National Environmental Development Association's Clean Air Project v. Environmental Protection Agency

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued January 17, 2014 Decided May 30, 2014

No. 13-1035

NATIONAL ENVIRONMENTAL DEVELOPMENT ASSOCIATION’S
CLEAN AIR PROJECT,
PETITIONER

v.

ENVIRONMENTAL PROTECTION AGENCY,
RESPONDENT

On Petition for Review of Action of the
United States Environmental Protection Agency

Gregory G. Garre argued the cause for petitioner. On the
briefs was Leslie Sue Ritts.

Kim Smaczniak, Attorney, Environmental Defense
Section, U.S. Department of Justice, argued the cause for
respondent. With her on the brief were Robert G. Dreher,
Acting Assistant Attorney General, Environment and Natural
Resources Division and Michael Horowitz, Attorney, U.S.
Environmental Protection Agency.

Before: TATEL, Circuit Judge, and EDWARDS and
WILLIAMS, Senior Circuit Judges.
 2
Opinion for the Court filed by Senior Circuit Judge
EDWARDS.

EDWARDS, Senior Circuit Judge: Under Title V of the
Clean Air Act (“CAA” or “the Act”), 42 U.S.C. §§ 7661-
7700, every “major source” of pollution is required to obtain
an operating permit for a fixed term. Id. § 7661a(a). Title V
operating permits impose emission limitations, standards,
monitoring requirements, compliance schedules, and other
conditions on covered sources of pollution. See id. § 7661c. A
source is considered “major” if it emits a certain amount of
pollution. Id. § 7602(j). The Act also requires New Source
Review (NSR) permits for a new or modified major source
within an area not in attainment with National Ambient Air
Quality Standards, if the source emits a certain amount of
pollutants. Id. §§ 7502(c)(5), 7503. Under regulations
promulgated by the Environmental Protection Agency
(“EPA”), multiple pollutant-emitting activities are considered
to be a single stationary source if they are, inter alia,
“adjacent.” 40 C.F.R. § 71.2, § 52.21(b)(5)-(6).

In applying agency regulations, EPA has stated that
determinations as to whether two or more facilities are
“adjacent” should be based on the functional
interrelationships of the facilities, and not simply the physical
distance between the facilities. In Summit Petroleum Corp. v.
EPA, 690 F.3d 733 (6th Cir. 2012), however, the Sixth Circuit
reversed an EPA determination that a natural gas plant and
associated wells were one “source” for the purpose of Title V
permitting. The court held that “EPA’s determination that the
physical requirement of adjacency can be established through
mere functional relatedness is unreasonable and contrary to
the plain meaning of the term ‘adjacent.’” Id. at 735. It
therefore found arbitrary and capricious EPA’s decision to
 3
treat the company’s operations as one source subject to Title
V permitting. Id. at 740-41.

In December 2012, two months after EPA’s petition for
rehearing was denied in Summit Petroleum, the Director of
EPA’s Office of Air Quality and Standards wrote a directive
to the Regional Air Directors of each of the ten EPA regions
“to explain the applicability of the decision by the [Sixth]
Circuit Court of Appeals.” Applicability of the Summit
Decision to EPA Title V and NSR Source Determinations
(Dec. 21, 2012), reprinted in Joint Appendix (“J.A.”) 1-2
(“Summit Directive”). The Summit Directive states that “EPA
may no longer consider interrelatedness in determining
adjacency when making source determination decisions in its
title V or NSR permitting decisions in areas under the
jurisdiction of the [Sixth] Circuit.” Id. at 1, reprinted in J.A.
1. The Summit Directive further states that:

Outside the [Sixth] Circuit, at this time, the EPA does not
intend to change its longstanding practice of considering
interrelatedness in the EPA permitting actions in other
jurisdictions. In permitting actions occurring outside of
the [Sixth] Circuit, the EPA will continue to make source
determinations on a case-by-case basis using the three
factor test in the NSR and title V regulations at 40 CFR
52.21(b)(6) . . . .

Id. This case involves a challenge to the Summit Directive.

Petitioner – an association of resource extraction and
manufacturing companies subject to permitting requirements
under the CAA – claims that the Summit Directive injures its
members who are located outside the Sixth Circuit. According
to Petitioner, facilities outside the Sixth Circuit are now at a
competitive disadvantage. Petitioner contends that by
 4
establishing inconsistent permit criteria applicable to different
parts of the country, the Summit Directive violates the CAA
and EPA regulations.

EPA argues that the petition for review should be
dismissed for three threshold reasons: (1) Petitioner lacks
Article III standing because the alleged injury is entirely
speculative. (2) The Summit Directive is not subject to judicial
review because it is not a final agency action. (3) Petitioner’s
claim is not ripe for review because it does not raise a
concrete issue that is fit for judicial review. And on the
merits, EPA maintains that neither the CAA nor EPA
regulations require it to ensure national uniformity in response
to a judicial decision.

We hereby grant the petition for review and vacate the
Summit Directive. We find no merit in EPA’s arguments in
opposition to Petitioner’s claims. The Summit Directive
creates a standard that gives facilities located in the Sixth
Circuit a competitive advantage. It therefore causes
competitive injury to Petitioner’s members located outside of
the Sixth Circuit. The Directive is a final agency action
because it sets forth EPA’s binding and enforceable policy
regarding permit determinations. And Petitioner’s claim is
ripe for review because it presents a purely legal issue that
will not benefit from further factual development.

On the merits, we hold that the Summit Directive is
plainly contrary to EPA’s own regulations, which require
EPA to maintain national uniformity in measures
implementing the CAA, and to “identify[] and correct[]”
regional inconsistencies by “standardizing criteria,
procedures, and policies.” 40 C.F.R. § 56.3(a), (b). We need
not decide whether the Summit Directive also contravenes the
requirements of the CAA.
 5

I. BACKGROUND

Pursuant to the agency’s authority under the CAA, 42
U.S.C. § 7601, EPA regulations entitled “Regional
Consistency” provide that:

It is EPA’s policy to:

(a) Assure fair and uniform application by all Regional
Offices of the criteria, procedures, and policies
employed in implementing and enforcing the act;
[and]

(b) Provide mechanisms for identifying and correcting
inconsistencies by standardizing criteria, procedures,
and policies being employed by Regional Office
employees in implementing and enforcing the
act . . . .

40 C.F.R. § 56.3(a), (b). The agency’s “Regional
Consistency” regulations specifically apply to “EPA
employees in Headquarters to the extent that they are
responsible for developing the procedures to be employed or
policies to be followed by Regional Offices in implementing
and enforcing the act.” Id. § 56.2(b). In addition, “[a]
responsible official in a Regional Office shall seek
concurrence from the appropriate EPA Headquarters office on
any interpretation of the Act, or rule, regulation, or program
directive when such interpretation may result in inconsistent
application among the Regional Offices of the act or rule,
regulation, or program directive.” Id. § 56.5(b).

As noted above, the CAA requires any “major source” of
air pollution to obtain an operating permit. A “major” source
 6
is “any stationary facility or source of air pollutants which
directly emits, or has the potential to emit, one hundred tons
per year or more of any air pollutant.” 42 U.S.C § 7602(j). In
determining whether a facility emits pollutants at a level to
qualify as a “major” source, EPA aggregates emissions from
multiple facilities that are (1) under common control, (2)
belong to the same major industrial grouping, and (3) “are
located on one or more contiguous or adjacent properties.” 40
C.F.R. § 71.2, 52.21(b)(5)-(6). Under the third requirement,
EPA has long followed a general policy of “determin[ing]
whether two facilities are ‘adjacent’ based on a ‘common
sense’ notion of a source and the functional interrelationship
of the facilities, rather than simply on the physical distance
between the facilities.” Summit Petroleum, 690 F.3d at 739
(quotations omitted).

In Summit Petroleum, petitioners challenged the
aggregation of emissions from multiple facilities that EPA
deemed “truly interrelated,” even though the facilities were
not located on contiguous, bordering properties. Id. at 741.
The Sixth Circuit held that EPA’s policy of considering
functionally interrelated facilities “adjacent” when the
facilities do not share a physical border violates the plain
meaning of the word “adjacent.” Id. at 744. In response to the
Summit Petroleum decision, the Director of EPA’s Office of
Air Quality Control Standards issued the Summit Directive
explaining that EPA would no longer apply the functionally
interrelated standard to facilities located in areas within the
jurisdiction of the Sixth Circuit. Summit Directive, reprinted
in J.A. 1. However, “[i]n permitting actions occurring outside
of the [Sixth] Circuit, the EPA will continue to make source
determinations on a case-by-case basis using the three factor
test in the NSR and title V regulations at 40 CFR
52.21(b)(6).” Id. Petitioner claims that the Summit Directive
violates EPA’s “Regional Consistency” regulations, which
 7
say that “[i]t is EPA’s policy to . . . [a]ssure fair and uniform
application by all Regional Offices of the criteria, procedures,
and policies employed in implementing and enforcing the
act.” 40 C.F.R. § 56.3(a).

II. ANALYSIS

A. Threshold Issues

1. Standing

The first issue before the court is Petitioner’s standing. If
Petitioner lacks standing, as EPA contends, then this court
lacks jurisdiction to address the petition for review.

As the Supreme Court explained in Lujan v. Defenders of
Wildlife, 504 U.S. 555 (1992):

[T]he irreducible constitutional minimum of standing
contains three elements. First, the plaintiff must have
suffered an injury in fact—an invasion of a legally
protected interest which is (a) concrete and
particularized, and (b) actual or imminent, not
conjectural or hypothetical. Second, there must be a
causal connection between the injury and the conduct
complained of—the injury has to be fairly . . . traceable
to the challenged action of the defendant, and not . . . the
result of the independent action of some third party not
before the court. Third, it must be likely, as opposed to
merely speculative, that the injury will be redressed by a
favorable decision.

Id. at 560–61 (quotations and citations omitted). An
association has standing to bring suit on behalf of its members
if at least one member would have standing to sue in its own
 8
right, the interests the association seeks to protect are germane
to its purpose, and neither the claim asserted nor the relief
requested requires that an individual member of the
association participate in the law suit. Sierra Club v. EPA,
292 F.3d 895, 898 (D.C. Cir. 2002).

EPA argues that Petitioner lacks standing because the
harm that it alleges is conjectural and hypothetical, not
imminent. EPA also argues that Petitioner has not suffered
any harm caused by the Summit Directive, so there is no
injury that can be redressed by a favorable decision from this
court. These arguments fail.

Petitioner’s members include companies in the oil and gas
industry, as well as others in manufacturing sectors that
operate facilities regulated under the Act. A number of these
members operate facilities outside of the jurisdiction of the
Sixth Circuit and, therefore, they remain subject to EPA’s
functionally interrelated permitting standard. The Summit
Directive thus puts these companies at a competitive
disadvantage vis-à-vis companies operating facilities located
within the Sixth Circuit.

EPA contends that these alleged injuries are speculative
because whether any particular facility qualifies as a “major”
source depends on a number of factors, evaluated on a case-
by-case basis. EPA’s argument is shortsighted. Even if
functional interrelatedness is not dispositive in a particular
permit decision, the potential that certain facilities outside the
Sixth Circuit may be considered “major” sources based on
functional interrelatedness imposes an additional regulatory
burden on these facilities because they must undergo EPA’s
case-specific assessment of whether they are functionally
interrelated. Similar facilities within the Sixth Circuit will not
be so burdened because emissions from these facilities will
 9
not be aggregated unless they are physically adjacent. See Br.
for Pet’r at 20 (“[U]nder this divergent regulatory scheme,
companies with shale gas leases outside of the Sixth Circuit
are placed at significant competitive disadvantage because
they face additional permitting requirements and the
ambiguity and delay that comes along with the ‘case-by-case’
determinations called for by the Summit Directive.”); Reply
Br. for Pet’r at 9 (“[M]embers operating outside the Sixth
Circuit have to wait longer and pay more to do the same thing
that, by virtue of the Summit Directive, their competitors
within the Sixth Circuit can now do immediately. That
concrete competitive injury is sufficient to give this suit the
real-world basis that Article III demands.”).

EPA also contends that the Summit Directive did not
cause Petitioner’s alleged injury and, therefore, the alleged
injury will not be redressed by vacating the Summit Directive.
Br. for Resp’t at 21-22. EPA argues that the Directive could
not have caused injury because it did not change the
regulatory burdens imposed on sources outside of the Sixth
Circuit. Thus, according to EPA, Petitioner’s members with
operations outside the Sixth Circuit “face . . . nothing more
than the status quo they faced prior to the memorandum.” Id.
at 21. This argument fails because it ignores the reality that,
even though the regulatory burdens remain unchanged outside
the Sixth Circuit, the Summit Directive will increase the
relative regulatory obligations and costs for companies
outside the Sixth Circuit.

EPA’s action has caused injury because the Summit
Directive has binding legal effect. The consequences of the
agency’s action must, for causation purposes, be assessed not
by reference to the status quo ante but instead to other actions
EPA could have taken. Petitioner need not show that the
Summit Directive rendered them worse off than the status quo
 10
ante. They may alternatively show that, had the EPA taken
the course of action that they claim the law required, they
would have been better off. See Nat’l Ass’n of Home Builders
v. U.S. Army Corps of Eng’rs, 663 F.3d 470, 475 (D.C. Cir.
2011) (noting that, in standing analysis, “the historical
baseline is not the only possible measure of injury”). As we
explain below, EPA could have responded to the Summit
Petroleum decision in several ways that would have avoided
affording a competitive advantage to sources within the Sixth
Circuit. Therefore, vacating the Summit Directive could
redress Petitioner’s injury because it will remove the binding
legal rule that subjects its members to unequal treatment.

2. Final Agency Action

The CAA provides for judicial review of “final action
taken” by EPA. 42 U.S.C. § 7607(b)(1). EPA argues that the
Summit Directive does not reflect a final agency action and,
therefore, it is not subject to review. We disagree.

In order to be “final,” an agency action must (1) “mark
the consummation of the agency’s decisionmaking process,”
and (2) “be one by which rights or obligations have been
determined, or from which legal consequences will flow.”
Bennet v. Spear, 520 U.S. 154, 177-78 (1997) (quotations
omitted); NRDC v. EPA, 643 F.3d 311, 319 (D.C. Cir. 2011)
(final agency action “announces a binding change in the
law”). EPA contends that the Summit Directive is not the
consummation of its decisionmaking process because, by its
terms, the directive explains that EPA is still “assessing what
additional actions may be necessary,” and “EPA’s
deliberations surrounding the matter are ongoing.” Br. for
Resp’t at 23. We find no merit in these arguments.
 11
An agency action may be final even if the agency’s
position is “subject to change” in the future. Appalachian
Power Co. v. EPA, 208 F.3d 1015, 1022 (D.C. Cir. 2000)
(“[A]ll laws are subject to change . . . [t]he fact that a law may
be altered in the future has nothing to do with whether it is
subject to judicial review at the moment.” (citation omitted));
see also Sackett v. EPA, 132 S. Ct. 1367, 1372 (2012) (“The
mere possibility that an agency might reconsider . . . does not
suffice to make an otherwise final agency action nonfinal.”).
This is hardly surprising because many agency actions are
subject to reconsideration. If an agency action announces a
binding change in its enforcement policy which immediately
affects the rights and obligations of regulated parties, then the
action is likely final and subject to review. See EDWARDS,
ELLIOTT, & LEVY, FEDERAL STANDARDS OF REVIEW 137-141
(2d ed. 2013).

The Summit Directive is not merely a policy statement or
an interpretative rule that is unreviewable because it “does not
establish a binding norm and is not finally determinative of
the issues or rights to which it is addressed.” Id. at 157. The
record establishes that the Summit Directive provides firm
guidance to enforcement officials about how to handle
permitting decisions. It therefore clearly “reflect[s] a settled
agency position which has legal consequences for [regional
officials] administering their permit programs and for
companies . . . who must obtain Title V permits.”
Appalachian Power Co., 208 F.3d at 1023. Indeed, the finality
and legal consequences of the Summit Directive were made
plain when the EPA relied on the directive in a permit
decision involving a company located outside the jurisdiction
of the Sixth Circuit. Approval and Promulgation of Federal
Implementation Plan for Oil and Natural Gas Well
Production Facilities; Fort Berthold Indian Reservation
(Mandan, Hidatsa, and Arikara Nation), North Dakota, 78
 12
Fed. Reg. 17836, 17842 & n.10 (March 22, 2013). EPA
explained that the Sixth Circuit’s version of the adjacency test
did not apply to facilities in North Dakota because they were
outside of the jurisdiction of the Sixth Circuit. Id. And EPA
cited the Summit Directive to support its action. Id.

EPA also cites Indep. Equip. Dealers Ass’n v. EPA, 372
F.3d 420 (D.C. Cir. 2004), in support of its claim that the
Summit Directive is not reviewable because it simply restates
the agency’s longstanding interpretation of its regulations. Br.
for Resp. at 24. The holding of Independent Equipment
Dealers, however, gives no aid to EPA’s position here. In
Independent Equipment Dealers, the court ruled that a letter
written by an EPA official was unreviewable because it was
“purely informational.” 372 F.3d at 427. The letter “neither
announced a new interpretation of the regulations nor effected
a change in the regulations themselves.” Id. Importantly, the
letter compelled no one to do anything and had “no binding
effect whatsoever” on agency officials or on regulated parties.
Id. The Summit Directive plainly differs from the letter at
issue in Independent Equipment Dealers because it compels
agency officials to apply different permitting standards in
different regions of the country.

EPA has undisputed legal authority to prescribe rules to
determine whether a facility constitutes a “major” source
under the CAA. And EPA has uncontested authority to adopt
and enforce policies regarding how the various regional
offices of the agency must implement and enforce the statute
and its accompanying rules. The Summit Directive addresses
both matters and announces a new enforcement regime in
response to the Sixth Circuit’s decision. In this light, there can
be little doubt here that the Summit Directive reflects final
agency action that is subject to judicial review.
 13
3. Ripeness

“Even when an agency has taken final action, a court may
refrain from reviewing a challenge to the action if the case is
unripe for review. The ripeness inquiry springs from the
Article III case or controversy requirement that prohibits
courts from issuing advisory opinions on speculative claims.
In other words, if a claim challenging final agency action is
not concrete, it may be unfit for judicial review without
regard to whether the complaining party has standing to
pursue the claim.” EDWARDS, ELLIOTT, & LEVY, FEDERAL
STANDARDS OF REVIEW 141 (2d ed. 2013) (citing Toilet
Goods Ass’n v. Gardner, 387 U.S. 158 (1967); Reg’l Rail
Reorganization Act Cases, 419 U.S. 102, 138 (1974)). “In
determining the fitness of an issue for judicial review we look
to see whether the issue is purely legal, whether consideration
of the issue would benefit from a more concrete setting, and
whether the agency’s action is sufficiently final.” Clean Air
Implementation Project v. EPA, 150 F.3d 1200, 1204 (D.C.
Cir. 1998) (quotations omitted).

EPA argues that this case is not ripe for review because
“it is entirely speculative how EPA’s interpretation . . . will
impact any source, or category of sources, in particular.” Br.
for Resp. at 27. Therefore, according to EPA, “we need to
wait for the action to be applied to see what its effect will be.”
Id. (quotations and alterations omitted). EPA contends that, in
some cases, treating functionally interrelated facilities as a
single source may subject those facilities to the “major”
source permit requirement, while in others it may not,
depending on other factors that are considered on a case-by-
case basis. Id. at 27-28. EPA also points out that, in some
cases, treating a group of facilities as a single source may
result in greater regulatory flexibility, as opposed to
additional regulatory requirements. Id. at 27. EPA’s argument
 14
misses the point. Petitioner’s challenge in this case presents a
purely legal question of whether EPA’s final action adopting
a non-uniform enforcement regime violates the strictures of
the CAA or EPA regulations. It is unnecessary to wait for the
Summit Directive to be applied in order to determine its
legality.

B. Merits

1. Standard of Review

“Judicial review of an agency’s interpretation of its own
regulations is governed by 5 U.S.C. § 706(2)(A), which
requires courts to set aside agency action that is ‘arbitrary,
capricious, an abuse of discretion, or otherwise not in
accordance with law.’” EDWARDS, ELLIOTT, & LEVY,
FEDERAL STANDARDS OF REVIEW 199 (2d ed. 2013) (citing
Allentown Mack Sales & Serv., Inc. v. NLRB, 522 U.S. 359,
377 (1998); Thomas Jefferson Univ. v. Shalala, 512 U.S. 504,
512 (1994)). And it is undisputed that the arbitrary and
capricious standard of review applies to EPA actions taken
under the Clean Air Act. See, e.g., Alaska Dep’t of Envtl.
Conservation v. EPA, 540 U.S. 461, 496-97 (2004) (applying
the “default standard of the Administrative Procedure Act, 5
U.S.C. § 706(2)(A)” to a petition for review under the Clean
Air Act).

Pursuant to this standard, a court accords “substantial
deference” to an agency’s views. . . . Thus, an agency
interpretation [of its own regulations] that “does not
violate the Constitution or a federal statute . . . must be
given controlling weight unless it is plainly erroneous or
inconsistent with the regulation.” Stinson v. United
States, 508 U.S. 36, 45 (1993). “In other words,”
deference to an agency’s interpretation of its regulation is
 15
required “unless an alternative reading is compelled by
the regulation’s plain language or by other indications of
the [agency’s] intent at the time of the regulation’s
promulgation.” Thomas Jefferson Univ., 512 U.S. at 512.

EDWARDS, ELLIOTT, & LEVY, FEDERAL STANDARDS OF
REVIEW 199 (2d ed. 2013).

It is “axiomatic,” however, “that an agency is bound by
its own regulations.” Panhandle Eastern Pipe Line Co. v.
FERC, 613 F.2d 1120, 1135 (D.C. Cir. 1979) (holding that an
agency does not have authority to “play fast and loose with its
own regulations”). “Although it is within the power of [an]
agency to amend or repeal its own regulations, [an] agency is
not free to ignore or violate its regulations while they remain
in effect.” U.S. Lines, Inc. v. Fed. Mar. Comm’n, 584 F.2d
519, 526 n.20 (D.C. Cir. 1978). Thus, an agency action may
be set aside as arbitrary and capricious if the agency fails to
“comply with its own regulations.” Environmentel, LLC v.
FCC, 661 F.3d 80, 85 (D.C. Cir. 2011).

2. The Summit Directive

The essence of Petitioner’s argument is that the Summit
Directive must be vacated because it violates EPA’s
“Regional Consistency” regulations without purporting to
amend those regulations. We agree.

As noted above, the applicable regulations state in clear
terms that it is EPA’s regulatory policy to “assure fair and
uniform application by all Regional Offices of the criteria,
procedures, and policies employed in implementing and
enforcing the act” and to “[p]rovide mechanisms for
identifying and correcting inconsistencies by standardizing
criteria, procedures, and policies being employed by Regional
 16
Office employees in implementing and enforcing the act.” 40
C.F.R. § 56.3(a), (b) (emphasis added). The regulations also
provide that officials in the regional offices “shall assure that
actions taken under the act . . . [a]re as consistent as
reasonably possible with the activities of other Regional
Offices.” Id. § 56.5(a)(2) (emphasis added). And they
specifically apply to officials in EPA headquarters who are
responsible for developing the policies governing the
implementation and enforcement of the CAA. Id. § 56.2.

EPA argues that these regulations “targeted particular
aspects of the Act that presented consistency problems” but
do not “require that EPA officials maintain perfect uniformity
in the application of criteria, procedure and policies in
implementing and enforcing the Act.” Br. for Resp’t at 35. In
support of this reading, EPA points out that section 56.4
requires the Administrator to ensure uniform enforcement of
Parts 51 and 58, which pertain to state implementation plans
and air quality monitoring programs not at issue in this case.
Id. Thus, according to EPA, because the Summit Directive did
not violate these “specific regulatory obligations,” id. at 36,
the directive cannot be said to violate agency regulations.
EPA’s argument attempts to prove too much.

It is true that section 56.4 states that “[t]he Administrator
shall include, as necessary, with any rule or regulation
proposed or promulgated under Parts 51 and 58 of this chapter
mechanisms to assure that the rule or regulation is
implemented and enforced fairly and uniformly by the
Regional Offices.” 40 C.F.R. § 56.4(a). But the references to
“Parts 51 and 58” in section 56.4 in no way dilute the broader
“Regulatory Consistency” mandates found in sections 56.1,
56.2, 56.3, and 56.5, which are not limited to Parts 51 and 58.
Section 56.5, for example, states without limitation that
EPA’s regional officials will “assure that actions taken under
 17
the act . . . [are] carried out fairly and in a manner that is
consistent with the Act and Agency policy as set forth in the
Agency rules and program directives,” and that these actions
“[a]re as consistent as reasonably possible with the activities
of other Regional Offices.” Id. § 56.5(a)(1), (2). The
regulations also state that “[a] responsible official in a
Regional Office shall seek concurrence from the appropriate
EPA Headquarters office on any interpretation of the Act, or
rule, regulation, or program directive when such interpretation
may result in inconsistent application among the Regional
Offices of the act or rule, regulation, or program directive.”
Id. § 56.5(b). These regulations, taken together, strongly
articulate EPA’s firm commitment to national uniformity in
the application of its permitting rules. And there is no
indication that EPA intended to exempt variance created by a
judicial decision.

EPA responds that the “general policy statements in Part
56” should not be read “as mandating that EPA adopt the
interpretation of the circuit court that first addresses a legal
matter.” Br. for Resp’t at 36. “It is absurd,” according to EPA,
“to suggest that EPA would have used a general policy
statement to constrain as important an agency function as its
discretion to independently assess the dictates of the statutes
and regulations it is charged with administering.” Id.
(citations and quotations omitted). EPA’s overblown
characterization of Petitioner’s position is misguided.

Any problems that EPA now faces as a result of
Petitioner’s action are attributable to the agency’s decision to
issue a directive that is plainly contrary to the agency’s own
“Regional Consistency” rules. EPA seems to assume that
under Petitioner’s position, the agency would be limited to
one course of action – follow the Summit Petroleum decision
in all regions of the country. But there are several other
 18
alternatives that might be available to EPA that would not
violate its uniformity regulations.

First, EPA might be able to revise its regulations for
aggregating emissions from multiple facilities, so as to require
aggregation when facilities are functionally interrelated,
rather than “adjacent.” Second, EPA could have appealed the
Sixth Circuit decision in Summit Petroleum to the Supreme
Court, which it did not do. See Johnson v. U.S. R.R. Ret. Bd.,
969 F.2d 1082, 1092 (D.C. Cir. 1992) (“When an agency
honestly believes a circuit court has misinterpreted the law,
there are two places it can go to correct the error: Congress or
the Supreme Court.”). And, finally, EPA might also revise its
uniformity regulations to account for regional variances
created by a judicial decision or circuit splits.

EPA contends that, because the Act allows review of
EPA’s regional actions by different circuits, 42 U.S.C.
§ 7607(b)(1), the CAA contemplates divergence between
circuits and, thus, permits the agency to apply varied
standards in different circuits. In support of the claim that the
Act and its regulations allow regional variance resulting from
decisions in different circuits, EPA invokes the doctrine of
intercircuit nonaquiescence. Br. for Resp’t at 30-31, 36 (citing
Indep. Petroleum Ass’n of Am. v. Babbitt, 92 F.3d 1248, 1261
(D.C. Cir. 1996) (Rogers, J., dissenting) (“[A]fter one circuit
has disagreed with its position, an agency is entitled to
maintain its independent assessment of the dictates of the
statutes and regulations it is charged with administering, in
the hope that other circuits, the Supreme Court, or Congress
will ultimately uphold the agency’s position.”)); see also Am.
Tel. & Tel. Co. v. FCC, 978 F.2d 727, 737 (D.C. Cir. 1992)
(referring to agency’s “right to refuse to acquiesce” in
decisions of circuit courts). EPA contends that “[t]o compel
an agency to follow the adverse ruling of a particular court of
 19
appeals would be to give that court undue influence in the
intercircuit dialogue by diminishing the opportunity for other
courts of proper venue to consider, and possibly sustain, the
agency’s position.” Br. for Resp’t at 31 (quoting Samuel
Estreicher and Richard L. Revesz, Nonacquiescence by
Federal Administrative Agencies, 98 YALE L.J. 679, 764
(1989)).

We need not determine whether the CAA allows EPA to
adopt different standards in different circuits. Since EPA’s
regulations preclude the Summit Directive by requiring
uniformity, there is no need for us to address whether the Act
does.

The doctrine of intercircuit nonaquiescence does not allow
EPA to ignore the plain language of its own regulations. As
noted above, “[an] agency is not free to ignore or violate its
regulations while they remain in effect.” U.S. Lines, Inc., 584
F.2d at 526 n.20. Therefore, an agency may not refuse to
acquiesce if doing so violates its own regulations. Section
56.3 not only states that EPA will establish uniform criteria
for implementing the Act, but also identify and correct
inconsistencies in such criteria. 40 C.F.R. § 56.3(b). This
implies that EPA was obligated to respond to the Summit
Petroleum decision in a manner that eliminated regional
inconsistency, not preserved it. EPA’s current regulations
preclude EPA’s inter-circuit nonaquiescence in this instance,
and the Summit Directive is therefore contrary to law.

III. CONCLUSION

For the reasons set forth above, we grant the petition for
review and vacate the Summit Directive.