16-3420-ag Finger Lakes Zero Waste Coal. v. EPA

UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT

SUMMARY ORDER RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.

At a stated term of the United States Court of Appeals for the Second Circuit, held at the Thurgood Marshall United States Courthouse, at 40 Foley Square, in the City of New York, on the 15th day of May, two thousand eighteen.

PRESENT: GERARD E. LYNCH, CHRISTOPHER F. DRONEY, Circuit Judges, WILLIAM K. SESSIONS III, District Judge* ________________________________________________

FINGER LAKES ZERO WASTE COALITION, INC.,

Petitioner,

v. No. 16-3420-ag

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, SCOTT PRUITT, ADMINISTRATOR, UNITED STATES ENVIRONMENTAL PROTECTION AGENCY,

Respondents.** ________________________________________________

* Judge William K. Sessions III, of the United States District Court for the District of Vermont, sitting by designation. ** In accordance with Fed. R. App. P. 43(c)(2), the Clerk of Court is directed to amend the caption as set forth above. FOR PETITIONER: Gary A. Abraham, Law Office of Gary A. Abraham, Great Valley, NY.

FOR RESPONDENT: Heather E. Gange, Environmental & Natural Resources Division, U.S. Department of Justice (Jeffrey H. Wood, Acting Assistant Attorney General, Environmental & Natural Resources Division, U.S. Department of Justice, Zach Pilchen, Michael Lee, Office of General Counsel, Environmental Protection Agency, on the brief), Washington, D.C.

Petition for Review of a July 29, 2016, order of the Administrator of the

Environmental Protection Agency.

UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED,

AND DECREED that the petition for review is DENIED.

Petitioner Finger Lakes Zero Waste Coalition, Inc. (“the Coalition”) petitions for

review of an order of the Environmental Protection Agency (EPA) Administrator denying

the Coalition’s request that the EPA reopen or object to a permit issued by the State of New

York for a facility burning gas from a nearby landfill in Ontario County, New York. We

assume the parties’ familiarity with the underlying facts, the procedural history of the case,

and the issues presented in the petition for review, which we discuss as relevant here.

I. Statutory Framework

Title V of the Clean Air Act (“CAA”), which Congress added to the CAA in 1990,

“requires major stationary sources of air pollution to receive operating permits

incorporating CAA requirements and establishes a procedure for federal authorization of

state-run Title V permitting programs.” N.Y. Pub. Interest Research Grp. v. Whitman,

, 320 (2d Cir. 2003) (“NYPIRG”); see also 42 U.S.C. §§ 76617661f. Following

2 the passage of Title V, the state of New York established such a state program through its

Department of Environmental Conservation (DEC). The EPA gave the program final

approval in 2001. See NYPIRG, 321 F.3d at 32022. Pursuant to the program, the DEC

may grant Title V permits to major stationary sources of air pollution. See 42 U.S.C. §

7661a; NYPIRG, 321 F.3d at 320.

As part of the permitting process, DEC must offer an “opportunity for public

comment” on a permit application. See 42 U.S.C. § 7661a(b)(6); NYPIRG, 321 F.3d at 323.

Once the DEC responds to public comments and decides to issue the permit, it “must give

the EPA 45 days to review and to object to a permit that does not meet the requirements of

Title V.” NYPIRG, 321 F.3d at 323 (citing 42 U.S.C. § 7661d(b)(1);

(c)).

If the EPA does not object, then “any person may petition the Administrator within 60 days

after the expiration of the Administrator’s 45-day review period to make such objection.”

(d). The Administrator must then review the petition within 60 days and

object if the petitioner “demonstrates” a permit applicant’s noncompliance with CAA

requirements. NYPIRG, 321 F.3d at 333; 42 U.S.C. § 7661d(b)(2).

The EPA Administrator may also reopen a state-issued Title V permit for cause

where the EPA discovers, or a petitioner demonstrates, that one of four requirements for

re-opening is satisfied. See 42 U.S.C. § 7661d(e);

(f)(1) (listing

requirements for EPA to reopen a Title V permit). If the Administrator denies either a

petition to object or a petition to reopen, the petitioner may appeal this final agency action

to the appropriate U.S. Circuit Court of Appeals. See 42 U.S.C. 7607(b)(1).

3 As the EPA explains, state permitting authorities considering a permit application

must decide whether to treat certain stationary sources of air pollution as a single source of

pollution or as separate sources. This decision has “real-world consequences” because “[i]f

two facilities are part of the same sources, and their combined emissions exceed certain

thresholds, they are considered a ‘major source’ . . . of air pollutants,” which results in

“more stringent [CAA] controls.” Respondents’ Br. at 8. To make this determination, state

permitting authorities must examine whether “any group of stationary sources . . . are [1]

located on one or more continuous or adjacent properties, . . . [2] are under common control

. . . , [and] [3] belong[] to a single major industrial grouping.”

(defining

“major source”).

At issue in this case is the “common control” requirement. While New York state

law does not define this requirement, the DEC applies its Declaratory Ruling 19-19 to

analyze the common control question. This ruling explains that the DEC will determine

common control on a “case-by-case basis,” guided by “EPA’s informal guidance

documents and determination letters” without being bound by those same letters or any test

or factor. App. 178.

II. Factual Background

This case began in 2011, when Seneca Energy II, LLC (“Seneca Energy”), applied

to DEC to renew and modify its Title V permit. Seneca Energy operates a “landfill gas-to-

energy” facility (“the facility”) in Ontario County, New York. App. 85. The facility obtains

its gas from a landfill on the same or adjacent property owned by Ontario County and

leased and operated by Casella Waste Systems of Ontario, LLC. During the public

4 comment portion of the permitting process, the Coalition submitted the only public input

regarding Seneca Energy’s application.

In its comments, the Coalition sought to demonstrate that the facility and the

adjacent landfill are under “common control” for purposes of the major source analysis. In

response, the DEC issued an 11-page “Responsiveness Summary” addressing the various

issues that the Coalition raised and reaffirming that the facility and landfill are not under

common control. DEC then submitted the proposed permit to the EPA for review, and the

EPA did not object within the 45-day time limit. As permitted by

(d), the

Coalition petitioned the EPA on December 22, 2012, to object to the permit on the ground

that the facility and landfill are under common control.

The EPA did not respond to the petition until June 29, 2015. The 2015 EPA Order

determined that the DEC had inadequately addressed the Coalition’s concerns in its

Responsiveness Summary, because that summary “did not affirmatively identify or explain

the facts and factors upon which it based its determination that the facilities are not under

common control.” App. 99. Instead, the “DEC merely provided targeted rebuttals to some

of the facts presented by the commenter.” App. 100. The EPA then directed the DEC “to

explain, on the record, what case-specific facts and factors [DEC] considered as part of its

source determination analysis regarding the two facilities” in order to “provide an adequate

record sufficient to support a source determination.” App. 10001.

The DEC responded to the 2015 EPA Order on October 26, 2015, with a “Source

Determination” explanation. The 2015 Source Determination provided additional

background details on the facility and the landfill, the statutory and legal framework, and

5 analysis of other “major source” criteria. That information was not included in the original

2012 Responsiveness Summary that the DEC issued. The DEC then applied numerous

factors from Declaratory Ruling 19-19, concluding that each factor weighed against finding

common control. As part of this analysis, the DEC (1) included additional reasoning

regarding the sharing of tax credits by the facility and the landfill to justify its common

control conclusion that the previous Responsive Summary did not address, and (2) noted

that the source determination was consistent with prior determinations in New York,

another factor that the Responsiveness Summary did not discuss.

On February 8, 2016, 105 days after the DEC Source Determination, the Coalition

filed a petition styled as a request to reopen the facility’s Title V permit. Although styled a

request to reopen, the petition noted the EPA’s 45-day timeframe to object to a permit and

the 60-day timeframe that outside parties have to petition to the EPA for an objection after

those initial 45 days. Using this timeframe, the Coalition stated that it had timely filed

within the 60-day timeframe, even though that timeframe is for a petition to object, and not

for a petition to reopen. As to its substance, the petition incorporated the Coalition’s 2012

petition to object by reference and noted a few facts from that petition to conclude that the

facility and the landfill are under common control. The Coalition also argued that the

DEC’s 2015 Source Determination did not respond to the 2015 EPA Order and applied the

wrong legal analysis.

The EPA Administrator denied the Coalition’s petition on July 29, 2016, both as a

petition to object and as a petition to reopen. As to the petition to reopen, the Administrator

primarily concluded that the Coalition did not address the reopening criteria under 40

(f)(1) and did not engage the 2015 Source Determination. Insofar as the

Coalition’s submission was a petition to object, the Administrator denied the petition for

similar reasons. The Coalition now appeals.

III. Review of the Petition

We review the denial of a Title V petition to object or reopen pursuant to the

standards for judicial review set forth in the Administrative Procedure Act. NYPIRG, 321

F.3d at 324 (citing

). “Under the APA, we must set aside any agency action

that is ‘arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with

law.’”

(quoting

(2)(A)); see also Alaska Dep’t of Envtl. Conservation v.

EPA,

, 49697 (2004) (reviewing EPA order regarding state environmental

agency’s decision under arbitrary and capricious standard of

(2)(A)). “[I]n

deciding whether agency action is arbitrary and capricious, a court considers whether the

agency relied on factors which Congress has not intended it to consider, entirely failed to

consider an important aspect of the problem, offered an explanation for its decision that

runs counter to the evidence before the agency, or is so implausible that it could not be

ascribed to a difference in view or the product of agency expertise.” Islander E. Pipeline

Co. v McCarthy,

, 15051 (2d Cir. 2008) (internal quotation marks omitted).

We conclude that the EPA Administrator did not act arbitrarily or capriciously by

denying the Coalition’s petition to reopen or object to the Title V permit. It was not

arbitrary or capricious for the Administrator to deny a petition to reopen where that petition

did not mention the relevant legal framework for reopening a case, much less explain why

the petitioner is entitled to the relief that it seeks under that framework. See

7 70.7(f)(1) (outlining standard for reopening a Title V permit). Similarly, insofar as the

Coalition’s petition requested that the EPA object to the permit, the Coalition did not

respond to or engage the 2015 Source Determination. As a result, the petition was plainly

inadequate under the relevant statutory framework. See 42 U.S.C. § 7661d(b)(2) (requiring

petitioner to “identify all . . . objections” to the Title V permit); see also id. (requiring

petitioner to “demonstrate[] to the Administrator that the permit is not in compliance with

the [CAA’s] requirements”); MacClarence v. EPA,

, 113033 (9th Cir.

2010) (affirming denial of petition to object where petition did not adequately address state

agency decision regarding the aggregation of polluting facilities).

In contrast to the Coalition’s petition, the 2015 DEC Source Determination set forth

the applicable statutory framework and common source explanation in significant detail.

The DEC submitted a detailed memo accompanied by many exhibits to support the

common control conclusion that it reached. Further, the 2015 Source Determination

included additional analysis regarding the tax credits that the facility and landfill shared

and pointed to precedent to justify the common source conclusion. Given the DEC’s

detailed response to the 2015 EPA Order and the Coalition’s failure to address that

response, the EPA’s 2016 Order provided a non-arbitrary and reasonable ground to deny

the petition.

We also reject the Coalition’s argument that the 2016 EPA Order was arbitrary and

capricious because the agency requested a more thorough common control explanation in

2015, but then denied the Coalition’s petition in 2016. First, as we have already explained,

the Coalition’s petition did not engage with the 2015 Source Determination. Second, as we

8 discussed above, the 2015 Source Determination provided a much more thorough

explanation for the common control decision. Accordingly, the Administrator’s differing

responses to the two DEC’s explanations from 2012 and 2015 did not constitute arbitrary

or capricious agency action.

We have considered the Coalition’s remaining arguments and find them without

merit. Accordingly, we DENY the petition for review of the EPA’s order.

FOR THE COURT: Catherine O=Hagan Wolfe, Clerk of Court

9