By Deborah Quick

How much discretion does the U.S. Environmental Protection Agency (EPA) wield when promulgating (non)attainment status for sub-state geographic areas under the federal Clean Air Act (42 U.S.C. § 7401 et seq., (CAA))?  Texas argued that EPA lacked discretion to alter its proposed designation of Bexar County as compliant with, i.e., in attainment, CAA ozone standards, because Texas submitted modeling demonstrating that the County would cure it current non-compliance within the five-year compliance period. The Fifth Circuit Court of Appeals disagreed. [State of Texas v. U.S. Environmental Protection Agency, ___F.3d___, Case No. 18-60606 (5th Cir. Dec. 23, 2020).]

Background

In 2015, EPA promulgated updated the National Ambient Air Quality Standard (NAAQS) for ozone from 0.075 parts per million (ppm) to 07 ppm as a result of the required five-year review of NAAQS. 42 U.S.C. § 7409(d)(1). The states were thereafter required to submit to EPA a list of all areas or portions thereof in the state, designating each area as nonattainment, attainment, or unclassifiable. See: Am. Trucking Ass’n v. EPA, 283 F.3d 355, 3580359 (D.C. Cir. 2002), 42 U.S.C. § 7407(d)(1)(A). The EPA Administrator then must “promulgate” the designations submitted by the states, “mak[ing] such modifications as the Administrator deems necessary to the [states’] designations of the areas.” 42 U.S.C. § 7407(d)(1)(B)(ii).

An area meeting the NAAQS is designated as “attainment” (42 U.S.C. § 7407(d)(1)(A)(ii)), while an area that “cannot be classified on the basis of available information as meeting or not meeting the [NAAQS] for the pollutant” is designated unclassifiable. 42 U.S.C. § 7407(d)(1)(A)(iii).

An area is designated nonattainment if it:

. . .does not meet (or. . .contributes to ambient air quality in a nearby area that does not meet) the national primary or secondary ambient air quality standard for the pollutant. 42 U.S.C. § 7407(d)(1)(A)(i).

Nonattainment areas are further classified as marginal, moderate, serious, severe, or extreme, depending on the severity of air pollution. See, 40 C.F.R. § 51.1303 (2018). The higher a county’s nonattainment classification, the more stringent the air planning requirements are to bring the county back into compliance. 42 U.S.C. §§ 7511, 7511a.

Texas’ 2018 submission to EPA designated Bexar County as nonattainment for ozone, based on certified monitoring results for 2013-2015 of 0.78 ppm. However, one-year later, Texas asked EPA to allow the state more time to show that additional data and considerations warranted an attainment designation for Bexar County. In 2018, Texas asserted to the Administrator that Bexar County qualified for an attainment designation as the state’s modeling “projected” that the county would “satisfy the 2015 NAAQS by 2020, and that projected compliance is sufficient to support an attainment designation.”

The EPA Administrator did not agree, and following a notice and comment period EPA designated Bexar County as a marginal nonattainment area “based on air quality monitoring from the 3 most recent years of certified data, which are 2015-2017.”

The Fifth Circuit’s Decision

Does EPA Have the Power to Change a State’s Proposed Designation?

Texas’ petition challenging the nonattainment designation of Bexar County argued that EPA lacks discretion to change a state’s proposed designation unless the change is “necessary,” i.e., “meaning that it is unavoidable and must be done.” Applying Chevron deference, the Fifth Circuit disagreed. BCCA Appeal Grp. v. EPA, 355 F.3d 817, 824 (5th Cir. 2003), citing Chevron U.S.A., Inc. v. NRDC, 467 U.S. 837, 842–43 (1984).

Asking first “‘whether Congress has directly spoken to the precise question at issue’ or whether, instead, the statute is ambiguous” (Exelon Wind 1, L.L.C. v. Nelson, 766 F.3d 380, 392 n.10 (5th Cir. 2014)), the Court of Appeals concluded that “‘Congress has spoken directly to the’ question of when EPA may modify a state’s proposed attainment designation.” Chevron, 467 U.S. at 842-843. While Texas focused on 42 U.S.C. § 7407(d)(1)(B)(ii)’s use of the word “necessary,” the court placed that word in the context of the subsection, which provides that the Administration may “make such modifications as the Administrator deems necessary to the [states’] designations of the areas.” (Emphasis added.)

If we were looking at the word “necessary” in isolation, we might agree with Texas. However, the word does not exist in a vacuum. It is part of a larger scheme, one which grants discretion to the Administrator to make modifications that it “deems necessary.” If Congress had said instead that the Administrator may only make changes “when necessary,” Texas’s argument might have more merit. Because the statute says that the Administrator “may” make changes that it “deems necessary,” however, it is clear that Congress has delegated discretionary authority to EPA to determine when adjustments should be made.

Under Chevron’s second step, the court asked “whether EPA’s construction of the statute is permissible.” EPA’s regulations provide that a state’s proposed designation may be changed when it is “inconsistent with the statutory language.” 83 Fed. Reg. at 31,138/1:

Thus, ‘any area that does not meet the [NAAQS]’ must be designated ‘nonattainment,’ even if the state initially designated it as ‘attainment.’ 42 U.S.C. § 7407(d)(1)(A).

Claim of Arbitrary and Capricious Conduct by the Administrator

Texas also argued that the Administrator acted arbitrarily and capriciously in ignoring Texas’ reliance on modeling showing that Bexar County would reach attainment by 2020 (i.e., the close of the five-year period during which the 0.07 ppm NAAQS would be in effect). Texas relied on a Dictionary Act provision providing that “unless the context indicates otherwise … words used in the present tense include the future as well as the present.” 1 U.S.C. § 1.

According to Texas, this means that when 42 U.S.C. § 7407(d)(1)(A)(i) says that any county that ‘does not meet’ the NAAQS should be designated nonattainment, what the statute really means is that any county that ‘does not [now, and will not in the future,] meet’ the NAAQS should be designated nonattainment.

The Court of Appeals was not persuaded. “The future-tense presumption applies only where context does not indicate otherwise.” Here, the CAA states an area must be designated nonattainment if it “does not meet” the NAAQS. 42 U.S.C. § 7407(d)(1)(A)(i):

An area designated as ‘marginal’ nonattainment (such as Bexar County) must then meet the NAAQS within three years. 42 U.S.C. § 7511(a)(1); 40 C.F.R. § 51.1303 (2018). It would be contradictory for EPA to require marginal nonattainment areas to comply within three years if projected compliance within three years triggered an attainment designation.

Conclusion and Implications

The Fifth Circuit’s straightforward application of Chevron analysis to the statutory language was likely buttressed by more recent monitoring data showing that Bexar County had not achieved compliance with the ozone NAAQS, contrary to what Texas’ modeling had predicted. The court’s opinion is available online at: http://blogs.edf.org/climate411/files/2020/12/18-60606-Opinion.pdf