IN THE UNITED STATES COURT OF APPEALS 

FOR THE NINTH CIRCUIT

Case Nos. 14-73368, 14-73384, 14-73386, 14-73394

STATE OF ARIZONA, ex rel. Henry Darwin, Director, Arizona Department 

of Environmental Quality, et al., 

Petitioners,

v.

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY and 

GINA MCCARTHY, Administrator, United States Environmental Protection 

Agency,

Respondents.

ON PETITION FOR REVIEW OF FINAL AGENCY ACTION OF THE 

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

PETITIONER PHOENIX CEMENT COMPANY’S 

FINAL OPENING BRIEF

GEORGE A. TSIOLIS

ATTORNEY AT LAW

351 Lydecker Street

Englewood, N.J. 07631

(201) 408-4256 (phone)

(201) 408-4622 (facsimile)

gtsiolis@nj.rr.com

MARK W. DELAQUIL

ANDREW M. GROSSMAN

BAKER & HOSTETLER LLP

Washington Square, Suite 1100

1050 Connecticut Avenue, N.W.

Washington, D.C. 20036

(202) 861-1527 (phone)

(202) 861-1783 (facsimile)

mdelaquil@bakerlaw.com

Counsel for Petitioner Phoenix Cement 

Company

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RULE 26.1 DISCLOSURE STATEMENT

Petitioner Phoenix Cement Company (“PCC”) is a division of the Salt 

River Pima-Maricopa Indian Community (“SRPMIC”), a federally recognized 

Indian Tribe. PCC was created under tribal law in 1994 to engage in the 

business of manufacturing cement “to promote the economic self-sufficiency 

of the SRPMIC so as to enable the Community to survive and prosper as an 

independent Indian Community by earning profits to sustain the Community’s 

necessary governmental programs.” See SRO-172-94. PCC has no parent 

company, subsidiary, or affiliate that has issued shares or debt securities to the 

public.

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TABLE OF CONTENTS

Page

RULE 26.1 DISCLOSURE STATEMENT.............................................................. i

TABLE OF CONTENTS...........................................................................................ii

TABLE OF AUTHORITIES....................................................................................iv

GLOSSARY..................................................................................................................vi

I. INTRODUCTION...........................................................................................1

II. JURISDICTIONAL STATEMENT .............................................................2

III. STATEMENT OF ISSUES ............................................................................3

IV. STATEMENT OF THE CASE.....................................................................3

A. Phoenix Cement Company ..............................................................................3

B. The Clean Air Act Visibility Program.............................................................4

C. Arizona’s Visibility Protection SIP .................................................................5

D. EPA’s Federal Plan for Visibility Protection.................................................6

E. Phoenix Cement Company Petitions for Review.......................................11

F. Phoenix Cement Company Petitions for Administrative Reconsideration 

and Stay .............................................................................................................12

V. SUMMARY OF ARGUMENT....................................................................14

VI. STANDARD OF REVIEW..........................................................................16

VII. ARGUMENT ..................................................................................................17

A. The Demonstration Project Is Arbitrary and Capricious Because It Was 

Enacted Without Adequate Notice...............................................................17

B. The Demonstration Project Is Arbitrary and Capricious Because EPA 

Failed To Provide a Reasoned Basis for It ..................................................22

VIII. CONCLUSION...............................................................................................24

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STATEMENT OF RELATED CASES .................................................................26

CERTIFICATE OF COMPLIANCE.....................................................................27

CERTIFICATE OF SERVICE................................................................................28

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TABLE OF AUTHORITIES

Page(s)

CASES

Appalachian Power Co. v. EPA, 135 F.3d 791 (D.C. Cir. 1998) ..............................22

Environmental Defense Center, Inc. v. EPA, 344 F.3d 832 (9th Cir. 2003) ...............17

Environmental Integrity Project v. EPA, 425 F.3d 992 (D.C. Cir. 2005)............. 17, 18

Ethyl Corp. v. EPA, 51 F.3d 1053 (D.C. Cir. 1995).................................................16

Fertilizer Institute v. EPA, 935 F.2d 1303 (D.C. Cir. 1991) .....................................21

Motor Vehicles Manufacturers Association v. State Farm Mutual 

Automobile Insurance Co., 463 U.S. 29 (1983)..........................................17, 23, 24

National Black Media Coalition v. FCC, 791 F.2d 1016 (2d Cir. 1986) ...................21

NLRB v. Wyman-Gordon Co., 394 U.S. 759 (1969) ....................................................1

NRDC v. Browner, 57 F.3d 1122 (D.C. Cir. 1995).....................................................4

NRDC v. EPA, 279 F.3d 1180 (9th Cir. 2002).......................................................18

Small Refiner Lead Phase-Down Task Force v. EPA, 

705 F.2d 506 (D.C. Cir. 1983) ...................................................................... 17, 21

STATUTES

5 U.S.C. § 706 ...............................................................................................................16

42 U.S.C. § 7410.....................................................................................................passim

42 U.S.C. § 7491.....................................................................................................passim

42 U.S.C. § 7492 ............................................................................................................4

42 U.S.C. § 7607.....................................................................................................passim

OTHER AUTHORITIES

40 C.F.R. § 51.308 .................................................................................................passim

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40 C.F.R. § 52.145 .................................................................................................passim

79 Fed. Reg. 9318 (Feb. 18, 2014) ..........................................................................6, 7

79 Fed. Reg. 52,420 (Sept. 3, 2014) ....................................................................passim

79 Fed. Reg. 56,322 (Sept. 19, 2014) ........................................................................14

Attorney General’s Committee on Administrative Procedure, 

Final Report (1941)..................................................................................................1

Comments of Phoenix Cement Company (Mar. 31, 2014), 

EPA-R09-OAR-2013-0588-0021..........................................................................8

Consent Decree, United States v. Ash Grove Cement Co., No. 13-2299 

(D. Kan. entered Aug. 14, 2013) .........................................................................11

Consent Decree, United States v. CalPortland Co., No. 11-2064 

(E.D. Cal. entered Feb. 8, 2012)..........................................................................11

EarthJustice Comments (Mar. 31, 2014), 

EPA-R09-OAR-2013-0588-0015....................................................................8, 21

Letter from Jared Blumenfeld, Regional Administrator, EPA Region IX, to 

Verle C. Martz, Phoenix Cement Company (Jan. 16, 2015) .......................3, 13

Letter Petition to Administrator McCarthy (Nov. 3, 2014)....................................2

Technical Support Document (Jan. 27, 2013), 

EPA-R09-OAR-2013-0588-0009..........................................................................7

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GLOSSARY

ADEQ Arizona Department of Environmental Quality

CAA Clean Air Act

CalPortland CalPortland Company

PCC Phoenix Cement Company

SNCR Selective Non-Catalytic Reduction Technology

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I. INTRODUCTION

Public participation “in the rule-making process is essential in order to 

permit administrative agencies to inform themselves and to afford adequate 

safeguards to private interests.” Attorney General’s Committee on 

Administrative Procedure, Final Report at 103 (1941); see also NLRB v. WymanGordon Co., 394 U.S. 759, 777-78 (1969) (Douglas, J., dissenting). Affording an 

adequate opportunity for public participation is particularly critical where an 

agency considers technical regulations that command the way in which 

individual regulated entities must design and operate their facilities, as no one 

knows those facilities’ operations better than their owners and operators.

In this case, EPA violated Phoenix Cement Company’s and the public’s 

right to comment when its federal plan for making reasonable progress toward 

the goal of achieving natural visibility in certain federal parks and wilderness 

areas in the State of Arizona included a “Demonstration Project” that was 

entirely absent from EPA’s regulatory proposal. This Project is “not typically 

required as part of a regional haze plan,” see 79 Fed. Reg. at 52,456/1, and was 

taken almost verbatim from consent decrees that EPA entered into to settle 

claims against cement manufacturers that were alleged to have violated the 

Clean Air Act.

In imposing the Demonstration Project, EPA failed to consider such 

fundamental questions as whether the Demonstration Project comports with 

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the statutory provisions of the Act’s visibility protection program and whether 

the Project is justified under the Agency’s implementing regulations. These 

deficiencies demonstrate how the lack of appropriate notice impairs the quality 

of agency decisionmaking and renders EPA’s decision to include the 

Demonstration Project arbitrary and capricious.

For these reasons and those discussed below, the Court should vindicate 

Phoenix Cement Company’s and the public’s interest in administrative 

regularity by partially vacating the rule under review to remove the 

Demonstration Project.

II. JURISDICTIONAL STATEMENT

The Court has jurisdiction over this petition for review of the final rule, 

Promulgation of Air Quality Implementation Plans; Arizona; Regional Haze and Interstate 

Visibility Transport Federal Implementation Plan; Final Rule, 79 Fed. Reg. 52,420 

(Sept. 3, 2014), J.A. 00315, because it was filed within the sixty-day 

jurisdictional period set forth in Clean Air Act § 307(b)(1), 42 U.S.C. 

§ 7607(b)(1). Venue is appropriate because the rule under review is the 

promulgation of an “implementation plan under section 7410 of this title” for 

the State of Arizona, which is located in this Circuit. CAA § 307(b)(1), 42 

U.S.C. § 7607(b)(1).

Although Phoenix Cement Company has filed a petition for 

administrative reconsideration, Letter Petition to Administrator McCarthy 

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(Nov. 3, 2014), J.A. 02039, and EPA has notified Phoenix Cement Company 

that it is reconsidering the Demonstration Project, Letter from Jared 

Blumenfeld, Regional Administrator, EPA Region IX, to Verle C. Martz, 

Phoenix Cement Company (Jan. 16, 2015), J.A. 02082, neither the filing of a 

petition for reconsideration, CAA § 307(b)(1), 42 U.S.C. § 7607(b)(1), nor 

EPA’s grant of reconsideration, CAA § 307(d)(7)(B), 42 U.S.C. § 7607(d)(7)(B), 

postpones the effectiveness of the rule or otherwise renders the rule non-final 

for purposes of judicial review.

III. STATEMENT OF ISSUES

1. Whether EPA’s decision to impose the Demonstration Project on 

Phoenix Cement Company is arbitrary and capricious because EPA provided 

no notice of the Project in its regulatory proposal?

2. Whether EPA’s decision to impose the Demonstration Project on 

Phoenix Cement Company is arbitrary and capricious because EPA failed to 

explain how the Project is consistent with the Act and justified under its 

regulations?

IV. STATEMENT OF THE CASE

A. Phoenix Cement Company

Phoenix Cement Company is an enterprise division of the Salt River 

Pima-Maricopa Indian Community. In order to raise revenues for the 

Community, Phoenix Cement Company operates a portland cement plant, the 

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Phoenix Cement Plant, near Clarkdale, Arizona. The Phoenix Cement Plant is 

located approximately nine kilometers south of the Sycamore Canyon 

Wilderness Area. The Phoenix Cement Plant’s operations are regulated by a 

comprehensive air permit that includes facility-wide limits on nitrogen oxides, 

or NOx, emissions,1as well as applicable new source performance standards 

and air toxics standards.

B. The Clean Air Act Visibility Program

The Clean Air Act “establishes a partnership between EPA and the 

states for the attainment and maintenance of national air quality goals.” NRDC 

v. Browner, 57 F.3d 1122, 1123 (D.C. Cir. 1995). Among the Clean Air Act’s 

programs is the visibility program, see CAA §§ 169A-169B, 42 U.S.C. §§ 7491-

7492, which “declares as a national goal the prevention of any future, and the 

remedying of any existing, impairment of visibility in [certain national parks and 

wilderness areas] which impairment results from manmade air pollution.” 

CAA § 169A(a)(1), 42 U.S.C. § 7491(a)(1).

In the visibility program, Congress gave states the authority to devise “a 

long-term . . . strategy for making reasonable progress towards meeting the 

 

1 Nitrogen oxides are a class of chemical compounds that can impair visibility. 

Certain nitrogen oxide particles, notably nitrate, affect visibility by absorbing 

and scattering light.

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national [visibility] goal,” CAA § 169A(b)(2)(B), 42 U.S.C. § 7491(b)(2)(B). In 

so doing, the state must consider four factors in an analysis that is often called 

the four-factor test: “[1] the costs of compliance, [2] the time necessary for 

compliance, and [3] the energy and nonair quality environmental impacts of 

compliance, and [4] the remaining useful life of any existing source subject to 

such requirements.” CAA § 169A(g)(1), 42 U.S.C. § 7491(g)(1); see also 40 

C.F.R. § 51.308(d)(1)(i)(A).

EPA may promulgate a federal plan only if it disapproves a state 

visibility plan for failing to meet the requirements of the Act or if a state fails to 

make a required visibility plan submission. See CAA § 110, 42 U.S.C. § 7410.

C. Arizona’s Visibility Protection SIP

Over the last decade, EPA and Arizona have had an ongoing dispute 

about how best to address visibility issues in the state. Because emissions from 

the Phoenix Cement Plant were found not to appreciably diminish or impair 

visibility in a national park or wilderness area, Arizona determined that it was 

not necessary for the Company to take any action regarding visibility in the 

State’s visibility improvement plan submissions. In its final submission, 

Arizona determined that, with respect to the factors listed at CAA § 169A(g)(1) 

and 40 C.F.R. § 51.308(d)(1)(i)(A), it was not reasonable to require PCC to 

implement emission controls. EPA disapproved that determination, which is 

the subject of Phoenix Cement Company’s challenge in Phoenix Cement Company 

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v. EPA, No. 13-73383, with oral argument set for March 9, 2015. If Phoenix 

Cement Company prevails in that action, the Court’s decision should render 

the federal plan void and moot this case.

D. EPA’s Federal Plan for Visibility Protection

Proposed Rule. After partially disapproving Arizona’s state plan, 

including its determination for the Phoenix Cement Plant, EPA proceeded to 

propose a federal plan to address visibility impairment pursuant to Clean Air 

Act § 110(c), 42 U.S.C. § 7410(c). For the Phoenix Cement Plant, EPA 

conducted an analysis that considered whether several control options 

(including selective catalytic reduction, mixing air technology, mid-kiln firing, 

low NOx precalciner or calciners, and low NOx burners) would be “reasonable” 

under the criteria of CAA § 169A(g)(1) and 40 C.F.R. § 51.308(d)(1)(i)(A).

The product of EPA’s analysis was its proposal that Phoenix Cement 

Company must meet a nitrogen oxides, or NOx, emission limit of 2.12 pounds 

of NOx per ton of clinker produced, based on a rolling 30-kiln operating day 

basis. See 79 Fed. Reg. at 9372/1. EPA proposed this limit because it was 

“equivalent” to the application of selective non-catalytic reduction control 

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technology, or SNCR,2 at the Phoenix Cement Plant. Id. at 9354/1. In its 

supporting technical materials, EPA explained that the 2.12 limit was derived 

from its assumption that the selective non-catalytic reduction control device 

would operate at 50% control efficiency, which was the highest efficiency 

achieved by similar devices at four comparable cement kilns in the United 

States. Technical Support Document at 107 & Table IV.C-6 (Jan. 27, 2013), 

EPA-R09-OAR-2013-0588-0009, J.A. 00197.

The federal plan proposal did not indicate that EPA was considering a 

demonstration project, or any similar mechanism, for the Phoenix Cement 

Plant or any other source that EPA proposed to regulate.

Comments on the Proposed Rule. In response to EPA’s proposed 

federal plan, Phoenix Cement Company submitted timely comments. Phoenix 

Cement Company did not comment on the possibility that EPA would turn the 

Phoenix Cement Plant into a demonstration project because EPA did not 

include any notice that it was considering a demonstration project in the 

proposal. As it pertains to the 2.12 lb/ton NOxemission limit, Phoenix 

 

2

Selective non-catalytic reduction technology introduces ammonia into the 

exhaust stream for a cement kiln. The reaction between the exhaust gas and 

the ammonia reduces the amount of nitrogen oxides that are released to the 

atmosphere.

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Cement Company supported EPA’s proposal, acknowledging that the 

“methodology” that EPA followed in arriving at the limit is “based on 

empirical data and is not inconsistent with the balance of the EPA’s cost of 

compliance analysis.” Comments of Phoenix Cement Company at 7 (Mar. 31, 

2014), EPA-R09-OAR-2013-0588-0021, J.A. 01911.

The only other comments that are relevant to Phoenix Cement 

Company’s claims are those submitted by EarthJustice on behalf of several 

advocacy groups. EarthJustice did not urge EPA to include a demonstration 

project or any of its component requirements. Instead, based on several 

demonstration projects located outside the United States, EarthJustice argued 

that EPA’s control efficiency estimates for SNCR were too low. EarthJustice 

Comments at 18 (Mar. 31, 2014), EPA-R09-OAR-2013-0588-0015, J.A. 01874. 

EarthJustice therefore requested that “EPA . . . reconsider its conclusion that 

50% SNCR control is appropriate for precalciner kilns,” and urged “EPA to 

fully explore higher SNCR efficiencies” at PCC. Id. at 19.

Federal Plan. EPA issued its final federal plan, the rule under review, on 

September 3, 2014. In the plan, EPA took two actions that are relevant to 

Phoenix Cement Company’s claims.

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First, EPA retained the 2.12 lbs/ton NOxemission limitation.3 In 

response to comments by EarthJustice arguing that “SNCR can reach higher 

control efficiencies for NOxthan the 50 percent control efficiency assumed by 

EPA,” the Agency explained that in “developing the SNCR control efficiency 

used in our analysis, we examined the most stringent level of control attributed 

to SNCR at other similar facilities (as a retrofit on preheater/precalciner kilns) 

in other regulatory actions.” 79 Fed. Reg. at 52,455/2-3. This analysis 

indicated that the required “50 percent control efficiency is the most stringent 

SNCR control efficiency that has been applied . . . in other actions.” Id. at 

52,455/3. For that reason, EPA rejected EarthJustice’s proffered control 

technology examples and “used a 50 percent control efficiency as the basis for 

cost and emission calculations for the Clarkdale Plant.” Id.

Second, EPA imposed “a series of control technology demonstration 

requirements” that it has called the “Demonstration Project” on the Phoenix 

Cement Plant. Id. EPA acknowledged that “this type of control technology 

 

3 The final rule also allowed Phoenix Cement Company the option of 

complying with an alternative means of compliance in the form of an annual 

NOxemissions cap. See 79 Fed. Reg. at 52,486/1 (codified at 40 C.F.R. 

§ 52.145(k)(4)). Phoenix Cement Company intends to comply through the 2.12 

lbs/ton limit, not the annual cap. See Martz Declaration, attached as Exhibit A 

to PCC’s Motion To Supplement Record, filed separately.

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demonstration is not typically required as part of a regional haze plan,” but 

argued that it was “appropriate here, given the significant variability in control 

efficiencies achievable with SNCR at cement kilns.” Id. at 52,456/1.

The requirements of the Demonstration Project are set forth at 40 CFR 

§ 52.145(k)(3), (6) and in 40 C.F.R. § 52.145 Appendix A. The Demonstration 

Project establishes design criteria for an ammonia-injection system that may 

exceed the requirements necessary to meet the 2.12 lbs/ton NOxemission 

limit, requires that PCC vary its operating parameters to essentially act as a 

laboratory facility for at least 165 days before installation of SNCR and 270 

days after installation of SNCR, and requires that the owner propose a 30-day 

kiln operating limit according to a specific statistical equation for EPA’s 

consideration in a separate rulemaking. 79 Fed. Reg. at 52,495/1-52,496/1.

EPA did not attempt to relate the Demonstration Project to any material 

included in its regulatory proposal. Similarly, EPA did not explain how 

imposition of the Demonstration Project was part of a strategy for improving 

visibility in any areas protected by Clean Air Act § 169A; whether imposition of 

the Demonstration Project was “reasonable” within the meaning of Clean Air 

Act § 169A(b)(2)(B), 42 U.S.C. § 7491(b)(2)(B), or its implementing regulations 

at 40 C.F.R. § 51.308(d); or how the Demonstration Project derived from a 

consideration of the four factors specified at 40 C.F.R. § 51.308(d)(1)(i)(A). 

Instead, EPA stated that the Demonstration Project was promulgated “in 

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response to concerns raised by Earthjustice and in order to ensure that 

performance of the SNCR system installed at the Clarkdale Plan is optimized.” 

79 Fed. Reg. at 52,455/3.

It was not, however, a mystery where EPA obtained the prescriptive 

requirements of the Demonstration Project. Although the federal plan did not 

explain its origin, it is a matter of public record that numerous consent decrees 

that EPA has entered into to settle claims against cement manufacturers that 

the Agency alleges have violated the Clean Air Act contain nearly identical 

provisions. See, e.g., Consent Decree Appendix A, United States v. Ash Grove 

Cement Co., No. 13-2299 (D. Kan. entered Aug. 14, 2013); Consent Decree 

Exhibit A, United States v. CalPortland Co., No. 11-2064 (E.D. Cal. entered Feb. 

8, 2012).4

E. Phoenix Cement Company Petitions for Review 

Phoenix Cement Company filed a timely petition for review of the 

federal plan on November 3, 2014. See Phoenix Cement Co. v. EPA, No. 14-

73386 (9th Cir.), J.A. 02034. Upon motion by EPA, to which Phoenix Cement 

Company consented, the Court consolidated Phoenix Cement Company’s 

 

4 EPA’s federal plan likewise imposed demonstration project requirements on a 

cement kiln owned by CalPortland and a lime plant.

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challenge with those brought by the State of Arizona, CalPortland Company, 

and Asarco LLC. See Order of December 11, 2014 [#9346656], J.A. 02080.

F. Phoenix Cement Company Petitions for Administrative 

Reconsideration and Stay

Phoenix Cement Company filed a timely petition for administrative 

reconsideration and stay on November 3, 2014. Phoenix Cement Company did 

not request that EPA reconsider the federal plan in its entirety or that it 

reconsider the 2.12 lbs/ton NOxemission limit applicable to Phoenix Cement 

Company. Instead, Phoenix Cement Company requested that EPA reconsider 

the Demonstration Project set forth at 40 C.F.R. § 52.145(k)(3), (6) and 40 

C.F.R. § 52.145 Appendix A for five reasons.

First, EPA provided no notice and no opportunity for comment because 

its regulatory proposal did not indicate that EPA was considering the 

Demonstration Project and because the protocol is not the logical outgrowth 

of the regulatory proposal.

Second, the Demonstration Project is contrary to EPA’s statutory 

authority under Clean Air Act § 110(c), 42 U.S.C. § 7410(c), governing the 

issuance of federal plans, and Clean Air Act § 169A, 42 U.S.C. § 7491, 

governing the visibility protection program.

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Third, EPA failed to comply with its own regulations by not considering 

whether the Demonstration Project was “reasonable” under the four criteria set 

forth at CAA § 169A and 40 C.F.R. § 51.308(d)(1)(i)(A).

Fourth, the Demonstration Project is technically inappropriate for the 

Phoenix Cement Plant and could damage the quality of cement produced at the 

facility.

Fifth, EPA imposed the Demonstration Project without following 

appropriate tribal consultation requirements.

On January 16, 2015, EPA issued a letter to Phoenix Cement Company 

stating that “[i]n response to your petition, EPA is granting reconsideration of 

the optimization requirements for the Phoenix Cement Plant.” Letter from 

Jared Blumenfeld, Regional Administrator, EPA Region IX, to Verle C. Martz, 

Phoenix Cement Company (Jan. 16, 2015), J.A. 02082. EPA did not act on 

Phoenix Cement Company’s stay request. See id.

As of the date of the filing of this brief, EPA has not published a notice 

in the Federal Register commencing reconsideration proceedings. In a recent 

situation where EPA granted reconsideration of its action disapproving 

Arizona’s visibility plan and instituted a replacement federal plan, 

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reconsideration proceedings have remained pending for years following the 

grant of reconsideration.5

V. SUMMARY OF ARGUMENT

EPA’s decision to include the Demonstration Project in its federal plan 

is arbitrary and capricious because it was made without adequate notice and 

without adequate explanation. Clean Air Act § 307(d), the statutory provision 

governing EPA’s actions, was intended to heighten the public’s ability to 

participate in EPA rulemakings. But EPA provided no notice of the 

Demonstration Project in its regulatory proposal, instead taking it directly from 

consent decrees that the Agency entered into with parties that were alleged to 

have violated the Clean Air Act. EPA’s decision to impose the Demonstration 

Project is unlawful and is inconsistent with fundamental values of openness 

and public participation that legitimize agency rulemaking.

 

5

In the case of the Apache Generating Station, for example, EPA disapproved 

the relevant state visibility plan in December 2012. Apache’s owner petitioned 

for reconsideration in February and May 2013, and its petition was granted in 

June 2013. See Approval and Promulgation of Air Quality Implementation Plans; 

Arizona; Regional Haze State and Federal Implementation Plans; Reconsideration, 79 

Fed. Reg. 56,322, 5,324/3-56,325/1 (Sept. 19, 2014). EPA proposed a rule to 

resolve the reconsideration petition and a subsequent state plan submission in 

September 2014, but that rule has not been finalized as of the filing of this 

brief.

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Additionally, EPA’s decision to impose the Demonstration Project is 

arbitrary and capricious. The inevitable product of inadequate notice is 

inadequate decisionmaking. This includes EPA’s failure to explain how the 

Demonstration Project was “reasonable” within the meaning of EPA’s 

regulations or based on a consideration of the four relevant factors. It also 

includes EPA’s failure to identify its purported statutory authority to require 

design and operational measures that are not related to visibility improvement, 

but that instead essentially require PCC to operate its facility as a laboratory for 

EPA’s further regulatory consideration. Thus, this provision was not only 

promulgated without notice, but is also unlawful.

EPA’s failure to proceed in a procedurally regular manner has real-world 

consequences. The Demonstration Project imposes burdensome substantive 

obligations that affect the design of pollution control devices and regulate the 

manner in which Phoenix Cement Company must operate its kiln. Phoenix 

Cement Company operates the Phoenix Cement Plant for the benefit of the 

members of the Salt River Pima-Maricopa Indian Community, its sole owner. 

EPA’s decision to impose the Demonstration Project on Phoenix Cement 

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Company directly imposes costs on the company that reduce the amount of 

revenue that it can return to the Community.

The Court should vacate the federal plan in part to eliminate the 

Demonstration Project.6

VI. STANDARD OF REVIEW

EPA’s action promulgating a federal implementation plan under Clean 

Air Act § 110(c), 42 U.S.C. § 7410(c), is governed by the rulemaking 

requirements of Clean Air Act § 307(d), 42 U.S.C. § 7607(d). See CAA 

§ 307(d)(1)(B), 42 U.S.C. § 7607(d)(7)(B). It is subject to review under the legal 

standards of Section 307(d)(9), including the standard proscribing agency action 

that is arbitrary, capricious, an abuse of discretion, or contrary to law.

Review under the CAA’s “arbitrary and capricious” standard is the same 

as under the Administrative Procedure Act. 5 U.S.C. § 706(2)(A); Ethyl Corp. v. 

EPA, 51 F.3d 1053, 1064 (D.C. Cir. 1995). The Court ensures that EPA has 

“examine[d] the relevant data and articulate[d] a satisfactory explanation,” that 

EPA’s “decision was based on a consideration of the relevant factors,” and that 

 

6 To avoid duplication, Phoenix Cement Company joins the State of Arizona’s 

and CalPortland’s arguments why EPA’s reasonable progress federal plan is 

arbitrary and capricious and is contrary to law.

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EPA has made no “clear error of judgment.” Motor Vehicle Mfrs. Ass’n v. State 

Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983) (quotations omitted).

VII. ARGUMENT

A. The Demonstration Project Is Arbitrary and Capricious Because It 

Was Enacted Without Adequate Notice

Public participation is the backbone of Clean Air Act rulemaking. 

Section 307(d), the rulemaking provision that governs EPA’s actions in 

promulgating a federal plan, ensures that EPA provides a full and fair 

opportunity for public participation by mandating meaningful notice-andcomment rulemaking procedures. Compared to the rulemaking requirements 

of the Administrative Procedure Act, “Congress intended agency notice under 

the Clean Air Act to be more, not less, extensive than under the APA.” See, e.g., 

Small Refiner Lead Phase-Down Task Force v. EPA, 705 F.2d 506, 518-19, 550 

(D.C. Cir. 1983). In so doing, Congress intended to “assure the opportunity 

for more extensive public participation in the rulemaking process.” Id. at 550 

(quotation omitted).

Accordingly, while a final rule may differ from a proposed rule, it must 

be the “logical outgrowth” of the proposal. See Envtl. Integrity Project v. EPA, 

425 F.3d 992, 996 (D.C. Cir. 2005); see also Envtl. Defense Ctr., Inc. v. EPA, 344 

F.3d 832, 877-78 (9th Cir. 2003). In contrast, “[a] decision made without 

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adequate notice and comment is arbitrary or an abuse of discretion.” NRDC v. 

EPA, 279 F.3d 1180, 1186 (9th Cir. 2002) (emphasis added).

In this case, the Demonstration Project that EPA included in its federal 

plan for Phoenix Cement Company was not the logical outgrowth of its 

regulatory proposal. The “logical outgrowth doctrine does not extend to a final 

rule that finds no roots in the agency’s proposal because [s]omething is not a 

logical outgrowth of nothing.” Envtl. Integrity Project, 425 F.3d at 996 (alteration 

in original) (quotations omitted). EPA never gave notice that it was 

considering turning the Phoenix Cement Plant into a Demonstration Project, a 

substantive regulatory requirement that includes, among other things:

a. Design requirements for Phoenix Cement Company’s selective 

non-catalytic reduction system that mandate that the system 

deliver ammonia to exhaust gases at a molar ratio of 1.2:1;

b. Submission requirements for multiple reports to EPA on design 

and optimization activities over the course of several years;

c. Permit application requirements ensuring that the selective noncatalytic reduction system be consistent with design reports 

submitted to EPA, regardless of whether doing so is necessary to 

meet the 2.12 lbs/ton NOxemission limit;

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d. The requirement that Phoenix Cement Company vary operating 

parameters of the kiln for a minimum of 165 days before 

installation of the selective non-catalytic reduction system;

e. The requirement that Phoenix Cement Company operate the 

facility for 270 days after the installation of the selective noncatalytic reduction system in a manner intended to provide data 

for EPA, not to make cement optimally;

f. The requirement to propose a new emission limit according to a 

specific statistical equation that was not included in the proposal, 

regardless of whether Phoenix Cement Company believes that the 

equation is appropriate:

79 Fed. Reg. at 52,494/1-52,496/1.

While EPA did indicate in its regulatory proposal that it was considering 

the issue of control efficiency, that topic is different from the substantive 

requirements of the Demonstration Project. Control efficiency concerns the 

effectiveness of a selective non-catalytic reduction system in removing NOx

from exhaust gases. In contrast, the Demonstration Project mandate is a 

specific design and operational protocol that might (or might not) affect the 

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control efficiency of a selective non-catalytic reduction system. And even 

assuming arguendo that the concept of a Demonstration Project was tied to the 

issue of control efficiency, the individual components of the Demonstration 

Project constitute burdensome substantive design and operational requirements 

of which EPA never gave proper notice.

The fact that the Demonstration Project is the product of consent 

decrees, and is “not typically required as part of a regional haze plan,” 79 Fed. 

Reg. at 52,456/1, further evidences that it is not the logical outgrowth of EPA’s 

control efficiency analysis. The question of control efficiency arises in nearly all 

visibility plans, as it is a necessary input in a source-specific application of the 

four-factor reasonable progress analysis at 40 C.F.R. § 51.308(d)(1)(i)(A). If the 

Demonstration Project were the logical outgrowth of control efficiency, rather 

than an eleventh-hour addition to the federal plan, it would be a regular feature 

of visibility plans.

EPA’s justification for the Demonstration Project confirms that it is not 

the logical outgrowth of its proposal. EPA states that the Demonstration 

Project was promulgated “in response to concerns raised by Earthjustice.” 79 

Fed. Reg. at 52,455/3. In other words, EPA did not justify the Demonstration 

Project by reference to any aspect of its regulatory proposal. EPA did not even 

state that it was based on the substantive material that EarthJustice submitted 

to EPA, which includes no mention of a Demonstration Project and no 

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suggestion that any regulated entities should be required to take the specific 

actions required under the Demonstration Project. See EarthJustice 

Comments, EPA-R09-OAR-2013-0588-0015, J.A. 01857.

Even if EarthJustice had requested that EPA include the Demonstration 

Project mandate in the federal plan in its comments, adopting it on that basis 

would still be arbitrary and capricious. EPA may not “bootstrap notice from a 

comment” filed during the rulemaking process. Fertilizer Inst. v. EPA, 935 F.2d 

1303, 1312 (D.C. Cir. 1991) (quotation omitted). Instead, “EPA must itself 

provide notice of a regulatory proposal.” Small Refiner, 705 F.2d at 549. “The 

fact that some commenters actually submitted comments” suggesting the 

outcome of the final rule “is of little significance.” Fertilizer Inst., 935 F.2d at 

1312; see also Nat’l Black Media Coal. v. FCC, 791 F.2d 1016, 1023 (2d Cir. 1986) 

(“[T]he comments of other interested parties do not satisfy an agency’s 

obligation to provide notice.”).

The federal plan’s Demonstration Project mandate imposes significant 

substantive burdens on Phoenix Cement Company. It may be appropriate as 

the product of the back-and-forth inherent in a consent decree. But it is 

arbitrary and capricious for EPA to impose it on Phoenix Cement Company 

with no notice.

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B. The Demonstration Project Is Arbitrary and Capricious Because 

EPA Failed To Provide a Reasoned Basis for It

One of the values that notice and public participation serve in the 

administrative system is to increase the quality of agency rulemaking. EPA’s 

eleventh-hour decision to transfer the Demonstration Project from consent 

decrees to its federal plan proves this point, as EPA included the protocol 

without considering whether it met the statutory and regulatory criteria for 

visibility plans and whether it made technical sense to do so. These deficiencies 

in EPA’s reasoning and its explanation render the Demonstration Project’s 

inclusion in the federal plan arbitrary and capricious.

EPA has an obligation “to examine key assumptions as part of its 

affirmative burden of promulgating and explaining a nonarbitrary, noncapricious rule” and “justify that assumption even if no one objects to it during 

the comment period.” Appalachian Power Co. v. EPA, 135 F.3d 791, 818 (D.C. 

Cir. 1998) (quotation omitted).7 This duty is an inherent aspect of reasoned 

decisionmaking, which mandates that EPA’s “decision was based on a 

 

7 Phoenix Cement Company’s position is that this presumption applies also to 

the question of whether EPA provided adequate notice of the Demonstration 

Project in its regulatory proposal.

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consideration of the relevant factors.” State Farm, 463 U.S. at 43 (quotation 

omitted).

The federal plan’s inclusion of the Demonstration Project fails this 

standard. For example, EPA failed to consider whether imposition of the 

Demonstration Project was “reasonable” within the meaning of 40 C.F.R. 

§ 51.308(d). The Demonstration Project unquestionably imposes costs on 

Phoenix Cement Company, as it regulates the design of a selective non-catalytic 

reduction system and requires Phoenix Cement Company to operate the Plant 

in a manner designed to generate data for EPA, not to make cement. But EPA 

failed entirely to consider whether imposing these costs was consistent with the 

relevant four-factor test for reasonableness set forth at CAA § 169A(g)(1) and 

40 C.F.R. § 51.308(d)(1)(i)(A), which considers the costs of compliance, the 

time necessary for compliance, the energy and non-air quality environmental 

impacts of compliance, and the remaining useful life of the source.

Similarly, EPA failed to consider whether the Demonstration Project 

was consistent with the Clean Air Act’s visibility protection program at all. 

“Reasonable progress” is not a standalone criterion that is applied to each 

source in a state, it is instead part of the requirement that states (and, in the 

absence of a satisfactory action by the state, EPA) devise “a long-term (ten to 

fifteen years) strategy for making reasonable progress toward meeting the 

national goal” of natural visibility conditions. CAA § 169A(b)(2)(B), 42 U.S.C. 

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§ 7491(b)(2)(B). The Demonstration Project effectively requires Phoenix 

Cement Company to operate the Plant as a laboratory facility to generate data 

that EPA could consider in future rulemakings. But those data do not inform 

the current “strategy,” which is the federal plan, and any future “strategy” 

would presumptively be the responsibility of the State of Arizona, not EPA. 

Similarly, more data about control efficiency is not relevant to any reasonable 

progress strategy unless EPA first determines that additional actions at the 

Plant could be beneficial in meeting visibility goals, which EPA never did.

Where an agency acts arbitrarily, as EPA did in imposing the 

Demonstration Project on Phoenix Cement Company, “[t]he reviewing court 

should not attempt itself to make up for . . . deficiencies” in the agency’s 

reasoning. State Farm, 463 U.S. at 43. The Court should instead vacate the 

Demonstration Project so that EPA can judge these important considerations 

that are absent from the rule under review.

VIII. CONCLUSION

For the reasons discussed above, the Court should vacate the 

Demonstration Project set forth at 40 C.F.R. § 52.145(k)(3), (6) and 40 C.F.R. 

§ 52.145 Appendix A. The Court should also grant the relief requested in 

Petitioners State of Arizona and CalPortland’s briefs.

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Dated: February 10, 2015 Respectfully submitted,

 /s/ Mark W. DeLaquil 

Mark W. DeLaquil

Andrew M. Grossman

BAKER & HOSTETLER LLP

Washington Square, Suite 1100

1050 Connecticut Avenue, N.W.

Washington, D.C. 20036-5304

Telephone: (202) 861-1527

Facsimile: (202) 861-1783

E-mail: mdelaquil@bakerlaw.com

George A. Tsiolis

Attorney At Law

351 Lydecker Street

Englewood, N.J. 07631

Phone: (201) 408-4256

Facsimile: (201) 408-4622

Email: gtsiolis@nj.rr.com

Counsel for Petitioner Phoenix Cement 

Company

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STATEMENT OF RELATED CASES

Petitioner Phoenix Cement Company states that the following cases 

pending in this Circuit satisfy the definition of “related cases” under Ninth 

Circuit Rule 28-2.6:

State of Arizona, ex rel. Darwin v. U.S. Environmental Protection Agency et al., 

No. 13-70366 (consolidated with Case Nos. 13-70396, 13-70409, 13-70410, 13-

70425).

Petitioner’s understanding, based on the Court’s online docket, is that all 

other related cases have been consolidated with the instant action.

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CERTIFICATE OF COMPLIANCE

This brief complies with the type-volume limitations of Fed. R. App. P. 

32(a)(7)(B) because it contains 4,919 words, excluding the parts of the brief 

exempted by Fed. R. App. P. 32(a)(7)(B)(iii). This brief complies with the 

typeface requirements of Fed. R. App. P. 32(a)(5) and the type style 

requirements of Fed. R. App. P. 32(a)(6) because it has been prepared in a 

proportionally spaced typeface using Microsoft Word in 14-point Garamond 

typeface.

Dated: July 8, 2015 /s/ Mark W. DeLaquil

Mark W. DeLaquil

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CERTIFICATE OF SERVICE

I hereby certify that I electronically filed the foregoing Petitioner’s Final 

Opening Brief with the Clerk of the Court for the United States Court of Appeals for 

the Ninth Circuit by using the appellate CM/ECF system on July 8, 2015. 

Participants in the case who are registered CM/ECF users will be served by the 

appellate CM/ECF system.

Dated: July 8, 2015 /s/ Mark W. DeLaquil

 Mark W. DeLaquil

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IN THE UNITED STATES COURT OF APPEALS 

FOR THE NINTH CIRCUIT

Case Nos. 14-73368, 14-73384, 14-73386, 14-73394

STATE OF ARIZONA, ex rel. Henry Darwin, Director, Arizona Department 

of Environmental Quality, et al.,

Petitioners,

v.

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY and 

GINA MCCARTHY, Administrator, United States Environmental Protection 

Agency,

Respondents.

ON PETITION FOR REVIEW OF FINAL AGENCY ACTION OF THE 

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

PETITIONER PHOENIX CEMENT COMPANY’S 

FINAL REPLY BRIEF

GEORGE A. TSIOLIS

ATTORNEY AT LAW

351 Lydecker Street

Englewood, N.J. 07631

(201) 408-4256 (phone)

(201) 408-4622 (facsimile)

gtsiolis@nj.rr.com

MARK W. DELAQUIL

ANDREW M. GROSSMAN

BAKER & HOSTETLER LLP

Washington Square, Suite 1100

1050 Connecticut Avenue, N.W.

Washington, D.C. 20036

(202) 861-1527 (phone)

(202) 861-1783 (facsimile)

mdelaquil@bakerlaw.com

Counsel for Petitioner Phoenix Cement 

Company

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TABLE OF CONTENTS

Page

TABLE OF CONTENTS............................................................................................ i

TABLE OF AUTHORITIES.....................................................................................ii

GLOSSARY..................................................................................................................vi

I. INTRODUCTION AND SUMMARY OF ARGUMENT......................1

II. ARGUMENT ....................................................................................................2

A. Section 307(d) Does Not Bar the Court from Considering Phoenix 

Cement’s Claims.................................................................................................2

B. EPA’s Regulatory Proposal Did Not Provide Adequate Notice of the 

Demonstration Project ...................................................................................14

C. EPA Did Not Engage in Reasoned Decisionmaking When It Included 

the Demonstration Project in the Federal Plan ..........................................19

III. CONCLUSION...............................................................................................23

CERTIFICATE OF COMPLIANCE.....................................................................24

CERTIFICATE OF SERVICE................................................................................25

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TABLE OF AUTHORITIES

CASES

Alaska Department of Environmental Conservation v. EPA, 540 U.S. 461 (2004) .......3

Altamirano v. Gonzales, 427 F.3d 586 (9th Cir. 2005)...............................................19

American Corn Growers Association v. EPA, 291 F.3d 1 (D.C. Cir. 2002)...............21

Appalachian Power Co. v. EPA, 135 F.3d 791 (D.C. Cir. 1998) ..........................9, 10

Bowen v. Georgetown University Hospital, 488 U.S. 204 (1988) ...................................11

Brown v. Valoff, 422 F.3d 926 (9th Cir. 2005)...........................................................14

California Trout v. FERC, 572 F.3d 1003 (9th Cir. 2009)........................................20

Central Arizona Water Conservation District v. EPA, 

990 F.2d 1531 (9th Cir. 1993)............................................................................8, 9

Central Bank of Denver, N.A. v. First Interstate Bank of Denver, N.A., 

511 U.S. 164 (1994) .................................................................................................6

Ciba-Geigy Corp. v. EPA, 46 F.3d 1208 (D.C. Cir. 1995)..........................................8

Circuit City Stores, Inc. v. Adams, 532 U.S. 105 (2001) ..............................................20

Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402 (1971).........................19

Environmental Defense Fund, Inc. v. EPA, 82 F.3d 451 (D.C. Cir. 1996), 

as amended, 92 F.3d 1209..........................................................................................3

EPA v. EME Homer City Generation, L.P., 134 S. Ct. 1584 (2014)..........................5

‘Ilio‘ulaokalani Coalition v. Rumsfeld, 464 F.3d 1083 (9th Cir. 2006)........................10

K Mart Corp. v. Cartier, Inc., 486 U.S. 281 (1988) .......................................................7

Leedom v. Kyne, 358 U.S. 184 (1958)...........................................................................12

Michigan v. EPA, 268 F.3d 1075 (D.C. Cir. 2001)...................................................17

Motor Vehicle Manufacturers Association of United States, Inc. v. State Farm Mutual 

Automobile Insurance Co., 463 U.S. 29 (1983).......................................................10

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iii

National Parks Conservation Association v. EPA, __ F.3d __, No. 12-73710, 

2015 WL 3359149 (9th Cir. June 9, 2015) .........................................................21

Northeast Maryland Waste Disposal Authority v. EPA, 

358 F.3d 936 (D.C. Cir. 2004) .............................................................................10

Northwest Resource Information Center, Inc. v. Northwest Power and Conservation Council, 

730 F.3d 1008 (9th Cir. 2013)..............................................................................18

NRDC v. EPA, 863 F.2d 1420 (9th Cir. 1988).......................................................16

NRDC v. EPA, 279 F.3d 1180 (9th Cir. 2002)......................................9, 16, 18, 19

NRDC v. EPA, 638 F.3d 1183 (9th Cir. 2011).........................................................3

Oklahoma v. EPA, 723 F.3d 1201 (10th Cir. 2013)...................................................5

Oklahoma Department of Environmental Quality v. EPA, 

740 F.3d 185 (D.C. Cir. 2014) .............................................................................10

Oljato Chapter of Navajo Tribe v. Train, 515 F.2d 654 (D.C. Cir. 1975) ................7, 8

Presidio Golf Club v. National Park Service, 155 F.3d 1153 (9th Cir. 1998) .............19

Prudential Locations LLC v. United States Department of Housing and Urban 

Development, 739 F.3d 424 (9th Cir. 2013)...........................................................20

Public Citizen v. Department of Justice, 491 U.S. 440 (1989)........................................12

SEC v. Chenery Corp., 332 U.S. 194 (1947)................................................................20

Small Refiner Lead Phase-Down Task Force v. EPA, 

705 F.2d 506 (D.C. Cir. 1983) .............................................................................11

Telecommunications Research and Action Center v. FCC, 

750 F.2d 70 (D.C. Cir. 1984)................................................................................12

Traynor v. Turnage, 485 U.S. 535 (1988).......................................................................4

Utility Air Regulatory Group v. EPA, 744 F.3d 741 (D.C. Cir. 2014)......................13

United States v. Granderson, 511 U.S. 39 (1994) .........................................................12

Wilson v. Commissioner of Internal Revnue, 705 F.3d 980 (9th Cir. 2013)....................4

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STATUTES

5 U.S.C. § 551 .................................................................................................................4

8 U.S.C. § 1252 ...............................................................................................................6

28 U.S.C. § 1331...........................................................................................................12

42 U.S.C. § 7410.......................................................................................................3, 22

42 U.S.C. § 7414.....................................................................................................passim

42 U.S.C. § 7491.................................................................................................... 21, 22

42 U.S.C. § 7601.............................................................................................................3

42 U.S.C. § 7607.....................................................................................................passim

47 U.S.C. § 405 ...............................................................................................................7

OTHER AUTHORITIES

40 C.F.R. § 51.308 .......................................................................................................21

40 C.F.R. § 52.145 .......................................................................................................23

76 Fed. Reg. 28,318 (May 17, 2011)..........................................................................14

77 Fed. Reg. 960 (Jan. 6, 2012)........................................................................... 13, 14

77 Fed. Reg. 52,554 (Aug. 29, 2012).........................................................................13

77 Fed. Reg. 71,323 (Nov. 30, 2012)........................................................................13

78 Fed. Reg. 2,210 (Jan. 10, 2013).............................................................................13

78 Fed. Reg. 36,042 (June 14, 2013).........................................................................13

79 Fed. Reg. 41,752 (July 17, 2014) ..........................................................................13

79 Fed. Reg. 54,420 (Sept. 3, 2014) ..........................................................................21

79 Fed. Reg. 56,322 (Sept. 19, 2014) ........................................................................13

Comments of Phoenix Cement Company (Mar. 31, 2014), EPA R09-OAR2013-0588-0021......................................................................................................15

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v

Final Brief of Respondent, Arizona v. EPA, No. 13-70366 (9th Cir. filed Mar. 

12, 2014) [Dkt. #101]..............................................................................................4

H.R. 6161, 95th Congress, 1st Session (1977) ..........................................................7

H.R. Rep. No. 95-294 (1977).................................................................................7, 11

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vi

GLOSSARY

ADEQ Arizona Department of Environmental Quality

CAA Clean Air Act

CalPortland CalPortland Company

PCC Phoenix Cement Company

SNCR Selective Non-Catalytic Reduction Technology

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I. INTRODUCTION AND SUMMARY OF ARGUMENT

When EPA requested comment on the efficiency of pollution control 

devices at the Phoenix Cement Plant, Phoenix Cement could never have 

anticipated that the Agency would change course and impose design and 

operational requirements from a consent decree that the Agency never stated 

was under consideration. This lack of notice is fatal to the federal plan’s 

Demonstration Project requirement for Phoenix Cement.

In an attempt to keep this Court from scrutinizing its lapse, EPA has 

advanced an argument that would grant it nearly limitless authority: that the 

Agency can throw anything into a final Clean Air Act rule that requires 

immediate compliance—even things that have nothing to do with the 

regulatory proposal or have no readily ascertainable legal basis—and no court 

can review that decision for the months or years that it takes for EPA to 

conclude its reconsideration process. This argument is fundamentally contrary 

to Congress’s intent in enacting Section 307(d) of the Clean Air Act, which 

requires EPA to provide more extensive notice to regulated entities affected by 

major Clean Air Act rulemakings than would otherwise be required under the 

Administrative Procedure Act.

For these reasons and those discussed in Phoenix Cement’s opening 

brief, the Court should vacate the Demonstration Project.

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II. ARGUMENT

A. Section 307(d) Does Not Bar the Court from Considering Phoenix 

Cement’s Claims

EPA’s argument that Section 307(d) bars this Court from considering 

Phoenix Cement’s claims is meritless. To begin with, EPA’s post hoc litigation 

rationale for the Demonstration Project pleads this argument out of court, as 

the “information gathering” authority of Section 114 is not subject to Section 

307(d) at all. Additionally, Section 307(d) was intended to increase the 

procedural rulemaking protections afforded stakeholders for certain Clean Air 

Act rulemakings, not as a shield behind which EPA can hide final rules that are 

entirely divorced from their precedent regulatory proposals. Interpreting 

Section 307(d) as EPA suggests would undercut Congress’s statutory design by 

giving EPA carte blanche to circumvent the Act’s notice and comment 

requirements.

1. EPA argues that Section 114 is the source of EPA’s legal 

authority for the Demonstration Project, but rules promulgated to carry out 

EPA’s Section 114 authority are not subject to the rulemaking provisions of 

Section 307(d). EPA Br. 71-72. Accordingly, the Court need not consider the 

application of Section 307(d)(7)(B)’s claim-processing provisions to Phoenix 

Cement’s claims.

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The Clean Air Act includes a general grant of rulemaking authority. See

CAA § 301(a)(1), 42 U.S.C. § 7601(a)(1). The Act does not, however, impose a 

uniform set of procedural requirements or legal standards to be applied in 

judicial review. Instead, two different standards govern, depending on the 

rulemaking. For certain actions specified in Section 307(d)(1), including federal 

plans promulgated by EPA pursuant to Section 110(c), the rulemaking 

provisions of Section 307(d) of the Clean Air Act govern. See 42 U.S.C. 

§ 7607(d). For other actions, like those under Section 114, the Administrative 

Procedure Act governs. See NRDC v. EPA, 638 F.3d 1183, 1190 (9th Cir. 

2011) (citing Alaska Dep’t of Envtl. Conservation v. EPA, 540 U.S. 461, 496-97 & 

n.18 (2004)). Thus, for those other actions, “the Clean Air Act . . . does not . . . 

require exhaustion of all available remedies,” and the absence of “a petition for 

reconsideration does not preclude” the court from considering a claim that was 

not first raised in comments. Envtl. Def. Fund, Inc. v. EPA, 82 F.3d 451, 468 

(D.C. Cir. 1996), as amended, 92 F.3d 1209.1

The Demonstration Project, which imposes ongoing design and 

operational requirements on the Phoenix Cement Plant, constitutes a “rule” 

 

1 Phoenix Cement’s opening brief did not discuss the Administrative Procedure 

Act standard of review because EPA never explained that the Demonstration 

Project was promulgated under Section 114 until its response brief in this case.

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within the meaning of the Administrative Procedure Act. See 5 U.S.C. § 551(4) 

(defining a “rule” as “an agency statement of general or particular applicability 

and future effect designed to implement, interpret, or prescribe law or policy.”). 

Accordingly, that aspect of the action under review is not subject to the 

procedural requirements of Section 307(d), and is exempt from the 

reconsideration claim-processing provisions of Section 307(d)(7)(B).

There is nothing unusual about having certain aspects of an action 

published in a single Federal Register entry being reviewed under the standards of 

Section 307(d), while others are reviewed under the Administrative Procedure 

Act. Indeed, this is precisely the situation that this Court faced in the Arizona 

visibility Phase 1 litigation. See Final Brief of Respondent 22, Arizona v. EPA, 

No. 13-70366 (9th Cir. filed Mar. 12, 2014) [Dkt. #101]. And were there any 

doubt as to whether dual standards govern, the Court should honor the “strong 

presumption that Congress intends judicial review of administrative action” 

and decide Phoenix Cement’s claims. Traynor v. Turnage, 485 U.S. 535, 542 

(1988) (quotation omitted); see also Wilson v. Comm’r of Internal Revenue, 705 F.3d 

980, 996-97 (9th Cir. 2013).

2. Section 307(d) is not a comprehensive exhaustion provision that 

would defer judicial review of every objection to an action under Clean Air Act 

until after the Agency had considered it, whether in response to comments or a 

petition for reconsideration. Instead, Section 307(d)(7)(B) applies only to 

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certain objections to a rule or procedure that are properly raised through 

comments and does not extend to key assumptions underlying the action.

Section 307(d)(7)(B) is a claim-processing provision that imposes 

procedural requirements on certain types of claims. See EPA v. EME Homer 

City Generation, L.P., 134 S. Ct. 1584, 1602-03 (2014).2 In this regard, Section 

307(d)(7)(B) of the Clean Air Act provides that certain objections should be 

made during the comment period in order for them to be raised during a 

judicial review proceeding by stating that “[o]nly an objection to a rule or 

procedure which was raised with reasonable specificity during the period for 

public comment (including any public hearing) may be raised during judicial 

review.” CAA § 307(d)(7)(B), 42 U.S.C. § 7607(d)(7)(B). Section 307(d)(7)(B) 

further provides that “[i]f the person raising an objection can demonstrate to 

the Administrator that it was impracticable to raise such objection within such 

time or if the grounds for such objection arose after the period for public 

comment (but within the time specified for judicial review) and if such 

objection is of central relevance to the outcome of the rule, the Administrator 

shall convene a proceeding for reconsideration of the rule . . . .” Id. In the 

 

2 EME Homer definitively rejects the Tenth Circuit’s theory that Section 

307(d)(7)(B)’s claim-processing provisions are jurisdictional. See Oklahoma v. 

EPA, 723 F.3d 1201, 1214 (10th Cir. 2013).

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event that the Administrator refuses to reconsider the rule, “such person may 

seek [judicial] review of such refusal.” Id.

Section 307(d)(7)(B) is not a mandatory exhaustion requirement. By 

using the terms “rule” and “procedure” to classify certain types of objections 

that should be raised in the comment period, Congress unambiguously signaled 

its intent that not all objections to “action” must be raised in comments before 

being raised in judicial review. Compare CAA § 307(b)(1), 42 U.S.C. 

§ 7607(b)(1) (requiring that all challenges to an “action” be brought by petition 

for review to the court of appeals).

In contrast, Congress knows how to craft mandatory exhaustion 

provisions so that they are clear on their face. See, e.g., Cent. Bank of Denver, 

N.A. v. First Interstate Bank of Denver, N.A., 511 U.S. 164, 176-77 (1994) 

(refusing to read aiding and abetting liability into Securities Exchange Act 

§ 10(b) securities fraud suits because Congress knew how to use such language 

but failed to do so). For example, the Immigration Code requires that “[a] 

court may review a final order of removal only if the alien has exhausted all 

administrative remedies available to the alien as of right,” 8 U.S.C. § 1252(d)(1), 

and the Telecommunication Act mandates that a petition for reconsideration is 

“a condition precedent to judicial review of any . . . order, decision, report, or 

action” in certain circumstances, such as where a petitioner “relies on questions 

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of fact or law upon which the Commission . . . has been afforded no 

opportunity to pass.” 47 U.S.C. § 405(a).

3. Section 307(d)(7)(B)’s claim-processing provisions do not apply 

here because Phoenix Cement’s “logical outgrowth” claims do not fall within 

the class of “objections to a rule or procedure” that must be vindicated through 

a petition for reconsideration prior to judicial review.

The “plain meaning” of Section 307(d)(7)(B), rather, must be read in 

light of “the particular statutory language at issue, as well as the language and 

design of the statute as a whole.” E.g., K Mart Corp. v. Cartier, Inc., 486 U.S. 281, 

291 (1988). In this regard, Section 307(d)(7)(B)’s claim-processing and 

reconsideration provisions were intended to give EPA the first opportunity to 

consider substantive objections to its actions. See, e.g., H.R. Rep. No. 95-294, at 

323 (1977).3 Specifically, the House Committee explained that Section 

307(d)(7)(B) was intended to “confirm[]” the D.C. Circuit’s decision in Oljato 

Chapter of Navajo Tribe v. Train, 515 F.2d 654 (D.C. Cir. 1975), which construed 

the predecessor provision of the Act to require a petition to EPA where a party 

 

3

Section 307(d) originated in the House of Representatives’ version of the 

Clean Air Act Amendments of 1977, H.R. 6161, 95th Cong., 1st Sess. (1977). 

The Senate version of that bill did not include a rulemaking provision, and the 

Conference adopted the House version with changes that are not relevant to 

Section 307(d)(7)(B).

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intended to use new technical information and arguments to challenge an 

existing Clean Air Act standard. Oljato Chapter was founded on concerns about 

the adequacy of the record and ensuring that the Agency had an opportunity to 

apply its expertise to issues before a reviewing court decided them. See 515 

F.2d at 665-67. In other words, Oljato Chapter was founded on ripeness 

concerns. See Ciba-Geigy Corp. v. EPA, 46 F.3d 1208, 1210 (D.C. Cir. 1995). It 

had nothing to say about timely challenges to a rule based on a failure to 

provide appropriate notice.

This reading of Section 307(d)(7)(B) as ensuring an appropriate 

administrative record for review is consistent with how this Court interpreted 

that provision in Central Arizona Water Conservation District v. EPA, 990 F.2d 

1531, 1543-44 (9th Cir. 1993). In that case, the Court denied the petitioners’ 

motion to supplement the administrative record and petition for review based 

on the existence of a new technical study that the petitioners alleged EPA 

improperly failed to include in the administrative record and to consider in its 

decision. The Court held that by directly raising a challenge based on the new 

technical study, “Petitioners ignore the route for administrative and judicial 

review of ‘new information’ and alleged ‘procedural errors’ in the creation of 

the administrative docket that Congress created: 42 U.S.C. § 7607(d)(7)(B)’s 

mechanism for reconsideration by the agency.” Id. at 1544.

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Unlike Central Arizona Water, which concerned an objection to an EPA 

rule based on a new study that was not presented to EPA in reconsideration 

and that EPA lacked a fair opportunity to consider, Phoenix Cement’s claims 

challenge a legal deficiency that is present on the face of the regulatory notice 

and final rule. Indeed, the crux of a logical outgrowth argument is that “[a] 

decision made without adequate notice and comment is arbitrary or an abuse of 

discretion.” NRDC v. EPA, 279 F.3d 1180, 1186 (9th Cir. 2002) (emphasis 

added). And it is by definition impossible to raise a relevant comment 

concerning the adequacy of notice; the whole point of a logical outgrowth 

argument is that comment was impossible. Nor is there any purpose in giving 

EPA this question because the content of that final rule is uniquely in its 

control. To put it bluntly, Section 307(d)(7)(B) is an anti-sandbagging 

provision, and Phoenix Cement has not sandbagged EPA.

4. Phoenix Cement’s challenges to EPA’s inadequate explanation for 

the Demonstration Project are likewise not subject to the claim-processing 

provisions of Section 307(d)(7)(B) because they challenge the Agency’s failure 

to examine a “key assumption” underlying its rule.

Courts may hear objections to Section 307(d) rules raised during judicial 

review that challenge EPA’s abrogation of its duty “to examine key 

assumptions as part of its affirmative burden of promulgating and explaining a 

non-arbitrary, non-capricious rule.” Appalachian Power Co. v. EPA, 135 F.3d 

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791, 818 (D.C. Cir. 1998) (quotation omitted). This duty requires that “EPA 

must justify that assumption even if no one objects to it during the comment 

period.” Id. (quotation omitted). See also Ne. Md. Waste Disposal Auth. v. EPA, 

358 F.3d 936, 948 (D.C. Cir. 2004); Okla. Dep’t of Envtl. Quality v. EPA, 740 

F.3d 185, 192 (D.C. Cir. 2014). Cf. ‘Ilio‘ulaokalani Coal. v. Rumsfeld, 464 F.3d 

1083, 1092-93 (9th Cir. 2006) (applying similar standard to NEPA claims).

In order for EPA to justify the Demonstration Project, whether as a 

measure necessary to assure reasonable progress towards the attainment of 

natural visibility, or as an “information gathering” tool pursuant to Section 114, 

EPA at the very least has an obligation to explain how the Demonstration 

Project fits the applicable statutory and regulatory criteria. Otherwise, EPA 

would have failed entirely to “explain why it has exercised its discretion in a 

given manner.” See Motor Vehicle Mfrs. Ass’n of U.S., Inc. v. State Farm Mut. Auto. 

Ins. Co., 463 U.S. 29, 48 (1983). This kind of challenge is not within the ambit 

of Section 307(d)(7)(B).

5. EPA’s interpretation of Section 307(d)(7)(B) is unreasonable.4 

Section 307(d) was intended to increase, not decrease, the burdens on EPA 

 

4 EPA appropriately does not argue that the Court should afford Chevron

deference to its litigation arguments concerning the construction of Section 

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during the rulemaking process to provide notice to stakeholders. See, e.g., Small 

Refiner Lead Phase-Down Task Force v. EPA, 705 F.2d 506, 518-19 (D.C. Cir. 

1983). Indeed, “Congress intended agency notice under the Clean Air Act to 

be more, not less, extensive than under the [Administrative Procedure Act].” 

Id. at 550. In so doing, Congress intended to “assure the opportunity for more 

extensive public participation in the rulemaking process.” Id. (quotation 

omitted). See also H.R. Rep. No. 95-294, at 319 (“[A]ppropriately broad 

administrative discretion to promulgate regulations to protect health or the 

environment must be restrained by thorough and careful procedural safeguards 

that insure an effective opportunity for public participation in the rulemaking 

process.”). It would frustrate Congress’s purposes in enacting Section 307(d) 

for that provision to provide less procedural protection for stakeholders who 

are aggrieved by violations of Section 307(d)’s notice requirements than those 

stakeholders otherwise would have been afforded under the Administrative 

Procedure Act.

Moreover, under EPA’s interpretation of Section 307(d)(7)(B), there is 

no limit to what material EPA could include in a final Clean Air Act rule and 

make immediately effective. For example, EPA could regulate entities in a final 

 

307(d)(7)(B), nor would such deference apply. See Bowen v. Georgetown Univ. 

Hosp., 488 U.S. 204 (1988).

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rule that were not put on notice of impending action by the regulatory 

proposal, or EPA could regulate under an entirely different Clean Air Act 

program in the final rule than it had proposed in the initial notice of 

rulemaking. EPA could likewise articulate no basis for its action, with this 

cornerstone of reasoned decisionmaking being left to the Agency’s response to 

a petition for reconsideration. And under EPA’s construction of Section 

307(d)(7)(B), regulated entities would be bound to the final rule during the 

lengthy pendency of the reconsideration, with a judicial stay unavailable and no 

relief until the conclusion of an administrative process that regularly takes 

years5(and occasionally takes decades) to conclude.6 This interpretation of 

Section 307(d) would lead to absurd results and is entirely unreasonable. See 

United States v. Granderson, 511 U.S. 39, 47 n.5 (1994) (dismissing an 

interpretation said to lead to an absurd result); Pub. Citizen v. Dep’t of Justice, 491 

U.S. 440, 454 (1989) (“Where the literal reading of a statutory term would 

 

5 As of the filing of this brief, EPA has not published a notice of 

reconsideration regarding Phoenix Cement’s petition in the Federal Register.

6 Presumably, a party with a pending reconsideration petition could seek some 

type of relief through a writ to protect this Court’s future jurisdiction, pursuant 

to the teaching of Telecommunications Research and Action Center v. FCC, 750 F.2d 

70 (D.C. Cir. 1984), or an action in the district court under 28 U.S.C. § 1331 

and the federal courts’ inherent equitable authority. See Leedom v. Kyne, 358 U.S. 

184 (1958).

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compel an odd result, we must search for other evidence of congressional 

intent to lend the term its proper scope.”) (quotation and citation omitted).

Finally, the effect of decisions construing Section 307(d)(7)(B) as 

requiring claims of inadequate notice to proceed through the reconsideration 

process, see, e.g., Utility Air Regulatory Group v. EPA, 744 F.3d 741, 746-47 (D.C. 

Cir. 2014), has been a breakdown in administrative regularity. In the case of 

the rule under review in this case, EPA has granted three petitions for 

administrative reconsideration based on material included in the final rule that 

was not the proper subject of notice (Phoenix Cement, CalPortland, and 

Lhoist). In the case of the Phase 1 visibility rule, EPA granted a petition for 

administrative reconsideration for this reason. See 79 Fed. Reg. 56,322 (Sept. 

19, 2014) (granting reconsideration of Apache Station BART determination). 

And major EPA rules regularly are forced into multiyear reconsideration 

processes, while remaining in effect in the meantime. See, e.g., 79 Fed. Reg. 

41,752 (July 17, 2014) (granting reconsideration of oil and natural gas sector 

NSPS); 78 Fed. Reg. 36,042 (June 14, 2013) (granting reconsideration of 

ethanol blend misfueling mitigation regulations); 78 Fed. Reg. 2,210 (Jan. 10, 

2013) (granting reconsideration of Tribal New Source Review Rule); 77 Fed. 

Reg. 71,323 (Nov. 30, 2012) (granting reconsideration of MATS and utility 

NSPS PM standard); 77 Fed. Reg. 52,554 (Aug. 29, 2012) (granting 

reconsideration of stationary combustion turbine NSPS); 77 Fed. Reg. 960 (Jan. 

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6, 2012) (granting reconsideration of petroleum refinery NESHAP); 76 Fed. 

Reg. 28,318 (May 17, 2011) (granting reconsideration of portland cement 

NESHAP and NSPS).

Both this pattern of introducing new material into final Clean Air Act 

rules, and the length of time that Phoenix Cement’s petition for reconsideration 

has been pending with no final action by EPA, implicate this Court’s rule that 

exhaustion provisions should not be construed in a manner that would 

abrogate effective judicial review. See, e.g., Brown v. Valoff, 422 F.3d 926, 943 

n.18 (9th Cir. 2005) (refusing to interpret the exhaustion and statute of 

limitations requirements in the Prison Litigation Reform Act so narrowly as to 

allow prison officials “to exploit the exhaustion requirement through indefinite 

delay in responding to grievances,” as a pattern of delay would “demonstrate 

that no administrative process is in fact available.”) (quotation omitted).

B. EPA’s Regulatory Proposal Did Not Provide Adequate Notice of 

the Demonstration Project

In its opening brief, Phoenix Cement argued that the Demonstration 

Project was not the logical outgrowth of EPA’s regulatory proposal. PCC Br. 

17-21. The only aspect of the proposed rule that conceivably related to 

Demonstration Project was EPA’s statement that it was considering the issue 

of control efficiency. PCC Br. 19. But as Phoenix Cement explained, there 

was no way that it could reasonably have anticipated that EPA’s consideration 

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of SNCR control efficiency at existing cement kilns would lead to a final rule 

that turned the Phoenix Cement Plant into a test laboratory, subject to 

proscriptive design and operational requirements, such as an ammoniainjection system that meets specific molar ratios in the injected ammonia, a 

minimum of 435 days of pre- and post-construction operational restrictions for 

information collection purposes, and a provision that Phoenix Cement must 

propose a specific operating kiln limit according to a precise statistical formula.

EPA’s defense is meritless.

First, EPA misstates the record when it suggests that Phoenix Cement’s 

claims are not properly before the Court because the Company “did not 

comment on control efficiency.” EPA Br. 67. In fact, Phoenix Cement 

responded to EPA’s request for comment regarding control efficiency by 

stating that, based on the technical information in the docket, “it would appear 

that a SNCR control efficiency of 50% is reasonable for Kiln 4.” See

Comments of Phoenix Cement Company at 6 (Mar. 31, 2014), EPA-R09-

OAR-2013-0588-0021, J.A. 01910; see also id. at 7 (“If, for whatever reason, the 

EPA considers finding in a final FIP that a lbs/ton standard lower than 2.12 

lbs/ton would be reflective of the use of SNCR at PCC, then, in that case, PCC 

would request and expect the opportunity to comment on the EPA’s reasoning 

in a supplemental proposed rulemaking.”).

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Second, EPA argues that, because the proposed rule includes “emission 

limits consistent with SNCR control technology,” Phoenix Cement “can hardly 

be surprised that other parties also commented or that EPA would consider 

comments on whether SNCR could be optimized.” EPA Br. 68-69. But EPA 

did not solicit comments on an optimization process, such as the varied 

operational parameters of the Demonstration Project; it solicited comments 

only regarding SNCR control efficiency at the regulated units in question. See

PCC Br. 6-8.

Regardless, the question is not whether the issue of control efficiency is 

implicated in some manner in the proposed rule, the question is “‘whether 

interested parties reasonably could have anticipated the final rulemaking from 

the draft.’” NRDC, 279 F.3d at 1186 (quoting NRDC v. EPA, 863 F.2d 1420, 

1429 (9th Cir. 1988)). In this regard, the Demonstration Project did not appear 

out of thin air. It was taken nearly verbatim from consent decrees that the 

United States entered into with alleged Clean Air Act violators. “[N]uance and 

subtlety are not virtues in agency notice practice,” as an agency should say 

“explicitly” what it is considering. NRDC, 279 F.3d at 1188. As the 

Demonstration Project was a known entity to EPA at the time of its regulatory 

proposal, EPA was obliged to inform Phoenix Cement and other stakeholders 

that it was considering requiring it, rather than just putting it in the final rule 

with no notice.

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Third, EPA concedes that the Demonstration Project includes design 

and testing parameters that exceed those “necessary to install the underlying 

controls,” but argues that this fundamental deviation from the proposed rule 

should be excused because “these requirements are reasonable given the level 

of technical uncertainty.” EPA Br. 69. But the question is not whether EPA’s 

action is or is not reasonable, it is whether Phoenix Cement could have 

anticipated that EPA would have required the Demonstration Project in the 

final rule. After all, EPA’s “mission is not a roving commission to achieve pure 

air or any other laudable goal,” Michigan v. EPA, 268 F.3d 1075, 1084 (D.C. Cir. 

2001), it is to implement the Clean Air Act consistent with the rulemaking 

requirements of the Administrative Procedure Act.

Fourth, EPA argues that the fact that the Demonstration Project is 

unique to this visibility plan is not relevant to the logical outgrowth inquiry. 

EPA Br. 70. But the uniqueness of the Demonstration Project is 

unquestionably relevant. Stakeholders “reasonably anticipate” based, in part, 

on how EPA treats similar issues in similar rulemakings. The fact that all 

visibility plans consider the efficiency of emission control devices but that this 

federal plan, and this federal plan only, includes a Demonstration Project, 

evidences that Phoenix Cement could not reasonably anticipate that EPA 

would choose the path it did.

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Fifth, EPA asserts that Phoenix Cement “ha[s] not come close to 

meeting the Act’s stringent standard of review for alleged procedural errors.” 

EPA Br. 70. But EPA never attempts to explain why Phoenix Cement does not 

meet the standard, which is necessary given that EPA bears the burden of 

proving that its error was not prejudicial.7 See Nw. Res. Info. Ctr., Inc. v. Nw. 

Power and Conservation Council, 730 F.3d 1008, 1019 (9th Cir. 2013) (rejecting 

agency’s harmless error argument where the agency failed to demonstrate that 

its mistake “clearly had no bearing on the . . . substance of [the] decision 

reached”) (alteration in original) (quotation omitted). In any case, EPA’s 

suggestion that Phoenix Cement’s reconsideration petition concerning the 

Demonstration Project meets the “central relevance” standard of Section 

307(d)(7)(B), a necessary prerequisite for EPA granting the petition, but not the 

“central relevance” standard of Section 307(d)(8), is entirely arbitrary. Compare 

EPA Br. 33, with id. at 70.

Moreover, EPA’s suggestion that failure to provide adequate notice is a 

procedural error is incorrect. In NRDC, this Court explained that such an 

error is a substantive flaw: “[a] decision made without adequate notice and 

 

7 EPA may mistakenly believe that Phoenix Cement is asking the court to 

invalidate the entire rule under review, given its characterization of Section 

307(d)(8). That assumption is incorrect, as Phoenix Cement has only asked the 

Court to vacate the Demonstration Project.

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comment is arbitrary or an abuse of discretion.” NRDC, 279 F.3d at 1186. In 

other words, the “process” of notice and comment was followed, but EPA’s 

decision to promulgate a final rule that is outside the bounds of a regulatory 

proposal results in a flawed regulation.

C. EPA Did Not Engage in Reasoned Decisionmaking When It 

Included the Demonstration Project in the Federal Plan

In its opening brief, Phoenix Cement argued that EPA failed to satisfy 

its fundamental obligations of reasoned decisionmaking when it entirely failed 

to explain how the Demonstration Project was justified under the statutory and 

regulatory provisions that establish the criteria for visibility plans. PCC Br. 22-

24. EPA tacitly acknowledges its failings by providing a post hoc litigation 

rationale for its decision: that the Demonstration Project is authorized under 

Section 114 of the Act. The Court should reject EPA’s last-ditch effort to 

justify the Demonstration Project and vacate that provision of the rule.

1. “The Supreme Court has forbidden . . . courts from relying upon 

. . . ‘post hoc’ rationalizations for agency action.” Presidio Golf Club v. Nat’l Park 

Serv., 155 F.3d 1153, 1164-65 (9th Cir. 1998) (citing Citizens to Preserve Overton 

Park, Inc. v. Volpe, 401 U.S. 402, 419 (1971)). In this regard, this Court will not 

affirm agency action when the agency justifies it under one legal theory, then 

flips its position in litigation. See Altamirano v. Gonzales, 427 F.3d 586, 595 (9th 

Cir. 2005). EPA never articulated Section 114 as the basis for the 

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Demonstration Project and the Court therefore cannot affirm the 

Demonstration Project on this basis. See SEC v. Chenery Corp., 332 U.S. 194, 

196 (1947) (a reviewing court may not supply a reasoned basis for the agency’s 

action that the agency itself has not given); see also Cal. Trout v. FERC, 572 F.3d 

1003, 1021 (9th Cir. 2009). EPA’s failure to justify its actions by reference to 

the statutory criteria in Section 114 is unquestionably prejudicial, given that the 

Demonstration Project is not simply an information-gathering mechanism but 

imposes ongoing design and operational restrictions.8

2. EPA’s suggestion that the Demonstration Project is “necessary 

for achieving reasonable progress” is meritless. EPA Br. 72-73. This argument 

does not accurately characterize the Agency’s parsimonious explanation for the 

Demonstration Project, which is only that the Project was promulgated “in 

response to concerns raised by Earthjustice and in order to ensure that 

 

8 Any rational construction of Section 114(a)(1)(G), which authorizes EPA to 

require regulated sources to “provide such other information as the 

Administrator may reasonably require,” must be construed consistent with the 

types of information gathering that are specifically enumerated in Section 

114(a)(1)(A)-(F), which are all passive types of information gathering that do 

not impose design or operational restrictions. See Prudential Locations LLC v. 

U.S. Dep’t of Hous. and Urban Dev., 739 F.3d 424, 437 n.2 (9th Cir. 2013) 

(Berzon, C.J., dissenting) (“[A]pplication of the familiar ejusdem generis canon 

also suggests that the catch-all term . . . should be ‘construed to embrace only 

objects similar in nature to those objects enumerated by the preceding specific 

words.’”) (quoting Circuit City Stores, Inc. v. Adams, 532 U.S. 105, 114-15 (2001)).

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performance of the SNCR system installed at the [Phoenix Cement] Plant is 

optimized,” and that EPA believes it is “appropriate here, given the significant 

variability in control efficiencies achievable with SNCR at cement kilns.” 79 

Fed. Reg. 54,420, 52,455/3-56/1 (Sept. 3, 2014), J.A. 00351. None of these 

explanations relate to the four factors for reasonable progress set forth in 

Section 169A(g)(1), 42 U.S.C. § 7491(g)(1), or at 40 C.F.R. § 51.308(d)(1)(i)(A), 

or attempt to tie control efficiency to the issue of visibility in any way. 

Moreover, the Demonstration Project imposes significant costs on Phoenix 

Cement but EPA drew no relationship between higher SNCR control 

efficiencies and actual visibility benefits. “[I]t is arbitrary and capricious for 

EPA to force an emissions source ‘to spend millions of dollars for new 

technology that will have no appreciable effect on the haze in any Class I 

area.’” Nat’l Parks Conservation Ass’n v. EPA, __ F.3d __, No. 12-73710, 2015 

WL 3559149, at *10 (9th Cir. June 9, 2015) (quoting Am. Corn Growers Ass’n v. 

EPA, 291 F.3d 1, 7 (D.C. Cir. 2002)).

3. EPA’s new argument that “[i]nformation is the very basis for all 

EPA decision-making in the regional haze context,” so “EPA properly 

determined that a demonstration project was a reasonable way to obtain that 

information,” is likewise flawed. EPA Br. 72. Information is the basis for all 

informed EPA decisionmakings, not just regional haze rules, which is why the 

Act includes Section 114’s information collection provisions. But the means by 

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which EPA gathers information must still comport with law. EPA failed to 

provide any legal basis in in the rule under review why the Demonstration 

Project comports with the requirements of Section 114. Having failed to 

provide that explanation in the rule, EPA cannot defend it on that basis and 

Phoenix Cement should not be forced to argue this issue in a vacuum.

Additionally, EPA’s suggestion that the Agency may require additional 

information in future visibility proceedings underscores the arbitrary nature of 

its actions. Arizona, not EPA, has primary authority to implement the Clean 

Air Act’s visibility programs. CAA § 169A(b)(2)(B), 42 U.S.C. § 7491(b)(2)(B). 

And Arizona is Phoenix Cement’s primary regulator, with ample authority to 

request whatever information it believes is necessary to fulfill its statutory 

obligations under the Clean Air Act and state law. EPA has the authority to 

regulate directly only if the state fails to make an approvable plan submission 

during the next planning period. See CAA § 110, 42 U.S.C. § 7410. It is 

arbitrary and capricious for EPA to anticipate supplanting the state’s authority 

before Arizona even devises its next visibility plan.

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III. CONCLUSION

For the reasons stated in Phoenix Cement Company’s opening brief and 

in this reply brief, the Court should vacate the Demonstration Project set forth 

at 40 C.F.R. § 52.145(k)(3), (6) and 40 C.F.R. § 52.145 Appendix A. The Court 

should also grant the relief requested in Petitioners State of Arizona and 

CalPortland’s briefs.

Dated: June 24, 2015 Respectfully submitted,

 /s/ Mark W. DeLaquil 

Mark W. DeLaquil

Andrew M. Grossman

BAKER & HOSTETLER LLP

Washington Square, Suite 1100

1050 Connecticut Avenue, N.W.

Washington, D.C. 20036-5304

Telephone: (202) 861-1527

Facsimile: (202) 861-1783

E-mail: mdelaquil@bakerlaw.com

George A. Tsiolis

Attorney At Law

351 Lydecker Street

Englewood, N.J. 07631

Phone: (201) 408-4256

Facsimile: (201) 408-4622

Email: gtsiolis@nj.rr.com

Counsel for Petitioner Phoenix Cement 

Company

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CERTIFICATE OF COMPLIANCE

This brief complies with the type-volume limitations of Fed. R. App. P. 

32(a)(7)(B) because it contains 5,139 words, excluding the parts of the brief 

exempted by Fed. R. App. P. 32(a)(7)(B)(iii). This brief complies with the 

typeface requirements of Fed. R. App. P. 32(a)(5) and the type style 

requirements of Fed. R. App. P. 32(a)(6) because it has been prepared in a 

proportionally spaced typeface using Microsoft Word in 14-point Garamond 

typeface.

Dated: July 8, 2015 /s/ Mark W. DeLaquil

Mark W. DeLaquil

 Case: 14-73368, 07/08/2015, ID: 9602048, DktEntry: 53, Page 31 of 32
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CERTIFICATE OF SERVICE

I hereby certify that I electronically filed the foregoing Petitioner’s Final Reply 

Brief with the Clerk of the Court for the United States Court of Appeals for the Ninth 

Circuit by using the appellate CM/ECF system on July 8, 2015. Participants in the 

case who are registered CM/ECF users will be served by the appellate CM/ECF 

system.

Dated: July 8, 2015 /s/ Mark W. DeLaquil

Mark W. DeLaquil

 Case: 14-73368, 07/08/2015, ID: 9602048, DktEntry: 53, Page 32 of 32