ORAL ARGUMENT NOT YET SCHEDULED

IN THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

 

 )

CALIFORNIA COMMUNITIES AGAINST )

TOXICS, et al., )

)

 Petitioners, )

)

v. ) No. 11-71127

 ) 

UNITED STATES ENVIRONMENTAL )

PROTECTION AGENCY, et al., ) 

)

 Respondents. )

)

EPA’S MOTION FOR A VOLUNTARY REMAND OF THE RECORD, TO 

VACATE THE BRIEFING SCHEDULE, AND TO STAY THE 

PROCEEDINGS DURING REMAND

IGNACIA S. MORENO

Assistant Attorney General

Environment and Natural Resources Division

AMY J. DONA

United States Department of Justice

Environmental Defense Section

P.O. Box 23986

Washington, D.C. 20026-3986

Attorneys for Respondents

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Pursuant to Rule 27, Federal Rules of Appellate Procedure, Respondents

United States Environmental Protection Agency, Administrator Lisa P. Jackson, and 

Regional Administrator Jared Blumenfeld (collectively “EPA” or the “Agency”), 

respectfully move the Court for an order remanding to the Agency the record for the 

final rule under review in this case, vacating all pending procedural deadlines,

including due dates for remaining briefs, and holding this case in abeyance during the 

time of remand to allow EPA to address three specific issues in the final rule and to 

provide a more complete explanation of the decision being challenged in this case. 

Counsel for all other parties have been contacted regarding this motion. 

Counsel for Petitioners California Communities Against Toxics and Communities for 

a Better Environment (collectively “Petitioners”) have indicated that their clients 

intend to file a memorandum in opposition to the motion. Counsel for Intervenor 

CPV Sentinel Energy Project has indicated that his client does not oppose the motion, 

but reserves the right to file a response. Counsel for Intervenor South Coast Air 

Quality Management District has indicated that its client supports the motion and 

does not intend to file a response.

INTRODUCTION

Petitioners challenge EPA’s final rule entitled “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 (April 20, 2011) (hereinafter “AB 

1318 Rule”). The AB 1318 Rule, promulgated by the State of California under the 

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authority of the Clean Air Act (“CAA” or the “Act”), 42 U.S.C. §§ 7401-7671q,

incorporates enabling language into the South Coast portion of the California State 

Implementation Plan (“SIP”), and by that incorporation, approves as meeting federal 

CAA requirements the transfer of specifically identified emission reduction credits for 

coarse particulate matter (PM10) and sulfur oxides (SOx). These emission reduction 

credits accrued when specific emission sources shut down or curtailed their

operations. These emission reduction credits were then tracked by the South Coast

Air Quality Management District (“SCAQMD”) and transferred into a specific 

tracking system for the use of the CPV Sentinel Energy Project to offset increases in 

the emissions of these two pollutants due to that project.

Petitioners’ Corrected Opening Brief asserts that EPA’s rulemaking was both 

procedurally and substantively flawed, and for the first time, provides important 

details in support of their substantive arguments. As explained in further detail below, 

based on the Agency’s examination of those arguments and additional review of the 

record in light of those arguments, EPA now concedes that its reasoning in approving 

the AB 1318 Rule contains errors that should be corrected before this Court considers 

the challenges to EPA’s action. In addition, EPA believes that it can provide a more

detailed and accurate explanation of how it determined that the emission reduction

credits listed in the Final Rule satisfy the federal offset requirements set forth at 40 

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C.F.R § 51.165(a)(3)(ii)(C)(1)(i)-(ii), which will then be of aid to the Court in assessing 

the validity of EPA’s action. 

EPA seeks a voluntary remand of the record to allow it the opportunity to 

reconsider certain of its responses to comments and provide additional information in 

the record of approving the AB 1318 Rule. Though EPA disagrees with Petitioners’ 

contention that the rulemaking was procedurally flawed, the process proposed by 

EPA on remand will allow for additional opportunity for notice and comment, 

mooting Petitioners’ procedural claim. Ultimately, granting this motion may conserve 

the Court’s and the parties’ resources, as it would allow EPA to address acknowledged 

deficiencies in its SIP approval without the need for further briefing, oral argument, or 

a Court decision, and avoid the possibility of a second round of litigation in the future 

to address the merits once the Agency has better explained its decision.

BACKGROUND

A. Statutory and Regulatory Background.

The CAA establishes a comprehensive program for controlling and improving 

the United States’ air quality through state and federal regulation. Since its inception 

in 1970, the CAA has depended upon federal and state cooperation to protect and 

improve the nation’s air quality. Under the CAA, EPA must identify air pollutants 

that endanger the public health and welfare and promulgate National Ambient Air 

Quality Standards (“NAAQS”) that specify the maximum permissible concentrations 

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for those air pollutants in the ambient air. 42 U.S.C. §§ 7408, 7409. In turn, States 

must implement NAAQS through state implementation plans, or SIPs, which 

establish specific control measures that apply to particular sources of air pollution 

within a State and are designed to attain, maintain, and enforce NAAQS. Id. § 

7410(a)(1). 

States are required to adopt each SIP in a legally enforceable form after notice 

and a public hearing, and must submit the adopted SIP to EPA for approval within 

three years of EPA’s promulgation or revision of a NAAQS. 42 U.S.C. § 7410(a)(1). 

The SIP approval process is not static; States routinely submit SIP revisions to EPA 

for approval consistent with the requirements of the CAA, such as when changes to 

federal or state law occur and the State seeks to incorporate those changes into the 

SIP. See id. § 7410(a)(2)(H) (requiring that SIPs provide for regular revisions to reflect 

evolving air quality conditions and standards).

Once submitted for approval, EPA conducts a completeness review of the SIP. 

Id. § 7410(k)(1)(B). If EPA determines the submission is complete, “the 

Administrator shall approve” the SIP within 12 months of such determination “if it 

meets all of the applicable requirements” of the CAA. Id. § 7410(k)(2) & (3). With 

regard to SIP revisions, EPA must disapprove a revision if it “would interfere with 

any applicable requirement concerning attainment and reasonable further progress . . . 

or any other applicable requirement” under the CAA. Id. § 7410(l).

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All SIPs, including SIP revisions, are subject to certain statutory and regulatory 

requirements, including CAA Part D, Sections 171-193, for nonattainment pollutants. 

Id. §§ 7410(a)(2), 7501-15. CAA sections 172(c)(6) and 173 require that SIPs establish

a permitting program for new and modified major stationary sources located in

nonattainment areas; that program must include provisions requiring that emission 

increases be offset by corresponding emission reductions. Id. §§ 7502(c)(6), 7503. 

Section 173(c) requires that offsetting emissions reductions be “in effect and 

enforceable” when a new source begins operations and the resulting increases in 

emissions be “offset by an equal or greater reduction” that was not “otherwise 

required.” Id. § 7503(c)

EPA has elaborated on the “integrity” criteria set forth in CAA section 173(c) 

in its implementing regulations, 40 C.F.R. § 51.165(a)(3)(ii)(C)(1)(i) and 40 CFR pt. 51, 

App. S IV(C)(3)(i)(1), stating that emission reductions are generally creditable for use 

as offsets if the reductions are surplus, permanent, quantifiable, and federally 

enforceable. EPA has also established by regulation a “base year” requirement for 

emission reductions resulting from past shutdowns and curtailments to be credited as 

offsets, 40 C.F.R. § 51.165(a)(3)(ii)(C)(1)(ii) and 40 CFR pt. 51, App. S IV(C)(3)(i)(2). 

These “base year” provisions provide that such emission reductions may generally be 

creditable for use as an offset if “the shutdown or curtailment occurred after the last 

day of the base year for the SIP planning process,” with the caveat that emission 

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reductions from a prior shutdown or curtailment may be considered “to have 

occurred after the last day of the base year if the projected emissions inventory used 

to develop the attainment demonstration explicitly includes the emissions from such

previously shutdown or curtailed emission units.” Id. (emphasis added.)

Of particular relevance to this motion, the regulatory language at 40 C.F.R. § 

51.165(a)(3)(ii)(C)(1) has been the subject of recent regulatory revision and judicial 

review. See NRDC v. EPA, 571 F.3d 1245, 1263-67 (D.C. Cir. 2009). This regulatory 

provision was revised as a part of comprehensive rulemaking that was finalized after 

reconsideration in 2007. See Phase 2 of the Final Rule To Implement the 8-Hour Ozone 

National Air Quality Standard—Notice of Reconsideration, 72 Fed. Reg. 31,727, 31,738-43 

(June 8, 2007). In that rulemaking, EPA restructured the regulation, subdividing the 

“integrity” criteria and the “base year” requirement, and eliminating a previouslyimposed requirement that an approved attainment demonstration be in place to allow 

new and modified sources to meet the offset requirement.

1

 See id. This revision of 

 

1

 Prior to the rulemaking that concluded in 2007, 40 C.F.R. § 51.165(a)(3)(ii)(C)(1) 

stated: 

Emissions reductions achieved by shutting down an existing source or 

curtailing production or operating hours below baseline levels may be generally 

credited if such reductions are permanent, quantifiable, and federally 

enforceable, and if the area has an EPA-approved attainment plan. In addition, 

the shutdown or curtailment is creditable only if it occurred on or after the date 

specified for this purpose in the plan, and if such date is on or after the date of 

the most recent emissions inventory used in the plan’s demonstration of 

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the regulation was subsequently challenged in the Court of Appeals for the District of 

Columbia Circuit. That court held that the elimination of the “fully-approved SIP 

requirement” was arbitrary and capricious, and remanded that portion of the 2007 

rulemaking without vacatur. NRDC, 571 F.3d at 1267, 1276. The Agency has not 

revised the regulatory language of the “base year” requirement following the NRDC v. 

EPA decision. 

B. Factual Background.

The South Coast Air Quality Management District (“SCAQMD”) is the state 

entity responsible for managing 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, §§ 60614, 60114. The South Coast Air Basin and the 

Coachella Valley planning area, one of the areas within the Riverside portion of the 

Salton Sea Air Basin, have been designated as nonattainment for PM 10. 40 C.F.R. § 

81.305. Sulfur oxides are a precursor to PM10, and therefore, are also treated as a 

PM10 nonattainment pollutant. 42 U.S.C. § 7513a(e). SCAQMD has been operating 

an internal bank of emission offsets, including PM10 and SOx offsets, for over 15 years

 

attainment. Where the plan does not specify a cutoff date for shutdown credits, 

the date of the most recent emissions inventory or attainment demonstration, 

as the case may be, shall apply. . . . 

Requirements for Implementation Plans; Air Quality New Source Review, 54 Fed. Reg. 27,286, 

27,299 (June 28, 1989).

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in conjunction with SCAQMD New Source Review rules that were approved by EPA 

in 1996. See Approval and Promulgation of Implementation Plan for [SCAQMD], 61 Fed. 

Reg. 64,291 (Dec. 4, 1996). Generally, SCAQMD’s internal bank is used to provide 

offsets for sources that are exempted from offsetting rules by SCAQMD Rule 1304 

and for sources that are considered “priority sources” under SCAQMD Rule 1309.1. 

See id. at 64,292. 

The CPV Sentinel Energy Project is designed to be a 850-megawatt electrical 

generating facility in Riverside County, California. See 76 Fed. Reg. 22038. SCAQMD 

adopted the CPV Sentinel Energy Project AB 1318 Tracking System (hereinafter “AB 

1318 Tracking System”) on July 9, 2010, and the California Air Resources Board 

(CARB) submitted the AB 1318 Tracking System to EPA as a source-specific SIP 

revision on September 10, 2010. See Proposed Rule—Revision to the South Coast Portion of 

the Cal. [SIP]CPV Sentinel Energy Project AB 1318 Tracking System, 76 Fed. Reg. 2294 

(Jan. 13, 2011). The proposed SIP revision consists of text to be included as a 

revision to the South Coast portion of the California SIP, and the AB 1318 Tracking 

System created to implement this new SIP provision. See id. The AB 1318 Tracking 

System transfers credits from the SCAQMD internal bank to a new internally 

maintained “account” from which the CPV Sentinel Energy Project can purchase 

credits of PM10 and SOxto offset emission increases of these pollutants resulting from 

the project’s operation. See id. at 2295.

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EPA published its proposed approval of the SIP revision on January 13, 2011, 

and provided a 30-day public comment period. See id. Petitioners jointly submitted 

comments that, in addition to other arguments, asserted that approval of the 

proposed SIP revision would violate CAA section 173(c) and 40 C.F.R. §

51.165(a)(3)(ii)(C)(1)(i)-(ii), as well as the Administrative Procedures Act (“APA”). 

See 76 Fed. Reg. 22,038.

Petitioners’ comments and EPA’s responses in regard to three offset 

requirements under 40 CFR 51.165(a)(3)(ii)(C)(1)(i)-(ii) are of particular relevance to 

the present motion. First, Petitioners asserted that the emission reductions were not 

“surplus” and thus could not be used for offsets, but in making this assertion,

Petitioners did not identify any new rule or standard that would require recalculation 

or adjustment of the credits listed in the AB 1318 Tracking System. See id. at 22,041. 

EPA thus rejected Petitioners’ contention, stating that “[SCAQMD] has not 

promulgated new rules or standards that would apply to these types of sources, and 

thus no adjustments to the credits were required.” Id.

Second, Petitioners argued that the emission reductions listed in the AB 1318 

Tracking System were not “quantifiable” and thus could not be used for offsets, but

they did not specify any particular emission reductions that violated the “quantifiable” 

requirement. Id. Instead, Petitioners referenced the lack of SCAQMD supporting 

documents in the electronic docket. See id. EPA responded that SCAQMD had 

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provided detailed background documentation about the emission reductions, id., and 

that EPA “examined each of the specific emission reduction actions that are the basis 

for the credits being transferred pursuant to this SIP revision and found a sufficient 

quantity—compared to the amount needed for the CPV Sentinel Energy Project, to 

meet the CAA offset requirements.” Id. at 22,039. 

Third, Petitioners argued that the proposed SIP revision violates the “base 

year” requirement of 40 C.F.R. § 51.165(a)(3)(ii)(C)(1)(ii). See id. at 22,041-42. 

Petitioners stated that under the SCAQMD’s 2007 Air Quality Management Plan 

(“AQMP”), the applicable base year was 2002, and since the 2007 AQMP did not 

include emission reductions pre-dating 2002 in the emissions inventory, certain 

emission reductions listed in the AB 1318 Tracking System were not creditable as 

offsets. See id. In response, EPA also referenced the 2007 AQMP, noting the 2002 

baseline, but stating its belief that because SCAQMD adds a portion of pre-baseline 

emission reductions into the emissions inventory for each future year, SCAQMD 

complies with the “base year” requirement. See id. 

Regarding the alleged procedural violation of the APA, Petitioners highlighted 

the fact that supporting documentation provided by SCAQMD was not provided in 

the electronic docket or listed in the administrative index of materials accompanying

the proposed rule. See id. at 22,040. Petitioners argued that this failure, combined

with certain confusing language in the proposed rule, deprived the public of a 

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meaningful opportunity to review and comment on the proposed rule. See id. EPA 

rejected the allegation of procedural error, noting that the documentation was 

provided in the docket and was available at the hard copy location. See id. EPA also 

noted that the same records had previously been provided to Petitioner California 

Communities Against Toxics by SCAQMD before the proposed rule was published. 

See id.

EPA ultimately concluded that the SIP revision complied with all relevant CAA 

requirements, and it fully approved the SIP revision into the California SIP on April 

20, 2011. See id. at 22,043. Petitioners promptly filed this petition for review, and in 

their Corrected Opening Brief renewed their arguments that the SIP revision violates 

certain requirements set forth in 40 C.F.R. § 51.165(a)(3)(ii)(C)(1)(i)-(ii) with greater 

specificity, and also argued that the rulemaking violates the APA. EPA’s Response 

Brief is currently due September 23, 2011. 

ARGUMENT

A. Standard for Granting a Voluntary Remand.

“A reviewing court has inherent power to remand a matter to the 

administrative agency.” Loma Linda Univ. v. Schweiker, 705 F.2d 1123, 1127 (9th Cir. 

1983). “[I]t is generally accepted that in the absence of a specific statutory limitation, 

an administrative agency has the inherent authority to reconsider its decisions.” 

Macktal v. Chao, 286 F.3d 822, 825-26 (5th Cir. 2002); see also Trujillo v. Gen. Elec. Co., 

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621 F.2d 1084, 1086 (10th Cir. 1980) (noting that “the power to decide in the first 

instance carries with it the power to reconsider”). This authority includes the right to 

seek voluntary remand of a challenged agency decision, without confessing error. 

SKF USA Inc., v. United States, 254 F.3d 1022, 1029 (Fed. Cir. 2001). For example, the 

agency may seek remand because it wishes to reconsider its interpretation of the 

governing statute, the procedures it followed in reaching its decision, or the decision’s 

relationship to other agency policies. Id. “Where the agency has failed to consider 

important evidence, the proper course is to remand for reconsideration rather than 

[having the court] undertake its own inquiry into the merits.” Loma Linda Univ., 705 

F.2d at 1127. 

While the reviewing court has discretion over whether to remand, voluntary 

remand is appropriate where the request is reasonable and timely. Macktal, 286 F.3d 

at 826. “Administrative reconsideration is a more expeditious and efficient means of 

achieving adjustment of agency policy than is resort to the federal courts.” B.J. Alan 

Co., Inc. v. ICC, 897 F.2d 561, 562 n.1 (D.C. Cir. 1990) (quoting Commonwealth of 

Pennsylvania v. ICC, 590 F.2d 1187, 1194 (D.C. Cir. 1978)). As the Court of Appeals 

for the District of Columbia Circuit has stated, “[w]e commonly grant such motions, 

preferring to allow agencies to cure their own mistakes rather than wasting the courts’ 

and the parties’ resources reviewing a record that both sides acknowledge to be 

incorrect or incomplete.” Ethyl Corp. v. Browner, 989 F.2d 522, 524 (D.C. Cir. 1993); 

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see also Anchor Line Ltd. v. Fed. Maritime Comm’n, 299 F.2d 124, 125 (D.C. Cir. 1962) 

(“[W]hen an agency seeks to reconsider its action, it should move the court to remand 

or to hold the case in abeyance pending reconsideration by the agency”).

In determining whether to remand to the agency or to vacate the agency’s 

decision, the court considers “the seriousness of the . . . deficiencies (and thus the 

extent of doubt whether the agency chose correctly) 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); see also Cook Inletkeeper v. 

EPA, 400 F. App’x 239, 241 (9th Cir. 2010) (granting EPA’s motion for voluntary 

remand, leaving the disputed permit in place during remand to avoid the disruptive 

consequences that would flow from vacating the permit); W. Oil & Gas Assoc. v. EPA, 

633 F.2d 803, 813 (9th Cir. 1980) (remanding a procedurally flawed CAA rulemaking 

without vacatur in order to avoid possibility of unforeseen, undesirable 

consequences). 

Where the deficiency in the challenged agency action is one of inadequate 

explanation, and where there is the possibility that the agency may cure that deficiency 

and thus aid proper judicial review by offering additional explanation, past courts have 

ordered remand of the record to allow the agency time and opportunity to provide 

that better explanation, with the court retaining jurisdiction during the remand. See, 

e.g., Public Service Comm’n of Kentucky v. FERC, No. 03-1092, 2004 WL 222900 (D.C. 

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Cir. Jan. 21, 2004) (granting FERC’s motion to remand the record and hold the case 

in abeyance to “provide further explanation of the basis for its decision to use the 

midpoint approach in calculating” rates of return); OZ Technology Inc. v. EPA, 129 F.3d 

631, 634 (D.C. Cir. 1997) (noting prior order granting EPA’s request for remand of 

the record, and the Agency’s action during that remand to better address 

documentation that had been submitted to EPA); State of Ohio v. Dept. of Interior, 880 

F.2d 432, 438 (D.C. Cir. 1989) (remanding record to DOI for “clarification of its 

interpretation of its own regulations”). 

B. Remand of the Record to EPA is Appropriate in this Case. 

EPA asks the Court to remand the record to the Agency so that EPA may 

reconsider how the “surplus” and “quantifiable” requirements of 40 C.F.R. §

51.165(a)(3)(ii)(C)(1)(i) affect the emission reductions listed in the AB 1318 Tracking 

System, and whether its analysis of the “base year” requirement of 40 C.F.R. § 

51.165(a)(3)(ii)(C)(1)(ii) is premised on a flawed interpretation of the regulation. In 

accordance with the cases noted above, EPA also requests that the case be held in 

abeyance pending reconsideration by EPA. 

In relation to the regulatory requirement that emission reductions must be 

“surplus” to be creditable as offsets, Petitioners’ Corrected Opening Brief for the first 

time pointed to two SCAQMD Rules that they argue require reductions in PM10 and 

SOXand that thus would render at least some emission reductions “non-surplus”: 

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Rule 1156 and Rule 1157. Pet’rs’ Br. at 21-22. After further review, EPA now 

believes that SCAQMD Rule 1157, and possibly another SCAQMD Rule not cited by 

Petitioners in their comments or Corrected Opening Brief, apply to some of the 

emission reductions listed in the AB 1318 Tracking System. This is contrary to EPA’s 

statement in the Final Rule that “[SCAQMD] has not promulgated new rules or 

standards that would apply to these types of sources, and thus no adjustments to the 

credits were required.” 76 Fed. Reg. at 22,041. To correct this likely error, EPA 

intends to solicit additional information from SCAQMD regarding new rules and 

standards that apply to the emission reductions listed in the AB 1318 Tracking 

System. With this additional information, EPA will be able to consider what quantity 

of emissions reductions, if any, should be removed from the credits listed in the AB 

1318 Tracking System because they are not surplus as required by 40 C.F.R. § 

51.165(a)(3)(ii)(C)(1)(i). EPA believes that the “non-surplus” number of emission 

reductions listed in the AB 1318 Tracking System is relatively small and that the total 

amount of emission reduction credits in the AB 1318 Tracking System will continue 

to exceed the amount required for the CPV Sentinel Energy Project. 

EPA also wishes to address on remand of the record which of the emission 

reductions listed in the AB 1318 Tracking System satisfy the “quantifiable” 

requirement. As noted above, Petitioners did not identify any particular emission 

reductions as non-quantifiable in their comments to the Agency, and EPA’s response 

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to the comments likewise spoke in generalities, merely stating that the AB 1318 

Tracking System contains “sufficient” credits. Petitioners subsequently identify in 

their Corrected Opening Brief one source for which the emission reductions are not 

quantifiable, and additionally, argue that the SCAQMD supporting documentation is 

insufficient for 69 additional pieces of equipment. See Pet’rs’ Br. at 22-26. EPA 

concedes that some of the emission reductions referenced by Petitioners are not 

quantifiable, but disagrees with the scope of Petitioners’ assertions. The Agency

recognizes that the reasoning in the AB 1318 Rule on this issue should have been 

more complete, specifically in terms of identifying which emission reductions it

verified as “quantifiable.” On remand of the record, EPA would intend to specifically 

identify those emission reductions that can be verified as quantifiable and those that

cannot, and explain the basis for its conclusions.

Finally, EPA intends to reconsider its discussion of the “base year” 

requirement of 40 C.F.R. § 51.165(a)(3)(ii)(C)(1)(ii). Petitioners presumed in both 

their comments and in the Corrected Opening Brief that the base year should be 

assessed in relation to the 2002 baseline set forth in the 2007 AQMP. See 76 Fed. 

Reg. at 22,042 and Pet’rs’ Br. at 26-28. EPA, likewise, presumed that the 2007 AQMP 

was the appropriate attainment demonstration to consider in assessing the base year 

when it issued the Final Rule. EPA is now, however, reevaluating this assumption in 

light of the fact that the 2007 AQMP has not been approved by EPA as a SIP 

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requirement. As discussed above, the Court of Appeals for the District of Columbia 

Circuit in NRDC v. EPA recently held that the elimination of the “fully-approved SIP 

requirement” from the federal offset requirements was arbitrary and capricious. 571 

F.3d at 1267. EPA now believes the better interpretation of 40 C.F.R. §

51.165(a)(3)(ii)(C)(ii) is that the base year should be evaluated by reference to the base 

year used in the most recently approved attainment demonstration. The most 

recently approved attainment demonstration for PM10 for this area was submitted in 

2003 and approved by EPA in 2005. See Approval and Promulgation of [SIPs] for Air 

Quality Planning Purposes; Cal.—South Coast and Coachella, 70 Fed. Reg. 69,081 (Nov. 14, 

2005). The base year in the 2003 AQMP is 1997, which would affect the Agency’s 

ultimate conclusion of whether certain emission reductions listed in the AB 1318 

Tracking System are pre-base year emission reductions, as required by EPA’s offset 

regulations. EPA believes that establishing the appropriate attainment demonstration 

to be used in determining the correct base year is a significant matter, and thus, 

should be remanded for reconsideration to the Agency. On remand of the record, 

EPA thus intends to provide additional notice and seek comments on this specific 

issue. 

EPA notes that Petitioners also assert that SCAQMD’s internal bank has a 

negative balance. This argument does not relate to the federal offset requirements 

that EPA wishes to address on reconsideration, and EPA continues to disagree with 

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this contention for the reasons set forth in the Final Rule. Though EPA does not 

intend to address this issue during remand, this argument should not be treated as a 

severable claim since it does not relate to an independent portion of the AB 1318

Rule. Accordingly, EPA requests a full remand of the record for EPA’s decision to 

approve the AB 1318 Rule while the Court holds the case in abeyance. EPA requests 

that the Court vacate the current briefing schedule, stay the proceedings, and direct 

the parties to propose a new briefing schedule when EPA has completed its 

proceedings on remand of the record. 

If remand of the record is granted, EPA intends to act with all due speed to 

propose, take comment on, and take final action concerning the AB 1318 Rule. 

During the remand, EPA intends to re-open the comment period for an additional 30 

days. Petitioners will have the opportunity to provide for the record specific data in 

support of their contentions that the emission reductions listed in the rule do not 

meet the offset requirements set forth at 40 C.F.R. § 51.165(a)(3)(ii)(C)(1)(i)-(ii), along 

with any other information that Petitioners desire to provide on this issue. EPA will 

then be able to fairly evaluate Petitioners’ comments, any additional public comments, 

and other, additional information relevant to this issue in its final decision, resulting in 

a more constructive and effective agency review. While EPA has identified the three 

specific areas described above that it wishes to address on remand of the record, the 

Agency may reconsider other issues discussed in AB 1318 Rule if it deems 

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reconsideration warranted. Judicial review can then go forward on a more fully 

developed record. 

The timing of this remand request is reasonable. EPA does not anticipate any 

unnecessary disruption or prejudice to any party resulting from this remand, as the 

CPV Sentinel facility at issue in this case is still under construction and has not yet 

begun operation. Moreover, remand at this juncture will serve the interests of judicial 

economy because the issues that Petitioners have raised in this litigation may become 

moot or significantly narrowed upon remand. 

Finally, EPA and Intervenors agree that the Court may order the requested 

record remand, rather than vacating EPA’s action. Based on the information 

currently available to the Agency, EPA continues to believe that a sufficient number 

of the credits listed in the AB 1318 Tracking System satisfy the federal offset 

requirements to meet the requirements of the CPV Sentinel Energy Project. EPA 

does not currently anticipate that Petitioners or other members of the public will 

submit any information that would cause EPA to reverse its approval of the SIP 

revision. The remand will not change the current level of regulation and will not 

prejudice Petitioners or any other person. See A.L. Pharma, Inc. v. Shalala, 62 F.3d 

1484, 1492 (D.C. Cir. 1995) (remand without vacatur is appropriate where no 

significant harm would result from allowing the decision to remain in effect).

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For the reasons set forth above, EPA seeks a voluntary remand of the record 

so that it may provide a more complete description of how the emission reduction 

credits listed for transfer to the AB 1318 Tracking System do or do not meet 

regulatory requirements, and correct the reasoning in the Final Rule. This request is 

reasonable and should be granted, and this case should be held in abeyance pending 

EPA’s completion of proceedings on remand of the record. Pursuant to Circuit Rule 

27-11, the briefing schedule should be stayed pending the Court’s disposition of this 

motion.

Respectfully Submitted, 

IGNACIA S. MORENO

Assistant Attorney General

Environment and Natural Resources Division

Dated: September 14, 2011 s/ Amy J. Dona 

AMY J. DONA

United States Department of Justice

Environmental Defense Section

P.O. Box 23986

Washington, D.C. 20026-3986

Tel: (202) 514-0223

Fax: (202) 514-8865

amy.dona@usdoj.gov

Attorneys for Respondents

Case: 11-71127 09/14/2011 ID: 7892873 DktEntry: 28-1 Page: 21 of 21