State ex rel. Darwin v. U.S. Environmental Protection Agency
815 F.3d 519
| 9th Cir. | 2016

Background

  • The Clean Air Act (CAA) and its regional-haze provisions (Section 169A/169B) require states to submit SIPs with BART (best available retrofit technology) determinations for certain older major sources that impair visibility at Class I areas; EPA reviews SIPs and must promulgate a FIP if it disapproves or a state fails to submit.
  • Arizona submitted a Section 308 SIP (after electing a Section 309 approach for Grand Canyon transport) that included NOx BART limits for Coronado Generating Station of 0.32 lb/mmBtu based on low-NOx burners with overfire air.
  • EPA partially disapproved Arizona’s SIP (finding flaws in cost, visibility, and explanations), promulgated a FIP in the same final rule, and set more stringent NOx limits for Coronado (initially a facility average of 0.065 lb/mmBtu after comment; earlier proposed 0.05/0.08 unit-specific numbers).
  • Petitioners (Arizona and Salt River Project) challenged EPA’s partial disapproval and the FIP; intervenors (NPCA, Sierra Club) supported EPA. The Ninth Circuit reviews EPA action under the APA arbitrary-and-capricious standard with deference.
  • The court upheld EPA’s partial disapproval because Arizona’s SIP lacked sufficient cost-detail, used inconsistent/insufficient visibility-analysis methods, and failed to explain how it weighed the five statutory BART factors; the court also upheld EPA’s FIP analyses on cost and visibility as reasonable, but stayed final review of FIP emission limits pending EPA’s later proposed revisions.

Issues

Issue Plaintiff's Argument Defendant's Argument Held
Whether EPA may substantively review and disapprove state BART SIPs and promulgate a FIP simultaneously Arizona: States have primary BART authority; EPA must defer to state judgments and could have given Arizona time to revise rather than issue a FIP immediately EPA: Statute authorizes substantive review; EPA may disapprove SIP parts and promulgate a FIP “at any time” within 2 years; Consent Decree set deadlines Held: EPA has substantive review authority; simultaneous disapproval and FIP promulgation was lawful and not arbitrary; states retain discretion but EPA ensures statutory compliance.
Adequacy of Arizona’s cost analysis supporting Coronado BART (use of SRP cost data; level of detail) Arizona/SRP: State relied on owner-supplied costs; EPA improperly rejected those estimates EPA: Cost inputs lacked line-item detail and documentation required by Guidelines/Cost Manual; without sufficient detail Arizona could not meaningfully evaluate costs Held: EPA reasonably found Arizona’s cost analysis inadequate because SRP’s submissions lacked necessary detail; disapproval was not arbitrary.
Adequacy of Arizona’s visibility analysis for Coronado (methodology and consideration of impacted Class I areas) Arizona/SRP: Averaging visibility benefits across areas was permissible; improvements may be imperceptible so costly controls are unjustified EPA: Averaging diluted large localized benefits (e.g., Gila Wilderness); inconsistent methods across plants and no explanation frustrated review; visibility gains need not be perceptible Held: EPA reasonably concluded Arizona’s visibility analysis was inconsistent/insufficient and that less-than-perceptible gains must be considered; disapproval upheld.
Reasonableness and achievability of EPA’s FIP NOx limits and underlying cost/visibility analyses SRP: EPA’s cost model ignored site-specific factors and excluded items (AFUDC); proposed NOx limits were technically infeasible and inconsistent with presumptive limits/Consent Decree EPA: Used IPM component grounded in project databases and supplemented with SRP cost info; excluded items inconsistent with Cost Manual to allow apples-to-apples comparisons; presumptive limits are rebuttable; EPA later proposed unit-specific adjustments Held: Court upheld EPA’s cost and visibility approaches as reasonable; declined to finally decide achievability of emission limits because EPA was reconsidering and had proposed FIP revisions (proceedings stayed on that point).

Key Cases Cited

  • Am. Corn Growers Ass’n v. EPA, 291 F.3d 1 (D.C. Cir.) (states have broad BART authority but EPA must ensure compliance with the Act)
  • Alaska Dep’t of Envtl. Conservation v. EPA, 540 U.S. 461 (2004) (EPA may review state BACT determinations for substantive compliance; states get deference)
  • Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29 (1983) (arbitrary-and-capricious standard requires reasoned analysis and connection between facts and choice)
  • Nat’l Parks Conservation Ass’n v. EPA, 788 F.3d 1134 (9th Cir.) (deference in technical regional haze/FIP review)
  • Oklahoma v. EPA, 723 F.3d 1201 (10th Cir.) (EPA may disapprove SIP parts and promulgate FIP; guidance on cost manual usage)
  • N. Dakota v. EPA, 730 F.3d 750 (8th Cir.) (EPA must review substantive content of BART determinations)
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