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Natural Resources Defense Council v. South Coast Air Quality Management District

ELR Citation: 41 ELR 20218
Nos. 09-57064, (9th Cir., 06/29/2011)

The Ninth Circuit upheld the dismissal of an environmental group's CAA claim challenging an air quality district's method for offsetting emissions increases in its new source review permit program. The district's regulation, contained in the state's EPA-approved SIP, requires that most increases be offset either through emission reduction credits or, for certain priority sources, with allocations from the district's priority reserve. The district maintains an internal bank of credits known as "offset accounts" that it uses to provide allocations from the priority reserve. The group alleged that the district deposited invalid credits into its offset accounts and continues to distribute them in violation of CAA §173(c). But because EPA issued rules that not only approved the SIP but also indicated that the credits in the priority reserve comply with §173(c), the group is effectively seeking review of EPA's decision. As such, the court lacks jurisdiction under CAA §304. The group also argued that the district violated the regulation by maintaining invalid credits in its offset accounts. But the district's regulation is clear that the validity requirements apply to emission reduction credits, not to the internal offsets at issue here. Accordingly, the group failed to state a claim. Last, the group argued that the district failed to track emission reductions to show it maintains positive account balances in its offset accounts. But nothing in the EPA-approved SIP even suggests a tracking system must be applied.