Opposition Brief — Alaska Dept. of Environmental Conservation v. EPA

f/ 2

No. 02-658 JAN 2 003

Jn the Supreme Court of the United Slates,

ALASKA DEPARTMENT OF ENVIRONMENTAL

CONSERVATION, PETITIONER

Vv.

ENVIRONMENTAL PROTECTION AGENCY, ET AL.

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

BRIEF FOR THE RESPONDENTS IN OPPOSITION

THEODORE B. OLSON

Solicitor General

Counsel of Record

KELLY A. JOHNSON

Acting Assistant Attorney

General

JOHN C. CRUDEN

Deputy Assistant Attorney

General

ANDREW J. DOYLE

Attorney

Department of Justice

Washington, D.C. 20530-0001

(202) 514-2217

Ty

Cs

QUESTION PRESENTED

Whether Sections 113(a)(5) and 167 of the Clean Air

Act, 42 U.S.C. 7413(a)(5) and 7477, authorize the Envi-

ronmental Protection Agency to issue administrative

orders to prevent construction of a major emitting

facility where a state permitting authority is prepared

to grant the facility operator a “prevention-of-signifi-

cant-deterioration” air quality permit based on an

arbitrary and capricious application of the statutory

requirement that such sources of air pollution be

subject to the best available control technology.

(I)

TABLE OF CONTENTS

Page

Opinions below 1

Jurisdiction 1

Statutory provisions involved 2

Statement 3

Argument .. 12

Conclusion 24

TABLE OF AUTHORITIES

Cases:

Alabama Power Co. v. Costle, 636 F.2d 323 (D.C.

Cir. 1979) 4, 16, 18

American Corn Growers Ass'n v. EPA, 291 F.3d

1 (D.C. Cir. 2002) 14

Bethlehem Steel Corp. v. Gorsuch, 742 F.2d 1028

(7th Cir. 1984) 15

Chevron U.S.A. Inc. v. NRDC, Inc., 467 U.S. 837

837 (1984) 23

Department of Hous. & Urban Dev. v. Rucker,

122 S. Ct. 1230 (2002) 19

Florida Power & Light Co. v. EPA, 650 F.2d 579

(5th Cir. 1981) 15

General Motors Corp. v. United States, 496 U.S.

530 (1990) 3-4

Public Serv. Co. v. EPA, 225 F.3d 1144 (10th Cir.

2000) : . 17

Sur Contra La Contaminacio’n v. EPA, 202 F.3d

443 (1st Cir. 2000) lnssessasconsttnsmpsonsssnscosesamss 5

Train v. NRDC, Inc., 421 U.S. 60 (1975) ..... 4, 12, 18, 14, 23

Union Elec. Co. v. EPA, 427 U.S. 246 (1976) .............. 13, 14

United States v. AM General Corp., 34 F.3d 472

IED GUID ctepnrnensasesensesecenesenscensesescsasassennsnensnsencscsesssessesesess 16

(IIT)

IV

Cases—Continued: Page

Virginia v. EPA, 108 F.3d 1397, modified on other

other grounds, 116 F.3d 499 (D.C. Cir. 1997) ............0000 14

Whitman v. American Trucking Ass’ns, 531 U.S.

457 (2001) 3

Statutes and regulations:

Clean Air Act, 42 U.S.C. 7401 et seq.:

§ 107(a), 42 U.S.C. 7407(a) 3

$§ 108-109, 42 U.S.C. 7408-7409 3

§ 110, 42 U.S.C. 7410 3, 12

§ 110(a)(1)-(2), 42 U.S.C. 7410(a)(1)-(2) 3

§ 110(a\(2\(C), 42 U.S.C. 7410(aX(2)(C) 4

§ 110(0), 42 U.S.C. 7410(0) 6

§ 113,42 U.S.C. 7413 14

§ 113(a), 42 U.S.C. 7413(a) 15

§ 113(a)(5), 42 U.S.C. 7413(a)(5) passim

§ 113(b), 42 U.S.C. 7413(b) 21

$§ 160-169, 42 U.S.C. 7470-7479 13

§ 161, 42 U.S.C. 7471 4

§ 165(a), 42 U.S.C. 7475(a) 4,11

§ 165(a)(1), 42 U.S.C. 7475(a\(1) 4

§ 165(a)(3), 42 U.S.C. 7475(aX(3) 16

§ 165(a)(4), 42 U.S.C. 7475(a)(4) 4, 16, 18

§ 165(d)(1), 42 U.S.C. 7475(d)(1) 6

§ 167, 42 U.S.C. 7477 passim

§ 1691), 42 U.S.C. 7479(a)(1) 4

§ 169(3), 42 U.S.C. 7479(3) 5, 11, 18, 19

§§ 169A-169B, 42 U.S.C. 7491-7492 13

§ 307(b\(1), 42 U.S.C. 7607(b)(1) 21

Alaska Admin. Code tit. 18:

§ 50.400(c)(3)(A)(1983) 5

§ 50.900(9)(1991) 5

40 C.F.R.:

Section 51.100(g) 6

Section 52.21 6

Section 52.96(a) 4

Miscellaneous:

EPA, New Source Review Worshop Manual (1990) ...... on

57 Fed. Reg. (1992):

p. 28,093

p. 28,095

58 Fed. Reg. (1993):

p. 10,957

p. 10,961

63 Fed. Reg. (1998):

p- 13,795

p. 13,796

p. 13,797

H.R. Conf. Rep. No. 564, 95th Cong., Ist Sess. (1977) ......

S. Rep. No. 127, 95th Cong., Ist Sess. (1977)

http://www.epa.gov/airtrends/nitrogen.html.

Cees eeeeeeseeseree

a4

—

S

~a8BscoBS BB BBR

In the Supreme Court of the Anited States

No. 02-658

ALASKA DEPARTMENT OF ENVIRONMENTAL

CONSERVATION, PETITIONER

v.

ENVIRONMENTAL PROTECTION AGENCY, ET AL.

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

BRIEF FOR THE RESPONDENTS IN OPPOSITION

OPINIONS BELOW

The opinion of the court of appeals (Pet. App. 1a-16a)

is reported at 298 F.3d 814. A prior order of the court

of appeals addressing its subject matter jurisdiction

(Pet. App. 17a-23a) is reported at 244 F.3d 748.

JURISDICTION

The judgment of the court of appeals was entered on

July 30, 2002. The petition for a writ of certiorari was

filed on October 25, 2002. The jurisdiction of this Court

is invoked under 28 U.S.C. 1254(1).

(1)

2

STATUTORY PROVISIONS INVOLVED

Section 113(a)(5) of the Clean Air Act (CAA or the

Act), 42 U.S.C. 7413(a)(5), provides:

Whenever, on the basis of any available information,

the Administrator finds that a State is not acting in

compliance with any requirement or prohibition of

the chapter relating to the construction of new

sources or the modification of existing sources, the

Administrator may—

(A) issue an order prohibiting the construction

or modification of any major stationary source in

any area to which such requirement applies;

(B) issue an administrative penalty order in

accordance with subsection (d) of this section, or

(C) bring a civil action under subsection (b) of

this section.

_ Nothing in this subsection shall preclude the United

States from commencing a criminal action under

subsection (c) of this section at any time for any such

violation.

Section 167 of the CAA, 42 U.S.C. 7477, provides:

The Administrator shall, and a State may, take such

measures, including issuance of an order, or seeking

injunctive relief, as necessary to prevent the con-

struction or modification of a major emitting facility

which does not conform to the requirements of this

part, or which is proposed to be constructed in any

area designated pursuant to section 7407(d) of this

title as attainment or unclassifiable and which is not

3

subject to an implementation plan which meets the

requirements of this part.

STATEMENT

Petitioner seeks review of a decision of the court of

appeals arising from three administrative orders of the

Environmental Protection Agency (EPA) issued under

the CAA. Petitions for review were filed challenging,

among other things, EPA’s statutory authority to issue

the orders. The court of appeals denied the petitions,

upholding EPA’s invocation and exercise of authority

under Sections 113(a)(5) and 167 of the CAA, 42 U.S.C.

7413(aX5) and 42 U.S.C. 7477.

1. The Clean Air Act establishes a comprehensive

program for controlling and improving the nation’s air

quality. Under it, “the States and the Federal Govern-

ment [are] partners in the struggle against air pollu-

tion.” General Motors Corp. v. United States, 496 U.S.

530, 532 (1990). A prime example of this partnership

exists in one of the central features of the Act: national

ambient air quality standards (NAAQS). The CAA

requires EPA to establish NAAQS for certain air pol-

lutants. 42 U.S.C. 7408-7409; Whitman v. American

Trucking Ass’ns, 531 U.S. 457, 462 (2001). States, in

turn, play a “statutory role as primary implementers of

the NAAQS.” American Trucking, 531 U.S. at 470.

Each State is to draft and submit to EPA for approval a

state implementation plan (SIP) that, inter alia, pro-

vides for the attainment and maintenance of the

NAAQS. See 42 U.S.C. 7407(a), 7410; American Truck-

ing, 581 U.S. at 470. States have considerable discretion

in developing the specific rules to which operators of

pollution sources within their borders are subject; EPA

must approve a SIP so long as it meets the criteria of 42

U.S.C. 7410(a)(1)-(2). See General Motors, 496 U.S. at

4

533. However, EPA is “charged with the administra-

tion of the Act[{] and made ultimately responsible for

the attainment and maintenance of the national stan-

dards.” Train v. NRDC, Inc., 421 U.S. 60, 93-94 n.28

(1975).

EPA and the States also share responsibilities in

“clean air areas,” i.e., areas of the country in which the

NAAQS for a given pollutant have been met or for

which insufficient data exist to know whether they

have been met. State implementation plans are to

include a program to prevent significant deterioration

of air quality in clean air areas, which include much of

the State of Alaska. 42 U.S.C. 7410(a)(2)(C), 7471; Pet.

App. 3a. EPA approved Alaska’s Prevention of Signifi-

cant Deterioration (PSD) program in 1983. 40 C.F.R.

52.96(a). In clean air areas, the CAA prohibits the

construction or modification of large sources of air pol-

lution (i.e., “major emitting facilities”) unless and until

their operator secures a PSD permit. See 42 U.S.C.

7475(a), 7479(a)(1). Section 165(a)(1) of the CAA out-

lines several preconstruction “requirements” applicable

te covered sources through a PSD permit. 42 U.S.C.

7475(a)(1).

“(Pjrincipal” among these PSD requirements is that

covered sources of air pollution be “subject to the best

available control technology” (BACT) to minimize emis-

sions of regulated air pollutants. 42 U.S.C. 7475(a)(4);

Alabama Power Co. v. Costle, 636 F.2d 323, 407 (D.C.

Cir. 1979). BACT is defined under the CAA, in

pertinent part, as

an emission limitation based on the maximum

degree of reduction of each [covered] pollutant

* * * emitted from * * * any major emitting facil-

ity, which the permitting authority, on a case-by-

5

case basis, taking into account energy, environ-

mental, and economic impacts and other costs,

determines is achievable for such facility.

42 U.S.C. 7479(3).' While the CAA does not mandate a

specific type of emissions control technology for a par-

ticular type of source, permitting authorities commonly

follow EPA’s recommended “top-down” approach in

determining what is BACT for a given source. Pet.

App. 18a (citing EPA, New Source Review Workshop

Manual (1990)). See, e.g., Sur Contra La Contamina-

cion v. EPA, 202 F.3d 443, 446 n.3 (1st Cir. 2000).

Under that approach,

the applicant ranks all available control technologies

in descending order of control effectiveness. The

most stringent technology is BACT unless the

applicant can show that it is not technically feasible,

or if energy, environmental, or economic impacts

justify a conclusion that it is not achievable. If the

top choice is eliminated, then the next most strin-

rent alternative is considered, and so on. The most

effective control option not eliminated is BACT.

Pet. App. 13a (citation omitted). Petitioner purported

to follow the “top-down” approach in arriving at the

BACT determination at issue in the EPA orders before

the court of appeals. [bid.

PSD permitting authorities, typically state agencies

(like petitioner), bear primary responsibility to ensure

that BACT and the other preconstruction requirements

' Alaska’s federally-approved PSD program contains a paral-

lel BACT requirement. See Alaska Admin. Code tit. 18,

§ 50.400(c)(3)(A) (1983); Alaska Admin. Code tit. 18, § 50.900(9)

(1991).

6

of the PSD program are satisfied.’ Indeed, permitting

authorities have “significant discretion” in making PSD

permit decisions. 63 Fed. Reg. 13,795, 13,796, 13,797

(1998). But EPA also plays an important oversight role

following approval of a State’s PSD program. The CAA

directs permitting authorities to keep EPA informed of

every PSD permit application and “of every action

related to the consideration of such permit.” 42 U.S.C.

7475(d)(1). In the majority of instances, beyond proffer-

ing comments, EPA finds no reason to take an active

role in PSD permit decisions.

In those rare occasions where a permitting authority

acts outside the bounds of its discretion, the CAA does

authorize EPA to take action. Section 113(a)(5) of the

CAA provides that on the basis of “any available

information,” EPA may “find[] that a State is not acting

in compliance with any requirement or prohibition” of

the PSD permit program. 42 U.S.C. 7413(a)(5)

(emphasis added). To remedy a permitting authority’s

noncompliance, the CAA grants EPA a broad range of

options. Specifically, under Sections 113(a)(5) and 167

of the CAA, EPA may: (1) “issue an order prohibiting

the construction or modification” of the proposed

source; (2) “issue an administrative penalty order” if

construction or modification has already commenced;

(3) “bring a civil action” for injunctive relief or civil

penalties; and (4) “take such measures

* * * as necessary to prevent the construction or

2 Not all PSD permitting authorities are States. Counties or

other local entities may assume permitting responsibility on behalf

of a State. See 40 C.F.R. 51.100(g). An Indian Tribe may also be a

permitting authority if it has an EPA-approved program. See 42

U.S.C. 7410(0). Additionally, EPA itself serves as a PSD per-

mitting authority in areas that have no approved program. See 40

C.F.R. 52.21.

7

modification” of the proposed source. 42 U.S.C.

7413(a)(5), 7477. This case involves EPA’s invocation

and exercise of Sections 113(a)(5) and 167 of the CAA to

prevent construction of a proposed source based on an

unlawful PSD permit issued by petitioner.

2. Teck Cominco Alaska Incorporated (Cominco)

operates a mine in northwestern Alaska that is the

largest producer of zinc concentrates in the world. Pet.

App. 3a-4a; see RER 46-001. Cominco produces its

own electricity at the mine. In 1998, Cominco sub-

mitted to petitioner an application for a PSD permit.

Cominco sought permission, among other things, to

increase the amount of emissions of nitrogen oxide

(NOx), a regulated air pollutant, from one of its six

existing 5,000 kilowatt diesel-fired power generators

(labeled “MG-5”). Cominco urged the permitting

authority to require, as BACT for MG-5, an emission

control technology known as “Low NOx.” Preliminar-

ily, petitioner disagreed with Cominco; it opined that a

more stringent type of technology—selective catalytic

reduction (SCR)—should be installed as BACT on

the modified generator. Pet. App. 4a; see RER 17-030,

17-040, 17-042. In fact, petitioner found that operating

MG-5 at Cominco’s requested level with SCR, rather

than Low NOx, would reduce emissions of the pollutant

by more than 450 tons per year—a 10-fold difference.

See RER 17-043.

3 “RER” refers to Respondents’ Supplemental Excerpts of Re-

cord filed in the court of appeals. “PER” refers to Petitioners’

Excerpts of Record filed in the court of appeals.

4 NOx “play[s] a major role in the formation of ozone, particu-

late matter, haze, and acid rain.” www.epa.gov/airtrends/nitrogen.

html (last visited December 19, 2002). :

8

In 1999, Cominco amended its PSD permit appli-

cation. The amended application requested a permit to

construct an entirely new generator, “MG-17.” As with

the equally-powerful MG-5, Cominco urged petitioner

to require Low NOx as BACT for MG-17, which would

be less costly than SCR. At the same time, Cominco

offered to “retrofit” its six existing generators, includ-

ing MG-5, with Low NOx. Petitioner was inclined to

agree with Cominco’s latest proposal and issued a draft

permit decision to that effect. Pet. App. 4a.

EPA, as well as the National Park Service,’ raised

concerns with petitioner about its draft permit decision.

EPA’s view was that the facts and analysis in peti-

tioner’s own permit record supported only a conclusion

that SCR, not Low NOx, was the best available control

technology for the MG-5 and MG-17 generators. EPA

explained that “the PSD program does not allow the

imposition of a limit that is less stringent than BACT

even if the equivalent emission reductions are obtained

by imposing new controls on other emission units.” Pet.

App. 5a; RER 47-001. Petitioner subsequently agreed

with EPA that it was improper for purposes of deter-

mining BACT on MG-17 to consider Cominco’s offer to

retrofit Low NOx on existing generators. PER 045.° It

is undisputed that operating MG-17 with SCR, as

opposed to Low NOx, would reduce emissions of NOx

by 90%. PER 044, 045.

5 The National Park Service administers land 32 miles from

Cominco’s mine. The closest residential communities to the mine

are the native villages of Kivalina and Noatak (16 and 20 miles,

respectively). RER 36-018, 46-001.

6 Cominco discovered that retrofitting existing engines would

allow it to obtain a sufficient increase in power without triggering

BACT review on any of them. See RER 55-002, 55-003; PER 043,

053, 132, 234.

9

Despite several meetings with EPA, petitioner and

Cominco continued to insist that Low NOx, not SCR,

qualified as the best available control technology for

MG-17. Pet. App. 5a. On December 10, 1999, EPA

issued petitioner a finding of noncompliance and order

—the first of the three administrative orders before the

court of appeals. See id. at 26a-37a. Pursuant to

Section 113(a)(5), EPA found that petitioner would not

be in compliance with the CAA and Alaska’s imple-

mentation plan if petitioner issued the permit as then

drafted (7.e., with a determination that best available

control technology for MG-17 was Low NOx). EPA

explained the factual basis for that finding in a cover

letter to the order. PER 234-235. In sum, EPA con-

cluded that petitioner’s BACT determination was arbi-

trary, capricious, and unsupported by petitioner’s own

record and analysis. Additionally, pursuant to Section

167 of the CAA, EPA directed petitioner not to issue

the permit unless and until it made a valid BACT deter-

mination. See Pet. App. 36a-37a.’

Notwithstanding EPA’s order, petitioner issued a

PSD permit to Cominco later that same day. The per-

mit purported to authorize construction of MG-17 with

an operating emissions limitation based on a determina-

tion that Low NOx constituted BACT. Petitioner’s

“foremost consideration” in rejecting SCR in favor of

Low NOx was to “support” Cominco’s mining project

and “its contributions to the region.” Pet. App. 15a;

PER 051. At the same time, however, petitioner’s

’ After petitioner in fact issued the permit, EPA later with-

drew the portion of the December 10, 1999, finding and order that

ordered petitioner not to do so, stating that “the Order does not

impose any continuing prohibitions or obligations to [petitioner].”

See Pet. App. 19a.

10

report “fail[ed] to explain how the costs of SCR would

affect the Mine’s world competitiveness or why the

capital cost is excessive.” Pet. App. 15a. See PER 050-

51.

In early February 2000, EPA renewed its finding

that petitioner had failed to comply with federal and

state PSD requirements. Pet. App. 5a; RER 5-002. On

the same date, to ensure that Cominco would not

commence construction under a PSD permit that EPA

concluded was invalid, EPA issued the second of the

three orders before the court of appeals. That order

directed Cominco not to commence construction of MG-

17 until it obtained a valid PSD permit. See Pet. App.

38a-50a. EPA amended the February order in March

2000; it reaffirmed the findings and conclusions of the

February order but allowed Cominco to conduct some

limited, weather-sensitive construction activity. Pet.

App. 6a; see id. at 5la-64a. '

All three of EPA’s administrative orders hinged on a

finding that petitioner did not subject the proposed

source of air pollution to best available control technol-

ogy and, therefore, did not act in compliance with the

Clean Air Act in issuing the PSD permit. See Pet. App.

35a-36a, 47a, 49a, 60a, 62a.

3. Petitioner and Cominco petitioned for review of

EPA’s orders. They argued primarily that the CAA

did not authorize EPA’s action. While conceding that

“EPA has considerable oversight and control over how

states run their PSD permitting programs,” petitioner

and Cominco contended that such authority did not

extend to a state permitting authority’s BACT deter-

mination. Pet. C.A. Opening Br. 56. See id. at 53; Pet.

C.A. Reply Br. 24, 29.

After oral argument and supplemental briefing on

various legal and factual issues, the court of appeals

11

rejected the challenge brought by petitioner and

Cominco to EPA’s statutory authority. Examining the

plain meaning of Sections 113(a)(5), 165(a), 167, and

169(3) of the CAA, the Ninth Circuit concluded that

subjecting MG-17 to BACT was a PSD preconstruction

“requirement” within the meaning of those provisions.

As such, the BACT requirement fell within EPA’s

authority to find that petitioner was “not acting in

compliance with any requirement” of the PSD program.

42 U.S.C. 7413(a)(5). While recognizing that “the state

has discretion to make BACT determinations as the

permitting authority,” the court of appeals found no

legal basis to exclude BACT determinations altogether

from the scope of EPA’s oversight and enforcement

authority. Pet. App. 10a. Furthermore, given the

breadth of remedies available to EPA where a finding

of noncompliance has been made, the court found that

EPA’s remedial decisions to issue “orders were author-

ized by the plain language of Section 113(a)(5) * * *

and of Section 167.” Jd. at 9a. Finally, the court of

appeals confirmed its plain reading of the CAA with

support from the Act’s structure and legislative his-

tory. Id. at 9a-1la.

The Ninth Circuit also rejected the alternative argu-

ment made by petitioner and Cominco that EPA erred

in its construction of the facts, i.e., EPA’s finding that

petitioner misapplied the BACT requirement. Apply-

ing an “arbitrary or capricious” standard of review, the

court of appeals found that EPA’s findings were ade-

quately supported. Indeed, the court agreed that peti-

tioner’s own permit record

shows that (1) Cominco failed to meet its burden of

demonstrating that SCR was economically infeasi-

ble; and (2) [petitioner] failed to provide a reasoned

12

justification for its elimination of SCR as a control

option.

Pet. App. 16a. The court noted that petitioner’s “appar-

ent motivation for the elimination of SCR—appre-

ciation for Cominco’s contribution to the local economy”

is “uncomfortably reminiscent of one of the very

reasons Congress granted EPA enforcement authority

—to protect states from industry pressure to issue ill-

advised permits.” [bid.

ARGUMENT

The court of appeals correctly ruled that EPA’s

oversight and enforcement authority under Sections

113(a)(5) and 167 of the Clean Air Act extends to a per-

mitting authority’s determination of what constitutes

the best available control technology for a covered

source of air pollution such as Cominco’s diesel-fired

generator. The Ninth Circuit’s eonstruction of the

Clean Air Act does not conflict with any decision of this

Court or any other court of appeals. Accordingly,

review by this Court is not warranted.

1. Contrary to petitioner’s contention (Pet. 14-15),

the court of appeals’ opinion does not conflict with

Train v. NRDC, Inc., 421 U.S. 60 (1975), or any other

decision of this Court. The Court in Train construed

Section 110 of the CAA, which sets forth the require-

ments for approval by the EPA of a State’s CAA imple-

mentation plan—its SIP. See 421 U.S. at 75-98. The

Court’s analysis in Train focused almost entirely on the

various provisions of Section 110 and their relationship

to one another. The Court in Train did not construe

the materially different Sections 113(a)(5) and 167 of

the CAA, which do not concern the requirements for

EPA approval of a SIP and which were neither cited

nor discussed in the Court’s opinion in Train. Indeed,

13

Train was decided before the 1977 enactment of the

PSD program at issue here (42 U.S.C. 7470-7479, 7491-

7492) and the 1990 broadening of Section 113(a)(5) to

include “any requirement” of the PSD program. See

EPA C.A. Br. 58-59. And the Court in Train upheld

EPA’s construction of the provisions at issue in that

case as “sufficiently reasonable that it should have been

accepted by the reviewing courts,” 421 U.S. at 75, a

decision that gives no support to petitioner’s effort to

reject EPA’s construction of the different provisions at

issue here.

Moreover, contrary to petitioner’s contention (Pet.

14), there is no inconsistency between T'rain’s discus-

sion of the federal-state framework of the CAA and

that applied by the court of appeals in this case. The

issue in Train was whether EPA correctly approved

Georgia’s NAAQS implementation plan. Included in

Georgia’s SIP was “a variance procedure whereby par-

ticular sources could obtain individually tailored relief

from general requirements.” 421 U.S. at 69. The Court

concluded that EPA appropriately limited its review of

Georgia’s SIP to whether “the ultimate effect of [the]

State’s choice of emission limitations is in compliance

with the national standards,” as opposed to directing

what particular mix of emission limitations the State

must promulgate into law. Jd. at 79. Accord Union

Elec. Co. v. EPA, 427 U.S. 246, 269 (1976), cited at Pet.

15. Thus, Train involved the scope of EPA’s authority

to approve a SIP, not, as here, the scope of EPA’s

authority to oversee requirements of the CAA after a

SIP has been approved.

Indeed, while it was not formally at issue in Train,

the Court expressly recognized EPA’s oversight role in

that case. The Court stated that no air polluter could

be granted a variance “until first the State, and then

14

the Agency, have determined that [it] will not jeopard-

ize the [NAAQS].” Train, 421 U.S. at 93-94 n.28

(emphasis added). See, e.g., Union Elec., 427 U.S. at

252-253 n.3. Additionally, the Court observed that the

CAA “imposes a duty of enforcement on the Agency” to

enforce a SIP’s emission limitations. Train, 421 U.S. at

92-93 n.27 (emphasis added) (citing the predecessor

version of Section 113 of the CAA). Consequently, it is

the position of petitioner, not the decision of the court

of appeals, that is inconsistent with Train. See id. at

93-94 n.28 (as between the States and EPA, EPA is

“ultimately responsible for the attainment and main-

tenance of the national standards”); Pet. App. 10a-lla

(as between the States and EPA, “EPA has the ulti-

mate authority to decide whether a state has complied

with the BACT requirements of the Act and the state

SIP.”).

2. Nor does the court of appeals’ decision conflict

with that of any other court of appeals. Petitioner

refers (Pet. 15-19) to three decisions of the D.C. Circuit,

two decisions of the Seventh Circuit, and one decision of

the Fifth Circuit. None of those decisions conflicts with

the decision of the court of appeals in this case.

a. Four of the six decisions cited by petitioner

involved issues not unlike that in Train—i.e., the scope

of EPA’s authority in approving or dictating the con-

tents of state implementation plans. In American Corn

Growers Ass’n v. EPA, 291 F.3d 1, 5-9 (D.C. Cir. 2002),

the D.C. Circuit vacated a particular method of weigh-

ing statutory factors promulgated by EPA as part of a

rule implementing a provision of the CAA aimed at

reducing haze in national parks and guiding States on

the content of SIP revisions to that effect. In Virginia

v. EPA, 108 F.3d 1397, 1403-1415, modified on other

grounds, 116 F.3d 499 (1997), the D.C. Circuit invali-

15

dated an EPA rule directing States to update their

SIPs with motor vehicle emission restrictions equiva-

lent to those of California. In Bethlehem Steel Corp. v.

Gorsuch, 742 F.2d 1028, 1035 (1984), the Seventh Cir-

cuit found error in EPA’s “partial approval” of a SIP

whereby EPA attempted to make a state law “more

stringent on its face than the state had ever intended it

to be.” And, in Florida Power & Light Co. v. EPA, 650

F.2d 579, 588 (1981), the Fifth Circuit reversed an EPA

rulemaking in which EPA “insist{ed) * * * on

incorporating into Florida’s SIP a state pollution

variance provision that is irrelevant to state compliance

with the Clean Air Act.” Like Train itself, none of

those four decisions involved an issue of the type before

the court of appeals in this case—the scope of EPA’s

authority to oversee a permit decision in a State with

an approved SIP.* Nor did any of those four decisions

involve provisions like Sections 113(a) and 167, which

on their face grant EPA broad authority to “prohibit([]

* * * the construction or modification of any major

stationary source” where “a State is not acting in

compliance with any requirement * * * of the chapter

relating to the construction of new sources,” 42 U.S.C.

7413(a)(5), and provide that EPA “shall * * * take

such measures * * * as necessary to prevent the

construction or modification of a * * * facility which

does not conform to the requirements of” the statutory

provisions designed to protect clean air areas, 42 U.S.C.

7477.

8’ For example, while the D.C. Circuit in American Corn

Growers found that EPA’s rule purported to limit the States’

ability to apply statutory factors, it did not (and had no occasion to)

address EPA’s authority to find that a State’s application of those

factors to any particular facts was unlawful.

16

Petitioner’s attempt to rely (Pet. 16-17) on Alabama

Power Co. v. Costle, 636 F.2d 323, 361, 363-364 (D.C.

Cir. 1980), is equally mistaken. The portion of Alabama

Power relied upon by petitioner dealt solely with the

requirement not to pollute above specified increments

(Section 165(a)(3)), which is separate and distinct from

the BACT requirement (Section 165(a)(4)). See 636

F.2d at 361-364. Furthermore, while the D.C. Circuit

did decline environmental groups’ invitation to order

EPA to “prescribe the manner in which states will

manage their allowed internal growth,” the court

recognized EPA’s authority to “prevent or correct a

violation of the increments.” 636 F.2d at 361, 364. That

recognition is consistent with the court of appeals’

ruling in this case.

Likewise, there is no conflict between United States

v. AM General Corp., 34 F.3d 472, 474-475 (7th Cir.

1994), and the court of appeals’ decision in this case. In

AM General, EPA issued a finding of state noncom-

pliance and commenced an enforcement action after the

permitting authority issued the permit and the opera-

tor modified its source in reliance on that permit. See

id. at 474-475. While not sustaining that course of ac-

tion, the Seventh Circuit did opine that EPA could

have had a proper cause of action under Section

113(a)(5) if, as here, EPA issued a finding of noncompli-

ance before the source operator proceeded with the

modification. Ibid.’

b. If anything, there is consistency, not conflict,

among the courts of appeals with respect to the scope of

® Petitioner’s stated concerns (Pet. 19) that EPA could “invali-

date a BACT determination * * * months, even years, after a

permit has been issued” are inapposite on the facts of this case,

where EPA acted before the permit was issued.

17

EPA’s oversight and enforcement authority under the

CAA’s PSD program. In Public Service Co. v. EPA,

225 F.3d 1144 (2000), the Tenth Circuit held that it

lacked subject matter jurisdiction to review opinion

letters issued by EPA to a state permitting authority,

in which EPA relayed its view that an operator of a

proposed source needed a PSD permit. As part of its

reasoning that EPA had not taken any “final agency

action,” the court stated:

The EPA letters do not * * * cause a direct and

immediate impact upon * * * the company actually

seeking a permit * * * because it is [Colorado] as

the permitting agency, and not the EPA, which will

initially determine whether * * * a PSD permit is

required. Although the EPA ultimately could over-

turn any decision rendered by [Colorado], the

opinion expressed in the two letters serves more

like a tentative recommendation than a final and

binding determination.

225 F.3d at 1147 (emphasis added; citing, among other

authorities, 42 U.S.C. 7413(a)(5)). The Tenth Circuit in

Public Service, like the court of appeals here, recog-

nized that while States assume primary, first-instance

duties, inter alia, to comprehensively review and make

permit decisions about proposed new sources of air

pollution, Congress intended EPA to retain a signifi-

cant oversight and enforcement role even after it

approves a plan that allows a State to become the PSD

permitting authority. No court of appeals has stated or

even suggested to the contrary.

3. The court of appeals’ decision is correct. There is

no question that EPA has “considerable oversight and

control over how states run their PSD permitting pro-

grams,” as petitioner (and Cominco) conceded before

18

the court of appeals. Pet. C.A. Opening Br. 56. See id.

at 53; Pet. C.A. Reply Br. 24, 29. Petitioner, neverthe-

less, now suggests that the court of appeals should have

interpreted the CAA as preventing EPA from taking

the action it did here in the face of what it found to be

petitioner’s “arbitrary and erroneous,” Pet. App. 12a,

application of the CAA’s BACT requirement. In

declining to adopt that construction of the statute, the

court of appeals did not err.

a. Ensuring that permitting authorities render rea-

soned and factually supported BACT decisions falls

well within EPA’s responsibilities under the CAA and

its PSD program. Section 113(a)(5) expressly grants

EPA the oversight authority to “find[] that a State is

not acting in compliance with any requirement” of the

CAA’s PSD program. 42 U.S.C. 7413(a)(5). That pro-

vision, together with Section 167, also sets forth a

specific range of administrative and judicial remedies

for such noncompliance. See 42 U.S.C. 7413(a)(5), 7477.

EPA’s authority under those provisions expressly

extends to “any requirement” and the “requirements”

of the PSD program. 42 U.S.C. 7413(a)(5), 7477 (empha-

sis added). One of those “requirements” is that a

covered source of air pollution (like the diesel-fired

MG-17 generator) be “subject to the best available

control technology.” CAA Section 165(a)(4), 42 U.S.C.

7475(a)(4).

No part of the CAA, including the definition of BACT

in Section 169(3), purports to exclude BACT determina-

tions from the scope of EPA’s oversight and enforce-

ment authority. Application of BACT controls is “one

of the principal substantive prerequisites to obtaining a

PSD permit.” Alabanta Power, 636 F.2d at 407. The

legislative history further confirms the national impor-

tance of the BACT requirement and EPA’s important

19

role in this area.” Had Congress intended to limit

EPA’s authority over this key aspect of the PSD

program, it would not have employed broad language

like “any requirement.” 42 U.S.C. 7413(a)(5) (emphasis

added). See Department of Housing & Urban Develop-

ment v. Rucker, 122 S. Ct. 1230, 1233 (2002) (“[T]he

word ‘any’ has an expansive meaning, that is, ‘one or

some indiscriminately of whatever kind.’”). Nor is the

BACT requirement beyond EPA’s oversight authority

simply because the CAA contemplates that a per-

mitting authority may exercise substantial discretion in

arriving at “an emission limitation” that is “achievable”

and “based on the maximum degree of reduction * * *

taking into account energy, environmental, and eco-

nomic impacts and other costs.” 42 U.S.C. 7479(3).

Nearly every part of a permit decision involves exercise

of discretion on the part of the permitting authority.

Nevertheless, as the court of appeals persuasively

reasoned:

It does not follow from the placement of initial

responsibility with the state permitting authority

that its decision is thereby insulated from the

oversight and enforcement authority assigned to the

EPA in other sections of the statute.

1 See S. Rep. No. 127, 95th Cong., Ist Sess. 12 (1977) (“(TJhere

is a national requirement that each new major facility to be located

in a clear air area install the best available control technology.”);

ibid. (“The Administrator’s role is one of monitoring State actions

* * * * The Administrator thus cr ‘i go to court to stop a permit

for activities which would exceed the increments of pollution or

which otherwise did not comply with the requirements of [PSD],

including use of best available control technology”); H.R. Conf.

Rep. No. 564, 95th Cong., Ist Sess. 153 (1977) (“The Administrator

shall issue orders and seek other action to prevent the issuance of

an improper permit.”).

20

Pet. App. 1la.

Petitioner, in fact, appears to concede (Pet. 14) that

EPA may take enforcement-action where a permitting

authority fails altogether to consider one or more

statutory factors in rendering a BACT decision. There

is no functional distinction between complete failure to

consider a statutory factor and what occurred in this

case, i.e., unreasoned or arbitrary application of factors.

While purporting to consider the statutory factors and

to follow the “top down” approach, petitioner failed to

offer any reasoned or record support for its “foremost”

reason to select Low NOx over SCR as BACT: general

“support” for the mine’s “contributions to the region.”

Pet. App. 15a.

b. Contrary to petitioner’s suggestion, EPA has

never construed the CAA as allowing it to simply

“second-guess” or “substitut[e] its judgment” for that

of a state permitting authority. Pet. (i), 16. Quite to the

contrary, well before this litigation, EPA had stated

that it may challenge a BACT determination only if the

permitting authority has not “met all procedural norms,

considered all available control technologies, and given

a reasoned justification of the basis of its decision.”

Pet. App. 12a (quoting a 1993 legal opinion from EPA's

Office of General Counsel) (emphasis supplied by the

court of appeals). The petition for certiorari does not

challenge the court of appeals’ substantive determina-

tions that EPA correctly found that “Cominco failed to

meet its burden of demonstrating that SCR was

economically infeasible” and that petitioner “failed to

provide a reasoned justification for its elimination of

SCR as a control option.” Jd. at 16a. Accordingly, this

case does not, as petitioner contends, present the ques-

tion whether EPA may second-guess a State’s BACT

determinaticns at will. Instead, it presents the ques-

21

tion whether EPA has any authority to act under

Sections 113(a)(5) and 167, where a State has granted a

permit based on a BACT determination for which there

is no reasoned justification."

4. Petitioners err in contending (Pet. 21) that the

court of appeals’ decision will cause “far-reaching” dis-

ruption to federal-state relations under the CAA. The

federal-state framework applied by the court of appeals

reflects EPA’s longstanding and consistent construc-

tion of its oversight authority. As early as 1983, an

EPA guidance document explained that

[oJnce its PSD SIP provisions have been approved

* * * the State, rather than EPA, assumes primary

responsibility for administering the PSD program.

The Agency does not completely relinquish its

obligations, however. Rather, it assumes an

oversight function * * * * Ifthe State fails to take

appropriate action * * * EPA must take measures

adequate to prevent the construction of the non-

complying source * * * * EPA retains PSD

enforcement authority and, where appropriate, is

expected to initiate PSD enforcement proceedings

1! Although the EPA was correct in its determinations in this

case, the availability of judicial review ensures that EPA will not

usurp the States’ authority in this area. For example, in enforcing

a finding of noncompliance or order, EPA may have to convince a

district court that the permitting authority arbitrarily or capri-

ciously applied the BACT requirement. See Pet. App. 22a & n.1

(citing 42 U.S.C. 7413(b)). Similarly, where, as here, a court of ap-

peals is convinced that EPA took a “final action” so as to invoke its

subject matter jurisdiction, EPA must defend its finding of non-

compliance under an arbitrary-or-capricious standard of review.

42 U.S.C. 7607(b)(1); Pet. App. 18a-21a.

22

both before and after the PSD SIP revisions have

been approved.

RER 69-003. See also RER 69-007 (advising that EPA

may “utilize the provisions of § 167 to prevent a source

from construction with a State-issued permit that EPA

feels is invalid,” and referencing “BACT require-

ments”). Similarly, a 1988 EPA guidance document

provides that

Because PSD permits are issued on a case-by-case

basis, taking into consideration individual source

factors, permitting decisions involve the exercise of

judgment. However, although not an exhaustive

list, any one of the following factors will normally be

sufficient for EPA to find a permit “deficient” and

consider enforcement action:

2. BACT determination not based on a reasoned

analysis.

Decl. of Douglas E. Hardesty, Attach. E, COM 70-002.”

That construction was reinforced in a 1993 EPA legal

opinion. See Pet. App. 12a. And, in response to com-

ments in rulemakings approving various States’ PSD

programs, EPA has expressly restated its view of its

oversight responsibilities. See 57 Fed. Reg. 28,093,

28,095 (1992) (Texas); 58 Fed. Reg. 10,957, 10,961 (1993)

(Connecticut); 63 Fed. Reg. 13,795, 13,796 (1998)

(Virginia).

EPA’s reading of its authority is consistent with Con-

gress’s intent in granting EPA a limited but important

2 EPA submitted this declaration (to which the above-quoted

record document is attached) to the court of appeals pursuant to its

invitation. See Pet. App. 7a, 22a.

23

oversight role. Absent EPA authority to prevent

issuance of permits based on objectively unreasonable

BACT determinations, some States might be tempted

to engage in a destructive competition to attract

industry through lax implementation of the environ-

mental laws. This record shows why that is important.

As the court of appeals recognized, petitioner’s

apparent motivation for the elimination of SCR—

appreciation for Cominco’s contribution to the local

economy—is not an accepted justification in the top-

down approach. Worse still, it is uncomfortably

reminiscent of one of the very reasons Congress

granted EPA enforcement authority—to protect

states from industry pressure to issue ill-advised

permits. s

Pet. App. 16a (citing S. Rep. No. 127, supra, at 136). In

short, the court of appeals’ decision maintains the

federal-state partnership as historically and consis-

tently construed by “the Agency charged with the

administration of the Act.” Train, 421 U.S. at 94 n.28.""

8 Contrary to petitioner’s suggestion (Pet. 20), there is no

evidence that “more jobs” would be created if the permit could

issue in this case. In fact, there was no evidence before petitioner

that Cominco’s operations would be any different if it installed

SCR rather than Low NOx on MG-17. See Pet. App. 15a; EPA

C.A. Br. 65.

4 Insofar as any ambiguity exists in the statutory provisions

before it, EPA’s longstanding and consistent construction of its

oversight authority is entitled to deference under step two of

Chevron U.S.A. Inc. v. NRDC, Inc., 467 U.S. 837 (1984).

24

CONCLUSION

The petition for writ of certiorari should be denied.

Respectfully submitted.

THEODORE B. OLSON

Solicitor General

KELLY A. JOHNSON

Acting Assistant Attorney

General

JOHN C. CRUDEN

Deputy Assistant Attorney

General

ANDREW J. DOYLE

Attorney

JANUARY 2003