Sierra Club v. Jackson

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued April 7, 2011 Decided July 1, 2011

No. 10-5280

SIERRA CLUB AND VALLEY WATCH, INC.,
APPELLANTS

v.

LISA PEREZ JACKSON, IN HER OFFICIAL CAPACITY AS
ADMINISTRATOR, UNITED STATES ENVIRONMENTAL
PROTECTION AGENCY,
APPELLEE

Appeal from the United States District Court
for the District of Columbia
(No. 1:09-cv-02089)

Robert Ukeiley argued the cause and filed the briefs for
appellants.

John E. Arbab, Attorney, U.S. Department of Justice,
argued the cause for appellee. With him on the brief was
Katherine J. Barton, Attorney. R. Craig Lawrence, Assistant
U.S. Attorney, entered an appearance.

Before: SENTELLE, Chief Judge, GINSBURG and BROWN,
Circuit Judges.
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Opinion for the Court filed by Chief Judge SENTELLE.

SENTELLE, Chief Judge: Appellants, nonprofit
environmentalist organizations, appeal from a judgment of
dismissal entered by the district court in an action against the
United States Environmental Protection Agency (“EPA”) under
the citizen suit provision of the Clean Air Act, challenging the
Administrator’s failure to take action to prevent the construction
of three proposed pollution-emitting facilities in Kentucky. The
district court held that there was no mandatory duty to act and
granted the EPA’s motion to dismiss for lack of subject matter
jurisdiction. The nonprofits brought the present appeal. We
affirm the dismissal on different grounds.

I.

The Clean Air Act (“the Act”), 42 U.S.C. §§ 7401 et seq.,
creates a complex regulatory regime designed “to protect and
enhance the quality of the Nation’s air resources.” § 7401(b)(1).
As part of that regime, the Act empowers the Administrator of
the EPA to establish National Ambient Air Quality Standards
(“NAAQS”), setting allowable concentrations of air pollutants
determined by the Administrator to meet statutorily defined
criteria. §§ 7408-09. In furtherance of the attainment of the
National Ambient Air Quality Standards, the Act requires each
state to develop a State Implementation Plan (“SIP”) by which
the state will achieve, maintain, and enforce those standards.
§ 7410. The Administrator is to designate areas of a state
meeting the applicable ambient air quality standard as
“attainment” areas. § 7407(d)(1)(A)(ii). The Act further
requires states to prevent “significant deterioration” of air
quality in attainment areas. §§ 7470 et seq. In furtherance of
this goal, the Act requires, inter alia, that no major emitting
facility may be constructed in an attainment area without a
permit meeting the requirements of the Act. § 7475.
 3

Section 7477, entitled “Enforcement,” states that “[t]he
Administrator shall, and a State may, take such measures,
including issuance of an order, or seeking injunctive relief, as
necessary to prevent the construction or modification of a major
emitting facility . . . proposed to be constructed” in an
attainment area. The present controversy involves three major
emitting facilities proposed to be built in attainment areas in
Kentucky.

II.

The three projects underlying this litigation are the East
Kentucky Power Cooperative’s J.K. Smith Generating Station
coal-fired CFB Boiler Project (“Smith”), Conoco Phillips and
Peabody’s Kentucky NewGas Synthetic Natural Gas Production
plant (“NewGas”), and Cash Creek Generation LLC’s coal-fired
Cash Creek Generating Station (“Cash Creek”). Because each
facility qualifies as a “major emitting facility,” see § 7479(1),
and because each is proposed to be built in a county designated
as an attainment area, all three facilities are required to obtain
permits from the State of Kentucky. § 7475(a). The permits are
part of the statutory Prevention of Significant Deterioration
(“PSD”) program implementing the requirements of § 7475(a).

Kentucky granted PSD permits to each facility prior to
September 15, 2010. That fact is significant because until that
date, the Kentucky State Implementation Plan failed to meet the
requirements of the Clean Air Act’s PSD regulations. In 1989
the EPA approved the PSD permitting program in effect in
Kentucky prior to September 15, 2010. See Approval and
Promulgation of Implementation Plans, Kentucky, 54 Fed. Reg.
36,307 (Sept. 1, 1989). In 1997, the EPA amended the federal
NAAQS to revise the nation’s standards for ozone, see National
Ambient Air Quality Standards for Ozone, 62 Fed. Reg. 38,856
(July 18, 1997), and in 2005 the EPA required those new ozone
 4

standards to be incorporated in each state’s SIP, see Final Rule
to Implement the 8-Hour Ozone NAAQS, 70 Fed. Reg. 71,612
(Nov. 29, 2005). Included in the 2005 EPA regulation was a
requirement that state PSD programs regulate nitrogen oxides,
or NOx, as an ozone precursor in attainment areas. 70 Fed. Reg.
at 71,679. Despite the 2005 mandate, until September 15, 2010,
Kentucky’s State Implementation Plan failed to incorporate the
1997 ozone NAAQS or to regulate NOx as a precursor to ozone
under its PSD program. Therefore, the Smith, NewGas, and
Cash Creek facilities do not comply with § 7475(a), which
forbids the construction of such facilities absent a PSD permit
meeting the requirements of the Clear Air Act.

When neither the Administrator nor the state took action to
prevent the construction of the nonconforming major emitting
facilities, appellants, two environmentalist nonprofits
(collectively referred to as “Sierra Club”), brought the present
action under 42 U.S.C. § 7604(a)(2), which provides for the
filing of citizen suits against the Administrator for her alleged
failure to perform any nondiscretionary duty under the Act.
Arguing that her duty under § 7477 was discretionary, and
therefore beyond the reach of the statute, the Administrator
moved for dismissal. Agreeing with the Administrator, the
district court ruled that the Administrator’s decision not to
exercise her statutory duty was discretionary, and thus not
subject to judicial review. Sierra Club v. Jackson, 724 F. Supp.
2d 33 (D.D.C. 2010). The district court entered a judgment of
dismissal under Rule 12(b)(1) for lack of subject matter
jurisdiction. Sierra Club brought the present appeal.

III.

Before we can consider the merits of the Sierra Club’s
appeal, we must first ensure that we have jurisdiction to do so.
Article III of the Constitution limits the federal courts to
 5

adjudication of actual, ongoing controversies. Honig v. Doe,
484 U.S. 305, 317 (1988). “It has long been settled that a
federal court has no authority ‘to give opinions upon moot
questions or abstract propositions, or to declare principles or
rules of law which cannot affect the matter in issue in the case
before it.’” Church of Scientology v. United States, 506 U.S. 9,
12 (1992) (quoting Mills v. Green, 159 U.S. 651, 653 (1895)).
“Accordingly, if an event occurs while a case is pending on
appeal that makes it impossible for the court to grant ‘any
effectual relief whatever’ to a prevailing party, the appeal must
be dismissed.” Beethoven.com LLC v. Librarian of Cong., 394
F.3d 939, 950 (D.C. Cir. 2005) (quoting Mills, 159 U.S. at 653)).

In this case, the Administrator advances two mootness
arguments. First, the Administrator asserts that because
Kentucky rescinded the East Kentucky Power Cooperative’s
authorization to construct and operate the Smith facility, there
is no longer a live controversy regarding this facility. As the
Sierra Club admitted in its brief, “there is currently no need for
EPA to prevent construction of Smith.” Br. for App. at 3.
Although the Sierra Club suggested that its appeal with regard
to the Smith facility was not moot because it qualifies for the
“issue capable of repetition yet evading review” exception, it
essentially conceded the issue at oral argument. Or. Arg.
3:24–30. (“There are three plants and one of the plants is gone,
so it is moot.”). We agree. The appeal is moot with respect to
the Smith facility.

The Administrator’s first mootness argument does not apply
to the other two facilities, as their permits remain in effect and
they remain in proposed-to-be-constructed status. Nonetheless,
the Administrator argues that the controversy concerning their
construction is moot as well. In her view, the proposed facilities
are no longer out of compliance with § 7475(a). She bases this
contention on the fact that the previously nonconforming SIP
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has been in compliance since September 15, 2010. Therefore,
the Administrator argues, the projects no longer fall within the
prohibition of § 7475(a) as they are not proposed to be built in
attainment areas that are currently “not subject to an
implementation plan which meets the requirements of this part
[of the Clean Air Act].” 42 U.S.C. § 7477. Thus, she contends,
even if § 7477 does create a mandatory duty, that section is no
longer applicable. She further contends that because the statute
no longer applies, any opinion on her duty under the previous
regime would be purely advisory.

Sierra Club offers two responses to the second mootness
argument. First, it contends that Kentucky’s newly achieved
compliance is irrelevant because Kentucky issued the PSD
permits in question under the prior non-compliant Kentucky
State Implementation Plan. Those permits, it contends, do not
meet the standards imposed by § 7475 as compliance with that
statute should be judged at the time of the issuance rather than
some subsequent date. In Sierra Club’s view, if there is to be a
compliant permit for a facility, that permit must issue under a
compliant plan.

Secondly, Sierra Club asserts that the Kentucky SIP suffers
from a further defect not rectified by the September 15, 2010
final rule. It contends that the Clean Air Act’s PSD program
requires public notice of the impact that a new source of air
pollution will have on air quality standards in nearby Class I
areas, such as wilderness and national parks. The Kentucky
Plan, on the other hand, requires notice only for Class I areas
located in the same county as the proposed source, and therefore
there was no published public notice to describe the impact that
the new facilities would have on other nearby Class I areas. In
short, Sierra Club argues, this case still presents a live
controversy because even as currently amended the Kentucky
Plan does not conform to the notice requirements of the Clean
 7

Air Act.

Without passing on the merits of Sierra Club’s contentions,
we agree that the question of the validity of the PFD permits
issued under the noncompliant SIP and the possible invalidity of
the amended SIP raise sufficient current controversy to save this
litigation from mootness as to the NewGas and Cash Creek
facilities.

IV.

Although we hold that we do not lose jurisdiction over this
controversy by reason of mootness, this does not resolve the
jurisdictional theory upon which the district court relied in
dismissing the case under Rule 12(b)(1) for lack of subject
matter jurisdiction. Sierra Club, 724 F. Supp. 2d at 42-43. The
district court’s ruling was based on the proposition that the
Administrator’s decision was discretionary and therefore not
justiciable. Before this court, Sierra Club, which certainly does
not concede that the district court should have dismissed the
claim at all, argues that the analysis should have been under
Rule 12(b)(6) to determine whether the complaint failed to state
a claim upon which relief could be granted rather than under the
jurisdictional standards of Rule 12(b)(1). While it does not in
the end affect the outcome, we ultimately agree that Rule
12(b)(6) should govern. We hasten to state that we do not fault
the district court for basing its dismissal on Rule 12(b)(1) rather
than Rule 12(b)(6). The distinction between a claim that is not
justiciable because relief cannot be granted upon it and a claim
over which the court lacks subject matter jurisdiction is
important. But we cannot fault the district court, as this court
“ha[s] not always been consistent in maintaining these
distinctions.” Oryszak v. Sullivan, 576 F.3d 522, 527 (D.C. Cir.
2009) (Ginsburg, J., concurring). Indeed, we have provided
authority both that discretionary duty claims fall outside our
 8

jurisdiction, and that such claims are nonjusticiable under Rule
12(b)(6). In Association of Irritated Residents v. EPA, we held
that agency decisions excluded from judicial review by 5 U.S.C.
§ 701(a)(2) are outside the court’s jurisdiction. 494 F.3d 1027,
1030 (D.C. Cir. 2007) (“In this case, subject matter jurisdiction
turns on whether the Agreement constitutes a rulemaking subject
to APA review, or an enforcement proceeding initiated at the
agency’s discretion and not reviewable by this court.”). Two
years later, in Oryszak v. Sullivan, we came to a different
conclusion. Without any reference to Association of Irritated
Residents, we stated:

Because the APA does not apply to agency action
committed to agency discretion by law, a plaintiff who
challenges such an action cannot state a claim under the
APA. Therefore, the court has jurisdiction over his case
pursuant to § 1331, but will properly grant a motion to
dismiss the complaint for failure to state a claim.

Oryszak, 576 F.3d at 525.

It is fixed law that “this Court is bound to follow circuit
precedent until it is overruled either by an en banc court or the
Supreme Court.” Maxwell v. Snow, 409 F.3d 354, 358 (D.C.
Cir. 2005). Therefore, when a decision of one panel is
inconsistent with the decision of a prior panel, the norm is that
the later decision, being in violation of that fixed law, cannot
prevail. However, that is not the case with Oryszak and
Association of Irritated Residents. Association of Irritated
Residents is in fact inconsistent with preexisting precedent. In
Trudeau v. FTC, 456 F.3d 178 (D.C. Cir. 2006), we addressed
whether the finality requirement contained in § 704 of the APA
was jurisdictional. Noting the Supreme Court’s holding in
Califano v. Sanders that “the APA does not afford an implied
grant of subject-matter jurisdiction permitting federal judicial
review of agency action,” 430 U.S. 99, 107 (1977), we held that
 9

the finality requirement was not jurisdictional. We reasoned
“[b]ecause § 704’s declaration that final agency action is
‘subject to judicial review’ is not a grant of jurisdiction, even if
we were to infer by negative implication that agency conduct not
amounting to final agency action is not ‘reviewable,’ that
inference would not deprive a federal court of any jurisdiction
it otherwise has.” 456 F.3d at 183-84. We expressly rejected
the proposition that “‘the presence of final agency action is a
jurisdictional issue.’” Id. at 183 (quoting Trudeau v. FTC, 384
F. Supp. 2d 281, 294 n.13 (D.D.C. 2005)).

Although Association of Irritated Residents and Trudeau
concerned different sections of the APA—section 701(a)(2)
rather than section 704—our opinion in Trudeau should have
guided our deliberations in Association of Irritated Residents as
it did later in Oryszak. Therefore, following the norm that the
older case remains undisturbed by the later, it is Trudeau and not
Association of Irritated Residents that provides precedent for our
current review. Applying Oryszak and Trudeau, we conclude
that a complaint seeking review of agency action “committed to
agency discretion by law,” 5 U.S.C. § 701(a)(2), has failed to
state a claim under the APA, and therefore should be dismissed
under Rule 12(b)(6), not under the jurisdictional provision of
Rule 12(b)(1). Oryszak, 576 F.3d at 525. Nonetheless, if the
district court was correct in dismissing the action as a
nonjusticiable challenge to discretionary agency action, it is
within our power to affirm despite the citation of the wrong rule.
As we have previously held, “[a]lthough the district court
erroneously dismissed the action pursuant to Rule 12(b)(1), we
could nonetheless affirm the dismissal if dismissal were
otherwise proper based on failure to state a claim under Federal
Rule of Civil Procedure 12(b)(6).” EEOC v. St. Francis Xavier
Parochial Sch., 117 F.3d 621, 624 (D.C. Cir.1997).
 10

With the threshold questions behind us, we now consider
the merits of the district court’s dismissal of the complaint, now
guided by the provisions of Rule 12(b)(6). We review that
decision de novo and, like the district court, accept the factual
allegations in the complaint as true. Jerome Stevens Pharm. v.
EPA, 402 F.3d 1249, 1250 (D.C. Cir. 2005).

The judicial review provisions of the Administrative
Procedure Act (“APA”), 5 U.S.C. §§ 701-06, establish a cause
of action for parties adversely affected either by agency actions
or by an agency’s failure to act. Heckler v. Chaney, 470 U.S.
821, 828 (1985); see 5 U.S.C. § 551(13) (defining “agency
action” as including an agency’s failure to act). However, the
APA explicitly excludes from judicial review those agency
actions that are “committed to agency discretion by law.” 5
U.S.C. § 701(a). The Supreme Court has specified at least two
occasions in which that exclusion applies: “[I]n those rare
instances where statutes are drawn in such broad terms that in a
given case there is no law to apply,” Citizens to Preserve
Overton Park, Inc. v. Volpe, 401 U.S. 402, 410 (1971)
(quotation marks and citations omitted), and when “the statute
is drawn so that a court would have no meaningful standard
against which to judge the agency’s exercise of discretion,”
Chaney, 470 U.S. at 830. Agency actions in these circumstances
are unreviewable because “‘the courts have no legal norms
pursuant to which to evaluate the challenged action, and thus no
concrete limitations to impose on the agency’s exercise of
discretion.’” Sec’y of Labor v. Twentymile Coal Co., 456 F.3d
151, 156 (D.C. Cir. 2006) (quoting Drake v. FAA, 291 F.3d 59,
70 (D.C. Cir. 2002)).

To determine whether a matter has been committed to
agency discretion, we “‘consider both the nature of the
administrative action at issue and the language and structure of
the statute that supplies the applicable legal standards for
 11

reviewing that action.’” Twentymile Coal, 456 F.3d at 156
(quoting Drake, 291 F.3d at 70). Furthermore, in cases that
involve agency decisions not to take enforcement action, we
begin with the presumption that the agency’s action is
unreviewable. Ass’n of Irritated Residents, 494 F.3d at 1031;
see Chaney, 470 U.S. at 831-32. This presumption is not
absolute and “may be rebutted where the relevant statute
supplies meaningful standards to cabin the agency’s otherwise
plenary discretion.” Drake, 291 F.3d at 71; see Chaney, 470
U.S. at 832-33 (“[W]e emphasize that the decision is only
presumptively unreviewable; the presumption may be rebutted
where the substantive statute has provided guidelines for the
agency to follow in exercising its enforcement powers.”). On
the other hand, if the statute in question does not “give any
indication that violators must be pursued in every case, or that
one particular enforcement strategy must be chosen over
another” and if it provides no meaningful guidelines defining the
limits of the agency’s discretion, then enforcement is committed
to the agency’s discretion. Ass’n of Irritated Residents, 494
F.3d at 1033 (citing Chaney, 470 U.S. at 834-35).

In this case, the Sierra Club argues that the district court
erred when it held that § 7477 does not place a mandatory,
judicially-reviewable duty upon the EPA Administrator. The
Sierra Club asserts that the express language of § 7477,
specifically the close juxtaposition of the mandatory “the
Administrator shall” with the permissive “the State may,”
establishes that Congress intended to strip the Administrator of
discretion. The crux of the Sierra Club’s argument is that the
plain text of § 7477 makes enforcement by the Administrator
mandatory and subjects the Administrator’s decision not to
enforce to judicial review.

The Sierra Club’s textual argument carries considerable
weight. As we have repeatedly noted, “shall” is usually
 12

interpreted as “the language of command.” See, e.g., Zivotofsky
v. Sec’y of State, 571 F.3d 1227, 1243 (D.C. Cir. 2009) (quoting
Escoe v. Zerbst, 295 U.S. 490, 493 (1935)); Allied Pilots Ass’n
v. Pension Benefit Guar. Corp., 334 F.3d 93, 98 (D.C. 2003);
Southwestern Bell Corp. v. FCC, 43 F.3d 1515, 1521 (D.C. Cir.
1995). In addition, when a statute “uses both ‘may’ and ‘shall,’
the normal inference is that each is used in its usual sense—the
one act being permissive, the other mandatory.” Oljato Chapter
of the Navajo Tribe v. Train, 515 F.2d 654, 662 (D.C. Cir. 1975)
(quoting Anderson v. Yungkau, 329 U.S. 482, 485 (1947)). We
cannot, however, consider those words in isolation. We must
also consider the language and structure of the statute to
determine whether the Administrator retained discretion in the
statutory duty so as to render her decision unreviewable. See
Twentymile Coal, 456 F.3d at 156.

Upon examination of the context and structure of § 7477,
we agree with the Administrator that she had sufficient
discretion to render her decision not to act nonjusticiable.
Congress’s mandate to the Administrator is that she shall “take
such measures, including issuance of an order, or seeking
injunctive relief, as necessary . . . .” There is no guidance to the
Administrator or to a reviewing court as to what action is
“necessary.” Granted, the statute further says, “as necessary to
prevent the construction or modification of a major emitting
facility . . . proposed to be constructed” in an attainment area,
but that nonetheless leaves it to the Administrator’s discretion
to determine what action is “necessary.” Where, as here, the
Administrator is satisfied that the PSD permit issued under the
noncompliant SIP is sufficient, then she has apparently made the
decision that no action is necessary. In more general terms,
agencies must regularly determine what action, if any, they
should take, depending on numerous factors, including “whether
agency resources are best spent on this violation or another,
whether the agency is likely to succeed if it acts, whether the
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particular enforcement action requested best fits the agency’s
overall policies, and, indeed, whether the agency has enough
resources to undertake the action at all.” Chaney, 470 U.S. at
831. Congress can limit an agency’s discretion “either by
setting substantive priorities, or by otherwise circumscribing an
agency’s power to discriminate among issues or cases it will
pursue.” Id. at 833. Given the broad range of options open to
the Administrator and the strength of the precedent from
Chaney, in the context of § 7477, the use of the mandatory
“shall” is not sufficient to provide legal standards for judicial
review of the Administrator’s decision not to act.

Section 7477 satisfies both Overton Park’s description of a
statute “drawn in such broad terms that in a given case there is
no law to apply,” 401 U.S. at 410 (internal quotations and
citation omitted), and Chaney’s description of a statute “drawn
so that a court would have no meaningful standard against which
to judge the agency’s exercise of discretion,” 470 U.S. at 830.
Furthermore, § 7477 does not indicate that one enforcement
measure should be chosen over another or otherwise provide
guidelines that define the limits of the Administrator’s
discretion. See Ass’n of Irritated Residents, 494 F.3d at 1033.
We conclude, therefore, that the APA does not provide a cause
of action to review the Administrator’s failure to act under
§ 7477 because her decision is an agency action “committed to
agency discretion by law.” See 5 U.S.C. § 701(a)(2).

CONCLUSION

For the foregoing reasons, the Sierra Club failed to state a
claim upon which relief could be granted. Although the district
court dismissed the case pursuant to Federal Rule of Civil
Procedure 12(b)(1) for lack of subject matter jurisdiction, we
affirm the district court’s action because dismissal would
 14

otherwise have been proper under Rule 12(b)(6). See St.
Francis Xavier Parochial Sch., 117 F.3d at 624.

So ordered.