Order Code RS21580
July 28, 2003
CRS Report for Congress
Received through the CRS Web
Federal/State Relations Under the Clean Air
Act: The Supreme Court Takes Two Cases
American Law Division
Recently, the Supreme Court agreed to hear two cases involving federalism issues
under the Clean Air Act (CAA). In Alaska Dep’t of Environmental Conservation v.
EPA, the Court will wrestle with whether EPA can enforce a Prevention of Significant
Deterioration (PSD) provision in the CAA contrary to a prior state determination under
its EPA-approved PSD program. In Engine Manufacturers Ass’n v. South Coast Air
Quality Mgmt. Dist., the issue is the preemptive scope of the CAA program regulating
mobile sources of air pollution. Why the Court has taken these cases is unclear, given
that they present no constitutional issues but only narrow questions of statutory
construction. Nor is there a direct split in the circuit courts. Perhaps the current Court’s
demonstrated interest in federalism issues is part of the reason.
It is noteworthy enough when the Supreme Court agrees to hear a case involving a
particular statute; agreeing to take two in a short span of time is even more so. On
February 24, 2003, the Court granted certiorari in Alaska Dep’t of Environmental
Conservation v. EPA,1 a case dealing with EPA’s enforcement and oversight authority
over state determinations under the Clean Air Act (CAA).2 On June 9, 2003, the Court
granted certiorari in Engine Manufacturers Ass’n v. South Coast Air Quality Mgmt. Dist.,3
a case addressing the preemptive scope of the CAA program regulating mobile sources
of air pollution. Not only do both cases involve the same statute, they also both involve
the same broad theme: the allocation of authority between the federal and state
governments under the CAA.4
298 F.3d 814 (9th Cir. 2002), cert. granted, 123 S. Ct. 1253 (Feb. 24, 2003) (No. 02-658).
42 U.S.C. §§ 7401-7671q.
309 F.3d 550 (9th Cir. 2002), cert. granted, 123 S. Ct. 2274 (June 9, 2003) (No. 02-1343).
It is the absence of such a federalism theme that leads us not to include in this report a third case
involving a federal environmental statute that recently was accepted by the Court. In South
Florida Water Mgmt. Dist. v. Miccosukee Tribe of Indians, 280 F.3d 1364 (11th Cir. 2002), cert.
granted, 71 U.S.L.W. 3798 (June 27, 2003) (No. 02-626), the question presented is whether
Congressional Research Service ˜ The Library of Congress
Alaska Dep’t of Environmental Conservation v. EPA
In this case, the issue before the Supreme Court is – may EPA issue CAA
noncompliance orders to a company, where such orders effectively overrule a state
permit, issued to the same company for the same activity, under the state’s EPA-approved
clean air program?
Some background may be useful. In areas of the United States where the air is
cleaner than the CAA’s national standards require, the Act limits the extent to which air
quality will be allowed to deteriorate down to those standards. This CAA program is
called “Prevention of Significant Deterioration (PSD).”5 The PSD program is
implemented in each state having a PSD area by, among other things, a permit program
for major new and modified sources of emissions in that area.6 This PSD permit program
is run by EPA, unless the state opts to include an EPA-approved PSD program in its state
implementation plan (SIP). Whoever runs the program, federal government or state,
persons seeking to construct major new and modified sources of emissions in a PSD area
must commit to using “best available control technology” (BACT).7
Alaska is a PSD area with respect to nitrogen dioxide. Under the state’s EPAapproved SIP, the state rather than EPA is the PSD permit issuer. As the CAA requires,
the state’s SIP demands BACT.
In Alaska DEC, that state determined that a mining company’s application for a PSD
permit – needed for new electric generators it wished to install – satisfied BACT. EPA
disagreed, however, and issued a noncompliance order stating that Alaska’s authorization
of the company’s new generators violated the CAA and Alaska’s SIP. Alaska issued the
PSD permit anyway, prompting two further orders from EPA preventing the mining
company from installing the new generators until it demonstrated to EPA compliance with
BACT requirements in the CAA and Alaska SIP. Alaska and the mining company sought
judicial review of these EPA orders in the Ninth Circuit.8 They argued that EPA’s
noncompliance orders exceeded its CAA authority because the orders effectively
invalidated a state permit issued under an EPA-approved SIP.
The Ninth Circuit held for EPA. It ruled that the CAA “compel[s] the conclusion
that the administrative orders [fall] within the EPA’s enforcement and oversight
pumping of water by a state water management agency that adds nothing to the water being
pumped constitutes an “addition” of a pollutant from a point source so as to trigger the
requirement of a NPDES permit under the Clean Water Act. Though the case involves the
application of a federal statute to a state agency, the Clean Water Act issue could have been
raised by any water-pumping entity, not merely governmental ones.
CAA Title I, Part C.
CAA § 165(a); 42 U.S.C. § 7475(a).
CAA § 165(a)(4); 42 U.S.C. § 7475(a)(4).
Under CAA section 307(b), a petition for review of any final action of the EPA Administrator
that is locally or regionally applicable may be filed only in the United State Court of Appeals for
the appropriate circuit, rather than the district court. 42 U.S.C. § 7607(b).
authority.” The court saw the Act’s language and legislative history as straightforwardly
supporting this conclusion.
As to the Act’s language, CAA section 113(a)(5) says that whenever EPA finds that
a state “is not acting in compliance with any requirement” of the Act relating to new
sources, it may “issue an order prohibiting the construction or modification of any major
stationary source ....”9 Targetting only PSD, CAA section 167 commands EPA to “take
... measures, including the issuance of an order ... to prevent the construction or
modification of a major emitting facility which does not conform to the requirements of”
the CAA portion establishing the PSD program. The BACT requirement fits both
sections: it is both a CAA requirement relating to new sources under section 113(a)(5) and
a requirement of the PSD portion of the CAA under section 167. Thus, the court found
EPA’s orders to be authorized by both sections. As to the Act’s legislative history, the
court perceived a steady progression since original enactment of the CAA in 1963 toward
greater federal oversight of state activity.
The counter-arguments of Alaska and the mining company were rejected. They
argued that because section 169(3) gives the state discretion to determine BACT, EPA
lacks authority to veto that judgment based on a mere difference of opinion. The court
responded that neither section 113(a)(5) nor section 167 contain any exemption for
requirements that involve the state’s exercise of discretion. Nor were the state and mining
company successful in arguing that EPA can only review whether the state complied with
“objective,” as opposed to discretionary, requirements of the CAA. Whatever “objective”
requirements means, said the court, it must include the state’s provision of a reasoned
justification for its BACT determination. This, concluded EPA, the state and mining
company did not provide.
Moving past EPA’s authority to revisit the state’s BACT determination, the court
addressed the validity of its conclusion that the determination was an abuse of discretion.
EPA’s determination, it held, was not arbitrary and capricious. In particular, the state’s
apparent motivation for rejecting Selective Catalytic Reduction – appreciation of the
mining company’s contribution to the local economy – is not an accepted justification
under the approach it used to determine BACT. Hence, EPA’s orders were sustained.
Engine Manufacturers Ass’n v. South Coast Air Quality
In this case, the issue before the Supreme Court is whether the CAA preempts rules
of a state’s air quality management district saying that when local operators of vehicle
fleets purchase or replace their fleet vehicles, they may acquire only those vehicles that
the district has designated.
Here we are dealing not with “stationary sources” of air pollution, as in Alaska DEC,
but rather with “mobile sources” – i.e., vehicles. A key difference between how the CAA
treats these two basic source categories is the degree to which state standards are
preempted. The CAA disavows any preemption of state stationary-source emission
standards that are stricter than federally required. In sharp contrast, the Act generally
42 U.S.C. § 7413(a)(5).
prohibits state mobile-source emission standards entirely. CAA section 209(a) says that
states may not adopt “any standard relating to the control of emissions from new motor
vehicles ... ,” nor require any approval “relating to the control of emissions from any new
motor vehicle as condition precedent to the initial retail sale ....” 10
There are exceptions, however. CAA section 209(b) offers a preemption waiver,
applicable solely to California, where that state determines that its standards will be at
least as protective as the federal ones and EPA, on application for the waiver, makes no
adverse findings.11 In addition, CAA section 177 allows states with EPA-approved
nonattainment plans to “piggyback” onto the California emission standards.12 That is,
they may adopt emission standards for new vehicles that are stricter than the federal ones
as long as their standards are identical to California’s for the model year in question.
Turning to the facts, the California legislature authorized the South Coast Air Quality
Management District (SCAQMD) to adopt fleet rules to reduce auto pollution in this
highly polluted area (including Los Angeles). In 2000, SCAQMD adopted six rules, each
of which mandates that when certain local operators of fleets purchase or replace their
fleet vehicles, they may acquire only those specific vehicles that SCAQMD has
designated as meeting its requirements. For example, Fleet Rule 1192 requires public
transit fleet operators with 15 or more vehicles to acquire alternative-fuel heavy-duty
vehicles when procuring or leasing vehicles, with some exemptions.
Plaintiffs, two trade associations with an interest in diesel fuel use, argued that the
Fleet Rules violate CAA section 209(a) in two ways: (1) they constitute preempted
“standard[s] relating to the control of emissions from new motor vehicles,” and (2) they
establish preempted “condition[s] precedent” to the sale of new motor vehicles.
The federal district court rejected both arguments.13 First, it said, the Fleet Rules do
not set a “standard relating to the control of emissions.” Asserted the court: “Rather than
imposing any numerical control on new vehicles, the rules regulate the purchase of
previously-certified vehicles.”14 To be sure, there is case law finding CAA preemption
of New York and Massachusetts laws requiring that a certain volume of vehicle sales in
those states be zero-emission vehicles.15 It does not follow, however, said the court, that
a rule regulating the purchase of vehicles is such a standard. The Fleet Rules are not
standards; plaintiffs may continue to sell any vehicle that is otherwise certified in
California. Furthermore, CAA section 246 expressly recognizes, in the court’s view, that
42 U.S.C. § 7543(a).
42 U.S.C. § 7543(b).
42 U.S.C. § 7507.
158 F. Supp. 1107 (C.D. Cal. 2001).
Id. at 1117.
American Automobile Mfrs. Ass’n v. Cahill, 152 F.3d 196 (2d Cir. 1998) (New York); Ass’n
of International Automobile Mfrs., Inc. v. Commissioner, 208 F.3d 1 (1st Cir. 2000)
Fleet Rules must be established in areas with very high pollution, and authorizes
restrictions on the purchase of fleet vehicles.16
Second, California’s Fleet Rules, said the district court, do not establish prohibited
conditions precedent to the sale of new motor vehicles. The rules, it noted, regulate the
purchasing and leasing, not the sale, of vehicles by fleet operators. They merely require
such operators to choose from among the least polluting of state-certified vehicles.
Importantly, the court pointed out that the rules impose no new emission requirements,
and thus do not run afoul of Congress’ concern underlying motor-vehicle emission
standard preemption – namely, that auto manufacturers not have to build engines to
comply with a multiplicity of state standards.
Finally, the court rejected plaintiffs’ argument that the Fleet Rules violate CAA
section 177. Section 177, it held, applies only to non-California “opt-in” states – not to
On appeal to the Ninth Circuit, the district court’s non-preemption ruling as to
section 209 was affirmed, but with no discussion.17 (The holding of section 177 nonapplicability was not appealed.)
In both Alaska DEC and Engine Mfrs. Ass’n, the only issue that is before the
Supreme Court is the federal-state one – the EPA override authority in Alaska DEC, and
the preemption issue in Engine Mfrs. Ass’n. Other issues in the two cases have fallen by
the wayside. The cases fall squarely into the long line of decisions dating to the early
1990s in which the current Court, or at least the five justices regarded as generally
conservative, has shown intense interest in federalism issues. While most of these
Supreme Court decisions address federalism in a constitutional context (under the
Commerce Clause, Tenth Amendment, or Eleventh Amendment), a few, like Alaska DEC
and Engine Mfrs. Ass’n, are solely statutory construction cases.18 Alaska DEC and
Engine Mfrs. Ass’n also tap into the rich body of debate and case law as to how the
federal-state partnership envisioned by Congress in the CAA and other similar federal
environmental programs should play out in specific situations.
That said, from a federalism perspective the lower-court decisions in Alaska DEC
and Engine Mfrs. Ass’n point in opposite directions, the former taking the federal side,
the latter the “states rights” position. Looking at the decisions from another perspective,
however, they are in harmony, in the sense that both decisions take the “environmental”
side of the argument.
42 U.S.C. § 7586.
309 F.3d 551 (9th Cir. 2002).
The most recent statutory environmental federalism decision of the Supreme Court is Solid
Waste Agency of Northern Cook County (SWANCC) v. U.S. Army Corps of Engineers, 531 U.S.
159 (2001). SWANCC involved the scope of the United States’ wetlands permitting authority
under the Clean Water Act – specifically, whether that authority extended to certain “isolated
waters.” The Court held that it did not.
It is anyone’s guess, of course, why the Supreme Court takes a case. As mentioned,
Alaska DEC and Engine Mfrs. Ass’n present no constitutional issues. Nor is there in
either instance a direct split in the circuit courts. Perhaps the Court’s interest was piqued
by the shared federalism theme, and intensified by the environmental context. Perhaps
it is the forum below, the Ninth Circuit, which has suffered a high Supreme Court reversal
rate in the past.
Oral argument in both cases is scheduled early in the Court’s upcoming term,
beginning October, 2003.
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