Case Name: RIVERSIDE CEMENT COMPANY, et al., Petitioners, v. Lee M. THOMAS, Administrator, United States Environmental Protection Agency, Respondents
Court: United States Court of Appeals for the Ninth Circuit
Jurisdiction: United States
Decision Date: 1988-04-08
Citations: 843 F.2d 1246
Docket Number: Nos. 86-7126, 86-7132
Parties: RIVERSIDE CEMENT COMPANY, et al., Petitioners, v. Lee M. THOMAS, Administrator, United States Environmental Protection Agency, Respondents.
Judges: Before NOONAN and THOMPSON, Circuit Judges, and TEVRIZIAN, District Judge.
Reporter: Federal Reporter 2d Series
Volume: 843
Pages: 1246–1250

Head Matter:
RIVERSIDE CEMENT COMPANY, et al., Petitioners, v. Lee M. THOMAS, Administrator, United States Environmental Protection Agency, Respondents.
Nos. 86-7126, 86-7132.
United States Court of Appeals, Ninth Circuit.
Argued and Submitted Jan. 12, 1988.
Decided April 8, 1988.
As Amended June 21, 1988.
Charlotte Uram, Landels, Ripley & Diamond, San Francisco, Cal., and James E. Good, Gresham, Varner, Savage, Nolan & Tilden, San Bernardino, Cal., for petitioners.
David W. Zugschwerdt, Dept, of Justice, Washington, D.C., for respondents.
Before NOONAN and THOMPSON, Circuit Judges, and TEVRIZIAN, District Judge.
Honorable Dickran M. Tevrizian, Jr., United States District Judge for the Central District of California, sitting by designation.

Opinion:
NOONAN, Circuit Judge:
At the heart of this case is a federal agency's acceptance of the bureaucratic equivalent of an illusory contract. What happened was this: The South Coast Air Quality Management District on January 8, 1982 adopted a rule regulating the permissible emission of nitrogen oxide from cement kilns. Rule 1112 stated in subsection (b)(1) that the discharge from a kiln could be "no more than 3.1 lbs. of nitrogen oxides per ton of clinker produced"; the rule went on to say in section (d) that prior to the Rule's effective date a hearing was to be held to review this limit and that if it was determined that the emission limit was "not supported by the evidence presented at the public hearing" then the emission limit should "be modified to the extent supported by the evidence."
The California Air Resources Board submitted Rule 1112 to the Environmental Protection Agency (EPA) as a revision of the State of California's plan for achieving what are called "national ambient air quality standards," that is, the standards set by EPA for outdoor air breathed by the public. On March 23, 1983 EPA issued a notice of proposed rulemaking apropos approval of this rule pursuant to its authority under the Clean Air Act, 42 U.S.C. § 7410(a),(c); 48 Fed.Reg. 12108-09. The notice stated that "Rule 1112 is contingent upon the results of ongoing fact finding." No further action was taken at this time.
On January 8, 1984 the South Coast Air Quality Management District extended until January 1986 the date for the public hearing on feasibility. The California Air Resources Board approved this extension and submitted it to EPA. On October 24, 1984 EPA again gave notice of rulemaking in relation to Rule 1112. This notice stated the limit of 3.1 pounds in absolute terms without reference to the condition in the rule itself. On January 7, 1986 EPA, without waiting for the feasibility hearing, approved the rule effective February 6, 1986. 49 Fed.Reg. 42748. Supplementary information published by EPA indicated that EPA regarded the rule as now setting an absolute limit of 3.1 pounds without regard to the contingency built into the rule. The petitioner cement companies challenge EPA's interpretation of the rule as arbitrary. 42 U.S.C. § 7607(d)(9).
EPA has been delegated authority by Congress to interpret the statutory scheme that the Clean Air Act has entrusted to its administration. Chevron U.S.A. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 845-46, 104 S.Ct. 2778, 2783, 81 L.Ed.2d 694 (1984). Its regulations are controlling unless "arbitrary, capricious, or manifestly contrary to the statute." Id. at 844, 104 S.Ct. at 2782. EPA here has acted arbitrarily, capriciously and contrary to the statute.
Congress set up a structure in which the states have the initiative. EPA's role in enforcing "the specific, source-by-source emission limitations" is "secondary." Train v. Natural Resources Defense Council, Inc., 421 U.S. 60, 79, 95 S.Ct. 1470, 1481, 43 L.Ed.2d 731 (1975). EPA may either accept or reject what the state proposes; but EPA may not take a portion of what the state proposes and amend the proposal ad libitum. Rule 1112 was proposed by the California authorities with a proviso that prevented it from having any effect prior to a public hearing on feasibility. This proviso was distinct from the general requirement of the statute that all state plans provide for revision. 42 U.S.C. § 7410(a)(2), (4). The proviso introduced a doubt into the standard itself. EPA could not without arbitrariness and caprice strike the proviso and pretend that it has a rule with an absolute limit. EPA could not, without following the procedure set by the statute, 42 U.S.C. § 7410(c), take upon itself the primary role Congress assigned to the states.
There was a further unlawful element in EPA's action. While it purported to establish an emission limitation which would achieve a certain reduction in nitrogen oxides emissions from cement kilns, in fact Rule 1112 is an elusive and illusory measure. EPA could not approve that rule as satisfying Clean Air Act § 110(a)(2)(B)'s requirement that a SIP include "emission limitations . as may be necessary to insure attainment and maintenance of such primary or secondary standard ." 42 U.S.C. § 7410(a)(2)(B). We accordingly vacate EPA's approval of Rule 1112 and remand for proceedings consistent with this Opinion.
VACATED AND REMANDED.