FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
NATURAL RESOURCES DEFENSE
COUNCIL, INC.; EAST YARD
COMMUNITIES FOR ENVIRONMENTAL
JUSTICE; COALITION FOR A SAFE
ENVIRONMENT; and ENDANGERED
HABITATS LEAGUE,
Petitioners,
v.
UNITED STATES ENVIRONMENTAL No. 08-72288
PROTECTION AGENCY, OPINION
Respondent,
and
SOUTHERN CALIFORNIA
ASSOCIATION OF GOVERNMENTS; and
SOUTH COAST AIR QUALITY
MANAGEMENT DISTRICT,
Respondent-Intervenors.
On Petition for Review of an Order of the
Environmental Protection Agency
Argued and Submitted
November 4, 2010—Pasadena, California
Filed March 30, 2011
4241
4242 NATURAL RESOURCES DEFENSE COUNCIL v. EPA
Before: J. Clifford Wallace and Susan P. Graber,
Circuit Judges, and Richard Mills,* Senior District Judge.
Opinion by Judge Graber
*The Honorable Richard Mills, Senior United States District Judge for
the Central District of Illinois, sitting by designation.
NATURAL RESOURCES DEFENSE COUNCIL v. EPA 4245
COUNSEL
Robert E. Yuhnke, Robert Yuhnke & Associates, Boulder,
Colorado; and Adriano Martinez, Natural Resources Defense
Council, Santa Monica, California, for the petitioners.
Heather E. Gange, Environment & Natural Resources Divi-
sion, United States Department of Justice, Washington, D.C.,
for the respondents.
Barbara Baird, South Coast Air Quality Management District,
Diamond Bar, California; and Joanna G. Africa, Southern
California Association of Governments, Los Angeles, Califor-
nia, for the intervenors.
John P. Dwyer, Dwyer & Biggs LLP, San Francisco, Califor-
nia, for the amicus curiae.
4246 NATURAL RESOURCES DEFENSE COUNCIL v. EPA
OPINION
GRABER, Circuit Judge:
Pursuant to the Clean Air Act, the Environmental Protec-
tion Agency (“EPA”) regulates emissions of particles known
as particulate matter. In order to meet statutory and regulatory
requirements, California submitted a state implementation
plan (“SIP”) to the EPA for its approval. The SIP contains,
among many other things, limits on motor vehicle emissions
for the years 2009 and 2012. Although the EPA’s overall
approval process of the SIP is still underway, the agency has
made a preliminary finding that the SIP’s limits on motor
vehicle emissions for years 2009 and 2012 are adequate for
purposes of the state’s transportation plans and projects. The
EPA’s adequacy determination allows California to approve
transportation plans and projects that otherwise could not pro-
ceed. Pursuant to 42 U.S.C. § 7607(b)(1), several environ-
mental groups filed this petition for review. Petitioners assert
that the EPA’s adequacy determination was arbitrary, capri-
cious, or otherwise contrary to law. We deny the petition.
FACTUAL AND PROCEDURAL HISTORY
A. Air Quality Standards and State Implementation Plans
The general statutory background concerning air quality
standards and SIPs is common to many cases:
The Clean Air Act, 42 U.S.C. §§ 7401-7671
(“Act”), establishes a comprehensive program for
controlling and improving the United States’ air
quality through state and federal regulation. The Act
requires the EPA to establish national ambient air
quality standards (“NAAQS”) for air pollutants that
the EPA determines may reasonably be expected to
endanger public health or welfare. 42 U.S.C.
§§ 7408, 7409.
NATURAL RESOURCES DEFENSE COUNCIL v. EPA 4247
The states are responsible for ensuring that their
air quality meets the NAAQS. Id. § 7407(a). The
states are divided into “air quality control regions,”
and each region is designated as being either in
attainment or nonattainment, or as unclassifiable
with respect to each of the NAAQS. Id. § 7407(d).
The attainment deadlines and control measures
applicable within each region vary, depending on the
pollutant and the severity of the region’s pollution
problem. See id. §§ 7502, 7509, 7511-7514a.
Under the Act, a state must develop a SIP that
provides for the attainment, maintenance, and
enforcement of the NAAQS in each region within
the state. Id. § 7410(a). Section 7410 sets forth the
general requirements for all SIPs, which include
enforceable emission limitations and other control
measures to meet the requirements of the Act;
enforcement programs; and assurances that the state
has adequate personnel, funding, and authority to
carry out the SIP. Every SIP or SIP revision must be
adopted by the state after reasonable notice and hear-
ing, and each must be submitted to the EPA for
approval. Id. § 7410(a)(1). The EPA may fully
approve, partially approve and partially disapprove,
conditionally approve, or fully disapprove a SIP. Id.
§ 7410(k)(3) & (4).
Latino Issues Forum v. EPA, 558 F.3d 936, 938 (9th Cir.
2009).
For areas designated “nonattainment,” the Act requires that
a SIP meet certain specifications. 42 U.S.C. § 7502(c). Rele-
vant here, the SIP must provide for “attainment” of the
NAAQS by the attainment deadline, id. § 7502(c)(1), and it
also must provide, in the interim years, for “reasonable further
progress” toward the goal of attainment. Id. § 7502(c)(2).
“The term ‘reasonable further progress’ means such annual
4248 NATURAL RESOURCES DEFENSE COUNCIL v. EPA
incremental reductions in emissions of the relevant air pollu-
tant as are required by this part or may reasonably be required
by the Administrator for the purpose of ensuring attainment
of the applicable [NAAQS] by the applicable date.” Id.
§ 7501(1).
In the part of the SIP known as the “control strategy imple-
mentation plan revision,” the state must describe “specific
strategies for controlling the emissions of and reducing ambi-
ent levels of pollutants in order to satisfy [statutory] require-
ments for demonstrations of reasonable further progress and
attainment.” 40 C.F.R. § 93.101. Additionally, the state must
allocate allowable emissions for each year between motor
vehicles and all other sources (e.g., factories and power
plants). Id. The state’s “budget” of emissions from motor
vehicles for a given year is known as the “motor vehicle emis-
sions budget.” Id. “Motor vehicle emissions budget is that
portion of the total allowable emissions defined in the submit-
ted or approved control strategy implementation plan revision
or maintenance plan for a certain date for the purpose of
meeting reasonable further progress milestones or demonstrat-
ing attainment or maintenance of the NAAQS . . . .” Id.
B. Regulation of Particulate Matter
“Particulate matter is the generic term for a broad class of
chemically and physically diverse substances that exist as dis-
crete particles (liquid droplets or solids) over a wide range of
sizes.” National Ambient Air Quality Standards for Particu-
late Matter, 62 Fed. Reg. 38,652-01, 38,653 (July 18, 1997)
(“1997 NAAQS Rule”). The EPA regulates particulate matter
as an air pollutant for purposes of the Clean Air Act. Id. The
EPA originally regulated all particulate matter as a single
class. Id. at 38,653-54. In 1987, the EPA created a subclass
of particulate matter: all particles with a diameter equal to or
less than 10 micrometers, referred to as “PM-10.” Id.
In 1997, spurred by extensive scientific research into the
deleterious effects of very small particles, the EPA added to
NATURAL RESOURCES DEFENSE COUNCIL v. EPA 4249
the list of regulated air pollutants a new subset of particulate
matter: those particles with a diameter equal to or less than
2.5 micrometers, referred to as “PM-2.5.” Id. at 38,654. In
2006, the EPA imposed more stringent air quality require-
ments by decreasing the acceptable level of PM-2.5. 71 Fed.
Reg. 61,144-01, 61,224 (Oct. 17, 2006) (“2006 NAAQS
Rule”).
The EPA has promulgated regulations describing the
requirements for SIPs concerning PM-2.5. 40 C.F.R.
§§ 51.1007-51.1009. The EPA designated 2002 as the default
“baseline emission inventory” year to “be used for attainment
planning” purposes. Id. § 51.1008(b). The EPA also specified
requirements concerning a nonattainment area’s plan for rea-
sonable further progress. Id. § 51.1009. For certain SIPs,
including the one at issue here, the SIP must “demonstrat[e]
that reasonable further progress will be achieved for the 2009
and 2012 emissions years,” known as “milestone years.” Id.
§ 51.1009(c)(2). “The RFP plan must demonstrate that in each
applicable milestone year, emissions will be at a level consis-
tent with generally linear progress in reducing emissions
between the base year and the attainment year.” Id.
§ 51.1009(d). The rule details the specific calculations that
correspond to a straight-line decrease in emissions from the
emissions level in the base year to the target emissions level
in the attainment year. Id. § 51.1009(f).
C. Transportation Projects and Transportation Plans
The Clean Air Act requires that all federally funded trans-
portation projects and transportation plans “conform” to the
applicable SIP. 42 U.S.C. § 7506(c)(1), (2). Section
7506(c)(1) provides:
Conformity to an implementation plan means—
(A) conformity to an implementation plan’s pur-
pose of eliminating or reducing the severity and
4250 NATURAL RESOURCES DEFENSE COUNCIL v. EPA
number of violations of the national ambient air
quality standards and achieving expeditious attain-
ment of such standards; and
(B) that such activities will not—
(i) cause or contribute to any new violation of any
standard in any area;
(ii) increase the frequency or severity of any exist-
ing violation of any standard in any area; or
(iii) delay timely attainment of any standard or
any required interim emission reductions or other
milestones in any area.
Those statutory requirements apply as soon as the state sub-
mits its SIP to the EPA for approval (and continue to apply
after EPA approval). Id. The EPA has an “affirmative respon-
sibility” to ensure conformity. Id. Those requirements mean,
among other things, that a transportation project or plan can-
not cause the applicable motor vehicle emissions budget to be
exceeded. 40 C.F.R. § 93.118(a).
Although perhaps not obvious at first glance, the EPA’s
“affirmative responsibility” to ensure that transportation proj-
ects do not, for instance, “delay timely attainment,” 42 U.S.C.
§ 7506(c)(1), puts the EPA in a difficult situation logistically.
The EPA’s approval process of a SIP, including the EPA’s
final determination whether the state’s proposed motor vehi-
cle emissions budget will meet the requirements of the Clean
Air Act, can take a long time. But the statute requires that the
EPA determine conformity for transportation purposes as
soon as the state submits its SIP. Id. Without approved motor
vehicle emissions budgets, however, state transportation agen-
cies cannot determine whether transportation projects or plans
will meet the statutory “conformity” requirements. Id.
NATURAL RESOURCES DEFENSE COUNCIL v. EPA 4251
The EPA attempted to resolve this tension by promulgating
the 1997 conformity rule, codified at 40 C.F.R. § 93.118.
Transportation Conformity Rule Amendments: Flexibility and
Streamlining, 62 Fed. Reg. 43,780-01 (Aug. 15, 1997). The
EPA decided that, once a state submits a SIP, the agency will
conduct a “cursory review” of the submitted motor vehicle
emissions budgets within a short time frame. Id. at 43,782. If
the submitted budgets meet six specified minimum criteria,
the EPA will deem the budgets “adequate for transportation
conformity purposes.” 40 C.F.R. § 93.118(e)(4).
Once the EPA deems a motor vehicle emissions budget
“adequate,” transportation projects and plans can proceed in
accordance with that budget, even though the EPA has not
given—and may never give—final approval to either the bud-
get or the SIP. The EPA’s notice in the Federal Register made
clear that the adequacy determination is independent of the
EPA’s final approval or disapproval of the SIP; thus, the EPA
may later disapprove a budget that the EPA previously had
found adequate. See 62 Fed. Reg. at 43,782; see also Sierra
Club v. EPA, 315 F.3d 1295, 1300 (11th Cir. 2002) (“There
are two, discrete EPA actions relevant to this case: (1) EPA’s
action finding the [motor vehicle emissions budget] to be ade-
quate for transportation conformity purposes, pursuant to 40
C.F.R. § 93.118(e); and (2) EPA’s approval of the SIP,
effected by notice and comment rulemaking. EPA has consis-
tently recognized that these separate actions are different from
each other.” (footnote and some citations omitted)). The EPA
explains in its brief to this court that, “[a]bsent such a process,
transportation projects would, in many instances, soon come
to a standstill while the region’s SIP submittal was being
reviewed.”
Not long after the EPA promulgated the 1997 conformity
rule, an environmental petitioner successfully challenged cer-
tain aspects of the adequacy review process in the District of
Columbia Circuit.1 Envtl. Def. Fund v. EPA, 167 F.3d 641,
1
For certain EPA actions concerning air pollution, 42 U.S.C.
§ 7607(b)(1) grants jurisdiction to the courts of appeals over petitions for
4252 NATURAL RESOURCES DEFENSE COUNCIL v. EPA
650-51 (D.C. Cir. 1999). Importantly, however, the petitioner
did not challenge the basic mechanism of this review process:
The EPA can determine that a budget is “adequate for trans-
portation conformity purposes” before the EPA makes a final
determination to approve or disapprove a SIP or a budget.
The EPA revised the conformity rule to its present form in
2004. 69 Fed. Reg. 40,004-01, 40,038-47 (July 1, 2004). The
EPA stated that the “final rule addresses only the procedures
for making adequacy findings for submitted SIPs in accor-
dance with the court decision. The final rule does not change
the criteria listed in § 93.188(e)(4) of the rule for determining
the adequacy of submitted SIPs, as the court did not address
this provision in its decision.” 69 Fed. Reg. at 40, 038.
Again, environmental petitioners sought review of the con-
formity rule in the District of Columbia Circuit. Envtl. Def. v.
EPA, 467 F.3d 1329 (D.C. Cir. 2006). This time, the court
held that, because the petitioners challenged only provisions
that the EPA originally promulgated in 1997 and did not chal-
lenge the 2004 modifications, the petitioners’ arguments were
time-barred. Id. at 1333-34. In other words, the time had
expired to challenge the EPA’s overall process for making
“adequacy” determinations. So long as the EPA conforms to
its own regulations and does not change its interpretation of
its regulations, the courts must not disturb the agency’s
action. Id. at 1334.
D. South Coast Air Basin’s Nonattainment Status
One of the air quality control regions in California is “the
review. For EPA actions of general applicability, such as rulemaking, the
District of Columbia Circuit is the appropriate forum. Id. For other EPA
actions, such as the one challenged here, which is “locally or regionally
applicable,” the proper forum is the regionally appropriate court of
appeals. Id.
NATURAL RESOURCES DEFENSE COUNCIL v. EPA 4253
South Coast Air Basin, comprising Orange County and por-
tions of Los Angeles, Riverside, and San Bernardino Coun-
ties.” Romoland Sch. Dist. v. Inland Empire Energy Ctr.,
LLC, 548 F.3d 738, 740 (9th Cir. 2008). In 2005, the EPA
designated the South Coast Air Basin as “nonattainment” with
respect to PM-2.5. 40 C.F.R. § 81.305; Air Quality Designa-
tions and Classifications for Fine Particles (PM2.5), 70 Fed.
Reg. 944-01 (Jan. 5, 2005). The relevant dates for the South
Coast Air Basin with respect to PM-2.5 are as follows: The
base year is 2004, the milestone years are 2009 and 2012, and
the attainment year is 2015.2
In 2007, the California Air Resources Board, which is the
state agency entrusted with preparing the SIP, submitted an
implementation plan to the EPA for approval. That SIP con-
tained, among other things, two sets of motor vehicle emis-
sions budgets for PM-2.5. One set, labeled “baseline”
budgets, contained budgets for the two milestone years only,
and did not contain a budget for the attainment year. The
baseline budgets reflected the anticipated emissions given the
present-day restrictions on motor vehicles. The second set,
labeled “SIP-based” budgets, contained budgets for the two
milestone years and for the attainment year. The SIP-based
budgets reflected more stringent emissions restrictions, in
anticipation of future legislative and other uncompleted
action.
Petitioners submitted extensive comments to the EPA in
opposition to the proposed budgets. Among other things, Peti-
tioners submitted scientific data and analyses demonstrating
that levels of PM-2.5 are much higher in close proximity to
2
There is some discrepancy concerning the precise attainment date, with
some references made to an attainment date of 2014. This discrepancy
may exist because, although the attainment date is 2015, the SIP specifies
that “emission reductions needed for attainment must be in place by
2014.” In any event, the precise attainment date is not at issue in this case.
The parties agree, and the regulations confirm, that the base year is 2002
and that the milestone years are 2009 and 2012.
4254 NATURAL RESOURCES DEFENSE COUNCIL v. EPA
highways. Petitioners argued that, accordingly, the South
Coast Air Basin could not achieve attainment without addi-
tional measures. Petitioners concluded that the alleged failure
to demonstrate attainment was fatal to all of the motor vehicle
emissions budgets, for both the milestone years and the attain-
ment year.
By letter to the California Air Resources Board and subse-
quent publication in the Federal Register, the EPA found that
the “SIP-based” budgets were not adequate for transportation
conformity purposes because those budgets depended on
emission-control measures that have yet to be implemented.
The EPA also found, however, that the “baseline” budgets
were adequate for transportation conformity purposes.
“As a result of [the agency’s] adequacy finding, [transpor-
tation agencies] must use these [‘baseline’] budgets in future
transportation conformity determinations.” The EPA
explained: “The ‘baseline’ motor vehicle emissions budgets
reflect emissions reductions from rules that were adopted as
of October 2006 but, in contrast to the ‘SIP-based’ budgets,
do not include new[, not yet implemented] emissions reduc-
tions from the State’s strategy as reflected in the 2007 South
Coast SIP.”
The EPA provided a detailed analysis of why its findings
complied with the six regulatory minimum criteria found at
40 C.F.R. § 93.118(e)(4). Relevant here, the fourth criterion
states that the EPA can find a budget adequate only if the bud-
get “is consistent with applicable requirements for reasonable
further progress, attainment, or maintenance (whichever is
relevant to the given implementation plan submission).” Id.
§ 93.118(e)(4)(iv). The EPA explained that the milestone-year
“baseline” budgets were adequate for transportation purposes
because those budgets “are consistent with the requirement to
demonstrate reasonable further progress.” The attainment-
year “SIP-based” budget, however, was not adequate for
transportation purposes because the EPA could not determine
NATURAL RESOURCES DEFENSE COUNCIL v. EPA 4255
that the budget is “consistent with the requirement to demon-
strate attainment.”
Petitioners timely filed this petition for review pursuant to
42 U.S.C. § 7607(b)(1). They challenge the EPA’s adequacy
determination with respect to the milestone-year baseline bud-
gets.3
STANDARDS OF REVIEW
Title 42 U.S.C. § 7607(b)(1) confers jurisdiction over peti-
tions for review challenging many different types of agency
actions, including an “adequacy” determination such as the
one at issue here. The statute provides a standard of review
for some types of agency actions covered by subsection (b)’s
grant of jurisdiction, id. § 7607(d)(9), but the statute is silent
on the standard of review for other types of agency actions,
including the one before us. The Supreme Court has held that,
in situations like this one, the courts of appeals must proceed
pursuant to the Administrative Procedure Act’s general stan-
dard of review for agency actions—5 U.S.C. § 706(2)(A).
Vigil v. Leavitt, 381 F.3d 826, 833 (9th Cir. 2004) (citing
Alaska Dep’t of Envtl. Conservation v. EPA, 540 U.S. 461,
496-97 & n.18 (2004)). Thus, we may set aside the challenged
3
Petitioners include the Natural Resources Defense Council, Inc.; East
Yard Communities for Environmental Justice; Coalition for a Safe Envi-
ronment; and Endangered Habitats League. Although the EPA does not
raise the issue of constitutional standing, we must consider it. United
States v. Hays, 515 U.S. 737, 742 (1995). According to Petitioners, some
of their members live within the South Coast Air Basin, including in close
proximity to highways; nearby transportation projects have been approved
because of the EPA’s adequacy determination; and those projects will
affect Petitioners’ daily lives. Petitioners therefore have standing. See
Sierra Club v. EPA, 129 F.3d 137, 139 (D.C. Cir. 1997) (holding that the
petitioners had standing in an analogous context); see also Massachusetts
v. EPA, 549 U.S. 497, 517-18 (2007) (discussing standing requirements
for actions brought under 42 U.S.C. § 7607(b)(1)); Fleck & Assocs. v. City
of Phoenix, 471 F.3d 1100, 1105-06 (9th Cir. 2006) (stating the require-
ments for associational standing).
4256 NATURAL RESOURCES DEFENSE COUNCIL v. EPA
agency action only if it is “arbitrary, capricious, an abuse of
discretion, or otherwise not in accordance with law.” 5 U.S.C.
§ 706(2)(A).
DISCUSSION
Petitioners challenge the EPA’s final agency action—its
determination that the baseline budgets were “adequate” for
transportation conformity purposes. Our jurisdiction is limited
to deciding whether that decision was arbitrary, capricious, an
abuse of discretion, or otherwise contrary to law. 5 U.S.C.
§ 706(2)(A); see also 42 U.S.C. § 7607(b) (describing the
extent of jurisdiction); Envtl. Def., 467 F.3d at 1332-33 (dis-
cussing the limits of jurisdiction under § 7607(b)). This limi-
tation is important because, at many times in Petitioners’
briefs, they appear to be challenging other, earlier actions by
the EPA.
For instance, Petitioners appear, at times, to argue that the
placement of air quality monitors is erroneous because none
of those monitors is in close proximity to a highway. But as
the government correctly points out, the placement of moni-
tors was the subject of earlier rulemaking and, therefore, can-
not be challenged in this action. In their reply brief,
Petitioners properly concede that they are not challenging
monitor placement. Similarly, Petitioners cannot now chal-
lenge the substance of the applicable rules concerning confor-
mity. Those rules were promulgated in earlier years, and the
60-day window for filing petitions for review long ago closed.
Envtl. Def., 467 F.3d at 1332-33. In other words, Petitioners
are limited to challenging the EPA’s application of those
rules to California’s submitted motor vehicle emissions bud-
gets. We turn, then, to that issue.
[1] Petitioners argue that the EPA failed to consider a rele-
vant factor—attainment—when it made its adequacy determi-
nation concerning the milestone-year budgets. The EPA
concedes that it did not consider Petitioners’ attainment data
NATURAL RESOURCES DEFENSE COUNCIL v. EPA 4257
for purposes of the milestone-year budgets but argues that
nothing requires it to do so. Therefore, the parties’ dispute
boils down to whether the EPA must consider attainment data
when conducting its adequacy review of a budget for a mile-
stone year.
That issue is properly before us. Generally, we must set
aside an agency’s action where it failed to consider mandatory
factors set forth by statute or in a regulation. Cerrillo-Perez
v. INS, 809 F.2d 1419, 1422 (9th Cir. 1987); see also NRDC
v. EPA, 526 F.3d 591, 602 (9th Cir. 2008) (“An agency action
is arbitrary and capricious ‘if the agency has relied on factors
which Congress has not intended it to consider, entirely failed
to consider an important aspect of the problem, offered an
explanation for its decision that runs counter to the evidence
before the agency, or is so implausible that it could not be
ascribed to a difference in view or the product of agency
expertise.’ ” (quoting Motor Vehicle Mfrs. Ass’n of U.S., Inc.
v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983))).
This issue falls within the jurisdictional scope of § 7607(b)(1)
because it questions whether the EPA’s final agency action—
its adequacy finding—properly applied the law to the facts at
hand.
Petitioners argue that the Clean Air Act and the EPA’s
implementing regulations, coupled with court cases interpret-
ing those sources of law, require the EPA to consider attain-
ment data when determining the adequacy of milestone-year
budgets. Before turning to those sources of law, it is helpful
to describe the parties’ positions on how they contend this
area of the law works.
[2] The EPA asserts that, for a milestone year, a budget
need only demonstrate reasonable further progress toward the
ultimate goal of attainment. Because a milestone year occurs
before the attainment year, it is not necessary to demonstrate
that the state has implemented sufficient measures to reach
attainment by the eventual attainment year. For purposes of
4258 NATURAL RESOURCES DEFENSE COUNCIL v. EPA
demonstrating reasonable further progress, it suffices that the
state demonstrate that it will have reduced emissions to a level
consistent with generally linear progress toward the target
emissions level by the attainment date. In order to calculate
emissions levels for a milestone year consistent with reason-
able further progress, the only information related to attain-
ment needed by the EPA is the total target emissions as of the
attainment date. Once the EPA has calculated the total target
emissions for the attainment year, a straight-forward linear
calculation easily provides the target emissions for the mile-
stone years. No other data concerning attainment are neces-
sary or relevant.
In Petitioners’ view, the EPA has the cart before the horse.
According to Petitioners, it makes little sense to find that,
even though the state cannot demonstrate how it will achieve
the ultimate goal of attainment, the EPA nevertheless can
determine the adequacy of the state’s incremental steps
toward achieving that ultimate goal. Petitioners make much of
the EPA’s admission that, in order to determine reasonable
further progress, it must calculate the attainment-year target
emissions level. Petitioners appear to argue that it is unreason-
able to approve the target emissions level, even for purposes
of adequacy review, if the EPA concedes that the state cannot
reach that target emissions level through the proposed
pollution-reduction measures.
[3] Once the state has demonstrated its ability to achieve
attainment (at least for purposes of adequacy review), then—
and only then—can the state reasonably back-calculate the
intermediate emissions levels. The ultimate goal, after all, is
attainment of the NAAQS. Reasonable further progress is an
extra requirement to which some states must adhere. The
EPA’s approval, for adequacy purposes, of milestone-year
budgets without a demonstration that the state can achieve
attainment, permits the state to effect an end-run around the
clear requirement of the Clean Air Act to achieve attainment.
NATURAL RESOURCES DEFENSE COUNCIL v. EPA 4259
Both the EPA’s view and Petitioners’ view are reasonable
in the abstract. There is nothing illogical about the EPA’s
view that, although it will not approve an attainment-year
budget where the state has not implemented enough measures,
it nevertheless will use the attainment-year target emissions
level to calculate intermediate-year emissions levels. Addi-
tionally, there is nothing illogical about the EPA’s approval,
for adequacy purposes, of the budgets corresponding to those
intermediate years if the budgets independently meet the stat-
utory and regulatory requirements.
At the same time, Petitioners’ view—that the “reasonable
further progress” goals should not be approved (for adequacy
or other purposes) until the state has demonstrated that it will
achieve attainment—also makes sense. After all, attainment is
the goal, and approval of intermediate-year goals has the prac-
tical effect of allowing transportation projects to proceed
before the state has demonstrated that it will achieve attain-
ment.
[4] Although both views are reasonable in the abstract, the
pertinent question is what choices Congress and the EPA
made when they, respectively, enacted the Clean Air Act and
promulgated implementing regulations. On that question,
Petitioners argue that both the conformity rule and the PM-2.5
implementation rules required the EPA to consider attainment
when making its adequacy determinations. In these circum-
stances, the deference owed to the agency cannot be under-
stated:
We must give substantial deference to an agency’s
interpretation of its own regulations. Our task is not
to decide which among several competing interpreta-
tions best serves the regulatory purpose. Rather, the
agency’s interpretation must be given controlling
weight unless it is plainly erroneous or inconsistent
with the regulation. In other words, we must defer to
the [agency’s] interpretation unless an alternative
4260 NATURAL RESOURCES DEFENSE COUNCIL v. EPA
reading is compelled by the regulation’s plain lan-
guage or by other indications of the [agency’s] intent
at the time of the regulation’s promulgation. This
broad deference is all the more warranted when, as
here, the regulation concerns a complex and highly
technical regulatory program, in which the identifi-
cation and classification of relevant criteria necessar-
ily require significant expertise and entail the
exercise of judgment grounded in policy concerns.
Thomas Jefferson Univ. v. Shalala, 512 U.S. 504, 512 (1994)
(citations and internal quotation marks omitted).
A. Conformity Rule
[5] Petitioners first argue that the EPA’s action violated the
conformity rule, originally promulgated in 1997, 40 C.F.R.
§ 93.118(e)(4). In particular, Petitioners challenge the EPA’s
finding concerning the fourth of the six criteria:
EPA will not find a motor vehicle emissions bud-
get in a submitted control strategy implementation
plan revision or maintenance plan to be adequate for
transportation conformity purposes unless the fol-
lowing minimum criteria are satisfied:
....
(iv) The motor vehicle emissions budget(s), when
considered together with all other emissions sources,
is consistent with applicable requirements for rea-
sonable further progress, attainment, or maintenance
(whichever is relevant to the given implementation
plan submission)[.]
Id. Quoting only portions of the conformity rule, Petitioners
argue that the rule requires that the milestone-year budgets be
“consistent with . . . attainment.” Id. But Petitioners’ repeated
NATURAL RESOURCES DEFENSE COUNCIL v. EPA 4261
quotation of only part of the rule is misleading. The full text
of the rule flatly contradicts their reading. A budget must be
“consistent with applicable requirements for reasonable fur-
ther progress, attainment, or maintenance (whichever is rele-
vant to the given implementation plan submission).” Id.
(emphases added). The plain-text meaning of the rule is clear:
For budgets concerning milestone years, reasonable further
progress requirements are relevant; for budgets concerning
the attainment year, attainment requirements are relevant; and
for budgets concerning maintenance years, maintenance
requirements are relevant. Because the approved budgets at
issue concern milestone years only, the only relevant require-
ments are reasonable further progress requirements; attain-
ment requirements are not relevant.
The definition of “motor vehicle emissions budget” further
supports the EPA’s interpretation: “Motor vehicle emissions
budget is that portion of the total allowable emissions defined
in the submitted or approved control strategy implementation
plan revision or maintenance plan for a certain date for the
purpose of meeting reasonable further progress milestones or
demonstrating attainment or maintenance of the NAAQS
. . . .” 40 C.F.R. § 93.101 (all emphases added). Consistent
with the EPA’s interpretation of § 93.118(e)(4)(iv), a budget
for any given year has a purpose either of meeting reasonable
further progress or of demonstrating attainment. Petitioners’
arguments to the contrary are unavailing, particularly given
the very strong deference owed to the EPA in this context.
Thomas Jefferson Univ., 512 U.S. at 512.
B. PM-2.5 Implementation Rules
[6] Petitioners next argue that the EPA’s action violated
the PM-2.5 implementation rules, 40 C.F.R.
§§ 51.1007-51.1009. Unlike the conformity rule, however, the
PM-2.5 implementation rules do not address what the EPA
must consider when making an adequacy determination.
4262 NATURAL RESOURCES DEFENSE COUNCIL v. EPA
Instead, those rules describe other requirements, such as what
a SIP must contain.
Relevant here, § 51.1007(a) specifies that each state must
submit an attainment demonstration “as expeditiously as prac-
ticable” and that each state’s “strategies must be consistent
with requirements in § 51.1009 for RFP [reasonable further
progress].”4 Section 51.1007(b) requires that a SIP must pro-
vide for attainment “as expeditiously as practicable” and
“must include RFP milestones in accordance with § 51.1009.”
In turn, § 51.1009(a) requires that the SIP “must demon-
strate reasonable further progress as provided in § 51.1009(b)
through (h).” Subsections (b) and (c) specify the milestone
years, if any, for which a SIP must demonstrate reasonable
further progress. If the SIP demonstrates attainment within
five years of the base year, then no reasonable further prog-
ress demonstration is required. Id. § 51.1009(b). If the SIP
demonstrates attainment between five and eight years from
the base year, then it must demonstrate reasonable further
progress for milestone year 2009. Id. § 51.1009(c)(1). Finally,
if the SIP demonstrates attainment between nine and ten years
from the base year, then it must demonstrate reasonable fur-
ther progress for milestone years 2009 and 2012. Id.
§ 51.1009(c)(2).
Section 51.1009(d) states that the reasonable further prog-
ress plan “must demonstrate that in each applicable milestone
year, emissions will be at a level consistent with generally lin-
ear progress in reducing emissions between the base year and
the attainment year.” Subsection (f) details the calculations
for achieving “generally linear progress”:
4
Although we decline to use the abbreviation “RFP” for the term “rea-
sonable further progress,” for simplicity, we maintain the agency’s use of
the abbreviation in its regulations. The agency uses the term as both a
noun and an adjective, making substitution of the full term awkward.
NATURAL RESOURCES DEFENSE COUNCIL v. EPA 4263
In the benchmark RFP plan, the State must iden-
tify direct PM-2.5 emissions and PM-2.5 attainment
plan precursors regulated under the PM-2.5 attain-
ment plan and specify target emission reduction
levels to be achieved during the milestone years. In
developing the benchmark RFP plan, the State must
develop emission inventory information for the geo-
graphic area included in the plan and conduct the
following calculations:
(1) For direct PM-2.5 emissions and each PM-2.5
attainment plan precursor addressed in the attain-
ment strategy, the full implementation reduction is
calculated by subtracting the full implementation
inventory from the baseline year inventory.
(2) The “milestone date fraction” is the ratio of the
number of years from the baseline year to the mile-
stone inventory year divided by the number of years
from the baseline year to the full implementation
year.
(3) For direct PM-2.5 emissions and each PM-2.5
attainment plan precursor addressed in the attain-
ment strategy, a benchmark emission reduction is
calculated by multiplying the full implementation
reduction by the milestone date fraction.
(4) The benchmark emission level in the milestone
year is calculated for direct PM-2.5 emissions and
each PM-2.5 attainment plan precursor by subtract-
ing the benchmark emission reduction from the base-
line year emission level. The benchmark RFP plan is
defined as a plan that achieves benchmark emission
levels for direct PM-2.5 emissions and each PM-2.5
attainment plan precursor addressed in the attain-
ment strategy for the area.
4264 NATURAL RESOURCES DEFENSE COUNCIL v. EPA
(5) In comparing inventories between baseline and
future years for direct PM-2.5 emissions and each
PM-2.5 attainment plan precursor, the inventories
must be derived from the same geographic area. The
plan must include emissions estimates for all types
of emitting sources and activities in the geographic
area from which the emission inventories for direct
PM-2.5 emissions and each PM-2.5 attainment plan
precursor addressed in the plan are derived.
(6) For purposes of establishing motor vehicle
emissions budgets for transportation conformity pur-
poses (as required in 40 CFR part 93) for a PM-2.5
nonattainment area, the State shall include in its RFP
submittal an inventory of on-road mobile source
emissions in the nonattainment area.
Id. § 51.1009(f).
[7] We agree with the EPA that nothing in those rules
mandates that the EPA consider attainment data when deter-
mining the adequacy of milestone-year budgets. Indeed, as the
calculation method detailed in § 51.1009(f) makes clear, to
calculate a given milestone-year budget, the only information
related to attainment that the EPA needs is the target
attainment-year emissions level (described in the regulation as
the “full implementation inventory,” id. § 51.1009(f)(1)).
Petitioners read the implementation rules differently. They
assert in their opening brief that, “[a]s the starting point for
determining the emission reductions that must be achieved for
each [reasonable further progress] milestone year, the rule
requires that ‘the State must submit an attainment demonstra-
tion showing that the area will attain the annual and 24-hour
standards as expeditiously as practicable.’ ” (Quoting 40
C.F.R. § 51.1007(a) (emphasis added).) Petitioners reason
that, because California has not achieved the “starting point”
NATURAL RESOURCES DEFENSE COUNCIL v. EPA 4265
in the analysis, the EPA’s adequacy determination is contrary
to law.
[8] Petitioners’ reading is plausible. Section 51.1007(a)
begins: “For any area designated as nonattainment for the
PM-2.5 NAAQS, the State must submit an attainment demon-
stration showing that the area will attain the annual and 24-
hour standards as expeditiously as practicable.” (Emphasis
added.) That text suggests that, before any calculations can be
done, the state must demonstrate attainment, at least in theory.
The same suggestion is found in § 51.1009(c): “For any area
for which the State submits to EPA an approvable attainment
demonstration and [SIP] that demonstrates the area needs an
attainment date of more than five years from the date of des-
ignation, the State also must submit an RFP plan.” (Emphasis
added.) That text suggests that, before the state calculates
milestone-year budgets, it must submit an “approvable attain-
ment demonstration.”
[9] Although Petitioners’ reading is plausible, the imple-
mentation rules do not state unambiguously that the submis-
sion of an attainment demonstration is the “starting point” for
the analysis, and they do not unambiguously require the con-
sideration of attainment when approving milestone-year bud-
gets. Section 51.1007(a) properly describes the requirement
that a state must demonstrate attainment. It may suggest a
starting point in the analysis, but it does not mandate one.
Similarly, § 51.1009(c), taken literally, means that the failure
of the state to submit an “approvable attainment demonstra-
tion” means that the state need not submit a reasonable further
progress plan at all. That literal reading, however, makes no
sense. In context, the intent of that provision is only to require
a reasonable further progress plan in the event, as here, that
the state cannot achieve attainment within five years. Com-
pare 40 C.F.R. § 51.1009(b) (attainment within five years)
with id. § 51.1009(c) (attainment beyond five years). In sum,
the suggestion of a “starting point” in some provisions of the
implementation rules is just that—a suggestion. The rules do
4266 NATURAL RESOURCES DEFENSE COUNCIL v. EPA
not require the EPA to begin with an acceptable attainment
demonstration.
[10] Moreover, and critically, the EPA has offered a rea-
sonable alternative interpretation. It is indisputable that the
state must provide a valid attainment demonstration as expe-
ditiously as practicable, and it is also indisputable that its SIP
must demonstrate attainment. But those regulations do not
speak to whether the EPA can approve milestone-year bud-
gets for purposes of transportation purposes. As discussed
above, § 51.1009(f) requires only that the EPA calculate the
target emissions level.
Petitioners also argue that, even if their reading is not com-
pelled by the plain text of the regulation, their reading is
“compelled by . . . other indications of the [agency’s] intent
at the time of the regulation’s promulgation.” Thomas Jeffer-
son Univ., 512 U.S. at 512 (internal quotation marks omitted).
On this point, Petitioners refer primarily to court decisions
explaining the operation of the applicable regulations.
Although Petitioners cite correct statements of the law, their
cases do not address the applicability of the implementation
rules to a milestone budget. For instance, Petitioners correctly
point out that, before the EPA approves a SIP, it must deter-
mine that the measures in the SIP will achieve attainment. See
Hall v. EPA, 273 F.3d 1146, 1159 (9th Cir. 2001) (“[T]he
EPA must determine the extent of pollution reductions that
are required and determine whether the emissions reductions
effected by the proposed revisions will be adequate to the
task.”); see also Envtl. Def. Fund, 167 F.3d at 650-51
(remanding to the agency for further rulemaking because of
the automatic “adequacy” finding provision in the 1997 ver-
sion of the conformity rule). None of those statements of law
speaks to the legal issue here: the EPA’s adequacy determina-
tion, for transportation conformity purposes, of a milestone-
year budget.
[11] In summary, the EPA’s reading of its own regulations,
which does not require an approvable attainment demonstra-
NATURAL RESOURCES DEFENSE COUNCIL v. EPA 4267
tion, is reasonable. Accordingly, an alternative reading to the
agency’s interpretation is not “compelled by the regulation’s
plain language.” Thomas Jefferson Univ., 512 U.S. at 512.
We have carefully considered all of Petitioners’ other argu-
ments as well, but we find none of them persuasive.5
Petition DENIED.
5
After oral argument in this case, we decided Association of Irritated
Residents v. EPA (AIR), 632 F.3d 584 (9th Cir. 2011). With respect to
motor vehicle emission budgets, we addressed the statutory requirement
that a SIP include transportation control measures “ ‘to offset any growth
in emissions from growth in vehicle miles traveled.’ ” Id. at 595 (quoting
42 U.S.C. § 7511a(d)(1)(A)). We concluded, at step one of the Chevron
analysis, that the EPA’s interpretation of the statutory phrase “any growth
in emissions” was erroneous. Id. at 596-97. We therefore granted the peti-
tion for review. Id. at 597. Although we mentioned adequacy determina-
tions with respect to motor vehicle emissions budgets in the factual
background section, id. at 588, we did not address the issue that we
resolve in this case—whether an adequacy determination of a milestone-
year motor vehicle emissions budget requires the EPA to consider attain-
ment data.
Because AIR touched on similar topics, we ordered supplemental brief-
ing on the effect of AIR on this case. We conclude that there is none. In
contrast to AIR, we address here the proper interpretation of regulations
(not a statute) and, in any event, we conclude that no plain meaning exists.
Additionally, our brief mention of “preliminary adequacy determinations
regarding . . . [motor vehicle emissions budgets]” in AIR was background
information only and does not contravene our analysis here. Id.