10th Circuit affirms EPA’s SIP authority
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August 09, 2012
10th Circuit affirms EPA’s SIP authority

In an opinion, the U.S. Court of Appeals for the 10th Circuit reinforced EPA’s authority to influence the contents of Clean Air Act (CAA) state implementation plans (SIPs) by denying a petition that argued that the Agency’s disapproval of a SIP was illegal because the SIP did not cause a violation of a national ambient air quality standard (NAAQS).

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Unavoidable breakdown rule

The case centers on Utah’s unavoidable breakdown rule (UBR), which permits operators of CAA-regulated facilities to avoid enforcement when they suffer an unexpected and unavoidable equipment malfunction. The state’s UBR has been in existence since 1980. However, in 1999 and 2001, the EPA issued two memoranda explaining the Agency’s belief that any exceedance of a CAA emissions limit was a violation of the Act. Because the effect of the UBR is to not treat such exceedances as violations, the EPA concluded that the UBR caused Utah’s SIP to be “substantially inadequate.”

Definition of a violation

The SIP disapproval was appealed by US Magnesium. The company argued that EPA’s disapproval was invalid because the EPA failed to set out facts showing that the UBR has prevented Utah from attaining or maintaining the NAAQS or otherwise complying with the CAA. The EPA responded that it has the authority to disapprove a SIP that undermined the fundamental integrity of the CAA’s SIP process and structure, regardless of whether the EPA could point to fact-based instances where the SIP allowed an area to be in nonattainment with the NAAQS.

The 10th Circuit found that the CAA is ambiguous on the need for facts in such cases. In instances where such ambiguity is found, the U.S. Supreme Court has concluded that the courts must rely on the expertise of the federal regulatory body. The 10th Circuit used this legal precedent as its basis for asserting that the EPA was not required to establish a factual basis (i.e., NAAQS nonattainment) for its conclusion that the UBR caused Utah’s SIP to be substantially inadequate. The 10th Circuit therefore rejected this part of US Magnesium’s argument.

Memos as rules?

The plaintiffs also contended that the EPA unlawfully elevated its 1999 and 2001 memos to the status of rules because the memos were never opened by the Agency to public comment. The EPA responded that the two memos were simply policy statements that explained EPA’s understanding of the CAA. The Agency explained that it did not rely on the memos as rules of law in their own right.

Again, the 10th Circuit agreed with the EPA. “As noted in the [SIP disapproval] discussion, the EPA clearly explained its reasoning in determining that the UBR did not comport with the EPA’s understanding of the CAA requirements,” stated the 9th Circuit. “The EPA’s references to its policy statements do not vitiate this explanation.”

The 10th Circuit’s opinion in US Magnesium v. EPA is at http://www.ca10.uscourts.gov/opinions/11/11-9533.pdf.

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