Southwestern Pa. Growth Alliance v. Browner

No. 96-3761

UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT

144 F.3d 984; 1998 U.S. App. LEXIS 10410; 1998 FED App.

0160P (6th Cir.); 46 ERC (BNA) 1609; 28 ELR 21251

December 4, 1997, Argued

May 26, 1998, Decided

May 26, 1998, Filed

DISPOSITION: Decision of the EPA to

redesignate the Cleveland-Akron-Lorain

area as an attainment area for ozone

undisturbed.

[*985] OPINION

MERRITT, Circuit Judge. This case

arises under the Clean Air Act, 42

U.S.C. §§ 7401-7671q, as amended. The

petitioner, the Southwestern

Pennsylvania Growth Alliance, appeals

the decision of the Administrator of

the United States Environmental

Protection Agency directly to this

Court under 42 U.S.C. § 7607(b)(1).

The petitioner argues that the EPA's

decision to redesignate the

Cleveland-Akron-Lorain, Ohio, area as

an "attainment" area for ozone was

arbitrary and capricious because the

EPA failed to take into account the

"regional" effect of ozone

pollution--specifically the effect of

the airborne transport of ozone and

its precursors across from Ohio into

Pennsylvania. The EPA counters that

the petitioner does not have standing

to bring this case and that the

petitioner's claims fail on the merits

because the EPA acted reasonably in

making the redesignation. It argues

that it is handling the regional

transport problem separately in a

comprehensive study and set of

proposals. We find that the actions of

the EPA were reasonable and within its

administrative authority, and

therefore we affirm the decision of

the EPA.

I.

Under the Clean Air Act, Congress

directed the Administrator to set

nationally uniform air quality

standards known as "National Ambient

Air Quality Standards." 42 U.S.C. §

7409. The Clean Air Act requires the

EPA to promulgate these standards for

six criteria pollutants, including

ground-level ozone. Ozone is formed in

the atmosphere when oxides of nitrogen

and volatile organic compounds are

emitted into the air in the presence

of sunlight. S. Rep. No. 101-228, at 6

(1990), reprinted in 1990 U.S.S.C.A.N.

3385, 3392.

Under the Act, the Administrator

designates areas as "nonattainment,"

"attainment," [*986] or

"unclassifiable," based upon whether

the area meets the standards for a

particular pollutant. 42 U.S.C. §

7407(d). Each area designated as

"nonattainment" is further classified

as marginal, moderate, serious, severe

or extreme, depending on the degree to

which the area exceeds the standards.

42 U.S.C. § 7511(a). The Act permits

the governor of a state to request the

Administrator to revise the

designation for any area within the

state. 42 U.S.C. § 7407(d)(3)(D).

The states are responsible for

meeting the national standards. Each

state must draft a State

Implementation Plan for each

pollutant. These State Implementation

Page 1
Plans provide for enforcement of

national standards. See 42 U.S.C. §

7410. Among other things, these plans

must include provisions prohibiting

air emissions within the state from

contributing significantly to

nonattainment in other states or

interfering with maintenance of the

standards by other states. 42 U.S.C.

§ 7410(a)(2)(D). If the Administrator

finds that a State's Implementation

Plan is "substantially inadequate" to

attain or maintain the standards or to

mitigate adequately interstate

pollutant transport, then the

Administrator is authorized to

"require the state to revise the plan

as necessary to correct such

inadequacies" within 18 months. 42

U.S.C. § 7410(k)(5). This procedure is

called a "SIP [State Implementation

Plan] call."

Before the EPA redesignates an area

for ozone attainment, the EPA follows

a two-step system. First, the EPA

determines whether an area has met the

applicable technical, chemical

standards for "attainment" of the

correct level of ozone in the area.

Second, the EPA determines whether the

area has met the additional

requirements for redesignation to

attainment.

In the first step, the EPA

determines whether the area has met

the "attainment" standard for ozone,

called the "national primary

standard." The EPA regulations define

the standard for ozone as .12 parts

per million. The "standard is attained

when the expected number of days per

calendar year with maximum hourly

average concentrations above .12 parts

per million . . . is equal to or less

than 1, as determined by appendix H."

40 C.F.R. Pt. 50. An area will have

attained the standard if three or

fewer instances over the standard are

recorded over a three year period at

any of the monitoring sites within the

area.

In the second step, after an area

has met the applicable standard for

attainment, the EPA determines whether

the area has met the additional four

criteria for redesignation from

nonattainment to attainment: (1) EPA

must fully approve the applicable

State Implementation Plan; (2) EPA

must determine that improvement in air

quality is due to permanent reductions

in emissions; (3) EPA must fully

approve a maintenance plan adopted by

the State which demonstrates that the

area will maintain the standard for at

least 10 years after redesignation;

and (4) the State has met all the

requirements applicable to the area

under section 7410 (requirements of

State Implementation Plans) and part

D. 42 U.S.C. § 7407(d)(3)(E).

In 1991, the

Cleveland-Akron-Lorain, Ohio, area was

designated as a moderate ozone

nonattainment area. On November 15,

1994, the Governor of the State of

Ohio submitted a request to the EPA to

redesignate the area to attainment.

On June 15, 1995, the EPA published

a Notice of Proposed Rulemaking,

proposing to approve Ohio's

redesignation request for the area

contingent on final approval by the

EPA of several elements of Ohio's

State Implementation Plan. 60 Fed.

Reg. 31,433 (1995). As part of this

proposal, the EPA included the

following section:

Transport of Ozone Precursors to

Downwind Areas

Preliminary modeling results

utilizing USEPA's [United

States Environmental

Protection Agency] regional

oxidant model (ROM) indicate

that ozone precursor

emissions from various

States West of the ozone

transport region (OTR) in

the northeastern United

States contribute to

increases in ozone

concentrations in the OTR.

Page 2

144 F.3d 984, *986; 1998 U.S. App. LEXIS 10410;

1998 FED App. 0160P (6th Cir.); 46 ERC (BNA) 1609
The State of Ohio has

provided documentation that

VOC and NO subX emissions in

the CAL

[Cleveland-Akron-Lorain]

nonattainment area are

predicted to remain below

attainment levels for the

next ten years. Should

emissions exceed attainment

levels, the contingency plan

will be triggered. In

[*987] addition, eight

years after redesignation to

attainment, Ohio is required

to submit a revision to the

maintenance plan which

demonstrates that the NAAQS

[National Ambient Air

Quality Standards] will be

maintained until the year

2105. The USEPA is currently

developing policy which will

address long range impacts

of ozone transport. The

USEPA is working with the

States and other

organizations to design and

complete studies which

consider upwind sources and

quantify their impacts. The

USEPA intends to address the

transport issue through

Section 110 based on a

domain-wide modeling

analysis.

60 Fed. Reg. at 31,439. The proposed

rule stated that the comment period on

redesignation closed on July 17, 1995.

The petitioner did not submit comments

on redesignation by the close of the

comment period.

On June 29, 1995, the EPA published

a direct Final Rule on attainment. In

the rule, the EPA determined that the

Cleveland, Toledo, Dayton and

Cincinnati-Hamilton areas had achieved

attainment. 60 Fed. Reg. 33,742

(1995). The action was based on Ohio's

demonstration that the areas achieved

the standards for ozone during the

three year period from 1992 through

1994. The rule stated that the action

would become effective on August 14,

1995, unless the EPA received adverse

comments by July 31, 1995. On July 28,

1995, the petitioner submitted

comments directed at the determination

of attainment in a letter captioned

"Adverse Comments on Determination of

Attainment of Ozone Standard by

Cleveland, Toledo, Dayton, and the

Cincinnati-Hamilton Interstate Ozone

Attainment Areas, as published in the

June 29, 1995 Federal Register." J.A.

at 861. In the letter, the petitioner

claimed that there was "strong

evidence" that the ozone problem in

southwestern Pennsylvania is caused by

emissions of ozone precursors from

states to its west, particularly Ohio

and West Virginia. J.A. at 862. The

EPA also received a comment on the

attainment rule from the New York

State Department of Environmental

Conservation. After receiving adverse

comments on the direct final notice of

attainment determination, the EPA

issued a notice on August 25, 1995,

withdrawing the direct final notice

and announcing that the EPA would

summarize and respond to the comments

in a subsequent final rule. 60 Fed.

Reg. 44,277 (1995).

On May 7, 1996, the EPA took action

on both the attainment and the

redesignation, responding to comments

on both actions. 61 Fed. Reg. 20,458

(1996). The interstate transport issue

was raised as a comment to the

attainment determination. The EPA

responded that interstate transport is

not relevant to the narrow issue of

attainment of air quality standards

but that it is relevant in a

determination of redesignation.

The EPA has been separately

studying the regional ozone

transportation problem. In November

1997, the EPA issued a new proposed

rule based in part on the technical

work and recommendations generated by

the Ozone Transport Assessment Group.

62 Fed. Reg. 60,318 (1997). The Ozone

Transport Assessment Group is an

informal advisory committee formed to

Page 3

144 F.3d 984, *986; 1998 U.S. App. LEXIS 10410;

1998 FED App. 0160P (6th Cir.); 46 ERC (BNA) 1609
assess the regional ozone transport

problem and develop solutions. The

Group includes representatives from

the EPA, thirty-seven states in the

Midwestern and Eastern portions of the

country (including Ohio), and industry

and environmental groups. Based in

part on the Group's recommendations,

the EPA's new proposed rule would

require twenty-two states, including

Ohio, to adopt and submit revised

State Implementation Plans containing

control measures that will mitigate

the transport of ozone to other

states. Under the new rule, Ohio would

be required to reduce its emissions of

oxides of nitrogen by approximately

forty per cent from otherwise expected

levels. 62 Fed. Reg. at 60,361.

The petitioner, Southwestern

Pennsylvania Growth Alliance, is an

organization of major manufacturers

and local governments in the

Pittsburgh-Beaver Valley Area. See

Southwestern Pennsylvania Growth

Alliance v. Browner, 121 F.3d 106, 111

(3rd Cir. 1997) (same petitioner). On

July 8, 1996, the petitioner filed

this case in the Court of Appeals, as

permitted by statute. The petitioner

filed a related lawsuit in the Third

Circuit, challenging the EPA's refusal

to redesignate the Pittsburgh-Beaver

Valley area to attainment. The

petitioner lost the challenge in that

case. Southwestern Pennsylvania

Growth Alliance v. Browner, 121 F.3d

106 (3rd Cir. 1997).

[*988] This Court must uphold the

EPA's decision unless it is

"arbitrary, capricious, an abuse of

discretion, or otherwise not in

accordance with the law." 5 U.S.C. §

706(2)(A). Because we must review the

EPA's interpretation of the Clean Air

Act, we use the Supreme Court's

two-step process for reviewing an

agency's interpretation of a statute

it administers. If "Congress has

directly spoken to the precise

question at issue . . . the court . .

. must give effect to the

unambiguously expressed intent of

Congress." Chevron, U.S.A., Inc. v.

Natural Resources Defense Council,

Inc., 467 U.S. 837, 842-43, 81 L. Ed.

2d 694, 104 S. Ct. 2778 (1984). If

Congress has been silent or ambiguous

about the "precise question at issue,"

then a reviewing court must defer to

the agency's statutory interpretation

if it is reasonable. Id. To uphold

EPA's interpretation of a statute, the

Court "need not find that it is the

only permissible construction that EPA

might have adopted but only that EPA's

understanding of this very 'complex

statute' is a sufficiently rational

one to preclude a court from

substituting its judgment for that of

EPA." Chemical Mfrs. Ass'n v. Natural

Resources Defense Council, Inc., 470

U.S. 116, 125, 84 L. Ed. 2d 90, 105 S.

Ct. 1102 (1985).

II.

The EPA argues that this Court

should dismiss the petitioner's case

because the petitioner has no standing

to challenge the EPA rule

redesignating Ohio from nonattainment

to attainment. Constitutional standing

requires a showing of three elements:

(1) an "injury in fact" that is

concrete and particularized; (2) a

connection between the injury and the

conduct at issue--the injury must be

fairly traceable to the defendant's

action; and (3) likelihood that the

injury would be redressed by a

favorable decision of the Court.

Lujan v. Defenders of Wildlife, 504

U.S. 555, 560-61, 119 L. Ed. 2d 351,

112 S. Ct. 2130 (1992).

The EPA argues that the petitioner

has not shown standing because the

petitioner fails to show that

emissions transported from the newly

redesignated Cleveland-Akron-Lorain

area are greater than they would have

been if the EPA had denied Ohio's

redesignation application. The

petitioner also asserts two other

injuries, however, that provide

standing. The petitioner argues that

it is injured by the EPA's process of

Page 4

144 F.3d 984, *987; 1998 U.S. App. LEXIS 10410;

1998 FED App. 0160P (6th Cir.); 46 ERC (BNA) 1609
dealing with the regional transport of

ozone. It says that this appeal is the

only way it can attack the separation

of the attainment decision from the

regional transport decision. This fact

together with its next argument

establishes standing.

The petitioner also argues that

southwestern Pennsylvania is at an

economic disadvantage as a result of

the Cleveland-Akron-Lorain

redesignation. The redesignation

enables Ohio businesses to pay less

for ozone controls, while businesses

in southwestern Pennsylvania are

required to pay the higher costs for

nonattainment areas. The EPA concedes

that areas designated as attainment

are subject to different requirements

than nonattainment areas. Attainment

areas are subject to the less costly

New Source Review requirements under

Part C of Title I, and the

nonattainment areas are subject to the

more costly New Source Review

requirements under Part D of Title I.

In addition, the EPA conceded during

oral argument that if the

Cleveland-Akron-Lorain area had not

been redesignated to attainment, the

area would have been subject to

additional emissions controls.

If the EPA incorrectly redesignated

the Cleveland-Akron-Lorain area as

attainment, then that area has an

economic advantage over its neighbors

in southwestern Pennsylvania because

businesses in the Ohio area unfairly

pay less for ozone control measures.

Thus, the southwestern Pennsylvania

area, which is designated as

nonattainment, suffers an economic

disadvantage compared to its Ohio

neighbor. This economic disadvantage

is an alleged "injury in fact"

directly caused by the EPA's decision,

an injury that would be redressed if

the decision were overturned by this

Court. See Central Arizona Water

Conservation District v. United States

Environmental Protection Agency, 990

F.2d 1531 (9th Cir. 1993) (water and

irrigation districts had standing

because EPA rule under Clean Air Act

would result in added costs to the

districts); Connecticut v. United

States Environmental Protection

Agency, 656 F.2d 902 (2nd Cir. 1981)

(Connecticut and New Jersey [*989]

permitted to petition for review of an

EPA decision on a revision of the New

York Implementation Plan); New York v.

Administrator, United States

Environmental Protection Agency, 710

F.2d 1200 (6th Cir. 1983) (the State

of New York appealed the decision of

an EPA approval of a Tennessee State

Implementation Plan revision); New

York v. United States Environmental

Protection Agency, 716 F.2d 440 (7th

Cir. 1983) (the State of New York

appealed the decision of an EPA

approval of an Illinois State

Implementation Plan revision).

III.

The petitioner argues that the

EPA's decision to redesignate the

Cleveland-Akron-Lorain area as an

attainment area for ozone was

arbitrary and capricious and should be

overturned by this Court. As already

discussed, once an area has satisfied

the technical requirements of

attainment, it must also meet four

additional requirements before it is

redesignated to attainment. One of

these requirements is that the EPA

approve Ohio's State Implementation

Plan. The Act provides that each State

Implementation Plan shall:

contain adequate

provisions--

(i) prohibiting,

consistent with provisions

of this subchapter, any

source or other type of

emissions activity within

the State from emitting any

air pollutant in amounts

which will --

(I) contribute

significantly to attainment

in, or interfere with

Page 5

144 F.3d 984, *988; 1998 U.S. App. LEXIS 10410;

1998 FED App. 0160P (6th Cir.); 46 ERC (BNA) 1609
maintenance by, any other

State with respect to any

such national primary or

secondary ambient air

quality standard . . .

42 U.S.C. § 7410(a)(2)(D)(i)(I). The

petitioner argues that the Ohio State

Implementation Plan should not have

been approved because it did not

contain a provision prohibiting

sources of pollution in one state from

emitting pollutants in amounts which

contribute significantly to

nonattainment in another state.

The EPA argues that Congress left

to the EPA the method of determining

whether interstate transport is a

problem and it says that it has

properly addressed the problem in this

case. Obviously, most land areas are

upwind of some areas and downwind of

others. According to the EPA, it is

addressing the interstate transport

problem by using a regional approach

to consider the broad and complex

regional nature of ozone transport

with the limited resources of the

agency. This approach is being

implemented through the Ozone

Transport Assessment Group, which has

studied the problem and recently made

recommendations to address the

problem. Based in part on these

recommendations, the EPA issued a new

proposed rule in November 1997. 62

Fed. Reg. 60,318 (1997). One portion

of this rule requires Ohio to submit a

revised State Implementation Plan that

will reduce its emissions of oxides of

nitrogen by approximately forty per

cent from otherwise expected levels.

62 Fed. Reg. at 60,361.

At the time that the EPA approved

the Ohio State Implementation Plan,

the Ozone Transport Assessment Group

had not yet made its recommendations.

The EPA argues that while it was

waiting for the Group to finish its

studies and make recommendations, the

EPA reasonably relied on its earlier

approval of an Ohio State

Implementation Plan which complied

with the interstate transport

requirement. The EPA presented in its

exhibits a memorandum which confirms

its position that it has consistently

interpreted section 7607(d)(3)(E) as

permitting the EPA to rely on prior

approvals of State Implementation

Plans when reviewing redesignation

requests. The memorandum, which was

written by John Calcagni, Director of

Air Quality Management Division to the

Directors of various Air Divisions,

J.A. at 801, states: "Regions should

not reconsider those things that have

already been approved and for which

the Clean Air Act Amendments did not

alter what is required." In addition,

Congress explicitly codified the same

principle in 42 U.S.C. § 7410(n)(1).

The petitioner counters that the

EPA should have reconsidered the ozone

transport issue because the previous

Ohio State Implementation Plan was

approved in 1980, before the 1990

amendments, and the 1990 amendments

made the requirements for interstate

transport more stringent. The EPA

argues that the 1990 amendments did

not change the standard for interstate

transport. Rather, the EPA requested

the change in the law [*990] because

prior to 1990 the EPA had enforced the

stricter standards and wanted Congress

to codify the EPA's longstanding

interpretation of the earlier

provision. The EPA's explanation is

confirmed in 57 Fed. Reg. 13,498,

13,556 n.34, which provides:

The pre-amended 110(a)(2)(E)

required SIP's to contain a

provision prohibiting

stationary sources from

emitting an air pollutant in

amounts which will "prevent

attainment" in another

State. The amended version

of this language requires a

SIP provision that prohibits

emissions that will

"contribute significantly to

nonattainment" in another

State. However, EPA

interpreted the pre-amended

Page 6

144 F.3d 984, *989; 1998 U.S. App. LEXIS 10410;

1998 FED App. 0160P (6th Cir.); 46 ERC (BNA) 1609
language in the manner that

Congress expressed in the

amended Act.

We find that the EPA's approach to the

regional transport problem is

reasonable and not arbitrary and

capricious. We therefore will not

disturb the decision of the EPA to

redesignate the Cleveland-Akron-Lorain

area as an attainment area for ozone.

Page 7

144 F.3d 984, *990; 1998 U.S. App. LEXIS 10410;

1998 FED App. 0160P (6th Cir.); 46 ERC (BNA) 1609