National Parks Conservation Ass'n v. McCarthy , 811 F.3d 1005 ( 2016 )

United States Court of Appeals
For the Eighth Circuit
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No. 12-2910
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National Parks Conservation Association; Voyageurs National Park Association;
Friends of the Boundary Waters Wilderness; Sierra Club; Minnesota Center for
Environmental Advocacy; Fresh Energy
lllllllllllllllllllllPetitioners
v.
Gina McCarthy, Administrator, United States Environmental Protection Agency;
United States Environmental Protection Agency
lllllllllllllllllllllRespondents
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No. 12-3481
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National Parks Conservation Association; Voyageurs National Park Association;
Friends of the Boundary Waters Wilderness; Sierra Club; Minnesota Center for
Environmental Advocacy; Fresh Energy
lllllllllllllllllllllPetitioners
v.
Gina McCarthy, Administrator, United States Environmental Protection Agency;
United States Environmental Protection Agency
lllllllllllllllllllllRespondents
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Petition for Review of an Order of the
Environmental Protection Administration
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Submitted: September 23, 2015
Filed: January 21, 2016
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Before RILEY, Chief Judge, BYE and BENTON, Circuit Judges.
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BENTON, Circuit Judge.
On June 12, 2012, EPA approved the Minnesota Regional Haze State
Implementation Plan. Six conservation organizations1 petition for review of the Plan.
Having jurisdiction under 42 U.S.C. § 7607(b)(1), this court denies the petition.
I.
A.
A national goal is natural visibility in “mandatory class I Federal areas.” 42
U.S.C. § 7491(a)(1). States must revise their environmental plans to include
“measures as may be necessary” for reasonable progress toward the national goal.
§ 7491(b)(2). Some major stationary facilities that emit “any air pollutant which may
reasonably be anticipated to cause or contribute to any impairment of visibility in
[class I Federal areas]” must install and operate the best available retrofit technology
(“BART”). § 7491(b)(2)(A).
1
National Parks Conservation Association, Voyageurs National Park
Association, Friends of the Boundary Waters Wilderness, Sierra Club, Minnesota
Center for Environmental Advocacy, and Fresh Energy.
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BART is “an emission limitation based on the degree of reduction achievable
through the application of the best system of continuous emission reduction for each
pollutant which is emitted by an existing stationary facility.” 40 C.F.R. § 51.301.
When implementing BART, the state must consider five statutory factors: “the costs
of compliance, the energy and nonair quality environmental impacts of compliance,
any existing pollution control technology in use at the source, the remaining useful
life of the source, and the degree of improvement in visibility” from BART. 42
U.S.C. § 7491(g)(2).
In 1999, EPA offered an alternative to BART if “the State demonstrates that
an emissions trading program or other alternative will achieve greater reasonable
progress toward natural visibility conditions.” Regional Haze Regulations, 64 Fed.
Reg. 35,714, 35,767 (July 1, 1999). See also 40 C.F.R. § 51.308(e)(2). For BART
alternatives, a state must submit a “demonstration that the emissions trading program
or other alternative measure will achieve greater reasonable progress than would have
resulted from the installation and operation of BART at all sources subject to BART
in the State.” § 51.308(e)(2)(i). The demonstration includes several steps.
§ 51.308(e)(2)(i)(A)-(E). A state may satisfy the final step of the demonstration by
meeting two criteria: “(i) Visibility does not decline in any Class I area, and
(ii) There is an overall improvement in visibility, determined by comparing the
average differences between BART and the alternative over all affected Class I
areas.” § 51.308(e)(3) (emphasis added).
On June 7, 2012, EPA determined that the Transport Rule—also known as the
Cross-State Air Pollution Rule (“CSAPR”)—is “better than BART.” Regional Haze:
Alternatives to Source-Specific Best Available Retrofit Technology (BART)
Determinations, 77 Fed. Reg. 33,642, 33,648 (June 7, 2012) (Better than BART
Rule). According to EPA, the Transport Rule achieves “greater reasonable progress
towards the national goal of achieving natural visibility conditions in Class I areas
than source-specific Best Available Retrofit Technology (BART) in those states
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covered by the Transport Rule.” Id. at 33,643. States subject to the Transport Rule
may use its emissions-trading program instead of source-specific BART. 40 C.F.R.
§ 51.308(e)(4). See EPA v. EME Homer City Generation, L.P., 134 S. Ct. 1584,
1610 (2014), approving 76 Fed. Reg. 48,208 (Aug. 8, 2011) (Transport Rule).
In addition to BART requirements, a state must propose a long-term strategy
plan for regional haze, including “enforceable emissions limitations, compliance
schedules, and other measures as necessary to achieve the reasonable progress goals
established by States having mandatory Class I Federal areas.” 40 C.F.R.
§ 51.308(d)(3). States must “establish goals . . . that provide for reasonable progress
towards achieving natural visibility conditions” at Class I areas. § 51.308(d)(1). In
establishing such goals, a state must consider four factors: “the costs of compliance,
the time necessary for compliance, the energy and non-air quality environmental
impacts of compliance, and the remaining useful life of any potentially affected
sources, and include a demonstration showing how these factors were taken into
consideration in selecting the goal.” § 51.308(d)(1)(i)(A). The state must also
“[a]nalyze and determine the rate of progress needed to attain natural visibility
conditions by the year 2064.” § 51.308(d)(1)(i)(B).
“If the state’s reasonable progress goals provide for a slower rate of
improvement than necessary to achieve natural visibility conditions by 2064, the state
must demonstrate ‘that the rate of progress for the implementation plan to attain
natural conditions by 2064 is not reasonable; and that the progress goal adopted by
the state is reasonable.’” North Dakota v. EPA, 730 F.3d 750, 756 (8th Cir. 2013),
quoting 40 C.F.R. § 51.308(d)(1)(ii). “The reasonable progress goals established by
the State are not directly enforceable but will be considered by the Administrator in
evaluating the adequacy of the measures in the implementation plan to achieve the
progress goal adopted by the State.” 40 C.F.R. § 51.308(d)(1)(v).
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B.
Minnesota has two Class I federal areas: the Boundary Waters Canoe Area
Wilderness and Voyageurs National Park. Proposed Rule; Minnesota; Regional
Haze, 77 Fed. Reg. 3,681, 3,686 (Jan. 25, 2012). Minnesota has five electric-
generating units (EGUs) subject to BART that pollute these Class I areas (and also
affect the visibility in Isle Royale National Park in Michigan). Id. at 3,686, 3,688.
For these EGUs, Minnesota proposed using the Transport Rule rather than source-
specific BART. Id. at 3,691. Days after EPA determined that the Transport Rule was
“better than BART,” EPA approved the Minnesota Plan, stating that “it is acceptable
for Minnesota to substitute participation in the [Transport Rule] trading programs for
source-specific BART.” Approval and Promulgation of Air Quality
Implementation Plans; Minnesota; Regional Haze, 77 Fed. Reg. 34,801, 34,803
(June 12, 2012).
EPA also approved Minnesota’s reasonable-progress goals to “attain natural
visibility conditions in Boundary Waters in 2093 and in Voyageurs in 2177.” Id.
Minnesota must review and reassess these reasonable-progress goals and its Plan “by
July 31, 2018 and every ten years thereafter.” 40 C.F.R. § 51.308(f).
The conservation organizations challenge EPA’s approval of Minnesota’s
decision to use the Transport Rule in place of source-specific BART, and
Minnesota’s reasonable-progress goals.
II.
The conservation organizations petition for review under 42 U.S.C.
§ 7607(b)(1). Neither side disputes this court’s jurisdiction to consider the
reasonable-progress goals in the Plan. EPA, however, asserts that its approval of the
Plan based on the Transport Rule is a nationally-applicable action that must be
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reviewed in the D.C. Circuit. The conservation organizations counter that EPA’s
approval of the Plan—including Minnesota’s reliance on the Transport Rule—is a
local or regional action that must be reviewed by this court.
Section 7607(b)(1) has three parts. First, only the D.C. Circuit may review a
petition for review of “nationally applicable regulations promulgated, or final action
taken, by the Administrator under this chapter.” 42 U.S.C. § 7607(b)(1). Second,
only an appropriate circuit court of appeals may review a “petition for review of the
Administrator’s action . . . which is locally or regionally applicable.” Id. This
includes petitions for review of the “Administrator’s action in approving or
promulgating any implementation plan under section 7410.” Id. However, for a
“locally or regionally applicable” action, only the D.C. Circuit may review the
petition “if such action is based on a determination of nationwide scope or effect and
if in taking such action the Administrator finds and publishes that such action is based
on such a determination.” Id. See Lion Oil Co. v. EPA, 792 F.3d 978, 982 (8th Cir.
2015) (holding this court had jurisdiction to hear a locally or regionally applicable
action because EPA did not publish a finding of nationwide scope or effect).
Section 7607(b)(1) thus has two routes for review in the D.C. Circuit. Am. Rd.
& Transp. Builders Ass’n v. EPA, 705 F.3d 453, 455 (D.C. Cir. 2013). First, “EPA’s
regulations may themselves be nationally applicable,” and second, “EPA may
determine that the otherwise locally or regionally applicable regulations have a
nationwide scope or effect” then find and publish the determination. Id. EPA’s
“‘action in approving or promulgating any implementation plan’ is the prototypical
‘locally or regionally applicable’ action that may be challenged only in the
appropriate regional court of appeals.” Id. See also ATK Launch Sys., Inc. v. EPA,
651 F.3d 1194, 1199 (10th Cir. 2011) (describing an action challenging a state plan
as a “purely local action” and “an undisputably regional action”). EPA has not found
and published a determination of nationwide scope or effect for the Minnesota Plan;
therefore, the D.C. Circuit has jurisdiction of this case only if EPA’s action is
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“nationally applicable.” The Minnesota Plan is a “prototypical ‘locally or regionally
applicable’ action” that must be challenged in the regional court of appeals. See Am.
Rd. & Transp. Builders, 705 F.3d at 455.
True, the Third Circuit has ruled that it has no jurisdiction of a challenge to
“the Transport Rule or Pennsylvania’s reliance on it.” Nat’l Parks Conservation
Ass’n v. EPA, 803 F.3d 151, 160 (3d Cir. 2015) (emphasis added). More instructive
is the Seventh Circuit’s Madison Gas case. Madison Gas challenged “an element of
a national program,” a program that involved “allocating allowances to all the
electrical generating plants in the nation, and all the allocations [were] listed . . . in
a single table in the regulations.” Madison Gas & Electric Co. v. EPA, 4 F.3d 529,
530-31 (7th Cir. 1993). The challenge was “based upon an entirely local factor,”
specifically “that the allowances [were] based on an incorrect determination of
Madison’s generating capacity.” Id. The Seventh Circuit noted that the petition “if
successful will have no impact on the overall program except insofar as the award of
additional allowances might pierce the national ceiling.” Id. at 531. Because this
was “too speculative to warrant forcing the case into the D.C. Circuit,” the Seventh
Circuit had jurisdiction of the petition for review. Id.
As in Madison Gas, the conservation organizations here challenge “an element
of a national program . . . based upon an entirely local factor”: whether the Transport
Rule as applied to the five EGUs in the Minnesota Plan is “better than BART.” See
also United States v. Cinergy Corp., 458 F.3d 705, 707 (7th Cir. 2006) (finding
jurisdiction of a challenge because the “validity of the regulation is not in issue, just
its meaning”); Texas v. EPA, 2011 WL 710598, at *3 (5th Cir. Feb. 24, 2011)
(unpublished order) (“Determining whether an action by the EPA is regional or local
on the one hand or national on the other should depend on the location of the persons
or enterprises that the action regulates rather than on where the effects of the action
are felt.”) (emphasis added). This court has jurisdiction to consider a petition for
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review of the Minnesota Plan, including the claim that EPA’s approval of the
Transport Rule for the five EGUs is “arbitrary or capricious.”
III.
This court sets aside EPA’s action if it is “arbitrary, capricious, an abuse of
discretion, or otherwise not in accordance with law.” Sierra Club v. EPA, 252 F.3d
943, 947 (8th Cir. 2001), quoting 5 U.S.C. § 706(2)(A). “An agency decision is
arbitrary or capricious if: the agency has relied on factors which Congress has not
intended it to consider, entirely failed to consider an important aspect of the problem,
offered an explanation for its decision that runs counter to the evidence before the
agency, or is so implausible that it could not be ascribed to a difference in view or the
product of agency expertise.” Lion Oil, 792 F.3d at 982. Under this narrow standard,
“a court is not to substitute its judgment for that of the agency,” yet “the agency must
examine the relevant data and articulate a satisfactory explanation for its action
including a ‘rational connection between the facts found and the choice made.’”
Motor Vehicle Mfrs. Ass’n of U.S., Inc. v. State Farm Mut. Auto Ins. Co., 463 U.S.
29, 43 (1983), quoting Burlington Truck Lines v. U.S., 371 U.S. 156, 168 (1962).
“If an agency’s determination is supportable on any rational basis, [a court] must
uphold it,” especially “when an agency is acting within its own sphere of expertise.”
Voyageurs Nat’l Park Ass’n v. Norton, 381 F.3d 759, 763 (8th Cir. 2004).
A.
The conservation organizations attack EPA’s approval of the Minnesota Plan,
claiming the Transport Rule allowances in the Plan are not “better than BART.”
Minnesota proposed to use the Transport Rule instead of BART for five EGUs.
77 Fed. Reg. at 3,689. EPA conducted “a technical analysis . . . to determine whether
compliance with the Transport Rule would satisfy the requirements of the [Regional
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Haze Rule] addressing alternatives to BART.” Id. at 3,683. Approving the
Minnesota Plan, EPA relied on two national rulings. See 76 Fed. Reg. 48,208 (Aug.
8, 2011) (Transport Rule); 77 Fed. Reg. 33,642 (June 7, 2012) (Better than BART
Rule). A state subject to the Transport Rule “need not require BART.” 40 C.F.R.
§ 51.308(e)(4) (codifying the two rulings). EPA decided that Minnesota properly
exercised its discretion as a Transport Rule state by using it for the five EGUs. 77
Fed. Reg. at 34,801-802. It concluded that Minnesota’s “compliance with the
Transport Rule will provide for greater reasonable progress toward improving
visibility than source-specific BART controls for EGUs.” 77 Fed. Reg. at 3,683. In
its final approval, EPA reiterated that the Transport Rule is “an alternative program
to source-specific BART for EGUs” and referred to the analysis in the Better than
BART Rule. 77 Fed. Reg. at 34,804.
True, evidence in the record indicates that source-specific BART may achieve
better results in Minnesota. The Forest Service was “concerned that the inclusion of
Minnesota in the Cross-State Air Pollution Rule (CSAPR) would likely mean that the
air pollution control equipment proposed for Minnesota power plants under BART,
such as [the largest power plant], would not be installed. . . . It appears that CSAPR
will not drive any emission reductions in Minnesota. Based on the spreadsheet from
EPA’s website . . . , the current emissions for Minnesota are already very close to its
2014 emission budgets under CSAPR.” (Emphasis added). The Forest Service later
emphasized, “For Minnesota we find CSAPR is more lenient than both your original,
and our recommended lower emitting, source-specific BART limits. It is clear that
the source-specific BART limits provide the greatest visibility improvement and
request that you use the values the EPA and FLMs proposed.”
However, EPA’s explanation that the Transport Rule is better than source-
specific BART is rational. Minnesota’s Transport Rule allowances are 41,981 tons
of SO2 and 29,572 tons of NOx. 76 Fed. Reg. at 48,261. Under BART, EPA
projected emissions from Minnesota EGUs in 2014 as 52,075 tons of SO2 and 29,875
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tons of NOx. Technical Support Attachment to Comments of Conservation
Organizations—Minnesota Regional Haze SIP Approval 11, 17 (Feb. 21, 2012)
(based on the EPA’s National BART 2014 spreadsheet). These emission projections
indicate that the Transport Rule is better than BART. The conservation organizations
disagree with EPA’s projected emissions under BART. Id. The EPA rejected the
conservation organizations’ numbers, referring to its analysis in the Transport Rule.
77 Fed. Reg. at 34,801-802. The EPA is acting within its sphere of expertise and its
determination here is supportable on a rational basis.
The Transport Rule seeks to achieve greater, overall reasonable progress
towards improving visibility than source-specific BART. The D.C. Circuit has
rejected the claim “that the Clean Air Act requires EPA to ensure that any BART-
alternative improves visibility at least as much as BART at every Class I area and in
all categories of days.” Utility Air Regulatory Group v. EPA, 471 F.3d 1333, 1340
(D.C. Cir. 2006) (analyzing the Transport Rule’s predecessor—the Clean Air
Interstate Rule). Here, Minnesota chose to use the Transport Rule, which EPA
determined will achieve greater overall reasonable progress than source-specific
BART. “Maybe time will prove [petitioner] right on some of these fronts; maybe not.
But arbitrary and capricious review does not ask who is right. It asks whether the
EPA followed a defensible process in assessing who is right.” St. Mary’s Cement,
Inc. v. EPA, 782 F.3d 280, 286 (6th Cir. 2015). EPA did not rely on factors that
Congress did not intend it to consider, did not entirely fail to consider an important
aspect of the problem, and did not offer an explanation that runs counter to the
evidence before the agency.
EPA’s approval of Minnesota’s reliance on the Transport Rule was not
arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.
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B.
The conservation organizations also seek review of the reasonable-progress
goals in the Minnesota Plan.
EPA approved the reasonable-progress goals in the Plan, finding Minnesota
had demonstrated it was not reasonable to meet the 2064 target for the first
implementation period. 77 Fed. Reg. at 34,803. Although the goals do not meet the
2064 target for natural visibility conditions, this does not mean EPA arbitrarily
approved Minnesota’s demonstration.
Approving the Plan, EPA explained that the “state followed the proper
approach in setting its [reasonable-progress goals] through 2018” by considering the
four factors in the regulations. Id. Minnesota considered “the costs of compliance,
the time needed for compliance, the energy and non-air quality environmental
impacts, and the remaining useful life of the facility.” Id. EPA noted that the
“visibility improvement at issue here is the visibility improvement for the first
implementation period, which extends until July 31, 2018.” Id. Much of the
pollution affecting Voyageurs and Boundary Waters is not within Minnesota’s
control; “Minnesota focused on the emissions it can control.” 77 Fed. Reg. at 3,690.
Minnesota’s contribution to light extinction for Boundary Waters is 28% and for
Voyageurs, 31%. Minnesota Pollution Control Agency, Regional Haze State
Implementation Plan 84 (Dec. 2009).
EPA determined that Minnesota adequately demonstrated—given the
uncontrollable causes and the weighing of the four prescribed factors—that its
progress goals are reasonable. 77 Fed. Reg. at 34,803. Just as in the North Dakota
case, “EPA’s determination on this matter is entitled to judicial deference, as it
involves ‘technical matters within its area of expertise.’” North Dakota, 730 F.3d at
766. North Dakota there determined that a large power plant did not need additional
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pollution control technologies in order to achieve reasonable progress. Id. at 764.
EPA disapproved this determination, “concluding that the decision not to install
additional controls was unreasonable in light of the State’s admission that it could not
meet the uniform rate of progress to restore natural visibility . . . by 2064.” Id. at 765.
On petition for review, this court concluded that EPA’s disapproval was not arbitrary
or capricious because EPA “demonstrated that the visibility model used by the State
[in evaluating the need of additional controls at the power plant] would serve . . . to
maintain current degraded conditions” Id. at 766.
Similar to the North Dakota case, the conservation organizations stress that
EPA erred by approving reasonable-progress determinations that did not include
additional controls at two large Minnesota EGUs. Unlike in North Dakota, EPA has
set forth plans to address the pollution emitted from one of the two EGUs. That EGU
is a source of RAVI (“reasonably attributable visibility impairment” directly from a
single source or a small number of sources). See 40 C.F.R. § 51.301. “EPA intends
to act on RAVI BART in a separate action” for this facility. 77 Fed. Reg. at 34,806,
34,804. In approving Minnesota’s reasonable-progress goals, EPA considered that
additional controls may be needed at the facility and committed to a regulatory
process that will result in a plan to address those controls. For the second EGU, EPA
determined that Minnesota properly relied on Transport Rule allowances in place of
BART. 77 Fed. Reg. at 34,803. EPA’s approval of the Plan articulates a “rational
connection between the facts found and the choice made.” Motor Vehicle Mfrs.
Ass’n, 463 U.S. at 43.
Because EPA acted rationally within its sphere of expertise, the conservation
organizations’ petition for review of the Minnesota Haze Plan’s reasonable-progress
goals is denied.
*******
Petition for review is denied.
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BYE, Circuit Judge, concurring in the result.
To the extent the six conservation organizations involved in this petition for
review contend the Transport Rule is not better than source-specific BART with
respect to Minnesota's Regional Haze State Implementation Plan, I find this case
indistinguishable from the contentions advanced by the conservation groups who
challenged Pennsylvania's Plan in National Parks Conservation Ass'n v. United States
Environmental Protection Agency, 803 F.3d 151 (3d Cir. 2015). I also believe the
Third Circuit's jurisdictional analysis is correct. Thus, to the extent the conservation
organizations claim source-specific BART is better than the Transport Rule as
applied to Minnesota's Plan, I conclude we lack jurisdiction. In all other respects, I
agree with my colleagues that the EPA acted rationally in approving Minnesota's
Plan, and thus concur in the result.
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