United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued September 4, 2001 Decided October 30, 2001
No. 99-1151
State of Michigan,
Michigan Department of Environmental Quality,
Petitioner
v.
Environmental Protection Agency,
Respondent
Navajo Nation,
Intervenor
Consolidated with
99-1152, 99-1153, 99-1154, 99-1155
On Petitions for Review of a Final Rule of the
Environmental Protection Agency
---------
Henry V. Nickel argued the cause for petitioners. With
him on the briefs were Lauren E. Freeman, David S. Har-
low, Edmund H. Kendrick, Brian J. Renaud, Susan M.
McMichael, Jennifer M. Granholm, Attorney General, State
of Michigan, and John Fordell Leone, Assistant Attorney
General. Richard S. Wasserstrom entered an appearance.
Cynthia A. Drew, Attorney, U.S. Department of Justice,
argued the cause for respondent. With her on the brief were
John C. Cruden, Acting Assistant Attorney General, Andrew
J. Doyle, Attorney, Anthony F. Guadagno, Attorney, Envi-
ronmental Protection Agency, and Michael W. Thrift, Attor-
ney. Lois J. Schiffer, Assistant Attorney General, U.S. De-
partment of Justice, and Christopher S. Vaden, Attorney,
entered appearances.
Jill E. Grant was on the brief for intervenor Navajo
Nation.
Before: Ginsburg, Chief Judge, Edwards and Sentelle,
Circuit Judges.
Opinion for the Court filed by Circuit Judge Sentelle.
Sentelle, Circuit Judge: State of Michigan, et al. (herein-
after petitioners), petition this Court for review of the Envi-
ronmental Protection Agency's ("EPA") 1999 revisions to the
Part 71 federal operating permit program rule, 64 Fed. Reg.
8247 (Feb. 19, 1999) (codified at 40 C.F.R. pt. 71).1 Petition-
ers argue that the EPA has exceeded its authority under the
Clean Air Act ("CAA" or "the Act"), 42 U.S.C. s 7401 et seq.
(2000), in proposing to promulgate and administer a federal
__________
1 The following petitions for review challenging the same EPA
rule were consolidated and are before us: State of Michigan,
Michigan Dep't of Envtl. Quality v. EPA, No. 99-1151, American
Forest and Paper Ass'n, Inc. v. EPA, No. 99-1152, New Mexico Oil
& Gas Ass'n v. EPA, No. 99-1153, New Mexico Env't Dep't v. EPA,
No. 99-1154, and Public Serv. Co. of New Mexico and Salt River
Project Agric. Improvement and Power Dist. v. EPA, No. 99-1155.
Arizona Public Serv. Co. v. EPA, No. 99-1146, challenging the
same rule, was voluntarily dismissed without prejudice on Septem-
ber 14, 2000.
operating permits program for areas where EPA believes the
Indian country status is in question, and in proposing to make
state/tribe jurisdictional determinations on a case-by-case ba-
sis rather than through notice and comment rulemaking.
Because we agree with petitioners that EPA has exceeded its
authority, we grant the petition for review.
I. Background
A. The Clean Air Act and Indian Tribes
The Clean Air Act establishes an intergovernmental part-
nership to regulate air quality in the United States. De-
scribed as an "experiment in federalism," Virginia v. EPA,
108 F.3d 1397, 1408 (D.C. Cir. 1997) (quoting Bethlehem Steel
Corp. v. Gorsuch, 742 F.2d 1028, 1036-37 (7th Cir. 1984)), the
Act gives EPA responsibility for establishing National Am-
bient Air Quality Standards ("NAAQS"). 42 U.S.C. s 7409;
see also Whitman v. American Trucking Ass'ns, 531 U.S.
457, __, 121 S. Ct. 903, 907 (2001). Title V of the 1990 Clean
Air Act Amendments gives states responsibility for imple-
menting these standards. See, e.g., 42 U.S.C. ss 7407, 7410.
As part of the 1990 Clean Air Act Amendments, Congress
also authorized EPA to "treat Indian tribes as States," thus
affording Indian tribes the same opportunity as states to
implement the NAAQS within tribal jurisdictions under a
Title V program. 42 U.S.C. s 7601(d). Title V requires that
states submit and obtain EPA approval of a state operating
permit program ("SOP") that meets the "minimum elements"
set forth under 42 U.S.C. s 7661a(d) and EPA regulations
promulgated pursuant to 42 U.S.C. s 7661a(b). Among the
requirements is that the state demonstrate that it has "ade-
quate authority," including jurisdiction, to regulate the emis-
sion sources subject to the SOP. Id. at s 7661a(d). This
same requirement applies to Indian tribes seeking to enact
their own implementation plan. Id. at s 7601(d).
Congress recognized the unique legal status and circum-
stances of Indian tribes by allowing tribes to be treated as
states, but not requiring them to apply to EPA to manage
Clean Air Act programs. See id. at s 7601(d)(1)(A). Tribes
may be treated as states if: they have a governing body; the
functions they are to exercise pertain to the management and
protection of air resources within the tribe's jurisdiction; and
the tribe is capable of carrying out these functions. See 42
U.S.C. s 7601(d)(2). No tribe to date has sought to create an
implementation plan. In the Tribal Authority Rule ("TAR"),
EPA exercised authority under 42 U.S.C. ss 7601(d)(2), (4)
by specifying those portions of the Clean Air Act for which it
deemed it appropriate to treat Indian tribes as states, and the
requirements necessary for tribes to establish jurisdiction to
develop Title V permitting programs. See Indian Tribes: Air
Quality Planning and Management, 63 Fed. Reg. 7254 (Feb.
12, 1998) (to be codified at 40 C.F.R. pts. 9, 35, 49, 50, and 81).
EPA's interpretation was upheld by this Court in Arizona
Pub. Serv. Co. v. EPA, 211 F.3d 1280 (D.C. Cir. 2000), cert.
denied, 121 S. Ct. 1600 (2001). Under the TAR a tribe may
only develop a Title V permitting program for non-
reservation areas if the tribe can demonstrate jurisdiction
under federal Indian law. Therefore the TAR provides a
procedure for resolving jurisdictional disputes. See 40 C.F.R.
s 49.9(e).
If a state fails to create an EPA-approved implementation
plan, or in cases where an approved program is not being
properly implemented, Congress requires EPA to "promul-
gate, administer, and enforce" a federal operating permit
program. 42 U.S.C. ss 7661a(d)(3), (i)(3). Further, in the
absence of an EPA-approved tribal implementation program,
EPA may adopt a federal implementation program. See 42
U.S.C. s 7601(d)(4). However, the parties before us disagree
as to the source of EPA's power to enact such a program for
Indian country. The EPA claims its "authority under the
CAA is based in part on the general purpose of the CAA,"
which was only supplemented in the Indian tribe context by
42 U.S.C. s 7601(d)(4). 64 Fed. Reg. at 8251; see also 62
Fed. Reg. 13748, 13749 (proposed rule and notice) ("Today's
notice makes it clear that EPA's implementation of part 71
programs in Indian country is based on EPA's overarching
authority to protect air quality within Indian country, not
solely on its authority to act in the stead of an Indian Tribe.").
In contrast, petitioners essentially contend EPA is merely
authorized to act in the shoes of the tribes--providing a
federal implementation program for tribes as it would for a
state that failed to develop an approved program. In any
event, both sides agree that in the absence of a tribal
implementation plan, EPA may provide a federal operating
plan for lands under the tribe's jurisdiction.
B. Federal Indian Law
Determining tribal jurisdiction is far from straightforward
and involves delicate questions involving state and tribal
sovereignty. Indeed, state-tribal relations have been a con-
cern since the time of the founding. See The Federalist No.
42 (Madison) ("What description of Indians are to be deemed
members of a State, is not yet settled, and has been a
question of frequent perplexity and contention in the federal
councils."). Under principles of federal Indian law, "Indian
country" denotes the geographic scope where "primary juris-
diction ... rests with the Federal Government and the Indian
tribe inhabiting it, and not with the States." Alaska v.
Native Village of Venetie Tribal Gov't, 522 U.S. 520, 527 n.1
(1998). "Indian country" is defined by statute as "all land
within the limits of any Indian reservation," "all dependent
Indian communities," and "all Indian allotments." 18 U.S.C.
s 1151 (2001). "Although this definition by its terms relates
only to federal criminal jurisdiction, [the Supreme Court has]
recognized that it also generally applies to questions of civil
jurisdiction such as the one at issue here." Venetie Tribal
Gov't, 522 U.S. at 527 (citing DeCoteau v. District County
Court for Tenth Judicial Dist., 420 U.S. 425, 427 n.2 (1975)).
Thus, unlike typical political boundaries, the jurisdictional
boundaries of Indian tribes are not always clearly delineated,
and often are determined through adjudication or other ad-
ministrative proceedings. See, e.g., id. at 534; Tribal Author-
ity Rule, 40 C.F.R. pt. 49, 63 Fed. Reg. 7254 (Feb. 12, 1998).
"[T]he test for determining whether land is Indian country
does not turn upon whether that land is denominated 'trust
land' or 'reservation.' Rather, we ask whether the area has
been 'validly set apart for the use of the Indians as such,
under the superintendence of the Government.' " Oklahoma
Tax Comm'n v. Citizen Band Potawatomi Indian Tribe of
Oklahoma, 498 U.S. 505, 511 (1991) (quoting United States v.
John, 437 U.S. 634, 648-49 (1978)). Difficult jurisdictional
questions can arise over lands that do not meet the prima
facie test for "Indian country." Claims of superintendence
can be controversial for lands that tribes claim to be "depen-
dent Indian communities," where title is not held by the
federal government or Indians, e.g. Venetie Tribal Gov't, 522
U.S. at 525-27, or lands outside the exterior boundaries of
formally-established reservations such as lands taken into
trust for tribes pursuant to the Indian Reorganization Act (25
U.S.C. s 465 (2000)), for which no action was taken by treaty,
Executive Order, or act of Congress to set the lands aside for
the use and benefit of a tribe.
It is against this background that EPA adopted its new
Part 71 rules providing for federal administration of an
operating permits program in Indian country.
C. The 1999 Part 71 Rule
In 1999, EPA finalized its 1997 proposal, 62 Fed. Reg.
13748 (March 21, 1997), establishing the Part 71 federal
operating permits plan throughout "Indian country unless a
Tribal or State Part 70 program has been explicitly approved
for the area." 64 Fed. Reg. at 8247, 8249 (codified at 40
C.F.R. s 71.4(b)). The major area of contention between
petitioners and EPA, and thus the issue before this Court is
EPA's authority to promulgate "Part 71 programs for Indian
country." Section 71.4(b) provides:
The Administrator will administer and enforce an operat-
ing permits program in Indian country as defined in
s 71.2, when an operating permits program which meets
the requirements of part 70 of this chapter has not been
explicitly granted full or interim approval by the Admin-
istrator for Indian country. For purposes of administer-
ing the part 71 program, EPA will treat areas for which
EPA believes the Indian country status is in question as
Indian country.
40 C.F.R. s 71.4(b) (emphasis added). Specifically, this
Court must evaluate whether EPA's decision to "treat areas
for which EPA believes the Indian country status is in
question as Indian country" has exceeded the agency's au-
thority under the Clean Air Act.
In its 1995 proposal for Part 71, EPA stated that the "Act
authorizes EPA to protect air quality on lands over which
Indian Tribes have jurisdiction." 60 Fed. Reg. at 20809
(emphasis added). The purpose was to provide a "mechanism
by which EPA [could] assume responsibility to issue permits
in situations where the State, local, or Tribal agency has not
developed, administered, or enforced an acceptable permits
program...." Id. at 20805. Thus, under the 1995 proposal,
EPA would issue permits for "Tribal areas" that "EPA
determines to be within a Tribe's inherent authority." Id. at
20830 (emphasis added). As a prerequisite the 1995 proposal
would have "required Tribes to establish their jurisdiction
over certain areas of Indian country before EPA could imple-
ment a Federal program for those areas." 64 Fed. Reg. at
8249 (emphasis added); see 60 Fed. Reg. at 20809. The 1999
rules adopted in Part 71 and the agency's approach to deter-
mining jurisdiction differ sharply from the original 1995 pro-
posal. Unlike the present rule, a final jurisdictional determi-
nation would have been required regardless of whether the
tribe sought its own program. Moreover, EPA proposed to
follow the same "approach to resolving jurisdictional issues
taken in the Tribal air rule." 60 Fed. Reg. at 20810. "EPA
would notify appropriate governmental entities of the bound-
ary of the Tribal area for a part 71 program at least 90 days
prior to the effective date of the program," and where a
dispute arose provide notice in the Federal Register and seek
comments. Id. Finally, the 1995 proposal anticipated that
EPA would "implement a part 71 program that covers all
undisputed areas, while withholding action on the portion
that addresses areas where a jurisdiction issue has not been
satisfactorily resolved." Id. (emphasis added). In contrast,
under the adopted rule, EPA assumes jurisdiction if "EPA
believes" the status of the area is "in question." 40 C.F.R.
s 71.4(b); 64 Fed. Reg. at 8262.
EPA contends that under its new Part 71 rule it need only
conclude there is a "bona fide" question before it will treat an
area's Indian country status as "in question." See 64 Fed.
Reg. at 8248 n.1. EPA claimed its authority with respect to
"in question" lands is based on the agency's "overarching
authority to protect air quality within Indian country, not
solely on its authority to act in the stead of an Indian Tribe."
62 Fed. Reg. at 13749. Further, rather than determine
whether an area's status is Indian country or at least "in
question" through notice and comment rulemaking, the agen-
cy proposes to use adjudications over individual emitting
sources to determine an area's status. See 64 Fed. Reg. at
8255 ("EPA would not conduct area-specific rulemaking pro-
cedures to assess the boundaries of programs in Indian
country.... Specific 'boundary' questions relating to appli-
cability of the program to particular sources would be ad-
dressed through a less formal consultation process [and] EPA
would make case-specific determinations on whether particu-
lar sources are in Indian country."); id. at 8257. Petitioners
sought review in this Court of the portion of EPA's 1999 Part
71 Rule authorizing EPA to treat as "Indian country" lands
for which EPA has deemed "Indian country" status to be "in
question" and of EPA's determination to make jurisdictional
inquiries through case-by-case adjudications rather than no-
tice and comment rulemakings.
II. Analysis
A. EPA's Authority
It is elementary that our federal government is one of
limited and enumerated powers. "The powers of the legisla-
ture are defined and limited; and that those limits may not be
mistaken or forgotten, the constitution is written." Marbury
v. Madison, 5 U.S. (1 Cranch) 137, 176 (1803) (Marshall, C.J.).
This principle applies with equal force to the so-called modern
administrative state. EPA is a federal agency--a creature of
statute. It has no constitutional or common law existence or
authority, but only those authorities conferred upon it by
Congress. "It is axiomatic that an administrative agency's
power to promulgate legislative regulations is limited to the
authority delegated by Congress." Bowen v. Georgetown
Univ. Hosp., 488 U.S. 204, 208 (1988). Thus, if there is no
statute conferring authority, a federal agency has none. We
must reverse EPA's decision to administer a federal operat-
ing permit program in lands whose Indian country status is
considered to be "in question" if it is arbitrary, capricious, an
abuse of discretion, or otherwise not in accordance with law.
See Motor Vehicle Mfrs. Ass'n of the United States, Inc. v.
EPA, 768 F.2d 385, 389 n.6 (D.C. Cir. 1985), cert. denied, 474
U.S. 1082 (1986). If EPA lacks authority under the Clean Air
Act, then its action is plainly contrary to law and cannot
stand. See American Petroleum Inst. v. EPA, 52 F.3d 1113,
1119-20 (D.C. Cir. 1995) ("API"); Ethyl Corp. v. EPA, 51
F.3d 1053, 1060 (D.C. Cir. 1995). To determine whether the
agency's action is contrary to law, we look first to determine
whether Congress has delegated to the agency the legal
authority to take the action that is under dispute. United
States v. Mead Corp., 121 S. Ct. 2164, 2171 (2000) ("We hold
that administrative implementation of a particular statutory
provision qualifies for Chevron deference when it appears
that Congress delegated authority to the agency generally to
make rules carrying the force of law...."); Chevron U.S.A.
Inc. v. Natural Resources Defense Council, Inc., 467 U.S.
837, 843-44. Mere ambiguity in a statute is not evidence of
congressional delegation of authority. See Sea-Land Servs.,
Inc. v. Dep't of Transp., 137 F.3d 640, 645 (D.C. Cir. 1998)
("[Chevron] deference comes into play of course, only as a
consequence of statutory ambiguity, and then only if the
reviewing court finds an implicit delegation of authority to the
agency.") (emphasis added); City of Kansas City, Mo. v.
Dep't of Housing & Urban Dev., 923 F.2d 188, 192-93 (D.C.
Cir. 1991) ("implicit delegation of interpretive authority," as
well as ambiguity, are required before Chevron-step-two def-
erence is appropriate); cf. Railway Labor Exec. Ass'n v.
Nat'l Mediation Bd., 29 F.3d 655 (D.C. Cir. 1994) (en banc).
However, when Congress has explicitly or impliedly left a gap
for an agency to fill, there is a delegation of authority to the
agency to give meaning to a specific provision of the statute
by regulation, "and any ensuing regulation is binding in the
courts unless procedurally defective, arbitrary and capricious
in substance, or manifestly contrary to the statute." Mead,
121 S. Ct. at 2171.
Agency authority may not be lightly presumed. "Were
courts to presume a delegation of power absent an express
withholding of such power, agencies would enjoy virtually
limitless hegemony, a result plainly out of keeping with
Chevron and quite likely with the Constitution as well."
Ethyl Corp. 51 F.3d at 1060 (D.C. Cir. 1995).2 "Thus, we will
not presume a delegation of power based solely on the fact
that there is not an express withholding of such power."
API, 52 F.3d at 1120.
We conclude that the plain meaning of 42 U.S.C. s 7601(d)
and s 7661a grants EPA the authority to "promulgate, ad-
minister and enforce a [federal operating permit] program"
for a state or tribe if, and only if, (1) the state or tribe fails to
submit an operating program or (2) the operating program is
disapproved by EPA or (3) EPA determines the state or tribe
is not adequately administering and enforcing a program.
See 42 U.S.C. ss 7661a(d), (i). Since Congress has not
delegated authority to the agency to act beyond these statuto-
ry parameters, we will not defer to EPA's interpretation of
the Act as giving it the broader power to indefinitely run a
federal operating permit program in the absence of the
conditions set out by sections 7661a(d), (i), and 7601(d). See
Mead, 121 S. Ct. at 2177 (Chevron deference not applicable
"where statutory circumstances indicate no intent to delegate
general authority to make rules with force of law"); Chevron,
467 U.S. at 842-43.
B. EPA's Treatment of "In Question" Lands
Petitioners and EPA agree that under the regime Congress
has created in the Clean Air Act, the states have primary
responsibility for ensuring that ambient air meets federally-
__________
2 Such a result would be out of keeping with Mead as well.
established standards. Section 502 of the Act, 42 U.S.C.
s 7661a, addresses EPA approval of state programs. EPA
must establish minimum elements of a permit program and
each state must develop such a program. Id. at ss 7661a(b)
and (d). Section 502(d)(3) specifies that "[i]f a program
meeting the requirements of this subchapter has not been
approved in whole for any State, the Administrator shall, 2
years after the date required for submission of such a pro-
gram ... promulgate, administer, and enforce a program
under this subchapter for that State." 42 U.S.C.
s 7661a(d)(3) (emphasis added). Similarly, if EPA deter-
mines that a state (or tribe) is "not adequately administering
and enforcing a program, or portion thereof" then "unless the
State has corrected such deficiency within 18 months after
the date of such finding, the Administrator shall, 2 years after
the date of such finding, promulgate, administer, and enforce
a program under this subchapter for that State." 42 U.S.C.
ss 7661a(i)(1), (4) (emphasis added).
Section 502, 42 U.S.C. s 7661a, does not speak of underly-
ing, residual, or even default EPA jurisdiction, authority, or
power. It only speaks of the EPA running an implementa-
tion program for a state that fails to develop an approved
program. EPA has no authority or jurisdiction under section
502 to operate a federal program unless or until the state fails
to have a SOP approved within a specified time frame.
Further, if EPA does implement a program, the Administra-
tor is instructed only "to administer and enforce federally
issued permits under this subchapter until they are replaced
by a permit issued by a permitting program," and EPA must
"suspend the issuance of permits promptly upon publication
of notice of approval of a permit program under this sec-
tion...." 42 U.S.C. s 7661a(e). Thus, once a state program
is approved, EPA's authority to operate a federal program
under section 502(d)(3) lapses.
Nothing in CAA section 301(d), 42 U.S.C. s 7601(d), adds
to EPA's jurisdiction to implement a federal program in place
of the states. Section 301(d) permits the EPA to "treat
Indian tribes as States" if certain prerequisites are met,
including that the "functions to be exercised by the Indian
tribe pertain to the management and protection of air re-
sources within the exterior boundaries of the reservation or
other areas within the tribe's jurisdiction." 42 U.S.C.
s 7601(d)(2)(B) (emphasis added). If the EPA determines
that treatment of Indian tribes as identical to states is
inappropriate or administratively infeasible, then the EPA
"will directly administer such provisions so as to achieve the
appropriate purpose." 42 U.S.C. s 7601(d)(4). Thus, under
section 301, EPA may treat qualifying tribes as states, and if
the tribe fails to meet the requirements set out under section
502, then EPA must implement a federal program. Alterna-
tively, if the tribe fails to qualify, then EPA must likewise
implement a federal program. Again, there is no suggestion
of inherent or underlying EPA authority, but rather a role for
the EPA if the tribe, for whatever reason, does not promul-
gate a tribal implementation program.
It is significant that neither the EPA nor the Intervenor,
Navajo Nation, can cite a single reference in the Clean Air
Act that suggests that the agency has some overarching
jurisdiction to implement federal programs. If anything, the
"structure" and "history" of the Act, to which they appeal,
suggest otherwise, for it is an experiment in cooperative
federalism, as Intervenor notes. Certainly the Act intended
to create an overarching federal role in air pollution control
policy, as Intervenor argues, but that overarching role is in
setting standards, not in implementation. EPA's role for
implementation is limited to the conditions set out in 42
U.S.C. ss 7601(d), 7661a.
The Intervenor's brief is telling. To support its contention
of default federal jurisdiction it cites vague statements that
the Act is "national in scope," that it is to "protect and
enhance the quality of the Nation's air resources" or that
EPA has the authority to issue regulations necessary to
implement the Act. But none of these implies that EPA has
some default authority to operate an implementation plan
except as specified in sections 301(d) and 502 of the Clean Air
Act, 42 U.S.C. ss 7601(d), 7661a. In its brief, EPA claims
that it "always has nationwide enforcement authority under
the Act" because "Congress charged EPA not only with
generally administering the Act, but also with nationally
overseeing and enforcing its requirements." Similarly, in
adopting the new Part 71 rules, EPA claimed its "authority
under the CAA is based in part on the general purpose of the
CAA." 64 Fed. Reg. at 8251. However, "EPA cannot rely on
its general authority to make rules necessary to carry out its
functions when a specific statutory directive defines the rele-
vant functions of EPA in a particular area." API, 52 F.3d at
1119. Rather, we have before had occasion to remind EPA
that its mission is not a roving commission to achieve pure air
or any other laudable goal. See, e.g., API, 52 F.3d at 1119;
Ethyl Corp., 51 F.3d at 1058. Commendable though these
goals may be, they are not within EPA's portfolio unless the
states and tribes fail to implement a program, and the
conditions in 42 U.S.C. ss 7601(d) and 7661a are therefore
met.
Having determined that EPA's only authority to administer
a federal operating permit program is found in 42 U.S.C.
ss 7601(d) and 7661a, we must next determine whether EPA
is acting within that authority in the challenged procedure.
The answer is plainly no. EPA asserts that where a state has
applied to operate a SOP under 42 U.S.C. s 7661a, EPA need
not actually determine whether the state has jurisdiction.
Rather, EPA claims it may administer a federal operating
permit program for sources in Indian country, including
areas where EPA believes a bona fide question of Indian
country status exists. Much of EPA's brief is dedicated to
arguing that it has authority to administer a federal operating
permit program in Indian country. However, these words
are wasted as petitioners do not claim otherwise. At issue in
this case is EPA's authority to administer a federal program
where the Indian country status is merely in question. The
petitioner states do not contend, as EPA and Intervenor
suggest, that the states should have jurisdiction over Indian
country lands. Petitioners happily concede that tribes, and
thus, potentially the EPA--acting for the tribe--have juris-
diction over Indian country. Similarly, petitioners not only
concede that EPA may undertake initial jurisdictional line-
drawing, subject to judicial review, they insist, correctly, that
EPA must make jurisdictional determinations. That is, EPA
cannot acquire jurisdiction for itself merely by determining
that an area's status is in question. Were we to hold other-
wise, EPA would effectively have a blank check to expand its
own jurisdiction by not deciding jurisdictional questions. The
Clean Air Act does not confer such authority.
EPA argues that it is the state's burden under 42 U.S.C.
s 7661a(d)(1) to make a showing of "adequate authority" (and
thus state jurisdiction) to carry out a SOP, and that unless a
state can demonstrate authority to regulate an area, then
EPA must provide for effective implementation of Title V
programs. EPA contends it need not determine whether the
disputed area is within the jurisdiction of a state or a tribe,
and that by operating a federal program over "in question"
areas it avoids jurisdictional disputes. See 64 Fed. Reg. at
8254. Because Congress has given EPA discretion to deter-
mine how to preserve tribes' statutorily-granted options to
seek to run a Title V program for sources within Indian
country, EPA argues that this Court should defer to its
decision under Chevron step two, as a rule reasonably filling
the gap left by Congress.
What EPA fails to appreciate is that its actions create a
jurisdictional dispute. If a state has an approved implemen-
tation plan, then EPA's only grounds for jurisdiction under
the Act is the fact that an area is Indian country, not that its
status is "in question." If the state does not have an ap-
proved plan, then EPA is acting for the state. There are no
intermediate grounds on which EPA may indefinitely exercise
jurisdiction--it is either acting in the shoes of a tribe or the
shoes of the state. There is no residual authority granted by
the CAA for the EPA to refuse to make a jurisdictional
determination and operate a federal program under some
general authority of its own. EPA comes close to arguing
that because Congress has not expressly forbidden this asser-
tion of federal jurisdiction, the agency may assert it. Howev-
er, as we reminded the EPA in Ethyl Corp. and American
Petroleum Institute, to suggest "that Chevron step two is
implicated any time a statute does not expressly negate the
existence of a claimed administrative power ..., is both flatly
unfaithful to the principles of administrative law ... and
refuted by precedent." 51 F.3d at 1060; 52 F.3d at 1120.
EPA and Intervenor Navajo Nation also argue that EPA's
obligation to protect Indian interests in land, including juris-
diction and other facets of self-government, and the strong
federal interest in preserving the sovereign rights of tribal
governments to regulate activities and enforce laws on Indian
lands, support the 1999 Part 71 rule allowing EPA to operate
a federal program for lands in question. See Exec. Order No.
13175, s 3(a), 65 Fed. Reg. 67249 (Nov. 9, 2000) ("Agencies
shall respect Indian tribal self-government and sovereignty,
honor tribal treaty and other rights, and strive to meet the
responsibilities that arise from the unique legal relationship
between the Federal Government and Indian tribal govern-
ments."). Intervenor argues that to allow states to imple-
ment Title V programs where the Indian country status is "in
question" would infringe on rights that belong to the tribes
under both the CAA and "general principles" of federal
Indian law. EPA similarly asserts that by operating a feder-
al program for "in question" areas, it "protect[s] tribal sover-
eignty interests." EPA essentially argues that its interpreta-
tion of the CAA is correct because it favors Indian interests.
Yet, the bedrock canon of statutory interpretation in Ameri-
can Indian jurisprudence that " 'statutes are to be construed
liberally in favor of the Indians, with ambiguous provisions
interpreted to their benefit' " is simply not implicated here.
Cobell v. Norton, 240 F.3d 1081, 1101 (D.C. Cir. 2001) (quot-
ing Montana v. Blackfeet Tribe of Indians, 471 U.S. 759, 766
(1985)). EPA is not interpreting 42 U.S.C. ss 7601(d) and
7661a for the benefit of Indian tribes. It does not, for
example, propose to give Indian tribes jurisdiction over "in
question" lands. Rather it is refusing to make a jurisdictional
determination, thereby depriving both tribes and states of the
opportunity afforded them by Title V to operate a permitting
program. If anything, by claiming independent federal juris-
diction over "in question" areas, EPA is construing these
statutes for its own benefit.
EPA notes in its brief that "disputes" over whether a
particular parcel of land is Indian country "typically are
resolved by tribunals other than EPA." However, EPA
offers no reason why it should refrain from deciding such
jurisdictional questions when they arise under the CAA.
Quite to the contrary, EPA has willingly accepted that it
must make jurisdictional decisions before approving a tribal
implementation plan. That very issue was the topic of litiga-
tion before this Court just last year in Arizona Public Service
Co. v. EPA, 211 F.3d 1280 (D.C. Cir. 2000). EPA is not
seriously contending that it cannot or should not make juris-
dictional decisions. Rather it is suggesting it would prefer
just to run the program itself. Ironically in the Tribal
Authority Rule at issue in Arizona Public Service Co., EPA
stated that a "territorial approach to air quality regulation
best advances rational, sound air quality management," 59
Fed. Reg. 43956, 43959 (Aug. 25, 1994), yet here EPA does
not want to decide who controls the territory, instead leaving
pockets of "in question" lands under federal, not Indian,
jurisdiction.
EPA claims in its brief that it will only assert authority if
there is a "bona fide" question of an area's status. However,
in the Federal Register, EPA concluded that for the "pur-
poses of this rule, there may be, but need not be, a formal
dispute, such as active litigation or other form of public
disagreement, for EPA to consider the Indian country status
of the area to be in question." 64 Fed. Reg. at 8254. Thus,
at least in the Federal Register, EPA has set a low, indeed
virtually undefined, threshold for deciding there is a dispute.
In any event, the Clean Air Act does not provide for EPA to
administer a federal program even if there is a bona fide
question of the area's status. Instead, under 42 U.S.C.
s 7661a(d), EPA must determine whether the state has ade-
quate authority to carry out the SOP. And EPA must tell
the state if the SOP is disapproved because of a lack of
jurisdiction. Section 7661a(d)(1) requires that if the SOP is
disapproved, "in whole or in part, the Administrator shall
notify the Governor of any revisions or modifications neces-
sary to obtain approval." As petitioners point out, there
either is jurisdiction or there isn't, but either way EPA must
decide and not simply grab jurisdiction for itself on the
ground that an area is "in question." Jurisdiction as between
states and tribes is binary, it must either lie with the state or
with the tribe--one or the other--and EPA does not have a
third option of not deciding.
Petitioners correctly fear that EPA is creating a situation
in which it may assume jurisdiction for itself and perpetually
keep it from the states (or the tribes) because of a lack of
showing of jurisdiction, without ever deciding who has juris-
diction. EPA even anticipates such an eventuality. It notes:
Where a State and Tribe assert jurisdiction over an area
whose Indian country status EPA believes is in question
(and EPA has not resolved the question and has not
explicitly approved a part 70 program as applying in the
area), EPA would not view either the State or the Tribe
as having satisfied the CAA section 502(b)(5) require-
ments to have adequate authority.... Only when the
State or Tribe prevails on the Indian country question
would EPA then be able to conclude that the section
502(b)(5) requirements have been met for the area. Un-
til that time, the absence of an approved part 70 pro-
gram in the area necessitates implementation of part 71.
By federally implementing the title V program in areas
for which EPA believes the Indian country status is in
question, EPA can help avoid jurisdictional disputes that
might hinder effective implementation of the CAA.
64 Fed. Reg. at 8254 (emphasis added). Instead, EPA de-
clines to resolve the dispute and imposes its own program.
This situation arises in part because "EPA believes there is
no reason to impose on Tribes the burden of making a
jurisdictional showing prior to EPA administering a Federal
program." 62 Fed. Reg. at 13750. The source of EPA's
belief is not entirely clear. EPA purports to rely on HRI,
Inc. v. EPA, 198 F.3d 1224 (10th Cir. 2000). However, the
issues in that case were quite different from those confront-
ing us today. In HRI, Inc., the court was called upon to
determine whether (1) the EPA had properly determined that
a parcel of land was Indian country and (2) whether the EPA
had determined that another parcel of land was in dispute.
The Tenth Circuit affirmed the EPA decisions before it, but
remanded for the EPA to make the jurisdictional determina-
tion concerning the disputed land. That court certainly did
not determine that the EPA had acquired potentially perma-
nent jurisdiction over a parcel of land simply by reason of its
status being in dispute. Here we need not decide whether
EPA could temporarily operate a Part 71 federal program
while determining whether a state or a tribe has jurisdiction,
as that is not before us. EPA does not propose to impose
federal jurisdiction over "in question" lands only until it can
resolve the dispute, but in perpetuity, or at least until a tribe
or state makes an adequate showing through some other
regulatory or adjudicatory mechanism. EPA did announce it
would work with states, tribes, the Department of the Interi-
or and other stakeholders "to assess whether sources are
located in Indian country," which EPA defines as including
areas for which EPA believes the Indian country is in ques-
tion. 64 Fed. Reg. at 8256. But that means only EPA will
take questions and comments on whether something is "in
question." EPA does not promise--or even suggest--it will
determine jurisdiction. It proposes to run a federal program
so long as the area is "in question" without resolving that
question--and EPA lacks that statutory authority to do so.
Even if Congress intended for EPA to fill jurisdictional gaps,
it did not empower EPA to create permanent, or even semi-
permanent, ones.
Because EPA's only authority under the Clean Air Act to
operate a federal permitting program arises from 42 U.S.C.
ss 7601(d) and 7661a, and because these provisions require
that EPA make a determination as to whether a state or a
tribe has jurisdiction, we vacate the portion of EPA's 1999
Part 71 rule authorizing EPA to treat lands for which EPA
has deemed "Indian country" status to be "in question" as
"Indian country" for purposes of implementing a federal
program in those areas.
C. Procedure for Determining "Indian country" Status
In evaluating EPA's decision to use adjudication to resolve
jurisdictional questions on a case by case basis, we are guided
by SEC v. Chenery, 332 U.S. 194 (1947). When Congress has
not specified an approach for the agency to follow, the form of
rulemaking or adjudicative procedure "lies primarily in the
informed discretion of the administrative agency." 332 U.S. at
203; see Vermont Yankee Nuclear Power Corp. v. Natural
Resources Defense Council, Inc., 435 U.S. 519, 543 (1978)
("Absent constitutional constraints or extremely compelling
circumstances the administrative agencies should be free to
fashion their own rules of procedure and to pursue methods
of inquiry capable of permitting them to discharge their
multitudinous duties.") (quotations omitted). Thus, EPA's
procedures for determining whether a particular emitting
source (and thus a particular area) falls within Indian country
(or is "in question") would typically be entitled to deference,
as the agency has broad discretion to choose between rule-
making and adjudication. See Chenery, 332 U.S. at 203;
Vermont Yankee, 435 U.S. at 543. However, when Congress
has spoken, we are bound by that pronouncement. Chevron,
467 U.S. at 842-43 (Chevron's step one). Further, regardless
of the reasonableness of EPA's decision under Chenery or
Chevron step two, under the Administrative Procedure Act
("APA") this Court must determine whether the EPA's deci-
sionmaking process was arbitrary, capricious, an abuse of
discretion, or otherwise not in accordance with law. See 5
U.S.C. s 706(2)(A). Here, Congress has clearly spoken, and
under Chevron step one, the inquiry ends there.
Section 502(d) of the Act, 42 U.S.C. s 7661a(d), requires
each state to develop a state program to submit to the EPA.
Each state must submit a legal opinion from the attorney
general (or environmental agency's chief legal officer) "that
the laws of the State, locality, or the interstate compact
provide adequate authority to carry out the program." 42
U.S.C. s 7661a(d)(1) (emphasis added). It is this provision
which has been interpreted to require a showing of jurisdic-
tion. Then, "[n]ot later than 1 year after receiving a pro-
gram, and after notice and opportunity for public comment,
the Administrator shall approve or disapprove such program,
in whole or in part." Id. (emphasis added). The Act clearly
requires notice and comment in approving or disapproving
any part of a state program. That includes the showing of
adequate authority and thus jurisdiction. EPA must deter-
mine, as part of that proceeding, which must include notice
and comment, whether the state has jurisdiction. It follows
that if the state has jurisdiction, then the tribe does not, and
vice versa. Such proceedings are open to public comment,
and judicial review, thus protecting the interests of the tribes
as well as the states. Congress has explicitly required use of
notice and comment in determining adequate authority (and
jurisdiction) when the agency is evaluating the SOPs, and
therefore EPA's decision to use separate adjudicatory pro-
ceedings that do not include notice and comment is contrary
to law and does not survive either Chevron step one or APA
review.
Section 502(i), 42 U.S.C. s 7661a(i), further confirms Con-
gress's clear pronouncement. Under that provision, "[w]hen-
ever the Administrator makes a determination that a permit-
ting authority is not adequately administering and enforcing a
program, or portion thereof, in accordance with the require-
ments of this subchapter, the Administrator shall provide
notice to the State...." 42 U.S.C. s 7661a(i)(1). If the
agency believes the state lacks jurisdiction, it must provide
notice to the state and give the state 18 months to correct the
"deficiency." See id. at s 7661a(i)(4).
Thus, it is clear under 42 U.S.C. s 7661a that jurisdictional
determinations are to be made as part of approving or
disapproving a state's (or tribe's) operating permit program,
and with procedures that include "notice and opportunity for
public comment." 42 U.S.C. s 7661a(d)(1). The statute here
is neither silent nor ambiguous; it requires the use of notice
and comment proceedings in the context where questions of
jurisdiction are to be resolved. As petitioners concede, such
proceedings will likely be complex and difficult. Nonetheless,
they are mandated by Congress. That ends our inquiry.
III. Conclusion
EPA must make jurisdictional determinations under the
Clean Air Act. It cannot simply declare a jurisdictional
conflict and then implement a federal program in the absence
of clear state or tribal authority. Congress specifically delin-
eated a role for EPA and a role for states and tribes in the
Clean Air Act. Under the Act's plain language, EPA's au-
thority to implement a federal operating permits program is
premised on the failure of a state or tribe to implement its
own program, not some overarching national authority. See
42 U.S.C. ss 7601(d), 7661a. Where a valid state program
exists, EPA may implement a federal program only for
Indian country itself, not for lands the status of which EPA
deems "in question." Thus, prior to implementing any feder-
al operating permits program EPA must determine the scope
of state and tribal jurisdiction.
In making such determinations EPA must use notice and
comment proceedings. The Act specifically provides for "no-
tice and opportunity for public comment" in approving or
disapproving a state plan, in whole or in part, and it requires
"notice to the State" whenever the "Administrator makes a
determination that a permitting authority is not adequately
administering and enforcing a program, or portion thereof."
42 U.S.C. ss 7661a(d)(1), (i)(1). This includes determinations
of "adequate authority," and thus determinations of jurisdic-
tion under the Act. Id. at s 7661a(d)(1). Because Con-
gress's intent is clear, EPA's proposed approach is simply
contrary to law.
We grant the petition for review, vacate the portion of the
1999 Part 71 rules authorizing EPA to treat lands for which
EPA has deemed "Indian country" status to be "in question"
as "Indian country," and remand to the agency for proceed-
ings consistent with this opinion.