# Reply Brief — Michigan v. Environmental Protection Agency

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URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386014_1310%3A6

## Record

- **Collection:** Supreme Court brief
- **Document type:** Reply Brief
- **Published:** January 1, 2001
- **Citation:** 532 U.S. 970

## Text

| Supreme Court, U.S.
| FILED
| MAR 28 9001
No. 00-746 |
= ‘RK

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IN THE \

Supreme Court of the Anited States

STATE OF MICHIGAN, et al,
Petitioners,
We
U.S. ENVIRONMENTAL PROTECTION AGENCY,
Respondent.

On Petition for a Writ of Certiorari to the
United States Court of Appeals
for the District of Columbia Circuit

REPLY BRIEF FOR PETITIONERS

JENNIFER M. GRANHOLM HENRY V. NICKEL
ATTORNEY GENERAL (Counsel of Record)
THOMAS L. CASEY DAVID S. HARLOW
SOLICITOR GENERAL HUNTON & WILLIAMS
JOHN FORDELL LEONE 1900 K Street, N.W.
ASSISTANT ATTORNEY GENERAL Washington, D.C. 1500
300 S. Washington Square (202) 955-20006

Suite 315

Counsel for Salt River Project
Lansing, Michigan 48913 Agricultural Improvement and
(517) 373-7540 Power District and Public
Counsel for the State of Service Company of Nev
Michigan Mexico

March 28, 2001
[Additional Counsel Listed Inside]

WILSON-EPES PRINTING Co., INC. — (202) 789-0096 -— WASHINGTON, D.C. 20001

JOHN B. WELDON, JR.

KAREN S. GAYLORD

SALMON, LEWIS & WELDON, P.L.C.
4444 North 32nd Street

Phoenix, Arizona 85018

(602) 801-9060

Counsel for Salt River Project
Agricultural Improvement and
Power District

BRIAN J. RENAUD

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HOWARD & HOWARD .

ATTORNEYS, P.C. .
Pinehurst Office Center e
39400 Woodward Avenue i
Suite 101 .
Bloomfield Hills, Michigan 48304 ¢
(248) 645-1483 ;

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Counsel for the National Association
of Manufacturers, the Michigan
Chemical Council, the Timber
Producers Association of Michigan
and Wisconsin, Inc., and the
Rhinelander Area Chamber of
Commerce, Inc.

DISCLOSURE STATEMENT

Pursuant to Rule 29.6, Petitioners hereby incorporate
by reference the corporate disclosure statement filed with the
petition for a writ of certiorari on November 9, 2000.

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TABLE OF AUTHORITIES
CASES Page
Brown v. Gardner, 513 U.S. 115 (1994)... TEA atest 5
Bugenig v. Hoopa Valley Tribe, 229 F.3d
See CHINE Sls SIE varias cinmssinlasaetcks comes enameneon eee aes 10
McAlpine v. U.S., 112 F.3d 1429 (10th Cir. 1997)... 0. 2

United Savings Ass'n of Texas v. Timbers
of Inwood Forest Associates, Ltd.,

NW SF: Sr 8 PIIID sissnrcseinssncecdoncuineubaaeasiea 6
U.S. v. Roberts, 185 F.3d 1125 (10th Cir. 1999)... ]
Whitman v. American Trucking Ass'n, No. 99-1257

CULE. EGR. 29, Aes BP ssscsncdsaenciasaneamavercmaneananaeae: 2, 5,6
STATUTES

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

CAA § 116, 42 U.S.C. § 7416 ..ccccccccccsseccssscccsseesese 9,10
CAA § 162, 42 U.S.C. § 7472 .ccccccccccsssessssesssssescssecsense 4
CAA § 164, 42 U.S.C. § 7474 ..ccccccccccsseescssesssseee passim
CAA § 164(a), 42 U.S.C. § 7474(a) ceccccccssseccsseecessee: 4,8

CAA § 164(b), 42 U.S.C. § 7474(b) cecccccsccccscccseccsseesse 2

iV

CAA § 164(b)(2), 42 U.S.C. § 7474(b)(2) -occscseseeessseee 2
CAA § 164(c), 42 U.S.C. § 7474(C) ceccecssesccssssseeessen 4,5
CAA § 164(€), 42 U.S.C. § 7474(€) cecccsccsssssssesssssseeeeee 8
CAA § 168(b), 42 U.S.C. § 7478(b) ..ccccsccccssssseeesessenee 6
CAA § 169(3), 42 U.S.C. § 7479(3) ccccccccsssssessssseeessnee 6
CAA § 301(d), 42 U.S.C. § 7601 ...cccccsssssssssssessssseeeeeee 8
CAA § 301(d)(2)(B), 42 U.S.C. § 7601(d)(2)(B).....8, 9

The Indian Reorganization Act, 25 U.S.C. §§ 461 ef seq.

mA § 5, 25 USA. O56 wcnneissmimaianmeaa i, 7
CODE OF FEDERAL REGULATIONS
25 CBR. Patt 1S8 ccccsssssssisssiseststesseiacaianmaaaa 2

40 C.F.R. § 52.01(f) (1974) ..cccccccccccsssscessssuecssssuesesseesssnnesessnees 6

REPLY BRIEF FOR PETITIONERS
ARGUMENT

The D.C. Circuit ruled that lands taken into trust
pursuant to the Indian Reorganization Act of 1934, 25 U.S.C.
§§ 461 et seg. (IRA), located outside the boundaries of
formal reservations — those established by treaty, Executive
Order, or Act of Congress — constitute reservation lands for
purposes of the Clean Air Act (CAA or the Act). This ruling
raises important issues that go to the heart of state-tribal
relations. The decision below permits tribes to redesignate
such lands to the more stringent “Class I” air quality status.
This action affords tribes unilateral and extraterritorial
authority to constrain or even stop growth and development
by non-Indians on lands under state land use jurisdiction.

The IRA was enacted both to reverse the alienation of
Indian lands that had resulted from the General Allotment
Act of 1887, as well as to establish a mechanism for recovery
of lands for tribes. On the face of the IRA, the only
consequence of taking land into trust is to exempt such land
from state and local taxation. IRA §5. Courts have
generally held, however, that a very significant additional
consequence flows from lands being taken into trust under
the IRA — ie., the loss of state and local regulatory
jurisdiction over such lands.

The IRA itself would appear to provide no decisional
criteria to govern the Secretary’s exercise of discretion in
taking lands into trust, other than, perhaps, that the land be
taken for the beneficial use of the tribe or individual Indian.
See U.S. v. Roberts, 185 F.3d 1125, 1137 (10th Cir. 1999).
The Secretary’s view of her discretion to take lands into trust
is bounded only by the self-imposed requirement that she
consider a series of factors identified in the Bureau of Indian

2

Affairs regulations set forth at 25 C.F.R. Part 151.’ None of
these listed factors involves the CAA _ regulatory
consequences that may flow from the Secretary’s decision to
take land into trust. Judicial review is thus limited to a
procedural inquiry into whether various factors, all irrelevant
to the CAA, were “considered” by the Secretary. See
McAlpine v. U.S., 112 F.3d 1429, 1434 (10th Cir. 1997).

The D.C. Circuit’s decision adds a new and very
troubling dimension to the Secretary’s authority under the
IRA to take lands into trust. The court found that, because
Congress did not specifically define the term “reservation” in
the CAA, EPA had the discretion, under the second prong of
Chevron, to interpret the Act as giving tribes authority to
redesignate IRA trust lands located outside the boundaries of
formal reservations. ~—

Under EPA’s interpretation of the CAA, the creation
of IRA trust lands by the Secretary now has an additional
ramification: the expansion of the extraterritorial authority
that tribes possess under the CAA over the activities of non-
Indians on non-Indian lands. This is a consequence certainly
not envisioned by Congress when it enacted the IRA in 1934,
and one which the Secretary need not even consider prior to
taking lands into trust. Moreover, given that the CAA
commits tribal redesignation decisions solely to the
discretion of the tribe,’ the EPA interpretation upheld by the

' But see Whitman v. American Trucking Ass'n, No. 99-1257, slip op.
at 12 (U.S. Feb. 27, 2001) (“We have never suggested that an agency can
cure an unlawful delegation of legislative power by adopting in its
discretion a limiting construction of the statute.”’).

* While CAA § 164(b) establishes procedures that states and tribes
must following in proposing redesignations to Class |, it contains no
substantive decisional criteria governing EPA’s approval of such
redesignations. To the contrary, EPA is authorized to disapprove such a
redesignation “only if [the Agency] finds . . . such redesignation does not
meet the procedural requirements” of CAA § 164. See CAA § 164(b)(2).

3

D.C. Circuit gives the Secretary the discretion to create tribal
power under the CAA without there being any guidance
governing the exercise of that discretion under either the [RA
or the CAA, or, for that matter, any supervision by EPA of
the Secretary’s exercise of that discretion.

Petitioners are unaware of any federal regulatory
statute that has ever been interpreted by the agency assigned
by Congress to administer that statute as implicitly delegating
to another federal agency the authority to create regulatory
powers in a non-federal instrumentality (such as an Indian
tribe) without any explicit guidance from Congress governing
that delegation, or without any oversight by the agency
administering the statute. Petitioners are unaware, until the
D.C. Circuit’s decision, of any court being asked to sustain,
much less sustaining, such a remarkable interpretation of a
federal regulatory statute.

EPA does not dispute Petitioners’ characterization of
the implications of the decision below. EPA does not
suggest that Petitioners have overstated the importance of the
decision, or contend that Petitioners’ concerns are not
immediate and concrete.’ Rather, EPA rests its argument that
Court review is “not warranted” solely on the grounds that
the D.C. Circuit was correct on the merits. EPA Opp. at 8.
As explained below, EPA is wrong.

> The brief in opposition by the respondent tribes suggests that
Petitioners have “attempt{ed] to elevate the importance of this relatively
routine administrative rulemaking to the level of a crisis by
misconstruing EPA’s action as a dramatic departure from existing
precedent and a significant threat to states.” Tribes Opp. at 11. The Brief
of Amici States in Support of Petitioners, which warns that the D.C.
Circuit decision allows tribes to “threaten use of their Class |
redesignation authority to override state and local government industrial
land use planning decisions, to restrict operation of existing facilities, to
even block new industrial and residential development, and to otherwise
impact a State’s natural resource policies,” States Brief at 4, rebuts the
tribes’ attempt to minimize the decision’s importance.

I. Congress Did Not Intend for EPA to Have the
Discretion to Construe the CAA to Give the
Secretary of Interior Authority to Expand the
Lands That Tribes May Redesignate.

When Congress amended the CAA in 1977 to
establish an area classification/redesignation scheme, it for
the first time explicitly delegated to tribes certain limited, but
extraordinary, authority to engage in air quality regulation
that could impose land use constraints both inside and
outside tribes’ formal reservations. What EPA has
overlooked is that Congress also delegated similar
extraordinary federal authority to the states.

Specifically, Congress in 1977 designated as Class II
the entire geographic area of the country (with the exception
of certain national parks, which were permanently designated
as Class 1). See CAA § 162. At the same time, Congress
created a new federal power: the authority to redesignate
those Class II areas as either the more stringent Class I or the
less stringent Class III. See CAA § 164.

In the 1977 Amendments, states were given the
exclusive power to redesignate a// of the land area within
their geographic borders, with the sole exception of “[l]ands
within the exterior boundaries of reservations of federally
recognized Indian tribes.” Congress delegated the authority
to redesignate “reservation” lands exclusively to the tribes.
See CAA §§ 164(a), 164(c).

For this reason, EPA’s assertions that “trust lands are
Indian country,” and that “federal law generally prohibits
States from exercising regulatory authority in Indian country
unless Congress has specifically authorized such action,”
EPA Opp. at 11, are beside the point. Congress has
“specifically authorized” states to redesignate those lands in
“Indian country” that are not “reservation” lands. That is,
with the exception of those specific portions of Indian

5

country that constitute “lands within the exterior boundaries
of reservations,” states were given exclusive authority by
Congress in the 1977 CAA Amendments to redesignate all
lands within their geographic borders.

Accordingly, EPA is wrong when its asserts that
Petitioners’ argument “rests on the incorrect premise that
States have general authority over Indian lands.” EPA Opp.
at 12 n.5. Petitioners do not assert that the states’ power to
redesignate is an attribute of their inherent sovereignty.
Rather, Petitioners’ position rests on the fact that the states
were delegated by Congress exclusive federal authority to
redesignate all areas of Indian country within the states’
borders except for those lands that constitute “reservation”
lands within the meaning of CAA § 164(c). While Congress
could have delegated to tribes redesignation authority over
the entirety of Indian country, it did not do so.

Thus, this case does not turn on general principles of
federal Indian law, but on statutory construction. As a result,
Congress’s intent when it first used the term “reservation” in
the 1977 CAA Amendments is of paramount importance.

EPA endorses the D.C. Circuit’s finding that, because
Congress provided no statutory definition of “reservation” in
the CAA, the term is “ambiguous.” It should therefore be
presumed, says EPA, that “Congress chose to entrust” the
Agency with the “task” of defining the term for CAA
purposes. EPA Opp. at 10.

As this Court has observed, however, “[a]mbiguity is
a creature not of definitional possibilities but of statutory
context.” Brown v. Gardner, 513 U.S. 115, 118 (1994).
“Words that can have more than one meaning are given
content” by “their surroundings.” American Trucking Ass'n,
slip op. at 5, citing FDA v. Brown & Williamson Tobacco
Corp., 529 U.S. 120, 132-133 (2000). Thus, statutory
construction is properly undertaken as a “holistic endeavor,”
in which a “provision that may seem ambiguous in isolation
is often clarified by the remainder of the statutory scheme.”

6

United Savings Ass'n of Texas v. Timbers of Inwood Forest
Associates, Ltd., 484 U.S. 365, 371 (1988).

Had the D.C. Circuit applied these principles, it
would have recognized that, in the case of the CAA, the
demarcation of “reservation” lands is precisely what
determines the extent to which tribes, through redesignation,
are permitted to constrain the activities of non-Indians on
non-Indian lands. See Cert. Pet. at 14-16. Having failed to
apply these principles, however, the court wrongly assumed
that, because Congress included no statutory definition of
“reservation,” it intended to leave the resolution of this issue,
with its attendant implications for the balance of state and
tribal jurisdiction, to the discretion of EPA. Cf American
Trucking Ass'n, slip op. at 8, citing Christensen v. Harris
County, 529 U.S. 576, 589-90 n. (2000) (Scalia, J.,
concurring in par* and concurring in judgment) (“The
implausibility of Congress’s leaving a highly significant
issue unaddressed (and thus ‘delegating’ its resolution to the
administering agency) is assuredly one of the factors to be
considered in determining whether there is ambiguity”).

The redesignation provisions in CAA § 164 were
enacted against a backdrop in which Congress codified, with
certain limited exceptions, the “prevention of significant
deterioration” (PSD) program that EPA had adopted in 1974.
See § 168(b). In those PSD rules, EPA defined the term
“reservation” to mean a formal reservation. ‘ee Cert. Pet. at
6-7. In this context, Congress did not have to define
“reservation” in the siatute in 1977; the term had already
been defined by EPA in 1974. Congress chose not to change
that definition, although it did change the definition of other
terms. Compare, e.g., 40 C.F.R. § 52.01(f) (1974) with CAA
§ 169(3) (definition of “best available control technology”).

EPA argues that there is “no reason to assume” that
“Congress by its silence intended to adopt the narrower
definition” of “reservation” from the Agency’s PSD program,
rather than the “broader” definitions found in other federal

7

statutes. EPA Opp. at 10. However, it is this very “silence”
in 1977 (and again in 1990) that indicates Congress’s
intended preservation of the definition of “reservation”
previously employed by EPA, a definition that reflected the
conventional and historic understanding of the formal
methods by which a “reservation” is created, and the
definition in reference to which Congress codified EPA’s
1974 PSD rules in 1977. Only if Congress wished to depart
from that definition to include off-reservation IRA trust lands
would a different statutory definition have been necessary.

In sum, EPA and the D.C. Circuit would have this
Court believe that Congress in 1977 intended to impart to
EPA the discretion, when it promulgated the Tribal Authority
Rule (TAR) in 1998, to interpret the term “reservation” as
used in CAA § 164 in a manner contrary to how EPA had
defined the term in its PSD rules both before and after
enactment of the 1977 CAA Amendments. EPA and the
D.C. Circuit would also have this Court believe that
Congress in 1977 gave EPA the further discretion, when it
would later promulgate the TAR, to redefine “reservation”
based on the Agency’s reading of judicial decisions rendered
after 1977, and to include in this new definition not only
those off-reservation lands which the Secretary of Interior
had taken into trust pursuant to IRA § 5, but also all such
lands which the Secretary might take into trust in the future.
And EPA and the D.C. Circuit would have this Court believe
that Congress intended this result without its having provided
any guidance in either the CAA or the IRA, or without its
requiring EPA to exercise any substantive supervision.

As a fallback position, EPA also argues that, if
Congress did not in 1977 delegate to tribes the authority to
redesignate lands beyond “reservation” lands, Congress did
extend to tribes this further authority in 1990. Because “trust
lands ordinarily are subject to tribal jurisdiction under
general principles of federal Indian law,’ EPA claims that
they constitute “other areas within the tribe’s jurisdiction”

8

under CAA § 301(d)(2)(B). EPA Opp. at 12. Thus, “eligible
Tribes would have authority” to redesignate trust lands “even
if petitioners were correct that trust lands are not properly
considered ‘reservation[s].’” Jd.

EPA’s assertion is refuted by the plain language of
CAA § 164(a). Under that provision of the Act, a state’s
redesignation authority applies to all lands within that state
other than reservation lands. EPA’s (and the D.C. Circuit’s)
interpretation of CAA § 301(d)(2) would mean that states and
tribes would both have jurisdiction to redesignate the same
non-reservation lands. However, states and tribes cannot
have concurrent authority to redesignate these same lands —
e.g., one reclassifying them Class I, the other reclassifying
them Class III.

Thus, had Congress intended to permit tribes to
redesignate lands other than “reservation” lands when it
enacted CAA § 301(d), it would have also had to have
revised CAA § 164(a) to remove from states their exclusive
authority to redesignate such lands. Congress did not so
revise CAA § 164(a) in 1990 to restrict state redesignation
authority over non-reservation lands within the state.

Finally, EPA errs when its suggests that Petitioners’
concerns should be assuaged by the process established by
CAA § 164(e), under which EPA will “resolve disputes
between Tribes and States over proposed redesignations.”
See EPA Opp. at 11 n.3. While EPA is permitted under CAA
§ 164(e) to negotiate disputes between states and tribes over
redesignation requests, the Agency is authorized to
disapprove a tribal redesignation request only when certain
procedural requirements have not been met. See note 2.
Where those procedural requirements have been fulfilled, a
tribe possesses the absolute discretion to redesignate any
lands located within the exterior boundaries of its reservation.

9

Il. Under the CAA, States May Not Be Divested of
Any Regulatory Authority They May Have Over
Non-Indian Fee Lands.

In light of the significant implications of Congress’s
“expressly delegating” to tribes regulatory authority over
non-Indian fee lands located within a reservation, there are
compelling reasons for this Court to review the D.C.
Circuit’s determination that the “treatment as_ states”
provisions of the 1990 CAA Amendments constitute such a
rare delegation. While relying on the D.C. Circuit’s decision,
EPA’s arguments are similarly inadequate..

First, in support of the D.C. Circuit’s delegation
holding, EPA reiterates the panel majority’s conclusion that
the distinction that CAA § 301(d)(2)(B) draws between areas
“within the exterior boundaries of the reservation” and “other
areas within the tribe’s jurisdiction” carries with it “the
implication that Congress considered the areas within the
exterior boundaries of a tribe’s reservation to be per se within
the tribe’s jurisdiction.” EPA Opp. at 15. Even if an express
delegation could ever be founded on so abstruse an
“implication,” as Judge Ginsburg correctly observed in his
partial dissent, “when one reads the relevant sentence as a
whole — rather than focusing solely upon the last phrase — one
sees that, rather than expressing a delegation of authority
over fee lands and rights-of-ways within a reservation,” the
sentence “by its terms merely lays down a precondition to the
Administrator’s treating a tribe as a state.” App. 44a. EPA is
wrong when it asserts that Petitioners’ “contrary reading”
would “render this careful formulation superfluous.” EPA
Opp. at 16.

Second, EPA rejects Petitioners’ contention that CAA
§ 116 precludes the “treatment as states” provisions being
construed as constituting an express delegation of authority
to tribes. arguing that CAA § 116 “does not grant States
authority to regulate air pollution activity in Indian country,

10

which includes fee lands within reservation boundaries.”
EPA Opp. at 17. EPA has misconstrued Petitioners’ position.

Petitioners do not assert that CAA § 116 gives states
authority over lands within Indian country, or that EPA lacks
authority under the Act to approve tribal regulatory programs
for non-Indian fee lands over which a tribe can demonstrate
inherent authority under the so-called Montana “second
exception.” If a particular tribe is found to have inherent
authority over non-Indian fee lands, there is, in effect, no
state authority over those lands which CAA §116 serves to
retain. At the same time, in those situations where a state
possesses authority under its own laws to regulate air quality
on non-Indian fee lands — authority which is “preserved” by
CAA § 116, as EPA itself concedes (see EPA Opp. at 17
n.10) — no federal authority over such lands exists under the
CAA that can then be delegated to the tribe.

Finally, EPA misconstrues the significance of
Bugenig v. Hoopa Valley Tribe, 229 F.3d 1210 (9th Cir.
2000), in which the Ninth Circuit adopted the reasoning of
Judge Ginsburg’s dissent as a “clear statement rule” for
determining delegation questions. Bugenig illustrates that the
approach taken by the D.C. Circuit’s panel majority is, to say
the least, subject to serious doubt. Moreover, since Judge
Ginsburg had himself misapplied the very test which the
Ninth Circuit was now adopting, review by this Court is
necessary in order to forestall the injection of more confusion
into a field of jurisprudence — federal Indian law — that
remains in desperate need of clarity.

CONCLUSION

Petitioners respectfully request that the petition for a
writ of certiorari be granted.

Re LN tk oh

ee nea = Berne

JENNIFER M. GRANHOLM
ATTORNEY GENERAL
THOMAS L. CASEY
SOLICITOR GENERAL

JOHN FORDELL LEONE
ASS’T ATTORNEY GENERAL
300 S. Washington Square
Suite 315

Lansing, Michigan 48913
(517) 373-7540

Counsel for the State of
Michigan

BRIAN J. RENAUD
HOWARD & HOWARD
ATTORNEYS, P.C.
Pinehurst Office Center
39400 Woodward Avenue
Bloomfield Hills,
Michigan 48304

(248) 645-1483
Counsel for the
National Association of
Manufacturers, et al.

Respectfully submitted,

HENRY V. NICKEL
(COUNSEL OF RECORD)
DaviD S. HARLOW
HUNTON & WILLIAMS
1900 K Street, N.W.
Washington, D.C. 20006
(202) 955-1500

Counsel for Salt River
Project Agricultural
Improvement and Power
District and Public Service
Company of New Mexico

JOHN B. WELDON, JR.
KAREN S. GAYLORD
SALMON, LEWIS &
WELDON, P.L.C.

4444 North 32nd Street
Phoenix, Arizona 85018
(602) 801-9060
Counsel for Salt River
Project Agricultural
Improvement and
Power District

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386014_1310%3A6. Public record. Not legal advice.