Summary of a Recent
Judicial Development in
Animal Feeding Operations

EPA Approved SIP Trumps Unincorporated
State Agricultural Exemption

Eric Foy
National AgLaw Center Research Associate

Summary of Decision

In Association of Irritated Residents v. C&R Vanderham Dairy, No. 1:05-CV-01593, 2007 WL 2815038 (E.D. Cal. Sept. 25, 2007), the United States District Court for the Eastern District of California granted Plaintiff's motions for summary judgment on the issues of whether Defendant C&R Vanderham Dairy violated the Clean Air Act (CAA) by failing to obtain an Authority to Construct (ATC) permit, to install Best Available Control Technology (BACT), and to purchase offsets. The court also granted Plaintiff's motion to strike Defendant's cross motion for summary judgment.

Background

Plaintiff, Association of Irritated Residents, filed a complaint against Defendant alleging violations of the CAA, and motioned for summary judgment on the grounds that Defendant violated and continued to violate California's State Implementation Plan (SIP). Id. at *1. Defendant opposed Plaintiff's motion and submitted a response to Plaintiff's statement of the facts. Id. Plaintiff's motion was heard. Id. At Defendant's request, they were given leave to file a supplemental brief on the matter. Id. Defendant filed a supplemental brief on the matter and Plaintiff responded with its own supplemental brief. Id. Defendant then filed a motion to strike and oppose Defendant's cross motion for summary judgment. Id. Plaintiff then filed a motion to strike and oppose Defendant's cross motion for summary judgment. Id.

Arguments

Plaintiff alleged that Defendant violated the plain language of the California SIP by failing to obtain an ATC prior to constructing a dairy operation. Id. at *4. Defendant argued that California state law exempted it from having to comply with the San Joaquin Air Pollution District's (District) Rule incorporated in the California SIP and approved by the EPA. Id. at *16. Under state law, Defendant claimed that it was a non-major stationary source of VOCs (Volatile Organic Compound), emitting less than 12.5 tons or VOC/year. Id. California state law exempted non-major stationary sources of VOCs, emitting less than 12.5 VOC/year, from the ATC permit requirement. Id. Because the state law exemption was enacted prior to the EPA's approval of the SIP and the EPA had knowledge of the exemption, Defendant claimed it was not required to obtain an ATC. Id. In response, Plaintiff argued that under the District's rule, as incorporated into California's SIP, any agricultural source emitting air contaminants must obtain an ATC. Id. Plaintiff asserted, based on the plain language of the SIP, that the California state law exemption did not apply to Defendant. Id.

Analysis and Holdings

"The general purpose of the CAA is to enhance the nation's air quality resources for the benefit of public health. . . . The CAA requires states to designate areas within its boundaries as non-attainment areas if air quality fails to meet National Ambient Air Quality Standards (NAAQS) for a particular criteria pollutant." Id. at *2. The San Joaquin Valley Air Basin was designated as a serious non-attainment area, and therefore was required to adopt a state implementation plan (SIP) to meet the NAAQS by a specific date. Id. at *6. The CAA mandates that the plan require pre-construction permits (ATCs) prior to construction or operation of new sources of the criteria pollutant. Id. at *2. In addition, new sources also must install Best Available Control Technology (BACT) when the potential to emit volatile organic compounds (VOC) exceeds a certain threshold, and purchase offsets or emission reduction credits for VOC emissions when the source's potential to emit exceeds a certain threshold. Id. at *22.

An EPA-approved SIP is federal law and does not change unless and until EPA approves a revision requested by a state. Id. at *20. States are free to revise their EPA approved SIPs, subject to certain CAA restrictions, but unless and until EPA approves a revision, a state must comply with its SIP as written. Id. Once a state adopts an SIP and receives approval from the EPA, its requirements become binding upon the state as a matter of law. Id. The Act precludes any state from adopting any emission standard that is less stringent than the EPA-approved SIP. Id. An SIP is to be interpreted according to the plain meaning of its language. Id.

The court held that California was free to revise an EPA approved SIP but the revisions must be approved by the EPA. Id. Without EPA approval of the revisions, California's only choice was to comply. Id. Because Defendant failed to provide any evidence that the state agricultural exemption was approved by the EPA, and based on the plain meaning of California's SIP, Defendant was required to obtain an ATC prior to the dairy's construction. Id. at *22. On the installation of BACT issue, as incorporated into California's SIP, the court held that Defendant never asserted any triable issue of fact. Id. at *23. Because Defendant failed to provide evidence to the contrary, the court found that Defendant exceeded the allowable emissions threshold and was required to install BACT. Id. at *24. Finally, the court held that Defendant failed to present evidence to rebut Plaintiff's expert's calculations of the dairy's annual emission of VOC capacity. Id. at *25. Therefore, Defendant was required to purchase offsets. Id. at *26.

The case was decided on September 25, 2007.