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In California Communities Against Toxics v. United States Environmental Protection Agency, (2012) 2012 U.S. App. Lexis 15428, the Ninth Circuit Court of Appeals invalidated the Environmental Protection Agency’s (EPA) approval of a revision to the California State Implementation Plan (SIP) without vacatur in order to permit a power plant to be constructed – but not operated – while EPA remedies its errors.

At issue in this case was whether EPA properly approved a revision to the SIP to accommodate a new power plant, which was under construction during the litigation, pursuant to requirements under the Clean Air Act. A revision to the SIP was required because state law mandated that new emissions be offset by reductions in emissions elsewhere. The mechanism used to implement such offsets was the emission credit system under which polluters may only emit the amount allowed by their credits. Thus, the new power plant required emission credits and the revision required the South Coast Air Quality Management District to transfer the necessary credits to the new power plant. The EPA reviewed and approved the revision and petitioners filed a lawsuit to have the approval vacated on the grounds the EPA committed procedural and substantive errors under the Clean Air Act.

On appeal, the Court concluded any procedural error committed by the EPA was harmless, but that the EPA did commit a substantive error which required invalidation. The alleged procedural error was that the EPA failed to include all relevant documents on its online docket to allow interested parties to participate in the decision making process. However, the court deferred to the EPA’s judgment on what it was required to disclose because the EPA was only required to practicably disclose information on its online docket under the E-Government Act. Moreover, any error related to information regarding the online docket was harmless because petitioners had all relevant documents in their possession from earlier proceedings. In response to the alleged substantive error, the details of which the court did not disclose, the EPA admitted it had employed flawed reasoning in approving the revision, but still argued its approval was not arbitrary and capricious. The Court, however, disagreed with the EPA’s argument because its review was limited to the EPA’s reasoning, which was flawed and thereby rendered the approval invalid.

Though the EPA’s approval of the revision to the SIP was held to be invalid, the Court did not vacate it. Vacatur in this case was not appropriate because principles of equity demanded the SIP be left in place due to potential for disruptive consequences. The court explained that vacatur would delay the power plant’s operations by halting its construction and potentially resulting in additional legal challenges. Such delays would prevent generation of much needed power and would effectively increase probabilities of blackouts next summer. Though the court refused to halt construction, it did remand the matter and require the EPA to obtain a new and valid EPA rule before it may begin operation.

Key Point:

A court may remand an agency approval without vacatur if principles of equity require the approval to stay in place while errors are remedied.

Written By: Tina Thomas, Ashle Crocker and Grant Taylor (law clerk)
For questions relating to this blog post or any other California land use, environmental and/or planning issues contact Thomas Law Group at (916) 287-9292.

The information presented in this article should not be construed to be formal legal advice by Thomas Law Group, nor the formation of a lawyer/client relationship. Readers are encouraged to seek independent counsel for advice regarding their individual legal issues.

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