The opinion
Opinions of the United
1997 Decisions States Court of Appeals
for the Third Circuit
7-28-1997
Southwestern PA v. E.Pa
Precedential or Non-Precedential:
Docket 96-3364
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iled July 28, 1997
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 96-3364
SOUTHWESTERN PENNSYLVANIA GROWTH ALLIANCE,
Petitioner
v.
CAROL BROWNER, Administrator of the U.S.
Environmental Protection Agency, and THE UNITED
STATES ENVIRONMENTAL PROTECTION AGENCY,
Respondents
ADVANCED MANUFACTURING NETWORK,
Intervenor in support of petitioner
ON PETITION FOR REVIEW OF A FINAL ORDER
OF THE ENVIRONMENTAL PROTECTION AGENCY
(Dated May 1, 1996)
Argued: March 11, 1997
Before: BECKER, SCIRICA, and ALITO, Circuit Judges.
(Opinion Filed: July 28, 1997)
Barry M. Hartman, Esq. (argued)
Kenneth S. Komoroski, Esq.
John P. Englert, Esq.
William J. Labovitz, Esq.
KIRKPATRICK & LOCKHART LLP
1500 Oliver Building
Pittsburgh, PA 15222
Attorneys for Petitioner
Lois J. Schiffer, Esq.
Assistant Attorney General
Environment and Natural
Resources Division
Greer S. Goldman, Esq. (argued)
Trial Attorney
United States Department of Justice
Environmental Defense Section
P.O. Box 23986
Washington, DC 20026-3986
Attorneys for Respondents
Blair S. McMillin, Esq.
Harley N. Trice II, Esq. (argued)
Paul S. Kline, Esq.
REED SMITH SHAW & MCCLAY
435 Sixth Avenue
Pittsburgh, PA 15219
Attorneys for Intervenor
John R. Serpa, Asst. County
Solicitor
3333 Forbes Avenue, Room 312
Pittsburgh, PA 15213-3120
Kerry A. Fraas, County Solicitor
300 Ft. Pitt Commons Bldg.
445 Ft. Pitt Blvd.
Pittsburgh, PA 15219
Attorneys for Amicus Curiae County
of Allegheny, Pennsylvania
Nick Francalancia, Esq.
1040 Third Street
Beaver, PA 15009
Attorney for Amicus Curiae
Beaver County Corporation for
Economic Development
2
Paul J. Elias
Assistant County Solicitor
Westmoreland County
103 Courthouse Square
Greensburg, PA 15601
Attorney for Amicus Curiae
Westmoreland County, Pennsylvania
Glenn R. Toothmann III, Esq.
TOOTHMAN & TOOTHMAN
61 North Richhill Street
Waynesburg, PA 15370
Attorney for Amicus Curiae
Greene County, Pennsylvania
Paul S. Kline, Esq.
435 Sixth Avenue
Pittsburgh, PA 15219
Attorney for Amici Curiae
Armstrong County, Pennsylvania,
Lawrence County, Pennsylvania and
Butler County, Pennsylvania
McCUNE & VREELAND, Solicitor
119 South College Street
Washington, PA 15301
Jill A. Devine
Assistant Solicitor
702 Courthouse Square
100 W. Beau Street
Washington, PA 15301
Attorney for Amicus Curiae
Washington County, Pennsylvania
3
Clifford B. Levine
THORP, REED & ARMSTRONG
One Riverfront Center
Pittsburgh, PA 15222
Attorney for Amicus Curiae
Port of Pittsburgh Commission
Howard I. Fox
Sierra Club Legal Defense Fund
1625 Mass. Ave., N.W., Suite 702
Washington, DC 20036
Joseph Ortis Minott
Delaware Valley Citizens'
Council for Clean Air
135 South 19th Street, Suite 300
Philadelphia, PA 19103
Attorney for Amicus Curiae
Delaware Valley Citizens' Council for
Clean Air
OPINION OF THE COURT
ALITO, Circuit Judge:
The Southwestern Pennsylvania Growth Alliance
("SWPGA") has petitioned for review of a final rule of the
Environmental Protection Agency ("EPA"), 61 Fed. Reg.
19,193 (May 1, 1996). In this rule, the EPA denied the
Commonwealth of Pennsylvania's request that the EPA
redesignate the Pittsburgh-Beaver Valley nonattainment
area (the "Area") to attainment status for ozone, pursuant
to the Clean Air Act, 42 U.S.C. §7407(d)(3). An intervenor,
Advanced Manufacturing Network, contends that the EPA's
final rule is invalid because the EPA did not comply with
the Regulatory Flexibility Act, 5 U.S.C. §§ 601-12. Although
we are sympathetic to the view expressed by many within
the Area that this rule threatens serious economic harm,
we recognize that our role as a reviewing court is strictly
limited. We conclude that under the applicable legal
4
standards, we are constrained to deny the petition for
review.
I.
A. Congress enacted the Clean Air Act to "protect and
enhance the quality of the Nation's air resources so as to
promote the public health and welfare and the productive
capacity of its population." 42 U.S.C. §7401(b)(1). To
achieve this purpose, the Act authorizes the EPA to identify
air pollutants that are sufficiently dangerous to warrant
federal regulation. See 42 U.S.C. §7408(a). For each
pollutant that the EPA identifies, the Act authorizes the
EPA to promulgate a national ambient air quality standard
(NAAQS), which is the maximum allowable concentration of
the pollutant in the ambient air. See 42 U.S.C. §7409(a).
One pollutant for which the EPA has promulgated a
NAAQS is ozone, whose chemical precursors are emitted by
industrial and transportation sources. See 40 C.F.R.
§50.9(a) (1996). The EPA measures ozone levels at
monitoring sites located throughout the country. When a
monitoring site measures that a given day's "maximum
hourly average ozone concentration" has exceeded the
NAAQS, an "exceedance" has occurred. See 40 C.F.R. §50,
App. H (1996). If a monitoring site registers more than an
average of one exceedance per year, over a three-year
period, that site is in noncompliance with the NAAQS. Id.
The Clean Air Act's 1990 amendments provide that the
EPA designate areas of the country as either "attainment"
areas, "nonattainment" areas, or "unclassifiable" areas for
particular pollutants, depending on whether an area has
complied with the NAAQS for that pollutant. See 42 U.S.C.
7407(d). If one monitoring site within an area is in
noncompliance with a NAAQS, then the entire area is
designated a nonattainment area for that pollutant. See 40
C.F.R. Pt. 50.9(a); 40 C.F.R. Pt. 50, App. H (1996).
Nonattainment areas are further classified as "marginal,"
"moderate," "serious," "severe," or "extreme" nonattainment
areas, according to the extent to which the area's monitor
readings exceed the NAAQS. See 42 U.S.C.§7511a.
5
The Clean Air Act assigns to the states the responsibility
for assuring air quality within each state. See 42 U.S.C.
§7407(a). The Act provides that within three years of the
EPA's promulgation of a NAAQS for a pollutant, each state
must submit to the EPA a state implementation plan ("SIP")
specifying measures that will attain, maintain, and enforce
the NAAQS. See 42 U.S.C. §7410(a). All SIPs must meet the
substantive requirements enumerated at 42 U.S.C.
§7410(a)(2). Once the EPA finds that a SIP complies with
the Act, the EPA will approve the SIP. See 42 U.S.C.
§7410(k). When the EPA has designated an area within a
state as a nonattainment area for a particular pollutant,
that state must modify its SIP to include increasingly strict
pollution controls delineated in the Act, depending on the
area's nonattainment classification. See 42 U.S.C. §7511a.
The Act specifies the procedures through which the EPA
may redesignate an area from nonattainment to attainment.
The process begins when the governor of a state submits a
request for redesignation. See 42 U.S.C. §7407(d)(3)(D).
Then, "[w]ithin 18 months of receipt of a complete State
redesignation submittal, the [EPA] Administrator shall
approve or deny such redesignation." Id. Under 42 U.S.C.
§ 7407(d)(3)(E), the EPA Administrator "may not promulgate
a redesignation of a nonattainment area . . . to attainment
unless" the following five criteria are met:
(i) the Administrator determines that the area has
attained the national ambient air quality standard;
(ii) the Administrator has fully approved the applicable
implementation plan for the area under section 7410(k)
of this title;
(iii) the Administrator determines that the improvement
in air quality is due to permanent and enforceable
reductions in emissions resulting from implementation
of the applicable implementation plan and applicable
Federal air pollutant control regulations and other
permanent and enforceable reductions;
(iv) the Administrator has fully approved a
maintenance plan for the area as meeting the
requirements of section 7505a of this title; and
6
(v) the State containing such area has met all
requirements applicable to the area under section 7410
of this title and part D of this subchapter.
Id. Thus, in order for the EPA to redesignate an area from
nonattainment to attainment, the EPA must find that all
five of these criteria have been satisfied.
B. In 1990, the EPA classified the Pittsburgh-Beaver
Valley Area (the "Area") as a moderate nonattainment area
for ozone.1 See 56 Fed. Reg. 56,694, 56,820 (Nov. 6, 1991).
The EPA based this designation on ozone exceedances
during the three-year period from 1987 to 1989. See id. In
November 1993, the Pennsylvania Department of
Environmental Resources submitted to the EPA a request
to redesignate the Area to attainment status for ozone. The
redesignation request pointed out that the Area had
attained the NAAQS for ozone during the three-year period
from 1991-1993, with only two exceedances in 1991, zero
exceedances in 1992, and one exceedance in 1993. See 61
Fed. Reg. 19,193, 19,195 (May 1, 1996). Pennsylvania's
request acknowledged that its SIP had not yet been fully
approved by the EPA, but stated that the state expected to
receive full EPA approval shortly. The request also included
a maintenance plan, under which Pennsylvania
demonstrated how it planned to maintain the NAAQS in the
area until the year 2004.2
In July 1995, the EPA published a final notice of
determination that the Area was in attainment of the
_________________________________________________________________
1. The Pittsburgh-Beaver Valley Area comprises Allegheny County,
Armstrong County, Beaver County, Butler County, Fayette County,
Washington County and Westmoreland County.
2. Pennsylvania's Department of Environmental Resources subsequently
submitted two revisions to this maintenance plan. First, in January
1995, the Department submitted a revision acknowledging that the
original submission was incomplete, because it relied upon measures
that had not been fully adopted. The Department submitted the second
revision in May 1995. This revision acknowledged that the original
submission had relied upon an automobile inspection and maintenance
program that Pennsylvania had suspended, as well as a contingency
measure for the use of reformulated gasoline, which Pennsylvania had
also suspended.
7
NAAQS for ozone. See 60 Fed. Reg. 37,015 (July 19, 1995).
Later in the summer of 1995, however, ozone monitors in
the Area recorded 16 exceedances over a seven-day period.
Two of these monitors recorded more than three
exceedances each. After confirming these data, the EPA
revoked its earlier determination that the Area had attained
the NAAQS for ozone. See 61 Fed. Reg. 28,061 (June 4,
1996).
The EPA also published a notice of proposed rulemaking
stating its intention to disapprove Pennsylvania's
redesignation request and maintenance plan. See 61 Fed.
Reg. 4,598 (Feb. 7, 1996). The EPA expressed various
reasons for proposing disapproval. One of the EPA's
reasons was that the 1995 summer ozone exceedances
indicated that the Area had not attained the NAAQS. The
EPA also reasoned that these exceedances indicated that
the underlying basis for Pennsylvania's maintenance plan
was no longer valid. See id. After public comment, the EPA
promulgated a final rule disapproving Pennsylvania's
redesignation request and maintenance plan. See 61 Fed.
Reg. 19,193 (May 1, 1996).
C. The petitioner in this case is the Southwestern
Pennsylvania Growth Alliance, which is an organization of
major manufacturers and local governments in the
Pittsburgh-Beaver Valley Area. SWPGA contests the EPA's
denial of Pennsylvania's request to redesignate the Area to
attainment status. As previously explained, 42 U.S.C.
§7407(d)(3)(E) lists five requirements that must be satisfied
in order for the EPA to redesignate a nonattainment area to
attainment status. Since the EPA's final rule stated that
none of these five criteria had been satisfied, the petitioner,
if it is to prevail, must demonstrate that the EPA erred in
its determinations as to all five of §7407(d)(3)(E)'s criteria.
The petitioner thus faces an exacting burden. Under the
Administrative Procedure Act, 5 U.S.C. §706(2)(A), this
court must uphold the EPA's action unless it is "arbitrary,
capricious, an abuse of discretion, or otherwise not in
accordance with law." In applying this standard, our "only
task is to determine whether [the EPA] considered the
relevant factors and articulated a rational connection
between the facts found and the choice made." Baltimore
8
Gas & Elec. Co. v. Natural Resources Defense Council, Inc.,
462 U.S. 87, 105 (1983). The EPA's disapproval of
Pennsylvania's redesignation request "would be arbitrary
and capricious if the agency has relied on factors which
Congress has not intended it to consider". Motor Vehicle
Mfrs. Ass'n v. State Farm Mut. Auto Ins. Co., 463 U.S. 29,
43 (1983).
II.
SWPGA first argues that the EPA erred when it
determined that the Area did not attain the NAAQS for
ozone. In so arguing, SWPGA contends that the EPA had no
basis for concluding that the first of 42 U.S.C.
§7407(d)(3)(E)'s five requirements was not satisfied. We
hold, however, that it was proper for the EPA to determine
that the Area did not attain the NAAQS for ozone.
A. The petitioner contends that the EPA acted contrary
to the language of the Clean Air Act when it took into
consideration the ozone exceedances that were recorded in
the summer of 1995. The petitioner points to language in
the Act stating that "[w]ithin 18 months of receipt of a
complete State redesignation submittal, the Administrator
shall approve or deny such redesignation." 42 U.S.C.
§7407(d)(3)(D) (emphasis added). The petitioner argues that
the use of the word "shall" in this provision imposes upon
the EPA a mandatory duty to act on a state's redesignation
request within 18 months of submission. According to the
petitioner, the EPA violated this mandatory duty when it
took into consideration the 1995 ozone exceedance data,
because these data did not exist during the 18-month
period. The petitioner concludes that without these
improperly considered data, there was no valid reason for
the EPA to deny redesignation.
We agree with the EPA that the petitioner may not raise
this argument on appeal because this argument was not
raised during the rulemaking process. "Generally, federal
appellate courts do not consider issues that have not been
passed on by the agency . . . whose action is being
reviewed." New Jersey v. Hufstedler, 724 F.2d 34, 36 n.1
(3d Cir. 1983), rev'd on other grounds, 470 U.S. 632 (1985).
9
The petitioner points to the following passage from the
record as evidence that Pennsylvania raised this argument
in its comments to the EPA's proposed rule disapproving
redesignation:
Pennsylvania believes that the Pittsburgh ozone
nonattainment area should have been redesignated by
EPA to attainment. The Commonwealth submitted the
request in 1993, and EPA had ample opportunity and
justification.
For the six year period from 1989 through 1994 the
national ambient air quality standard for ozone was
achieved. During this time eight ozone monitors
operated for the full six years and one additional
monitor operated two years at one site and the four
subsequent years at a nearby site. Six of these
monitors had no exceedances during this period and
the remaining monitors stayed under the standard.
Thus for the four consecutive three-year periods from
1989 through 1994, the Pittsburgh area attained and
maintained the ambient standard.
Comments on Proposed Disapproval of Request to
Redesignate Pittsburgh Ozone Nonattainment Area, J.A. at
550. Pennsylvania further commented that "the Pittsburgh
area [had not] been redesignated in a timely manner." Id. at
551.
We hold that these comments are insufficient to preserve
petitioner's intricate statutory interpretation argument.
These comments admittedly demonstrate that
Pennsylvania, during the rulemaking process, broached the
question whether the EPA had acted in a timely manner.
Yet the comments include neither a reference to a statutory
provision imposing a specific time limit, nor an explicit
argument that the existence of such a time limit precluded
the EPA from considering the 1995 exceedances. The
petitioner thus raises its statutory interpretation argument
for the first time on appeal.
We recognize that ("our practice has been to hear issues
not raised in earlier proceedings when special
circumstances warrant an exception to the general rule.)"
Hufstedler, 724 F.2d at 36 n.1 (considering the retroactivity
10
of amendments to a federal education act, even though the
retroactivity argument was not raised in the lower court,
because it was "an issue of national importance" that was
"singularly within the competence of appellate courts" and
"not predicated on complex factual determinations"); see
also Selected Risks Ins. Co. v. Bruno, 718 F.2d 67, 69 (3d
Cir. 1983). Although a variety of circumstances have
prompted appellate courts to apply this exception,"[t]he
matter of what questions may be taken up and resolved for
the first time on appeal is one left primarily to the
discretion of the courts of appeals, to be exercised on the
facts of individual cases." Singleton v. Wulff, 428 U.S. 106,
121 (1976). In this case, we find it inappropriate to consider
this new issue. Although appellate courts are certainly
capable of addressing questions of statutory interpretation
that were not raised during an agency's rulemaking
process, it is far more efficient for courts to face such
questions only after they have been considered by the
agency that Congress has charged with the primary
responsibility for enforcing the complex statute in question.
In the instant case, both the EPA and Pennsylvania's
Department of Environmental Resources possess special
expertise regarding the workings of the Clean Air Act.
Pennsylvania was thus fully capable of explicitly raising the
argument that 142 U.S.C. §7407(d)(3)(D) requires the EPA
to act on a redesignation request within 18 months. Had
Pennsylvania made such an explicit argument, the EPA
would have then applied its singular expertise on the Act's
mechanics and made a ruling that would inform the
deliberations of this court on appeal. If this court were to
consider the petitioner's argument without the benefit of
the EPA's expert input, we would undermine a fundamental
principle of our system of judicial review of administrative
decisions.
The harm that would come to the petitioner as a result of
this outcome is not so great as to warrant disregarding
these concerns. See, e.g., North Alamo Water Supply Corp.
v. City of San Juan, 90 F.3d 910, 916 (5th Cir.), cert.
denied, 117 S.Ct. 586 (1996) (an appellate court should
invoke its discretion to review a purely legal issue not
raised below when "a miscarriage of justice would result
11
from [the court's] failure to consider it)." For these reasons,
we hold that the petitioner may not raise for the first time
in this proceeding its argument that 42 U.S.C.
§7407(d)(3)(D) required the EPA to act on Pennsylvania's
redesignation request within 18 months.
Moreover, even if we were to reach the merits of the
petitioner's argument, we would hold that 42 U.S.C.
§7407(d)(3)(D) did not preclude the EPA from considering
the summer 1995 exceedance data. The language of the
provision that enumerates the redesignation criteria tends
to support this result. Under 42 U.S.C. §7407(d)(3)(E)(i), the
EPA Administrator "may not" promulgate a redesignation of
a nonattainment area unless, among other things, "the
Administrator determines that the area has attained the
national ambient air quality standard." The use of the term
"has attained" instead of "attained" may be interpreted as
suggesting that the attainment must continue until the
date of the redesignation.
In any event, even if we assume for present purposes that
the language of 42 U.S.C. §7407(d)(3)(E) is ambiguous as to
whether the EPA may disregard data arising after the
expiration of the 18-month period, we must defer to the
EPA's interpretation of this provision under the rule of
Chevron, U.S.A., Inc. v. Natural Resources Defense Council,
Inc., 467 U.S. 837 (1984). Chevron instructs reviewing
courts that if Congress has not "directly spoken to the
precise question at issue . . . the question for the court is
whether the agency's answer is based on a permissible
construction of the statute." Id. at 842-43. The EPA has
published numerous legislative rules that have interpreted
42 U.S.C. §7407(d)(3)(E) as obliging the EPA to deny a
redesignation request if the EPA knows that the area is not
in present attainment of the NAAQS,3 because the EPA's
_________________________________________________________________
3. See, e.g., 61 Fed. Reg. 19,193, 19,197 (1996) (the final rule denying
Pennsylvania's request to redesignate the Area, in which the EPA "note[d]
that it has not and may not (in light of section 107(d)(1)(A)(i) and
107(d)(3)(E)) approve a redesignation request for an area that is violating
the ozone standard"); 61 Fed. Reg. 4,958, 4,599 (1996) (the proposed
rule denying Pennsylvania's request to redesignate the Area, in which
the EPA concluded that "the Pittsburgh area no longer meets
12
interpretation is a reasonable construction of the statute.
See Chevron, 467 U.S. at 844 (when Congress has implicitly
delegated to an agency the authority to "elucidate a specific
provision of the statute by regulation," a reviewing court
"may not substitute its own construction of a statutory
provision for a reasonable interpretation made by the
administrator of an agency").
The petitioners contend that §7407(d)(3)(D) prohibits the
EPA from considering any data acquired more than 18
months after the submission of Pennsylvania's
redesignation request. They assert -- correctly, in our view
-- that the use of the word "shall" in §7407(d)(3)(D) imposes
upon the EPA a mandatory duty to act on a state's
redesignation request within 18 months. The petitioner's
argument fails, however, because §7407(d)(3)(D)'s use of the
word "shall" does not conclusively indicate that Congress
intended to prohibit the EPA from taking action after the
expiration of the statutorily specified time period.
The Supreme Court faced a similar question of statutory
interpretation in Brock v. Pierce County, 476 U.S. 253
(1986). At issue in Brock was a provision of the
Comprehensive Employment and Training Act ("CETA")
stating that the Secretary of Labor "shall" issue a final
determination as to the misuse of CETA funds by a grant
recipient within 120 days after receiving a complaint
alleging such misuse. See id. at 254-55. The Department of
Labor disallowed almost $500,000 of CETA expenditures by
a county, after an investigation revealed that those funds
had not been used in accordance with the CETA program.
_________________________________________________________________
[§7407(d)(3)(E)'s] first criteria for redesignation" in light of the summer
1995 exceedances); 59 Fed. Reg. 37,190, 37,195 (1994) (a proposed rule
redesignating the Detroit-Ann Arbor area to attainment status, in which
the EPA warns that if "data shows violations of the ozone NAAQS before
the final USEPA action on this redesignation, the USEPA proposes that
it disapprove the redesignation request"); 59 Fed. Reg. 22,757 (1994) (a
final rule in which the EPA denied redesignation of the Richmond,
Virginia area because that area did "not meet the statutory criteria for
redesignation to attainment found in section 107(d)(3)(E) of the CAA,"
even though the area's only ozone exceedance was registered after the
EPA published a rule proposing approval of the redesignation request).
13
The county argued that the Secretary of Labor could not
recover the misused funds because the Secretary did not
issue his final determination of misuse until more than 120
days after the Department received the initial complaint.
The Supreme Court thus faced the question whether the
use of the word "shall" in the CETA statute prohibited the
Secretary from recovering misused funds after the
expiration of the 120-day period. A unanimous Court
concluded that "the mere use of the word `shall' " was not
enough to demonstrate that Congress intended to prohibit
the Secretary from acting after 120 days. Id. at 262. In so
deciding, the Court stated that it "would be most reluctant
to conclude that every failure of an agency to observe a
procedural requirement voids subsequent agency action."
Id. at 260. The Court instead concluded that "the normal
indicia of congressional intent" should determine whether
an agency may act after the expiration of a statutory
deadline. See id. at 262 n.9.
Here, the petitioner has not brought to our attention
anything in the Clean Air Act itself (other than the use of
the word "shall" in 42 U.S.C. §7407(d)(3)(D)), or anything in
the Act's legislative history that shows that Congress
intended for the EPA to lose its power to consider data
brought to its attention after the expiration of the 18-month
deadline. To the contrary, two important aspects of the
Clean Air Act strongly suggest that Congress did not intend
for the EPA to lose its power to act after 18 months. The
first is the Act's failure to specify a consequence for
noncompliance with the 18-month deadline. As the
Supreme Court has observed, "if a statute does not specify
a consequence for noncompliance with statutory timing
provisions, the federal courts will not in the ordinary course
impose their own coercive sanction." United States v. James
Daniel Good Real Property, 510 U.S. 43, 63 (1983).
Second, the Clean Air Act affords a less drastic remedy
than that urged by the petitioner. In Brock, the Supreme
Court stated that when "there are less drastic remedies
available for failure to meet a statutory deadline, courts
should not assume that Congress intended the agency to
lose its power to act." Brock, 476 U.S. at 260. The Brock
court's conclusion that there existed a less drastic remedy
14
in that case provides guidance for our present inquiry.
Noting that "nothing in CETA appears to bar an action to
enforce the 120-day deadline," the Brock court concluded
that anyone within the statute's zone of interests could
have brought an action to force the Secretary of Labor to
act within the statutory deadline. Id. at 260 n.7. Thus, 120
days after the original complaint, the defendant in Brock
could have brought an action to force the Department of
Labor to drop its investigation, provided that the defendant
could achieve standing by successfully arguing that
Congress enacted the 120-day limit in order "to protect
grant recipients from lengthy delays in audits." Id.
Similarly, in the present case, either the petitioner or the
Commonwealth of Pennsylvania could have brought an
action to enforce the 18-month deadline in 42 U.S.C.
§7407(d)(3)(D).4 The petitioner has not called to our
attention any provision of the Clean Air Act that would have
precluded such an action. Had the petitioner brought such
an action, the result would have been far less drastic than
that which the petitioner now urges, which is the
redesignation of an area that is not in attainment of the
NAAQS.
After oral argument, the parties have called to our
attention certain new facts that must be considered. First,
in 1995 the EPA issued a direct final notice redesignating
LaFourche Parish, Louisiana, as an attainment area. After
the publication of this notice, but prior to its effective date,
a monitor recorded a violation of the NAAQS for ozone in
the LaFourche Parish area. Although the EPA was aware of
this exceedance, the EPA did not withdraw the notice, and
the LaFourche Parish area was redesignated as an
attainment area for ozone on the notice's effective date. The
petitioner argues that this redesignation demonstrates that
the EPA is not precluded from redesignating an area that
_________________________________________________________________
4. Such an enforcement action would have been available pursuant to
the Administrative Procedure Act, 5 U.S.C. #8E8E # 701-706, which entitles
any person "adversely affected or aggrieved by agency action" to judicial
review, §702, unless the relevant statute precludes judicial review or
"agency action is committed to agency discretion by law," §701(a). In
such an enforcement action, a court would have authority to "compel
agency action unlawfully withheld or unreasonably delayed." §706(1).
15
experiences an exceedance while a redesignation request is
pending.
The EPA's redesignation of the LaFourche Parish area in
no way undermines the analysis set forth in this opinion.
As discussed above, we accept the view that the EPA may
not redesignate an area if the EPA knows that the area is
not meeting the NAAQS. The EPA's redesignation of the
LaFourche Parish redesignation was thus not proper.
However, the fact that the EPA apparently acted contrary to
law in a prior case did not permit, much less require, the
EPA to disregard the law in the instant case. See Kokechik
Fishermen's Assoc. v. Secretary of Commerce, 839 F.2d 795,
802-03 (D.C. Cir. 1988) ("[p]ast administrative practice that
is inconsistent with the purpose of an act of Congress
cannot provide an exception").
The same analysis applies to the second incident that the
parties have brought to our attention. In at least one case,
the EPA has excluded exceedance data from its evaluation
of a redesignation request because the data came from
monitors that were not part of the State or Local Air
Monitoring Stations network ("SLAMS") required by 40
C.F.R. §58 (1996). The petitioner contends that such
incidents undermine the proposition that EPA is required to
deny a redesignation request when it possesses knowledge
that the NAAQS is not being attained. Assuming arguendo
that the EPA's exclusion of non-SLAMS exceedance data
violates the EPA's duty not to redesignate an area that fails
to attain the NAAQS, the EPA's prior disregard of this duty
did not relieve the EPA of its obligation to act correctly in
other cases.
B. The petitioner further attacks the EPA's conclusion
that the Area did not attain the NAAQS by arguing that the
EPA failed to take into account data demonstrating that
much of the offending ozone originated outside the Area.
The petitioner contends that ozone readings from border
monitors demonstrate that much of the ozone contributing
to the exceedances during the summer of 1995 originated
in neighboring states and was transported into the Area by
wind. In its final rule denying redesignation, the EPA
included the following analysis of the interstate ozone
transport question:
16
Pennsylvania has made no demonstration that the
ozone problem in the Pittsburgh area is caused by
transport from upwind sources. An adequate technical
demonstration, including emissions data and a
modeling analysis, must be provided to support any
claim of transport-dominated nonattainment.
Although ozone levels recorded at monitors near the
West Virginia/Ohio/Pennsylvania border seem to
correlate with the levels recorded further east in the
nonattainment area, this data is not sufficient to
demonstrate that the Pittsburgh area's ozone problem
is due to transport. During the summer of 1995, on the
days when monitors in the Pittsburgh area
("downwind" monitors in Allegheny and Westmoreland
Counties) recorded exceedances of the ozone standard,
ozone levels at the monitors on the western border of
the Pittsburgh area (the "upwind" monitors in Beaver
and Washington Counties, Pennsylvania) recorded
increased levels of ozone. However, these "upwind"
monitors did not record any exceedances of the ozone
standard. In other words, "downwind" monitors in the
Pittsburgh area always recorded higher ozone levels
than the monitors at the western border. This
demonstrates the Pittsburgh area is causing its own
exceedances by generating ozone in the area. . . .
. . . [E]ven if the violations in Pittsburgh could be
attributed to transport, EPA would not have the
authority to redesignate Pittsburgh to attainment.[42
U.S.C. §7407(d)(1)(A)(ii)] defines an attainment area as
an area "that meets" the national ambient air quality
standard and [§7407(d)(3)(E)] prohibits EPA from
redesignating an area to attainment unless EPA
determines that the area is attaining the standard. As
an area that is experiencing violations of the ozone
standard is not attaining the standard, EPA is not
authorized by the Clean Air Act to redesignate such an
area to attainment.
61 Fed. Reg. 19,193, 19,194 (May 1, 1996).
The petitioner contends that the EPA "failed to
adequately analyze and consider the role transported ozone
17
and ozone precursors played in the Area's 1995
exceedances." Pet'r. Br. at 28. Although the petitioner does
not seem to argue that these exceedances were caused
solely by transported ozone, the petitioner maintains that
such ozone plainly contributed to the 1995 exceedances.
See id. The petitioner states that "[t]here is nothing in the
record upon which the EPA bases its assumption that
exceedances are attributable solely to sources within the
border when high ozone levels are being transported into
the Area." Id. at 29.
In response, the EPA argues that the Clean Air Act and
its implementing regulations "require that EPA determine
whether or not an area has met the NAAQS and satisfied
the first criterion for redesignation without regard to why
the NAAQS and the criterion many not have been met."
Resp't. Br. at 30. In essence, then, the EPA maintains that
the origin of the ozone that caused the 1995 exceedances
was legally irrelevant. See 61 Fed. Reg. at 19,193 19,194
(the EPA's final rule denying Pennsylvania's request to
redesignate the Area). The EPA goes on, however, to defend
its scientific analysis of the role of transported ozone in the
Area.
In evaluating the EPA's interpretation of the Clean Air
Act, we must apply the familiar Chevron analysis to which
we previously referred. Under this analysis, if "Congress
has directly spoken to the precise question at issue. . . the
court . . . must give effect to the unambiguously expressed
intent of Congress." Chevron, 467 U.S. at 842-43. If,
however, the "precise question at issue" is one about which
Congress has been either "silent or ambiguous," then a
reviewing court must defer to the agency's statutory
interpretation if it is "based on a permissible construction
of the statute" Id. at 843.
Here, the EPA contends that the Clean Air Act itself
prohibited allowances for ozone transported from outside
the Area. The EPA relies in part on 42 U.S.C.
§7407(d)(1)(A)(ii), which provides that an attainment area is
one that "meets" the NAAQS, and 42 U.S.C.
§7407(d)(3)(E)(i), which prohibits the EPA from
redesignating an area to attainment unless the EPA
determines that the area "has attained" the NAAQS. These
18
provisions are certainly consistent with and lend some
support to the EPA's interpretation.
Somewhat stronger support for the EPA's argument is
furnished by other provisions of the Act. The first of these
is 42 U.S.C. §7511a(h), which establishes "rural transport
areas." These are areas that do not attain the NAAQS for
ozone, despite not producing any significant amount of
ozone themselves. Congress addressed the problem that
ozone transport causes rural transport areas by exempting
such areas from certain pollution control requirements,
provided that the areas make certain submissions to the
EPA. Although such areas can enjoy relaxed control
requirements, they must remain in nonattainment status,
because they have not attained the NAAQS for ozone.
Congress also addressed the problem of ozone transport
in 42 U.S.C. §7511(a)(4), which describes certain
circumstances under which the EPA may adjust a
nonattainment area's classification (e.g., from "severe" to
"serious"). Under this provision, if a nonattainment area
meets criteria making it eligible for adjustment of its
classification, there are several factors that the EPA may
consider when making the adjustment. One of these factors
is "the level of pollution transport between the area and
other affected areas, including both intrastate and
interstate transport." Id. Thus, under this provision, the
EPA may consider pollutant transport when adjusting a
nonattainment area's classification, but pollution transport
does not affect the area's designation as a nonattainment
area.
Although these provisions provide significant support for
the EPA's interpretation, we need not, and do not, go so far
as to hold that the Clean Air Act dictates that
interpretation. For present purposes, it is enough to hold
that even if the Act would permit a different interpretation,
the EPA's interpretation is plainly a reasonable one to
which, under Chevron, we must defer. Accordingly, we
accept the EPA's position that the origin of the ozone that
caused the exceedances at issue is legally irrelevant.
After oral argument, the EPA brought to our attention
certain administrative actions that must be addressed in
19
connection with this analysis. First, the EPA pointed out
that it has issued a "Guideline on the Identification and
Use of Air Quality Data Affected by Exceptional Events."
See Letter from Lois J. Schiffer, Assistant Attorney General,
Environment and Natural Resources Division, to the Court
at 3 (May 8, 1997), referring to U.S. Environmental
Protection Agency, Office of Air and Radiation, Office of Air
Quality Planning and Standards, Monitoring and Data
Analysis Division, Guideline on the Identification and Use of
Air Quality Data Affected by Exceptional Events, EPA-
450/4-86-007 (July 1986). This Guideline permits the
exclusion from consideration, for various regulatory
purposes, of data affected by certain exceptional events.
The only exceptional event that applies to ozone data is a
"stratospheric ozone intrusion." This is a phenomenon that
occurs when a parcel of air from the stratosphere suddenly
falls to ground level, as occasionally happens during severe
thunderstorms. See id., referring to the Guideline at 4.1.2.
Second, the EPA has noted that in considering certain other
redesignation requests, it has excluded ozone data as
having been influenced by forest fires. See id.
The petitioner contends that it is inconsistent for the EPA
to exclude ozone data that is influenced by stratospheric
ozone intrusions or forest fires, but not to exclude ozone
data that is influenced by interstate ozone transport. This
inconsistency, the petitioner contends, undermines the
argument that the Clean Air Act prohibits the EPA from
redesignating an area that is not in attainment, even in
cases when the nonattainment is attributable to ozone that
has been transported from outside the area.
The petitioner's argument, however, does not disturb our
conclusion that the EPA's interpretation of the Act as
precluding allowances for transported ozone, even if not
statutorily compelled, is nevertheless reasonable. The EPA's
view that allowances are permissible in cases of
stratospheric ozone intrusions and forest fires is not at
issue here, and does not prove that the EPA's position
concerning transported ozone is unreasonable.
C. In light of our deference to the EPA's interpretation of
the Act as precluding allowances for transported ozone, the
petitioner's attack on the EPA's scientific evaluation of the
20
role of transported ozone is beside the point. Yet even if it
were not, we would see no ground for disturbing that
analysis. A reviewing court "must generally be at its most
deferential" when reviewing factual determinations within
an agency's area of special expertise. New York v. E.P.A.,
852 F.2d 574, 580 (D.C. Cir. 1988), cert. denied, 489 U.S.
1065 (1989). It is not the role of a reviewing court to
"second-guess the scientific judgments of the EPA."
American Mining Congress v. E.P.A., 907 F.2d 1179, 1187
(D.C. Cir. 1990). Rather, we must "review the record to
ascertain that the agency has made a reasoned decision
based on reasonable extrapolations from some reliable
evidence, to ensure that the agency has examined the
relevant data and articulated a satisfactory explanation for
its action including a rational connection between the facts
found and the choice made." Id. (internal quotations and
citations omitted).
If we were to review the EPA's final rule under this
standard, we would conclude that the EPA considered the
relevant data and articulated a satisfactory explanation for
its findings. In its response to comments concerning the
interstate transport of ozone, the EPA considered the
correlation between border ozone readings and the ozone
levels in the Area, but concluded that the data from the
border was insufficient to demonstrate that ozone transport
"caused" the exceedances in the Area. See 61 Fed. Reg. at
19,194. The EPA supported its conclusion by noting that
the ozone levels were higher within the Area (where the
exceedances were registered) than at the border (where no
exceedances were detected), demonstrating that the Area
was "causing its own exceedances by generating ozone in
the [A]rea." Id. Contrary to the petitioner's suggestion, we
do not interpret the EPA's explanation to mean that it
found that transported ozone did not contribute to the 1995
exceedances. Rather, the EPA found only that the
exceedances were not "caused by" or "due to" transported
ozone. 61 Fed. Reg. at 19,194. Since the EPA considered
the relevant data and articulated a rational connection
between these data and its conclusion, we cannot disturb
the EPA's factual determinations.
D. We thus conclude that the EPA did not act arbitrarily
21
or capriciously, did not abuse its discretion, and did not act
contrary to law when it determined that the Pittsburgh-
Beaver Valley area was not attaining the national ambient
air quality standard for ozone. Since 42 U.S.C.
§7407(d)(E)(i) prohibits the EPA from redesignating an area
that is not in attainment of the NAAQS, the EPA correctly
denied Pennsylvania's request for redesignation. We thus
do not need to consider the petitioner's arguments that the
EPA erred in determining that §7407(d)(E)'s four other
criteria were also not met, since §7407(d)(E) provides that
nonfulfillment of any one of its five criteria will prohibit the
EPA from redesignating a nonattainment area to attainment
status.5
III.
We next consider the contention of the intervenor,
Advanced Manufacturing Network ("AMN"), that the EPA's
final rule denying Pennsylvania's redesignation request was
invalid because the EPA did not comply with the Regulatory
Flexibility Act, 5 U.S.C. §§ 601-12. We conclude that the
intervenor may not raise its RFA argument in this
proceeding because this argument was not adequately
presented to the EPA during the rulemaking process. In the
alternative, we hold that the intervenor's RFA argument
lacks merit, because the EPA's final rule is sufficient to
satisfy the requirements of the RFA.
A. The Regulatory Flexibility Act requires administrative
agencies to give public consideration to the impact that a
proposed regulation will have on small entities, including
small businesses, small not-for-profit enterprises, and
small local governments. See 5 U.S.C. §601(3)-(6). Under
_________________________________________________________________
5. We find no merit to the petitioner's contention that it was inconsistent
for the EPA to create de minimis exceptions to §7407(d)(E)'s criteria in
some other cases but not in the instant case. An area's failure to attain
a NAAQS is the most fundamental criterion in its designation as a
nonattainment area. This is demonstrated by §7407(d)(1)(A)(i), which
defines a "nonattainment" area as "any area that does not meet [the
NAAQS] for the pollutant". The Area's failure to meet the NAAQS for
ozone is thus a far cry from the types of trivialities that warrant the
creation of a de minimis exception.
22
the RFA, at two points during the rulemaking process, an
agency must prepare a regulatory flexibility analysis, which
is an assessment of the proposed rule's effects on small
entities. First, whenever an agency is required by law to
publish a proposed rule, the agency must prepare an initial
regulatory flexibility analysis. See 5 U.S.C. 603(a). Second,
whenever an agency promulgates a final rule after having
been required to publish a proposed rule, the agency must
prepare a final regulatory flexibility analysis. See 5 U.S.C.
604(a). The RFA exempts an agency from the requirement
to publish the two regulatory flexibility analyses if the
agency "certifies that the rule will not, if promulgated, have
a significant economic impact on a substantial number of
small entities." 5 U.S.C. 605(b).
In its final rule disapproving Pennsylvania's request for
redesignation, the EPA made the following certification
statement, which summarized a similar statement in the
proposed rule:
As described in the [notice of proposed rulemaking],
EPA has determined that the disapproval of the
redesignation request will not affect a substantial
number of small entities. EPA's denial of the
Commonwealth's redesignation request under [42
U.S.C. §7407(d)(3)(E)] does not affect any existing
requirements applicable to small entities nor does it
impose new requirements. The area retains its current
designation status and will continue to be subject to
the same statutory requirements. To the extent that
the area must adopt regulations, based on its
nonattainment status, EPA will review the effect of
those actions on small entities at the time the
Commonwealth submits those regulations.
61 Fed. Reg. 19,193, 19,197.
The intervenor argues that this statement is not sufficient
to satisfy the requirements of the RFA. Specifically, the
intervenor contends that this statement is conclusory
because it mentions neither the number of small entities
that the EPA believes the rule will affect, nor the number of
small entities that the EPA believes to be "substantial." The
intervenor argues that the EPA erred in concluding that the
23
rule would not affect a substantial number of small entities.
In the intervenor's view, the rule will affect small entities
because the retention of the Area's nonattainment status
will soon require the EPA to reclassify the Area from
moderate nonattainment status to serious nonattainment
status, thereby subjecting small entities within the Area to
heightened pollution control requirements.
B. We must consider whether we have jurisdiction to
hear the intervenor's RFA argument. The intervenor asserts
that we have jurisdiction over the RFA claim pursuant to
the Small Business Regulatory Enforcement Fairness Act of
1996 ("SBREFA"), which amended the RFA to provide, inter
alia, for judicial review of agency action under the RFA. See
Pub. L. No. 104-121, §242, 110 Stat. 857, 865-66 (1996)
(codified as amended at 5 U.S.C. §611) ("For any rule
subject to this chapter, a small entity that is adversely
affected or aggrieved by final agency action is entitled to
judicial review of agency compliance with the requirements
of [the RFA]"). The EPA retorts that the SBREFA
amendments do not provide jurisdiction over the
intervenor's RFA claim, because the EPA published its final
rule before the effective date of the SBREFA amendments.
Thus, in order to determine whether we have jurisdiction
over the intervenor's RFA claim, we must determine
whether the SBREFA amendment allowing judicial review of
RFA claims applies to legislative rules that were
promulgated before the effective date of the SBREFA
amendments.
The Supreme Court analyzed the question of the
temporal reach of new statutes in Landgraf v. USI Film
Prods., 511 U.S. 244 (1994), and Lindh v. Murphy, No. 96-
6298, 1997 WL 338568 (U.S. June 23, 1997). In Landgraf,
the Court provided the following guidance to lower courts
considering the temporal reach of new federal statutes:
When a case implicates a federal statute enacted after
the events in suit, the court's first task is to determine
whether Congress has expressly prescribed the
statute's proper reach. If Congress has done so, of
course, there is no need to resort to judicial default
rules. When, however, the statute contains no such
express command, the court must determine whether
24
the new statute would have retroactive effect, i.e.,
whether it would impair rights a party possessed when
he acted, increase a party's liability for past conduct,
or impose new duties with respect to transactions
already completed. If the statute would operate
retroactively, our traditional presumption [against
retroactive applicability] teaches that it does not govern
absent clear congressional intent favoring such a
result.
Landgraf, 511 U.S. at 280.
In Lindh, the Supreme Court explained that this language
from Landgraf does not mean that there exist only two
possible means of determining questions of temporal reach,
namely, an "express command" or the Landgraf default
rule. See Lindh at *3-4. Instead, this language reaffirms the
traditional rule that courts will not apply statutes having
retroactive effect unless Congress expressly indicated that it
intended for such application. This clear statement rule has
no bearing on other inquiries related to questions of
temporal reach, including "determining whether a statute's
terms would produce a retroactive effect" and "determining
a statute's temporal reach generally." Id. To such inquiries
"our normal rules of construction apply." Id.
Following Landgraf and Lindh, we consider whether the
SBREFA amendments indicate the temporal reach of the
amendment concerning judicial review. The only portion of
the SBREFA amendments that mentions applicability to
past EPA action is the following:
This subtitle shall become effective on the expiration of
90 days after the date of enactment of this subtitle,
except that such amendments shall not apply to
interpretative rules for which a notice of proposed
rulemaking was published prior to the date of
enactment.
Pub. L. No. 104-121, §245, 110 Stat. 857, 868 (1996).
The intervenor argues that since this provision expressly
provides that the amendments do not apply to interpretive
rules that were promulgated before the effective date, the
amendments must apply to legislative rules that were
25
promulgated before the effective date, such as the
legislative rule denying redesignation of the Area. This
negative inference, drawn from application of the statutory
interpretation canon expressio unis est exclusio alterius, is
very convincing. See Lindh, 1997 WL 338568 at *4-*5.
This conclusion is bolstered by the fact that the SBREFA
amendment concerning judicial review does not
retroactively alter substantive rights, duties or liabilities. In
its discussion of retroactive applicability, Landgraf
distinguishes between two categories of intervening
statutes. The first category consists of statutes that
"attach[ ] new legal consequences to events completed
before [the statutes'] enactment." Landgraf, 511 U.S. 269-
70. Such statutes "would impair rights a party possessed
when he acted, increase a party's liability for past conduct,
or impose new duties with respect to transactions always
completed." Id. at 280. To such statutes, the courts apply
a "deeply rooted" "presumption against statutory
retroactivity," because "considerations of fairness dictate
that individuals should have an opportunity to know what
the law is and conform their conduct accordingly." Id. at
265, 273, 265.
The second category of intervening statutes consists of
statutes that "authorize[ ] or affect[ ] the propriety of
prospective relief." Id. at 273. Application of such a statute
to events that took place before the statute's enactment "is
unquestionably proper" because no substantive rights are
retroactively affected. Id. Courts have thus "regularly
applied intervening statutes conferring or ousting
jurisdiction, whether or not jurisdiction lay when the
underlying conduct occurred." Id. at 274.
We hold that the amendment entitling small entities to
judicial review of agency compliance with the RFA falls
within Landgraf's second category. This is because the
amendment does not retroactively alter any substantive
rights or duties, since the SBREFA amendment allowing
judicial review did not change the substantive RFA
requirements that applied to the EPA's promulgation of the
final rule denying redesignation. SBREFA's judicial review
amendment instead prospectively changed the jurisdiction
of the federal courts to allow judicial review of an agency's
26
compliance with the RFA. We must apply such a statute to
a rule promulgated before the statute's enactment. As
indicated above, we hold that the text of the SBREFA
amendments support this conclusion.
We note that the United States District Court for the
District of Maine reached the opposite conclusion in
Associated Fisheries v. Daley, 954 F.Supp. 383 (D. Maine
1997). The court in that case held that the SBREFA
amendment concerning judicial review did not apply to a
rule promulgated before the SBREFA amendments. In so
ruling, the Associated Fisheries court observed that, in
addition to the provision concerning judicial review, the
SBREFA amendments also contained provisions imposing
new substantive requirements upon an agency that
undertakes a regulatory flexibility analysis under the RFA.
Since such substantive requirements cannot be applied to
rules promulgated before the amendments, the court
concluded that it "would be anomalous to apply the judicial
review portion of the [SBREFA] amendments to past agency
actions but at the same time not apply the substance of
those amendments, unless Congress expressly stated that
was its intent." Id. at 387.
We disagree with the Associated Fisheries court's
conclusion that the SBREFA's judicial review provision and
substantive provisions must be treated uniformly for
purposes of applicability to past agency actions. The
Supreme Court in Landgraf addressed this precise question
when it held that §102 of the Civil Rights Act of 1991
should govern cases arising before its enactment, even
though other provisions of that Act imposed new
substantive requirements. The Landgraf Court reasoned as
follows:
[T]here is no special reason to think that all the diverse
provisions of the Act must be treated uniformly for
[purposes of applicability to past conduct]. To the
contrary, we understand [the statute's] instruction that
the provisions are to "take effect upon enactment" to
mean that courts should evaluate each provision of the
Act in light of ordinary judicial principles concerning
the application of new rules to pending cases and pre-
enactment conduct.
27
Landgraf, 511 U.S. at 280.
We conclude that it is proper to apply the SBREFA's
judicial review amendment to past agency action, even
assuming that it would be inappropriate to apply the
SBREFA's substantive amendments to past agency action.
For these reasons, we conclude that we have jurisdiction
over the intervenor's RFA claim, pursuant to the SBREFA's
judicial review amendment.
C. EPA contends that the intervenor may not raise its
RFA argument because the petitioner, SWPGA, did not raise
this argument in its own brief. It is a general rule that an
intervenor may argue only the issues raised by the
principal parties and may not enlarge those issues. See
Vinson v. Washington Gas Light Co., 321 U.S. 489, 498
(1944); Synovus Fin. Corp. v. Board of Governors, 952 F.2d
426, 433 (D.C. Cir. 1991). The intervenor contends that the
petitioner sufficiently raised the RFA issue in its brief
through the following incorporation by reference:
Petitioner incorporates by reference the statement of
issues raised by Intervenor with regard to whether EPA
erred in certifying under the Regulatory Flexibility Act
that its disapproval of the Commonwealth of
Pennsylvania's request for redesignation would have no
effect on small entities.
Petitioner's Br. at 2 n.3.
The EPA argues that such an incorporation by reference
is insufficient to satisfy the rule that a principal party must
raise an issue in its brief before an intervenor may argue it.
In support of this argument, the EPA points to Time Warner
v. FCC, 56 F.3d 151, 202 (D.C. Cir. 1995), cert. denied, 116
S.Ct. 911 (1996). The court in Time Warner was presented
with an intervenor's claim that certain FCC orders did not
comply with the RFA and the Small Business Act ("SBA").
The only mention of the RFA and SBA arguments in the
brief of the Time Warner petitioners was "a short two-
sentence footnote." Id. This footnote "neither explain[ed] nor
develop[ed] the statutory challenges, noting only that the
intervenors' brief [would] discuss this issue." Id. (internal
quotation omitted). The Time Warner court concluded that
such a "terse reference in a complex regulatory case is
28
insufficient to raise an issue unrelated to petitioners' other
challenges and not discussed elsewhere in their briefs or
even mentioned in their petition for review." Id.
We agree with the EPA that under Time Warner
intervenor AMN could not raise its RFA argument because
petitioner SWPGA's incorporation by reference did not
sufficiently broach the issue. However, we decline to follow
Time Warner on this point. In its analysis of this issue, the
Time Warner court relied on Carducci v. Regan, 714 F.2d
171, 177 (D.C. Cir. 1983) (Scalia, J.), and Railway Labor
Executives' Ass'n v. United States R.R. Retirement Board,
749 F.2d 856, 859 (D.C. Cir. 1984). See id. We believe that
the Time Warner court misapplied these precedents when it
concluded that an intervenor may not raise an argument
that a principal party mentions only in an incorporation by
reference.
The court in Carducci reviewed a federal employee's
claims that he was unlawfully reassigned to a position of
lower rank. In his complaint, the disgruntled employee
asserted, inter alia, that his employing agency violated his
Fifth Amendment right to due process when it reassigned
him. The district court's opinion, which dismissed the
employee's complaint, did not discuss his due process
claim. In his appellate brief, the employee expressed his
due process argument only through a single assertion that
an official who reviewed the reassignment "rel[ied] on
information not contained in the grievance file or record
when he issued his final decision on the grievance."
Carducci, 714 F.2d at 176.
On appeal, the District of Columbia Circuit did not
address the employee's due process claims because the
employee had "made no attempt to address the issue." Id.
at 177. The court stated that it would not resolve the
complex legal issues that the employee's claim presented
"on the basis of briefing and argument by counsel which
literally consisted of no more than the assertion of violation
of due process rights, with no discussion of case law
supporting that proposition or of the statutory text and
legislative history relevant" to the legal questions involved.
Id. The court so ruled because consideration of complicated
legal questions without proper briefing by the parties would
29
ultimately deprive the courts of the assistance of counsel
that our adversarial system assumes. Id.
We endorse the Carducci court's conclusion that
appellate courts generally should not address legal issues
that the parties have not developed through proper briefing.
However, the situation in Carducci differs dramatically from
that in both Time Warner and the instant case, in which a
party has adopted by reference an argument that is
thoroughly developed in an intervenor's brief. As then-
Judge Scalia explained in the Court of Appeals' decision in
Carducci, deciding legal issues without proper briefing can
result in bad decisions. No similar danger is presented,
however, when a petitioner incorporates by reference an
argument that is fully developed in an intervenor's brief. We
thus disagree with Time Warner on this point, and we hold
that when a principal party adopts by reference an
argument that an intervenor fully briefs, the intervenor may
argue the question just as if the principal party had fully
briefed the issue itself.
We find further support for our conclusion in the fact
that this practice does not differ substantively from the
practice of an appellant's (or appellee's) adopting by
reference part of the brief of a coappellant (or coappellee),
which is expressly permitted under Fed. R. App. P. 28(i).
Applying this analysis to the instant case, we conclude that
intervenor AMN is not precluded from raising its RFA
argument by the fact that petitioner SWPGA adopted the
intervenor's RFA argument by reference, rather than fully
developing the argument in its own brief.
D. Although we have jurisdiction over the intervenor's
RFA claim, and although the parties have properly briefed
the question, we hold that the intervenor may not raise this
issue in this proceeding because it was never presented to
the EPA during the rulemaking process. "Generally, federal
appellate courts do not consider issues that have not been
passed on by the agency . . . whose action is being
reviewed." Hufstedler, 724 F.2d at 36 n.1.
The intervenor has not identified any section of the
record in which the EPA was presented with an argument
that mentions the applicability of the RFA to the EPA's
30
rulemaking. The only section of the record that the
intervenor has identified as relevant to its RFA argument is
a discussion of the circumstances that will result in a
"bump up" of an area's nonattainment classification. See
Intervenor's Reply Br. at 8, citing J.A. at 298. The
intervenor argues that this discussion is relevant to its
argument that retention of the Area's nonattainment status
will affect small entities by subjecting them to enhanced
pollution control requirements when the EPA subsequently
"bumps up" the Area's nonattainment classification. This
argument is flawed, however, because the section of the
record to which the intervenor points discusses the
nonattainment classification of the Reading area, not the
Pittsburgh-Beaver Valley area. See id. Since the intervenor
has brought to our attention no other portion of the record
relevant to its RFA argument, we conclude that the
intervenor may not raise this argument before this Court
because this argument was never presented to the EPA
during the rulemaking process.
E. We hold in the alternative that the EPA's certification
statement satisfies the requirements of the RFA. The EPA's
statement complies fully with 5 U.S.C. §605(b), which sets
out certain circumstances under which the requirement of
a regulatory flexibility analysis does not apply. Under
§605(b), an agency may avoid preparing a regulatory
flexibility analysis if the agency publishes in the Federal
Register a certification that "the rule will not, if
promulgated, have a significant economic impact on a
substantial number of small entities." 5 U.S.C. §605(b).
Along with this certification, the agency must also publish
a "statement providing the factual basis for such
certification." Id. The intervenor contends that the EPA
violated this provision because the EPA's statement did not
sufficiently explain the agency's reasons for the
certification. According to the intervenor, the statement is
deficient because it mentions neither the number of small
entities that the EPA believes the rule will affect, nor the
number of small entities that the EPA believes to be
"substantial."
We hold that the EPA's statement is sufficient to satisfy
the requirements of §605(b). Directly applicable to this
31
inquiry is Colorado State Banking Bd. v. Resolution Trust
Corp., 926 F.2d 931 (10th Cir. 1991). In that case, the
Resolution Trust Corporation ("RTC") adopted a rule that
would allow banks to operate acquired insolvent thrifts as
bank branches, notwithstanding Colorado and New Mexico
laws that prohibited such operation. These two states
contended that the RTC's adoption of the rule did not
satisfy the §605(b) criteria for exemption from the obligation
to undertake a regulatory flexibility analysis. In
promulgating the rule, the RTC published the following
certification statement:
The basis for the RTC's certification is its
determination that the rule will not impose compliance
requirements on depository institutions of any size. It
imposed no performance standards, no fees, no
reporting or recordkeeping criteria, nor any other type
of restriction or requirement with which depository
institutions must comply. Thus, it does not have the
type of economic impact addressed by the EPA.
Id. at 948.
The Tenth Circuit held that the RTC's brief statement
"present[ed] a valid basis for certification" because it
addressed the RFA's concern for "the high cost to small
entities of compliance with uniform regulations." Id.,
quoting Mid-Tex Elec. Coop., Inc. v. FERC, 773 F.2d 327,
342 (D.C. Cir. 1985). Similarly, the EPA's statement in the
instant case, which closely resembles the RTC's statement
in Colorado State Banking Board, adequately addressed this
concern by noting that the denial of redesignation"does not
affect any existing requirements applicable to small entities
nor does it impose new requirements." 61 Fed. Reg. 19,193,
19,197.
We also find no merit in the intervenor's contention that
the EPA erred when it concluded that the final rule would
not affect the requirements applicable to small entities. The
intervenor argues that the EPA's disapproval of
Pennsylvania's redesignation request will soon result in a
"bump up" of the Area's nonattainment classification from
"moderate" to "severe." This will happen, the intervenor
posits, because 42 U.S.C. §7511(b)(2)(A) provides that an
32
area that fails to attain the NAAQS by the applicable
attainment date "shall be reclassified by operation of law" to
the next higher classification. Since reclassification to
"severe" status will impose stricter pollution control
requirements upon small entities in the Area, the
intervenor contends that the EPA erred when it certified
that the denial of redesignation would not alter the
requirements applicable to small entities in the Area.
Although the intervenor accurately describes the
operation of §7511(b)(2)(A), its argument isflawed because
the more stringent pollution controls will result from the
rulemaking process that will accompany the reclassification
under §7511(b)(2)(A), not the rulemaking process through
which the EPA denied the redesignation request. When the
time comes for §7511(b)(2)(A) to reclassify the Area by
operation of law, the EPA will provide notice and an
opportunity for the public to comment, which will include
the opportunity to comment on the requirements of the
RFA. The EPA made this observation in its certification
statement, when it said that "to the extent that the area
must adopt regulations, based on its nonattainment status,
EPA will review the effect of those actions on small entities
at the time the Commonwealth submits those regulations."
For this reason, we conclude that the EPA correctly
determined that small entities would not be affected by the
particular rulemaking at issue in this case, namely, the
EPA's denial of Pennsylvania's request to redesignate the
Area.
IV.
For the reasons discussed above, we deny the petition for
review of the EPA's final rule denying Pennsylvania's
request to redesignate the Pittsburgh-Beaver Valley area
from nonattainment to attainment status.
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BECKER, Circuit Judge, concurring.
I join in Judge Alito's fine opinion. This brief concurrence
is merely to record my view that there is something amiss,
or at least unfair, in the EPA's treatment of regions such as
the Pittsburgh-Beaver Valley nonattainment area which,
because of the geographical configuration of the jet stream,
receives a constant infusion of transported ozone from
highly industrialized upwind sources. Although I lack the
technical expertise of the agency, my immersion in the
record in this case has left the distinct and indelible
impression that, while laudably attempting to fulfill its
statutory mission of assuring cleaner air, the EPA has paid
insufficient attention to: (1) the difficulty that downwind
areas such as Southwestern Pennsylvania have in meeting
the ozone NAAQS, and (2) more importantly, the imperative
of infusing its regulations with equity. The economic
consequences to the area as the result of continued
nonattainment status are enormous, as this record
demonstrates, and surely assuring equity vis-a-vis other
areas of the nation is within the agency's charter. I suspect
there are several avenues through which the EPA could
afford relief to the Pittsburgh-Beaver Valley region and
other similarly situated areas without violating its statutory
mandate.
Modest escape valves already exist within the current
regulatory structure. For example, an EPA guideline
permits the "flagging" of data affected by certain exceptional
events in carrying out various regulatory tasks. As Judge
Alito explains, this guideline authorizes the EPA to
disregard ozone data influenced by the phenomenon of
stratospheric ozone intrusion. See U.S. Environmental
Protection Agency, Office of Air and Radiation, Office of Air
Quality Planning and Standards, Monitoring and Data
Analysis Division, Guideline on the Identification and Use of
Air Quality Data Affected by Exceptional Events, EPA-
450/4-86-007 (July 1986). Additionally, the EPA has
acknowledged that it has, in the past, excluded ozone data
affected by forest fires in evaluating other redesignation
requests.
The presence of these exceptions highlights the problem
faced by communities such as the Pittsburgh-Beaver Valley
34
area, whose herculean and largely successful efforts to
combat air pollution may be derailed due to circumstances
(upwind ozone) beyond its control. The tremendous
remedial efforts undertaken by those regions seem to have
been inadequately considered when contrasted with the
aforementioned regulatory mollifications.
I would urge Congress to address the burdens faced by
the Pittsburgh-Beaver Valley nonattainment region and
other areas in the same predicament. Congress has taken
into account the problem of transported ozone in the past,
excusing certain so-called "rural transport areas" from
certain pollution control requirements. See 42 U.S.C.
§ 7511a(h). I see no reason to treat metropolitan areas
differently, especially where, as here, a region has achieved
such significant emissions improvements. I acknowledge
the potentially ameliorative effects of the Regulatory
Flexibility Act, 5 U.S.C. § 601 et seq., but it does not
directly address the problems facing Southwestern
Pennsylvania.
I would also urge the EPA to address these problems in
the regulatory context. If the EPA and Congress
satisfactorily address the referenced issues, we may be able
to avoid a succession of expensive and burdensome
litigations like this one. Judge Scirica joins in this
concurrence.
A True Copy:
Teste:
Clerk of the United States Court of Appeals
for the Third Circuit
35