Are insignificant emissions significant? Western States Petroleum Ass'n v. EPA: the air operating permit program of the Clean Air Act.

I. Introduction

One of the primary goals of the Clean Air Act (CAA)(1) is to "encourage or otherwise promote reasonable Federal, State, and local governmental actions . . . for pollution prevention."(2) In designing its air operating permit program pursuant to the CAA, the State of Washington acted reasonably when it decided not to require monitoring, reporting, or recordkeeping of air emissions deemed to be insignificant Washington's decision was in harmony with the regulations, policy guidelines, and prior and subsequent approvals of the Environmental Protection Agency (EPA). When the EPA failed to approve Washington's permit program, the United States Court of Appeals for the Ninth Circuit held that EPA abused its discretion in Western States Petroleum Ass'n v. EPA.(3)

In Title V of the Clean Air Act Amendments of 1990, Congress created a comprehensive air operating permit program for all major stationary sources of air pollution.(4) Title V requires EPA to promulgate regulations implementing the permit program.(5) These regulations, passed in July 1992, establish the minimum requirements of a state's air operating permit program, addressing permits, monitoring and reporting requirements, and fees to cover the cost of the programs.(6) States failing to implement the required permit program by the statutory deadlines are subject to mandatory sanctions, including the loss of federal highway funds.(7)

While Title V does not add any substantive new requirements, it requires all new and existing major sources to obtain permits from state air pollution control agencies.(8) EPA regulations require that the permit application for a facility list all emission units, except for emission units deemed insignificant as defined by the state permitting authority.(9) The current EPA guidelines for insignificant emission units (IEUs)(10) make it clear that a state has broad discretion in determining permit application and permit requirements for small equipment and activities.(11) The rationale for this EPA policy is the agency's belief that IEUs typically have inconsequential environmental impacts.(12)

An activity may be categorically defined as an IEU based on the activity's size or production rate.(13) At a facility, these "categorically exempt" activities might include street sweeping, landscaping, or even air escaping from an office building vent(14) Activities with emissions below certain yearly tonnage thresholds may also be defined as IEUs.(15) In an individual facility, there may be thousands of IEUs which account for only a small percentage (less than 5%) of total emissions.(16) Guidance from EPA and permit program approvals in other EPA regions make it clear that a state can exempt IEUs from Title V monitoring, reporting, and recordkeeping requirements.

Against this regulatory background, the State of Washington created its air operating permit program through notice and comment rulemaking.(17) Washington agreed with public comments that IEU monitoring, reporting, and recordkeeping requirements would result in excessive paperwork and would likely decrease the ability of permitting agencies to effectively enforce Title V permits.(18) In its final rules submitted to EPA for approval, Washington therefore exempted IEUs from Title V monitoring, reporting, and recordkeeping requirements, but not from any substantive CAA requirements.(19) Under Washington's program, an IEU still must comply with generally applicable requirements(20) such as the state opacity rules.(21) Washington continues to rely on periodic agency inspections, public complaints, and industrial audits to identify any future IEU compliance problems.(22)

EPA then granted interim approval of Washington's program, conditioning final approval upon Washington's amendment of its IEU rules to disqualify any emission unit subject to any applicable requirement, general or specific.(23) This condition would have effectively prevented any emission unit subject to any applicable requirement (e.g., the state opacity rule which applies generally to all emission units) from being designated an IEU,(24) in apparent contradiction with EPA's own regulations and guidance documentation.(25) In Western States Petroleum Ass'n v. EPA,(26) air pollutant emitters and trade associations in Washington petitioned for judicial review of EPA's conditional approval of Washington's permit program.(27) Washington moved to intervene in defense of its program.(28)

The Ninth Circuit granted EPA's motion to vacate and remand its decision on Washington's IEU rules but retained jurisdiction in the matter.(29) On remand, EPA backed down from its position which would prevent any emission unit subject to any applicable requirement from being an IEU.(30) However, EPA still disapproved of Washington's exemption of IEUs from permit monitoring, reporting, and recordkeeping requirements.(31) Petitioners then renewed their objections to EPA's decision. The Ninth Circuit reviewed EPA's decision under the CAA standard of judicial review,(32) "arbitrary, capricious, abuse of discretion," the same standard of judicial review set forth in the Administrative Procedure Act (APA).(33)

In Western States the Ninth Circuit held that EPA abused its discretion because its decision on Washington's permit program conflicted significantly with numerous EPA decisions in other states and localities.(34) EPA had approved, both before and after the interim approval of Washington's program, eight air operating permit programs in other EPA regions which omitted IEUs from permit requirements.(35) Instead of remanding the case to the EPA for reconsideration, the court ordered EPA to grant full approval to Washington's Title V program.(36) This unusual step, showing a lack of deference to agency expertise may have been taken because of the mandatory sanctions Washington would have been subject to if it did not have an EPA-approved program by the end of 1996.(37)

This chapter explores the purposes of the Title V air operating permit program, whether those purposes are in harmony with EPA's IEU regulations and policy guidelines, and how Washington has followed these regulations and guidelines to implement an effective permit program, balancing the concerns of the state, industry, EPA, and the general public. The chapter contends that when an administrative agency seriously considers comments from the general public and industry and develops regulations in response to those comments and in the public interest, as Washington did in developing its IEU program, the result is more effective regulation.

II. CLEAN AIR ACT AMENDMENTS OF 1990

A. A Need for Legislation

The declared purpose of the Clean Air Act is "to protect and enhance the quality of the Nation's air resources so as to promote the public health and welfare and the productive capacity of its population.(38) The CAA, originally enacted in 1955(39) and twice amended,(40) was the first of the modern-era federal regulatory environmental statutes.(41) Building upon the expertise states had acquired in regulating air pollution in the past, the 1970 amendments created a unique state federal partnership in which the Environmental Protection Agency (EPA) was given responsibility for establishing national ambient air quality standards (NAAQSs), and in which the states were responsible for enforcing and attaining NAAQSs by establishing state implementation plans (SIPs).(42)

In 1977, with the deadlines for attaining the NAAQSs fast approaching, Congress once again amended the CAA, requiring more detailed SIPs and establishing new deadlines.(43) In the early 1980s, the Reagan Administration, encouraged by industry, launched an attack to cut back the CAA, including an attempt to eliminate the health-based NAAQSs.(44) Legislation was introduced to weaken the CAA,(45) but the industry coalition supporting its passage fragmented and the legislation never made it out of the House Energy and Commerce Committee.(46) This failure ended the assault on the CAA(47) and commenced years of debate that culminated in President Bush signing the 1990 Amendments into law on November 15, 1990.(48)

B. The 1990 Amendments

As the 1980s came to a close, a number of events occurred which influenced the passage of the 1990 CAA Amendments. The accidental release of methyl isocyanate from a Union Carbide chemical plant in Bhopal, India, on December 3, 1984, focused public attention on the dangers of toxic air pollutants.(49) The first National Toxic Release Inventory (NTRI), released in March 1989 as part of the Superfund Amendments and Reauthorization Act of 1986,(50) also attracted a great deal of attention. The NTRI reported that 2.7 billion pounds of toxic air pollutants were released into the air in 1987.(51) High levels of ozone pollution during the summer of 1988, the Exxon Valdez oil spill, and the twentieth anniversary of Earth Day also brought environmental issues to the forefront of policy debates and public attention.(52)

Changes in congressional leadership and President Bush's arrival in the White House were also critical events leading to the 1990 Amendments. In 1989, Sen. George Mitchell (D-Me.), a major proponent of acid rain regulations, became Senate Majority Leader, replacing Sen. Robert Byrd (D-W. Va), champion of his state's high sulfur coal miners and Midwestern utility companies.(53) President Bush announced in June 1989 that he would introduce new CAA legislation.(54) The bill introduced by the Bush Administration(55) was a complete reversal of the Reagan Administration's position.(56) The heart of the President's bill was the provision pertaining to acid rain control.(57) The acid rain provision established a nationwide cap on sulfur dioxide emissions and implemented a market-based emissions trading system.(58) Acid rain control was politically attractive because the public viewed acid rain as a serious environmental problem. Furthermore, the emissions trading scheme was popular with industrial leaders and conservative members of Congress.(59)

The President's bill also included a requirement that every mayor stationary source of air pollution regulated under any provision of the CAA be issued an operating permit by the state in which it was located,(60) ensuring that one permit document would contain all of a source's air pollution control obligations.(61) This proposed operating permit program responded to criticism that the SIP process was inefficient and led to lax enforcement of the substantive requirements of the CAA.(62) Prior to the 1990 amendments, most changes, even minor ones, to a source's obligations under a SIP required notice and comment rulemakings at both the state and federal levels.(63) One commentator labeled this dual notice and comment requirement as the "double-key" system, referring to the delays and wasted resources which this system caused.(64) Members of the House and Senate initially viewed the permit provisions as highly technical, arousing little debate.(65) Only near the end of the legislative process did industry organize a lobbying campaign against the proposed permit requirements.(66)

House Bill 3030, as amended, passed the House on May 23, 1990.(67) The Senate Environmental Protection Subcommittee of the Committee on Environmental and Public Works used Senate Bill 1630 as its markup vehicle.(68) Congressional and administration concerns about the cost of implementing the new amendments caused Senate Majority Leader Mitchell to withdraw Senate Bill 1630 from the floor on February 1, 1990.(69) A panel of administration officials and Senate leaders conducted closed-door negotiations for the next month.(70) After another month of debate, during which 111 amendments were added,(71) the Senate passed Senate Bill 1630 on April 3, 1990(72) and referred it to the Conference Committee. Senate Bill 1630, as reported out by the Conference Committee,(73) passed the House on October 26, 1990(74) and passed the Senate on October 27, 1990.(75)

III. TITLE V AIR OPERATING PERMIT PROGRAM

A. The Part 70 Regulations

The 1990 Clean Air Act Amendments added the Title V air operating permit program, which was generally modeled after the National Pollutant Discharge Elimination System (NPDES) permit program of the Clean Water Act.(76) The NPDES permit program had "successfully imposed pollution controls on large numbers of sources in a readily enforceable and administratively flexible manner."(77) In contrast to the NPDES program, the Title V program had to incorporate the existing CAA and State air permit programs.(78) EPA officials therefore expected that lisle V permits would generally be more difficult to administer than NPDES permits because Title V sources are larger, more complex, and tend to emit more pollutants.(79)

If a State fails to submit a permit program, or if EPA rejects its permit program, the State is subject to mandatory sanctions.(80) EPA must impose sanctions no later than 18 months after the deadline for program submission has passed.(81) Sanctions on the states include the loss of federal highway funds and heavy fines.(82) If the state permit program's deficiencies impact, nonattainment area requirements, EPA may also impose higher offset ratios for new sources in the state.(83) If, after the imposition of sanctions, the state is still not in compliance, EPA must promulgate a federal permit program for the state.(84)

Title V of the 1990 Amendments required EPA to promulgate, by November 15, 1991, "regulations establishing the minimum elements of a permit program to be administered by any air pollution control agency."(85) The regulations were required to address, in part, the following: 1) requirements for permit applications, including a standard application form and criteria for determining in a timely fashion the completeness of applications,(86) 2) monitoring and reporting requirements,(87) 3) a requirement for permit fees in an amount adequate to cover the permitting authorities' program costs,(88) 4) requirements for adequate personnel and funding for program administration,(89) 5) a requirement that the permitting authority have adequate authority to ensure compliance with the permit program?(90) and 6) adequate procedures for reviewing applications, including providing public notice, an opportunity for public comment and a hearing, and an opportunity for judicial review.(91)

Although EPA submitted its draft permit regulations to the Office of Management and Budget (OMB) in October 1991, discussions with OMB and the Council on Competitiveness delayed promulgation of the final regulations (Part 70 Regulations) until July 21, 1992--eight months after the November 15, 1991, deadline.(92) Even though EPA missed its own deadline, the states were still required to submit their permit programs, in compliance with the Part 70 Regulations and with Title V, no later than November 15, 1993--three years after the enactment of the 1990 Amendments.(93) EPA's delay in issuing final regulations hindered federal and state implementation of the Title V program.(94) While EPA had provided some guidance and assistance to the states on Title V permit program requirements,(95) the delay "hampered EPA's efforts to provide more definitive guidance and assistance to the states."(96)

B. The IEU Exemption

When EPA first proposed the Part 70 Regulations in May 1991, [sections] 70.3(c)(1) of the regulations stated that "the permitting authority shall include in the permit all applicable requirements for all regulated emission units in the mayor source."(97) A rigid interpretation of this language could result in generally applicable state air regulations being read to impose limits on every emission unit or activity, regardless of size.(98) State permitting authorities and industry voiced their concerns about having to regulate insignificant emission units and activities, which would bury them in paperwork without any foreseeable benefits.(99) In their comments on the proposed regulations, the states and industry groups urged EPA to include a de minimis exemption for IEUs to allow states to exempt these units from the Title V regulatory scheme.(100)

In response to these comments, EPA did include a de minimis exemption in the final Part 70 Regulations.(101) EPA described the purpose of this de minimis exemption in the Federal Register notice of the final Part 70 Regulations:

These types of exemptions minimize unnecessary paperwork and reduce the

need for sources to conduct analysis of all emissions regardless of the

amount involved. Such a position is also supported by the Alabama Power

decision, where the court found that emissions from certain small

modifications and emissions of certain pollutants at new sources could

be exempted from some or all Prevention of Significant Deterioration (PSD)

review requirements on the grounds that such emissions would be de minimis.

In other words, the Administrator may determine levels below which there

is no practicable value in conducting an extensive review.(102)

EPA gave the individual states the authority to develop exemptions for insignificant activities or emission levels, reasoning that "[t]o require one test nationally would ignore several State programs which have already defined workable criteria for insignificant emissions activities . . . [and s]tate discretion to apply these exemptions also allows title V to build upon rather than disrupt existing State programs."(103) In the final regulations EPA changed [sections] 70.3(c)(1), contemporaneously with the addition of the IEU exemption to [sections] 70.5, to read that "the permitting authority shall include in the permit all applicable requirements for all relevant emissions units in the major source."(104) Reading the changes to sections 70.3 and 70.5 together, it seemed apparent that EPA was allowing states to exclude insignificant emissions and activities from application(105) and permit requirements. Allowing a source to omit IEUs from a permit application clearly results in the IEUs being omitted from the permit itself because, logically, the authority writing the permit can only determine what requirements are applicable, based on the information provided to it in the permit application.

IV. WESTERN STATES PETROLEUM ASS'N V. EPA

A. Administrative Background

When Washington submitted its Title V permit program for EPA approval in November 1993, it was the first state in the country to do 50.(106) Washington received comments from a variety of groups during its permit program rulemaking.(107) Based on these comments, guidance then available from EPA, and the Part 70 Regulations themselves, Washington decided to exempt IEUs from Title V monitoring, recordkeeping, and reporting requirements, but not from any substantive CAA requirements.(108) Washington believed that subjecting IEUs to continuous monitoring, recordkeeping, and reporting "would require too much of the permitting authorities' and sources' time, time which would be better spent addressing larger emission points."(109) If the emissions from an IEU become problematic, Washington has the authority to require any source, on a case-by-case basis, to monitor its emissions and to report the results.(110)

In the Part 70 Regulations, EPA limited a state's discretion in exempting IEUs by including limitations, commonly called "gatekeepers," in the approval criteria of [sections] 70.5.(111) An applicant may not omit information needed to determine whether the emission units are subject to any applicable requirement or information needed to determine permit fees.(112) Furthermore, an application must list IEUs exempted because of their size or production rate.(113) Washington designed its IEU exemption around these gatekeepers, requiring that the permit application and the permit itself include all generally applicable requirements that apply to IEUs,(114) and that the permit application list all IEUs that are exempt based on size or production rate.(115)

In November 1993 EPA granted interim approval(116) of Washington's Title V permit program.(117) EPA conditioned final approval of the permit program upon Washington 1) amending its IEU rules to disqualify from exemption any emission unit subject to any applicable requirement, and 2) removing the language that exempted IEUs from being included in the permit.(118) However, EPA's conditions, which disqualify from exemption any emission unit subject to any applicable requirement, appeared to make the IEU exemption in [section] 70.5 of the Part 70 Regulations meaningless. Many generally applicable requirements apply to all emission units. For example, Washington's opacity standards apply to any emission unit within a source.(119) EPA's condition for final approval would have obliterated Washington's IEU exemptions since every emission unit and activity at a source is subject to a generally applicable opacity requirement.(120)

On January 9, 1995, in Western States Petroleum Ass'n v. EPA,(121) air pollutant emitters and trade associations(122) in Washington petitioned the United States Court of Appeals for the Ninth Circuit for judicial review of EPA's conditional approval of Washington's permit program.(123) Washington moved to intervene in defense of its proposed program.(124) The Ninth Circuit granted EPA's motion to vacate and remand to EPA the final decision on Washington's IEU rules but retained jurisdiction in the matter.(125) After reviewing the Part 70 Regulations and Washington's IEU provisions on remand, EPA agreed with the petitioners that there are circumstances under which a state operating permit program can define an emission unit or activity as "insignificant," even if it is subject to an applicable requirement as an IEU.(126) However, EPA still disapproved of Washington's exemption of IEUs from the permit monitoring, reporting, and recordkeeping requirements of [section] 70.6 of the Part 70 Regulations.(127)

During the comment period, Washington argued that not exempting IEUs from [section] 70.6 permit requirements would obliterate the [section] 70. 5(c) IEU exemption.(128) EPA explained that [section] 70.5(c) contained a limited exemption for IEUs, regarding only the information required in permit applications.(129) EPA relied on the plain language of [subsections] 70.5 and 70.6 for this conclusion.(130) Because [section] 70.6 does not specifically exempt IEUs from the permit monitoring, recordkeeping, and reporting requirements, EPA asserted that the IEU exemption in [section] 70.5 applies only to application requirements.(131) Although Washington's IEU program is in compliance with [section] 70.5 gatekeepers, EPA stated it is merely enforcing [section] 70.6.(132) In response to the commentators'(133) argument that "it is entirely illogical for EPA to specifically exempt these IEUs from the application and then attempt to regulate these same IEUs in the final permit," EPA again pointed out that there is no language in [section] 70.6 specifically exempting IEUs from permit requirements.(134)

B. Ninth Circuit Review

In their appeal to the Ninth Circuit, petitioners renewed their objections to EPA's final decision.(135) The court reviewed EPA's decision under the CAA's "arbitrary, capricious, abuse of discretion" standard of judicial review.(136) While the court acknowledged that it must give deference to EPA's reasonable interpretation of its own standard,(137) it did not need to defer to an anomalous interpretation if EPA had abused its discretion in failing to follow its own prior standards.(138)

The petitioners emphasized that while EPA had identified two Title V programs that applied permit requirements to IEUs,(139) EPA had also approved the exemption of IEUs from permit requirements in at least eight other state and local programs.(140) EPA approved these conflicting programs both before and after the agency's decision on Washington's IEU program.(141) EPA completely denied any inconsistency between its Washington decision and its approval of other state and local Title V programs stating that "the commentators can point to no instance in which EPA has approved a State program which expressly exempts IEUs with applicable requirements from the permit content requirements of section 70.6."(142)

EPA argued alternatively that the Washington decision was the fist thorough, well-reasoned discussion of the permissibility of exempting IEUs from permitting requirements and was therefore entitled to deference from the court.(143) The Ninth Circuit recognized that while EPA may have the power to adjust is policies and rulings in light of is experience,(144) EPA may not depart, sub silentio, from is usual rules of decision to reach a different, unexplained result in a single case.(145) The court viewed the Washington decision as a change in the EPA's interpretation of the Part 70 Regulations.(146) EPA had to support such a change in interpretation with a "reasoned analysis,"(147) explaining the grounds for its departure from the prior norms so that the court could understand the agency's action and judge its consistency with the EPA's mandate.(148) In Western States, EPA failed to provide any explanation for its anomalous Washington decision.(149) The fact that EPA issued at least eight conflicting decisions both before and after the Washington decision refutes the agency's argument that the Washington decision marked a well reasoned, lasting change of interpretation.

EPA also relied on Puerto Rican Cement Co. v. EPA(150) for the assertion that, even if the Washington decision was an anomaly, a large agency such as EPA cannot "guarantee that all its administrators will react similarly, or interpret regulations identically, throughout the United States."(151) The Ninth Circuit distinguished Puerto Rican Cement from Western States because in Puerto Rican Cement the "deviant" interpretation occurred only once; EPA interpretations before and after the deviant interpretation were consistent with the current interpretation upheld by the Puerto Rican Cement court.(152) In contrast to Puerto Rican Cement, the Western States petitioners did "more than point to a single potentially deviant precedent before the reviewing court [could] find such inconsistency in agency action as to constitute arbitrary treatment of Litigants."(153) The petitioners identified at least eight deviant EPA decisions on other permit programs in conflict with the EPA's Washington decision.(154)

In addition to these conflicting decisions, on March 5, 1995, EPA sued a new guidance document, White Paper Number 2.(155) Its declared purpose was to "enable State and local agencies to take further steps to reduce the complexity and preparation costs of part 70 permit applications and of part 70 permits themselves."(156) In these guidelines, "EPA interprets part 70 to allow considerable discretion to the permitting authority in tailoring the amount and quality of information required in permit applications and permits as they relate to IEUs."(157) In direct contradiction to the position EPA took in the Western States litigation, EPA states in these most recent guidelines that "the permitting authority can provide that the status quo (i.e., no monitoring) will meet [section] 70.6(a)(3)(i)."(158) If a source has no IEU monitoring requirement, it is logical that the source would not have any data subject to recordkeeping or reporting either. EPA based its IEU monitoring policy on its belief that IEUs typically have "inconsequential environmental impacts and present little potential for violations of generically applicable requirements."(159)

Emphasizing EPA's numerous unexplained, conflicting decisions concerning IEU permit requirements in both state program applications and in the EPA's own regulations and guidelines, the Ninth Circuit held that EPA had abused its discretion in departing from its prior standards by not approving Washington's permit program.(160) Therefore, EPA's decision was not entitled to deference by the court(161) The Ninth Circuit reversed EPA's decision and on remand ordered EPA to grant full approval to Washington's Title V program.(162)

C. Discussion

The Ninth Circuit did not state its reasons for not remanding the case once again to EPA for further consideration, as is common practice in administrative law.(163) There is Ninth Circuit precedent for not allowing EPA further consideration on remand. For example, in Abramowitz v. EPA,(164) the Ninth Circuit also found an abuse of discretion on EPA's part for failure to meet a CAA deadline. The Ninth Circuit in Abramowitz noted that when an administrative agency has abused its discretion, a court should generally remand the matter to the agency for further consideration(165) The court found that EPA had already exceeded its discretion by deferring its decision beyond a clear statutory deadline and therefore remanded the matter to EPA with specific instructions that EPA take action.(166)

There were similar equitable considerations in the Western States case. EPA had missed its deadline in promulgating the Part 70 Regulations, delaying both state and federal implementation of the Title V program.(167) Significantly, EPA had already considered the Washington decision twice, denying any conflict with other EPA decisions.(168) The court may have been persuaded that yet another remand to EPA would only result in further post hoc rationalizations of the Washington decision, leading to further delays in Title V program implementation(169) Washington would have been subject to mandatory sanctions if EPA did not approve their permit program by December 9, 1996.(170) Any further changes in Washington's permit program would require both state and federal notice and comment rulemaking, each taking six to eight months.(171) Remanding the case for further consideration would likely have forced Washington to accept a permit program it viewed as unworkable.

EPA's failure to follow its own well-reasoned interpretations and guidelines, issued before and after this case, may further explain why the court chose not to remand the decision for further agency consideration.(172) Nonetheless, EPA's present guidelines continue to recognize that state and local agencies have valuable and extensive expertise in permitting and will play a critical role in implementation of the Title V permit programs.(173) EPA has pledged to work closely with state and local agencies in all aspects of implementing Title V.(174)

Some commentators argue that inconsistency in agency decision making, such as that illustrated by the Western States case, conflicts with the Due Process Clause of the Fifth Amendment.(175) Even if agency inconsistency does not implicate a constitutional question, it is clear from the case law that "an agency must either follow its own precedents or explain why it departs from them."(176) Another large agency, the Internal Revenue Service (IRS), has long argued that this consistency requirement should not apply to its decisions.(177) The IRS maintains that because of the large number of IRS decisions, consistency is impossible, making it unnecessary to consider precedents or to provide an explanation when departing from them.(178) Congress formally adopted the IRS position in 1976.(179) While EPA made a similar impossibility argument in Western States,(180) Congress has not exempted EPA from its duty to be consistent in its decision-making.

In drafting its Title V regulations, Washington made ideal use of notice and comment rulemaking procedures.(181) Washington worked closely with industry to promulgate regulations that balanced the concerns of the state, EPA, industry, and the general public.(182) EPA should not attempt to undermine reasonable state regulations, especially if they are in accordance with its regulations, guidelines, and precedents.

V. CONCLUSION

The result the Ninth Circuit reached in Western States helps to define the limits to the deference a court will afford an EPA decision. Courts generally give EPA's interpretations of its own regulations great deference because EPA, not the judiciary, has the expertise in environmental matters. However, the courts limit this deference when EPA repeatedly delays statutorily-required decision-making. Additionally, limited judicial deference will be given to EPA decisions that depart, without explanation, from the agency's own well-reasoned interpretations and guidelines.

Given this policy of deference to agencies in matters involving areas of their expertise, Western States should have been an easy win for EPA. EPA had two chances to give a reasoned explanation for its departure from previous EPA policy of allowing states to omit IEUs from Title V permits. The Ninth Circuit did initially remand the case to allow EPA to reconsider its decision, and the court most likely would have given deference to any reasonable interpretation EPA subsequently made. Instead of taking that opportunity to defend its new policy, however, EPA chose to completely deny the existence of any conflicting decisions within the agency. By relying solely on the principle of judicial deference to administrative agency expertise,(183) EPA lost an easy case and failed to live up to the CAA goal of promoting reasonable federal, state, and local governmental actions to prevent pollution.(184)

In promulgating its Title V air operating permit regulations, the State of Washington used all of its available resources to produce workable rules. It solicited comments from all interested parties, including the state and local permitting agencies, industry, and the general public. In developing its IEU exemption, Washington considered these comments, and the guidance provided by EPA itself, to develop a program that focused on major sources of pollution without requiring needless paperwork to keep track of de minimis emissions. The regulatory structure Washington has chosen for its Title V program will lead to the issuance of more effective permits while achieving the goals of all concerned parties.

(1) Clean Air Act, 42 U.S.C. [subsections] 7401-7671q (1994 & Supp. I 1995).

(2) 42 U.S.C. [sections] 7401(c) (1994).

(3) 87 F.3d 280, 286 (9th cir. 1996).

(4) Title V of the 1990 Clean Air Act Amendments, 42 U.S.C. [sections] 7661 (1994). The air operating permit program is commonly referred to as Title v, but is codified as Subchapter V in the statute. See David R. Wooley, Clean Air Act Handbook: A Practical Guide to Compliance xiii-xix (6th ed. 1997), for an explanation of Clean Air Act statutory nomenclature.

(5) 42 U.S.C. [sections] 7661a(b) (1994).

(6) 40 C.F.R [sections] 70.7 (1996).

(7) 42 U.S.C. [sections] 7661a(d)(2)(B) (1994) (applying the sanctions of id [sections] 7509(b))

(8) 42 U.S.C. [sections] 7661a(a) (1994).

(9) 40 C.F.R. [sections] 70.5 (1996).

(10) Office of the Air Quality Planning and Standards, EPA, White Paper Number 2 for Improved Implementation of the Part 70 Operating Permits Programs (1996) [hereinafter EPA, White Paper Number 2].

(11) Id. at 31.

(12) Id. at 33.

(13) 40 C.F.R [sections] 70.5(c) (1996).

(14) Wash. Admin. Code [subsections] 173-401-532, -830 (1995).

(15) 40 C.F.R [sections] 70.5(c) (1996); see, e.g., Wash. Admin. Code [sections] 173-401-530 (1995).

(16) See, e.g., Northwest Alloys, Inc., Air Operating Permit Application, Form C-3 (1995) (on file with author), Kaiser Alluminum & Chem. Corp. Tacoma Works, Title V Air Operating Permit Application, Form C-3 (1995) (on file with author).

(17) See Wash. Rev. Code [subsections] 34.05.310-.395 (1996) (procedural and rulemaking requirements).

(18) Letter from Joseph R. Williams, Program Manager, Air Quality, State of Washington Department of Ecology, to David C. Bray, Permits Program Manager, U.S. Environmental Protection Agency 4 (Oct. 30, 1995) (on file with author) [hereinafter Ecology Comments].

(19) Wash. Admin. Code [sections] 173-401 530(2)(c) (1995).

(20) Id. [sections] 173-401 530(1)

(21) See, e.g., Wash. Admin. Code [sections] 173-415-030(3) (1995) ("Visible emissions from any emissions unit in a primary aluminum plant shall not exceed an average twenty percent opacity for more than six consecutive minutes in any sixty minute period."). Opacity is "[a] measure of the amount of light obscured by particulate pollution in the air; clear window glass has a zero [percent] opacity, a brick wall has 100 percent opacity." Robert V. Percival et al., Environmental Regulation 1412 (2d ed. 1996).

(22) Petitioners' Opening Brief at 7 n.9, Western States Petroleum Ass'n v. EPA. 8, F.3d 380 (9th Cir. 1996) (No. 95-70034); Intervenor State of Washington's Reply Brief at 7, Western States Petroleum Ass'n v. EPA, 87 F.3d 280 (9th Cir. 1996) (No. 970034).

(23) Clear Air Act Final Interim Approval of Operating Permits Program in Washington, 59 Fed. Reg. 55,813, (Nov. 9, 1994).

(24) Petitioners' Opening Brief at 8, Western States (No. 95-70034).

(25) Clean Air Act Final Interim Approval of Operating Permit Program; Washington, 60 Fed. Reg. 62,992 (Dec. 8, 1995).

(26) 87 F.3d at 280 (9th Cir. 1996).

(27) Id. at 282.

(28) Id. at 283 & n.2

(29) Id. at 283. EPA's motion for remand was granted by the court on July 7, 1995. Id.

(30) 60 Fed. Reg. at 62,993.

(31) Id.

(32) 42 U.S.C. [sections] 7607(d)(9)(A) (1994); Ober v. EPA, 84 F.3d 304, 307 (9th Cir. 1996) (holding, in part, that EPA's approval of Arizona's State implementation Plan (SIP) was in violation of the CAA and the Administrative Procedure Act (APA) because Phoenix's inability to attain the annual PM-10 NAAQS did not relieve Arizona of the duty to independently examine and implement control measures targeting the 24-hour standard NAAQS).

(33) Abramowitz v. EPA, 832 F.2d 1071, 1074 (9th Cir. 1987) (holding that EPA's decision to approve California's South Coast Air Basin ozone and carbon monoxide control measures was arbitrary and capricious because it violated the CAA requirement that such measures must provide for attainment of NAAQS).

(34) Western States Petroleum Ass'n v. EPA, 87 F.3d 280, 287 (9th Cir. 1996).

(35) Id. at 285.

(36) Id. at 287.

(37) Intervenor State of Washington's Reply Brief at 3, Western States (No. 95-70034).

(38) 42 U.S.C. [sections] 7401(a)(1) (1996).

(39) Air Pollution Act of 1955, ch. 360, 69 Stat. 322 (1955).

(40) Clean Air Act, Pub. L. No. 88-206, 77 Stat. 392 (1963); Air Quality Act of 1967, Pub. L. No. 90-148, 81 Stat. 485 (1967).

(41) Clean Air Amendments of 1970, Pub. L. No. 91404, 84 Stat. 1676 (1970); see Percival et al., supra note 21, at 763. In the decade following the January 1, 1970 signing of the National Environmental Policy Act (NEPA), 42 U.S.C. [subsections] 4321-4370d (1994 & supp. I 1995), a number of significant environmental statutes were enacted including the Federal Water Pollution Control Act of 1972 (Clean Water Act), 33 U.S.C. [subsections] 1251-13P7 (1994 & Supp. I 1995). the Endangered Species Act of 1973, 16 U.S.C. [subsections] 1531-1544 (1994 & Supp. I 1995), the Safe Drinking Water Act of 1974, 42 U.S.C. [subsections] 300f to 300j-26 (1994 & supp I 1995), Resource Conservation and Recovery Act (RCRA) of 1976, 42 U.S.C. [subsections] 6901-6992k, and the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA). 42 U.S.C. [subsections] 9601-9675. See Percival et al., supra note 21, at 106-08.

(42) See Alan L. Mitchell, Chapter, Transportation Planning and the Clean Air Act. 25 Envtl. L. 927, 929 (1995).

(43) Id. at 930.

(44) Henry A. Waxman, An Overview of the Clean Air Act Amendments of 1990, 21 Envtl. L. 1721, 1724-25 (1991). Rep. Waxman (D-Calif.), Chairman of the Energy and Commerce Committee's Subcommittee on Health and the Environment, was a central architect of the 1990 CAA Amendments.

(45) See 127 Cong. Rec. 31,881-86 (Dec. 16, 1981) (summarizing H.R. 5252, Proposed CAA Amendments of 1981).

(46) Waxman, supra note 44, at 1727.

(47) Id.

(48) Statement by President Bush Upon Signing Senate Bill 1630, 26 Weekly Comp. Pres. Doc. 1824 (Nov. 19, 1990), reprinted in 1990 U.S.C.C.A.N. 3887-1.

(49) Waxman, supra note 44, at 1729 & n.25.

(50) 42 U.S.C. [subsections] 9601-9676 (1994) (reauthorizing CERCLA).

(51) Waxman, supra note 44, at 1731 & n.28. (citing Subcomm. on Health and the Env't, The National Toxic Release Inventory: Preliminary Air Toxic Data (1989)).

(52) Waxman, supra note 44, at 1735.

(53) Gary C. Bryner, Blue Skies, Green Politics 80 (1993).

(54) Waxman, supra note 44, at 1736 n.47; see George Hager, Bush Sets Clean-Air Debate in Motion With New Plan, 47 Cong. Q. Wkly. 1460-64 (1989).

(55) Rep. John Dingell (D-Mich.) introduced the administration's bill in the House as House Bill 3030. 135 Cong. Rec. H4458 (July 27, 1989). Sen. John Chafee (D-R.I.) introduced it in the Senate as Senate Bill 1490. 135 Cong. Rec. H4458 (Aug. 4, 1989). A team of officials from the White House, the Office of Management and Budget, the Department of Energy, and the EPA prepared the bill. Bryner, supra note 53, at 95.

(56) Waxman, supra note 44, at 1736.

(57) This provision was eventually enacted as Title IV (Acid Deposition Control) of the 1990 CAA Amendment. 42 U.S.C. [subsections] 7651-76510 (1994) (codified as Subchapter IV-A).

(58) Wooley, supra note 4, at 4-1.

(59) Bryner, supra note 53, at 95-96.

(60) Id. at 154.

(61) S. Rep. No. 101-228, at 347 (1989), reprinted in 1990 U.S.C.C.A.N. 3385, 3730.

(62) Id at 346, reprinted in 1990 U.S.C.C.A.N. 3385, 3729.

(63) Id. at 347-48, reprinted in 1990 U.S.C.C.A.N. 3385, 3730 31.

(64) Id. at 348, reprinted in 1990 U.S.C.C.A.N. 3385, 3731; William F. Pedersen, Jr., Why the Clean Air Act Works Badly, 129 U. Pa. L. Rev. 1059, 1079 (1981) ("In other words, any change that a state wants to make in a SIP, no matter how routine, requires boat state and EPA approval, and, generally, two rounds of public notice and comment. Both actors must turn the key before any new requirement is established.").

(65) Bryner, supra note 53, at 155.

(66) Id Industry groups warned that if every source of emissions required a permitted emission limit, permitting agencies "would be crushed in a mountain of detail" and the resulting permits would be "unwieldy and unworkable." Id.

(67) See 136 Cong. Rec. H3171 (June 5, 1990), for the text of the amended bile life bill passed by a vote of 401 to 21. 136 Cong. Rec. H2915-01 (May 23, 1990).

(68) Sen. Max Baucus (D-Mont.) introduced Senate Bill 1630, an alternative clean air proposal, on September 14, 1989. 135 Cong. Rec. S11,139 (daily ed. Sept. 14, 1989).

(69) Environmental Law Inst., Clean Air Deskbook 86 (1992).

(70) Id.

(71) Id. at 90.

(72) See 136 Cong. Rec. S4363 (Apr. 18, 1990) for the text of the amended bill. The bill passed by a vote of 89 to 11. Id.

(73) See Memorandum from Sen. Baucus, Chairman of Senate Conferees, and Rep. Dingell, Chairman of House Conferees, to House-Senate Conferees on S. 1630 (Sept. 14, 1990), reprinted in Environmental Law Inst., supra note 69, at 297

(74) 136 Cong. Rec. H12,911 (Oct. 26, 1990) (passed by a vote of 401 to 25).

(75) 136 Cong. Rec. S1434 (Oct. 27, 1990) (passed by a vote of 89 to 10).

(76) See H.R. Rep. No. 101-490, pt. 1, at 342 (1990), reprinted in Environmental Law Inst., supra note 69, at 487; 33 U.S.C. [sections] 1342 (1994 & Supp. I 1995). There are fundamental differences between the CAA Title V permit program and the Clean Water Act NPDES permit program. At least theoretically, the jurisdiction of the NPDES program includes "the discharge of any pollutant by any person" into a navigable waterway. 33 U.S.C. [sections] 1311(a) (emphasis added). Typically, a source is subject to the CAA Title V permit program only if it is a major stationary source (emits or has a potential to emit one hundred tons per year or more) of a pollutant emitted into the ambient air. 42 U.S.C. [sections] 7602(j) (1994). Also, an air pollution discharge into an airshed has a greater potential effect on a broader geographic area than a point discharge into a waterway. H.R. Rep. No. 101-490, pt. 1, at 342 (1990), repented in Environmental Law Inst., supra note 69, at 487.

(77) S. Rep. No. 101-228, at 347 (1989), reprinted in 1990 U.S.C.C.A.N. 3385, 3730. Additionally, in the arena of hazardous waste management, the Resource Conservation and Recovery Act (RCRA) requires operating permits for treatment, storage, and disposal facilities. Id. at 346, reprinted in 1990 U.S.C.C.A.N. 3385, 3729; 42 U.S.C. [sections] 6925 (1994).

(78) H.R. Rep. No. 101-490, pt. 1, at 342 (1990), reprinted in Environmental Law Inst., supra note 69, at 487. The Title V permit program incorporates the existing CAA permit programs: the New Source Review (NSR) program for nonattainment areas, 42 U.S.C. [subsections] 7501-7515 (1994 & Supp. I 1995), and the Prevention of Significant Deterioration (PSD) program for new or modified sources in attainment areas, 42 U.S.C. [subsections] 7470-7479 (1994). The Title V program also incorporates any state permit programs for existing sources in attainment areas. Id & 7661e(a).

(79) U.S. Gen. Accounting Office, Air Pollution: Difficulties in Implementing a National Air Permit Program 10 (1993) [hereinafter Difficulties in Implenting].

(80) 42 U.S.C. [sections] 7661a(d)(2) (1994).

(81) Id.

(82) Id. [sections] 7509(b)(1).

(83) Id. [sections] 7509(b)(2). Title V incorporates by reference the same sanctions that EPA must apply if a state fails to submit a SIP, or if EPA disapproves the SIP. Id. [sections] 7661a(d)(2)(A) (C), (i)(1)(3). Any new or modified major stationary source in a nonattainment area must obtain emission reductions of a relevant air pollutant to offset any new emissions of that pollutant. Id. [sections] 7503(c). The [sections] 7509 sanctions require that the ratio of emissions reductions to increased emissions be at least 2 to 1. Id. [sections] 7509(b)(2).

(84) Id. [sections] 7661a(d)(3). EPA will only impose a federal permit program as a last resort because states generally have more expertise and better resources to implement a permit program.

(85) Id. [sections] 7661a(b)

(86) Id. [sections] 7661a(b)(1)

(87) Id. [sections] 7661a(b)(2).

(88) Id. [sections] 7661a(b)(3).

(89) Id. [sections] 7661a(b)(4)

(90) Id. [sections] 7661a(b)(5).

(91) Id. [sections] 7661a(b)(6).

(92) Difficulties in Implementing, supra 79, at 3; 57 Fed. Reg. 32,250 (July 21, 1992) (codified at 40 C.F.R. [sections] 70 (1996)).

(93) 42 U.S.C. [sections] 7661a(d)(1) (1994); see Timothy L. Williamson, Fitting Title V into the Clean Air Act: Implementing the New Operating Permit Program, 21 Envtl. L. 2085, 2099 & n.44 (1991).

(94) Difficulties in Implementing, supra note 79, at 3. "A delay of approximately 8 months in issuing the final permit rules and delays by EPA in providing guidance and assistance to the states may have already affected implementation of the program." U.S. Gen. Accounting Office Air Pollution: State Planning Requirements Will Continue to Challenge EPA and the States 25 (1993) [hereinafter State Planning Requirements].

(95) State Planning Requirements, supra note 94, at 2. "EPA should provide adequate guidance and training [to the permitting authorities] to minimize the need for any vetoes." S. Rep. No. 101-228, at 356 (1989), reprinted in 1990 U.S.C.C.A.N. 3385, 3739.

(96) Difficulties in Implementing, supra note 79, at 3.

(97) Proposed Rules, Operating Permit Program, 56 Fed. Reg. 21,711, 21,770 (May 10, 1991) (emphasis added).

(98) Charles H. Knauss et al., The Clean Air Act Operating Permit Program: A Handbook for Counsel, Environmental Managers & Plant Managers 41 (1993); Petitioners' Opening Brief at 3, Western States Ass'n v. EPA, 87 F.3d 280 (9th Cir. 1996) (No. 95-70034).

(99) Knauss et al., supra note 98, at 42 ("Imposing permit requirements on these types of emission points would create needless recordkeeping, monitoring, and reporting requirements for regulated sources and permitting authorities without any corresponding benefits.").

(100) Id. at 41.

(101) 40 C.F.R. [sections] 70.5(3)(c) (1996) ("The Administrator may approve as part of a State program a list of insignificant activities and emissions levels which need not be included in permit applications.")

(102) Environmental Protection Agency: Operating Permit Program, 57 Fed Reg. 32,250, 32,273 (July 21, 1992) (codified at 40 C.F.R. pt. 70); see Alabama Power Co. v. Costle, 636 F.2d 323, 360-61 (D.C. Cir. 1980) (holding that EPA has authority to create de minimis exemptions where "the burdens of regulation yield a gain of trivial or no value.").

(103) 57 Fed. Reg. at 32,250, 32,273.

(104) 40 C.F.R. [sections] 70.3(c)(1) (1996) (changing "all regulated emissions") (emphasis added).

(105) See Knauss et al., supra note 98, at 42 (stating "[i]n general, the application would not need to refer to any emissions covered by the de minimis exemptions").

(106) Petitioners' Opening Brief at 1, Western States Petroleum Ass'n v. EPA, 87 F.3d 280 (9th Cir. 1998) (No. 95-70034).

(107) See, e.g., supra note 18 and accompanying text (discussing suggestions of one comment received from the Washington State Department of Ecology).

(108) Wash. Admin. Code [sections] 173-401 530(2)(c) (1995) ("The permit shall not require testing, monitoring, reporting or recordkeeping for insignificant emissions units or activities except where generally applicable requirements of the state implementation plan specifically impose these requirement").

(109) Intervenor State of Washington's Reply Brief at 4-5, Western States (No. 95-70034). Washington noted that at one source in the state "there are three to eight times the number of IEUs as non-IEU emission units," such that a resulting permit including IEU's would include over three thousand emission units. Id. at 5 n.4. Compare Wash St. Reg. 94-11-105 at 131 ("[O]mitting or reducing the reporting requirements for these [insignificant] emission units and activities will help prevent the permitting process from becoming unmanageable and will greatly reduce the costs of preparing and reviewing permit applications and complying with permit program requirements.") With 57 Fed. Reg. 32,250, 32,273 (July 21, 1992) (EPA commented when the Part 70 Regulations were promulgated that "[t]hese types of exemptions minimize unnecessary paperwork and reduce the need for sources to conduct analysis of all emissions regardless of the amount involved.").

(110) Wash. Admin. Code [sections] 173-400-105(2) (1995); see supra note 22 and accompanying text. Washington specifically asserted this authority in its legal opinion submitted to EPA, as required by 40 C.F.R. [sections] 70.4(b)(3) (1996). Mary Sue Wilson, Attorney General's Opinion for the Washington State Department of Ecology 9 (Oct. 27, 1993).

(111) Petitioner's Opening Brief at 9, Western States (No. 95-70034).

(112) 40 C.F.R. [sections] 70.5(c) (1996).

(113) Id.

(114) Wash. Admin. Code [sections] 173-401-530(2)(b) (1995).

(115) Id. [sections] 173-401-530(1)(c) (1995)

(116) 42 U.S.C. [sections] 7661a(g) (1994); 40 C.F.R. [sections] 70.4(d) (1996). EPA may grant interim approval of a permit program if it "substantially meets the [Part 70] requirements." Id. [sections] 70.4(d)(1). Interim approval can expire no later than 2 years, and may not be renewed. Id. [sections] 70.4(d)(2)

(117) Clean Air Act Final Interim Approval of Operating Permits Programs in Washington, 59 Fed. Reg. 55,813 (Nov. 9, 1994).

(118) Id. at 55,818 ("Revise WAC 173-401 530(2) to define an emissions unit as insignificant only if it is subject to no federally enforceable applicable requirement and delete the last sentence in WAC 173-401-200(16) ("These units and activities are exempt from permit program requirements except as provided in WAC 173-401-530.')").

(119) See supra note 21 and accompanying text.

(120) Wash Admin. Code [sections] 173-415-030(3) (1995).

(121) 87 F.3d 280 (9th Cir. 1996).

(122) These trade associations represent the petroleum, pulp and paper, and aluminum industries in Washington.

(123) 87 F.3d at 282.

(124) Id. at 283 & n.2.

(125) Id. at 283. EPA's May 23, 1995 motion for remand was granted by the court on July 7, 1995.

(126) Clean Air Act Proposed Interim Approval of Operating Permits Programs; Washington, 60 Fed. Reg. 50,166, 50,167 (Sept. 28, 1995)

(127) Clean Air Act Final Interim Approval of Operating Permits Programs; Washington 60 Fed. Reg. 62,992, 62,993 (Dec. 8, 1995) ("EPA continues to believe that part 70 does not exempt IEUs subject to applicable requirements from the telling, monitoring, recordkeeping, [and] reporting . . . requirements of 4.0 CFR 70.6(a)(1), (a)(3) and (c).").

(128) Ecology Comments, supra note 18, at 3 (disagreeing with the EPA's proposed action on the IEU portion of Washington's title V air operating permit program); see 60 Fed. Reg. 50,166 (Sept. 28, 1995).

(129) 60 Fed. Reg. at 62,993.

(130) Id.

(131) Id.

(132) Petitioner's Opening Brief, supra at 15, Western States Petroleum Ass'n v. EPA, 87 F.3d 280 (9th Cir. 1996) (No. 95-70034).

(133) In addition to the petitioners and the state of Washington, Boeing Corporation submitted comments on EPA's proposed action. Boeing noted that subjecting aD IEUs to the [sections] 70.6 permit conditions would force one Boeing facility, not the largest one in Washington, to monitor, keep records, and report every six months the emissions from over 3,000 emission units. See Petitioners' Opening Brief at 4 n.5, Western States (No. 96-70034).

(134) 60 Fed. Reg. 62,992, 62,993 (Dec. 8, 1995).

(135) The Ninth Circuit had jurisdiction to review EPA's final decision pursuant to the CAA, 42 U.S.C. [sections] 7607(b)(1) (1994), and the court's July 7, 1996 order retaining jurisdiction of the matter. Western States Petroleum Ass'n v. EPA, 87 F.3d 280, 283 (9th Cir. 1996).

(136) Western States, 87 F.3d at 283. This arbitrary and capricious standard is the same as the,judicial review standard of the Administrative Procedures Act (APA). Compare CAA, 42 U.S.C. [sections] 7607(d)(9)(A) (1994) ("In the case of review of any action of the Administrator ....the court may reverse any such action found to be--arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law....") with APA, 5 U.S.C. [sections] 706(2) (A) (1994) ("The reviewing court shall . . . hold unlawful and set aside agency action . . . found to be arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law. . . ."); see also Abramowitz v. EPA, 832 F.2d 1071, 1078 (9th Cir. 1987) (holding that EPA's decision to approve California's South Coast Air Basin ozone and carbon monoxide control measures exceeded its authority because the measures violated the CAA requirement that such measures provide for attainment of NAAQS); Ober v. EPA, 84 F.3d 304, 311 (9th Cir. 1996) (holding, in part, that EPA's approval of Arizona's SIP was in violation of the CAA and APA because Phoenix's inability to attain the annual PM-10 NAAQS did not relieve Arizona of the duty to independently examine and implement contra measures targeting the 24 hour standard NAAQS).

(137) Western States, 87 F.3d at 283; see Citizens for Clean Air v. EPA, 959 F.2d 839, 844, 847 (9th Cir. 1992) (holding that EPA's decision not to consider recycling as a possible best available control technology was entitled to deference as a reasonable interpretation of EPA regulations because it was not arbitrary or capricious).

(138) Western States, 87 F.3d at 283 (citing Oil, Chem. and Atomic Workers Int'l Union, Local 1-547 v. NLRB, 842 F.2d 1141, 1143 n.1 (9th Cir. 1988) (kidding in a challenge to the National labor Relations Board's interpretation of a no-strike clause that the court need not defer to the Board if the Board abuses its discretion by falling to follow its own standards)).

(139) See 59 Fed. Reg. 47,105 (Sept. 14, 1994) (proposing interim approval of Oregon's Title V program); 60 Fed Reg. 32,600, 32,604 (June 23, 1995) (noting final approval of San Francisco Bay Area Air Quality Management District Title V program).

(140) Western States, 87 F.3d at 285.

(141) On November 10, 1994, in granting final interim approval of Hawaii's Title V program, EPA stated that "significant activities need not be described on permit applications and are essentially exempt from part 70 permitting." Clean Air Act Final Interim Approval of Operating Permits Program; State of Hawaii, 59 Fed Reg. 61,549, 61,550 (December 1, 1994). On July 28, 1995, EPA granted final full approval of Ohio's Title V program Clean Air Act Final Full Approval of Operating Permits Program; Ohio, 60 Fed. Reg. 42,045 (August 15, 1995). Ohio's Title V regulations state that "the permit shall include all applicable requirements for all relevant emissions units . . . the term `relevant emissions units' shall mean only those emissions units that are subject to applicable requirements and that are not insignificant activities and emissions levels." Ohio Admin. Code [sections] 374-77-02(E)(1) (1996). On September 14, 1995, EPA proposed disapproval for Washington's IEU exemption from permit requirements. 60 Fed. Reg. 50,166 (Sept. 28, 1995). On the very next day, EPA granted final interim approval of Florida's Title V program 60 Fed Reg. 49,343 (Sept. 25, 1995) (changes required did not include subjecting IEUs to permit requirements). Florida's Title V regulations state that IEUs are "exempt from the permitting requirements." Fla. Admin. Code Ann. r. 62-210.300(3)(a) (1996). On November 2, 1995, EPA granted final interim approval of North Carolina's Title V program 60 Fed. Reg. 57,357 (November 15, 1995). North Carolina's Title V regulations clearly state that "[t]he permit shall not include insignificant activities." N.C. Admin. Code tit. 15A, r. 2Q.0508(aa) (July 1994). EPA also granted approval of the Massachusetts, Jefferson County, Kentucky, and North Dakota Title V programs exempting IEUs from permitting requirements. See 61 Fed. Reg. 3,827 (Feb. 2, 1996); 60 Fed. Reg. 58,033 (Nov. 24, 1995); 60 Fed. Reg. 35,335 (July 7, 1995).

(142) 60 Fed. Reg. 62,992, 62,995 (Dec. 8, 1995).

(143) Western States, 87 F.3d at 284; see also Brief for Respondents at 27, 29, Western States (No. 95-70034)

(144) California Trucking Ass'n v. ICC, 900 F.2d 208, 212 (9th Cir. 1990) (citing Montana Power Co. v. EPA, 608 F.2d 334, 347 (9th Cir. 1979)) (holding that a decision of the Interstate Commerce Commission (ICC) was not arbitrary and capricious because the deviation from prior standards was sufficiently explained).

(145) California Trucking Ass'n, 900 F.2d at 212 (citing NLRB v. Silver Bay Local Union No. 962, 498 F.2d 26, 29 (9th Cir. 1974)).

(146) Western States, 87 F.3d at 284.

(147) Id. (citing Flagstaff Med. Ctr., Inc. v. Sullivan, 962 F.2d 879, 886 (9th Cir. 1992) (concerning Department of Health and Human Services interpretation regarding free medical care to indigent people under the Hill-Burton Act)); see also Seldovia Native Ass'n v. Lujan, 904 F.2d 1335, 1345 (9th Cir. 1990) (noting that when agency reverses prior interpretation, its most recent interpretation is accorded less deference than is ordinarily extended and the agency must "provide a reasonable rationale supporting its departure from prior pratice"); Motor Vehicles Mfrs. Ass'n of the United States v. State Farm Mut. Auto Ins. Co., 463 U.S. 29, 42 (1983) (overturning an agency reversal because the agency had provided no explanation for its change in policy).

(148) Western States, 87 F.3d at 284-85 (citing Atchison, Topeka & Santa Fe Ry. Co. v. Wichita Bd. of Trade, 412 U.S. 800, 808 (1973) (holding, in a railroad rates case, that the Interstate Commerce Commission did not explain its apparent department from precedent in a manner sufficient to permit judicial review of its policies); Arizona Elec. Power Coop v. United States, 816 F.2d 1366, 1374 (9th Cir. 1987) (also involving railroad hauling rates)

(149) Western States, 87 F.3d at 285.

(150) 889 F.2d 292 (1st Cir. 1989) (holding that EPA's application of the prevention of significant deterioration (PSD) method of emissions measurement was not an improper or arbitrary interpretation that was inconsistent or contradictory to EPA's regulations).

(151) Id. at 299.

(152) Western States, 87 F.3d at 285.

(153) Puerto Rican Cement, 889 F.2d at 299 (quoting NLRB v. Sunnyland Packing Co., 557 F.2d 1157, 1160 (5th Cir. 1977) ("[O]ne swallow doesn't make a summer, and one inconsistent precedent does not entitle an agency litigant to demand that the [agency] ignore prior and subsequent holdings which have followed a uniform approach")).

(154) Western States, 87 F.3d at 285.

(155) EPA, White Paper Number 2, supra note 10.

(156) Id. at 1.

(157) Id. at 31; see also Intervenor State of Washington's Brief at 33, Western States (No. 9570034) ("With respect to monitoring, recordkeeping, and reporting requirements, EPA recognizes the permitting authority has broad discretion in determining the nature of such requirements.")

(158) EPA, White Paper Number 2, supra note 10, at 33. "Permitting authorities . . . have the best sense of which requirements qualify as generally applicable [and] where it is appropriate to conclude that periodic monitoring is not necessary for IEUs...." Id. at 33-34.

(159) Id. at 33.

(160) Western States, 87 F.3d at 285.

(161) Id. (citing Oil, Chem. And Atomic Workers Int'l Union, Local 1-547 v. NLRB, 842 F.2d 1141, 1143 n.1 (9th Cir. 1988)).

(162) Western States, 87 F.3d at 287.

(163) See Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 416 (1971) (holding that in reviewing agency action under the APA "[t]he court is not empowered to substitute its judgment for that of the agency."); Vermont Yankee Nuclear Power Corp. v. Natural Resources Defense Council, 435 U.S. 519, 524-25 (1978) (cautioning reviewing courts against engrafting their own notions of proper procedures upon agencies entrusted with substantive functions by Congress).

(164) 832 F.2d 1071, 1079 (9th Cir. 1987).

(165) Id. at 1078; see also Camp v. Pitts, 411 U.S. 138, 143 (1973) (remanding decision to Comptroller for an explanation following the agency's denial of a bank charter); Loma Linda Univ. v. Schweiker, 705 F.2d 1123, 1127 (9th Cir. 1983) (noting that the decision on hospital's billing status was remanded by the court to the Health Care Finance Agency for reconsideration).

(166) Abromowitz, 832 F.2d at 1079.

(167) See supra notes 92-96 and accompanying text.

(168) See supra notes 116-134 and accompanying text.

(169) Washington made this argument in its reply brief. See Intervenor State of Washington's Reply Brief at 3, Western States Petroleum Ass'n v. EPA, 87 F.3d 280 (9th Cir. 1996) (No. 95-70034).

(170) Clean Air Act Final Interim Approval of Operating Permits Program; Washington, 60 Fed. Reg. 62,992, 62,997 (Dec. 8, 1995).

(171) Intervenor State of Washington's Reply Brief at 3, Western States (No. 95-70034); see supra notes 63-64 and accompanying text.

(172) See supra note 10 and accompanying text; see supra notes 149-154 and accompanying text.

(173) EPA, Implementation Strategy for the Clean Air Act Amendments of 1990, at 10 (1991).

(174) Id.

(175) See Meade Emory & Lawrence Zelenak, The Tax Exempt Status of Communitarian Religious Organizations: An Unnecessary Controversy, 50 Fordham L. Rev. 1085, 1099 & n.95 (1982) ("The due process clause of the fifth amendment requires equal protection of the laws as applied by a federal agency."); see generally U.S. Const. amend V ("[N]or shall [any person] be deprived of life, liberty, or property, without due process of law.").

(176) 2 Kenneth Culp Davis & Richard J. Pierce, Jr., Administrative law Treatise 11.5, at 206 (3d ed. 1994).

(177) 4 Kenneth Culp Davis, Administrative Law Treatise [sections] 8:12, at 206 (2d ed. 1983).

(178) Id. at 208-09.

(179) 26 U.S.C. [sections] 6110(j)(3) (1994) ("Unless the Secretary otherwise establishes by regulations, a written determination may not be used or cited as precedent.").

(180) See supra notes 145-46 and accompanying text.

(181) See Wash Rev. Code [subsections] 34.05.310-34.05.395 (1996) (Washington procedural and rulemaking requirements). See also 5 U.S.C. [sections] 553 (1994) (APA rulemaking procedures).

(182) See supra note 107-08 and accompanying text.

(183) See Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 843 (1984) (discussing the appropriate deference to be given to agencies decisions).

(184) 42 U.S.C. [sections] 7401(c) (1994).

Todd B. Westersund, Ninth Circuit Review Editor, Environmental Law, 1997-98; student, Northwestern School of Law of Lewis & Clark College, J.D. expected 1998; B.S. Chemical Engineering 1989, Cornell University. The author wishes to thank Professor Ed Brunet, Svend Brandt-Erichsen, and Katy Westersund for their invaluable assistance with this Chapter.