SIERRA CLUB v. GORSUCH

Opinion for the Court filed by Senior Circuit Judge BAZELON.

Dissenting opinion filed by Senior Circuit Judge MacKINNON.

BAZELON, Senior Circuit Judge:

Petitioner, Sierra Club, challenges the failure of the Environmental Protection Agency (EPA) to place strip mines on the list of pollutant sources subject to fugitive emissions regulations. EPA maintains that no decision has been made whether to include strip mines on the list and that the issue is still under study. EPA argues that until such decision is made, jurisdiction to review the dispute is lacking.1 We find that jurisdiction does exist, but that the record is inadequate for our review. We therefore remand to the agency for supplementation of the record.

BACKGROUND

The Clean Air Act (Act)2 established minimum air quality standards to be achieved in all regions of the country. Prior to 1977, however, the Act contained no explicit provision to prevent areas where air quality exceeded the statutory minimum from degenerating to that level. In 1974, following Sierra Club v. Ruckelshaus,3 EPA promulgated regulations establishing a program for "prevention of significant deterioration" (PSD) to prevent such degeneration. In 1977, Congress amended the Act to incorporate a PSD program into the structure of the Act.4

In areas where PSD provisions apply, major new sources of pollution may not be built without first obtaining a permit from the state in which the source will be located.5 Permits may be issued only to sources that satisfy two principal requirements. First, the owner or operator of the source must demonstrate that emissions from construction or operation of the source will not violate any applicable emissions standard of the Act.6 Second, the proposed source must be subject to the best available pollution control technology.7

The PSD provisions of the Act only apply to "major emitting facilities."8 The Act's definition of that term encompasses sources in twenty-eight industrial categories that have the potential to emit 100 tons per year of any regulated pollutant, or any other source with the potential to emit 250 tons or more per year of any such pollutant.9 For purposes of calculating potential emissions, the Act distinguishes between two types of emissions: "point source" emissions, such as those from a chimney; and "fugitive" emissions, which are not emitted from a single point.10

Prior to Alabama Power Co. v. Costle,11 EPA's PSD regulations considered all emissions from a source for purposes of determining whether it qualified as a major emitting facility under the Act. In Alabama Power, this court held that the agency could only consider fugitive emissions in such determinations when done pursuant to a rule.12 The court remanded to the agency for further consideration.

On remand, EPA proposed revised PSD regulations. The proposal included a list of twenty-seven categories13 of sources whose fugitive emissions would be taken into account in determining whether a source is a major emitting facility and thus required to meet all requirements for a construction permit from EPA. Strip mines were not among the categories listed. The agency explained, however, that exclusion from the list was not a final decision:

Sierra Club strongly urged that strip mines be included on the final list.15 Its testimony cited the "PEDCo report,"16 an EPA-commissioned study that calculated the emission levels of various strip mine operations. Sierra Club concluded from data in that study that even a small mine producing only one million tons of coal per year would generate fugitive emissions of 1750 tons per year17 and that between 10% and 15% of those emissions (175 to 262 tons) would be in the dangerous, respirable 10 micron-or-less size range.18 Thus, many small mines and certainly larger mines would satisfy the 250 tons per year requirement, making them eligible for PSD regulation under the Act.

On August 7, 1980, EPA promulgated the revised PSD regulations in final form.19 Strip mines were not included. The agency indicated that its greater experience in quantifying fugitive emissions from the listed sources was the reason that they had been included at that stage.20

On November 25, 1980, Sierra Club petitioned EPA for reconsideration of the regulations on the ground that the agency had improperly omitted strip mines from the list. On March 2, 1981, the agency denied the petition. In the agency's response, the administrator explained that the absence of strip mines from the final list "did not mean that the agency had concluded its review of the strip mine question and had decided" not to include strip mines as a source on the list. Instead, the administrator said that the agency was "actively gathering information ... [to] put it in a better position than it is now to reach a final decision on strip mines."

That information-gathering process continues. In the meantime fugitive emissions from new strip mines are not included for purposes of determining whether the mine will result in violation of air quality standards.

On October 6, 1980, Sierra Club petitioned this court for review. The case was consolidated with several others filed by industry petitioners challenging other aspects of PSD regulation.21 Briefing of the issues was stayed while settlement negotiations on some of the issues — but not the instant question — were conducted. On February 8, 1982, EPA moved to dismiss Sierra Club's petition for review on the ground that EPA had not yet taken final action on whether to include strip mines in the PSD regulations. This court then severed Sierra Club's petition for review from the consolidated cases and referred EPA's motion to dismiss to the merits panel.

ANALYSIS

A. Jurisdiction

Section 307(b)(1) of the Act22 vests jurisdiction in this court to review "final action" of the administrator, and action of the administrator concerning "nationally applicable regulations." Although the Act does not define the terms "action" or "final action," both terms have traditional meanings in the administrative context. The Administrative Procedure Act (APA)23 defines "agency action" to include "the whole or a part of an agency rule, order, license, sanction, relief, or the equivalent or denial thereof, or failure to act...."24 The requirement of finality is in essence a question of ripeness, focusing on the appropriateness of the issues presented for judicial review. Courts have approached this determination in a pragmatic way, considering "the fitness of the issues for judicial decision and the hardship to the parties of withholding court consideration."25

In the instant case, jurisdiction over Sierra Club's claim exists because its petition challenges EPA's list of sources as promulgated. The inclusion of strip mines was clearly an issue in that rulemaking, as strip mines had been regulated by the PSD regulations invalidated by Alabama Power,26 and Sierra Club had submitted comments on the issue. The regulations under challenge became final the date they were published in the Federal Register, and review of the regulation was appropriate any time thereafter.27 Indeed, the judicial review provisions of the Act would seem to suggest that review had to be sought immediately, if at all.28

The source of our jurisdiction does, however, narrow the focus of the issue presented. At issue is only the validity of EPA's promulgated rule, not the independent necessity of future rules that EPA might promulgate concerning strip mines. EPA confuses this point when it contends that judicial review is inappropriate for lack of agency final action. We are not deciding whether regulations covering strip mines would have been required in the absence of an ongoing proceeding. Sierra Club's position, as best we can piece it together, is that given the agency's criteria for placing a category of sources on the August 7, 1980, list, strip mines should have been included.29 The scope of our jurisdiction is fully adequate to consider that claim.

B. Scope of Review

The scope of our review is set forth in section 307(d) of the Act,30 the rulemaking provision under which EPA promulgated the regulations. Section 307(d)(9) authorizes a reviewing court to reverse action by the Administrator found to be "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." The court is aided in its review by section 307(d)(6)(B), which requires that a rule promulgated by EPA "be accompanied by a response to each of the significant comments, criticisms, and new data submitted in written or oral presentations during the comment period."31 The purpose of this provision is to enable a reviewing court and the parties to see the factual and decisional framework underlying the agency's action. The responses should explain how the agency resolved any significant issues raised by the comments and show how that resolution led to the ultimate rule.32

It has frequently been recognized that application of the "arbitrary and capricious" standard requires reviewing courts to adjust their inquiry according to the particular agency action under review.33 Such adjustment depends on a variety of factors, many of which reflect limits of judicial competence that counsel give greater deference to some agency decisions than others. Where an agency has been given wide discretion, the nature of judicial review will perforce be narrower than when an explicit statutory mandate exists. Likewise, the agency expertise required by a decision will also affect the standard against which courts review agency action. Such a flexible approach creates difficulty articulating with precision the standard of review, but a more rigid approach is untenable given the wide range of actions subject to review under this single standard.34

Although EPA's position — that final action has not been taken — does not affect our jurisdiction, it does affect our standard of review. Absent a precise statutory timetable35 or other factors counseling expeditious action,36 an agency's control over the timetable of a rulemaking proceeding is entitled to considerable deference. Such deference derives from an agency's discretion to set its own priorities, which may reflect a variety of factors outside the focus of a rulemaking.37 For this reason, our review of delayed action in rulemaking is of necessity limited to examining an agency's reasons for deferred action and determining whether that delay is inconsistent with the agency's discretion under the applicable statutory scheme.38 That review must be undertaken vigorously, however, for it must enable reviewing courts to evaluate claims — like the one made by petitioner here — that an agency is preventing review of a decision not to regulate by indefinitely insisting that final action has been deferred.39 Judicial review of decisions not to regulate must not be frustrated by blind acceptance of an agency's claim that a decision is still under study.40

C. The August 7, 1980 Regulation

Sierra Club's argument that strip mines must be included on the list of regulated sources relies heavily on findings of the PEDCo report. Those findings suggest that many small strip mines — and presumably all larger ones — produce enough pollutants to satisfy the Act's 250-ton threshold requirement. If the report is correct, the inclusion of strip mines would seem mandated by EPA's policy statement accompanying the proposed list, which stated that

EPA defends the omission of strip mines by arguing that it lacks quantification techniques for applying PSD regulations to individual mines. In promulgating the final list, EPA explained that it was focusing first on the sources listed because its experience in quantifying fugitive emissions from them is, in general, greater than its experience in doing so for other sources.42 EPA uses this rationale as justification for the "multi-year, multi-stage" set of studies in which it is currently engaged.

As Sierra Club points out, however, this justification seems to contradict the agency's reasoning used to defend the inclusion of several other sources on the list. When EPA proposed the list, it received strong criticism from industry claiming that it should not have listed certain sources because "fugitive emissions data were either unavailable or inadequate." In response, the agency asserted that precise quantification was necessary only to determine whether a particular source was subject to review, not to determine whether a category of sources should be regulated:

On the issue of the appropriateness of including fugitive emissions in threshold calculations for particular categories of sources, the basic objection expressed by most commenters was that fugitive emissions data were either unavailable or inadequate, and that it would therefore be inappropriate to include fugitive emissions in threshold calculations for a particular category.

In response, EPA notes that such concerns should and will be addressed in the context of particular applicability determinations, but that they have not changed the basic policy decision made by the Administrator under section 302(j). As explained earlier, fugitive emissions must be taken into account under section 165 in determining the impact of ambient air quality of a proposed new source and the [best available control technology] requirements which will apply to it, even if there are no existing fugitive emissions data, or if the available data are crude. Obviously, the nature and extent of the available data and technologies are important factors in determining how fugitive emissions should be taken into account and how they should be regulated under the review and permitting process of section 165; but those factors will not avoid or eliminate the consideration of fugitive emissions under that process. Similarly, although the issue of quantification may be relevant to particular applicability determinations, EPA does not believe that that issue alone is critical in determining whether, as a general policy matter, it is appropriate to include fugitive emissions in threshold calculations for a particular category of sources.43

Sierra Club argues that this language, combined with the implications of the PEDCo report, demonstrate that EPA has arbitrarily treated similar quantification problems differently.

EPA responds that the rationale expressed in the quoted language applies only to the categories of source actually chosen for listing. In short, the agency implies that although precise quantification is not necessary for some sources, it is necessary for others. EPA does not, however, offer any explanation for why this is so. The reasons underlying such a distinction certainly are not self-evident.

In sum, the picture on review is as follows. EPA has stated its intention to regulate all facilities that emit 250 tons per year of a regulated pollutant, regardless of whether the emissions are point source or fugitive. According to Sierra Club, the PEDCo report — a study commissioned by EPA — suggests that most strip mines emit the 250-ton threshold amount. Neither the agency nor industry intervenors44 have given reasons to discount Sierra Club's interpretation of the PEDCo report. In fact, the statement accompanying the final regulations contains no reference to the PEDCo report at all, despite Sierra Club's reliance on it in comments. Furthermore, the agency has not retreated from its position that all sources meeting the 250-ton threshold requirement should be regulated. Yet, EPA has thus far declined to regulate strip mines. If there is reasoned decisionmaking lurking behind such agency behavior, it is yet to be articulated. For agency action to be upheld, it must not only be explainable; it must also be explained.45 Without such explanation, we cannot properly exercise review.

EPA's insistence that no final decision has been made provides little comfort. When EPA first proposed regulations governing fugitive emissions and did not place strip mines on the list of regulated sources, the agency indicated that "over the next several months, [the Administrator] will consider the need for additional source types to be added to the list beyond those that will be newly regulated ... including strip mines."46 Final regulations were promulgated eleven months later, and no explicit action on strip mines had yet been taken. The agency offered no discussion of the evidence submitted concerning strip mines, and rulemaking on the issue was not extended. The rulemaking proceeding in which strip mines had been in issue officially ended at that time. It is the omission of strip mines from the list promulgated in that proceeding that we have considered and found troubling.

Although the record before us is inadequate to support EPA's action, we cannot say at this point that the agency has acted arbitrarily or capriciously. We therefore remand the record to EPA and, in the interest of judicial economy, the panel retains jurisdiction. On remand, the agency is to reconsider whether strip mines should be added to the list of regulated sources. We expect EPA to give explicit consideration to the PEDCo report and to consider whether it forms a sufficient basis for including strip mines on the list of sources subject to regulation. If EPA decides not to regulate strip mines at the present time, relying in part upon quantification difficulties, it should clarify the role of quantification techniques in the decision to include a category of sources on the list. Finally, we trust that the agency will act on this remand in an appropriately expeditious manner.47

So ordered.

MacKINNON, Senior Circuit Judge, dissenting:

I agree with the statement in the majority opinion that "we cannot say at this point that the agency has acted arbitrarily or capriciously." Maj. Op. at 661. Implicit in that determination is the fact that the agency has not taken final action on strip mines. I thus find under section 307(b)(1) of the Clean Air Act, 42 U.S.C. § 7607(b)(1),1 that this court lacks jurisdiction because there is no final action for this court to review. The Administrator has not promulgated any national regulation or taken any "final action" under the Act with respect to strip mines.

The contention by appellant that this court should review the situation because it includes an alleged decision not to regulate strip mines is based on an incorrect fact, but in any event the cause is obviously not ripe for review. There is absolutely nothing in the record to support a statement that the Administrator has made any such decision. Neither does the record indicate that the Administrator has unreasonably delayed rule making with regard to strip mines. Without any "final action" in the matter, and an unripe record, this court is without jurisdiction. This is another case where petitioners have jumped the gun again. See Kleppe v. Sierra Club, 427 U.S. 390, 96 S.Ct. 2718, 49 L.Ed.2d 576 (1976), reversing and remanding Sierra Club v. Morton, 514 F.2d 856 (D.C.Cir.1975). Petitioners' impatience with agency action cannot confer jurisdiction. The variations in the location, character and operation of strip mines throughout the United States and the number of such mines is so great that it is very reasonable for the EPA to require complete data before it embarks on imposing controls and regulations in what is essentially a new field, i.e., the nationwide regulation of the emission of dust (fugitive emissions) from strip mines. The EPA is to be commended for not acting arbitrarily and capriciously and for not proceeding on incomplete and inadequate information.

I would accordingly dismiss the petition for review. When the EPA makes a final decision in the matter, if petitioners are dissatisfied, they can bring the matter before the court in the proper manner as a separate case. There is absolutely no justification whatsoever for this panel to reach out to acquire jurisdiction of whatever case, if any, may subsequently arise on the merits with respect to the regulation of fugitive emissions from strip mines. The consideration we have given to this case has been devoted primarily to procedural issues and that does not justify the continuation of jurisdiction in the panel. If ever another appeal eventuates, it will be from some final action of the Administrator that will undoubtedly include some regulations and a relevant record. If petitioners then have no complaint against those regulations or the action of the Administrator, there should not be any appeal. And if they do it will be essentially a different case with a different record on substantially different issues than what is presently before us. Regardless of how much the majority might like to exercise judicial jurisdiction in that case, nothing they have done in this case justifies their assignment of that case to themselves on a record that would undoubtedly present far different facts and issues. Thus, in the interim we should not carry this case on our pending docket. I thus respectfully dissent to the extent above stated from the panel's refusal to dismiss the appeal and from their unsupportable assumption of the right to exercise jurisdiction of any case that might subsequently develop for determination on the merits. The court, regardless of the action it takes, should not remand the record, but should couch its decision in a final judgment on the case that is before us. I thus respectfully dissent to the extent above stated.