El Comité Para El Bienestar de Earlimart, along with a coalition of community organizations (collectively El Comité),[1] filed suit in federal district court against California state officials, alleging California violated the terms of a state implementation plan (SIP) created pursuant to the Clean Air Act (CAA).[2] El Comité also challenged California’s methodology in calculating a baseline inventory of pesticides. The district court concluded it did not have jurisdiction to review the methodology California used to calculate the baseline for emissions standards, but ordered relief for El Comité on the basis that California did not adhere to the SIP approved by the United States Environmental Protection Agency (EPA). On appeal, the Ninth Circuit reversed the decision of the district court and held the district court did not have jurisdiction to order a remedy for El Comité because EPA did not integrate the disputed requirements into the final SIP and the case did not involve the enforcement of an “emission standard or limitation.”[3]

Under the CAA, states are required to submit a SIP to EPA that outlines how the state will attain the National Ambient Air Quality Standards (NAAQS) established by EPA for certain air pollutants.[4] The provisions in the SIP for nonattainment areas[5] must contain enforceable limitations on emissions, as well as a schedule and timetable for compliance.[6] In 1994, after EPA threatened to take control of California’s air quality planning, the California Air Resources Board (CARB) submitted a SIP to EPA for approval. The SIP contained a section known as the Pesticide Element, which included strategies for reducing certain smog-producing emissions from agricultural and commercial structural pesticides. In response to the SIP, the Director of EPA’s Region Nine Air Division, David Howekamp, expressed concern over the lack of specific emission reduction goals for nonattainment areas and suggested the SIP include a deadline that would require California to adopt new emissions regulations by June 15, 1997. In response, California transmitted a “clarification” for the Pesticide Element that stated California’s commitment to adopt and submit to EPA by June 15, 1997, any regulations necessary to achieve the emissions regulations from pesticides, as specified in an attached letter (the Wells Memorandum). The Wells Memorandum, which came from the director of the California Department of Pesticide Regulation, included a table with interim reduction goals for each area not in attainment with the NAAQS.

In issuing the notice of proposed rulemaking, EPA included the Wells Memorandum to provide clarification on the Pesticide Element’s technical details. Additionally, EPA indicated the Wells Memorandum was part of the SIP. Prior to publication of the final rule, but after the public comment period closed, CARB sent a letter asking EPA to delete the table of interim reduction goals from the Wells Memorandum and the SIP. EPA removed the table, which “effectively erased any record indicating the interim target reductions for the nonattainment areas,” and approved the SIP.[7] By the time of the June 1997 deadline, California decided not to promulgate additional regulations. Subsequently, El Comité filed a citizen suit under section 304 of the CAA to enforce the SIP, alleging California violated an emissions standard by failing to adopt regulations by June 15, 1997, to reduce pesticide-related emissions in nonattainment areas. As a second cause of action, El Comité claimed California violated an emission standard or limitation by manipulating the baseline calculation for the pesticide emissions to avoid an obligation to adopt new regulations.

The district court granted summary judgment for El Comité on the first count, holding California failed to adopt regulations by the 1997 deadline.[8] On the second count, the district court granted summary judgment in favor of California after concluding the court did not have jurisdiction to review the baseline calculation claim. Nevertheless, the court declared California violated the CAA and the SIP by failing to adopt enforceable control measures and by altering the method for calculating the baseline. Additionally, the district court ordered California to submit regulations to EPA to implement the emission reductions goals outlined in the Wells Memorandum. California appealed the grant of summary judgment in favor of El Comité and the remedy order.

The Ninth Circuit reviews questions of regulatory interpretation and administrative law de novo.[9] In examining the scope of the SIP, the Ninth Circuit concluded California was not in violation of the SIP because EPA did not include the table of interim requirements from the Wells Memorandum in the final SIP. In reaching its conclusion, the court initially noted the persuasiveness of California’s argument that the district court erred in ignoring 40 C.F.R. § 52.220,[10] which catalogs approved revisions to the California SIP, but contains no reference to the Wells Memorandum.[11]

The Ninth Circuit examined the two sources of evidence relied upon by the district court: language from the final rule’s preamble and a declaration filed by Howekamp in response to the litigation. With regard to the preamble, the court first outlined rules of statutory construction that indicated the “preamble language should not be considered unless the regulation itself is ambiguous.”[12] The Ninth Circuit reasoned that El Comité’s reliance on the original mention of the Wells Memorandum in the proposed rule stretched beyond the plain meaning of the final rule, which made no reference to the Wells Memorandum.

The Ninth Circuit further rejected El Comité’s argument that EPA acted improperly in revising the SIP in response to California’s request, which came after the close of the comment period. While recognizing El Comité’s assertion as a “quintessential administrative challenge”[13] that could be brought in a petition to review EPA’s rulemaking process under section 7607(b)(1), the Ninth Circuit concluded the court did not have jurisdiction to review the claim in the present case because El Comité instead filed its case under section 304, the citizen suit provision of the CAA.

Next, the Ninth Circuit turned to Howekamp’s declaration. Concluding the declaration was offered “some years after the fact” by Howekamp, a former employee, the court determined there was no need to consider the statement because it could not trump the plain language in the regulation and Federal Register.[14] Accordingly, the Ninth Circuit held the district court erred in concluding the Wells Memorandum was included in the SIP.

Finally, the Ninth Circuit determined the court did not have jurisdiction to review California’s method for calculating the emission baseline because the methodology was not “an emission standard or limitation” subject to challenge under the CAA.[15] Consequently, “neither the baseline nor the methodology qualify as independently enforceable aspects of the SIP.”[16] Having held that neither the Wells Memorandum nor the baseline data provided enforceable emissions standards or limitations, the Ninth Circuit concluded the district court improperly awarded relief to El Comité.

In sum, the Ninth Circuit held California did not violate the terms of the SIP because the interim requirements listed in the Wells Memorandum were not adopted into the final rule and the baseline data did not provide an enforceable standard or limitation under the CAA. The Ninth Circuit reversed the district court’s grant of summary judgment, vacated the remedy order, and remanded the case with orders to dismiss for lack of jurisdiction.

^[1] The other organizations involved in the coalition were the Community & Children’s Advocates Against Pesticide Poisoning, Wishtoyo Foundation, Ventura Coastkeeper, and the Association of Irritated Residents. The Air Coalition Team intervened on behalf of plaintiffs.

^[2] 42 U.S.C. §§ 7401-7671q (2006).

^[3] See id. § 7604(a).

^[4] Id. §§ 7409-7410.After the SIP is approved by EPA, the SIP becomes federal law. See Safe Air for Everyone v. U.S. Envtl. Prot. Agency, 488 F.3d 1088, 1091 (9th Cir. 2007); Bayview Hunters Point Cmty. Advocates v. Metro. Transp. Comm’n, 366 F.3d 692, 695 (9th Cir. 2004).

^[5] Nonattainment areas are those which do not meet NAAQS for the pollutant. 42 U.S.C.

§ 7501(2) (2006).

^[6] Id. § 7502(c)(6).

^[7] El Comité Para el Bienestar de Earlimart v. Warmerdam, 539 F.3d 1062, 1068 (9th Cir. 2008).

^[8] El Comité Para el Bienestar de Earlimart v. Helliker, 416 F. Supp. 2d 912, 934 (E.D. Cal. 2006).

^[9] See Arakaki v. Hawaii, 314 F.3d 1091, 1094 (9th Cir. 2002).

^[10] 40 C.F.R. § 52.220 (2007).

^[11] See id. § 52.02(f) (“Revisions to applicable plans will be included in this part when approved or promulgated by the Administrator.”).

^[12] Warmerdam, 539 F.3d at 1070; see also Wards Cove Packing Corp. v. Nat’l Marine Fisheries Serv., 307 F.3d 1214, 1219 (9th Cir. 2002) (“[T]he plain meaning of a regulation governs and deference to an agency’s interpretation of its regulation is warranted only when the regulation’s language is ambiguous.”).

^[13] Warmerdam, 539 F.3d at 1072.

^[14] Id.

^[15] See 42 U.S.C. § 7604(a) (2006).

^[16] Warmerdam, 539 F.3d at 1073.

The Engine Manufacturers Association (EMA), a trade association representing manufacturers of diesel engines and diesel producers, contested a set of new vehicle regulations enacted by the South Coast Air Quality Management District (District).[1]These “Fleet Rules” required operators of certain public and private vehicle fleets-like street sweepers, garbage trucks, and airport shuttles-to use vehicles meeting specified emissions standards or containing specified alternative-fuel engines when adding to their fleets. The United States District Court for the Central District of California granted summary judgment for the District, ruling that neither section 209 nor section 177 of the Clean Air Act (CAA)[2]preempted the Fleet Rules because the rules only required fleet operators to buy new
vehicles conforming with existing California emissions standards and “did not compel manufacturers to meet new emissions standards.”[3]

This case was in the Ninth Circuit for the second time: the Ninth Circuit originally affirmed the district court’s grant of summary judgment in favor of the District, and EMA appealed to the United States Supreme Court. The Supreme Court reversed,[4]holding that section 209 may preempt some portions of the Fleet Rules but leaving it to the district court to determine whether the CAA actually preempted the Fleet Rules.[5]On remand, EMA brought a motion in the district court for an order implementing the Supreme Court’s decision, requesting the court to declare the Fleet Rules entirely preempted by sections 177 and 209(a) of the CAA.[6]The district court again granted summary judgment for the District, ruling that EMA had brought a facial challenge to the Fleet Rules and failed to prove that every application of the Rules was preempted. Specifically, the district court held the rules were not preempted as applied to state and local government entities because the rules regulated the conduct of the state and local entities in the market. On appeal (now for the second time), the Ninth Circuit affirmed the district court in part, reversed in part, and remanded the case for further proceedings.

In this second appeal to the Ninth Circuit, EMA alleged two errors:
1) the district court erred in holding that the rules were not preempted as applied to state and local agencies, and 2) the district court erred in declining to determine whether the CAA preempted other applications of the rules. The Ninth Circuit affirmed the district court’s holding that the rules were not preempted as applied to state and local entities, but reversed the district court’s dismissal of the case and remanded for the district court to determine which applications of the rules were preempted.

The Ninth Circuit first discussed whether the “market participant” doctrine applied to preemption under sections 177 and 209(a) of the CAA. The market participant doctrine “distinguishes between a state’s role as regulator . . . and its role as a market participant,” such that where the state acts as a market participant its actions are generally not deemed preempted by federal law.[7]The court noted that congressional intent is the starting point to preemption analysis and, therefore, it would look first to see if the CAA contained any indication of express or implied preemption. The legislative purpose of the CAA is to ensure that “the states . . . do their job in regulating air pollution effectively,”[8]and the CAA’s congressional findings indicate that reducing air pollution is primarily the responsibility of the states.[9]Moreover, the court determined that section 209(a) of the CAA contained no indication that Congress intended to prevent states from acquiring vehicles exceeding federal emissions standards. Also, the court determined that section 177 of the CAA is only a corollary of section 209, and does not expressly or impliedly preempt a state’s proprietary actions.[10]EMA conceded that the market participant doctrine applies to preemption under sections 177 and 209(a) of the CAA. However, amicus Los Angeles Taxi Industry (LATI) argued that the market participant doctrine did not apply to the CAA, and amicus American Automotive Leasing Association (AALA) argued that section 246 of the CAA preempted the Fleet Rules in their entirety.[11]The Ninth Circuit noted it generally does not consider issues raised only by amicus parties,[12]but it would consider the amici’s arguments here because the arguments went to the core issue of the scope and applicability of the market participant doctrine under the CAA.

LATI argued the Ninth Circuit’s opinion in Hydrostorage, Inc. v. Northern California Boilermakers Local Joint Apprenticeship Committee[13]indicated the market participant doctrine is not applicable outside of the dormant commerce clause context. The court responded that its “dictum” in Hydrostorage was “not the product of ‘deep consideration,’”[14]and that, in any event, the Supreme Court’s opinion in Building & Construction Trades Council v. Associated Builders & Contractors(Boston Harbor)[15]abrogated the dictum. LATI countered by attempting to distinguish Boston Harbor because it concerned only implied preemption, but the court disagreed and stated that Boston Harbor did not distinguish between express and implied preemption. The Ninth Circuit concluded that under BostonHarbor, courts should not infer preemption absent a clear indication that Congress intended to regulate a state’s management of its property when pursuing proprietary interests.[16]

Amicus AALA argued that section 246 of the CAA preempted the Fleet Rules because section 246 states that “a fleet operator ‘shall’ have ‘the choice of clean-fuel vehicles and clean alternative fuels,’”[17]while the Rules require the use of such vehicles and fuels. The court responded by noting that the Rules, as applied to state and local entities, simply represented the state’s elective choice to use clean-fueled vehicles in its own fleets-a choice “entirely consistent” with section 246.[18]

Having determined that the market participant doctrine applies to preemption analysis under sections 177 and 209(a) of the CAA, the court turned to whether the doctrine actually prevented preemption of the Fleet Rules. EMA argued that the Rules were regulatory rather than proprietary action, and, therefore, not protected by the market participant doctrine.[19]To determine if the rules are proprietary, the court inquired whether they fit either of the two categories of state proprietary action established in Chamber of Commerce v. Lockyer.[20]In Lockyer, the Ninth Circuit held that state action is proprietary if 1) “it ‘essentially reflect[s] the [governmental] entity’s own interest in its efficient procurement of needed goods and services, as measured by comparison with the typical behavior of private parties in similar circumstances,’” or 2) if “the narrow scope of the challenged action defeat[s] an inference that its primary goal was to encourage a general policy rather than address a specific proprietary problem.”[21]The court noted that Lockyer posed its definitions of “proprietary” in the context of preemption under the National Labor Relations Act, while the present case concerned the CAA. The court cautioned that each legislative enactment will have its own legislative intent, but that in this case, the Fleet Rules as applied to state and local entities fell squarely under the first category announced in Lockyer, and declined to further refine the definition of “proprietary action.”[22]

The Ninth Circuit concluded that the portions of Fleet Rules directing state and local governments to “purchase, procure, lease, or contract for use of vehicles meeting specified air pollution criteria” represented direct state participation in the market.[23]EMA objected to the court’s conclusion on three grounds. First, EMA argued that the Fleet Rules are not concerned with “efficient procurement” within the meaning of Lockyer because they are designed to reduce air pollution.[24]The court criticized EMA’s reading of “efficient procurement,” holding that procurement is “efficient” if it furthers the state’s purposes. The court clarified that the state’s purposes need not be confined to saving money, and to hold otherwise would be to read the word “efficient” too narrowly.[25]Second, EMA argued that the Rules were not proprietary because they direct how subentities of the state were to spend money, rather than how the state spends its own money. The court noted this argument was “largely foreclosed” by Big Country Foods, Inc. v. Board of Education,[26]which rejected an analogous argument and identified “strong public policy arguments” supporting its position.[27]There is no reason why the market participant doctrine should not apply, the court reasoned, because the state directed the disposition of funds by its constituent parts. Third, EMA argued that the rules were regulatory because they are enforceable by criminal sanctions. The court summarily rejected this argument because EMA based the assertion on Lockyer, which the court noted is not applicable because it addressed a rule that was clearly regulatory. Also, there was no indication that the criminal sanctions are enforceable against state or local entities.

As a final argument for preemption, EMA argued that not preempting the rules “would seriously undermine the uniformity contemplated by § 209(a)” because government entity purchases make up a substantial portion of the market.”[28]The court rejected this argument, as there was no evidence in the record to support it and EMA did not provide any cases suggesting that a state’s great market power precludes application of the market participant doctrine.[29]Thus, the court concluded that the Fleet Rules, as applied to state and local entities, were not preempted by section 177 or 209(a) of the CAA. Turning finally to the application of the Fleet Rules to anyone other than a state or local entity, the court concluded that the district court should have determined what applications of the Rules the CAA does preempt. The court agreed with the district court that EMA brought a facial challenge to the rules, and opined that if the Rules had been single, unseverable provisions with multiple applications the district court’s ruling would have been sound. However, the court held that because each Rule contained multiple provisions, the district court should have determined in the first instance whether each was valid. The court noted that plaintiffs are not required to show that every provision in a multipart enactment is invalid,[30]and that a court reviewing a statute is to maintain the statute insofar as it is valid.[31]Therefore, the Ninth Circuit ordered the district court to determine on remand which provisions of the Fleet Rules were valid and which were facially invalid.

In sum, the Ninth Circuit affirmed the district court’s holding that the Fleet Rules were valid as applied to state and local entities, but remanded to the district court for determination of whether the CAA preempted other provisions of the rules.

^[1] The District is a political subdivision of the State of California that manages air pollution in the South Coast Air Basin. The South Coast Air Basin encompasses the City of Los Angeles and surrounding areas, and is the only area in the United States classified as an “extreme nonattainment area” for ozone, as well as being one of only five areas designated as a “serious nonattainment area” for small particulate matter. Engine Mfrs. Ass’n v. S. Coast Air Quality Mgmt. Dist.(Engine Mfrs.), 498 F.3d 1031, 1035 (9th Cir. 2007).

^[2] 42 U.S.C. §§ 7401-7671q (2000).

^[3]Engine Mfrs., 498 F.3d at 1038.

^[4] Engine Mfrs. Ass’n v. S. Coast Air Quality Mgmt. Dist., 541 U.S. 246, 259 (2004).

^[5]Id. at 258-59.

^[6]See 42 U.S.C. § 7507 (2000)(providing that other states may adopt the standards promulgated by California, but only if the other states’ standards are “identical” to California’s);id. § 7543(a) (“No State or any political subdivision thereof shall adopt or attempt to enforce any standard relating to the control of emissions from new motor vehicles or new motor vehicle engines subject to this part.”).

^[7]Engine Mfrs.,498 F.3d at 1040; see, e.g., Hughes v. Alexandria Scrap Corp., 426 U.S. 794, 809-10 (1976)(holding that Maryland did not violate the Commerce Clause by favoring in-state processors of scrap metal).

^[8] Exxon Mobil Corp. v. U.S. Envtl. Prot. Agency, 217 F.3d 1246, 1255 (9th Cir. 2000)(emphasis omitted).

^[9] 42 U.S.C. § 7401(a)(3) (2000).

^[10]See id. § 7507.

^[11]Engine Mfrs.. 498 F.3d at 1043-44.

^[12]Swan v. Peterson,6 F.3d 1373, 1383 (9th Cir. 1993)(“Generally, we do not consider on appeal an issue raised only by an amicus.”).

^[13] 891 F.2d 719 (9th Cir. 1989).

^[14]Engine Mfrs., 498 F.3d at 1044(quoting Associated Gen. Contractors v. Metro. Water Dist.,159 F.3d 1178, 1184 (9th Cir. 1998).

^[15] 50 U.S. 218 (1993).

^[16]Id. at 231.

^[17]Engine Mfrs., 498 F.3d at 1044(citing 42 U.S.C. § 7586(d) (2000)).

^[18]Id.

^[19]Id. at 1045.

^[20] 463 F.3d 1076 (9th Cir. 2006).

^[21]Id. at 1084(adopting the Fifth Circuit’s analysis in Cardinal Towing & Auto Repair, Inc. v. City of Bedford, 180 F.3d 686 (5th Cir. 1999)).

^[22]Engine Mfrs., 498 F.3d at 1045.

^[23]Id.

^[24]Id. at 1046.

^[25]Id. at 1047.

^[26] 952 F.2d 1173 (9th Cir. 1992).

^[27]Id. at 1180.

^[28]Engine Mfrs., 498 F.3d at 1048.

^[29]Cf. Reeves, Inc. v. Stake, 447 U.S. 429, 437 (1980)(holding that South Dakota, operating in its capacity as a cement seller, could legally discriminate by selling only to in-state users during a time of shortage).

^[30] United States v. Salerno, 481 U.S. 739 (1987).

^[31] Nat’l Collegiate Athletic Ass’n v. Miller, 10 F.3d 633, 640 (9th Cir. 1993).

Defendants (Technic Services, Inc. (TSI) and TSI’s secretary and treasurer Rick Rushing) appealed their convictions and sentences under the Clear Air Act (CAA)[1] and Clean Water Act (CWA).[2] The Ninth Circuit ultimately reversed Rushing’s conviction on Count 8–solicitation of false statements from employees–for lack of evidence. The Ninth Circuit affirmed the remainder of the convictions. With respect to the defendants’ sentences, the Ninth Circuit vacated the enhancement of Rushing’s sentence for abuse-of-trust, but otherwise affirmed the district court’s decision.

TSI, an Alaska corporation, provided asbestos remediation services. TSI won a bid that involved asbestos removal in buildings at a former pulp mill. The work included removal of asbestos insulation on pipes, boilers, and salvageable components. After TSI began work on the mill, the Occupational Health and Safety Administration (OSHA) and the Environmental Protection Agency (EPA) ordered a temporary stop in work after inspections uncovered TSI’s noncompliance with appropriate work standards for asbestos removal. TSI completed the asbestos removal from the powerhouse at the former mill in January 1997. A pulp mill employee, Cle Wade, subsequently certified that the building was clean. However, because of its earlier inspections, EPA was concerned that TSI was washing waste water through the floor drains in the mill buildings and into Silver Bay. In 1998, before TSI demolished the powerhouse and at EPA’s request, Wade reinspected a pipe within the powerhouse and discovered asbestos. The government subsequently began a criminal prosecution against TSI and Rushing.

A jury convicted both defendants on all counts.[3] The court sentenced Rushing to 57 months in jail plus three years of supervised release and a $520,000 fine for CWA violations.[4] TSI was assessed a $600,000 fine, $520,000 for CWA violations, and five years of probation.[5]

The Ninth Circuit first set forth the standards of review. Concerning defendants’ claims of insufficient evidence the standard of review was de novo. Concerning defendants’ claims of a multiplicitous indictment, the standard of review was also de novo. Concerning the defendants’ allegations regarding the district court’s jury instructions and the district court’s decisions regarding evidence, the Ninth Circuit noted that the standard of review was abuse of discretion. Concerning the defendants’ sentencing, the standard of review was abuse of discretion. However, the court reviewed fact finding in sentencing for clear error, and the court’s application of the abuse-of-trust enhancement was reviewed de novo.

The Ninth Circuit first addressed defendants’ argument that Count 1, relating to the work standards for asbestos, was duplicitous. The court noted that Federal Rule of Criminal Procedure 12(b)(2)[6] requires a defendant to raise a duplicity argument before trial, or the argument is waived. Thus, the court found that defendants had waived this argument. With regard to the argument that the evidence was insufficient to support a conviction on Count 1, the Ninth Circuit considered the evidence regarding the regulation of asbestos and visible emissions. The court found that the evidence was sufficient to support a conviction on Count 1 because testimony was provided regarding the concentration of asbestos and testimony and videotape evidence were offered regarding the visible emissions. Finally, with respect to Count 1, the defendants contended that the district erred in its jury instructions. The Ninth Circuit noted that the defendants did not object at trial to the jury instructions at issue. The court conducted a clear error review and considered whether the instructions “prejudiced the defendant’s substantial rights so as to affect seriously the fairness or integrity of the proceedings.”[7] The court found that the instructions did not misstate the law and that the district court did not commit error in giving them to the jury. Thus, the Ninth Circuit affirmed the convictions on
Count 1.

With regard to the criminal convictions for knowingly discharging a pollutant under the CWA[8] (Count 2), the defendants contended that there was a National Pollutant Discharge Elimination System (NPDES) permit in place for the mill, that there was no evidence that pollutants were in the water discharged from the mill, and that the district court abused its discretion by refusing to admit three letters that analyzed the asbestos content of the discharged water. The Ninth Circuit found that the district court did not err with respect to Count 2. The court found that prior to the mill closure there was a NPDES permit to discharge pollutants, but that it was only in effect until the mill closed. Additionally, the court noted that TSI did not have a NPDES permit. Finally, the court explained that a general stormwater permit did not cover the discharge of asbestos that occurred at the mill.

Addressing the defendants’ argument about lack of evidence, the court noted that an EPA representative testified that asbestos was a pollutant under the CWA. In addition, the court considered evidence that defendant Rushing was present at a project meeting where discussions about the floor drains to Silver Bay occurred. Finally, the Ninth Circuit referred to the testimony of TSI employees, which confirmed that asbestos was washed down the drains and into Silver Bay. Thus, the court found that there was sufficient evidence for a jury to conclude that defendants discharged pollutants to the bay. The Ninth Circuit also affirmed the district court’s refusal to admit three letters proffered by the defendants, finding that the defendants had not established a proper foundation for the evidence.

With regard to Count 3, relating to Rushing’s interference with federal proceedings, Rushing claimed that there was insufficient evidence of a federal proceeding. Additionally, he argued that to convict on an obstruction charge, the government must prove that such obstruction occurred in a “proceeding pending before a department or agency of the United States.”[9] The Ninth Circuit found that TSI’s work was investigated by EPA and that “[a]n investigation into a possible violation of the [CAA or CWA], which could lead to a civil or criminal proceeding . . . [was] a kind of proceeding.”[10] The court also noted that Rushing tampered with air monitors that EPA used to determine concentrations of asbestos in the air. Furthermore, the court noted that TSI used the results of the air monitoring to prove its compliance with the federal work product standard. Therefore, the Ninth Circuit found that there was sufficient evidence to support a conviction on obstructing a federal proceeding.

Next, the Ninth Circuit considered Counts 4 through 9, which addressed Rushing’s solicitation of signatures on false statements to EPA. The Ninth Circuit rejected three of Rushing’s four arguments, including: 1) that it was error to admit the statements because the statements were protected under Federal Rule of Evidence 408,[11] 2) that the evidence failed to show Rushing’s role in the statements, and 3) that the district court erred in refusing to consolidate Counts 4-9. The Ninth Circuit rejected Rushing’s first argument because it found that Rushing had stipulated to admission of the statements. In addition, although the evidence concerning the statements was produced during settlement, under Rule 408 the evidence was properly admitted because it was offered for another purpose, “such as proving . . . an effort to obstruct a criminal investigation.”[12] The court noted that the evidence was offered for another purpose in this case because criminal obstruction of an administrative investigation was similar to obstruction of a criminal investigation. Thus, the court rejected Rushing’s first argument.

Concerning Rushing’s second argument, the court noted that testimony of three workers stating that Rushing solicited their signatures to the statements was evidence to show Rushing’s role in the statements. Finally, in rejecting Rushing’s claim that the district court erred in refusing to consolidate Counts 4-9, the Ninth Circuit applied a test for multiplicity. The test was whether each count required proof of an additional fact, which another count does not. In this case, the court explained that proof that Rushing solicited each particular person was required for each count; therefore, the district court was correct in refusing to consolidate the counts.

With regard to Count 8, the court accepted Rushing’s argument that there was insufficient evidence to convict on the obstruction of procuring employee Hildebrand’s signature. The court noted that there was no evidence that Hildebrand signed the statement. There were no witnesses to Hildebrand’s signature and there was no evidence of the circumstances surrounding the signing of the statement if Hildebrand did sign it. Therefore, the court reversed the conviction on Count 8.

The Ninth Circuit then addressed Rushing’s sentencing arguments. Rushing claimed that the district court erred in applying a six-level upward adjustment of his offenses under United States Sentencing Guidelines (U.S.S.G.) section 2Q1.2(b)(1)(A), pertaining to ongoing releases of hazardous substances into the environment that cause contamination.[13] The court referred to the proposition set forth in United States v. Ferrin,[14] which stated that proof of pollutants contaminating the environment was needed for the guideline to apply. In addition, the court cited United States v. Van Loben Sels,[15] which upheld the application of the guideline when a defendant discharged water polluted by benzene into a city sewer system, noting that the court could infer from evidence of the ongoing discharge that the environment was contaminated. In finding that the district court did not err in applying the guideline, the Ninth Circuit noted the evidence presented in the present case. The court considered the lack of containment of the facilities that would allow asbestos to escape into the environment. In addition, the court considered TSI’s regular washing of asbestos down floor drains into Silver Bay. Furthermore, the court considered that workers removed filters in the floor drains allowing contaminated water to drain into the bay. Thus, the court determined that there was sufficient support for the district court’s application of the section 2Q1.2 guideline.

Rushing also argued that the district court erred by adjusting his offense level under U.S.S.G. section 3B1.1(a) based upon his aggravated role. The Ninth Circuit found that because there was testimony by five or more workers stating that Rushing was the leader in perpetrating violations of the CAA, the record supported the district court’s application of U.S.S.G. section 3B1.1(a). This section of the sentencing guidelines authorized the court to increase the defendant’s offense level by four levels “[i]f the defendant was an organizer or leader of a criminal activity that involved five or more participants or was otherwise extensive.”[16] Because the court found that Rushing met the first part of the standard, it did not address whether the offense was otherwise extensive.

Finally, the court considered Rushing’s argument that he did not violate a position of trust and therefore the district court erred in increasing his offense level under the abuse-of-trust enhancement set forth in U.S.S.G. § 3B1.3.[17] The Ninth Circuit held that Rushing did not violate a position of public trust. The court explained that a position of trust is established from the point of the victim. Thus, the court concluded that the victim was the public with respect to the CWA and CAA violations and the victim was the federal government and the public with respect to the obstruction violations. Therefore, the issue was whether the defendant was in a position of trust toward the public or the federal government. The court noted that the record did not support a finding that the defendant was in such a position. The defendant was not a government employee. In addition, the court noted that neither having a government issued licensed to conduct asbestos remediation nor being under a government contract triggered the role of a public trust position for the defendant. However, the court noted that if the guidelines were considered ambiguous as to whether Rushing was in a position of public trust, that the rule of lenity would apply and the abuse of public trust enhancement would not apply.

The Ninth Circuit then considered the argument that Rushing violated a position of private trust. The court remanded this part of the case because of ambiguity concerning what the district court would have found in addressing this aspect of the enhancement. The court noted that the private trust is “characterized by professional or managerial discretion”[18] and that it is likely that Rushing’s role, as secretary and treasurer of TSI would qualify. However, the court did not conclude whether Rushing abused a position of private trust.

Finally, the court addressed the defendants’ arguments concerning the fines for their CWA violations. The Ninth Circuit rejected the defendants’ arguments, finding that Count 2 adequately conveyed the length of the violations: 104 days. Therefore, the district court did not err in computing the fines because it assessed the minimum fine of $5,000 per day and multiplied it for the length of the violation. Thus, the fine of $520,000 assessed by the district court was correct.

The dissent disagreed with the majority’s decision regarding the abuse of public trust enhancement, arguing that the guidelines were not ambiguous, and therefore the rule of lenity would not apply. In addition, the dissent did not find that Rushing was not a government employee to be dispositive of the issue. The dissent argued that the court must look to facts of the defendants’ conduct and determine whether a position of public trust could be inferred.

[1] 42 U.S.C. §§ 7401-7671(q) (2000). Specifically, the conviction was under 42 U.S.C. § 7413(c)(1) (2000).

[2] Federal Water Pollution Control Act, 33 U.S.C. §§ 1251-1387 (2000). Specifically, the defendants were convicted for violation of 33 U.S.C. § 1319 (2000).

[3] Both defendants were charged with several violations including the discharge of pollutants into Silver Bay without a permit. United States v. Technic Services, Inc. (TSI), 314 F.3d 1031, 1037 (9th Cir. 2002). Rushing was also charged under 18 U.S.C. § 1505 for “attempting to ‘influence, obstruct, or impede’ inspection and enforcement proceedings . . . by ‘altering, concealing and deactivating’ personal air-monitoring devices worn by workers,” and soliciting false statements from employees that stated that TSI did not discharge pollutants into the bay. Id. (quoting 18 U.S.C. § 1505 (2000)).

[4] Id.

[5] Id.

[6] Fed. R. Crim. P. 12(b)(2).

[7] TSI, 314 F.3d at 1040 (quoting United States v. Savage, 67 F.3d 1435, 1439 (9th Cir. 1995)).

[8] 33 U.S.C. § 1319(c)(2)(A) (2000).

[9] TSI, 314 F.3d at 1044 (quoting United States v. Price, 951 F.2d 1028, 1031 (9th Cir. 1991)).

[10] Id.

[11] “Federal Rule of Evidence 408 does not require the exclusion of evidence produced in the course of settlement negotiations if that evidence is ‘offered for another purpose, such as . . . proving an effort to obstruct a criminal investigation . . .‘” Id. at 1045 (emphasis in original) (quoting Fed. R. Evid. 408).

[12] Id.

[13] U.S. Sentencing Guidelines Manual § 2Q1.2(b)(1)(A), cmt. n.5 (2002).

[14] 994 F.2d 658, 663-64 (9th Cir. 1993).

[15] 198 F.3d 1161, 1165 (9th Cir. 1999).

[16] U.S. Sentencing Guidelines Manual § 3B1.1(a) (2002).

[17] Id. § 3B1.3. “[A] defendant is eligible for a two-point enhancement ‘[i]f the defendant abused a position of public or private trust, or used a special skill, in a manner that significantly facilitated the commission or concealment of the offense.’” TSI, 314 F.3d at 1048 (quoting the U.S. Sentencing Guidelines Manual § 3B1.3 (2002)).

[18] U.S. Sentencing Guidelines Manual § 3B1.3, cmt. n.1 (2002).

Public Citizen and others (collectively Public Citizen) challenged three regulations promulgated by the Federal Motor Carrier Safety Administration (FMCSA) under the National Environmental Policy Act (NEPA)[1] and the Clean Air Act (CAA).[2] The Ninth Circuit held that FMCSA failed to conduct adequate environmental assessments.

FMCSA, a branch of the Department of Transportation, promulgated three regulations concerning the application and use of Mexican-domiciled trucks for conducting business across the United States border in recognition of the North American Free Trade Agreement (NAFTA).[3] President Bush subsequently lifted a long-standing moratorium on business conducted by Mexican-domiciled trucks in the United States. For two of the regulations, the Application regulation[4] and Safety Monitoring System regulation,[5] FMCSA conducted an environmental assessment and issued Findings of No Significant Impact (FONSIs). For the third regulation, the Certification regulation,[6] FMCSA did not conduct an environmental assessment because it determined that the regulation was categorically exempted from the requirement, without conducting a conformity determination as required under the CAA. Public Citizen claimed that FMCSA failed to conduct a necessary environmental impact statement (EIS) under NEPA as well as a conformity determination under the CAA and petitioned the Ninth Circuit for review under the Administrative Procedure Act (APA).[7]

The Ninth Circuit first addressed preliminary questions about Public Citizen’s ability to bring suit. For standing, Public Citizen needed to demonstrate injury in fact, causation, and redressability.[8] The Ninth Circuit evaluated standing by considering the procedural injury caused by FMCSA’s failure to perform necessary environmental analyses. Among the plaintiffs were United States residents living along the Mexican border in California and Texas, who claimed that additional emissions from trucks permitted into the United States would create increased health hazards. Relying on Supreme Court precedent,[9] the Ninth Circuit determined that for environmental injury cases, injury in fact could be demonstrated by showing that the plaintiffs’ use of the area would be hampered or lessened by the challenged activity. Public Citizen provided evidence that one of its members reduced outdoor recreation when smog and pollution warnings were issued, thus satisfying the injury in fact requirement.

Public Citizen also met the causation and redressability requirements, standards which the Ninth Circuit held were lowered when the alleged injury is procedural. Concerning causation, FMCSA argued that the regulations themselves did not cause increased emissions because until the President removed the moratorium, there was no probable threat from the regulations. The Ninth Circuit rejected this theory because Public Citizen provided evidence that the President had indicated he would remove the moratorium if safety measures were in place. The court found that this established the reasonable probability of the threat, regardless of the two separate actions that had to occur to create it. The court also determined that, because the regulations would become effective if Public Citizen’s challenge was denied, the likelihood of harm was high. The Ninth Circuit then held that the harm was redressable because the further environmental analyses required by the court could affect the enactment of the regulations causing the harm.

The Ninth Circuit also addressed whether Public Citizen had organizational standing to bring suit. Applying the test defined in Friends of the Earth, Inc. v. Laidlaw Environmental Services, Inc.,[10] the court determined that the members would individually have standing, their interests were central to the organization, and suit by the organization would make individual suits unnecessary. Thus the Ninth Circuit summarily determined that Public Citizen had organizational standing.

The final standing issue addressed by the court was whether Public Citizen met APA standing requirements, which call for 1) final adverse agency action and 2) injury that falls within the “zone of interests” of the statute at issue. In this case, the final agency action occurred when the agency promulgated the regulations, and Public Citizen’s aim to protect the environment fit easily within NEPA purposes.

In considering the adequacy of the environmental analyses conducted by FMCSA prior to enactment of the regulations, the Ninth Circuit considered separately the NEPA and CAA claims, keeping in mind the standard that the agency was required to take a “hard look” at the consequences of its actions prior to promulgation.[11]

Under NEPA, an EIS must be conducted for “major Federal actions significantly affecting the . . . human environment.”[12] A less extensive environmental assessment (EA) may first be conducted to determine whether an EIS is necessary.[13] If the EA demonstrates no possible significant impact, the agency may issue a FONSI.[14] For both the Application and Safety Monitoring regulations, the agency issued FONSIs.

Analysis of the necessity for an EIS includes evaluation of whether the action is a “major Federal action” and “whether [that action] may significantly affect the environment.”[15] Under NEPA, a major federal action is one that may have significant effects and may be subject to federal control.[16] In arguing that the regulations were not major actions, FMCSA claimed any environmental effects would result from the revocation of the moratorium by the President, not from the regulations. The Ninth Circuit rejected this assertion because of the requirement that indirect, later effects be considered as part of the overall effect of any given federal regulation.[17] Having already determined that the Presidential action was reasonably foreseeable, the Ninth Circuit determined that the regulations adopted by FMCSA constituted major federal actions.

The Ninth Circuit next determined that the regulations also significantly affected the human environment. Conducting an in-depth evaluation of what “significant” means, the court explained that it entails both context and intensity of the environmental impacts.[18] On the context front, the Ninth Circuit found that FMCSA failed in two ways. First, it did not evaluate the local impacts. Second, it narrowed the scope to only the year 2002. In assessing the intensity of the possible environmental impacts of the regulations, the Ninth Circuit found that FMCSA failed to consider the health effects of increased exhaust emissions, the uncertainty regarding increases in Mexican truck traffic and polluting emissions, the conformity of the regulations with California’s state emission standards, and the substantial dispute of its assessment as embodied by the high percentage of public comments opposing the regulations. Because the regulations arguably constituted a major federal action with a plausible substantial impact on the environment, the agency had a duty to offer a statement of the reasons why it did not think a significant negative environmental impact would occur. Having failed to offer any such rationale, the Ninth Circuit held that FMCSA was required to conduct an EIS rather than an EA.

The Ninth Circuit also rejected FMCSA’s rationale for not conducting environmental analyses for its third regulation, the Certification regulation. Under the CEQ regulations, actions that do not have independent or cumulative significant effects, as found by procedures adopted by a federal agency, are categorically excluded from NEPA requirements.[19] Although the proposed regulation did not fall into any defined categorical exclusion, FMCSA argued it should be excluded because it had no significant environmental impact. The Ninth Circuit rejected this weak argument, holding that the agency had a duty to conduct an environmental analysis.

Finally, the Ninth Circuit considered FMCSA’s compliance with CAA air quality standards. Under the CAA, states create EPA-approved State Implementation Plans (SIPs) for pollutants, which limit emissions and have the purpose of bringing all regions into compliance with air quality standards.[20] While most federal actions require a “conformity determination” to evaluate the conformity with any SIP,[21] two categories of federal actions are exempted from this requirement.[22] These two categories include actions in which the total direct and indirect emissions fall below statutory limits, and those which do not increase emissions.[23] FMCSA argued that the regulations were exempt under both exceptions and thus it had no duty to make conformity determinations. However, the Ninth Circuit rejected this argument because the agency failed to adequately assess emissions levels, instead focusing only at a national assessment of emissions, again attempting to separate the impact of its regulations from the impact after the President lifted the moratorium. The Ninth Circuit also rejected FMCSA’s argument that the second exception applied to all federal regulations. Therefore, the court instructed FMCSA to conduct a conformity determination for all three regulations.

[1] National Environmental Policy Act of 1969, 42 U.S.C. §§ 4321-4370e (2000).

[2] 42 U.S.C. §§ 7401-7671p (2000).

[3] North American Free Trade Agreement Implementation Act, 19 U.S.C. §§ 3301-3473 (2000).

[4] Application by Certain Mexico-Domiciled Motor Carriers to Operate Beyond United States Municipalities and Commercial Zones on the United States-Mexico Border, 67 Fed. Reg. 12,702 (Mar. 19, 2002) (to be codified as 49 C.F.R. pt. 365).

[5] Safety Monitoring System and Compliance Initiative for Mexico Domiciled Motor Carriers Operating in the United States, 67 Fed. Reg. 12,758 (Mar. 19, 2002) (to be codified as 49 C.F.R. pt. 385).

[6] Certification of Safety Auditors, Safety Investigators, and Safety Inspectors, 67 Fed. Reg. 12,776 (Mar. 19, 2002) (to be codified as 49 C.F.R. pts. 350, 385).

[7] 5 U.S.C. §§ 551-59, 701-06, 1305, 3105, 3344, 4301, 5335, 5372, 7521 (2000).

[8] Public Citizen v. United States Dep’t of Transp., 316 F.3d 1002, 1015 (9th Cir. 2003) (citing Friends of the Earth, Inc. v. Laidlaw Envtl. Servs., Inc., 528 U.S. 167, 180-81 (2000) (quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992))).

[9] Friends of the Earth, Inc. v. Laidlaw Envtl. Servs., Inc., 528 U.S. 167, 183 (2000) (quoting Sierra Club v. Morton, 405 U.S. 727, 735 (1972)).

[10] 528 U.S. 167 (2000).

[11] Public Citizen, 316 F.3d at 1021.

[12] 42 U.S.C. § 4332(2)(C) (2000).

[13] 40 C.F.R. § 1501.4 (2002).

[14] Public Citizen, 316 F.3d at 1021.

[15] Id.

[16] 40 C.F.R. § 1508.18 (2002).

[17] Id. § 1508.7.

[18] Id. § 1508.27.

[19] Id. § 1508.4.

[20] 42 U.S.C. § 7407(a) (2000).

[21] 40 C.F.R. §§ 93.150-93.160.

[22] Id. § 93.153(c)(1)-(2).

[23] Id.

Several Phoenix residents, Martha Vigil, Andy Blackledge, and Robin Silver (Petitioners), petitioned for review of a final rule promulgated by the Environmental Protection Agency (EPA) implementing the Clean Air Act (CAA).[1] The rule approved the State of Arizona’s state implementation plan (SIP) for airborne particulate matter in the Phoenix area, and granted a five-year extension of the attainment deadline to 2006. On review, the Ninth Circuit held that EPA’s concurrence with Arizona’s rejection of reformulated diesel fuel–commonly known as CARB diesel–for use in Phoenix-area vehicles was arbitrary and capricious, and remanded this portion of EPA’s decision for further consideration. The Ninth Circuit, however, affirmed EPA’s approval of Arizona’s general permit rule for agricultural emissions of airborne particulate matter. The Ninth Circuit also remanded EPA’s decision to granting the five-year extension of the attainment deadline for further analysis in conjunction with consideration of the CARB diesel fuel issue.

The CAA authorizes EPA to establish national ambient air quality standards for various pollutants.[2] EPA has identified airborne particulate matter with a diameter of ten micrometers or less, known as PM-10, as a regulated air pollutant.[3] The CAA amendments designated non-attainment areas for PM-10 levels.[4] State-prepared plans created for “moderate” non-attainment areas must include assurances that reasonably available control measures will be implemented and that the area will reach attainment by the end of 1994 for both twenty-four hour PM-10 standards and annual PM-10 standards.[5] Areas not reaching attainment by this deadline were reclassified as serious non-attainment areas.[6] State-prepared plans for serious non-attainment areas had to implement not just reasonable, but also best available control measures (BACMs),[7] and assure the area would reach attainment by the end of 2001.[8] The amendments authorized an extension of the 2001 deadline under various conditions. Among these conditions was a finding that the state plan incorporated “the most stringent measures [MSMs] that are included in the implementation plan of any state or are achieved in practice in any state, and can be feasibly implemented in the area.”[9]

This case is the Ninth Circuit’s third concerning PM-10 standards in the Phoenix metropolitan area.[10] Prior events included EPA’s rejection of Arizona’s first moderate area PM-10 state implementation plan in 1994, EPA’s approval of Arizona’s revised plan in 1995, and a Ninth Circuit decision overturning EPA’s approval. Subsequently, in 1996, EPA determined that Arizona did not comply with the 1994 statutory deadline and thus reclassified the state as a serious PM-10 non-attainment area. Over the next six years EPA and Arizona worked on plans which culminated in EPA’s 2002 final approval of Arizona’s state implementation plan for the twenty-four hour PM-10 standards and annual PM-10 standards. EPA specifically found that Arizona’s proposed standards met the BACM requirement and the MSM standard. EPA also granted Arizona’s request to extend the deadline for attainment of these standards from 2001 to 2006.

The Petitioners filed for Ninth Circuit review of EPA’s final approval. Specifically, they challenged EPA approval of: 1) Arizona’s general permit rule for agricultural PM-10 emissions, arguing that the rule did not constitute either BACM or MSM; 2) Arizona’s refusal to require use of CARB diesel fuels to control emissions, arguing again that the state did not implement either BACM or MSM; and 3) extension of the attainment deadline, which, they argued, constituted an abuse of discretion.

The CAA grants the courts of appeals jurisdiction to review EPA’s approval of a state implementation plan.[11] The CAA, however, does not specify a standard of review. The Ninth Circuit reviewed EPA’s actions under the Administrative Procedure Act,[12] specifically whether EPA’s actions were “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.”[13]

The court first considered the level of deference to be afforded EPA’s decision. Congress gave EPA general rulemaking authority under the CAA, including the authority to promulgate such terms as “reasonably available control measures,”[14] “best available control measures,”[15] and “most stringent measures.”[16] However, EPA has never formally adopted rules defining these terms.[17] Instead, EPA provides only informal guidance in the form of “preliminary interpretations” that “do not bind the States and the public as a matter of law.”[18] Thus, Chevron‘s highly deferential standard, given to construction of an ambiguous statute adopted through formal rulemaking, was in this situation inappropriate.[19] Instead, the court granted EPA’s preliminary interpretations Skidmore deference, finding that the agency’s interpretations are “entitled to respect.”[20] The Ninth Circuit noted its conclusions would have been the same under either standard of deference.

On the substantive issues, the Ninth Circuit first turned to the issue of Arizona’s General Permit Rule for Agriculture. Petitioners objected to a provision that required each commercial farmer to implement only one best management practice (BMP) from each of three categories of such practices, thirty-four possible BMPs were spread among the three categories. Petitioners argued this requirement did not qualify as the BACM required for serious PM-10 non-attainment areas, reasoning that the state had determined all thirty-four BMPs to be feasible. Thus, requiring more than one BMP had to be better than the base requirement of one BMP per category.

The Ninth Circuit rejected Petitioners’ argument, finding that Arizona’s plan and EPA’s approval were grounded on EPA’s reasonable interpretation of the CAA. Arizona’s decision, accepted by EPA, to require implementation of only one BMP per category was based on a cost-benefit analysis of many regional variables such as climate, soil, water availability, and proximity to urban centers. The analysis concluded that these variables, along with the costs associated with implementing multiple BMPs, did not allow imposition of uniform requirements on commercial farmers, but rather, suggested the flexible approach adopted in Arizona’s plan. The Ninth Circuit concluded that EPA had reviewed Arizona’s explanation with sufficient scrutiny and thus EPA’s approval was not arbitrary or capricious.

Next, the Ninth Circuit reviewed EPA’s determination that Arizona’s General Permit Rule for Agriculture included “the most stringent measures that are included in the implementation plan of any state, or are achieved in practice in any state, and can be feasibly implemented in the area.”[21] The comparative inquiry into MSMs required two determinations: 1) whether any other regional plan contained more stringent requirements than the Arizona plan, and 2) if so, whether the more stringent requirements were technologically and economically feasible to implement within Arizona.[22] Petitioners asserted that the MSM standard was not met because Arizona’s plan did not adopt measures similar to those adopted by California in the South Coast Air Quality Management District (South Coast). The two programs differed in that the Arizona plan required implementation of fewer BMPs than the South Coast plan, and the Arizona plan did not mandate cessation of tilling on high wind days.[23] The Ninth Circuit noted that Arizona was bound by the CAA to adopt the South Coast standards only if they could “feasibly be implemented in the area.”[24] The Ninth Circuit upheld EPA’s conclusion that various factors relating to the differences in topography, soil conditions, crops, irrigation methods, and wind conditions made implementation of the South Coast standards infeasible in Arizona.

The Ninth Circuit then reviewed Petitioners’ challenge to Arizona’s decision to reject the use of CARB diesel, a reformulated diesel fuel required for use in South Coast. Both the court and EPA decided that Arizona’s plan properly treated diesel emissions as a significant source of pollutants, and adopted a number of programs that specifically addressed diesel emissions. Arizona, however, provided only one reason for rejection of CARB diesel: lack of information on whether an adequate supply existed for the Arizona market, and excessive fuel costs if supplies were short. Reviewing the plan, EPA did not address Arizona’s concerns regarding the cost of CARB diesel, but approved the plan anyway as a BACM on the grounds that Arizona’s plan was among the most stringent and extensive programs in the nation.

When considering Arizona’s rejection of CARB diesel under the MSM standard, EPA determined that use of the fuel would only minimally reduce PM-10 emissions and “would not contribute to expeditious attainment of the 24-hour [PM-10] standard.”[25] Arizona, however, did not justify its rejection of CARB diesel with this argument, the rationale emanated entirely from EPA. In light of the fact that the EPA and Arizona rationales for rejection of CARB diesel were dissimilar, the Ninth Circuit found EPA’s explanation of its reasoning inadequate, and, therefore, arbitrary and capricious. The court remanded the issue for EPA’s further consideration as to whether Arizona’s rejection was consistent with either the best available control measures or the most stringent measures.

Finally, the court reviewed Petitioners’ claim that EPA abused its discretion in granting the five-year extension. EPA may grant an extension if the state satisfies the MSM standard, if attainment by the original deadline is impracticable, and if the state has complied with all implementation requirements and commitments.[26] Petitioners argued the EPA’s decision was impermissible for two reasons. First, Petitioners asserted that if all the previously suggested measures were put into effect, Arizona could attain PM-10 standards. Second, Petitioners argued that Arizona’s past failure to meet CAA standards and deadlines made the state ineligible for the extension.

The court had already determined that EPA acted arbitrarily in finding Arizona had achieved MSMs when it rejected the CARB diesel fuel requirements, but acted reasonably in finding Arizona’s agricultural PM-10 standards consistent with the most stringent measures test. The Ninth Circuit went on to reject Petitioners’ arguments that Arizona was ineligible for an extension. Specifically, the court found Petitioners’ second assertion to be an “unreasonable” reading of the law, because a state that had met the previous requirements would not need an extension.[27] Nevertheless, the court remanded EPA’s grant of the extension to 2006 for further consideration together with the CARB diesel fuel issue and its impact on the MSM determination.

In summary, the Ninth Circuit remanded the CARB diesel fuel rejection for further analysis by EPA. The court also remanded the issue of the five-year extension, contingent upon the sufficient explanation of the EPA’s rationale for rejecting a CARB diesel requirement. Finally, the court upheld EPA’s decision to approve Arizona’s general permit rule for agricultural PM-10 standards.

[1] Clean Air Act, 42 U.S.C. §§ 7401-7671q (2000).

[2] Id. §§ 7408(a), 7409(a).

[3] National Primary and Secondary Ambient Air Quality Standards, 40 C.F.R. § 50.6 (2000).

[4] 42 U.S.C. § 7407(d)(4)(b) (2000).

[5] Id. § 7513(a).

[6] Id. § 7513(b)(2).

[7] Id. § 7513a(b)(1)(B).

[8] Id. § 7513(c)(2).

[9] Id. § 7513(e).

[10] See Ober v. United States Envtl. Prot. Agency, 84 F.3d 304, 309 (9th Cir. 1996) (finding that the state must independently examine and implement “‘reasonably available control measures’ targeting the 24-hour standard” even if the state showed that it could not feasibly meet the standards for allowable annual levels of PM-10); Ober v. Whitman, 243 F.3d 1190, 1198 (9th Cir. 2001) (finding that EPA could designate some sources of PM-10 as de minimis).

[11] 42 U.S.C. § 7607(b)(1) (2000).

[12] Administrative Procedure Act, 5 U.S.C. §§ 551-559, 701-706, 1305, 3105, 3344, 4301, 5335, 5372, 7521 (2000).

[13] Id. § 706(2)(A).

[14] 42 U.S.C. § 7513a(a)(1)(C) (2000).

[15] Id. § 7513a(b)(1)(B).

[16] Id. § 7513(e).

[17] Vigil v. Leavitt, 381 F.3d 826, 834 (9th Cir. 2004).

[18] Id. (quoting State Implementation Plans for Serious PM-10 Nonattainment Areas, and Attainment Date Waivers for PM-10 Nonattainment Areas Generally; Addendum to the General Preamble for the Implementation of Title I of the Clear Act Amendments of 1990, 59 Fed. Reg. 41,998, 41,999 (Aug. 16, 1994)).

[19] Chevron U.S.A. v. Natural Res. Def. Council, 467 U.S. 837, 843-44 (1984).

[20] Vigil, 381 F.3d at 835 (referencing Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944)).

[21] 42 U.S.C. § 7513(e) (2000).

[22] Vigil, 381 F.3d at 839 (construing Clean Air Act, 42 U.S.C. § 7512(e) (2000)).

[23] Id.

[24] Id. (quoting 42 U.S.C. § 7513(e) (2000)).

[25] Id. at 845 (quoting Approval and Promulgation of Implementation Plans; Arizona-Maricopa County PM-10 Nonattainment Area; Serious Area Plan for Attainment of the PM-10 Standards, 67 Fed. Reg. 48,718, 48,725 (July 25, 2002)).

[26] § 7513(e).

[27] Vigil, 381 F.3d at 846.

The Grand Canyon Trust (Trust) appealed from a district court order granting partial summary judgment on the merits and final summary judgment based on laches to the Tucson Electric Power Company (Tucson Power). Trust had brought an action alleging that Tucson Power violated the Clean Air Act (CAA)[1] by constructing and operating a coal-powered electric plant near Springerville, Arizona. The Ninth Circuit vacated the district court orders for partial and final summary judgment in favor of Tucson Power and remanded with instructions to reconsider Tucson Power’s motions based on all properly submitted evidence. The Ninth Circuit also denied Tucson Power’s motion to strike the Trust’s appeal of the award of partial summary judgment as an unappealable interlocutory order.

In late 1977, Congress amended the CAA to require all new sources of air pollution to implement Best Available Control Technology (BACT) standards.[2] Under regulations issued by the Environmental Protection Agency (EPA), facilities that commenced construction prior to March 19, 1979 were not subject to BACT requirements, provided that construction was not discontinued for longer than eighteen months and construction was completed within a reasonable time.[3] If, however, construction did not meet the requirements of either commencement within eighteen months or completion within a reasonable time, or if construction was suspended for more than eighteen months, a permit would automatically be invalidated, unless the administrator approved an extension.[4]

In 1977, Tucson Power applied for a permit to construct two coal-fired power units. The first of these units was ultimately completed in 1985 and the second was completed in 1990. In 2001, Tucson Power announced a plan to build two additional units at the Springerville Plant. Under the plan, the new units would not be subject to environmental assessment in isolation, but rather would be included within a single net or bubble encompassing the entire facility. This would avoid triggering several CAA requirements, provided that the entire plant did not produce a net increase of emissions once Tuscon Power completed the third and fourth units.

The district court held that Tucson Power had commenced construction prior to the statutory deadline by drilling wells at the Springerville site in 1978 and, therefore, granted partial summary judgment to Tucson Power. The district court also granted Tucson Power’s motion for final summary judgment on the entire action based on the doctrine of laches.

On appeal, Tucson Power first argued that the district court had lacked subject matter jurisdiction over the action. Tucson Power argued that the Trust’s action was essentially seeking review of an EPA ruling and only a Court of Appeals has jurisdiction over review of EPA’s final decisions under the CAA. The Ninth Circuit clarified that the Trust’s suit was properly characterized as a citizen enforcement action against a third party for alleged violations of the CAA, not a challenge to an EPA ruling. Because the CAA allows citizen suits to be brought in district court for enforcement of permit requirements, the Ninth Circuit held that the Trust’s action was properly brought in district court.[5]

Tucson Power next argued that the Ninth Circuit lacked subject matter jurisdiction to review the award of partial summary judgment pertaining to construction commencement. Tucson Power argued this action was not an “appealable final decision . . . because it did not dispose of [the Trust's] case in its entirety.”[6] The Ninth Circuit held that because the Trust had appealed the grant of final summary judgment based on laches, which was an appealable final order, the court had discretion to reconsider related interlocutory orders.[7]

The Ninth Circuit vacated the district court’s order of partial summary judgment on the issue of when construction commenced, based in part on an EPA investigation concluding that Tucson Power had not begun construction prior to March 19, 1979. EPA did not publish the results of this investigation until after the district court issued its opinion. Nevertheless, the Ninth Circuit decided EPA’s expertise on this issue may have persuaded the district court. The Ninth Circuit noted Tucson Power’s argument that EPA had since withdrawn its objection, but stated it could not address that contention based on the record before it. Thus, the Ninth Circuit remanded the issue to the district court.

Finally, the Ninth Circuit addressed the Trust’s appeal of the grant of final summary judgment to Tucson Power based on the doctrine of laches. The Trust argued that because laches cannot be invoked against the government, it should not be invoked to bar citizen enforcement actions that are substantially similar to governmental enforcement actions. The Ninth Circuit declined to address this specific issue, but vacated the order that the Trust’s enforcement actions were barred by laches.

The Ninth Circuit emphasized that the doctrine of laches requires two components: undue delay and prejudice. The Ninth Circuit stated, “[a] lengthy delay, even if unexcused, that does not result in prejudice does not support a laches defense.”[8] The court then noted that either evidentiary or expectation prejudice will support a laches defense. First, the court looked at whether Tucson Power suffered evidentiary prejudice. This type of prejudice is based on the idea that it may be difficult to ensure justice when, due to the passage of time, evidence has been lost or witness recollections have faded.[9] In this case, the Ninth Circuit held that Tucson Power had not suffered evidentiary prejudice because Tucson Power did not present evidence of any inability to defend itself against the Trust’s action.

The Ninth Circuit next addressed the question of whether Tucson Power suffered expectation prejudice. The district court found that if the Trust succeeded, Tucson Power would have to replace its original pollution control equipment at the cost of three hundred million dollars. Moreover, because the Trust was seeking civil penalties that accrued daily, the delay in bringing suit served to inflate the potential award of damages. The Ninth Circuit held, however, that in regard to the cost of replacing the equipment, the delay in bringing suit benefited Tucson Power because it recovered a portion of its investment in the plant. The court pointed out that had the Trust “brought this action immediately after construction of each Unit was completed, and had the court held that Tucson [Power] was required to replace the equipment it had just installed, Tucson [Power's] loss would have been total.”[10]

Regarding Tucson Power’s increased penalty liability, the Ninth Circuit noted that Tucson Power might have a statute of limitations defense. In addition, the court held that if the penalties were inequitable, laches was not the appropriate means of correcting that inequity. The Ninth Circuit noted that if the Trust prevailed on remand, the district court had discretion to “consider whether equity requires it to reduce [Tucson Power's] civil penalties.”[11]

Ultimately, the Ninth Circuit denied Tucson Power’s motion to strike the Trust’s appeal of partial summary judgment as an unappealable interlocutory order. In addition, the Ninth Circuit vacated the district court’s orders that awarded partial and final summary judgment to Tucson Power. Finally, the Ninth Circuit remanded with instructions to the district court to reconsider Tucson Power’s motion for partial summary judgment on the merits based on all properly submitted evidence.

[1] Clean Air Act, 42 U.S.C. §§ 7401-7671q (2000).

[2] Id. §7475(a)(4).

[3] Prevention of Significant Deterioration of Air Quality, 40 C.F.R § 52.21(i)(2)(ii) (2003).

[4] Id. § 52.2(i)(1)(ii)(c).

[5] 42 U.S.C. § 7604(f)(3), (4).

[6] Grand Canyon Trust v. Tucson Elec. Power Co. (Grand Canyon Trust), 391 F.3d 979, 986 (9th Cir. 2004) (internal quotations omitted).

[7] Envtl. Prot. Info. Ctr. v. Pac. Lumber Co., 257 F.3d 1071, 1075 (9th Cir. 2001).

[8] Grand Canyon Trust, 391 F.3d at 988.

[9] Id.

[10] Id. at 989.

[11] Id.

The Metropolitan Transportation Commission (MTC), which plans, coordinates, and finances regional transportation in the San Francisco Bay Area, appealed a summary judgment[1] and preliminary injunction[2] issued by the district court in favor of Bayview Hunters Point Community Advocates and seven other community and environmental organizations (collectively Bayview). Bayview had filed a citizen suit pursuant to the Clean Air Act (CAA)[3] against MTC and two local transit providers, alleging non-compliance with a provision of the CAA mandated State Implementation Plan (SIP).[4] The Ninth Circuit reversed the district court’s judgment and injunction, finding that MTC was in compliance with the relevant provisions of the SIP.

The CAA requires each state to adopt a SIP to satisfy National Ambient Air Quality Standards (NAAQS) set by the Environmental Protection Agency (EPA).[5] Each SIP must include enforceable measures and timetables for compliance with NAAQS.[6] MTC is responsible for developing Transportation Control Measures (TCMs) aimed at reducing hydrocarbon and carbon monoxide emissions within the San Francisco Bay Area as part of the 1982 SIP. One of these measures, TCM-2, dealt with transit ridership levels, and projected air quality improvements associated with a 15% increase in transit ridership from 1982 levels. After several revisions to the 1982 SIP, TCM-2 remained in the document. However, as of 2001, ridership levels only increased by 12.5% over 1982 levels. As a result, Bayview filed a citizen suit, as authorized by the CAA, to compel MTC to take further measures to reach the 15% ridership increase.[7]

The district court found that TCM-2 imposed five separate requirements: 1) adoption of five-year plans by the region’s major transit operators, 2) adoption by MTC of an overall transit ridership target, 3) implementation of the five-year plans, 4) monitoring of annual ridership gains, and 5) achievement of a 15% transit ridership increase over 1982 levels. The district court concluded that MTC had not met the final 15% transit ridership increase requirement and issued a permanent injunction against MTC, requiring the agency to meet the 15% increase requirement by 2006 and amend its regional transportation plan to specify how it would achieve the transit ridership increase.[8]

The issue facing the Ninth Circuit on appeal was whether TCM-2 constituted a binding commitment to achieve the 15% increase in public transit ridership. The court began with an analysis of the plain language of TCM-2. It noted that the 15% ridership increase was described as a “target,” and that the document did not contain an explicit requirement that the target be achieved.[9] Turning to contract law, the court determined that “a promise must be distinguished from . . . a mere prediction of future events.”[10] The Ninth Circuit decided the lack of plain language requiring the 15% transit ridership increase “weighs heavily against the conclusion that such an obligation can be imposed based upon TCM-2.”[11]

The Ninth Circuit held that the lack of a clear requirement to attain the 15% transit ridership increase was logical, since such a ridership increase was not within MTC’s control, unlike the other four requirements the district court found in TCM-2. The 15% transit ridership increase was dependent upon outside factors such as changing work patterns or individual preferences in relation to public transit, and thus the Ninth Circuit concluded that TCM-2 could not have been intended to impose the 15% transit ridership target as a binding obligation.

The Ninth Circuit then looked more closely at the other provisions of TCM-2 and applied a “basic rule of statutory construction . . . that one provision should not be interpreted in a way which is internally contradictory or that renders other provisions of the same statute inconsistent or meaningless.”[12] The court understood the other provisions of TCM-2 to mean MTC should meet the 15% transit ridership increase target through improvements in productivity without further substantial investment. However, the Ninth Circuit thought the district court’s injunction would require MTC to take quite different measures, focusing on significant and expensive transit expansion programs. The Ninth Circuit held that such a requirement rendered the 15% provision inconsistent with the other TCM-2 provisions by essentially removing any limitation on the cost of implementing the TCMs.

The Ninth Circuit next looked at whether the 15% ridership increase constituted a specific SIP strategy, or an overall objective or aspirational goal of the SIP. While strategies in CAA implementation plans can be enforced by court order, objectives and goals cannot.[13] Although the first four requirements found by the district court were clearly enforceable strategies, the Ninth Circuit held that the 15% transit ridership increase target was a proxy for the emissions reduction goal, and thus unenforceable by a court.

The Ninth Circuit also rejected the district court’s determination that “failure to infer an increased ridership obligation would render TCM-2 virtually meaningless.”[14] The Ninth Circuit pointed out that in the early 1990′s MTC had in fact adopted a number of contingency TCMs to address insufficient reductions in emissions necessary to attain NAAQS which, while not increasing transit ridership, had resulted in attainment of overall emissions reduction levels during this period by positively affecting other facets of transportation. [15] When the San Francisco Bay Area later fell out of attainment for the ozone NAAQS, the court noted that MTC and other responsible agencies prepared a revised SIP to address the problem. The Ninth Circuit held that the district court had failed to consider this broader regulatory aspect when narrowing in on the failure to achieve the transit ridership increase goal.

The Ninth Circuit held that citizen suits, such as the one brought by Bayview, are appropriate “to enforce specific measures, strategies or commitments designed to ensure compliance with the NAAQS,”[16] not to “obtain modification of an SIP to conform with [the citizen group's] own notion of a proper environmental policy.”[17] The court noted that the remedy when an agency fails to achieve overall emissions reductions comes from new TCMs and new strategies, not the alteration of TCM-2′s provisions sought by Bayview.

Finally, the Ninth Circuit dismissed the persuasiveness of an EPA opinion letter agreeing with Bayview’s contention that TCM-2 would not be fully implemented until the transit ridership goal of a 15% increase over 1982 levels was met. The court determined the EPA opinion letter would be persuasive only in an ambiguous regulatory situation.[18] The Ninth Circuit held that the plain meaning of the SIP was contrary to EPA’s opinion letter, and thus the letter was not entitled to deference.[19]

In conclusion, the Ninth Circuit reversed the district court’s summary judgment and permanent injunction in favor of Bayview. The Ninth Circuit held that MTC had met its obligations to increase transit productivity under TCM-2 even though these strategies had not yielded the desired increase in transit ridership.

Judge Thomas dissented from the majority’s opinion and would have affirmed the district court’s decision. Judge Thomas emphasized the CAA requirement that SIPs be submitted to EPA in an “enforceable form.” Therefore, the 15% ridership increase provision, if not binding, was a violation of the CAA.[20] Judge Thomas believed that without the 15% ridership increase provision, the remaining strategies were “too attenuated and amorphous” to be realistically enforceable.[21] He noted that local agencies would take advantage of a failure to hold them accountable to their goals by “defin[ing] their commitments as vaguely as possible in order to avoid constraint and reform.”[22]

[1] Bayview Hunters Point Cmty. Advocates v. Metro. Transp. Comm’n (Bayview I), 177 F. Supp. 2d 1011, 1033 (N.D. Cal. 2001).

[2] Bayview Hunters Point Cmty. Advocates v. Metro. Transp. Comm’n (Bayview II), 212 F. Supp. 2d 1156, 1170 (N.D. Cal. 2002).

[3] Clean Air Act, 42 U.S.C. §§ 7401-7671q (2000).

[4] Id. § 7410(a)(1).

[5] Id. § 7409(a), (b).

[6] Id. § 7409(a)(2)(A).

[7] Id. § 7604(a).

[8] Bayview II, 212 F. Supp. 2d at 1170-1171.

[9] Bayview Hunters Point Cmty. Advocates v. Metro. Transp. Comm’n (Bayview III), 366 F.3d 692, 698 (9th Cir. 2004).

[10] Id.

[11] Id.

[12] Id. at 700 (quoting Hughes Air Corp. v. Public Utilities Comm’n, 644 F.2d 1334, 1338 (9th Cir. 1981)).

[13] See, e.g., Trustees for Alaska v. Fink, 17 F.3d 1209, 1212 (9th Cir. 1994) (noting that TCMs in a SIP must be “submitted to the EPA in an enforceable form” and that a SIP is “not enforceable apart from specific TCM strategies”); Action for Rational Transit v. West Side Highway, 699 F.2d 614, 616 (2d Cir. 1983) (holding that the “aims and goals of the SIP are not enforceable apart from the specific measures designed to achieve them”).

[14] Bayview III, 366 F.3d at 702 (citing Bayview I, 177 F. Supp. 2d 1011, 1027 (N.D. Cal. 2002)).

[15] For examples of cases litigating the previous failure to achieve NAAQS and resulting contingency TCMs, see Citizens for a Better Env’t v. Deukmejian, 731 F. Supp. 976 (N.D. Cal. 1990); Citizens for a Better Env’t v. Deukmejian, 746 F. Supp. 1448 (N.D. Cal. 1990); Citizens for a Better Env’t v. Wilson, 775 F. Supp. 1291 (N.D. Cal. 1990).

[16] Bayview III, 366 F.3d at 703 (quoting Conservation Law Found., Inc. v. Busey, 79 F.3d 1250, 1258 (1st Cir. 1996)).

[17] Id. (quoting Wilder v. Thomas, 854 F.2d 605, 614 (2d Cir. 1988)).

[18] Id. (citing Wards Cove Packing Corp. v. Nat’l Marine Fisheries Serv., 307 F.3d 1214, 1219 (9th Cir. 2002)).

[19] See Christensen v. Harris County, 529 U.S. 576, 588 (2000) (finding that “deference [to an agency's interpretation of its regulation] is warranted only when the language of the regulation is ambiguous”).

[20] Bayview III, 366 F.3d at 704 (citing Clean Air Act, 42 U.S.C. § 7502(c)(6) (2000), stating that “such plan provisions shall include enforceable emission limitations, and such other control measures, means, or techniques”).

[21] Id.

[22] Id. at 705.