On Aug. 19, 2008, a federal appeals court ruled that state and local permitting authorities may supplement, or “fix,” air pollution monitoring requirements when the U.S. Environmental Protection Agency has taken no action. In Sierra Club v. USEPA, ___ F.3d ___, 2008 WL 3834186 (D.C. Cir. Aug. 19, 2008), the U.S. Court of Appeals for the D.C. Circuit vacated a Clean Air Act rule that had prevented state authorities from issuing supplemental monitoring requirements in Title V permits regulating air pollution from stationary sources such as power plants and factories. On top of federal requirements, this decision will require environmental managers and other stakeholders to closely follow state and local developments of air monitoring and additional permitting requirements.

Since 1997, USEPA has gone back and forth on whether to allow state and local authorities to supplement monitoring requirements where federal standards are inadequate. (Where there are no federal monitoring requirements, state and local authorities must create one and include it in the permit.) In a 2006 rulemaking, USEPA finally determined the federal agency alone could fix inadequate monitoring requirements. It promulgated a rule prohibiting state and local permitting authorities from imposing additional monitoring requirements in Title V permits, including when existing standards were deemed inadequate for assuring compliance. 71 Fed. Reg. 75,422 (Dec. 15, 2006).

In reviewing the environmental group’s challenge, the court focused on the Clean Air Act’s mandate that “[e]ach permit . . . shall set forth . . . monitoring . . . requirements to assure compliance with the permit terms and conditions.” 42 U.S.C. § 7661c(c). USEPA and industry intervenors argued that the Act’s “[e]ach permit” mandate limits the imposition of new monitoring requirements to USEPA alone. They also argued that allowing supplementation by state and local authorities would create new emission standards not authorized by the Act. The court disagreed. Because USEPA failed to fix inadequate monitoring requirements prior to the issuance of the permits, the court found that state and local authorities must be allowed to cure those monitoring requirements before including them in the Title V permits. The court concluded that the 2006 rule violated the Clean Air Act, and vacated the rule.

The environmental group also sought review of the monitoring requirements of the Part 70 rules, arguing that if those provisions did not allow permitting authorities from supplementing inadequate monitoring requirements, they, too, must be vacated. The court denied this petition for review, concluding that the monitoring provisions are consistent with the Clean Air Act because they could be easily and reasonably read to allow state and local permitting authorities to supplement inadequate monitoring requirements in each Title V permit issued.

Importantly, the federal appeals court left open the question of who wins when USEPA and state authorities conflict over whether a given requirement is sufficient to ensure compliance with the Clean Air Act. This may mean that the states will be required to undertake the task of deciding whether existing requirements are adequate, and providing supplemental monitoring requirements. Further, groups such as the National Association of Clean Air Agencies may step in and offer guidance to the states. In any case, environmental managers and other related stakeholders may have to identify and adjust to varying state and local standards and requirements.