The Eleventh Circuit Court of Appeals has effectively reinstated Alabama’s Clean Air Act (CAA) State Implementation Plan (SIP) provisions for opacity. Ala. Envtl. Council v. EPA, No. 08-16961, (11th Cir. 3/6/13) . At issue was a revision to Alabama’s opacity rules providing an exception from the 20-percent opacity limit under certain circumstances. The U.S. Environmental Protection Agency (EPA) approved that SIP revision in 2008, and multiple groups challenged the approval by seeking administrative reconsideration and filing lawsuits.

In 2009, EPA decided to reconsider the approval and asked the court hearing the challenges to stay the proceedings and remand the matter to the agency. In 2011, EPA reversed itself, disapproving the 2008 SIP revision. That disapproval was challenged in court in a new action. Ultimately, the cases challenging both the 2008 SIP revision approval and the 2011 disapproval were consolidated.

With respect to the 2011 disapproval, EPA argued that it had statutory and inherent authority to reverse its decision, and the remand granted it authority to do so. The court disagreed. It found that EPA has two statutory methods to change an approved SIP. It could issue a SIP call to the state or it could find that it had committed an error in approving the SIP revision and correct that error. No SIP call occurred, and the court found that EPA did not make any finding of error as the statute required. The closest thing it could find to support such a determination was in EPA’s 2009 motion for remand, which stated, “the agency has determined that its prior action may have been in error or inadequately explained.” The court found this inadequate to invoke the CAA’s error correction provisions.

The court also determined that its remand order did not grant EPA authority to revise the SIP outside the statutorily established mechanisms. It further held that, because the statute provided an express means to correct any error, the court could not infer additional inherent authority to make such corrections without following the statutory requirements. The court therefore vacated the 2011 disapproval.

Turning to the 2008 approval challenge, which focused on EPA’s 2008 interpretation of a statutory provision that, in essence, prohibited approval of SIPs that would interfere with any CAA requirement, the court found that EPA had, at the time, adopted a reasonable interpretation under which it would approve a SIP revision “unless the agency finds it will make air quality worse.” Since EPA’s 2008 interpretation was reasonable, the court deferred to the agency and upheld its SIP approval. But the court declined to pass judgment on EPA’s 2011 interpretation of the statute, saying that EPA could adopt a new permissible interpretation even if that constitutes a “dramatic shift” in agency policy.