1 SETTLEMENT AGREEMENT WHEREAS, on July

17, 2009, the L ouisiana Environmental Action Network (“LEAN”) filed a complaint (civil action no. 1:09

- 0133) against L isa Jackson, Administrator, United States Environmental Protection Agency (“EPA”) in the United States District Court for the District of Columbia (hereinafter LEAN v. Jackson), which complaint was amended on February 17, 2010; WHEREAS, in its complaint L EAN alleges that EPA has failed to perform nondiscretionary

duties under the Clean Air Act relat ed to the attainment of national ambient air quality standards for ozone in the Baton Rouge Area; WHEREAS, on March 5, 2010, EPA filed its answer to LEAN’s amended complaint, denying any

liability ; WHEREAS, Clean Air Act sections 172(c)(5) and 182(d) and 185, 42 U.S.C. §§ 7502(c)(5) and 7511a(d), and 7511d, set forth certain requirements applicable to areas classified as “severe” ozone nonattainment areas; WHEREAS, EPA reclassified the Baton Rouge area as a severe 1

- hour ozone nonattainment area effecti ve June 23, 2003, and established a schedule for Louisiana to submit State Implementation Plan (SIP) revisions addressing the Clean Air Act’s pollution control requirements for severe ozone nonattainment areas; WHEREAS, in 2004 EPA promulgated a final r ule (“the Phase 1 Implementation Rule”) to implement the 8

- Hour Standard, and purported to remove the need for s tates to include 1

- hour ozone new source review elements as part of their federally approved State Implementation Plan; WHEREAS, the U.S. Court of Appeals for the District of Columbia Circuit in South Coast Air Quality

Management Dist. v. EPA, 472 F.3d 882 (D.C. Cir. 2006) vacated those portions of the Phase 1 Implementation Rule that purported to remove the need for States to include 1

- hour ozo ne new source review elements as part of their federally approved State Implementation Plan; WHEREAS, the L ouisiana Department of Environmental Quality (“LDEQ”) has submitted to EPA for approval certain State Implementation Plan revisions relevant to Seve re 1

- Hour Requirements for major sources in the Baton Rouge Area, which submissions include: (1) a June 15, 2005 submittal titled “Severe Area Rule Update,” (2) a December 20, 2005, submittal titled “New Source Review State Implementation Plan (SIP),” and (3) a November 9, 2007, submittal titled “General Rule Update.” WHEREAS, EPA has not made an y determination whether the June 15, 2005, December 20, 2005, and November 9, 2007, state implementation revisions submitted by L DEQ meet applicable requirements o f the Clean Air Act; WHEREAS, the EPA’s Office of Air and Radiation issued a memorandum dated October 3, 2007, noting that the effect of the South Coast decision is to restore the obligation for areas designated nonattainment for the 8

- hour ozone standar d to have in their State Implementation Plans new source review applicability thresholds and emission offsets pursuant to the nonattainment classification in effect for the area for the 1

- hour ozone standard at the time of designation for the 8

- hour standard;2

WHEREAS, EPA’s Acting Regional Administrator, EPA Region 6, on April 29, 2009, sent a letter to the Secretary of the Louisiana Department of Environmental Quality strongl y encouraging the State to comply with the court decision in South Coast, and adv ising LDEQ that “EPA expects States to implement 1

- hour nonattainment NSR requirements using thresholds and emission offsets based on the classifications for areas designated nonattainment for the 1

- hour ozone standard;” WHEREAS, the Baton Rouge Area is currently designated nonattainment for the 8

- hour ozone standard; WHEREAS, recent monitoring data suggests that the Baton Rouge area is currentl y meeting the 8

- Hour Standard and may be eligible for redesignation to attainment; WHEREAS, LDEQ has submitte d a request to redesignate to attainment for the 8

- hour NAAQS the Baton Rouge nonattainment area; WHEREAS, certain requirements applicable to nonattainment areas terminate when an area is redesignated to attainment; WHEREAS, on March 27, 2008, EPA promu lgated a revised 8

- hour ozone standard of 0.75 ppm, 73 Fed. Reg. 16,436 (Mar. 27, 2008). EPA is reconsidering whether that standard is sufficient to protect public health. EPA has proposed to promulgate a revised ozone standard within the range of 0.060 to 0.070 ppm. 75 Fed. Reg. 2938 (Jan. 19, 2010). Complete, quality

assured data for 2008 and 2009, and preliminary data through September 30, 2010, suggests that the Baton Rouge area is not meeting the 0.75 standard; this same data suggests that the area is not meeting a standard within the range of 0.060 to 0.070 ppm. WHEREAS, the Parties have agreed to a settlement of the claims raised in this action without any

admission or adjudication of fact or law, which they consider to be a just, fair, and equ itable resolution of the claims raised; NOW, THEREFORE, the Parties agree to this settlement in the manner, terms, and conditions as follows: GENERAL TERMS 1. The parties to this Settlement Agreement (“Agreement”) are LEAN and EPA. 2. For purposes of this Agreement, the following terms shall have the meanings provided below:

“Agreement” refers to this document. “Baton Rouge Area” refers to the five

- parish Baton Rouge Nonattainment Area, which includes Ascension, East Baton Rouge, Iberville, L ivingston , and West Baton Rouge Parishes. “EPA” means the Administrator of the United States Environmental Protection Agency , or the Administrator’s dul y authorized representative, and the United States Environmental Protection Agency

. “1

- Hour Standard” refer s to the 1

- hour ozone national ambient air qualit y standard of 0.12 parts per million promulgated in 1979, 44 Fed. Reg. 8202 (Feb. 8, 1979).3 “8

- Hour Standard” refers to the 8

- hour ozone national ambient air qualit y standard of 0.08 parts per million promulgated in 1997, 62 Fed. Reg. 38,856 (July 18, 1997). “Settling Parties” refers to L EAN and EPA. AGREED DEADLINES 3. Within five (5) day s of the execution of this Agreement by both Settling Parties, the Settling Parties shall file a joint motion with the Court in L EAN v. Jackson, notifying it of this Agreement and requesting the Court enter an order holding litigation in abeyance pending completion of the process under section 113(g) of the Clean Air Act and during the period required to effectuate the terms of this Agreement, if EPA gives final approval and consents to this Agreement after the Clean Air Act section 113(g) process addressed in paragraphs 16 and 17 below. 4. If, b y February 28, 2012, EPA has not taken final action redesignating the Baton Rouge Area to attainment for the 1997 8

- hour ozone NAAQS, EPA will, by that date, sign a notice, to be published in the Federal Register, proposing action on (1) LDEQ’s June 15, 2005 submittal titled “Severe Area Rule Update,” (2) LDEQ’s December 20, 2005, submittal titled “New Source Review State Implementation Plan (SIP),” and (3) LDEQ’s November 9, 2007, submittal titled “General Rule Update.” 5. If, b y September 30, 2012, EPA has not taken final action redesignating the Baton Rouge Area to atta inment for the 1997 8

- hour ozone NAAQS, EPA will, by that date, sign a notice, to be published in the Federal Register, taking final action on the three proposed actions referenced in Paragraph 4. 6. Within 30 day s after EPA’s completion of the obligation s in paragraphs 4 and 5, or within 30 day s after EPA has taken final action redesignating the Baton Rouge Area to attainment for the 1997 8

- hour ozone NAAQS, LEAN and EPA shall jointly file with the Court in L EAN v. Jackson (civil action no. 1:09

- 01333) a motion pursuant to Fed. R. Civ. P. 41(a) to dismiss without prejudice its First Amended Complaint except that such dismissal shall be with prejudice as to an y claim against EPA to require EPA to take final agency action on (1) LDEQ’s June 15, 2005 submitt al titled “Severe Area Rule Update,” (2) LDEQ’s December 20, 2005, submittal titled “New Source Review State Implementation Plan (SIP),” and (3) LDEQ’s November 9, 2007, submittal titled “General Rule Update.” If LEAN fails to do so, EPA may file such a m otion and LEAN shall not oppose it. Dismissal of this Action pursuant to this Agreement shall not serve as a waiver or relinquishment of an y other rights that LEAN may have under the Clean Air Act. By way of example and not limitation, dismissal will not waive an y of LEAN’s right with respect to its position that Severe 1

- Hour Requirements apply until the Baton Rouge Area achieves attainment with the applicable ozone standard that is current as of the time of an y redesignation decision by EPA. REMEDY FOR NON - COMPLIANCE 7. If EPA fails to timely fulfill any

dut y under this Agreement, LEAN’s sole judicial remed y shall be to the right to ask the Court to lift the stay described in paragraph 3, and to pursue the claims raised in its Complaint. EPA does not w aive or limit an y defense relating to4

the claims raised in LEAN’s Complaint, nor does EPA concede that it has any legal dut y to take the actions called for in this Settlement Agreement. 8. The Settling Parties agree that contempt of court is not an avail able remed y under this Agreement. AGENCY DISCRETION 9. Nothing in the terms of this Agreement shall be construed to limit or modify the discretion accorded EPA by the Clean Air Act or by

general principles of administrative law. JURISDICTION 10. Nothi ng in the terms of this Agreement shall be construed to confer upon the district court jurisdiction to review an y decision, either procedural or substantive, to be made b y EPA pursuant to this Agreement.

EFFECT OF SETTLEMENT AGREEMENT 11. The Settlement Agreement shall not constitute an admission or evidence of any fact, wrongdoing, misconduct, or liability on the part of an y Settling Party. 12. Except as set forth in this Agreement, the Settling Parties retain all rights, claims, defenses, and discre tion they may otherwise have. 13. Nothing herein shall constitute an EPA finding or determination with respect to the three State Implementation Plan submissions referenced in Paragraph 4. COSTS 14. The Settling Parties shall each bear their own costs an d fees, including but not limited to attorney ’s and expert witness fees MODIFICATION 15. This Agreement, including the deadlines set forth in paragraphs 4 and 5, may be modified or amended b y written agreement b y counsel for the Settling Parties. CLEAN AI R ACT SECTION 113(g) 16. The Settling Parties agree and acknowledge that final approval and entry of this Agreement is subject to the requirements of Clean Air Act § 113(g), 42 U.S.C. § 7413(g). That subsection provides that notice of this proposed Agreement be given to the public, that the public shall have a reasonable opportunity to make an y comments, and that the Attorney General, as appropriate, must consider those comments in deciding whether to agree to this Settlement. 17. EPA shall submit a public notice of this Agreement to the Federal Register for publication and public comment within fourteen day s of execution of this Agreement by the Settling Parties. Within 45 day s of the close of the public comment period EPA shall notify5

LEAN wheth er it consents to this Agreement. This Agreement shall become final and effective on the date EPA notifies LEAN in writing that it consents to the Agreement. EFFECTIVE DATE 18. This Agreement shall become effective upon signature b y all Settling Part ies, completion of the public process under section 113(g) of the Clean Air Act, and EPA’s notification to L EAN in writing of its final consent to the Agreement. COMPLIANCE WITH OTHER LAWS 19. No provision of this Agreement shall be interpreted so as to c onstitute a commitment or requirement that EPA obligate or pay funds in contravention of the Anti

Deficiency

Act, 31 U.S.C. § 1341, or take actions in contravention of the APA, 5 U.S.C. §§ 551

- 559, 701

- 706, the Clean Air Act, or an y other law or regulation , either substantive or procedural. REPRESENTATIVE AUTHORITY 20. Each undersigned representative of the parties to this Agreement certifies that he or she is fully

authorized by

the part y to enter into and execute the terms and conditions of this Agreeme nt. By

signature below, all Settling Parties consent to this Agreement. FOR EPA : Ignacia S. Moreno, Assistant Attorney General Environment & Natural Resources Division

_________________________ Eric G. Hostetler Environmental Defense Section Envi ronment & Natural Resources Division U.S. Department of Justice P.O. Box 23986 Washington, D.C. 20026

- 3986 (202) 305

- 2326 Date: ___________ FOR LEAN :

__________________________ Adam Babich D.C. Bar. No. 382747 Tulane Environmental Law Clinic 6329 Freret Street New Orleans, LA 70118

- 6321 (504) 862

- 8800 Date: ___________