Opinion ID: 400897
Heading Depth: 1
Heading Rank: 3

Heading: Conditional Approval

Text: 19 Under EPA's conditional approval policy, a plan that is in substantial compliance with Part D may be conditionally approved as satisfying Part D if the state provides strong assurances that the remaining minor deficiencies will be remedied within a specified short period. Conditional approval operates to lift the § 7410(a)(2)(I) moratorium on major new construction or modification of stationary sources of pollution. If the state then fails to submit corrections by the specified date or submits corrections ultimately determined to be inadequate, the SIP will be disapproved and the construction moratorium reimposed. 44 Fed.Reg. 38583 (July 2, 1979); 44 Fed.Reg. 67182 (Nov. 23, 1979). EPA represents that conditional approvals are not granted unless the existence of the deficiency, during the interim until unqualified approval, will not prevent the state from attaining a NAAQS and from making reasonable further progress toward attainment. EPA Brief at 30. 20 Petitioners claim that the literal approve or disapprove language of § 7410(a)(2) and the absence of any mention of conditional approvals in the Clean Air Act preclude EPA's conditional approval of a Part D submission. But this Court has held that an agency's power to approve conditionally is inherent in the power to approve or disapprove. 21 (T)he power to condition ... approval on the incorporation of certain amendments is necessary for flexible administrative action and is inherent in the power to approve or disapprove. We would be sacrificing substance to form if we held invalid any conditional approval but affirmed an unqualified rejection accompanied by an opinion which explicitly stated that approval would be forthcoming if modifications were made. 22 McManus v. CAB, 286 F.2d 414, 419 (2d Cir.), cert. denied, 366 U.S. 928, 81 S.Ct. 1649, 6 L.Ed.2d 388 (1961). McManus involved the administration of a different statute by a different agency, but the underlying principles of administrative law are fully applicable here. Conditional approval offers administrative agencies a measured course that may be more precisely tailored to particular circumstances than the all-or-nothing choice of outright approval or disapproval. Cf. United States v. Chesapeake & Ohio Ry., 426 U.S. 500, 514, 96 S.Ct. 2318, 2325, 49 L.Ed.2d 14 (1976). 23 In the context of the Clean Air Act, the conditional approval mechanism gives EPA the necessary flexibility to work more closely with the states, which, even after the 1977 Amendments, retain the primary responsibility for assuring air quality. § 7407(a). The need for flexibility in the administration of a statute whose provisions have been described as virtually swim(ming) before one's eyes, United States Steel Corp. v. USEPA, 444 U.S. 1035, 1038, 100 S.Ct. 710, 711-712, 62 L.Ed.2d 672 (1980) (Rehnquist, J., dissenting from denial of certiorari), should not be underestimated. We have in the past been careful to defer to EPA's choice of methods to carry out its difficult and complex job as long as that choice is reasonable and consistent with the Act. Friends of the Earth v. USEPA, 499 F.2d 1118, 1124 (2d Cir. 1974). Even petitioners appear willing to concede that EPA would be able to use a conditional approval mechanism if the conditions operated as conditions precedent to final approval rather than conditions subsequent. Accordingly, we decline to construe the statute as permitting only outright approval or disapproval of state plans. Conditional approval is a direct adjunct of EPA's general responsibility for administration of the Act, § 7601(a), 16 and the more specific authority to approve or disapprove state plans, § 7410(a) (2). 17 24 We must be careful, however, not to permit EPA's use of the conditional approval procedure to circumvent substantive requirements of the 1977 Amendments. Cf. Charette v. Bergland, 84 F.R.D. 98, 102-03 (D.R.I.1979) (conditional approval cannot be used to circumvent explicit requirements of federal school breakfast program statute). While we must follow EPA's interpretation of the Clean Air Act as far as its construction is reasonable, Train v. Natural Resources Defense Council, Inc., supra, 421 U.S. at 75, 95 S.Ct. at 1479-80; Udall v. Tallman, 380 U.S. 1, 16, 85 S.Ct. 792, 801, 13 L.Ed.2d 616 (1965), we are required to reject an interpretation contrary to the clear import of the statute, Manchester Environmental Coalition v. EPA, 612 F.2d 56 (2d Cir. 1979) (citing TVA v. Hill, 437 U.S. 153, 98 S.Ct. 2279, 57 L.Ed.2d 117 (1978)). FEC v. Democratic Senatorial Campaign Committee, --- U.S. ----, ----, 102 S.Ct. 38, 40-42, 70 L.Ed.2d 23 (1981). EPA's final, though conditional, approval of Connecticut's plan had two main practical effects. 18 First, although the record contains no evidence that in Connecticut there has been or is contemplated any major stationary source construction or modification, the conditional approval lifted the construction moratorium imposed by § 7410(a)(2)(I). 19 Second, the conditional approval may have satisfied any time or deadline requirements in the Act for EPA action on Connecticut's submittal and pretermitted any duty under § 7410(c) for EPA itself to promulgate rules to bring Connecticut into compliance with the requirements of Part D. Petitioners contend that these effects violate the explicit terms of the Clean Air Act and require that the conditional approval of Connecticut's plan be vacated.
25 EPA contends that continued imposition of construction restrictions no longer serves Congress' purpose once a state is in substantial compliance with Part D and is firmly committed to remedying outstanding deficiencies on a specified schedule. Since Congress' primary goals of state attainment and reasonable further progress toward attainment will not be compromised by the conditional approvals (the delay in full compliance having been found not to prevent attainment or reasonable further progress toward attainment), EPA reasons that Congress would not want the ban in effect in the interim. We disagree. 26 Congress in passing the 1977 Amendments went beyond merely mandating attainment of air quality standards. That approach had already failed. In light of past experience, Congress determined that a firmer guiding hand was needed to increase the chances for ultimate success. Hence, Congress chose to specify the precise track it wanted the states to take in reaching attainment. The construction moratorium is an important ingredient in the statutory scheme. Congress recognized that a major weakness in the 1970 Act was the failure to assess the impact of emissions from new sources on state plans to attain air quality standards by statutory deadlines. Too often states had permitted new construction on the assumption that, prior to statutory attainment deadlines, emissions could be reduced to compensate for any increase in pollution. S.Rep.No.95-127, 95th Cong., 1st Sess. 55 (May 10, 1977). The construction ban thus not only provides incentive for states to adopt the route Congress believed would lead to success, but also helps prevent further deterioration in nonattainment areas from major new sources of pollution until a plan meeting all requirements of Part D is in place, cf. id. at 25. 27 The terms of § 7410(a)(2)(I), which is the statutory provision triggering the construction moratorium, are absolute and unqualified. Every SIP must provide that 28 after June 30, 1979, no major stationary source shall be constructed or modified in any nonattainment area ... to which such plan applies, if the emissions from such facility will cause or contribute to concentrations of any pollutant for which a (NAAQS) is exceeded in such area, unless, as of the time of application for a permit for such construction or modification, such plan meets the requirements of part D of this subchapter (relating to nonattainment areas) 29 § 7410(a)(2)(I). Similarly, § 7503(4) forbids the granting of permits for new major construction unless the requirements of Part D are being implemented in the nonattainment area, and § 7502(a)(1) describes the Part D requirements as a precondition for the construction or modification of any major stationary source. EPA itself has concluded that (t)he statutory language and legislative history indicate that the (moratorium) is automatic and mandatory under the Act and existing state implementation plans, and is not a new prohibition that can be imposed or withheld at EPA's discretion. 44 Fed.Reg. 38471, 37472 (July 2, 1979). 20 30 What little legislative history there is confirms our understanding of the moratorium provisions. The provisions did not emerge in final form until the Conference Committee Report. The conferees emphasized the relationship between approved Part D revisions and the moratorium: As a condition for permitting major new sources to locate in a nonattainment area, States are required to have approved revised implementation plans. H.R.Conf.Rep.No.95-564, 95th Cong., 1st Sess. 121, 157, reprinted in (1977) U.S.Code Cong. & Ad.News 1502, 1537. The Conference Committee indicated that it adopt(ed) much of the Senate's approach to the nonattainment problem. Clarifying Statement of Conference Committee on P.L. 95-95, 123 Cong.Rec. H8662 (Aug. 4, 1977), reprinted in (1977) U.S.Code Cong. & Ad.News 1570, 1573. The Senate's version of the ban had its origin in the recognition that a major weakness in the 1970 Act was the failure to control new source pollution. S.Rep.No.95-127, supra, at 55. 31 Congress has specified that the moratorium must remain in effect until a SIP revision fully complies with Part D. When Congress speaks as precisely as it has here, it is not for us or EPA to decide whether something else might be just or almost as good. Natural Resources Defense Council, Inc. v. EPA, 478 F.2d 875, 883 (1st Cir. 1973). Congress itself specified the techniques that it believed would lead to attainment and made them an inflexible precondition to major new construction. 21 By lifting the moratorium, EPA has legitimated, albeit on a temporary basis, a deviation from Congress' chosen path toward attainment. 22 And if an unconditional approval is not forthcoming, the ban will have been relaxed without the state's ever having adopted all the requirements Congress thought necessary for timely attainment. These are the sorts of chances Congress deliberately chose not to take in the 1977 Amendments. After missing the deadlines once before, the states were to take the route specified by Congress if they were to avoid the construction moratorium. 32 Because EPA has used the conditional approval mechanism to circumvent this one substantive requirement of the Act, 23 we vacate that portion of the final order that prematurely lifted the construction moratorium. 24 EPA remains free to lift the ban when it determines that a plan fully complies with the requirements of Part D, even though implementing details of a plan remain to be furnished. Cf. Friends of the Earth v. USEPA, supra. 25 The ban need not apply to major sources emitting only pollutants for which Connecticut is in attainment, 40 C.F.R. § 52.24 (1981), or for which Connecticut has a fully approved Part D plan, e.g., carbon monoxide.
33 Petitioners also claim that conditional approval violates the strict time limitations built into the Act. With respect to this claim, however, we find that EPA's action, to the limited extent it is within our jurisdiction to review, is fully consistent with the Act. Mindful of the deference to be given an agency administering a statute, particularly when the administrative practice at stake 'involves a contemporaneous construction of a statute by (those) charged with the responsibility of setting its machinery in motion, of making the parts work efficiently and smoothly while they are yet untried and new,'  Power Reactor Development Co. v. International Union of Electrical, Radio & Machine Workers, 367 U.S. 396, 408, 81 S.Ct. 1529, 1535, 6 L.Ed.2d 924 (1961) (quoting Norwegian Nitrogen Products Co. v. United States, 288 U.S. 294, 315, 53 S.Ct. 350, 358, 77 L.Ed. 796 (1933)), we reject the claim concerning time limits. 34 In considering the claim that the conditional approval technique unlawfully modifies the time limits of the Act, we must distinguish between different types of time periods. The distinction affects not only the lawfulness of EPA's action but also determines which court has jurisdiction to remedy any unlawful action. On the one hand are time periods pertinent to a duty of EPA to promulgate its own SIP revisions or to act upon SIP revisions submitted by a state. A promulgation duty may arise after a state fails to meet the January 1, 1979 statutory deadline for submitting its Part D revisions, or fails to meet the deadline imposed by EPA for taking steps to satisfy the conditions of a conditionally approved revision. EPA's duty to act upon Part D revisions timely submitted to it is initially set by the Act as July 1, 1979, and may thereafter arise with respect to late Part D revisions by a state or state corrections submitted pursuant to the requirements of a conditional approval. Jurisdiction to enforce EPA's duty to promulgate its own SIP revisions or to act upon the revisions or corrections submitted to it rests with the district court. § 7604(a)(2); see Citizens for a Better Environment v. Costle, 515 F.Supp. 264 (N.D.Ill.1981); Pacific Legal Foundation v. Costle, 14 Env't Rep. Cases 2121 (E.D.Cal.), aff'd, 627 F.2d 917 (9th Cir. 1980), cert. denied, 450 U.S. 914, 101 S.Ct. 1354, 67 L.Ed.2d 338 (1981). 35 On the other hand are the time periods pertinent to an assessment of the lawfulness of EPA's action in approving or conditionally approving a Part D revision. That assessment requires some scrutiny of the time periods EPA has approved for taking whatever steps were promised in an approved Part D revision or were promised to satisfy EPA's conditions for securing Part D approval. Jurisdiction to determine whether EPA has tolerated time periods of unreasonable delay rests with the court of appeals in exercising its authority to review final agency action. § 7607(b). 36 We have outlined the various time periods pertinent to litigation of this sort to highlight the narrow issues presented to this Court by petitioners' claim that conditional approval unlawfully modifies the time limits of the Act. We are not determining whether EPA could have been compelled at an earlier date to promulgate a Part D revision for Connecticut, nor whether EPA could have been compelled at an earlier date to act upon Connecticut's tardy submission. Instead we face two other issues. The first is whether the technique of conditional approval is unlawful whenever both the State and EPA fail to act within statutory time limits for submitting and approving a Part D revision, or whether the lateness requires EPA to reject any deficient aspects of the submission and promulgate a federal plan to remedy the deficiencies. The second issue is whether the use of the technique is unlawful in this case because of the particular time periods specified for Connecticut to meet the conditions for unqualified Part D approval. We do not find EPA's action unlawful in either respect. 37 Once a state has gone so far as to be in substantial compliance with Part D and has given firm assurances of its intent to remedy any minor deficiencies that remain, we believe Congress did not intend to require EPA to reject the state's revision and resort to federal promulgation under § 7410(c). So long as the construction ban remains in effect in the interim, we think the Act permits EPA to afford states an opportunity to implement their own plans and to correct whatever minor deficiencies remain. § 7407(a) (states have primary responsibility for assuring air quality); Train v. Natural Resources Defense Council, Inc., supra ; S.Rep.No.95-127, supra, at 10 (federal government does not have and will not have resources required to do an effective job of running pollution control programs for the states). EPA is entitled to interpret the Act to prefer a commitment by the state to make the needed (minor) modifications rather than imposition of a federal plan. City of Seabrook v. USEPA, 659 F.2d 1349, 1356-57 (5th Cir. 1981). Cf. § 7410(c)(1)(C); Utah International, Inc. v. EPA, 478 F.2d 126, 127 (10th Cir. 1973) (per curiam) (EPA revision following disapproval after state fails to come up with revised plan of its own). In short, the statutory scheme gives a district court jurisdiction to determine whether to compel EPA to act if statutory deadlines are exceeded. But once the state has made its submission and EPA has assessed it as sufficient to meet its requirements for conditional approval, 26 the concern of a court of appeals is not how late EPA's action occurred, but whether the substance of the action satisfies the substantive requirements of the Act. 27 EPA's promulgation authority is not a punishment to be imposed for a late submission sufficiently complete to merit conditional approval. 38 The second issue is not a serious one on the facts of this case. Even if we assess the reasonableness of the period of delay tolerated in the conditional approval in light of the length of time that had already elapsed since the deadline for submission of Part D revisions, we cannot say that EPA has acted unlawfully in according Connecticut brief intervals to make relatively minor modifications. 28 39 We therefore reject petitioners' challenges to EPA's conditional approval, 29 except to the extent that EPA lifted the construction moratorium.IV. Indirect Source Review 40 Petitioners also contest EPA's approval of Connecticut's partial withdrawal of its indirect source review program (ISR) from its SIP. Indirect source review programs provide for preconstruction review of facilities that do not themselves pollute but that attract mobile sources of pollution. Shopping centers, sports complexes, highways, airports, and the like are reviewed for the increase in air pollution from motor vehicle traffic that they are likely to bring. In 1973, EPA required all states to revise their SIPs to include ISRs in response to the D.C. Circuit's decision in Natural Resources Defense Council, Inc. v. EPA, 475 F.2d 968 (D.C.Cir.1973). EPA promulgated regulations under § 7410(c), inserting ISRs into the SIPs of recalcitrant states. Congress reacted by adding riders to appropriations bills forbidding EPA to administer any ISR programs (except for airports and highways). E.g., Pub.L.No.93-245, 87 Stat. 1071 (1974). In the 1977 Amendments, Congress sought to give the same relief to states that had voluntarily adopted ISR programs as part of their SIPs. Section 7410(a)(5)(A) provides that 41 (i) Any State may include in a State implementation plan, but the Administrator may not require as a condition of approval of such plan under this section, any indirect source review program. The Administrator may approve and enforce, as part of an applicable implementation plan, an indirect source review program which the State chooses to adopt and submit as part of its plan. 42 (ii) Except (for major federally assisted or owned indirect sources), no plan promulgated by the Administrator shall include any indirect source review program for any air quality control region, or portion thereof. 43 (iii) Any State may revise an applicable implementation plan approved under this subsection to suspend or revoke any such program included in such plan, provided that such plan meets the requirements of this section. (emphasis added). 44 Connecticut was one of those states that had voluntarily adopted an ISR program as part of its SIP. In 1977, it amended its regulations to limit the scope of its ISR program to airports and major highway projects. EPA approved Connecticut's request for such partial withdrawal of the ISR program under § 7410(a)(5)(A)(iii). It found that Connecticut had complied with all procedural requirements of § 7410, which it believed was all that was required by the final proviso of § 7410(a)(5)(A)(iii). This court reversed, ruling that EPA could approve a withdrawal of an ISR program from a SIP under § 7410(a)(5)(A) (iii) only if the state's overall SIP complies with all of the requirements of § 7410-both procedural and substantive. Manchester Environmental Coalition v. EPA, 612 F.2d 56, 59 (2d Cir. 1979) (emphasis in original). Connecticut could not withdraw its ISR program from a SIP whose success may have depended on the ISR. Id. at 60. We suggested that if EPA approved Connecticut's soon-to-be-submitted Part D revisions as in compliance with the Act, it would kill (two) birds with a single administrative stone since the revised plan would presumably not include an ISR. Id. at 61. 45 Connecticut renewed its request to withdraw its original ISR program when it submitted its Part D revisions. It sought to revise the program further by limiting its scope to review of major highway projects. When EPA conditionally approved Connecticut's Part D submittal, it approved Connecticut's partial withdrawal of ISR; it found that Connecticut's SIP both as an integrated whole and project by project met the requirements of § 7410. 45 Fed.Reg. at 84785. 46 Petitioners first contend that the ISR program cannot be withdrawn because Connecticut is not yet in full compliance with Part D. They rely primarily on our suggestion in Manchester Environmental Coalition v. EPA, supra, that when EPA determined that Connecticut's Part D-revised SIP complied with the Act, EPA would simultaneously approve the withdrawal of ISR. Since EPA has not yet certified Connecticut's SIP as in full compliance with Part D, petitioners reason that the ISR withdrawal is premature. 47 The result in Manchester Environmental Coalition and the suggestion that we offered were intended only to ensure that the partial withdrawal of Connecticut's ISR program would not jeopardize the success of a SIP that depended in part on the ISR for attainment. 612 F.2d at 59-60. This time EPA has certified that Connecticut's SIP satisfies all the substantive requirements of § 7410 and Part D, except for the few minor deficiencies that occasioned conditional approval. None of the deficiencies relate to Connecticut's plan for carbon monoxide attainment, which has been given full approval. Because Connecticut's ISR program required review of indirect sources only for their contribution to carbon monoxide pollution, the success of Connecticut's SIP no longer depends on the ISR program. EPA has given full approval to Connecticut's plan to attain the carbon monoxide standard without a full ISR program. We therefore now see no reason why Connecticut cannot take advantage of the choice, which Congress evidently intended to give it, of withdrawing its ISR program. 30 48 Petitioners next contend that the statutory authority to withdraw from ISR, contained in § 7410(a)(5)(A)(iii), does not apply to nonattainment states like Connecticut. They attempt to bolster this contention by a separate argument based upon § 7502(b)(2), which requires nonattainment states to provide for the implementation of all reasonably available control measures as expeditiously as practicable in nonattainment areas. Petitioners contend that ISR is a reasonably available control measure within the meaning of § 7502(b)(2), especially for Connecticut, since ISR was a control measure already included in Connecticut's SIP. Combining the arguments, petitioners contend that since § 7502(b)(2) requires Connecticut to use ISR as one form of RACM, Connecticut cannot be permitted to withdraw from ISR, and § 7410(a)(5)(A)(iii), which permits withdrawal, should therefore be construed to be inapplicable to Connecticut, if not to all nonattainment states. 49 We decline to adopt such a strained reading of § 7410(a)(5)(A)(iii), which on its face does not mention any exceptions to its coverage. Section 7502(b)(2), like § 7410(a)(5)(A)(iii), was enacted into law as part of the 1977 Amendments. We doubt that Congress intended implicitly to limit the scope of § 7410(a)(5)(A)(iii), which deals specifically with ISR withdrawal, by another provision of the same legislation that arguably includes ISR but makes no specific mention of it. If Congress intended to limit ISR withdrawal to attainment areas, it would have said so expressly. We do not believe that Congress silently and indirectly imposed a limiting scheme onto § 7410(a)(5)(A) (iii). 31 In fact the legislative history indicates that Congress rejected an interpretation of § 7410(a)(5)(A) similar to the one we are asked to adopt here. The House Bill would have allowed EPA to require some nonattainment states to adopt ISR programs. H.R.Rep.No.95-294, 95th Cong., 1st Sess. 221-24, reprinted in (1977) U.S.Code Cong. & Ad.News 1077, 1300-03. The Conference Committee eliminated the exception and declared that EPA would be prohibited outright from requiring ISR programs. H.R.Conf.Rep.No.95-564, 95th Cong., 1st Sess. 121, 126, reprinted in (1977) U.S.Code Cong. & Ad.News 1502, 1506. 50 Petitioners point to language in subsections (a)(i) and (a)(iii) of § 7410(a) (5)(A) suggesting that the restrictions regarding ISR programs apply only to plan(s) under this section (7410) or this subsection (7410(a) ). They suggest the reference to § 7410 as opposed to the Act, which was the language in the House version of the legislation, demonstrates Congress' intent that § 7410(a)(5)(A) would not apply to nonattainment areas covered by Part D. We find two flaws in this argument. First, under the House Bill the restriction against EPA-required ISR did not apply to some nonattainment areas. H.R.Rep.No.95-294, supra, at 221-24. Therefore it cannot be argued that the final version of § 7410(a)(5)(A) was more limited and replaced a House version that would have applied across the board. The change was in precisely the opposite direction, broadening the restriction on requiring ISR. Second, Congress never intended to set up a separate process for EPA administration of states' Part D revisions. Section 7410(a)(2)(I) links Part D to the general SIP revision process. All SIPs are submitted under § 7410; if they are for nonattainment areas, the only difference is that Part D poses additional requirements. Therefore the references in § 7410(a)(5)(A) to plans submitted under § 7410 include submissions to meet the requirements of Part D. 32