# United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued November 8, 2004 Decided February 18, 2005

No. 03-1222

C ENTER FOR E

NERGY AND E

CONOMIC D EVELOPMENT

, P ETITIONER

V

.

E NVIRONMENTAL P ROTECTION A GENCY

,

R ESPONDENT

P HELPS D ODGE C ORPORATION

, ET AL

.,

I NTERVENORS

On Petition for Review of an Order of the

Environmental Protection Agency

Paul M. Seby argued the cause for petiti o ner. With him

on the briefs was Peter S. Glaser

. A dam T. DeVoe and Sean

M. Sullivan entered appearances.

Kenneth C. Amaditz

, Attorn ey, U.S. Department of

Justice, argued the cause for respondent. With him on the

brief were John C. Cruden

, Deputy Assis tant Attorney

General, and Jan M. Tier ney , Attorney, U.S. Environmental

Protection Agency.

Joseph P. Mikitish

, Assistant Attorney Ge n eral, Attorney

General's Office of Sta te of Arizona, argued the cause for2

amici curiae State of Arizona, et al. in s upport of respondent.

With him on the brief were Terry Goddard , Attorney General,

Bill Lockyer

, Attorney General, Attor ney General’s Office of

State of Cal

ifornia, M

anel M. Medeiros

, Solicitor General,

Lisa Madigan

, Attorney General, Attorn e y General’s Office

of State of Illinois, G ary Feinerman

, Solicitor General,

Patricia Ma drid , Attorney General, Attorney General,

Attorney General’s Office o f State of New Mexico, T racy M.

Hughes

, Special Assistant Attorney Ge neral, M ark Shurtleff

, Attorney General, Attorney General’s Office of State of Utah,

Fred Nelson

, Assistant A ttorney General, P atrick J. Crank

, Attorney General, Attorney General’s Office of State of

Wyo ming, and J

ay Jerde

, Senior Assistant Attorney General.

Charles F. Noble , Attorney, New Mexico Environment

Department, entered an appearance.

Chris S. Leason

, Vickie L. Patton

, and Thom as A.

Bloomfield were on the brief for intervenors Phel ps Dodge

Corporation, et al.

Before: E

DWARDS and H

ENDERSON

, Circuit Judges, and

W ILLIAMS

, Senior Circuit Judge

.

Opinion for the Court filed by Senior Circuit Judge

W ILLIAMS

.

W ILLIAMS

, Senior Circuit Judge : Haze obscuring the

Grand Canyon and various other nati onal parks and

wilderness areas in the west is a multi-state problem. In the

interests of developing a solution, the Environmental

Protection Agency in 1999 adopted a Regional Haze Rule

(“Haz e Rule”), 40 C.F.R. §§ 308-309. Section 308 required

states to impose best available retrofit technolo gy (“BART”)

on so-called “BART-eligible sources,” a sp ecified class of

large sta tionary pollution sources that had been in operation

s ince August 7, 1977. In A merican Corn Growers Ass’n v.3

EPA

, 29 1 F.3d 1 (D.C. Cir. 2002), we vacated parts of § 308

because we found EPA’s methods for determining BART

i nconsistent with the Clean Air Act. Those aspects of the

Haze Rule remain pending before EPA on remand.

Section 309 of th

e Haze Rule, however, permitted states

to reduce haze by

alternative means, including a regional

approach, so long as the al t ernative would be “better than

BART”—i.e., improve visibility more rapidly than under

BART. In the rule before us, which implements the Haze

Rule, EPA approved a regional alternative. To determine

whether the rule was better t h an BART, EPA used a BART

met hodology quite similar to the one A merican Corn Growers

c ondemned. On a challenge by the Center for Energy and

Economic Developme n t, representing a group of pollution

sources in the region, we find that the simila rity fatally taints

EPA’s rule.

* * *

The disputed regulations in this case arise from two

amendments to the Clean Air Act. Section 169A, adopted in

1977, “declar

e[d] as a national goal the prevention of any

futu re, and the remedying of any existing, impairment of

visibility in mandatory class I Federal areas which impa irment

results from manmade air pollution.” 42 U.S.C. § 7491(a)(1).

It instructed

EPA to require covered states to submit state

implementation plans (“SIPs”) that “contain such . .

.

measures as may be necessary to make rea sonable progress

toward mee

ting the national goal.” 42 U.S.C. § 7491(b)(2).

In determini

ng reasonable progress, EPA was to consider four

factors—“the costs of compliance, the t ime necessary for

compliance,

. . . the energy and nonair quality environmental

impacts of compliance, and the remaining useful life of any

ex isting [regulated] source.” 42 U.S.C. § 7491(g)(1). In

imposing BART requiremen ts on the states, EPA was to4

consider those four factors, plus “the degree of improvement

in visibility which may re asonably be anticipated to result

from the use of such technology.” 42 U.S.C. § 7491(g)(2).

On July 1, 1999 EPA promulgated the Haze

Rule—essentially 40 C.F.R §§ 51.308-309. Section 308 sets

out requirements for SIPs to achieve natural visibility

conditions by 2064. 40 C.F.R. § 51.308(d). In A merican

Corn Growers we addressed § 308(e)(1) , which had instructed

states to measure t

he first four BART factors by source, but to

measure the de gree of anticipated visibility improvement by

area affected

—in effect, by groups of sources defined by area

of impact. 40 C.F.R. §§ 51.308(e)(1)(ii)(A)-(B). “To treat

one of the five statutory factors in such a dramatically

differe nt fashion distorts the judgment Congress directed the

states to make for each

BART-eligible source.” A merican

Corn Growers

, 291 F.3d at 6. As a result, we found, a state

could be compelled to impose BART on a source eve n if the

imposition would have “no appreciable effect on the haze in

a ny class I area.” I

d

. at 7. We reversed and remanded, and

the remand is now pending before EPA.

Section 169B, adopted in 1990, expressed a broadened

congressional concern, instructing EPA to research visibility

impairment in national parks and wilderness (“Class I”) areas.

42 U.S.C. § 7492(a)(1). It also directed EPA to “establish a

visibility transport commission for the region affecting the

visibility of the Grand Canyon National Park.” 42 U.S.C.

§ 7492(f). One year later, EPA created the Grand Canyon

Visibility Transport Commission (the “Commission”) to

conduct research and recommend remedial measures. The

Commission submitted recommendations to EPA in a 1996

report , covering the Grand Canyon and fifteen other Class I

areas on the Colorado Plateau.5

EPA pursu

ed the implications of § 169B by incorporating

in the Haze Rule not only a BART mandate but a regiona l

alternative. It allowed states “to implement an emissions

trading program or other alternative measure” so long as the

alternative would achieve “better than BART” results. 40

C.F.R. §§ 51.308(e)(2), 51.309(a). Under § 309, the

Commissio n

, or a regional body formed to implement a prior

Commission report, may opt for a regional alt ernative by

submitting an “annex” to that report. If EPA approved the

program described in the annex, then any state among the nine

covered by the Commission could ad opt the program in lieu

of the state-by-state requirements. See 40 C.F.R. § 51.309(f).

EPA approval would turn largely on w hether the regional

alternative provide s “greater rea sonable progress [toward

natural visibility levels] than would be achieved by [BART].”

40 C.F.R. § 309(f)(1)(i).

The Western Regional Air Partnership (“WRA P”), a

regional b ody formed to implement the 1996 Commission

report, submitted an annex in September 2000. The resulting

plan has a number of important similarities to and differences

from the program before us in American Corn Growers

. First, to develop “milestones” that would meet the Haze

Rule’s better-than- BART standard, WRAP estimated BART’s

likely achievements with a methodology similar to what we

rejected in A merican Corn Growers

. It applied the four

f actors other than visibility improvement by source categor y

rather than individua lly, but, just as had the approach rejected

in American Corn Growers , it measured visibility

improvemen

t in terms of the cumulative effect on particular

Class I areas of changes in emissions from all covered sources

in the “transport region.”

See Annex, Attachment C at C-4,

C-11-12. Ultimately, “the milestones were negotiated

numbers,” see Annex Rule, 68 Fed. Reg. 33,764, 33,769/1

(June 5, 2003), but these estimations were evidently a core

basis for the negotiations.6

Second, the Annex doesn’t directly impose restrict ions on

any sources. Rather, it sets various emission limitation

“mileston es” that steadily decline over time. If sources in the

aggregate fail to meet these milestones “voluntarily,” a

backstop emissions trading program will come i nto force.

Under it, sources may not emit the relevant pollutants in

amounts exceeding

their entitlements—which they will have

received either via allotment from the state or via trading. It

was plausible that

the trading program would meet the betterthan-BART benchmark because it cover s many sources

besides ones that are BA R T-eligible under the statutes and

§ 308. And the provision for trading presumably would

reduce the cost for any given level of emissions re duction.

See generally A cid Rain Program: General Provisions and

Permits, Allowance System, Continuous Emissions

Monitoring, Excess Emissions and Administrative Appeals , 58

Fed. Reg. 3590 (Jan. 11, 1993).

EPA approved and promulgated the substantially similar

Annex Rule. 68 Fed. Reg. 33,764 (June 5, 2003).

The Center for Energy and Economic De velopment,

representing a group of pollution sources in the region,

petitions fo r review. It argues that the EPA’s BART

benchma rk is unlawful under our analysis in A merican Corn

Growers

. After addressing various preliminary issues, we

grant the petition.

* * *

EPA raises two jurisdictional objections to the

petition—that the petitioner lacks stan ding and that our

judgment in America n Corn Growers p recludes review. We

reject both.7

Standing of course compri ses the familiar elements of

injury in fact, causation, and redressability, L ujan v

. Defenders of Wildlife

, 504 U.S. 555, 560-61 (1992). EPA has

posed several objections to standing, some in its original brief

and another in a round of briefing that we requested after oral

ar gument. Initially EPA said that the Annex Rule’s

“voluntar y” system of trading emission allowances was more

favorable to the Center tha n are the “command and control”

§ 308 BART rules that would otherwise apply on remand

from American Corn Growers

. Moreover, if the Center is

correct that the Annex Rule does not achieve e nough visibility

improvement to constitute “reasonable progress,” EPA

reasoned that a rule meeting that standar d would necessarily

be more stringent and thus would only worsen the Center’s

burden.

Both arguments f

ail. The Center rightly points out that

the Annex Rule requires immediate compliance with certain

reporting requirements, subject to sanctions, so the rule

burdens the Cent er’s members n ow

, which normally is enough

for standing. See S ierra Club v. EPA

, 292 F.3d 895, 900

( D.C. Cir. 2002). As to the difference between § 308 and the

Annex Rule, EPA’s argument that the Annex Rule is

necessarily more lenient errs on two counts. First, as between

a § 308 that has not yet been repromulgated, see 69 Fed. Reg.

25,184 (May 5, 2004), and a living Annex Rule, the injury

from the latter see ms clear. Second, contrary to EPA’s

characterization, the Center’s complaint about the method of

calculating reasonabl

e progress is not that the Annex Rule is

too lenient, but that, in violation of American Corn Growers

, i t lacks legally required evidence of attendant visibility gai ns.

The Center’s hope that both § 308 and the Annex Rule will

emerge from remand imposing substantiall y lighter burdens

on its members is hardly chimerical. “Where an agency rule

causes the injury,” as her e, “the redressability requirement

may be satisfied

. . . by vacating the challenged rule and8

giving the aggrieved party the opportunity to participate in a

new rulemaking the results of which might be more favorable

to it.” A merica’s Community Bankers v. FDIC

, 200 F.3d 822,

828-29 (D.C. Cir. 2000).

Following oral argument, we invited t he parties to brief

the issue whether any harm to the Center’s members from the

Annex could properly be said to stem from EPA ’s action.

After all, EPA’s r

ules offered the Annex as an optional

alternative to § 308, and for the moment § 308 languishes in

unpr omulgated limbo. State pursuit of the Annex alternative

is the direct cause of injury to the Center’s members, and all

the states could, for a time, h ave refrained from any action.

EPA respond ed that as between §§ 308 and 309, “[t]he choice

is left entirely to the States,” four of which did not choose

§ 309. Intervenors and seven amici states in support of EPA

also re m ind us that the western states themselves initially

provided the “blueprint” or “roadmap” for the Ann e x Rule.

See Amicus Supp. Br. at 4, Intervenors Supp. Br. at 6. “A

decision to strike the Annex Rule,” th e amici states observe,

“wou ld not prevent Western States from adopting the same

limitations in

order to achieve reasonable progress.” Amicus

Supp. Br. at 13; see also Resp. Supp. Br. at 11-12.

The existence of state choice is in itself immaterial.

“‘Your money or your life?’ calls for a choice, but each

option makes the recipient of the offer worse off.” H enn v.

Nat’l Geographic Soc’y

, 819 F.2d 824, 826 (7th Cir. 1987).

Under § 309(f)(1) of the Haze Rule a state can, by filing a

valid annex with the Commission or appropriate regional

body, “satis fy the requirements of § 51.308(b) through (e),”

i.e., fulfill its otherwise app licable Haze Rule obligations and

av oid the trouble of expending its own administrative

re sources to develop other measures while BART remains

pending before EPA. The states’ choice, in other words, is

between one burden and another.9

Nor does the stat es’ initiative in designing the Annex

undermine the inference that EPA’s pressure has been

decisive, much less prove that the states acted spontaneously.

The Annex Rule addresses regional haze—“air pollutants

emitted by numerous sources across a broad region” that

impair “visibility in the 16 Class I areas on th e Colorado

Plateau.” 68 Fed. Reg. at 33,765. Regional haze is a problem

in which the benefits of each state’s emissions controls are

largely felt in other states. Without federal intervention, then,

a state calculating how ha rd it should press in limiting

pollution has no incentive to consider resulting enhanc ements

of other states’ welfare. There is no reason to believe that

New Mexico, for example, would without federal pressure

tighten limits for in-state polluters an extra notch so that

tourists could gaze at clear skies above the Grand Canyon.

Even an an

ti-pollution commitment demonstrated by

“numerous stakehold er meetings and public workshops across

the West,” Intervenors Supp. Br. at 3, does not explain why

one state would, absent federal pressure, ma rtyr itself for

another, or subject its electric power users (for example) to

additional costs for the benefit of out-of-state interests. Cf.

Maryland People’s Counsel v . FERC , 761 F.2d 768, 778

(D.C. Cir. 1985) (“[I]t is ridiculous to assume that” a

company would “engage in

. . . self-sacrificing behavior”

“simply because there is nothing that stops it from doing so”).

The western states, though active, were not self-starting: “The

Commission was given the charge to

. . . address[] regional

haze.” WRAP Report, at I.B. (emphasis added).

As a result, the regulatory scheme “is at least a

substantial factor motivating the [states’] actions,” and the

C e nter alleges an injury to its members that is “fairly

traceable” to that scheme. T ozziv. U.S. Dep’t of Health and

Hu man Servs. , 271 F.3d 301, 308 (D.C. Cir. 2001) (quoting

Cmty. for Creative Non-Violence v. Pierce , 814 F.2d 663, 669

(D.C. Cir. 1987)).10

Moreover, as the western states are well aware, § 308’s

days as an unpromulgated rule are numbered. Nothing in

American Corn Growers s uggests the contrary. Given zero

prospect of avoiding federal regional haze regulation

altogether, the states have reason to get ahead of the game by

devising their own plans, and securing EPA approval, now.

Under the Haze Rule, states adopting a § 30 9 alternative must

submit their SIPs by December 31, 2003, five years before

states operating under § 308 must sub mit theirs. 40 C.F.R.

§§ 51.309(c), 51.30 8(b). The amici states suggest that § 309’s

requiremen

t of swifter action makes it less appealing,

showing—they suppose—that § 308 cannot have played a

causal role. But the distinction cuts the other way if the states

have reason to believe complying with § 309 will be more

appealing, as it m

ay well, at least in part because the

emissions trading progra m is likely to enable sources to

achieve the desired cu

tbacks at lower total cost. Thus, even a

state believing that the BART rule emerging from remand will

be materially milder than its predecessor could reasonably

prefer the Annex approach an d would have a regulatory

incentive to jump now , for fear of losing the Annex option.

Cf. Block v. Meese

, 793 F.2d 1303, 1308 (D.C. Cir. 1986)

(finding standing o n a showing that agency action “create[d] a

disincentive” from which plaintiffs su ffered). So understood,

the earl ier § 309 deadline spurs states promptly to implement

§ 309 rather than wait for § 308 to reemerge from remand.

EPA’s second juris dictional challenge is that the Center’s

c laims were ripe but defeated in American Corn Grow ers , and

are now precluded. In particular, EPA objects to the Center’s

arguments regarding EPA’s st a tutory authority to promulgate

the Annex Rule, the Annex Rule’ s effect on state discretion,

an d the Annex Rule’s compliance with § 309 reasonable

progress goals. These purely legal arguments, EPA contends,

we re ripe for review when it promulgated the Haze Rule, as

that rule, especiall y §§ 308(e)(2) and 309(f), set out the11

criteria for approving an Annex—cri teria the Annex Rule

faithfu l ly applied. EPA reads American Corn Growers as

having struck do w n only the group BART provisions

governing BART im

position, not those governing BART

altern atives. As the Center neither sought clarification nor

petitioned for rehearing, EPA regards this petition as a “backdoor challenge” to the Haze Rule, Resp. Br. at 22, filed well

past the Clean Air Act’s sixty-day, post-publication window.

See 42 U.S.C. § 7607(b)(1).

The Cente r, by contrast, reads A merican Corn Growers

as concluding “tha t the Haze Rule’s BART provisions are

contrary to

. . . § 169A.” 291 F.3d at 8-9. By the Center’s

reading, we

have already held §§ 308(e)(2) and 309(f) to be

invalid “BART prov

isions” because A merican Corn Growers

did not distinguish mandatory BART from BART

alternatives. Reply Br. at 10-11. Alternatively, the Center

argues that American Corn Growers implicitly regarded

issues revolving around §§ 308(e)(2) and 309(f) as unripe and

therefore to be dealt with in “a more choate situation in the

future.” Reply Br. at 12-13.

The exact parsing of American Corn Growers has in the

end no effect. While we limited the decision carefully,

“hold[ing] only that the Haze Rule’s treatment of

§ 169A(g)( 2)’s benefit calculation and its infringement on

states’ authority

. . . render the BART provisions of the rule

impermissible,” 291 F.3d at 9, w e gave no intimation that a

better-than-BART standard, defined simply as achiev ing more

rapid progress than BART, could ever pass muster. On the

other hand, we never explicitly addressed better-than-BART

in th e § 309 context, a hesitation reasonably based on the

po ssibility that the BART benchmark used to calculate

“better-than-BART” might in the end differ materially from

the origi nal BART. See N

at’l Park Hospitality Ass’n v. Dep’t

of Interior

, 538 U.S. 803, 812 (2003) (facia l challenge to a12

federal regulation is unripe if it “rel[ies] on specific

characteristics of certain types of [disputed] contracts to

s upport [its] positions”). As in fact it did: recall that whereas

the BART calculation struck down in American Corn

Growers applied the first four factors by source, the progre s s

imputed from BART to support the Annex “milestones” was

estimated on the basis of clusters of sourc e s by source type.

Either wa y American Corn Growers is read, it plainly forbade

use of the origina l BART methodology in any § 169A

context. We thus turn to the merits.

* * *

The Center’s firs t argument on the merits is that § 169A

flatly bars the An

nex Rule’s approach insofar as it deviates

from BART (correctly conceived). Under section 169A(b)(2),

EPA’s regulations must require SIPs

to contain such emission limits, schedules of compliance

and other measure s as may be necessary to make

reasonable progres s toward meeting the national

[visibility] goal . . . , including—

(A) . . . a requirement that each [BART-eligible

source]

. . . shall

[implement BART] as determined

by the State . . . .

42 U.S.C. § 7491(b)(2). We review EPA’s interpretation of

this provision und er the standard framework of C hevron

U.S.A., Inc. v. Natural Resources Defense Council, Inc.

, 467

U.S. 837 (1984). Provided the statute is ambiguous, we defer

to the agency’s interpretation as long as it is reasonable.

The Center asserts that § 169A( b)(2) can be read only one

way. That is, each SIP’s constituent measures must

“includ[e]” BART. That the Annex Rule—unlike13

§ 16 9A—also applies to BART- in eligible sources is no

answe r

, the Center insists, at least to the extent EPA applies

the Annex Rule to BART-eligible ones. The Center also cites

excerpts from the Clean Air Act’s legislative history to

suggest Congress did not intend to give EPA a choice on

whether to include BART.

EPA, by contrast, sees “at least two permissible

i nterpretations” of § 169A(b)(2). Resp. Br. at 30. One is the

Center’s. The other is that each SIP’s “emission limits,

schedules of compliance and other measures” must

“include[e] ” BART only “as may be necessary to make

reasonable progress toward” national visibility goa ls. I d

. (quoting 42 U.S.C. § 7491(b)(2)). If WRAP’s alternatives

would achieve greater progress than BART, then BART

would not be “necessary to make reasonable progress.” The

Ninth C ircuit, EPA observes, upheld this reading in C entral

Arizona Water Conservation District v . EPA , 990 F.2d 1531,

1543 (9th Cir. 1993).

The Center never explains why EPA must detach the

“inclu[sion]” of BART from the condition t hat it be

“necessary to make reasonable progress” to national visibility

goal s. Nor can we discern a reason. Moreover, the Center’s

legislative hi

story references all pertain to § 169A.

Congress’s addition of § 169B, however, clarified that the

focus of the Clean Air Act wa s to achieve “actual progress

and improvement in visibility,” 42 U.S.C. § 7492(b), not to

anoint BART the ma ndatory vehicle of choice. It is no

wonder, then, that § 169B( d)’s list of issues on which any

visibility transport commission is to make a ssessments and

repor t s, see 42 U.S.C. § 7492(d), includes no reference to

BART at all. Thus the Center has shown neither that

Co ngress’s language precluded non-BART alternatives where

BART wasn’t “necessary to make reasona b le progress,” nor

that EPA’s reading is otherwise unreasonable.14

EPA nevertheless must rationally exercise its § 169A

discretion to approve bett er-than-BART SIPs. See 42 U.S.C.

§ 7607(d)(9)(A). The Center argues that EPA did not,

because American Corn Grow e rs invalidated “the key

p remise on which EPA developed the Annex Rul e—that

‘better than BART’ means ‘better than group-BART,’” Pet.

Br. at 37. The latter is the Center’s label for the hybrid BART

condemned in American Corn Growers : evaluatin g prospects

of visibility improvement by reference to all sources affecting

an area, but evaluating the other BART factors by reference to

individual plants or similar types of plants. Given that WRAP

developed the Anne x using a variant of pre-remand BART,

the C enter considers the ensuing emission limitations

irrational. In other words, EPA cannot under § 309 require

states to exceed invalid emission reductions (or, to put it more

exactly, limit them to a § 309 alternative defined by an

unlawful methodology).

By EPA’s contrary reading, Ameri can Corn Growers

only invalidat

ed group (or hybrid) BART “when i mposing

BART on specific sour ces.” Resp. Br. at 35. Whether this

distinction was relevant for purposes of ripeness, EPA

provides no reason

why it signifies the substantive difference

EPA presses here. Once installed, the Annex Rule is not

merely advisory—covered states i mpose its requirements on

the Center’s members. The less stringent § 308 BART is, the

less stringent need be the state requirements under § 309.

EPA makes no effort to distinguish the original BART

calculations from those employed in choosing the Annex

Rule’s “milestones.”

This omission was a sensible saving of

paper. Though the Annex Rule clustered sources by source

type in hypothesizing emissions reductions, it lo oked to the

im p act of all emissions reductions to estimate visibility

progress, and thus remained a hybrid.15

Consequently, we do not reach the Center’s additional

objections to the A

nnex Rule’s impact on state authority and

implement a tion of § 169A reasonable progress goals. The

petition for review is

Granted

.