Air v. Usepa

FOR PUBLICATION

UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT

ASSOCIATION OF IRRITATED No. 13-73398
RESIDENTS, a California non-profit
corporation,
Petitioner, OPINION

v.

U.S. ENVIRONMENTAL PROTECTION
AGENCY; GINA MCCARTHY, in her
official capacity as Administrator of
the U.S. Environmental Protection
Agency; JARED BLUMENFELD, in his
official capacity as Regional
Administrator for region IX of the
U.S. Environmental Protection
Agency,
Respondents,

FOSTER POULTRY FARMS; FOSTER
FARMS LLC; DAIRY CARES; SAN
JOAQUIN VALLEY UNIFIED AIR
POLLUTION CONTROL DISTRICT; AIR
COALITION TEAM,
Respondents-Intervenors.
2 ASS’N OF IRRITATED RESIDENTS V. EPA

On Petition for Review of an Order of the
Environmental Protection Agency

Argued and Submitted
February 10, 2015—San Francisco, California

Filed June 23, 2015

Before: Mary M. Schroeder, Senior Circuit Judge, Barry
G. Silverman, Circuit Judge, and Marvin J. Garbis, Senior
District Judge. *

Opinion by Judge Garbis

SUMMARY **

Environmental Law

The panel denied a petition for review brought by the
Association of Irritated Residents seeking review of the
United States Environmental Protection Agency’s
promulgation of 40 C.F.R. § 52.245 under § 110(k)(6) of
the Clean Air Act, an error-correcting provision, after the
EPA determined that it had mistakenly approved certain

*
The Honorable Marvin J. Garbis, Senior United States District
Judge for the District of Maryland, sitting by designation.
**
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
 ASS’N OF IRRITATED RESIDENTS V. EPA 3

New Source Review rules in 2004 as part of California’s
State Implementation Plan.

The panel held that the EPA was not arbitrary, nor did it
abuse its discretion, in correcting the prior approval of the
New Source Review rules after it learned that California
law, California Senate Bill 700, did not authorize the San
Joaquin Air Control District to require new source permits
or emissions for minor agricultural sources. The panel
further held that because those rules conflicted with state
law, they should not have been incorporated into the State
Implementation Plan, and the EPA did not act improperly
in correcting its prior approval.

The panel held, as a matter of first impression, that the
EPA reasonably interpreted § 110(k)(6) of the Clean Air
Act to grant the EPA authority to amend retroactively its
approval of the 2004 New Source Review rules.

COUNSEL

Brent Newell (argued), Center on Race, Poverty & the
Environment, Oakland, California; Sofia Parino, Center on
Race, Poverty & the Environment, San Francisco,
California, for Petitioners.

Robert Dreher, Acting Assistant Attorney General, and
Simi Bhat (argued), Environmental Defense Section,
Environmental & Natural Resources Division, United
States Department of Justice, Washington, D.C.; Jefferson
Wehling, United States Environmental Protection Agency,
Region IX, Office of Regional Counsel, San Francisco,
California; Scott Jordan, United States Environmental
4 ASS’N OF IRRITATED RESIDENTS V. EPA

Protection Headquarters, Office of General Counsel,
Washington, D.C., for Respondents.

Philip M. Jay (argued), Rissa A. Stuart, and Ann M.
Grottveit, Kahn, Soares & Conway, LLP, Sacramento,
California, for Respondent-Intervenor Air Coalition Team.

David E. Cranston and Sedina L. Banks, Greenberg
Glusker Fields Claman & Machtinger LLP, Los Angeles,
California, for Respondent-Intervenor Dairy Cares.

Timothy S. Bishop (argued), Mayer Brown LLP, Chicago,
Illinois; Carmine R. Zarlenga, Michael B. Kimberly, and
Matthew A. Waring, Mayer Brown LLP, Washington,
D.C., for Respondents-Intervenors Foster Farms, LLC and
Foster Poultry Farms, Inc.

Catherine T. Redmond, Special Advisory Counsel, and
Annette Ballatore-Williamson (argued), District Counsel,
San Joaquin Valley Unified Air Pollution Control District,
Fresno, California, for Respondent-Intervenor San Joaquin
Valley Unified Air Pollution Control District.

OPINION

GARBIS, District Judge:

Petitioner, Association of Irritated Residents (“AIR”),
petitions this court for review of the United States
Environmental Protection Agency’s (“EPA”) promulgation
of 40 C.F.R. § 52.245, a regulation that revised the scope of
a previous EPA decision. The EPA promulgated the
regulation under § 110(k)(6) of the Clean Air Act (“CAA,”
 ASS’N OF IRRITATED RESIDENTS V. EPA 5

“Act”), an error-correcting provision, after the Agency
determined that it had mistakenly approved certain New
Source Review rules in 2004 as part of California’s State
Implementation Plan.

This case requires the court to address two matters.
First, this court must decide whether the EPA reasonably
determined that it made the error. This court holds that the
EPA was not arbitrary, nor did it abuse its discretion in
correcting its prior approval of the New Source Review
rules after it learned that California law, specifically Senate
Bill 700, did not authorize the San Joaquin Air Control
District to require new source permits or emissions offsets
for minor agricultural sources. Because those rules
conflicted with state law, they should not have been
incorporated into the State Implementation Plan in 2004;
thus, the EPA did not act improperly in correcting its prior
approval.

Second, as a matter of first impression, this court must
decide whether § 110(k)(6) of the CAA grants the EPA
authority to amend retroactively its approval of the 2004
New Source Review rules. Petitioner argues that the other
enumerated actions in § 110(k) strictly limit the EPA’s
methods of revising an error. Using the standard set forth
in Chevron, U.S.A., Inc. v. Natural Resources Defense
Council, Inc., 467 U.S. 837 (1984), we find that § 110(k)(6)
does not clearly speak to the issue at hand. In light of this
ambiguity, the EPA reasonably interpreted § 110(k)(6)’s
requirement that the EPA “revise such [erroneous] action as
appropriate” to encompass a retroactive limitation of its
previous approval. Accordingly, we deny the petition for
review.
6 ASS’N OF IRRITATED RESIDENTS V. EPA

I. Background

A. The Clean Air Act

Congress enacted the CAA amendments in 1970 “to
protect and enhance the quality of the Nation’s air
resources so as to promote the public health and welfare
and the productive capacity of its population.” 42 U.S.C.
§ 7401(b)(1). At that time, Congress also created the EPA
and charged it with setting National Ambient Air Quality
Standards (“NAAQS”) for various harmful air pollutants at
levels necessary to protect the public health and welfare.
42 U.S.C. §§ 7408, 7409. The EPA must designate areas
for each NAAQS as attainment (it meets the EPA-set
pollutant level), nonattainment (it does not meet the EPA-
set pollutant level), or unclassifiable. 42 U.S.C.
§ 7407(d)(1). The EPA is charged with assuring
compliance with environmental laws and taking
enforcement action against violations. See 42 U.S.C.
§ 7413(a), (b).

Under the CAA, the EPA works with the states
pursuant to a model of cooperative federalism to achieve
the statute’s environmental goals. Vigil v. Leavitt, 381 F.3d
826, 830 (9th Cir. 2004). The Act delegates to the states
“primary responsibility for assuring air quality” within their
respective boundaries and requires each state to develop a
State Implementation Plan (“SIP”), “which will specify the
manner in which [the NAAQS] will be achieved and
maintained.” 42 U.S.C. § 7407(a). In California’s San
Joaquin Valley, the San Joaquin Valley Unified Air
Pollution Control District (the “District”) promulgates and
enforces regulations to meet the standards set by the EPA.
A state submits its SIP to the EPA for review and approval
whenever the NAAQS are updated. 42 U.S.C. § 7410(a).
Once an adequate SIP (one that meets the Act’s
 ASS’N OF IRRITATED RESIDENTS V. EPA 7

requirements) is approved by the EPA, it has “the force and
effect of federal law.” Safe Air for Everyone v. EPA, 488
F.3d 1088, 1091 (9th Cir. 2007). The CAA requires states
to give the EPA “necessary assurances” that state law
authorizes the air control districts to carry out any rules
contained in the SIP. 42 U.S.C. § 7410(a)(2)(E).

In 1977, Congress enacted the CAA’s New Source
Review (“NSR”) program “to strengthen the safeguards
that protect the nation’s air quality.” New York v. EPA,
413 F.3d 3, 10 (D.C. Cir. 2005). The NSR program
requires new and modified major sources, 1 in non-
attainment areas, to acquire construction permits, install
Best Available Control Technology (“BACT”), and
purchase offsets from other sources (emission reductions).
42 U.S.C. §§ 7502(c), 7503(a). A minor source is subject
to the EPA regulations, although it is not required to have
NSR permits for all construction activities. A minor source
is not subject to offset requirements unless the state
chooses to establish them as part of the SIP.

B. California’s Implementation of the Clean Air
Act

California’s Central Valley, which includes the San
Joaquin Valley, has, and at all times relevant hereto, had, a
major air pollution problem. In 2004, the EPA designated

1
A major source is defined as a source that emits above a threshold
level of any air pollutant. See, e.g., 42 U.S.C. § 7511a(e) (designating a
source as major when it has the potential to emit at least ten tons of
volatile organic compounds a year). A minor source is one that is not
major.
8 ASS’N OF IRRITATED RESIDENTS V. EPA

the San Joaquin Valley as a non-attainment area for the 8-
hour ozone standard. See 69 Fed. Reg. 23,858, 23,889
(Apr. 30, 2004).

Ground-level ozone (aka smog) forms when volatile
organic compounds (“VOCs”) react with nitrogen oxides in
the presence of heat and sunlight during the summer.
Ozone pollution causes serious health problems, including
damaging lung tissue and exacerbating asthma and other
respiratory diseases. 69 Fed. Reg. at 23,859–60.

The District estimated that, even with air pollution
controls, confined animal facilities were among the largest
sources of VOCs in the Valley. Nevertheless, California’s
former California Health & Safety Code § 42310(e)
exempted agricultural operations, including those that
would be considered major sources under the CAA, from
the NSR permit obligations until 2003. Due to this blanket
exemption, the EPA would not accept the District’s
proposed NSR Rules to the SIP because California could
not “give necessary assurances” that it had authority under
state law to carry out the SIP. See 68 Fed. Reg. 37,746,
37,747 (June 25, 2003).

In order to avoid sanctions and loss of federal highway
funding, the California legislature passed Senate Bill 700
(“SB 700”) in September 2003, which removed the blanket
exemption that had previously excused all agricultural
sources from the CAA’s NSR requirements. California
state law then required major agricultural sources to meet
the pollution controls required by the CAA and the
proposed NSR Rules. However, SB 700 retained narrow
 ASS’N OF IRRITATED RESIDENTS V. EPA 9

exemptions 2 that excused certain minor agricultural sources
from NSR permitting and offset requirements.

Around this same time, the EPA considered District
Rules 2020 and 2201 (the “2004 NSR Rules”), which the
District had submitted in 2002 to the EPA for approval.
The 2004 NSR Rules required new source permits and
offset requirements for all new and modified stationary
sources of air pollution, whether major or minor. See
68 Fed. Reg. 7,330, 7,331 (Feb. 13, 2003). In evaluating
the 2004 NSR Rules, the EPA failed to realize that the
Rules conflicted with SB 700, which continued to exempt
certain minor agricultural sources. The EPA approved the
2004 NSR Rules – sans exemptions for minor agricultural
sources – which became effective on June 16, 2004. See
69 Fed. Reg. 27,837 (May 17, 2004).

Beginning in 2005, AIR filed three citizen suits 3 in the
Eastern District of California against dairy farms that were
minor agricultural sources under the CAA. See Assoc. of
Irritated Residents v. C & R Vanderham Dairy, No. 05-
01593 (E.D. Cal. Dec. 15, 2005) (“Vanderham”); Assoc. of
Irritated Residents v. Fred Schakel Dairy, No. 05-00707
(E.D. Cal. June 1, 2005); Assoc. of Irritated Residents v.
Foster Farms, LLC, No. 06-01648 (E.D. Cal. Nov. 15,
2006). AIR alleged that the dairies violated the 2004 NSR
Rules by not obtaining a permit, purchasing offsets, or

2
Cal. Health & Safety Code § 42301.18(c) (“Offset Provision”). See
also Cal. Health & Safety Code § 39011.5(b) ,(c) (“Savings Clauses”).
3
An approved SIP may be enforced by citizens in federal court as
well as by the EPA. 42 U.S.C. § 7604(a).
10 ASS’N OF IRRITATED RESIDENTS V. EPA

installing BACT. See, e.g., Vanderham, 2007 WL
2815038, at *1 (E.D. Cal. Sept. 25, 2007). In Vanderham,
the district court granted summary judgment in favor of
AIR and held that the defendants violated the 2004 NSR
Rules. Id. at *29.

C. The EPA’s Error

After the Vanderham decision, the EPA realized that it
had made an error in approving the 2004 NSR Rules,
because the District did not have authority under SB 700 to
enforce the permit and offset provisions of those Rules
against certain minor agricultural sources. Specifically, the
EPA found that the District did not have authority under
SB700 “to require permits for new or modified minor
agricultural sources with actual emissions less than 50
percent of the major source threshold or to require new
minor agricultural sources or minor modifications to
agricultural sources to obtain emission reduction offsets.”
See 78 Fed. Reg. 46,504, 46,505-06 (Aug. 1, 2013); Cal.
Health & Safety Code §§ 42301.16, 42301.18(c).
However, the CAA requires SIP revisions to be supported
by necessary assurances from the State that the District will
have adequate authority under State law to carry out the
revised SIP. See 78 Fed. Reg. at 46, 511; 42 U.S.C.
§ 7410(a)(2)(E).

In 2008 and 2009, California submitted SIP revisions to
amend the 2004 NSR Rules to include the state law
exemptions. In 2010, the EPA proposed a rule that would
modify its 2004 approval and correct the mismatch between
state law and the SIP. See 75 Fed. Reg. 4,745 (Jan. 29,
2010). The new 2010 NSR Rules, complete with the state
exemptions, replaced the 2004 NSR Rules and were
incorporated into the SIP. See 75 Fed. Reg. 26,102 (May
11, 2010). However, this fix was only prospective and did
 ASS’N OF IRRITATED RESIDENTS V. EPA 11

not eliminate the mismatch between the SIP and state law
that existed from 2004 to 2010.

To correct this error retroactively, the EPA relied on
§ 110(k)(6) of the CAA which states:

Whenever the Administrator determines that
the Administrator’s action approving,
disapproving, or promulgating any plan or
plan revision (or part thereof), . . . was in
error, the Administrator may in the same
manner as the approval, disapproval, or
promulgation revise such action as
appropriate without requiring any further
submission from the State. Such
determination and the basis thereof shall be
provided to the State and public.

42 U.S.C. § 7410(k)(6). Specifically, the EPA proposed
correcting its error by amending its previous approval of
the 2004 NSR Rules so that the approval was limited to be
consistent with state law. 78 Fed. Reg. at 46,506. The EPA
considered a retroactive limited approval to be the most
appropriate response because it was a “narrowly tailored”
approach that retained most of the pollution control aspects
of the 2004 NSR Rules but still remedied the mismatch
between the SIP and state law. See 78 Fed. Reg. at 46,511.
In light of this proposed action, the district court stayed the
Vanderham and other citizen suits cases pending judicial
review of the EPA’s final action. See Vanderham, 2008
WL 678590, at *2 (E.D. Cal. Mar. 11, 2008); Fred Schakel
Dairy, 634 F. Supp. 2d 1081, 1096 (E.D. Cal. 2008); Foster
Farms, 06-1648, Minute Order (E.D. Cal. Aug. 13, 2013)
(No. 66).
12 ASS’N OF IRRITATED RESIDENTS V. EPA

Before the EPA finalized its error correction in 2013, it
requested the California Attorney General to interpret SB
700 and its bearing on the District’s authority to require
permits and offsets from minor agricultural sources. In two
letters, the Attorney General confirmed the EPA’s view
that SB 700 did not give the District authority to apply the
2004 NSR Rules to certain minor agricultural sources or
require offsets.

The EPA then revised the scope of its 2004 approval,
78 Fed. Reg. at 46,511, and promulgated the final rule
limiting its 2004 approval to cover only the air pollution
controls allowed by state law. See 40 C.F.R. § 52.245. The
new regulation states:

(a) Approval of the [2004] New Source
Review rules for the San Joaquin Valley
Unified Air Pollution Control District Rules
2020 and 2201 as approved on May 17,
2004 in § 52.220(c)(311)(i)(B)(1), and in
effect for Federal purposes from June 16,
2004 through June 10, 2010, is limited, as it
relates to agricultural sources, to the extent
that the permit requirements apply:

(1) To agricultural sources with potential
emissions at or above a major source
applicability threshold; and

(2) To agricultural sources with actual
emissions at or above 50 percent of a
major source applicability threshold.

(b) Approval of the [2004] New Source
Review rules . . . is limited, as it relates to
agricultural sources, to the extent that the
 ASS’N OF IRRITATED RESIDENTS V. EPA 13

emission offset requirements apply to major
agricultural sources and major modifications
of such sources.

40 C.F.R. § 52.245. The error correction was in the form
of notice-and-comment rulemaking, the same procedure the
EPA had used to approve the 2004 rules.

D. The Instant Lawsuit

AIR challenges the EPA’s promulgation of 40 C.F.R.
§ 52.245, the regulation that corrected the EPA’s approval
of the 2004 NSR rules, on two grounds. First, AIR claims
that § 110(k)(6) of the CAA authorizes the EPA to correct
only its own erroneous approval or disapproval and does
not give the EPA authority retroactively to limit or amend a
SIP. Second, AIR asserts that even if the EPA has
authority retroactively to revise its approval of the 2004
SIP, it did not need to correct the approval because (a) the
plain meaning of SB 700 does not exempt minor
agricultural sources from obtaining permits and offsets
under the District Rules and (b) the Savings Clauses grant
the District with the authority to regulate minor agricultural
sources regardless of the other provisions. AIR requests
that this court vacate 40 C.F.R. § 52.245. The following
Intervenors, representing various agricultural interests,
organizations and an air pollution control district, appear on
the EPA’s behalf: Air Coalition Team (“ACT”), Dairy
Cares, Foster Farms, LLC, Foster Poultry Farms, and San
Joaquin Valley Unified Air Pollution Control District.
14 ASS’N OF IRRITATED RESIDENTS V. EPA

Petitioner filed a petition for review of the EPA’s
promulgation of 40 C.F.R. § 52.245 in this court on
September 27, 2013. This court has jurisdiction under the
CAA § 307(b)(1), 42 U.S.C. § 7607(b)(1). 4

II. Discussion

A. Standard of Review

The CAA does not specify a standard of review of the
EPA actions. Therefore, this court reviews the EPA’s
action under the standard set forth in the Administrative
Procedure Act (“APA”). Sierra Club v. EPA, 671 F.3d
955, 961 (9th Cir. 2012).

Section 706 of the APA provides that a court may
reverse an agency action found to be “arbitrary, capricious,
an abuse of discretion, or otherwise not in accordance with

4
Intervenors ACT and Foster Farms contend that AIR’s individual
members do not have standing because (a) their injuries are not “fairly
traceable” to the EPA’s action and (b) vacating the EPA’s finalized
error correction will not redress their injuries. This court finds that
both causation and redressability are established for purposes of this
suit and thereby rejects the Intervenors’ challenge. In light of studies
which show that dairy and poultry facilities greatly contribute to the
amount of VOCs in the Valley, it stands that AIR’s members’ injuries
are enhanced by the EPA’s rule, which retroactively lessens the
controls on pollution-emitting agricultural sources. Also, were it not
for the EPA’s proposed correction, AIR would have been able to
continue with its citizen suits enforcing the 2004 NSR Rules.
Therefore, this court concludes that the Petitioners have standing to
challenge the EPA’s promulgation of 40 C.F.R. § 52.245. See, e.g.,
WildEarth Guardians v. EPA, 759 F.3d 1064, 1072 (9th Cir. 2014);
Sierra Club v. EPA, 762 F.3d 971, 977 (9th Cir. 2014).
 ASS’N OF IRRITATED RESIDENTS V. EPA 15

law.” 5 U.S.C. § 706(2)(A). When applying this standard,
the court does not “substitute its judgment for that of the
agency.” Motor Vehicle Mfrs. Ass’n of U.S., Inc. v. State
Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983); Nw.
Ecosystem Alliance v. United States Fish & Wildlife Serv.,
475 F.3d 1136, 1140 (9th Cir. 2007). Instead, this court
“consider[s] whether the decision was based on a
consideration of the relevant factors,” Citizens to Preserve
Overton Park, Inc. v. Volpe, 401 U.S. 402, 416 (1971), and
whether the agency articulated a “rational connection
between the facts found and the choice made,” Burlington
Truck Lines v. United States, 371 U.S. 156, 168 (1962).

When reviewing the EPA’s interpretation of
§ 110(k)(6) of the CAA, this court applies the two-step
analysis provided in Chevron U.S.A., Inc. v. Natural Res.
Def. Council, Inc., 467 U.S. 837, 842–43 (1984). First, the
court must decide whether Congress has unambiguously
and “directly spoken to the precise question at issue.” Id. at
842. If so, this court will give effect to the congressional
intent expressed in the statute. Id. at 842–43. To discover
“the plain meaning of the statute, the court must look to the
particular statutory language at issue, as well as the
language and design of the statute as a whole.” K Mart
Corp. v. Cartier, Inc., 486 U.S. 281, 291 (1988). If,
however, “the statute is silent or ambiguous with respect to
the specific issue, the question for the court is whether the
agency’s answer is based on a permissible construction of
the statute.” Chevron, 467 U.S. at 843. “EPA’s
interpretation of its own regulations is given considerable
deference and ‘must be given controlling weight unless it is
plainly erroneous or inconsistent with the regulation.’”
Comm. for a Better Arvin v. EPA, — F.3d —, No. 11-
73924, 2015 WL 2384556, at *3 (9th Cir. May 20, 2015)
16 ASS’N OF IRRITATED RESIDENTS V. EPA

(quoting Thomas Jefferson Univ. v. Shalala, 512 U.S. 504,
512 (1994)).

B. The EPA’s Error Determination

We begin our inquiry by determining whether the EPA
made an error that needed to be corrected. We ask whether
the EPA acted arbitrarily or capriciously, abused its
discretion, or contradicted the CAA when it decided there
was a mismatch between state law and the SIP. See
5 U.S.C. § 706(2)(A). According to AIR, the District did
have authority under state law to carry out the 2004 SIP,
thus there was no mistake. The parties’ disagreement arises
out of conflicting interpretations of SB 700’s Offset
Provision and Savings Clauses.

In reviewing agency action pursuant to § 706:

Although we presume regulations to be
valid, our inquiry into their validity is a
“thorough, probing, in-depth review.”

...

To determine whether the agency action was
arbitrary and capricious, we must decide
whether the agency “considered the relevant
factors and articulated a rational connection
between the facts found and the choice
made.” An agency action must be reversed
when 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
 ASS’N OF IRRITATED RESIDENTS V. EPA 17

implausible that it could not be ascribed to a
difference in view or the product of agency
expertise.” Our review of an agency
decision is based on the administrative
record and the basis for the agency’s
decision must come from the record. We
cannot substitute our judgment for that of
the agency.

Nat’l Ass’n of Home Builders v. Norton, 340 F.3d 835, 841
(9th Cir. 2003) (internal citations omitted). Thus, the court
will uphold the EPA’s action as long as the EPA employed
a rational, non-arbitrary process to determine if it had made
an error.

At the outset, we note that while our court is not
required to defer to the Attorney General, it need not
interpret SB 700 for itself as long as it determines that the
EPA did not clearly go against the plain meaning of the
statute. 5 The pertinent provisions of SB 700 are

5
ACT and the San Joaquin Valley District challenge this court’s
jurisdiction under 42 U.S.C. § 7607(b)(1) to hear AIR’s claims
involving the District’s, CARB’s, and the Attorney General’s
interpretation of SB 700. They claim that these types of challenges are
suited for a state forum and go beyond the scope of jurisdiction granted
in the CAA § 307. To the contrary, Congress granted this court broad
jurisdiction to hear challenges to “any other final action of the
Administrator,” 42 U.S.C. § 7607(b)(1), which encompasses issues of
state law involved in the EPA’s action. AIR is not required to exhaust
state law remedies before it can petition this court for review of the
EPA action.
18 ASS’N OF IRRITATED RESIDENTS V. EPA

ambiguous, and both the EPA and AIR provide permissible
interpretations. In light of this ambiguity, it was
appropriate and reasonable for the EPA to rely on the
interpretations of the Attorney General and the California
Air Resources Board (“CARB”) in its determination that
SB 700 provided certain exemptions that were not
accounted for in the 2004 NSR Rules. The EPA made a
“rational connection” between the state officials’
interpretations, the purposes of the CAA, and the choice it
made. See Burlington Truck Lines, 371 U.S. at 168.

The EPA insists that it made an error in its 2004
approval because there was a substantive mismatch
between the 2004 NSR Rules and state law, meaning that
the EPA had failed to get the “necessary assurances” that
the District had adequate “authority under State . . . law to
carry out” the SIP. See 42 U.S.C. § 7410(a)(2)(E); see
generally 78 Fed. Reg. 46,504 (Aug. 1, 2013). Both the
EPA and AIR offer logical readings of the SB 700
provisions at issue: the so-called Offset Provision and
Savings Clauses. Because there is more than one plausible
explanation, the wording of the statute is ambiguous. The
EPA gave adequate consideration to the relevant factors,
including the Attorney General’s interpretation, and arrived
at a rational conclusion on SB 700’s meaning; therefore,
the EPA’s error determination was not arbitrary or
capricious.

Even so, because we conclude that the EPA considered the
relevant factors and had a reasoned basis for concluding that SB 700
conflicted with the 2004 NSR Rules, there is no need for us to go
further and substantively interpret SB 700 for ourselves.
 ASS’N OF IRRITATED RESIDENTS V. EPA 19

1. Interpretation of the Offset Provision

SB 700’s Offset Provision states:

A district may not require an agricultural
source to obtain emissions offsets for criteria
pollutants for that source if emissions
reductions from that source would not meet
the criteria for real, permanent, quantifiable,
and enforceable emission reductions.

Cal. Health & Safety Code § 42301.18(c).

According to the EPA, the Offset Provision exempts
minor agricultural sources from the emission offsets
requirement because minor agricultural sources did not
meet the statutory criteria during the time period that the
2004 NSR Rules were in effect. See 75 Fed. Reg. 4,745,
4,748 (Jan. 29, 2010). The minor sources did not meet the
criteria because, according to the EPA, the Attorney
General, and CARB, the words “real, permanent,
quantifiable, and enforceable emission reductions” referred
to the criteria for offset credit under the CAA. See
40 C.F.R. § 51.165(a)(3)(ii)(C)(1)(i) (to qualify for offset
credit, emissions reductions must be “surplus, permanent,
quantifiable, and federally enforceable”). Since minor
agricultural sources were not determined to meet these
criteria and were not eligible to receive offset credit for, or
bank, their emission reductions, they were not required to
purchase emissions offsets as an equitable matter. 78 Fed.
Reg. at 46,510. This led the EPA to conclude that the
Offset Provision did not grant the same authority to the
District as the exemption-free 2004 NSR Rules did.

According to AIR, the plain meaning of the Offset
Provision’s criteria requires agricultural sources to obtain
20 ASS’N OF IRRITATED RESIDENTS V. EPA

offsets when their emission reductions are SIP creditable,
not offset creditable. To support this contention, AIR
compares the words of the Offset Provision to the CAA’s
criteria for SIP credibility in the General Preamble for the
Implementation of Title I of the CAA. See 57 Fed. Reg.
13,498, 13,567–68 (Apr. 16, 1992) (suggesting principles
for a SIP strategy that includes “quantifiable” emissions,
“enforceable” measures, “replicable” measures, and an
“accountable” control strategy). AIR then argues that since
the EPA has approved SIP credit for emissions reductions
by several types of minor agricultural sources, those minor
agricultural sources meet the criteria of SB 700’s Offset
Provision and are thus compatible with the 2004 District
NSR Rules.

Because the listed criteria in the Offset Provision do not
correspond precisely with either the requirements of SIP
credibility or offset credibility, it is reasonable to interpret
the provision as requiring either one or even both. Since
the statute is ambiguous, as long as the EPA provides a
plausible and rational explanation for why it chose
interpretation X over interpretation Y, then the court must
uphold the EPA’s decision. See Bowman Transp., Inc. v.
Arkansas-Best Freight Sys., Inc., 419 U.S. 281, 286 (1974)
(“[W]e will uphold a decision of less than ideal clarity if
the agency’s path may reasonably be discerned.”).

In reaching its final rule, the EPA spent several years
considering the issue of the interpretation of SB 700, issued
multiple notices, and accepted and responded to several
comments, but the EPA’s main source of support for its
decision was the Attorney General’s and CARB’s letters
interpreting the pertinent provisions of SB 700 in regard to
minor agricultural sources. 78 Fed. Reg. at 46,506,
46,509–10. Since the statute is ambiguous and technical, it
 ASS’N OF IRRITATED RESIDENTS V. EPA 21

was rational for the EPA to request and accept the Attorney
General’s interpretation, especially since commenters,
including AIR, had requested that the EPA obtain the
Attorney General’s input. See 78 Fed. Reg. at 46,506. The
Attorney General’s second letter in March 2013, which
specifically addressed the application of the Offset
Provision to minor agricultural sources, stated that these
minor sources did not currently meet the criteria for “real,
permanent, quantifiable and enforceable emission
reductions,” so the statute “suspend[s] the duty of a minor
agricultural source to offset emissions from that source.”
Letter from Robert W. Byrne, Cal. Acting Sr. Asst. Attny.
Gen. to Jared Blumenfeld, EPA Regional Administrator, 1
(March 18, 2013). The letter stated that this position was
consistent with a CARB letter written in 2008. Id. at 2.

The 2008 CARB letter is the source of the EPA’s
argument that the Offset Provision’s “criteria” refer to
offset credit, not just SIP credit, as AIR argues.
Specifically the letter stated:

This limited exemption from the offset
requirement means that agricultural sources
that are not amenable to District prohibitory
rules or control measures that would qualify
for SIP credit—or that are unable to
generate emission reductions that would
qualify as offsets—because they fail to meet
one or more of the basic criteria for a
creditable rule or for offset credit cannot be
required to provide offsets.

Letter from James Goldstene, Exec. Officer, CARB to Air
Pollution Control Officers, 4 (Sept. 3, 2008) (emphasis
added). This interpretation reveals that the Offset
Provision’s criteria refer to both SIP creditability and offset
22 ASS’N OF IRRITATED RESIDENTS V. EPA

creditability. The EPA addressed this reading in its final
rule:

[T]he use of the conjunction “or” by CARB
in its discussion of [the Offset Provision] . . .
means that, under CARB’s interpretation,
even if SIP credit were approved for
prohibitory rules or control measures, new
or modified minor agricultural sources could
not be required to provide emission offsets if
they are unable to generate emission
reductions that would qualify as offsets.

78 Fed. Reg. at 46,510.

AIR argues that since the EPA had already approved
SIP credit for emissions reductions by agricultural sources,
it was arbitrary and capricious for the EPA to say those
sources do not meet the criteria under the Offset Provision.
AIR’s argument misses the point. Because the EPA
understands that the Offset Provision refers to both SIP-
credit and offset-credit requirements, it does not matter that
the EPA approved some minor agricultural sources for SIP
credit because those sources still do not meet the
requirements for offset credit. According to the EPA, none
of the sources mentioned by AIR receive offset credit for
the emission reductions required by the SIP. Therefore, the
EPA was not arbitrary or capricious in determining that the
District lacked the power under state law to require offsets
from minor agricultural sources from 2004–2010.

AIR argues that this court should not defer to the
California Attorney General’s interpretation of SB 700, nor
to CARB’s interpretation of the Offset Provision. If it were
clear from the plain meaning of the statute that the EPA’s
interpretation was erroneous or unreasonable, then it may
 ASS’N OF IRRITATED RESIDENTS V. EPA 23

well have been erroneous for the EPA to defer to a clearly
wrong interpretation by the Attorney General. However,
that is not the situation presented by the instant case.

AIR seeks to rely on two decisions of this court, which
AIR states hold that this court does not have to defer to an
Attorney General’s opinion on state law. See Maldonado v.
Harris, 370 F.3d 945, 954 n. 5 (9th Cir. 2004); Virginia v.
Am. Booksellers Ass’n, Inc., 484 U.S. 383, 395, certified
question answered sub nom. Com. v. Am. Booksellers
Ass’n, Inc., 372 S.E. 2d 618 (Va. 1988). However, both
decisions concerned facial constitutional challenges to state
statutes that necessitated direct judicial review of the
statute, whereas the present case involves judicial review of
an agency’s use of the California Attorney General’s and
CARB’s informal interpretation of a state statute. See
Maldonado, 370 F.3d at 948 (involving First Amendment
challenge to California Outdoor Advertising Act); Am.
Booksellers Ass’n, Inc., 484 U.S. at 386 (interpreting the
scope of a Virginia statute prohibiting display of explicit
material in certain situations). Moreover, although the
court is not bound by the California Attorney General’s
opinion, the EPA may properly find an Attorney General’s
interpretation reasonable and persuasive.

Other circuits have applied the arbitrary and capricious
standard to the EPA’s reliance on an Attorney General’s or
agency’s interpretation of an ambiguous state law. In Ohio
Envtl. Council v. EPA, the Sixth Circuit held that the EPA’s
reliance on the Ohio Attorney General’s interpretation of
Ohio law was not arbitrary and capricious, particularly
because the petitioner did not take its challenge to the Ohio
state courts prior to the action. See 593 F.2d 24, 29 (6th Cir.
1979). The Sixth Circuit also held that the EPA’s
determination based on the Attorney General’s opinion was
24 ASS’N OF IRRITATED RESIDENTS V. EPA

“clearly consistent with its secondary role” in forming SIPs
under the CAA. Id.

Similarly, in Defenders of Wildlife v. EPA, the Tenth
Circuit addressed the EPA’s reliance on a letter from New
Mexico’s Water Quality Control Commission (“WQCC”)
when interpreting an ambiguous New Mexico state
regulation. 415 F.3d 1121, 1127–28 (10th Cir. 2005). The
EPA based its approval of the regulation on WQCC’s
interpretation. The Tenth Circuit held that the EPA was not
arbitrary or capricious in doing so. See id. at 1128 (“[T]he
EPA did not act arbitrarily and capriciously in approving
the regulation, particularly since the agency reserved the
right to revoke approval if New Mexico interpreted the
regulation in the future in a way that would not comply
with the [Clean Water Act].”).

In the instant case, the EPA’s reliance on the Attorney
General’s and CARB’s letters to interpret the ambiguous
provisions of SB 700 was not arbitrary, capricious, or
unlawful.

2. Interpretation of the Savings Clauses

The EPA and AIR interpret the Savings Clauses in SB
700 differently and disagree on whether there was an error
or mismatch that the EPA needed to correct. The Savings
Clauses provisions state:

Any district rule or regulation affecting
stationary sources on agricultural operations
adopted on or before January 1, 2004, is
applicable to an agricultural source.

Cal. Health & Safety Code § 39011.5(b).
 ASS’N OF IRRITATED RESIDENTS V. EPA 25

Nothing in this section limits the authority
of a district to regulate a source, including,
but not limited to, a stationary source that is
an agricultural source, over which it
otherwise has jurisdiction pursuant to this
division, or pursuant to the federal Clean Air
Act . . . or any rules or regulations adopted
pursuant to that act that were in effect on or
before January 1, 2003 . . . .

Cal. Health & Safety Code § 39011.5(c).

According to AIR, the Savings Clauses provisions
preserve the District’s authority to apply the 2004 District
NSR Rules (adopted prior to January 1, 2004) to certain
minor agricultural sources regardless of the meaning of the
Offset Provision. AIR refers to the broad language of the
Clauses and asks that the court adhere to their plain
meaning.

The EPA proposes a more limited interpretation,
contending that the provisions in the Savings Clauses do
not override the provisions of SB 700 that exempt minor
agricultural sources from air pollution controls. Nor,
according to the EPA, do the Savings Clauses authorize the
District’s 2004 NSR Rules. Instead they only serve to
preserve the District’s authority to regulate sources that
hadn’t previously been, but were now considered
“agricultural” because of SB 700’s new definition 6 for

6
The prior definition of agricultural source was “equipment used in
agricultural operations in the growing of crops or the raising of fowl or
animals.” Cal. Health & Safety Code § 42310(e) (1989) (emphasis
26 ASS’N OF IRRITATED RESIDENTS V. EPA

agricultural sources. 7 Moreover, section 39011.5(c) does
not grant authority to enforce the 2004 NSR Rules. Even
though the definitional section of SB 700 did not limit the
District’s authority, other sections, such as the Offset
Provision, might.

As was the case with the Offset Provision, the EPA’s
determination that the Savings Clauses did not give the
District overriding authority to enforce the 2004 NSR Rules
was based on the California Attorney General’s
interpretation in the 2012 letter. 78 Fed. Reg. at 46,508.
The Attorney General stated that the Savings Clauses “do
not authorize the Rules’ permit and offset requirements”
because they were meant to be read in light of the
definitional context of section 39011.5. Letter from Robert
W. Byrne, Cal. Acting Sr. Asst. Attny. Gen. to Jared
Blumenfeld, EPA Regional Administrator, 4 (November
14, 2012).

Before the legislature passed SB 700, California law
had provided an exemption to agricultural sources from all

added). The definition included in SB 700 is a source “used in the
production of crops, or the raising of fowl or animals located on
contiguous property under common ownership or control” that is a
“confined animal facility” or an “internal combustion engine” or a
CAA Title V source. Cal. Health & Safety Code § 39011.5(a)
(emphasis added).

7
The Attorney General gives the example of production equipment,
such as a stationary diesel engine, that would not have been considered
an agricultural source before SB 700, but were regulated by the
District. See Letter from Robert W. Byrne, Cal. Acting Sr. Asst. Attny.
Gen. to Jared Blumenfeld, EPA Regional Administrator, 4 (November
14, 2012).
 ASS’N OF IRRITATED RESIDENTS V. EPA 27

New Source Review permitting requirements, but districts
were allowed to adopt non-New Source Review emission
rules of general application that applied to agricultural
stationary sources. Id. Section 39011.5(b) was meant to
preserve those rules only—not NSR rules. Id. The purpose
was to “preserve[] and validate[] those existing equipment-
governing regulations of general application that, without
such a savings clause, might be construed as invalid
because the regulated equipment was included as part of
SB 700’s ‘agricultural sources’ [definition].” Id. This
explanation is reasonable. If not limited to rule
preservation, section 39011.5(b) would be granting districts
new authority to apply NSR rules — authority that had
previously not existed under California’s blanket
exemption.

The Attorney General also interpreted section
39011.5(c). Id. “[S]ubdivision (c) clarifies that section
39011.5 itself does not limit a district’s existing authority,
but subdivision (c) does not concern whether some other
provision of SB 700 might limit a district’s authority.” Id.
This explanation accounts for the statute as a whole. If the
legislature intended for the Savings Clauses to allow the
District to ignore the exemptions located elsewhere in SB
700, then it would have said that a district’s prior authority
was not limited by any section in the statute. For the same
reasons set forth above regarding the Offset Provision, the
court finds that the EPA reasonably relied on this
interpretation from the Attorney General and was not
arbitrary or capricious in deciding that it had made an error
because it fully considered the effect of the Savings
Clauses on the District’s authority under state law.
28 ASS’N OF IRRITATED RESIDENTS V. EPA

3. The EPA Reasonably Respected State Law

The EPA’s desire to correct its 2004 approval to make
it align with state law is not an arbitrary one, considering
the aims and structure of the CAA’s model of cooperative
federalism. The CAA grants primary authority to the states
to develop emission limits. Train v. Natural Res. Def.
Council, 421 U.S. 60, 79 (1975). The EPA’s role under the
CAA’s scheme is secondary. Id. Therefore, by trying to
respect California’s statutory limits on air pollution
controls, the EPA is properly considering the purpose and
structure of the Act it is entrusted to enforce.

Before SB 700 was enacted, California’s law included a
blanket exemption for all agricultural sources, both major
and minor, from the NSR air pollution controls. See
75 Fed. Reg. 4745, 4747 (Jan. 29, 2010). This legislative
background indicates that California may have wished to
preserve some form of agricultural exemption in its laws
and intended for that exemption to carry into the SIP.
Therefore, the EPA’s interpretation of SB 700 and its
decision to correct its 2004 approval were reasonable and
pass arbitrary and capricious review.

In sum, this court holds that the EPA reasonably
determined that California’s SB700 was inconsistent with
the 2004 NSR rules. It was appropriate and reasonable for
the EPA to rely on the interpretations of the Attorney
General and CARB when determining that the ambiguous
California law provided certain exemptions that were not
 ASS’N OF IRRITATED RESIDENTS V. EPA 29

accounted for in the 2004 NSR Rules. 8 The EPA made a
“rational connection” between the Attorney General’s and
CARB’s interpretations, the purposes of the CAA, and the
choice it made. Burlington Truck Lines, 371 U.S. at 168.

C. The EPA’s Authority Under § 110(k)(6) of the
Clean Air Act

Concluding that the EPA reasonably decided it made an
error that needed revising, we now address whether the
EPA had the statutory authority to correct the error in the
way that it did. Whether § 110(k)(6) of the CAA gives the
EPA authority to retroactively revise the scope of an earlier
approval of a state’s NSR Rules presents a question of first
impression.

The Eleventh Circuit has previously considered the
EPA action taken under § 110(k)(6), but it did not interpret
the meaning of the provisions in question. Alabama Envtl.
Council v. Adm’r, EPA, 711 F.3d 1277, 1289–90 (11th Cir.
2013) (determining that the EPA had not made an error
determination as required by the Act).

8
AIR argues that even if the 2004 NSR Rules conflict with SB700,
that conflict does not matter because once the 2004 NSR Rules were
approved by the EPA in 2004, they became federal law trumping any
inconsistent state law. It is true that when the EPA approves a SIP, it
becomes federal law. See Safe Air for Everyone, 488 F.3d at 1097.
But, AIR’s argument fails to address the relevant time period. The
error at issue in this case is the EPA’s apparent failure to recognize that
the 2004 NSR Rules conflicted with SB700 prior to the EPA’s issuing
its May 2004 final approval of the Rules. See 78 Fed. Reg. at 46,505-
06. At that point in time, the 2004 NSR Rules had not yet been
approved, and, thus, were not yet federal law.
30 ASS’N OF IRRITATED RESIDENTS V. EPA

Section 110(k)(6) reads:

Whenever the [EPA] determines that [its]
action approving, disapproving, or
promulgating any plan . . . was in error, the
[EPA] may in the same manner as the
approval, disapproval, or promulgation
revise such action as appropriate without
requiring further submissions from the State.
Such determination and the basis thereof
shall be provided to the State and public.

42 U.S.C. § 7410(k)(6) (emphasis added).

This broad provision was enacted to provide the EPA
with an avenue to correct its own erroneous actions and
grant the EPA the discretion to decide when to act pursuant
to the provision. See Alabama Envtl. Council, 711 F.3d at
1287 (“Through the use of the terms ‘whenever’ and ‘may,’
Section 110(k)(6) confers discretion on the EPA to decide
if and when it will invoke the statute to revise a prior
action.”); see also 75 Fed. Reg. 82,536, 82,543 (Dec. 30,
2010) (discussing Congress’ implementation of § 110(k)(6)
to overturn a Third Circuit decision that held that the EPA’s
inherent authority to correct errors was narrow and could
be used only to correct typographical errors, suggesting that
Congress intended to grant the EPA broad authority to
revise an error).

Pursuant to the statute, to correct an error, the EPA
must first determine that it, in fact, made an error.
42 U.S.C. § 7410(k)(6). The EPA clearly articulated its
alleged error and the basis thereof in the Federal Register
and even received and replied to comments on the matter.
See, e.g., 78 Fed. Reg. at 46511. The EPA determined that
it erred because it approved the 2004 NSR Rules even
 ASS’N OF IRRITATED RESIDENTS V. EPA 31

though it did not receive “necessary assurances” that
California had authority to carry out the Rules as mandated
by the CAA. See 42 U.S.C. § 7410(a)(2)(E). Therefore,
this court concludes that the error determination
requirement was met.

Having determined that it erred, the EPA is required by
§ 110(k)(6) to “revise such action” (1) “in the same
manner as the approval, disapproval, or promulgation,” and
(2) “as appropriate without requiring further submissions
from the State.” 42 U.S.C. § 7410(k)(6).

1. Interpretation of “in the same manner”

a. Chevron Step One

Under Chevron, the court must first look at the statutory
language of § 110(k)(6) to determine whether Congress
clearly designated “in the same manner” to be a procedural
requirement. That is, whether the EPA must revise its
action by employing the same APA or CAA procedures
used in the original rulemaking. See 78 Fed. Reg. at
46,511. AIR contends that the words “in the same manner”
limits the EPA’s actions to either an approval or a
disapproval of a state-submitted plan since those were the
only actions originally available to the EPA when presented
with the SIP.

The words “in the same manner” refer to the EPA’s
original action of “approving, disapproving, or
promulgating any plan” that was taken in error. 42 U.S.C.
§ 7410(k)(6). The statute itself does not clearly state
whether “in the same manner” is a procedural or
substantive requirement. Because Congress has not
directly spoken to the issue at hand, the court will proceed
to the second Chevron step.
32 ASS’N OF IRRITATED RESIDENTS V. EPA

b. Chevron Step Two

The EPA reasons that “in the same manner” refers to
procedural processes when read in the context of the
provision as a whole. See Gustafson v. Alloyd Co., Inc.,
513 U.S. 561, 575 (1995) (applying the principle that “a
word is known by the company it keeps”). Specifically, the
section authorizes the EPA to act “without requiring any
further submission from the State” and requires it to
provide the “determination and the basis thereof” of its
error. 42 U.S.C. § 7410(k)(6). Both state submissions and
“determination and the basis” are procedural requirements,
lending support to the EPA’s procedural reading of “in the
same manner.” The Supreme Court has also interpreted the
phrase “in the same manner,” as it existed in the Affordable
Care Act, as a procedural one. See Nat’l Federation of
Indep. Bus. v. Sebelius, 132 S. Ct. 2566, 2583–84 (2012)
(holding that the statute’s directive to assess a penalty “in
the same manner” as taxes meant the Secretary of the
Treasury should apply the “same ‘methodology and
procedures’” used to collect taxes). The EPA has held to
this interpretation of “in the same manner” for as long as it
has applied § 110(k)(6). See 58 Fed. Reg. 49,254, 49,257
(Sept. 22, 1993); see also Barnhart v. Walton, 535 U.S.
212, 220 (2002) (declaring that the court “normally
accord[s] particular deference to an agency interpretation of
‘longstanding’ duration”).

This court determines that the EPA reasonably
interpreted “in the same manner” as a procedural
requirement. In this instance, the EPA acted through a
notice-and-comment rulemaking, the same process used to
approve the 2004 NSR Rules into the SIP. Therefore, the
EPA did not exceed its authority under the CAA and its
 ASS’N OF IRRITATED RESIDENTS V. EPA 33

promulgation of 40 C.F.R. § 52.245 comported with the
procedural requirements of § 110(k)(6).

2. Interpretation of “appropriate”

a. Chevron Step One

The court must determine next whether § 110(k)(6)
enables the EPA to revise an error by retroactively limiting
the scope of its approval to cover only certain parts of the
NSR Rules. In other words, was the EPA’s correction
“appropriate” under the plain meaning of § 110(k)(6)?

The word “appropriate” “means only ‘specially
suitable: fit, proper.’” Ruckleshaus v. Sierra Club,
463 U.S. 680, 682 (1983) (quoting Webster’s Third
International Dictionary). Section 110(k)(6) itself does not
clearly define what is an “appropriate” action. Thus, this
court concludes that the language does not directly speak to
the matter at hand and will proceed to Chevron step two.

b. Chevron Step Two

As long as the EPA’s interpretation of “appropriate” is
“based on a permissible construction of” § 110(k)(6), then
the court must accept it. Chevron, 467 U.S. at 843.

AIR argues that § 110(k)(6) does not allow the EPA to
“sua sponte promulgate a regulation that substantively
amends or limits a SIP.” This reading, however, ignores
the direction of § 110(k)(6) that the EPA revise its actions
when an error has been made “without requiring any
further submission from the State.” 42 U.S.C.
§ 7410(k)(6). The plain meaning of these words indicates
unilateral action by the EPA. While it is true that agencies
do not have plenary authority in absence of congressional
34 ASS’N OF IRRITATED RESIDENTS V. EPA

limitation, Louisiana Pub. Serv. Comm’n v. F.C.C., 476
U.S. 355, 374 (1986) (“an agency literally has no power to
act . . . unless and until Congress confers power upon it”),
the Supreme Court has interpreted Congress’s command
elsewhere to take “appropriate action” as giving an agency
“a substantial amount of latitude in choosing the programs
and techniques they would use to meet their obligations
under the [statute].” Horne v. Flores, 557 U.S. 433, 440–41
(2009) (quoting Castaneda v. Pickard, 648 F.2d 989, 1009
(5th Cir. 1981)).

Under the circumstances of this case, the court finds
that the EPA’s understanding of “appropriate” was
permissible. First, the EPA’s interpretation of
“appropriate” contemplated the goals and purposes of the
CAA as a whole. See Richards v. United States, 369 U.S.
1, 11 (1962) (affirming that “in fulfilling our responsibility
in interpreting legislation, ‘we . . . (should) look to the
provisions of the whole law, and to its object and policy’”).
The EPA’s action preserves the “strengthening aspects” of
the 2004 NSR Rules, which removed the total exemption
for agricultural sources, while still ensuring that the SIP
matches state law. See 78 Fed. Reg. 46,504, 46,511 (Aug.
1, 2013). The EPA considered a complete retroactive
disapproval of the 2004 NSR Rules, but determined it
would have had a “deleterious effect” on the SIP by
loosening the air pollution controls even further. Id. When
faced with a choice between a narrower revision that serves
to improve air quality and a broader one that undoes the
progress made in the SIP, the EPA permissibly reasoned it
was more appropriate to choose the former.

Second, the EPA’s method of correction is
“appropriate” because it is the only method that would fix
the unusual problem at issue here. See 78 Fed. Reg. at
 ASS’N OF IRRITATED RESIDENTS V. EPA 35

46,510. AIR argues that the only “appropriate” responses
the EPA could take to correct its error are the ones
provided in § 110(k), namely a partial approval/partial
disapproval, a limited approval/limited disapproval, a
conditional approval, a SIP Call, or a complete disapproval.
See U.S.C. § 7410(k). The EPA demonstrates, however,
why each of those options fails to correct the error in this
specific instance.

Section 110(k)(3) authorizes the EPA to make a partial
approval/partial disapproval if portions of the SIP do not
comply with the CAA and are separable, but NSR Rules
are not separable. 78 Fed. Reg. at 46,511. A limited
approval/limited disapproval is similarly unsuitable
because it would “incorporate the entire rule into the
California SIP, and thus would not remedy the problem of
the mismatch.” Id. at 46,510. A conditional approval under
§ 110(k)(4) requires the state to correct deficiencies within
a year, but as the EPA explains, even though California had
corrected its deficiencies by submitting the new 2010 NSR
Rules, this did nothing to correct its mistake retroactively.
Likewise, a SIP Call requiring a state to submit a revision
provides only a prospective, not a retroactive solution. See
Alabama Envtl. Council, 711 F.3d at 1290 (distinguishing
§ 110(k)(6) from a § 110(k)(5) SIP Call as an alternative
way to revise a SIP). 9

9
AIR argues that just because a SIP Call does not facilitate the EPA’s
desired retroactive outcome, does not mean it is inappropriate. But if
an option is not “suitable” or “fit” to revise an erroneous action, then
that option is not “appropriate” by the definition of the word. See
Ruckleshaus, 463 U.S. at 682.
36 ASS’N OF IRRITATED RESIDENTS V. EPA

Perhaps most significantly, the EPA’s revision was
“appropriate” because it respected state law. The CAA
imposes a duty on the states to meet the standards for air
quality through state control programs. 42 U.S.C.
§ 7407(a). AIR argues that the EPA’s action violates the
“Clean Air Act’s state-federal partnership” because it is
stepping out of its role of a “regulatory backstop” to amend
the SIP. However, California did not intend the 2004 NSR
Rules to omit SB 700’s limited exemptions for minor
agricultural sources. After AIR brought the citizen suits,
California submitted amended District NSR Rules with the
explicit limitations taken from SB 700. See 75 Fed. Reg.
4745 (January 29, 2010). By revising its past approval to
align with the intent of the state, the EPA did not impose its
own policy choices on the state. Instead, the EPA
appropriately respected California’s role as envisioned in
the CAA.

This court determines that the EPA’s interpretation of
§ 110(k)(6) prevails under the second step of Chevron
because it is reasonable that Congress, by amending the
CAA to add § 110(k)(6), was providing the EPA with the
authority to act in ways other than those enumerated in
§ 110(k). The EPA has shown that its chosen method was
a method – albeit not the only one – that enabled it to fix its
mistake in light of the particular circumstances and goals of
the CAA. Therefore, this court defers to its interpretation
under the circumstances of the instant case.

III. Conclusion

As discussed herein, this court holds that the EPA did
not abuse its discretion in correcting its prior approval of
the 2004 NSR Rules. Its action was permissible in light of
the fact that California law (SB 700) did not authorize the
San Joaquin Air Control District to require permits for the
 ASS’N OF IRRITATED RESIDENTS V. EPA 37

agricultural sources involved here. Because those rules
conflicted with state law, they should not have been
incorporated into the State Implementation Plan in 2004.
Moreover, the EPA properly acted to revise retroactively
the scope of its approval of the 2004 NSR Rules.

The Petition for Review is DENIED.