State of Arizona, ex rel. Henry R. Darwin, Director, Arizona Department of Environmental Quality, Petitioner,
U.S. Environmental Protection Agency; Scott Pruitt, Administrator, United States Environmental Protection Agency, Respondents. CalPortland Company, Petitioner,
U.S. Environmental Protection Agency, Respondent. Phoenix Cement Company, an enterprise division of the Salt River Pima-Maricopa Indian Community, Petitioner,
U.S. Environmental Protection Agency, Respondent. ASARCO LLC, Petitioner,
U.S. Environmental Protection Agency, Respondent.
and Submitted June 21, 2016 San Francisco, California
Petition for Review of an Order of the Environmental
H. Acken (argued) and Fredric D. Bellamy, Ryley Carlock &
Applewhite, Phoenix, Arizona, for Petitioner CalPortland
W. DeLaquil (argued) and Andrew M. Grossman, Baker &
Hostetler LLP, Washington, D.C.; George A. Tsiolis,
Englewood, New Jersey; for Petitioner Phoenix Cement Company.
L. Hiser (argued) and Trevor J.L. Burggraff, Jorden Bischoff
& Hiser PLC, Scottsdale, Arizona; George A. Tsiolis,
Englewood, New Jersey; for Petitioner ASARCO LLC.
M. Spence (argued), Trial Attorney; John C. Cruden, Assistant
Attorney General; Environment and Natural Resources Division,
United States Department of Justice, Washington, D.C.;
Matthew C. Marks and M. Lea Anderson, EPA Office of General
Counsel, Washington, D.C.; Charlotte Withey, EPA Office of
Regional Counsel, Region IX, San Francisco, California; for
Before: Marsha S. Berzon, Jay S. Bybee, and John B. Owens,
panel dismissed in part and denied in part petitions for
review brought by the State of Arizona and several private
companies objecting to several sections of the United States
Environmental Protection Agency's most recent Federal
Implementation Plan ("FIP"), promulgated under the
Clean Air Act, to replace certain rejected portions of
Arizona's State Implementation Plan, concerning how the
state intended to improve air quality in federal parks and
forests by reducing emissions of various pollutants.
regulatory scheme codified in Section 169A of the Clean Air
Act required each state with emissions impacting protected
federal lands to create a State Implementation Plan. If the
state submitted either a deficient plan or none at all, the
Act required the EPA to promulgate its own plan - called a
FIP - to force compliance with Congress's mandate.
panel held that several of petitioners' objections to the
FIP were not properly before the court because they were not
first presented to the EPA during the notice-and comment
period in 42 U.S.C. § 7607(d)(7)(B). Specifically, the
panel held that the issues petitioners raised for the first
time on appeal were not so "key" that, assuming the
D.C. Circuit's "key assumption" applied,
Nat. Res. Def. Council v. EPA, 755 F.3d 1010, 1023
(D.C. 2014), they must have been anticipated by the EPA. The
panel concluded that petitioners were barred from challenging
in this appeal the numerical "reasonable progress
goals" and the EPA's decision to jettison the
affirmative defense for malfunction. The panel held that it
was barred from reviewing those issues in this proceeding,
and dismissed that portion of the petitions.
remaining objections that were ripe for consideration
consisted of a series of technical challenges to the emission
controls imposed on a cement kiln and copper smelters.
According due deference, the panel held that the EPA's
emission-control measures were not arbitrary or capricious
and thus constituted valid agency rulemaking.
McGuffey III (argued) and Justin Wong, Troutman Sanders LLP,
Atlanta, Georgia; Paul L. Gale, Troutman Sanders LLP, Irvine,
California; Peter S. Glaser, Troutman Sanders LLP,
Washington, D.C.; James T. Skardon, Assistant Attorney
General, Environmental Enforcement Section; Mark Brnovich,
Attorney General; Office of the Attorney General, Phoenix,
Arizona; for Petitioner State of Arizona.
BYBEE, Circuit Judge:
late 1970s, Congress declared it a "national goal"
to improve air visibility in federal parks and forests. 42
U.S.C. § 7491(a)(1); see also 40 C.F.R. §
81.400 et seq. (listing all national parks, national
monuments, and wilderness areas Congress sought to protect).
To achieve that goal, Congress sought to reduce emissions of
various pollutants through a new regulatory scheme codified
in Section 169A of the Clean Air Act (CAA). 42 U.S.C. §
7491(b). That scheme required each state with emissions
impacting protected federal lands to create a State
Implementation Plan (SIP) describing how the state intended
to make reasonable progress toward the national visibility
goal. Id. §§ 7410(a), 7491(b)(2). If the
state submitted either a deficient SIP or none at all, the
CAA required the EPA to promulgate its own plan-called a
Federal Implementation Plan (FIP)-to force compliance with
Congress's mandate. Id. § 7410(c)(1).
extensive litigation arose when Arizona-a state containing
twelve wilderness areas subject to Section 169A, see
40 C.F.R. § 81.403-clashed with the EPA over its SIP
submitted in 2011. Although the SIP listed proposals to
manage and reduce emissions from various industrial sources
operated within the state, the EPA determined that Arizona
could do better in improving visibility. The EPA disapproved
certain aspects of Arizona's SIP and issued its own FIP
that imposed enhanced emission-control measures.
EPA's actions spawned a series of legal challenges from
Arizona and several private companies subject to EPA
regulation (collectively, Petitioners). We have rejected most
of those challenges in two prior decisions, concluding that
the EPA acted within its authority when it disapproved
portions of Arizona's SIP that it deemed problematic.
Arizona ex rel. Darwin v. EPA (Arizona I),
815 F.3d 519, 524 (9th Cir. 2016); Phoenix Cement Co. v.
EPA, 647 Fed.App'x 702, 704-05 (9th Cir. Mar. 31,
2016). All that remains before us now are Petitioners'
objections to several sections of the EPA's most recent
FIP-those issued to replace certain rejected portions of
Arizona's SIP-which Petitioners claim constitute invalid
that several of Petitioners' objections to the FIP are
not properly before us because they were not first presented
to the EPA during the notice-and-comment period. See
42 U.S.C. § 7607(d)(7)(B) ("Only an objection to a
rule or procedure which was raised with reasonable
specificity during the period for public comment (including
any public hearing) may be raised during judicial
review."). As to the remaining objections that are ripe
for our consideration, we conclude that the EPA's
emission-control measures are not arbitrary or capricious and
thus constitute valid agency rulemaking. Accordingly, we
dismiss in part and deny in part the consolidated petitions
twentieth century, our nation experienced a significant
degradation of visibility in its most treasured wilderness
areas. See Regional Haze Regulations, 64 Fed. Reg.
35, 714, 35, 715 (July 1, 1999). The air pollution, Congress
found, was "primarily" due to the emission of
"[sulfur dioxide], oxides of nitrogen, and particulate
matter" from poorly regulated industrial sources.
Id. (citing H.R. Rep. No. 95-294, at 204 (1977)). To
tackle the problem, Congress adopted Section 169A of the CAA,
and the EPA promulgated implementing regulations to require
states to improve visibility by adopting certain emission
controls. 42 U.S.C. § 7491(b)(2). Two categories of such
emission controls are relevant to the issues before us:
"best available retrofit technology" (BART) and
what the EPA sometimes refers to as "reasonable
progress" (RP) controls. 42 U.S.C. §
7491(b)(2)(A)-(B), (g)(1)-(2); 40 C.F.R. § 51.308(f)(3);
Promulgation of Air Quality Implementation Plans; Arizona;
Regional Haze and Interstate Visibility Transport Federal
Implementation Plan, 79 Fed. Reg. 52, 420, 52, 447, 52, 463
(Sep. 3, 2014) [hereinafter Final FIP].
Best Available Retrofit Technology
a term of art used to describe technology that can be
installed on an industrial source to control its emissions or
make those emissions cleaner. 42 U.S.C. § 7491(b)(2)(A),
(g)(2). Congress directed BART to be implemented on older
stationary sources that "emit any air pollutant which
may reasonably be anticipated to cause or contribute to any
impairment of visibility" in protected federal lands.
Id. § 7491(b)(2)(A); see also 40
C.F.R. § 51.301 (defining a "BART-eligible
source" as an "existing stationary facility"
built between 1962 and 1977 that "has the potential to
emit 250 tons per year or more of any air pollutant").
If there are such sources within a regulated state, the state
must not only "submit an implementation plan containing
emission limitations representing BART, " 40 C.F.R.
§ 51.308(e), but do so for each pollutant those sources
emit, id. § 51.301.
determining the appropriate BART to install, states must
engage in a cost-benefit analysis by balancing five factors:
" the costs of compliance,  the energy and nonair
quality environmental impacts of compliance,  any existing
pollution control technology in use at the source,  the
remaining useful life of the source, and  the degree of
improvement in visibility which may reasonably be anticipated
to result from the use of such technology." 42 U.S.C.
§ 7491(g)(2). Because the balancing is source specific,
it could lead a state to adopt stringent BART regulations,
none at all, or something in between. See Final FIP,
79 Fed. Reg. at 52, 447 (recognizing that cost-benefit
analyses could reasonably lead to various degrees of BART
regulations). If the EPA is dissatisfied with a state's
BART determination, it can issue a FIP containing its own
cost- benefit analysis in accordance with Section 169A. 42
U.S.C. § 7410(c)(1).
Reasonable Progress Controls
to BART, RP controls serve to limit emissions of harmful
pollutants that degrade visibility in protected wilderness
areas. Although RP controls, as such, are not mentioned in
Section 169A, they are an outgrowth of Congress's mandate
to make "reasonable progress toward meeting the national
[visibility] goal." 42 U.S.C. § 7491(b)(2). The EPA
has construed that mandate as requiring each regulated state
to establish reasonable progress goals (RPGs) that depend on
how much of that state's current haze would have to be
eliminated each year to achieve natural, pristine conditions
by the year 2064. 40 C.F.R. § 51.308(d)(1)(i)(B). If a
state believes that it is unable to conform with the
year-to-year reduction rate-or the "glidepath, " as
it is known in regulatory nomenclature-its SIP must explain
why achieving the rate is not reasonable, while its proposed
RPGs are. Id. § 51.308(d)(1)(ii).
state calculates its RPGs, it must determine whether to
implement RP controls to reach those RPGs. See id.
§ 51.308(d). In making that determination, the state may
take into account existing control measures-including BART-as
well as the visibility impact of controls established through
other programs under the CAA. See id. §
51.308(d)(1). If the existing control measures do not cut it,
the state must consider four factors to determine whether
additional measures are warranted: " the costs of
compliance,  the time necessary for compliance, and 
the energy and non-air quality environmental impacts of
compliance, and  the remaining useful life of any existing
source subject to such requirements." 42 U.S.C. §
7491(g)(1); see also 40 C.F.R. §
51.308(d)(1)(i)(A). Should a state fail to conduct an
accurate balancing, the EPA can correct the state's
errors in a FIP. 40 C.F.R. § 51.308(d)(1)(v); see
also 42 U.S.C. § 7410(c)(1).
characteristic of RP controls is worth emphasizing: they
apply not just to some but to all pollutant-emitting
stationary sources that impede reasonable progress. Take, for
instance, a cement kiln emitting sulfur dioxide built in
1983. Although the kiln would not be subject to BART
regulation because it was not in existence as of 1977,
see 42 U.S.C. § 7491(b)(2)(A), it might
nonetheless be required to adopt additional measures because
limiting its pollution would help its home state achieve
RPGs. In essence, then, RP controls fill a regulatory gap
that would have existed if the EPA were not able to regulate
BART-ineligible cement kilns, smelters, and other emission
sources threatening to deteriorate visibility.
2011, Arizona submitted a SIP to the EPA outlining its RPGs
and describing the steps it intended to take to limit air
pollution within its state. See Arizona I, 815 F.3d
at 528. The EPA deemed several portions of Arizona's SIP
inadequate and issued a FIP to correct what it perceived to
be Arizona's noncompliance with Section 169A and related
regulations. Id. at 529; Phoenix Cement,
647 Fed.App'x. at 705-06. Because the validity of that
FIP is the primary issue in this action, we first outline the
steps the EPA took in preparing that document.
The Proposed FIP
portions of Arizona's SIP that the EPA rejected consisted
of "BART control analyses and determinations" for
multiple stationary sources, RPG "analyses and
determinations, " and long-term strategies for
"making reasonable progress." See
Promulgation of Air Quality Implementation Plans; Arizona;
Regional Haze and Interstate Visibility Transport Federal
Implementation Plan; Proposed Rules, 79 Fed. Reg. 9318, 9320
(Feb. 18, 2014) [hereinafter Proposed FIP]. Here is what the
EPA proposed, in relevant part, to replace those rejected
Reasonable Progress Goals
short, narrative section, the EPA proposed a set of RPGs
"consistent with a combination of control measures that
include those in the approved [portions of Arizona's] SIP
as well as [the Proposed] FIP." Id. at 9321.
The EPA did not express those RPGs numerically, explaining
that although it "would prefer to quantify these
proposed RPGs, " it lacked "sufficient time and
resources" to do so. Id. at 9363. Instead, the
EPA simply noted that "[i]n total, these final and
proposed controls to meet the BART and RP requirements will
result in higher emissions reductions and commensurate
visibility improvements beyond what was in [Arizona]'s
CalPortland's Cement Kiln
next considered whether CalPortland's cement kiln should
be subject to additional RP controls. Id. at 9351.
Although Arizona had identified that kiln as a source that
might contribute to visibility impairment, it failed to
conduct the requisite four-factor analysis in its SIP.
See Approval and Disapproval of Air Quality State
Implementation Plans; Arizona; Regional Haze and Interstate
Transport Requirements, 78 Fed. Reg. 46, 142, 46, 168-69, 46,
171 (July 30, 2013). The EPA therefore balanced the four
factors itself and proposed that CalPortland install an
emissions-control technology called "selective
non-catalytic reduction" (SNCR) with a "50 percent