United States Court of Appeals, District of Columbia Circuit
Argued Nov. 18, 2013.
On Petition for Review of a Final Rule of the United States Environmental Protection Agency.
Lynn H. Slade argued the cause for petitioner. With him on the briefs were William C. Scott and Deana M. Bennett.
John R. Jacus, Charles A. Breer, and Radcliffe Dann, IV were on the brief for amicus curiae Oklahoma Independent Petroleum Association in support of petitioner.
David A. Carson, Attorney, United States Department of Justice, argued the cause for respondent. With him on the briefs were Robert G. Dreher, Acting Assistant Attorney General, and Jon M. Lipshultz, Attorney.
Philip Baker-Shenk, Kurt E. Blase, Richard A. Duncan, and Jill Elise Grant were on the brief for Tribal Intervenors in support of respondent.
Beverly M. Conerton, Assistant Attorney General, Office of the Attorney General for the State of Minnesota was on the brief for amicus curiae State of Minnesota in support of respondent.
Michael C. Small and James E. Tysse were on the brief for amicus curiae The Osage Nation in support of respondent.
Before: HENDERSON and BROWN, Circuit Judges, and GINSBURG, Senior Circuit Judge.
Opinion for the Court filed by Senior Circuit Judge GINSBURG.
GINSBURG, Senior Circuit Judge:
The Oklahoma Department of Environmental Quality petitions for review of a final rule promulgated by the Environmental Protection Agency establishing a federal implementation plan for the attainment of national air quality standards in " Indian country." See Review of New Sources and Modifications in Indian Country, 76 Fed.Reg. 38,748 (2011) (codified at 40 C.F.R. pts. 49 and 51) (hereinafter Indian Country NSR Rule). Jurisdiction to implement the Clean Air Act lies initially in either a state or an Indian tribe. The EPA may in certain circumstances implement a federal program in Indian country, see 42 U.S.C. § 7601(d), but when it does so, in our view, it is subject to the same jurisdictional limitations as the tribe in whose shoes it stands. Because the EPA requires a tribe to show it has jurisdiction before regulating Indian country outside a reservation, yet made no demonstration of tribal jurisdiction before itself regulating those areas, we hold the agency was without authority to displace Oklahoma's state implementation plan in non-reservation Indian country. We therefore grant the petition for review and vacate the Indian Country NSR Rule with respect to non-reservation lands.
The Clean Air Act (CAA or Act) places upon each state " the primary responsibility for assuring air quality within the entire geographic area comprising such State." 42 U.S.C. § 7407(a). In order to carry out that responsibility, each state must submit for EPA approval a state implementation plan (SIP) for the attainment of national air quality standards, § 7410(a)(1), and each SIP must contain a permitting or so-called " new source review" (NSR) program. See § 7410(a)(2)(C) (requiring " regulation of the modification and construction of any stationary source within the areas covered by the plan ..., including a permit program" ). The EPA first approved Oklahoma's SIP in 1972, see Approval and Promulgation of Implementation Plans, 37 Fed.Reg. 10,842, 10,888/1, and in modified form that SIP remains in effect today, see 40 C.F.R. § 52.1922.
In 1990 the Congress amended the Act to authorize the EPA " to treat Indian
tribes as States," § 7601(d)(1)(A), subject to the condition that " the functions to be exercised by the Indian tribe pertain to the management and protection of air resources within the exterior boundaries of the reservation or other areas within the tribe's jurisdiction," § 7601(d)(2)(B). In 1998 the EPA interpreted the geographic reach of the tribal jurisdiction created in 1990 to track the definition of " Indian country" in the federal criminal code. Indian Tribes: Air Quality Planning and Management, 63 Fed.Reg. 7254, 7259/1 (1998) (codified at 40 C.F.R. pts. 9, 35, 49, 50, and 81) (hereinafter Tribal Authority Rule). More specifically, the EPA interpreted the term " reservation" in § 7601(d)(2)(B) to include formal reservations, Pueblos, and tribal trust lands, the latter two categories being essentially informal reservations, id. at 7258/1; it interpreted the phrase " other areas within the tribe's jurisdiction" to include " all non-reservation areas of Indian country," id. at 7259/1, i.e., the " dependent Indian communities" and " Indian allotments" referenced in 18 U.S.C. § 1151(b)-(c).
Although the Tribal Authority Rule thus allowed Indian tribes to implement the Act over both reservation and non-reservation areas of Indian country, it differentiated between the two in an important respect: The Rule authorized each tribe to implement the Act " over its reservation without requiring the tribe to demonstrate its own jurisdiction," whereas before implementing the Act over a " non-reservation area[ ]," the tribe would have to " demonstrate [its] jurisdiction" under federal Indian law. Id. at 7255/2. We upheld the Rule and this distinction in Arizona Public Service Co. v. EPA, 211 F.3d 1280, 1294-95 (2000).
In the 1990 amendments to the Act the Congress also authorized the EPA to displace a tribe and directly regulate areas of Indian country in " any case in which the Administrator [of the EPA] determines that the treatment of Indian tribes as identical to States is inappropriate or administratively infeasible." 42 U.S.C. § 7601(d)(4). In 2011, pursuant to this authority, the EPA issued the Indian Country NSR Rule here under review. 76 Fed.Reg. at 38,778/2. This rule established a federal implementation plan (FIP) including an NSR program covering all Indian country nationwide except where the EPA had already approved a tribal NSR program or expressly authorized a SIP to be enforced. Id. at 38,752/2; 40 C.F.R. §§ 49.151(c), 49.166(c).
The EPA explained it was promulgating the FIP in order to fill a regulatory gap created by the general lack of state authority to regulate air quality in Indian country and the failure of ...