Association of Irritated Residents v. U.S. Environmental Protection Agency, 790 F.3d 934

In 2004 the EPA approved San Joaquin Valley NSR Rules (District Rules 2020, 2201) into California’s SIP; those rules imposed permit, BACT, and offset requirements for new/modified sources.
California had enacted SB 700 (2003), which removed a blanket agricultural exemption for major sources but retained narrower exemptions for certain minor agricultural sources (Offset Provision and Savings Clauses).
The EPA’s 2004 approval failed to account for SB 700’s minor-source exemptions; the rules as approved omitted those exemptions and therefore conflicted with state law.
After citizen suits by the Association of Irritated Residents (AIR) and a district-court decision, the EPA concluded it had erred, sought state input (Attorney General and CARB letters), and in 2013 issued 40 C.F.R. § 52.245 to retroactively limit its 2004 approval to conform with SB 700.
AIR challenged § 52.245, arguing the EPA lacked authority under CAA § 110(k)(6) to retroactively narrow an earlier SIP approval and that SB 700 did not actually exempt the minor agricultural sources.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether EPA reasonably determined it had erred in approving the 2004 NSR Rules	AIR: EPA misread SB 700; Savings Clauses and Offset Provision permit District to enforce 2004 rules against minor ag sources, so no EPA error	EPA: SB 700’s Offset Provision and Savings Clauses exempt some minor ag sources; Attorney General and CARB interpretations show the SIP/State-law mismatch	Court: EPA’s error determination was not arbitrary or capricious; reliance on state officials’ reasonable interpretations of ambiguous SB 700 was permissible
Whether CAA § 110(k)(6) authorizes the EPA to retroactively limit/modify a prior SIP approval	AIR: §110(k)(6) does not permit the EPA to unilaterally amend a SIP retroactively; EPA confined to other enumerated §110(k) procedures	EPA: §110(k)(6) authorizes the Agency to "revise such action as appropriate without requiring further submissions," and "in the same manner" is procedural; retroactive limitation is a permissible "appropriate" revision here	Court: Under Chevron, §110(k)(6) is ambiguous on this point; EPA’s interpretation (procedural parity + authority to make a retroactive, narrowly tailored correction) is reasonable and entitled to deference; petition denied

Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (agency interpretation of ambiguous statute reviewed under two-step test)
Motor Vehicle Manufacturers Ass'n v. State Farm Mutual Automobile Ins. Co., 463 U.S. 29 (arbitrary-and-capricious/APA review principles)
Ruckelshaus v. Sierra Club, 463 U.S. 680 (definition of "appropriate" and agency corrective authority context)
Train v. Natural Resources Defense Council, Inc., 421 U.S. 60 (principles of cooperative federalism under the CAA)
Burlington Truck Lines v. United States, 371 U.S. 156 (requirement that agency articulate rational connection between facts and decision)