Opinion ID: 626372
Heading Depth: 3
Heading Rank: 2

Heading: The So-Called “Similar Source” Requirement

Text: In addition to disapproving the PCP Standard Permit for not complying with the EPA’s interpretation of Texas law, the agency also disapproved it on the 6 Nor could the EPA have lawfully treated Texas’s SIP-approved standard permits program as a proxy for the CAA’s requirements in this case, as the EPA suggested at oral argument. That the standard permits program meets the CAA’s requirements does not mean that it supplants those requirements in the next case. It may be that the program passed CAA muster with flying colors, and that the PCP Standard Permit could likewise satisfy the Act even assuming, for argument’s sake, that it does not meet the high standards of the standard permits program and is significantly less environmentally protective (assumptions that Petitioners vigorously dispute and that seem unlikely given that PCPs are, by definition, environmentally protective). 12 No. 10-60891 grounds that its availability is not limited to “similar sources.” 75 Fed. Reg. at 56,447. According to the EPA’s proposed disapproval, the “similar source” requirement limits the availability of each standard permit to a “narrowly defined categor[y] of emission sources,” such as “oil and gas facilities, asphalt concrete plants, and concrete batch plants.” 74 Fed. Reg. at 48,476 & n.10. Petitioners challenge the EPA’s authority to impose a “similar source” requirement, arguing that no such requirement exists in any applicable provision of the CAA or its implementing regulations. The EPA parries that it has “properly tie[d] the requirement that general permits be limited to similar sources to CAA section 110(a)(2) [42 U.S.C. § 7410(a)(2)] requirements that control measures be enforceable.” The EPA then points to several agency guidance documents that are said to “elucidate principles” relevant to its interpretation of the Act—presumably out of the hope that we will apply Chevron deference in reviewing that interpretation. See Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 842–43 (1984). Petitioners reply that the EPA’s “similar source” requirement merits no deference and is without support in the CAA. We first address what level of deference, if any, we owe to the EPA’s interpretation of § 7410(a)(2) as embracing a “similar source” requirement. We do not owe any deference to that interpretation based on the EPA’s insistence on a “similar source” requirement in its proposed and final disapproval. That is because nowhere in the rulemaking record does the EPA even hint that the “similar source” requirement reflects its interpretation of any applicable provision of the CAA or its implementing regulations.7 There is thus no agency 7 To the contrary, the EPA suggested in its final rule that the “similar source” standard derives from Texas law. See, e.g., 75 Fed. Reg. at 56,444 (“Under the Texas Standard Permits Minor NSR SIP, an individual Standard Permit must be limited to new or existing similar sources.”). Insofar as the “similar source” requirement reflects the EPA’s interpretation of Texas law, imposition of it here is ultra vires for the reasons discussed above in Part III.A. 13 No. 10-60891 interpretation in the rulemaking record to which to defer. See United States v. Mead Corp., 533 U.S. 218, 226–27 (2001) (setting forth the framework for when and to what degree courts must defer to agency interpretation “of a particular statutory provision”). For this same reason we owe no deference to the “similar source” requirement based on the EPA’s citation to agency guidance documents. See 74 Fed. Reg. at 48,476 n.11 (citing various agency guidance documents). The EPA concedes that these documents do not interpret the relevant statutory provisions—that is, those that govern SIP approval of minor NSR. See 75 Fed. Reg. at 56,447 (“The utility of these citations is not in the specific subject matter they address, but in their discussion of the regulatory principles to be applied in reviewing permit schemes that adopt emission limitations created through standardized protocols.”).8 Nevertheless, we must still consider whether we owe some measure of deference to the EPA’s interpretation of the Act in its appellate brief, which represents the first time it has argued that the CAA authorizes it to impose a “similar source” requirement on minor NSR. Chevron deference is out of the question. See Pool Co. v. Cooper, 274 F.3d 173, 177 n.3 (5th Cir. 2001) (litigation briefs are not entitled to Chevron deference). Still, we ordinarily must afford a weaker form of deference under Skidmore v. Swift & Co., 323 U.S. 134 (1944), to agency interpretations of statutes they administer that do not carry the force of law and, therefore, do not command Chevron deference. Mead, 533 U.S. at 234–35. The deference due under Skidmore varies with the persuasive force of 8 The EPA stated in its final disapproval that “[t]he memoranda cited in the proposal were cited for the purpose of providing documentary evidence of how EPA has exercised its discretionary authority when reviewing general permit programs similar to the Texas Standard Permits SIP.” Id. (emphasis added). This statement reflects a misapprehension by the EPA of its authorized role in the SIP-approval process. As discussed above, the EPA does not possess any “discretionary authority” in that process. See 42 U.S.C. § 7410(k)(3). Only the states enjoy discretion in implementing the dictates of the CAA. See, e.g., Union Elec. Co., 427 U.S. at 250 (“Each State is given wide discretion in formulating its [SIP].”). 14 No. 10-60891 the agency interpretation. See id. at 228. In Mead, the Court described as “near indifference” the level of Skidmore deference due “an interpretation advanced for the first time in a litigation brief.” Id. (citing Bowen v. Georgetown Univ. Hosp., 488 U.S. 204, 212–13 (1988)). In discussing the deference question in Bowen, the Court explained that “[d]eference to what appears to be nothing more than an agency’s convenient litigating position would be entirely inappropriate.” Bowen, 488 U.S. at 213. Thus, it appears that although we are bound to extend some modicum of deference to the EPA’s appellate counsel’s interpretation, that degree of deference is minimal. See Mead, 533 U.S. at 228 (the approach outlined in Skidmore “has produced a spectrum of judicial responses,” with deference to litigation briefs at the lowest end of that spectrum). Even affording Skidmore deference to the EPA’s interpretation of the CAA, we agree with the Petitioners that the Act does not authorize the EPA to impose a “similar source” requirement on minor NSR.9 We have already made clear that the Act empowers the EPA to disapprove a SIP revision only “if the revision would interfere with any applicable requirement concerning attainment [of the NAAQS] . . . or any other applicable requirement of [the Act].” § 7410(l). Otherwise the EPA must approve the revision. § 7410(k)(3). We can quickly dispense with any supposition that inclusion of a “similar source” rule in the PCP Standard Permit is necessary to prevent interference with the NAAQS. The Texas regulations governing the PCP Standard Permit provide that “[t]his standard permit must not be used to authorize [any PCP] that . . . the [TCEQ] executive director determines [has] the potential to exceed a [NAAQS].” 30 Tex. Admin. Code § 116.617(a)(3)(B). Given this provision, 9 We note that the interpretation advanced in the EPA’s brief is not particularly persuasive because the agency’s brief merely asserts, without any statutory analysis or support, that the “EPA properly ties the requirement that general permits be limited to similar sources to CAA section 110(a)(2) requirements that control measures be enforceable.” 15 No. 10-60891 which makes the PCP Standard Permit unavailable for any PCP that has even the potential to cause a breach of the NAAQS, we cannot say that the permit “would interfere” with the NAAQS. 42 U.S.C. § 7410(l) (emphasis added). Indeed, it is impossible for the PCP Standard Permit to cause interference with the NAAQS, provided that we assume, as we ought, that Texas will enforce this provision of its own regulations. See City of Seabrook, Tex. v. EPA, 659 F.2d 1349, 1367 (5th Cir. 1981) (admonishing that the “EPA could assume [that the] state would implement [its regulations and if it] fails to do so, then either the EPA or a concerned citizen may bring an enforcement action”). Nor can we accept the EPA’s argument that its “similar source” requirement is an applicable provision of the Act. First, the “similar source” requirement finds no purchase in the text of any applicable provision of the Act. See § 7410(a)(2)(C) (each SIP minor NSR program need only “include . . . regulation of the modification and construction of any stationary source within the areas covered by the plan as necessary to assure that [the NAAQS] are achieved”).10 In addition, the inclusion of a “similar source” requirement elsewhere in the Act is strong evidence that the requirement does not apply to minor NSR. Title V of the CAA, which governs operating permits, explicitly imposes a “similar source” limitation. Compare § 7661c(d) (operating permit rules) with § 7410 (containing the requirements for minor NSR); see Keene Corp. v. United States, 508 U.S. 200, 208 (1993) (“‘[W]here Congress includes particular language in one section of a statute but omits it in another . . . , it is 10 The EPA also argues that a “similar source” limitation is necessary to ensure enforceability. The only mention of enforceability in § 7410 is the requirement that SIPs “include enforceable emission limitations and other control measures . . . as may be necessary or appropriate to meet the applicable requirements of this chapter.” § 7410(a)(2)(A). However, the only requirement in this chapter applicable to minor NSR is that the SIP include “regulation of the modification and construction of any stationary source within the areas covered by the plan as necessary to assure that [NAAQS] are achieved.” § 7410(a)(2)(C). As explained above, the PCP Standard Permit necessarily meets this requirement because it is unavailable for any PCP that has even the potential to cause a breach of the NAAQS. 16 No. 10-60891 generally presumed that Congress acts intentionally and purposely in the disparate inclusion or exclusion.’” (quoting Russello v. United States, 464 U.S. 16, 23 (1983)). Finally, the structure of the CAA militates against reading an extra-statutory requirement into the Act’s limitations on state discretion. Because the states enjoy “wide discretion” in implementing the Act, the imposition of newfound restrictions upsets the Act’s careful balance between state and federal authority. Union Elec. Co., 427 U.S. at 250; see also Fla. Power & Light Co., 650 F.2d at 587 (“The great flexibility accorded the states under the Clean Air Act is . . . illustrated by the sharply contrasting, narrow role to be played by EPA.”). This structural principle applies with special force in this case because, as previously discussed, the Act imposes only the most minimal of requirements on minor NSR. Because the so-called “similar source” requirement is neither necessary to safeguard the NAAQS nor warranted by any applicable provision of the Act, we must conclude that the EPA’s insistence upon it here was unjustified. Like the EPA’s reliance on its interpretation of Texas law, its imposition of a “similar source” standard was arbitrary and capricious. See State Farm, 463 U.S. at 43 (agency action is “arbitrary and capricious if the agency has relied on factors which Congress has not intended it to consider”). The EPA’s attempt to graft a “similar source” rule onto the applicable provisions of the CAA was also a violation of 5 U.S.C. § 706(2)(C), which requires reviewing courts to set aside agency action that is “in excess of statutory . . . authority.”