OKLAHOMA DEPARTMENT OF ENVIRONMENTAL QUALITY, Petitioner v. ENVIRONMENTAL PROTECTION AGENCY, Respondent Navajo Nation, et al., Intervenors.
No. 11-1307.
United States Court of Appeals, District of Columbia Circuit.
Argued Nov. 18, 2013. Decided Jan. 17, 2014.
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David A. Carson, Attorney, United States Department of Justice, argued the cause for respondent. With him on the briefs were Robert G. Dreher, Acting Assistant Attorney General, and Jon M. Lipshultz, Attorney.
Philip Baker-Shenk, Kurt E. Blase, Richard A. Duncan, and Jill Elise Grant were on the brief for Tribal Intervenors in support of respondent.
Beverly M. Conerton, Assistant Attorney General, Office of the Attorney General for the State of Minnesota was on the brief for amicus curiae State of Minnesota in support of respondent.
Michael C. Small and James E. Tysse were on the brief for amicus curiae The Osage Nation in support of respondent.
Before: HENDERSON and BROWN, Circuit Judges, and GINSBURG, Senior Circuit Judge.
Opinion for the Court filed by Senior Circuit Judge GINSBURG.
GINSBURG, Senior Circuit Judge:
The Oklahoma Department of Environmental Quality petitions for review of a final rule promulgated by the Environmental Protection Agency establishing a federal implementation plan for the attainment of national air quality standards in “Indian country.” See Review of New Sources and Modifications in Indian Country, 76 Fed. Reg. 38,748 (2011) (codified at
I. Background
The Clean Air Act (CAA or Act) places upon each state “the primary responsibility for assuring air quality within the entire geographic area comprising such State.”
In 1990 the Congress amended the Act to authorize the EPA “to treat Indian
Although the Tribal Authority Rule thus allowed Indian tribes to implement the Act over both reservation and non-reservation areas of Indian country, it differentiated between the two in an important respect: The Rule authorized each tribe to implement the Act “over its reservation without requiring the tribe to demonstrate its own jurisdiction,” whereas before implementing the Act over a “non-reservation area[],” the tribe would have to “demonstrate [its] jurisdiction” under federal Indian law. Id. at 7255/2. We upheld the Rule and this distinction in Arizona Public Service Co. v. EPA, 211 F.3d 1280, 1294-95 (2000).
In the 1990 amendments to the Act the Congress also authorized the EPA to displace a tribe and directly regulate areas of Indian country in “any case in which the Administrator [of the EPA] determines that the treatment of Indian tribes as identical to States is inappropriate or administratively infeasible.”
The EPA explained it was promulgating the FIP in order to fill a regulatory gap created by the general lack of state authority to regulate air quality in Indian country and the failure of many tribes to implement NSR programs of their own:
We believe ... states generally lack the authority to regulate air quality in Indian country.... We interpret past approvals and delegations of NSR programs [in SIPs] as not extending to Indian country unless the state has made an explicit demonstration of juris-
diction over Indian country and we have explicitly approved or delegated the state‘s program for such area.
76 Fed. Reg. at 38,752/2 n.9; see also id. at 38,778/3 (“[O]nly a few Tribes have yet sought eligibility to administer a minor NSR program and no Tribe has yet sought eligibility for the nonattainment major NSR program“). Because SIPs did not ordinarily apply to Indian country and few tribes had sought to administer the Act over their lands, the EPA concluded much of Indian country was unregulated. The EPA therefore issued the FIP in order to fill the regulatory gap until such time as a tribe‘s approved NSR program displaced the FIP.
Oklahoma petitions for review of the Indian Country NSR Rule “only as it pertains to non-reservation ‘Indian country’ lands, including allotments and dependent Indian communities.” Oklahoma does not challenge the rule as it pertains to reservations, whether formal or informal. The Navajo Nation, the Shakopee Mdewakanton Sioux Community, the Red Lake Band of Chippewa, and the United South and Eastern Tribes, Inc. intervene in support of the EPA.
II. Analysis
Oklahoma contends the Indian Country NSR Rule is arbitrary and capricious, in violation of the Administrative Procedure Act (APA),
A. Threshold Objections
Before we may consider the merits of the parties’ arguments, we must address a series of threshold issues, the first two of which are jurisdictional. First, the EPA questions whether Oklahoma has standing to bring the challenge at hand. Second, the EPA contends Oklahoma‘s claim that its SIP presumptively applies over non-reservation Indian country is time-barred because the issue was decided by the Tribal Authority Rule issued in 1998. Third, the EPA argues that the same claim is forfeit because Oklahoma failed to raise it in the rulemaking proceeding for the Indian Country NSR Rule now under review. Although there is something to each of these objections, none is ultimately a bar to our reaching the merits of this case.
1. Standing
The “irreducible constitutional minimum of standing contains three elements“: (1) injury in fact, (2) causation, and (3) redressability. Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992). Oklahoma alleges it is injured by the Indian Country NSR Rule because the Rule “divests [Oklahoma] of regulatory authority over areas otherwise within [its] purview,” to wit, non-reservation Indian country, and that injury would be redressed if the court were to vacate the Rule in relevant part.
In supplemental briefs ordered by the court after oral argument, the EPA challenged this straightforward account of standing on the ground that Oklahoma‘s
[I]f the Administrator of the [EPA] determines that a regulatory program submitted by the State of Oklahoma for approval by the Administrator under a law administered by the Administrator meets applicable requirements of the law, and the Administrator approves the State to administer the State program under the law with respect to areas in the State that are not Indian country, on request of the State, the Administrator shall approve the State to administer the State program in the areas of the State that are in Indian country, without any further demonstration of authority by the State.
Because the EPA has already approved Oklahoma to administer its SIP “with respect to areas in the State that are not Indian country,” the EPA suggests Oklahoma can obtain regulatory authority over Indian country merely by seeking the EPA‘s approval of an application pursuant to the SAFETEA; therefore Oklahoma‘s alleged injury is caused not by the Rule but by the State‘s own failure to seek relief under the SAFETEA. See Petro-Chem Processing, Inc. v. EPA, 866 F.2d 433, 438 (D.C. Cir. 1989) (“[T]o the extent that this injury is self-inflicted, it is so completely due to the complainant‘s own fault as to break the causal chain” (internal quotation marks and brackets omitted)).
We do not think relief under the SAFETEA is so certain or complete as to render Oklahoma‘s injury self-inflicted. As the State points out, the EPA might attach a condition to its approval of Oklahoma‘s SIP as applied to Indian country that is “inconsistent with Oklahoma‘s current SIP authority.” And if the EPA does interpret the SAFETEA as authorizing it to attach conditions, then the agency might well be entitled to judicial deference under Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842-43 (1984). Lest one think this concern merely speculative, we note that although the EPA argues the “SAFETEA provides a remedy to the State‘s alleged injury,” it has stopped short, both in its brief and at oral argument, of stating that Oklahoma would be entitled to approval without conditions of an application under the SAFETEA.
Clearly, Oklahoma has alleged an injury caused by the rule it challenges and redressable by our vacatur of that rule. The possibility of an alternative remedy, of uncertain availability and effect, does not render its injury self-inflicted. Cf. Cmty. Nutrition Inst. v. Block, 698 F.2d 1239, 1247 (D.C. Cir. 1983) (“Consumers have been injured economically, even if they could ameliorate this injury by purchasing some alternative product“), rev‘d on other grounds, 467 U.S. 340 (1984). Oklahoma therefore has standing to bring this petition for review.4
2. Timeliness
The EPA argues Oklahoma comes to this court more than a decade too late to argue its SIP presumptively applies in non-reservation Indian country because the EPA “made crystal clear in the Tribal Authority Rule” it issued in 1998 “that it
The EPA points to this passage in the preamble of the Tribal Authority Rule:
It is EPA‘s position that, unless a state has explicitly demonstrated its authority and been expressly approved by EPA to implement CAA programs in Indian country, EPA is the appropriate entity to be implementing CAA programs prior to tribal primacy.... EPA will not and cannot “grandfather” any state authority over Indian country where no explicit demonstration and approval of such authority has been made.
63 Fed. Reg. at 7258/3. Although this passage refers to “Indian country” writ large, it was issued in response to a commenter‘s asserting that the “states have historically regulated non-[Indian] CAA-related activities on fee lands within reservation boundaries.” Id. A reasonable reader might therefore understand the EPA was refusing to grandfather state authority over reservations, leaving state authority over non-reservation Indian country intact. This impression would be reinforced on the very next page: “[W]hile Congress delegated CAA authority to eligible tribes for reservation areas, the CAA authorizes a tribe to implement a program in non-reservation areas only if it can demonstrate authority over such areas under federal Indian law.” Id. at 7259/2. This statement can fairly be read to imply, as Oklahoma argues, state authority would be withdrawn from non-reservation areas only upon a proper showing of tribal authority.
The EPA‘s contrary reading of these preambular statements is not implausible, and if Oklahoma were prescient perhaps it would have “challenged the agency‘s authority from the beginning.” Motor & Equip. Mfrs. Ass‘n v. Nichols, 142 F.3d 449, 461 (D.C. Cir. 1998). Be that as it may, however, we have before us a “different rule than the one promulgated” in 1998, id. at 460, because it says expressly what the 1998 Rule at most left uncertain: The EPA deems a SIP presumptively inapplicable in both reservation and non-reservation areas of Indian country because “states generally lack the authority to regulate air quality in Indian country.” Indian Country NSR Rule, 76 Fed. Reg. at 38,779/1. Oklahoma‘s challenge to this express determination in the Indian Country NSR Rule is therefore timely.
3. Forfeiture
The EPA‘s next and last hope of avoiding a resolution on the merits of Oklahoma‘s petition for review is its argument the State forfeited its claim that a SIP presumptively applies in non-reservation Indian country; here the agency focuses particularly upon Oklahoma‘s invocation of
Although the argument might have been raised more clearly before the EPA, we do not think we must for that reason disregard Oklahoma‘s argument concerning the reach of its SIP. The reason for the forfeiture rule is to ensure an agency has had “an opportunity to consider the matter, make its ruling, and state the reasons for its action,” Unemployment Comp. Comm‘n of Alaska v. Aragon, 329 U.S. 143, 155 (1946); “litigants must not be encouraged to ‘sandbag’ agencies by withholding legal arguments for tactical reasons until they reach the courts of appeal,” USAir, Inc. v. Dep‘t of Transp., 969 F.2d 1256, 1260 (D.C. Cir. 1992). Unfair surprise, however, is not a concern here because the EPA has a preexisting “‘duty to examine key assumptions as part of its affirmative burden of promulgating and explaining a non-arbitrary, non-capricious rule’ and therefore ... ‘must justify that assumption even if no one objects to it during the comment period.‘” Appalachian Power Co. v. EPA, 135 F.3d 791, 818 (D.C. Cir. 1998) (quoting Small Refiner Lead Phase-Down Task Force v. U.S.E.P.A., 705 F.2d 506, 534-35 (D.C. Cir. 1983)). The agency‘s determination that a SIP presumptively does not apply in Indian country was the source of the “regulatory gap” upon which the EPA premised the need for the Indian Country NSR Rule. See 76 Fed. Reg. at 38,778/2. It was therefore a “key assumption” that required justification by the agency. That the EPA did not discharge its duty to examine that assumption is most evident because it did not even consider whether the assumption was consistent with our opinion in Michigan v. EPA, 268 F.3d 1075 (2001), of which more below. Because the EPA did not examine the key assumption concerning the applicability of a SIP in Indian country, the issue was not forfeited and will be considered here.
B. Merits
Oklahoma argues its SIP applies to non-reservation Indian country within the state because (1) regulatory jurisdiction under the Act must lie initially with either a tribe or a state; (2) a tribe may exercise jurisdiction over non-reservation Indian country only if it demonstrates its authority to do so; (3) the EPA, when instituting a FIP pursuant to
The EPA issued the Indian Country NSR Rule under authority of
In any case in which the Administrator determines that the treatment of Indian tribes as identical to States is inappropriate or administratively infeasible, the Administrator may provide, by regulation, other means by which the Administrator will directly administer such provisions so as to achieve the appropriate purpose.
Because state implementation plans generally did not extend to Indian country and few tribes had sought to implement NSR programs of their own, the EPA perceived “a gap for implementation of these pro-
We last considered the EPA‘s authority under
The EPA defended the rule on two principal grounds. First, it argued its authority to regulate lands “in question” was based upon its “overarching authority to protect air quality within Indian country, not solely on its authority to act in the stead of an Indian Tribe” under
The EPA‘s second argument was that it wished to avoid deciding jurisdictional disputes between states and tribes yet needed to provide for regulation over the lands “in question.” Id. at 1084. We rejected that argument because the Congress had vested jurisdiction to implement the Act in the states, see
The principles we identified in Michigan control this case. Jurisdiction under the Act must lie either with a state or with a tribe, and the Act unambiguously delineates the two: A state has “primary responsibility,” i.e., jurisdiction, “within the entire geographic area comprising such State,”
The EPA objects first on the ground that
The EPA next maintains this court did not decide in Michigan that “a State must necessarily have authority over any non-reservation area of Indian country if a Tribe fails to make a sufficient showing of inherent tribal authority over the area.” The court‘s binary understanding of jurisdiction, according to the EPA, “was limited to the consideration of in-question areas, which might not be Indian country ...; EPA‘s authority over areas that unquestionably are Indian country was not questioned.” True, true; irrelevant. The EPA‘s treatment of non-reservation Indian country in the Indian Country NSR Rule today is identical to its treatment of “in question” lands in the Federal Operating Permits Program of 1999: Here, the EPA insists no tribe may exercise jurisdiction because no tribe has demonstrated authority; it simultaneously maintains no state may exercise jurisdiction because the land is “unquestionably” Indian country. Michigan does not permit such a status; either a state has jurisdiction or a tribe has jurisdiction.
The EPA also contends the Tribal Authority Rule does not require it to “make the same showing as [a Tribe would have to make] before it may” exercise regulatory authority on a tribe‘s behalf. Although the EPA‘s interpretation of its own regulation is ordinarily entitled to controlling weight, see Auer v. Robbins, 519 U.S. 452, 461-62 (1997), we cannot defer where, as here, the interpretation “violate[s] the very statute the agency administers,” City of Idaho Falls, Idaho v. FERC, 629 F.3d 222, 230 (D.C. Cir. 2011); see also Stinson v. United States, 508 U.S. 36, 45 (1993) (no deference to an agency‘s interpretation of its own regulation where the interpretation “violate[s] the Constitution or a federal statute“). As we explained in Michigan,
Finally, the EPA argues it “reasonably interpreted its past SIP approvals as not applying in Indian country” and that again we should defer to its interpretation. The rationale for that interpretation, however, was the EPA‘s assumption that “states generally lack the authority to regulate air quality in Indian country,” Indian Country NSR Rule, 76 Fed. Reg. at 38,752/2 n.9, including, as relevant here, non-reservation areas of Indian country over which no tribe has demonstrated jurisdiction. Because it is based upon an assumption that is incorrect as a matter of law, the EPA‘s interpretation of its past SIP approvals is “plainly erroneous” and warrants no deference from the court. Auer, 519 U.S. at 461.
III. Conclusion
We hold a state has regulatory jurisdiction under the Clean Air Act over all land within its territory and outside the boundaries of an Indian reservation except insofar as an Indian tribe or the EPA has demonstrated a tribe has jurisdiction. Until such a demonstration has been made, neither a tribe nor the EPA standing in the shoes of a tribe may displace a state‘s implementation plan with respect to a non-reservation area of the state. We therefore grant Oklahoma‘s petition for review and vacate the Indian Country NSR Rule with respect to non-reservation Indian country.
So ordered.
1. The Clean Air Act is codified at
2.
3. “Dependent Indian communities include ... ‘Indian communities under federal protection that did not originate in either a federal or tribal act of reserving, or were not specifically designated a reservation,‘” while allotments are “‘land[s] owned by individual Indians and either held in trust by the United States or subject to a statutory restriction on alienation.‘” Ariz. Pub. Serv. Co. v. EPA, 211 F.3d 1280, 1285-86 (D.C. Cir. 2000) (quoting FELIX S. COHEN, HANDBOOK OF FEDERAL INDIAN LAW 38, 40 (1982)).
4. Because the SAFETEA does not provide certain and complete relief to Oklahoma‘s injury, we need not decide whether any prudential or Article III rule of standing would prevent Oklahoma from pursuing this action if the SAFETEA did provide an adequate alternative avenue for relief.
5. For this reason we also reject the intervenors’ contention that federal Indian common law and