ELR Citation: ELR 20836
No(s). s. 92-1535 et al (D.C. Cir. May 6, 1994)

The court holds that Clean Air Act (CAA) §110(k)(4) does not authorize the U.S. Environmental Protection Agency (EPA) to grant conditional approvals for basic or enhanced vehicle inspection/maintenance (I/M) program submittals that contain no substantive measures but only promise submission of such measures within one year, and upholds for the most part EPA's final rule on model basic and enhanced I/M programs. The CAA required states to submit basic I/M programs as revisions to their state implementation plans (SIPs) immediately after November 15, 1990. The Act also required the states to submit enhanced I/M programs and plans for applying reasonably available control technology (RACT) to sources of nitrogen oxides (NO_x) by November 15, 1992. EPA was to promulgate guidance for the enhanced I/M submittals by November 15, 1991, but did not do so until November 5, 1992. To extend the deadlines for state compliance, EPA decided to conditionally approve basic and enhanced I/M and NO_x RACT submittals that contained only a state commitment to submit the actual programs within one year (committal SIPs).

The court first holds that a memorandum to regional directors and a letter to plaintiff environmental group that embodied EPA's policy on approving committal SIPs, and a supplement to the general preamble for the implementation of Title I of the CAA amendments of 1990 that contained EPA's policy on NO_x RACT submittals are final agency actions and ripe for review. Although none of these documents were promulgated as formal rules, EPA has acted pursuant to them and caused the challenged effects. The court next holds invalid EPA's construction of CAA §110(k)(4) as authorizing conditional approval of committal SIPs. The section's plain language authorizes conditional approval only of substantive SIPs that, although not approvable as submitted, can be made so by adopting specific EPA-required changes within the prescribed conditional period. Further, the Act allows approval, disapproval, or conditional approval of a submission only after EPA determines whether the submission is complete. The court concludes that the conditional approval mechanism was intended to provide EPA with an alternative to disapproving substantive but unsatisfactory SIPs submitted on time, and not as a means of circumventing statutory deadlines. The court nonetheless upholds EPA's extension of the enhanced I/M SIP deadlines because Congress would have intended states to have the full year that the CAA contemplates to act on EPA's late guidance. The court also upholds EPA's extension of the deadlines for state NO_x program submittals and for EPA review of those submittals because states needed more time to perform photochemical grid modeling, which is the only reliable tool to justify an areawide exemption from the NO_x requirements. Also, if Congress had foreseen the timing problem, it would have elected to accord EPA the full statutory time to review the submittals. The court next holds that EPA's extension of the deadline for basic I/M submittals was impermissible. The basic submittals were not dependent on EPA promulgating any new guidance, but only had to comply with guidance and SIPs that already existed when the deadline was enacted. The court thus orders EPA to accelerate its review of enhanced I/M submittals and propose to either approve or disapprove the SIPs by July 15, 1994, to finally approve or disapprove them by September 15, 1994, and to begin running the sanction clock for SIPs it disapproves at the time of disapproval. The court leaves EPA's timetable for NO_x RACT submittals intact.

The court next holds that EPA's rule calling for full implementation of enhanced I/M programs by 1996 does not contravene the CAA's requirement that such programs "take effect" on the November 15, 1992, enhanced program submittal deadline. Finding that the phrase "take effect" is ambiguous, the court defers to EPA's interpretation of CAA §182(c)(3)(B) as requiring only that the enhanced programs be legally effective by that date. The court next holds that EPA's selection of implementation deadlines for enhanced I/M programs is consistent with the CAA's timetable for meeting final and interim air pollution reduction targets. The court next holds that EPA's exemption of largely rural areas in the Northeast Ozone Transport Region from the enhanced I/M requirements is reasonable. The court also holds that EPA's requirement that basic I/M programs extend only to urban portions of moderate and worse nonattainment areas is reasonable even though Congress did not create an express rural exemption from the basic program as it did for the enhanced program. The court next holds that EPA's inspection performance standards, which exempt certain older vehicles from certain methods of emission testing, are within its discretion and are not unduly lenient. The court holds, however, that EPA's exempting older vehicles from visual inspection for emission reduction equipment tampering violates the CAA's requirement that the I/M programs include both emissions testing and visual inspection.

Turning to a challenge to the final I/M rule by an automobile dealers association, the court holds that EPA's promulgation of the model I/M program in the form of a final rule rather than an informal guidance was proper. Congress unambiguously intended the performance standard and other features of the enhanced program to be binding on the states, thus EPA was probably required to issue those mandatory parts of the program through notice-and-comment rulemaking. The court holds that the association lacks standing to challenge the enhanced I/M rule because it failed to allege any injury from the rulemaking apart from injury relating to the CAA-mandated binding effect of the guidance. The court next holds that Congress did not preclude EPA's issuing the basic I/M guidance in the form of a rule and that the rule is authorized by the EPA Administrator's power under CAA §301 to prescribe such regulations as are necessary to carry out the Administrator's functions. The court next holds that EPA's emphasis on centralized testing and its automatic 50 percent emission credit penalty on test-and-repair systems that do not demonstrate equivalency with centralized systems is reasonable and within the Agency's discretion. Finally, the court holds that EPA presented sufficient support for the inclusion of the IM-240 emissions test in its model program.

Counsel for Petitioner
David M. Driesen
Natural Resources Defense Council
1350 New York Ave. NW, Ste. 300, Washington DC 20005
(202) 783-7800

Counsel for Respondents
Seth M. Barsky,
Ronald M. Spritzer
Environment and Natural Resources Division
U.S. Department of Justice, Washington DC 20530
(202) 514-2000

Before MIKVA, Chief Judge, WALD and HENDERSON, Circuit Judges.