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New Mexico Envtl. Improvement Div. v. Thomas

ELR Citation: 16 ELR 20647
Nos. No. 85-1628, 789 F.2d 825/24 ERC 1427/(10th Cir., 04/23/1986)

The court rules that the Environmental Protection Agency (EPA) may impose Clean Air Act §176(a) sanctions on a state whose inspection and maintenance (I/M) program is invalidated by the state courts after EPA approval of the plan. EPA had approved the New Mexico state implementation plan (SIP) governing carbon monoxide pollution in the region where Albuquerque is located, but the state supreme court invalidated the funding mechanisms for the I/M program and the local governments responsible for implementing the program did not reinstitute a valid I/M scheme. The court first rules that EPA's disapproval of the SIP and imposition of sanctions is subject to the Administrative Procedure Act's (APA's) arbitrary and capricious standard for informal rulemaking, not the more probing standard for orders. The SIP procedure does not call for formal hearings on the record, the main criteria by which the APA identifies orders, and the proceeding did not require adjudication of factual disputes, so review under the arbitrary and capricious standard is appropriate.

The court next rules that the imposition of sanctions concerning a SIP that becomes inadequate after EPA approval, because a key provision is invalidated by state courts, is governed by §176(a). EPA's interpretation of the statute, which is due deference, requires action under subsection (a), dealing with failure to make reasonable efforts to submit an adequate SIP, not (b), dealing with failure to make reasonable efforts to do so, triggers §176(a) sanctions, the court holds that in this case New Mexico failed both tests. The state had delegated authority for implementing the I/M program to local governments, but retained the obligation to see that the Act's requirements were honored. At the time EPA disapproved the plan and imposed sanctions, neither the state nor the local governments had taken concrete steps to repair the defective SIP provisions. That the state later passed legislation addressing I&M funding is irrelevant, since EPA's action must be judged on the record at the time it acted.

The court rules that EPA need not give a state an opportunity to revise its SIP under §110(a)(2)(H)(ii) before imposing sanctions under §176(a). The state was obligated to correct its SIP deficiency and had early notice of EPA's intended action and ample opportunity to fix the SIP. The court dismisses petitioner's challenge to EPA's use of a sanctions formula under which the state's air pollution control grants were cut by the amount directly allocated to the Albuquerque region and by a percentage of the money allocated generally to the state equal to that region's share of the state's population. Petitioner did not comment on the allocation formula when EPA proposed it, despite an express request for feedback, and the record provides no basis for overturning EPA's decision.

Counsel for Petitioners
Louis W. Rose
Environmental Improvement Division
P.O. Box 968, Santa Fe NM 87504-0968
(505) 984-0020

Counsel for Respondents
David W. Zugschwerdt
Land and Natural Resources Division
Department of Justice, Washington DC 20537
(202) 633-2686