

comment period ended and they were intimately familiar with

the documents at issue. Finally, any disadvantage petitioners

suffered can be corrected on remand when they will have an

opportunity to comment meaningfully on the documents. 

B. Substantive Errors.

[7] Petitioners argue that the EPA violated the Clean Air

Act in approving the District’s revision to its plan. The EPA

concedes that there are flaws in the reasoning adopted for its

final rule. Despite its concession, EPA maintains its rule is not

arbitrary and capricious and offers new reasoning to support

its final rule. But “our review of an administrative agency’s

decision begins and ends with the reasoning that the agency

relied on in making that decision.” Safe Air for Everyone v.

EPA, 488 F.3d 1088, 1091 (9th Cir. 2007); see also SEC v.

Chenery Corp., 318 U.S. 80, 87 (1943). We therefore find that

the EPA’s final rule is invalid. 

That the EPA’s final rule is invalid is not the end of the

analysis. In considering whether vacatur is warranted, we

must balance these errors against the consequences of such a

remedy. 

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II. Consequences of vacatur

[8] The delay and trouble vacatur would cause are severe.

Sentinel is scheduled to come on line in November, but vacatur would pave the road to legal challenges to Sentinel’s construction that could well delay a much needed power plant.

Without Sentinel, the region might not have enough power

next summer, resulting in blackouts. Blackouts necessitate the

use of diesel generators that pollute the air, the very danger

the Clean Air Act aims to prevent. See 42 U.S.C. § 7401(b)(1)

(stating the purpose of the Clean Air Act is “to protect and

enhance the quality of the Nation’s air”). 

Stopping construction would also be economically disastrous. This is a billion-dollar venture employing 350 workers.

In addition, vacatur would likely require the California legislature to pass a new bill to allow the District to transfer credits

from its internal bank to Sentinel, which would create needless and duplicative legislative effort.

Petitioners claim that failure to vacate the EPA’s rule will

allow Sentinel to continue construction, and that construction

will pollute the air. But the California Energy Commission

has already found that Sentinel’s construction harms are insignificant with mitigation. And that mitigation doesn’t implicate

the credits at issue. 

[9] While we have only ordered remand without vacatur in

limited circumstances, if saving a snail warrants judicial

restraint, see Idaho Farm Bureau, 58 F.3d at 1405-06, so does

saving the power supply. Accordingly, we remand without

vacatur so that construction of Sentinel may proceed without

delay. This does not authorize commencement of Sentinel’s

operation without a new and valid EPA rule in place.

REMANDED without VACATUR.

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