Amer Petro Inst v. EPA

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued October 26, 1999 Decided January 4, 2000

No. 98-1561

American Petroleum Institute and

National Petrochemical & Refiners Association,

Petitioners

v.

U.S. Environmental Protection Agency and

Carol M. Browner, Administrator,

U.S. Environmental Protection Agency,

Respondents

Valero Energy Corporation,

Intervenor

On Petition for Review of an Order of the

Environmental Protection Agency

Michael F. McBride argued the cause for petitioners.

With him on the briefs were Bruce W. Neely, G. William

Frick, John E. Reese and Maurice H. McBride.

Mary F. Edgar, Attorney, U.S. Department of Justice,

argued the cause for respondents. With her on the brief was

Lois J. Schiffer, Assistant Attorney General, and John T.

Hannon, Attorney, Office of General Counsel, U.S. Environ-

mental Protection Agency. Christopher S. Vaden, Attorney,

U.S. Department of Justice, entered an appearance.

Sam Kalen and Howard Bleichfeld were on the brief for

intervenor.

Before: Silberman, Williams and Randolph, Circuit

Judges.

Opinion for the Court filed by Circuit Judge Williams.

Williams, Circuit Judge: Automobile engines emit volatile

organic compounds ("VOCs"), which together with nitrogen

oxides ("NOX") form ozone. Reformulated gasoline ("RFG")

can reduce VOCs emissions compared to levels associated

with ordinary gasoline; but it costs more, and there is some

concern about the nation's current RFG production capacity.

See 42 U.S.C. s 7545(k)(6)(B) (1994) (creating special provi-

sions that operate in the event of insufficient capacity). In

guiding the efforts of the Environmental Protection Agency

to limit ozone concentrations, Congress in the Clean Air Act

(the "Act") authorized limited reliance on RFG. It directed

that RFG should initially be mandatory in the nine worst

ozone areas with populations over 250,000, with any area later

classified as "Severe" to be added as well. See 42 U.S.C.

s 7545(k)(1), (5), (10)(D). And it also provided for "opt-in,"

i.e., for election by a state to demand an EPA ban on the sale

of non-RFG in specified areas. But Congress carefully limit-

ed the eligible areas:

Upon the application of the Governor of a State, the

Administrator shall apply the prohibition [on the sale of

non-reformulated gasoline] in any area in the State clas-

sified ... as a Marginal, Moderate, Serious, or Severe

Area....

Act s 211(k)(6)(A), 42 U.S.C. s 7545(k)(6)(A) (emphasis add-

ed). There is a fifth category, "Extreme," to which only Los

Angeles belongs; there was no need to include that category

because it was automatically covered by Congress's direct

mandate.

Apart from Los Angeles, most areas of the United States

that are not in "attainment" for EPA's ozone standards

belong to one of the four specified categories. But for several

reasons--mainly the interaction between Congress's (1) rules

limiting the ability of a nonattainment area to break into the

broad sunlit uplands of attainment, and (2) provisions govern-

ing the treatment of missing data--an area may be in "nonat-

tainment" but not in any of the four specified classes. In

interpreting the opt-in provision EPA decided that Congress

meant to include not only "Marginal, Moderate, Serious, or

Severe" areas, but also any other areas that either were

currently out of attainment or had ever been. The American

Petroleum Institute ("API") has petitioned for review of the

rule, arguing that the agency exceeded its statutory authori-

ty; we agree.

* * *

The Act requires EPA to establish and periodically revise a

primary national ambient air quality standard ("NAAQS") for

each air pollutant that the agency identifies as meeting

certain criteria. See 42 U.S.C. ss 7408-7409. The primary

NAAQS for each pollutant is the maximum concentration

"requisite to protect the public health" with "an adequate

margin of safety." 42 U.S.C. s 7409(b)(1). In 1979 the EPA

administrator set a primary NAAQS for ozone at 0.120 parts

per million ("ppm"), averaged over intervals of one hour. See

44 Fed. Reg. 8202. That level was upheld by this court in

American Petroleum Inst. v. Costle, 665 F.2d 1176 (D.C. Cir.

1981), and remains in effect today.1

__________

1 In 1997 the EPA adopted a revised ozone NAAQS of 0.08 ppm

averaged over an eight-hour period. See 62 Fed. Reg. 38,856

(1997). But in American Trucking Ass'ns v. EPA, 175 F.3d 1027,

1038 (D.C. Cir 1999) ("ATA"), modified on reh'g, 195 F.3d 4 (D.C.

Cir. 1999), we granted a petition for review of that order and

remanded to the EPA with instructions to provide an intelligible

principle guiding its interpretation of the relevant sections of the

In approaching this case the most critical distinction is

between "nonattainment" and "design value" as measures of

compliance. A maximum concentration, without more, leaves

open the question of how often an area's hourly reading can

exceed 0.120 ppm without causing the area to be out of

compliance. Congress adopted EPA's answer to this ques-

tion. It decreed, "by operation of law," that each area's

attainment status would be based on the regulatory standards

"in effect immediately before November 15, 1990." 42 U.S.C.

s 7407(d)(1)(C). Under those standards (also still in effect),

an area is allowed no more than one day a year in which its

maximum hourly ozone concentration is greater than 0.120

ppm. But the exact formula is more complicated because it

recognizes that many areas will not have data for every hour

of the year; it therefore uses estimates to fill this gap. See

40 CFR pt. 50, App. H. The formula generates an "expected

number of days per calendar year with maximum hourly

average concentrations above 0.12 parts per million," id.

s 50.9(a), and if the expected number of exceedances for a

three-year period is greater than one, the area is in nonat-

tainment.

In 1990 Congress also introduced, for ozone, a refinement

based on how far each nonattainment area was from attain-

ment status, establishing different dates for compliance ac-

cording to the severity of the existing violations. See 42

U.S.C. s 7511(a)(1). To group areas according to the various

deadlines, Congress used a concept already in use by EPA,

known as "design value," and once again adopted EPA's

method for calculating this number. See id. ("The design

value shall be calculated according to the interpretation meth-

odology issued by the Administrator most recently before

November 15, 1990."). Much like the calculation of attain-

ment, EPA's method for determining design values also ex-

cuses one exceedance per year (e.g., the first three excee-

dances in a three-year period have no effect on the design

value). But it has no mechanism for generating data to fill

__________

Act. See ATA, 175 F.3d at 1038-40. Thus, the 0.12 ppm, 1-hour

standard remains in place.

gaps in monitoring: Here, the design value is simply the

fourth-highest daily maximum ozone concentration in an area

over three consecutive years for which there are sufficient

data. See American Trucking Ass'ns v. EPA, 175 F.3d 1027,

1046 n.6 (D.C. Cir. 1999) ("ATA"), modified on reh'g, 195 F.3d

4 (D.C. Cir. 1999); EPA, The Clean Air Act Ozone Design

Value Study: Final Report 1-3 to 1-5 (1994).

In s 181(a)(1) of the Act Congress used design value to

create five categories of nonattainment, with varying compli-

ance deadlines for each category:

Marginal 0.121 to 0.138 ppm

Moderate 0.138 to 0.160 ppm

Serious 0.160 to 0.180 ppm

Severe 0.180 to 0.280 ppm

Extreme 0.280 ppm and above

See 42 U.S.C. s 7511(a)(1) tbl.1. But because Congress

treated missing data differently for purposes of design value

and attainment status, while every area with a known design

value above 0.120 ppm is in nonattainment, an area may be in

nonattainment even though its design value is 0.120 ppm or

below. EPA called such areas "submarginal." See 56 Fed.

Reg. at 56,697/2 (1991).

Similarly, s 107(d)(1)(C)(i) of the Act, 42 U.S.C.

s 7407(d)(1)(C)(i), requires areas designated nonattainment

under portions of the previous standards, see 42 U.S.C.

s 7407(d)(1)(C) (adopting provisions of the Clean Air Act

Amendments of 1977, s 103, Pub. L. No. 95-95, 91 Stat. 685,

687-88), to remain so classified because of inadequate data.

EPA called such areas "incomplete data areas." 56 Fed. Reg.

at 56,697/3; cf. 42 U.S.C. s 7511e (allowing areas that can

demonstrate compliance with the ozone NAAQS for the years

1987-89 to have a special, "transitional," status).

The key issue here is the application of the RFG program

to these two types of areas, "submarginal" and "incomplete

data."

* * *

In the disputed rule, EPA stated that any "area currently

or previously designated as a nonattainment area for ozone

under 40 CFR 50.9 ... or any time later, may be included on

petition of the governor." 40 CFR s 80.70(k); 63 Fed. Reg.

at 52,104. Largely because of the divergence between the

concepts of nonattainment and design value, this rule swept

into "opt-in" a variety of areas not belonging to the four

categories specified by Congress--Marginal, Moderate, Seri-

ous or Severe. We assess the validity of the rule under the

familiar two-step process in Chevron U.S.A. Inc. v. NRDC,

467 U.S. 837, 842-43 & nn.9 & 11 (1984).

Chevron requires us to determine whether Congress spoke

"to the precise question at issue." Id. at 842. It is hard to

imagine how Congress could have done so more clearly.

Acting within a universe where nonattainment and the four

categories overlap but are distinct, Congress chose the four

categories. If it meant to express "nonattainment," its word-

ing was not merely a long-winded but a positively obtuse way

of doing so. As we said in Michigan Citizens for an Inde-

pendent Press v. Thornburgh, 868 F.2d 1285 (D.C. Cir.), aff'd

by an equally divided court, 493 U.S. 38, 39 (1989), if Con-

gress makes an explicit provision for apples, oranges and

bananas, it is most unlikely to have meant grapefruit. Id. at

1293.

Despite the text, EPA argues that the scope of s 211(k)(6)

is ambiguous, thus opening the door to "reasonable" interpre-

tations by EPA. It notes that s 181(a)(1) of the Act states

that "[e]ach area designated nonattainment for ozone ...

shall be classified at the time of such designation ... as a

Marginal Area, a Moderate Area, a Serious Area, a Severe

Area, or an Extreme Area based on the design value for the

area." 42 U.S.C. s 7511(a)(1). From this it infers that,

despite the different methods for calculating design value and

attainment status, Congress thought that no nonattainment

area would be classified as other than Marginal, Moderate,

Serious, Severe, or Extreme, and thus the reference to the

first four categories in s 211(k)(6) was Congress's way of

making the RFG program available to all nonattainment

areas. Because s 211(k)(6) does not prohibit the inclusion of

nonattainment areas with design values below 0.121 or areas

whose design values are unknown, EPA argues, it is at least

ambiguous as to whether they may join.

EPA seems to think that the possibility that Congress was

unaware of the nonattainment-design value divergence sug-

gests that, had it been aware, it might have wanted EPA to

allow nonattainment areas with incomplete data or design

values below 0.121 ppm to require RFG. There are two

problems here: the assumption of congressional ignorance is

farfetched, and even if correct would not get EPA where it

wants to go.

In the normal case Congress is assumed to be conscious of

what it has done, especially when it chooses between two

available terms that might have been included in the provi-

sion in question. See BFP v. Resolution Trust Corp., 511

U.S. 531, 537 (1994) ("[I]t is generally presumed that Con-

gress acts intentionally and purposely when it includes partic-

ular language in one section of a statute but omits it in

another."). Sometimes (e.g., where the pieces of legislation

are not closely linked in either codification or time of enact-

ment) this assumption may be a stretch, justifiable in part

because its effect is to push toward coherent interpretations

of law. See West Virginia Univ. Hosps., Inc. v. Casey, 499

U.S. 83, 100 (1991). But here the assumption that Congress

was aware of the law is sound: the divergence between

nonattainment and design value is the direct product of

distinctive definitions explicitly adopted by Congress. To

suppose that Congress was ignorant of the divergence is to

impute sleepwalking to the legislators.

We have already explained how Congress expressly

adopted differing formulae. These formulae generate the two

problematic categories at issue here. First, as we recognized

in ATA, the stringent criteria for changing an area's designa-

tion from nonattainment to attainment ensures that there can

and will be nonattainment areas with design values below

0.121 ppm (submarginal areas). ATA, 175 F.3d at 1047; 42

U.S.C. s 7407(d)(3)(E) (noting that an area cannot be redesig-

nated to attainment status until it shows compliance with the

relevant NAAQS and that the improvement in air quality is

due to permanent and enforceable reductions in emissions).

Second, "incomplete data areas" have no hope of leaving

nonattainment until they generate enough data to prove that

they comply with the ozone NAAQS. See id. Thus, they

must remain in nonattainment, but can secure the RFG

option if they generate data placing them in the four congres-

sionally specified categories. Quite sensibly, the literal read-

ing of s 211(k)(6)(A) provides RFG as an option when the

need is clear, and only then.

But even the ignorance assumption, were it true, would not

support EPA's inference. Having used words of art to

describe areas eligible for opt-in, a hypothetically ignorant

Congress would likely have assumed that if some areas

turned up partly resembling the areas it specified--areas out

of attainment but less clearly so--they would not be subject

to RFG in the absence of new congressional action. More

specifically, even if Congress had thought that, as of 1990, all

nonattainment areas under the 0.120 ozone NAAQS would

have a recorded design value of at least 0.121 ppm, it knew

that the formula for nonattainment status (unlike the fixed

values for design value) was likely to change over time. EPA

has a continuing obligation to review and revise the NAAQS

every five years, see 42 U.S.C. s 7409(d)(1); ATA, 175 F.3d

at 1049, and to redesignate attainment status accordingly, see

42 U.S.C. s 7407(d)(1)(B). In ATA, we noted that Congress

had locked the categories of s 181(a)(1) into place, presum-

ably to avoid having its ozone enforcement scheme adminis-

tratively overridden by EPA as a result of such revision. 175

F.3d at 1049-50. The same is true here. By basing the opt-

in provisions in s 211(k)(6) on the statutorily imposed catego-

ries in s 181(a)(1), Congress could limit the scope of the RFG

program to areas that clearly fall within the categories of its

choosing.2

__________

2 In the rulemaking the EPA expressed its belief that areas in

nonattainment for the new, more stringent ozone NAAQS, would be

On this record we are reluctant even to mention the

legislative history. "[W]e do not resort to legislative history

to cloud a statutory text that is clear." Ratzlaf v. United

States, 510 U.S. 135, 147-48 (1994); see also Sutton v. United

Air Lines, Inc., 119 S. Ct. 2139, 2146 (1999); United States v.

Bost, 87 F.3d 1333, 1336 (D.C. Cir. 1996). But it scarcely

helps EPA. The conference report observed, "States could

elect to have the [RFG] requirements apply in other cities

with ozone pollution problems." H.R. Conf. Rep. No.

101-952, at 336, reprinted in 1 A Legislative History of the

Clean Air Act Amendments of 1990, at 1449, 1786 (1993)

[hereinafter Leg. Hist.]. But this is said simply to distinguish

the statute's mandate of RFG for specified regions, and

certainly does not claim that every other city with any ozone

pollution would qualify for opt-in. The floor debates add little

clarity. True, there are statements of the authors of the

provision in question, and sponsors of the amendments gener-

ally, to the effect that "any" or "all" non-mandated ozone

nonattainment areas could join the RFG program; but none

shows enough attention to the problem presented here to

overcome the plain language of the text. See Senate Debate

on the Clean Air Act Amendments of 1990 Conference Re-

port, reprinted in 1 Leg. Hist. at 731, 1024; House Debate on

the Clean Air Act Amendments of 1990 Conference Report,

reprinted in 1 Leg. Hist. at 1177, 1266; House Debate on

H.R. 3030, reprinted in 2 Leg. Hist. at 2667, 2690. Interest-

ingly, all the statements contain inaccuracies on another

issue, asserting that the area makes the election, not the state

or governor, a position with no support in the statute. The

colloquial language of debate is at best a rough guide to the

intricacies of technical statutory wording.

Similarly, the Senate and House committee reports that list

the likely classification of nonattainment areas under

s 181(a)(1) do not show that Congress meant to base RFG

__________

allowed to opt into the RFG program. See 63 Fed. Reg. 52,094,

52,101 (1998). The issue is temporarily moot in the light of ATA,

but on its face such a claim seems even less well-founded than

EPA's core position.

participation on attainment status. Both lists classify the

areas according to their design values. The Senate list does

not even mention attainment status, and is thus no evidence

at all of congressional determination that it should control.

See S. Rep. No. 101-228, at 35-37 (1989), reprinted in 5 Leg.

Hist. at 8375-77. Nor does the House Report speak of

nonattainment. It uses the looser term "areas violating the

ozone NAAQS" and then lists areas by design value. H. Rep.

No. 101-490, at 230-32, reprinted in 2 Leg. Hist. at 3254-56.

EPA would have us believe that the list demonstrates accep-

tance of its view that Congress really meant nonattainment

because the table includes two areas, Jacksonville, FL and

Waldo Co., ME, as likely to be classified as marginal areas

despite their design values of only 0.120 ppm. But the likely

explanation is that the compiler mistakenly thought that

because 0.120 was the cut-off point for "Marginal," an area

with exactly that reading should be so classified. Moreover,

these lists can shed no light on the proper classification of

areas that lack sufficient data to calculate a design value or

even to confirm their nonattainment status.

EPA next argues that even if the text is clear, this case

presents one of the rare instances "in which the literal

application of a statute will produce a result demonstrably at

odds with the intentions of its drafters." R.G. Johnson Co. v.

Apfel, 172 F.3d 890, 895 (D.C. Cir. 1999) (internal quotations

omitted). The agency appears to find absurdity because

under the direct reading of the statute it denies opt-in to

some areas with "continuing ozone problems." But the argu-

ment assumes away all trade-offs. Given the acknowledged

cost and supply drawbacks associated with RFG, it seems

entirely sensible to confine opt-in to areas experiencing non-

attainment with the comparative clarity implied by belonging

to one of the four specified categories. We see no absurdity.

EPA offers a special argument under which it could reach

back into history to allow opt-in for an area that once was--

but is no longer--classified as Marginal, Moderate, Serious,

or Severe. The statute allows opt-in for "any area in the

State classified ... as a Marginal, Moderate, Serious, or

Severe Area." As a matter of sheer linguistic possibility,

either of two explicit phrases could be understood to precede

the word "classified": it could read (1) "any area in the state

[that is presently] classified ... as a Marginal, Moderate,

Serious, or Severe Area," or (2) "any area in the state [that

has ever been] classified as a Marginal, Moderate, Serious, or

Severe Area." EPA favors the second reading, but it seems

utterly implausible. If an area is in attainment, its historical

design value has no relationship to its need for RFG. If it is

in nonattainment, but lacks sufficient data to be classified

under s 181(a)(1), then RFG will be an option if, in the

process of generating sufficient data to prove itself in attain-

ment, it is shown to have a design value of 0.121 ppm or

above. See 42 U.S.C. s 7407(d)(3)(E).

In s 211(k)(6) Congress provided for opt-in only for areas

classified as Marginal, Moderate, Serious or Severe. It

meant what it said. Accordingly, API's petition for review is

Granted.