Kerr-McGee Chemical Corp. v. Department of the Interior

No. CV 80-3696-FW (C.D. Cal. December 22, 1981)

The court holds that the Department of the Interior violated § 164(d) of the Clean Air Act in recommending that Death Valley National Monument be redesignated a Class I area without considering the non-air-quality impacts of the redesignation. First, the court rules that the Secretary of the Interior violated the clear congressional intent of § 164, which requires a determination of whether a redesignation to Class I is "appropriate." A determination of the appropriateness of redesignation must include consideration of health, environmental, economic, social, and energy effects. The court also rules that the recommendation was arbitrary and capricious in violation of § 706(2)(A) of the Administrative Procedure Act (APA) because it failed to include any analysis of the present air quality of the area. However, the Secretary did not err in consulting with state but not local authorities in making the redesignation determination.

Next, the court holds that under § 164 the agency is required to determine the environmental effects of the redesignation notwithstanding the Clean Air Act exemption from the National Environmental Policy Policy Act requirements contained in § 7 of the Energy Supply and Environmental Coordination Act. The court bars the State of California from initiating redesignation proceedings absent a lawful § 164 recommendation by the Department of the Interior. The court finds that since plaintiff has alleged that the state's imminent redesignation of Death Valley National Monument will delay state review of plaintiff's chemical facility permit, a present case or controversy exists between the parties. Finally, the court rules that the Secretary's recommendation is a final agency action under § 704 of the APA and is, therefore, ripe for judicial review.

Counsel for Plaintiff
Peter J. Nickles
Covington & Burling
P.O. Box 7566, Washington DC 20044
(202) 662-6000

Counsel for Defendants
Andrea S. Ordin, U.S. Attorney
312 N. Spring St., Los Angeles CA 90012
(213) 688-2434

Edwin J. Dubiel; George Deukmejian, Attorney General
3580 Wilshire Blvd., Los Angeles CA 90010
(213) 736-2304

[13 ELR 20269]

Whelan, J.:

Memorandum of Decision

This case came on for hearing on the motion of Plaintiff Kerr-McGee Chemical Corporation for summary judgment and [13 ELR 20270] on the motions to dismiss brought by Defendants herein, the United States Department of the Interior, Secretary of the Interior Cecil D. Andrus, and the State of California. The Court has heretofore announced its decision that Plaintiff's motion should be granted and that the motions of Defendants should be denied. The following constitutes the memorandum of the Court setting forth the grounds for its decision.

Plaintiff Kerr-McGee ChemicalCorporation (hereinafter Kerr-McGee) brought this action for declaratory relief challenging a recommendation of Defendants Department of the Interior and Secretary Andrus that Death Valley National Monument be redesignated a Class I area for purposes of the Prevention of Significant Deterioration (PSD) provisions of the Clean Air Act, 42 U.S.C. § 7401 et seq. Plaintiff also challenges the lawfulness of any action by Defendant State of California to implement the allegedly unlawful recommendation of the Department of the Interior and Secretary Andrus. Counts One and Two of Plaintiff's complaint allege that the Department of the Interior and Secretary Andrus unlawfully failed to consider relevant factors in issuing the challenged recommendation. Count Three alleges that the Department and Secretary Andrus unlawfully failed to prepare an environmental impact statement to accompany the recommendation. Count Four alleges that the State of California may not lawfully initiate proceedings to redesignate Death Valley National Monument based upon the unlawful recommendation. This Court has jurisdiction of the action. 28 U.S.C. §§ 1331(a), 2201 and 2202.

The material facts in this action are not in dispute, and this is a proper case for summary judgment. Plaintiff Kerr-McGee owns and operates a chemical plant located in Searles Valley, California, approximately 18 miles from the boundary of Death Valley National Monument. Death Valley National Monument is located in Southeastern California and Southwestern Nevada, comprising an area of over two million acres.

The Prevention of Significant Deterioration provisions of the Clean Air Act, 42 U.S.C. §§ 7470-7491, were added by the Clean Air Act Amendments of 1977, Public Law No. 95-95, and establish a statutory scheme for the prevention of the deterioration of air quality in national parks, national wilderness areas, national monuments, and other areas of natural, scenic, recreational or historic value. 42 U.S.C. § 7470. Under the PSD provisions, such areas were initially classified into one of three categories: Class I, Class II or Class III. Class I areas are subject to stringent limitations and controls on increases in air pollutants. See, e.g., 42 U.S.C. §§ 7473, 7475, 7491. Class II and Class III areas are subject to less burdensome restrictions. Death Valley National Monument was initially designated a Class II area under the Act. 42 U.S.C. § 7472.

In the PSD provisions of the Act, Congress authorized the States to redesignate national monuments initially designated Class II areas as Class I areas. 42 U.S.C. § 7474(b). Under this statute, the Defendant State of California has the authority to redesignate Death Valley National Monument from a Class II to a Class I area, provided it complies with the substantive and procedural requirements of § 7474. In subsection (d) of § 7474 Congress provided:

The Federal Land Manager shall review all national monuments, primitive areas, and national preserves, and shall recommend any appropriate areas for redesignation as Class I where air quality related values are important attributes of the area. The Federal Land Manager shall report such recommendations, within [sic] supporting analysis, to the Congress and the affected States within one year after August 7, 1977. The Federal Land Manager shall consult with the appropriate States before making such recommendations.

Under § 7474(b), Congress provided that the State shall, prior to any redesignation, give notice of proposed redesignation, and that:

public hearings shall be conducted in areas proposed to be redesignated and in areas which may be affected by the proposed redesignation. Prior to any such public hearing a satisfactory description and analysis of the health, environmental, economic, social, and energy effects of the proposed redesignation shall be prepared and made available for public inspection and prior to any such redesignation, the description and analysis of such effects shall be reviewed and examined by the redesignating authorities.

42 U.S.C. § 7474(b)(1)(A). Subsection 7474(b)(1)(B) provides:

Prior to the issuance of notice under subparagraph (A) respecting the redesignation of any area under this subsection, if such area includes any Federal lands, the State shall provide written notice to the appropriate Federal land manager and afford adequate opportunity (but not in excess of 60 days) to confer with the State respecting the intended notice of redesignation and to submit written comments and recommendations with respect to such intended notice of redesignation. In redesignating any area under this section with respect to which any Federal land manager has submitted written comments and recommendations, the State shall publish a list of any inconsistency between the redesignation and such recommendations and an explanation of such inconsistency (together with the reasons for making such redesignation against the recommendation of the Federal land manager).

Defendant Andrus, as Secretary of the Interior, is the Federal Land Manager of Death Valley National Monument for purposes of the Clean Air Act. Acting under the mandate of $7474(d), Secretary Andrus assigned the responsibility for review of national monuments and other areas, including Deach Valley National Monument, to a Task Force. This Task Force's findings and recommendations as to areas to be recommended for redesignation to Class I under the Act were adopted by the Secretary and the Department of the Interior as their § 7474(d) recommendation, and was published in the Federal Register on June 25, 1980. 45 Fed. Reg. 43002. The recommendation identified Death Valley National Monument as an appropriate area for redesignation to Class I, and stated that the recommendations for redesignation of the specified areas was made on the basis of a single criterion: "The presence or absence of air quality related values as important attributes of the area." 45 Fed. Reg. at 43003.

The recommendation explained why only air quality related values were considered in the review of such areas appropriateness for redesignation as Class I area under the Act.

The Task Force did not attempt to assess the economic consequences of redesignation in its review since the Clean Air Act states that this analysis is to be done by the States and Sovereign Indian tribes. The Task Force restricted the scope of its review in recognition of the significant role assigned to the States and Indian governing bodies in the redesignation process. The Clean Air Act gives the States and Indian governing bodies exclusive responsibility for redesignating an area, and they must fully assess the consequences of redesignation following specific procedural requirements detailed in Section 164(d), 42 U.S.C. § 7474(b). Thus, had the Task Force, in preparing the recommendations, considered an assessment of the consequences of redesignation, they would have assumed a function specifically assigned to the States and Indian governing bodies.

45 Fed. Reg. 43004. This explanation was repeated in the transmittal letter to the State governors and the Congress accompanying the recommendation submitted by the Secretary and the Department of the Interior, a copy of which is part of the record in this case.

Plaintiff Kerr-McGee contends that the Secretary's recommendation with respect to Death Valley National Monument is unlawful and invalid because only air quality related values were considered in determining the appropriateness of its redesignation as Class I. Plaintiff contends that, before making his § 7474(d) recommendation, the Secretary was required to consider the health, environmental, economic, social and energy effects of redesignation of Death Valley as a Class I area. This Court agrees. Plaintiff also contends that the supporting analysis required to be [13 ELR 20271] submitted by the Department of the Interior with the recommendation is a meaningless analysis or no analysis. Although the Court is bound to accord considerable weight and deference to the interpretation of § 7474(d) rendered by the Secretary and the Department of the Interior, the Court will overturn the recommendation of the Secretary as it finds that his interpretation conflicts with the plain meaning of the statute. 5 U.S.C. § 706(2)(C); Citizens to Reserve Overton Park, Inc. v. Volpe, 401 U.S. 402 415-16 [1 ELR 20110] (1971).

Section 7474(d) requires the Defendant Secretary not only to determine if air quality related values are important attributes of an area reviewed for redesignation, but also requires him to determine if such redesignation to Class I is "appropriate." An area is obviously not appropriate for redesignation to Class I if the "health, environmental, economic, social and energy effects of the proposed redesignation" militate against redesignation. Congress, in Section 7474(b), expressly recognized the relevance of these factors to the issue of the appropriateness of redesignation, and required the Secretary and the States to consult with one another prior to any redesignation by the State. The clear intent of these provisions is to require the Secretary and the Department of Interior to consider all relevant factors, including the effects of redesignation, in determining the appropriateness of such redesignation.

The analysis prepared by the Department of the Interior in support of its recommendation as to the appropriateness of redesignating Death Valley National Monument a Class I area shows that only "air quality related values" were considered in the Department's determination, without any consideration of the health, environmental, economic, social and energy effects of redesignating the area, rendering the recommendation invalid.

The Court notes that, in contrast to its contention here, the Department of the Interior in its first notice of its review of areas for redesignation recommendations did not construe § 7474(d) as limiting it to a consideration of only air quality related values. 43 Fed. Reg. 15016 (Apr. 10, 1978). In that notice, the Department indicated that, in addition to considering the importance of air quality related values in areas reviewed, that it would also consider the effect redesignation would have on planned major sources of pollution in the vicinity of such areas, and whether it would be in the public interest to redesignate an area near such sources of pollution. Id. It should be noted that the final notice by the Department of the Interior stated in substance that the Air Quality Task Force of the Department of the Interior relied on only one criterion: "The presence or absence of air quality related values as important attributes of the area." However, the notice went on to state: "The final report on the Secretary's findings to Congress and the affected States and Indian tribes was prepared to indicate that while air quality related values exist as important attributes, there are other values and concerns to consider during the redesignation process, some of which are shared by this Department." 45 Fed. Reg. 43003 (1980).

Plaintiff also contends that the recommendation with respect to Death Valley National Monument is arbitrary and capricious and therefore invalid under 5 U.S.C. § 706(2)(A). Section 706(2)(A) provides that agency action may be set aside if it is "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." A court reviewing agency action "must consider whether the decision was based on a consideration of the relevant factors." Citizens to Preserve Overton Park, Inc., 401 U.S. at 416. Although this standard of review is narrow, the Court may set aside agency action where "there has been a clear error of judgment" by the agency, although proper deference is to be accorded an agency's interpretation of its authority under a statute. Id. Montana Power Co. v. EPA, 608 F.2d 334, 334-45 [9 ELR 20667] (9th Cir. 1979). Applying this standard, the Court concludes that the Secretary and the Department clearly erred in limiting their determination with respect to the presence and importance of air quality related values to Death Valley National Monument.

As discussed above, § 7474(d) required the Secretary and the Department of the Interior to consider the health, environmental, economic, social and energy effects of redesignation in determining the appropriateness of Death Valley for redesignation as a Class I area. The Defendants' analysis in support of their recommendation, as noted previously, ignored these factors. The statute requied the Department of the Interior to deliver supporting analysis to the States and Congress along with its recommendation. The so-called analysis was no analysis at all. There is only cursory support in the analysis for the conclusion therein that air quality related values are important attributes of the area. No analysis of the present air quality of the area, or of the effect redesignation would have to preserve such air quality was undertaken. Instead, the analysis relies almost exclusively upon the preamble to the Presidential proclamation establishing Death Valley National Monument to determine if air quality related values were significant. That preamble states only that the purpose of designating Death Valley a national monument was to preserve "the unusual features of scenic, scientific and educational interests therein contained . . . ." 47 Stat. 2554 (Feb. 11, 1933). This proclamation makes no reference to "air quality." The analysis concluded that air quality related values were important attributes of the area, as (1) "the ability to see broad vistas is essential to proper enjoyment" of the area's scenic features, (2) certain plant species would be threatended by increases in air pollution levels, and (3) specified cultural sites in the area would be subjected to "acid rain" deterioration if air pollution levels increase. In the absence of any analysis of the present air quality of the area, these conclusions are little more than speculation. There is no rational basis for concluding that air quality related values would be adversely affected unless Death Valley National Monument were redesignated a Class I area.

The Plaintiff's contention, however, that the Department of the Interior is required by Section 7474(d) to consult with local, as well as State authorities, in making its § 7474(d) determination is without merit. That Section only provides for consultation with the "States."

Plaintiff contends that the Department of the Interior and the Secretary unlawfully failed to prepare an environmental impact statement (EIS) to accompany their § 7474(d) recommendation with respect to Death Valley National Monument. 42 U.S.C. § 4332(a) requires all federal agencies to submit an EIS with "every recommendation or report on proposals for legislation and other major actions significantly affecting the quality of the human environment . . . ." While it is true, as the Department of the Interior and the Secretary argue, that Congress has provided that "[n]o action taken under the Clean Air Act shall be deemed a major Federal action significantly affecting the quality of the human environment within the meaning of the National Environmental Policy Act of 1969," 15 U.S.C. § 793(c)(1), this Court holds that, under 42 U.S.C. § 7474, the Secretary and the Department of the Interior are required to determine the environmental effects of redesignation in making their determination and recommendation with respect to Death Valley National Monument.

Plaintiff Kerr-McGee contends that, as the recommendation of the Secretary and the Department of the Interior that Death Valley National Monument be redesignated Class I is unlawful, that Defendant State of California may not lawfully take action in furtherance of the recommendation by initiating redesignation proceedings under § 7474(b) with respect to Death Valley. Plaintiff's contention has merit. This Court is of the opinion that the State may not initiate such redesignation proceedings absent a lawful recommendation by the Secretary and the Department of the Interior, made under § 7474(d). The Secretary and the Department by the statute are designated to determine whether air quality related values are important attributes of Death Valley National Monument, under the terms of § 7474. The State is given no such authority by the statute. If, as Defendants argue, the State was able to make its own determination of the importance of air quality related values to Federal lands within its boundaries, the mandate of § 7474(d) that the Federal Land Manager shall make such a determination would be rendered superfluous. This contravenes elementary principles of statutory interpretation. Tabor v. Ulloa, 323 F.2d 823, 824 (9th Cir. 1963) (a legislature is presumed to have used no superfluous words in a statute).

In its motion to dismiss Counts One and Two of Plaintiff's complaint. the Department of the Interior first contends that [13 ELR 20272] Plaintiff's claims raise no substantial federal question, and thus, are subject to dismissal for failure to state a claim. The basis of this contention is Defendant's claim that it was not required to consider other than air quality related values in recommending Death Valley National monument be redesignated a Class I area under the Act. The Court has rejected this claim for reasons set forth above, and thus Defendant's motion to dismiss Counts One and Two must be denied.

The Department of the Interior also moved to dismiss Counts One and Two of Plaintiff's complaint for failure to state a case or controversy. The Department argues that any injury or harm alleged by Plaintiff will occur only if the State of California redesignates Death Valley National Monument as a Class I area. The Department asserts that Plaintiff's alleged injury is too remote and speculative to be considered as a present case or controversy for declaratory relief, as the State may not act upon its recommendation by initiating redesignation proceedings with respect to Death Valley National Monument.

The State of California has also moved to dismiss Count Four of Plaintiff's complaint, contending that there is no present case or controversy between it and the Plaintiff. The basis of this contention is the State's assertion that it is not bound by the recommendation of the Secretary and the Department of the Interior with respect to Death Valley National Monument, and thus any determination it makes with respect to the appropriateness of redesignation would be untainted by the unlawful recommendation.

In its complaint, the Plaintiff alleged specific harm attributable to the recommendation of the Secretary and the Department of the Interior that Death Valley National Monument be redesignated a Class I area. This Court holds that the State may not initiate redesignation proceedings under § 7474(b) absent a lawful recommendation under § 7474(d). Plaintiff has submitted the uncontroverted affidavit of Mr. W. W. Young, Plaintiff's executive vice president, in support of its motion for summary judgment. The affidavit states that Plaintiff has filed a permit application with the pertinent California authorities for modification and expansion of its Searles Valley facility. The affidavit states that Plaintiff is informed and believes that the State authorities will not act upon Plaintiff's pending and expected permit applications until after the State has concluded its scheduled redesignation proceeding with respect to Death Valley. At the hearing of these motions, counsel for the State of California declined to stipulate that the State does not intend to redesignate Death Valley National Monuent as Class I.

The Court concludes that these facts and allegations suffice to establish a case or controversy for declaratory relief between Plaintiff and Defendants, and therefore Defendants' motions to dismiss must be denied.

This case is ripe for decision. The recommendation of the Department of the Interior and the Secretary with respect to Death Valley National Monument is "final agency action" within the meaning of 5 U.S.C. § 704, and the issues tendered are legal in character, thus militating in favor of judicial resolution. Abbott Laboratories v. Gardner, 387 U.S. 145, 149 (1967). It appears that the State of California, acting upon the unlawful recommendation of the Department of the Interior, imminently intends to redesignate Death Valley National Monument. Plaintiff's alleged harm, therefore, is neither speculative nor remote, and is directly traceable to the actions of Defendants. Stewart v. M.M. & P. PensionPlan, 608 F.2d 776, 783-84 (9th Cir. 1979) (issue is ripe for judicial determination when interests of the plaintiff are imminently threatened with substantial injury), citing Maryland Casualty Co. v. Pacific Coal & Oil Co., 312 U.S. 270, 273 (1941).

Finally, the contention of the Secretary of the Interior, in his motion to dismiss, that he may not be sued eo nomine is without merit. 28 U.S.C. § 1331(a); Cervase v. Office of Federal Register, 580 F.2d 1166, 1171 (3d Cir. 1978); 13 WRIGHT, MILLER & COOPER, FEDERAL PRACTICE AND PROCEDURE Cum. Supp. § 3568, at 364 (1980).

The foregoing constitutes the summary of undisputed material facts and Conclusions of Law of the Court. Judgment will be entered in favor of the Plaintiff but no judgment shall be entered until the Court has signed and caused to be filed its formal judgment. Counsel for Plaintiff are ordered to promptly submit a proposed form of judgment in accordance with this decision.