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Early ActionCompacts: TheSolution toRoanoke’sSmog Problemor MoreStonewallingfrom the EPA?by Tim BalloW&L Law, Class of 2004

Introduction

Billing it as a program that pro-vides incentives for “earlyplanning, early implementa-

tion, and early reductions of emis-sions,”1 in December 2002, theUnited States EnvironmentalProtection Agency (“EPA” or the“agency”) voluntarily agreed not toenforce key provisions of the CleanAir Act (“Clean Air Act” or “theAct”) with respect to nearly three-dozen metropolitan areas, includingRoanoke, Virginia, regardless ofwhether the air quality in thoseareas meets the Act’s health-basedrequirements.2 In exchange forsparing the rod, the EPA hasrequired these localities to conclude“early action compacts,” specifyingthe measures each will undertake toreduce air pollution. If early actioncompacts do enable these areas tomeet federal air quality standards,and to meet them sooner than the

Clean Air Act would otherwiserequire, the. EPA’s skirting of theClean Air Act may produce a “win-win” situation by providing localgovernments with regulatory flexi-bility and residents of these locali-ties with breathable air. However, aswith any new and highly flexibleregulatory approach, there is muchcause for concern that strayingfrom what has worked in the pastmay open the door to a host of newdifficulties.

The Eight-Hour Ozone StandardSection 109 of the Clean Air Act

requires the EPA to promulgateNational Ambient Air Quality

Standards (“NAAQS”), which estab-lish limitations on air pollutant lev-els sufficient to protect the publichealth.3 Each state then must adopta State Implementation Plan(“SIP”), with the EPA’s approval, tomeet the standards set in theNAAQS through “enforceable emis-sion limitations and other controlmeasures, means, or techniques.”4

Those regions in which one or moreof the NAAQS are unmet are gener-ally known as “nonattainmentareas.”5 When a region’s air qualityfalls into nonattainment status, theAct requires the appropriate state torevise its SIP to incorporate a seriesof enumerated air quality improve-

Chair’sCornerW hat can the Environmental Law Section do for you? That’s

what we want to know. Each year we try to serve our membersby publishing two or three editions of the Environmental Law

News, and we produce two CLE programs. We want to help you stay cur-rent on what’s happening in environmental law at the state and federallevels and in our courts. Last April, board member Heather Stevensonorganized an Environmental Update CLE program involving state regula-tors. At the Virginia State Bar meeting in Virginia Beach on June 18, weco-sponsored with the Tax Section a program entitled: PollutionControl Can Save You Money: The Tax Savings and EconomicBenefits of Conservation and Property Cleanup.

This year the Environmental Law Section will continue to providemembers with practical information about this constantly evolvingarea of the law. We are investigating the costs to develop anEnvironmental Law Section website that contains a list of membersand links to legal resources. We also are looking into the costs of par-ticipating in or developing a listserve that would facilitate timely dis-semination of environmental law updates and the newsletter. We hope

continued on page 2Tim Ballo is a 2004 graduate of Washington& Lee University School of Law.

Published by the Environmental Law Section of the Virginia State Bar for its members

Environmental Law NewsVolume XVI, No. 1 Summer 2004

continued on page 3

Environmental Law News

Environmental Law NewsVolume XVI, No. 1

Summer 2004

Prepared by the staff ofEnvironmental Law Digest

Washington and Lee UniversitySchool of Law

Lexington, Virginia 24450

Editor-in-ChiefTerrence Egland

Executive EditorErin Sullivan

Managing EditorApril Ballou

Senior Articles EditorGabrielle Butcher

Senior Case Review EditorStephen Brownback

Senior Legislative EditorNathaniel Parker

Articles EditorTiffany Davidson

Case Review EditorStephen Mealor

StaffMichael Bauer

Shannon BorromeoMichael BourdaaJames BraswellClint Carpenter

Grace DoeRyan Dunlavey

Laura FleischmannRoswell HenryTaylor MenloveAbigail Parolise

Zahid RajaJennifer Rawls

Jason ReidMichael SpencerEdward StandleyBrien Van WagnerMichelle Williams

Faculty AdvisorsProfessor Sean H. DonahueProfessor Mark A. Drumbl

All statements, expressions, opinionsor comments appearing herein arethose of the by-lined authors or the

editors and are not necessarily those of the State Bar or the

Environmental Law Section.

to sponsor at least one environmen-tal awareness project.

Members of this year’s Board ofGovernors include private practi-tioners (Marina Phillips, HeatherStevenson, David Graham, ManningGasch, and Brooks Smith), state reg-ulators (Kathy Frahm and RickLinker of DEQ), a federal regulator(J.T. Morgan of the EPA), represen-tatives of industry (Kelley Kline ofSmithfield Foods) and representa-tives of local government (KarlaHaynes of the Virginia Beach CityAttorney’s Office and Barbara Roseof the Hanover County Attorney’sOffice). If you have ideas or sugges-tions on how section dues can bene-fit our members, please call or writeany member of the section’s Boardof Governors. A complete list ofboard members may be found onthe back page.

Mark your calendars. The Envi-ronmental Law and Real Estate Sec-tions are working on a CLE for the2005 Virginia State Bar meeting inVirginia Beach, which will be heldon June 15-19. We hope this CLEmay include an ethics component. Ifyou have program ideas please sendthem to me or any other Boardmember.

We hope you enjoy this editionof the Environmental Law News.Thanks to Todd Egland, editor-in-chief at Washington and Lee and allof the other students, editors andcontributors at Washington and Leefor their dedication to this effortand to Visiting Professor SeanDonahue for his assistance. Finally,if you know Barbara Rose, newly-anointed executive editor of theEnvironmental Law News, I hopeyou will join me in thanking her fordevoting the last month of her life toinsure that this edition of thenewsletter is published.

Karen T. Lebo, Chair

Table of ContentsEarly Action Compacts: The

Solution to Roanoke’s SmogProblem or More Stone-walling from the EPA? . . . 1

by Tim Ballo

Chair’s Corner . . . . . . . . . . . 1

Editor’s Note . . . . . . . . . . . . 4

Standards of Review inChallenges to Environ-mental Agency Actions. . . 14

by Michael S. Whitlow

News from Practitioners . . . 19by James T. (“J.T.”) Morgan. Jr.

Case Digest . . . . . . . . . . . . 21

Summer Regulatory Review. . . . . . . . . . . . . . . 25

Chair’s Cornercontinued from page 1 Articles

The articles in this newsletterare intended to provide analysisand discussion of topics that mayinterest attorneys who practicein areas of environmental law.The Environmental Law Digestwelcomes submissions of appro-priate articles. Suggestions oftopics for articles and other com-ments are also welcomed. Pleasesend any submissions or com-ments to the EnvironmentalLaw Digest at:

Environmental Law DigestWashington and Lee University

School of LawLexington, Virginia 24450

or by e-mail at:[email protected]


ment measures designed to bringthe area back into attainment.6

In 1997, the EPA revised theNAAQS for ground-level ozone, apollutant that forms when oxides ofnitrogen (“NOx”) and volatile organ-ic compounds (“VOCs”) react in thepresence of sunlight.7 Many differentsources emit NOx and VOCs, such asmotor vehicles, power plants, andother industrial facilities.8 Exposureto high levels of ozone, a key compo-nent in what is commonly known assmog, can cause a variety of respira-tory problems, and long-term expo-sure may permanently damage lungfunction.9 Before the 1997 revision,the NAAQS for ozone, known as the“one-hour” standard, required thatozone levels not exceed 0.12 partsper million in any hourly ozonemonitor reading more than threetimes in a three-year period.10 Incontrast, the stricter standard prom-ulgated in 1997, known as the “eight-hour” standard, gauges ozone attain-ment by taking the average of thelast eight consecutive hourly ozonemonitor readings.11 The fourth-high-est daily peak eight-hour readingsfrom each of the last three years arethen averaged together.12 This figure,called the “design value,” must notexceed 0.08 parts per million (or, asfrequently stated, 85 parts per bil-lion) for the area to remain in attain-ment with the ozone NAAQS.13 TheEPA promulgated the eight-hourstandard after undertaking a com-prehensive review of information onthe effects of ozone on health anddetermining, in accordance with sec-tion 109 of the Act, that the newstandard was necessary to protectthe public health.14 The eight-hourstandard provoked a lengthy courtchallenge, but was ultimately upheldby the U.S. Supreme Court inWhitman v. American TruckingAssociations, Inc.15 in February,2001.16 Because the new standard istougher, many areas of the countrythat were able to meet the oldNAAQS for ozone do not meet thenew eight-hour standard.17 Thus,

implementation of the eight-hourstandard creates a large number ofnew nonattainment areas.18

Nonattainment AreaRequirements

Which Subpart Applies?

Being designated a nonattain-ment area triggers a host of burden-some requirements for the affectedarea. The governing state mustmodify its SIP to incorporate sever-al air quality improvement meas-ures that are set forth in Part D ofTitle I of the Act.19 Part D containsone subpart that applies generallyto all areas designated as nonattain-ment for any pollutant, as well asfour pollutant-specific subparts, thefirst of which covers ozone nonat-tainment areas.20 Thus, to deter-mine what SIP requirements applyto ozone nonattainment areas, onewould normally supplement thegeneral nonattainment area SIPrequirements contained in Subpart1 with the requirements specific toozone nonattainment areas, whichare found in Subpart 2.21 As theSupreme Court has noted, the“backbone” of Subpart 2 is a tablethat breaks ozone nonattainmentareas into five categories — margin-al, moderate, serious, severe, andextreme — with attainment dead-lines and SIP requirements specificto each category.22 However, withrespect to the new eight-hour ozonestandard, just what those require-ments might be is a question forwhich the Act does not provideclear answers. This is becauseSubpart 2, enacted as part of the1990 Amendments to the Clean AirAct, bases its tabular breakdown onozone design values calculatedaccording to the old one-hourozone standard. Thus, for exam-ple, an ozone nonattainment areawith a one-hour ozone design valueof 0.13 parts per million would beclassified as being in marginalnonattainment and would need toreduce its one-hour ozone designvalue to the NAAQS of 0.12 partsper million within three years,while an area with a one-hour

design value of 0.14 parts per mil-lion would be a moderate nonattain-ment area and would have six yearsto reach the same standard.23

The problem is that the EPA’sadoption of the eight-hour ozonestandard creates a gap in Subpart 2’sstatutory framework because thenew regulatory standard is morestringent than the one-hour standardreferenced in Subpart 2. Thus,although Subpart 2 requires that“each area designated nonattain-ment for ozone…shall be classified”according to Subpart 2’s classifica-tion system, Subpart 2 fails to classi-fy a significant number of nonattain-ment areas that have eight-hourozone design values greater than0.08 parts per million, but less than0.12 parts per million.24 The simplereason is that when Congress enact-ed the 1990 Amendments to theClean Air Act, ozone design valuesbetween 0.08 and 0.12 parts per mil-lion did not indicate a violation ofthe NAAQS for ozone.

With this problem in mind, theEPA initially indicated that it wouldimplement the eight-hour ozonestandard entirely according to therequirements contained in Subpart1, while the more specific require-ments of Subpart 2 would continueto have effect only in those areasthat remained in nonattainment forthe one-hour ozone standard.25

However, in American Trucking,the Supreme Court struck down thisimplementation strategy.26 In doingso, the Court was careful to notethat the “gaps in Subpart 2’s schemeprevent us from concluding thatCongress clearly intended Subpart 2to be the exclusive, permanentmeans of enforcing a revised ozonestandard in nonattainment areas.”27

Yet, the Court maintained that itcould only defer to a reasonableinterpretation of the ambiguity thatexists with regard to how “Subpart 1and Subpart 2 interact” to governthe implementation of the eight-hour ozone standard.28 By this lan-guage, the Court thus indicated thatneither subpart could exclusively

continued on page 4

Early Action Compactscontinued from page 1


govern implementation of the eight-hour standard, and that the EPAwould have to come up with animplementation strategy that drewfrom both provisions.29

As support for its reading of therelationship between Subparts 1and 2, the Court noted that Con-gress enacted the more specificSubpart 2 requirements to curb thediscretion that Subpart 1 vested inthe EPA.30 The Court then reasonedthat the EPA could not “construethe statute in a way that complete-ly nullifies textually applicable pro-visions meant to limit its discre-tion.”31 The Court also foundsupport for its analysis in thelengthy temporal reach of Subpart2. Noting that “[s]ome of the ele-ments required to be included inSIPs under Subpart 2 were not totake effect until many years afterthe passage of [the 1990 Amend-ments],” the Court explained thatit could not countenance an inter-pretation of Subpart 2 that wouldallow the EPA to “abort” that sec-tion “the day after it was enacted”by revising the NAAQS for ozone.32

The EPA’s Implementation Rule

Faced with the task of reconcil-ing the eight-hour ozone standardand Subpart 2, the EPA respondedwith a highly complex final rule onApril 15, 2004 (the “Implementa-tion Rule”), which preserves theoverall framework of the Subpart 2classification system, but essentiallyapplies that framework only to thosenonattainment areas that violateboth the eight-hour standard andthe one-hour standard, which theImplementation Rule abolishes.33

This counter-intuitive approach isbest explained through an examina-tion of what it means for differentnonattainment areas.

For classification purposes, theImplementation Rule divides eight-hour ozone nonattainment areasinto two groups based on whetherthey are also in nonattainment

Early Action Compactscontinued from page 3Editor’s Note

As we begin a new school year, and another year of publishingEnvironmental Law News, it is appropriate that the new editori-al staff is recognized. I am blessed with six exceptional third-year

students and one spectacular second-year as partners on the board. ErinSullivan begins her third year on the Digest as executive editor. Erin wasa summer associate with the law firm of Epstein Beirne in Rochelle Park,New Jersey this past summer. Next year she will be clerking for theHonorable Harvey Weissbard of the New Jersey Appellate Division.Replacing Erin as managing editor is third-year student April Ballou.April spent last summer with the law firm of Surovell Markle Isaacs &Levy in Fairfax, Virginia and is returning to the firm following graduation.

Our articles editors this year are both 3Ls and bring considerable tal-ent and drive to the Digest. Gabrielle Butcher will serve as senior articleseditor. Gabrielle spent last summer as a summer associate with Bredimus& McClure in Leesburg, Virginia and will clerk for the Honorable RichardH. Jones of the United States District Court for the Eastern District ofVirginia, Alexandria Division following graduation. Tiffany Davidsonjoined the ELD last year as a staff writer and served last summer as a legalintern in the Office of Legal Affairs at the United States Court of Appealsfor the Second Circuit. Our two case summary editors are equally tal-ented. Steven Brownback is a 3L who also joined the ELD as a staff writerlast year. Steve has spent time at the Department of Justice and theLehigh County District Attorney’s Office in Pennsylvania. Next year hewill be working for a mid-size firm outside of Philadelphia. StephenMealor is our lone 2L on the editorial board for the 2004-2005 schoolyear. Stephen is an ordained Presbyterian minister specializing in con-flict resolution. Steve has worked with congregations in Mississippi,Michigan and Missouri. He clerked for Forman Perry Watkins Krutz &Tardy in Jackson, Mississippi last summer.

Nathaniel Parker has spent all three years on the ELD staff. This yearhe serves as the senior legislative editor. Nathaniel has done research onfederal transportation funding programs and worked in planning at theFairfax County Department of Transportation. After his first year,Nathaniel clerked at the litigation practice of Bowman and Brooke inRichmond. This past summer, Nathaniel served as a legal intern for theU.S. Attorney in Raleigh, NC. As for myself, I am Terrence Egland, andI am also in my third year on the ELD. I spent last summer with the firmof Klein, DeNatale, Goldner, Cooper, Rosenlieb & Kimball in Bakersfield,California, and I will be returning there after graduation.

I look forward to my time as editor-in-chief. With a staff as dedicat-ed and bright as the one I have just introduced, the EnvironmentalLaw News shall remain as well written and informative as it has in thepast. If you have any suggestions on how to improve either the contentor format of the Environmental Law News, please do not hesitate tolet me know. We are here to serve you.

Terrence EglandEditor-in-Chief

[email protected]


under the one-hour standard.34 TheEPA refers to areas that meet theone-hour standard but violate theeight-hour standard as “basic”nonattainment areas.35 Basic nonat-tainment areas are subject only tothe more general requirements ofSubpart 1.36 Thus, none of the moredetailed Subpart 2 requirementsapply to these areas. This alsomeans that basic ozone nonattain-ment areas have until June 2009 toattain the eight-hour standard.37

In contrast, Subpart 2 continuesto apply to areas that exceed boththe eight-hour and one-hour stan-dards, but the EPA has altered thetable in Subpart 2 to reflect theadoption of the eight-hour stan-dard.38 In effect, an area’s one-hourozone design value triggers theapplicability of Subpart 2, but thatarea’s eight-hour ozone design valuedetermines its nonattainment clas-sification within Subpart 2. Forexample, an area with a one-hourozone design value of 0.14 parts permillion and an eight-hour ozonedesign value of 0.091 parts per mil-lion would be classified as a margin-al nonattainment area. Although its0.14 one-hour ozone design valuewould have merited a moderatenonattainment designation underSubpart 2 as written, under theImplementation Rule, the marginalnonattainment designation appliesto areas that have one-hour designvalues above 0.12 parts per millionand eight-hour ozone design valuesfrom 0.085 up to 0.092 parts permillion.39

Although the ImplementationRule thus maintains the one-hourozone design value as a “gatekeeper”to Subpart 2, it further provides forthe revocation of the one-hour stan-dard, effective June 15, 2005.40 EPA’sinitial implementation strategy forthe eight-hour standard includedretention of the one-hour standardin areas that remained in one-hourozone nonattainment, but theSupreme Court’s rejection of thatimplementation strategy in Ameri-can Trucking prompted the agencyto re-examine the appropriate rolefor the one-hour standard.41 In doing

so, the EPA determined that it didnot believe “the additional burdenStates would undertake in planningto achieve both the 1-hour and the 8-hour NAAQS is necessary to protectthe public health.”42 Thus, beginningin 2005, the eight-hour standard willbe the only ozone standard thatareas will need to attain.43

As all early action compact areasare basic nonattainment areas, areview of the requirements applica-ble to basic nonattainment areasmay help to put the early actioncompact program into perspective.44

Aside from having to meet the 2009attainment deadline, these areas aresubject to a variety of control provi-sions aimed at bringing the area intoattainment “as expeditiously aspracticable.”45 Within three years ofthe date of designation, the appro-priate state must submit to the EPAa SIP revision providing for attain-ment within the statutory dead-line.46 Among other things, the SIPrevision must provide for the adop-tion of “Reasonably AvailableControl Technology” at existingemissions sources and the achieve-ment of “Reasonable FurtherProgress” through “annual incre-mental reductions” of ozone precur-sor emissions.47 It also must imple-ment “New Source Review,” theAct’s permitting program for the“construction and operation of newor modified major stationarysources.”48 Further, to combat pollu-tion from mobile sources of emis-sions, the Act requires that all feder-ally-funded transportation projectsundertaken within the nonattain-ment area be in conformity with thegoal of “achieving expeditiousattainment” of the problematicNAAQS.49 Such projects may notproceed if they will “increase thefrequency or severity of any exist-ing” NAAQS violation or “delaytimely attainment” of such a stan-dard.50 Finally, once the area hassuccessfully attained the NAAQS,the state must submit another SIPrevision containing measures neces-sary to ensure that the area will con-tinue to meet the standard for atleast ten years after being redesig-nated attainment.51 Later, a second

maintenance plan must provide forcontinued attainment for an addi-tional ten years.52

Early Action CompactsThe central requirement that

drives the entire early action com-pact program is that participatingareas must attain the eight-hourozone standard through the imple-mentation of their selected air qual-ity control strategies by December31, 2007.53 However, the earlyaction compact program features adetailed protocol with many prelim-inary steps. First, to be eligible toparticipate in the program an areamust be in attainment with the one-hour ozone standard.54 Next, theEPA required areas meeting this cri-terion that wished to participate tocommit to the program by Decem-ber 31, 2002.55 This is accomplishedby concluding an early action com-pact with the EPA.56 The earlyaction compact is “a Memorandumof Agreement to prepare and imple-ment an [early action plan]. Morespecifically, the [early action com-pact] sets measurable milestonesfor developing and implementingthe [early action plan].”57 Inexchange for the compact area’sagreement to adhere to the earlyaction compact protocol and tomeet the December, 2007 attain-ment deadline, the EPA agrees todefer the participating area’s ozonenonattainment designation.58

Once the early action compact isconcluded, a series of deadlinesattempt to keep the compact areason track. The EPA established aJune 16, 2003 deadline for the sub-mission of a tentative list from eachparticipating locality detailing theair quality improvement measuresunder consideration.59 These locali-ties then had until March 31, 2004to finalize and submit to their stategovernments early action plans thatadopted “specific, quantified, andpermanent” measures to reduceozone levels.60 The EPA alsorequired that, by this point, theearly action plans “include specific

continued on page 6


implementation dates for the localcontrols, as well as detailed docu-mentation supporting the selectionof measures.”61 Upon receipt of alocality’s early action plan, the stategovernment has until December 31,2004 to adopt the plan as a revisionto its SIP and to submit that SIPrevision to the EPA for approval.62

Once the EPA approves a SIP revi-sion, the early action plan measuresbecome federally enforceable.63

The early action compact proto-col includes additional requirementsthat apply once the early action planis in place. Control strategies devel-oped through the compact processand set forth in the plan must beimplemented by December 31,2005.64 By June 30, 2006, participat-ing states must submit reportsdetailing the implementation of con-trol strategies and assessing air qual-ity improvements and the extent ofreductions in emissions of NOx andVOCs.65 Additionally, the EPArequires semiannual progressreports from participating areasthroughout the five year period.66 Ifany compact area fails to meet oneof the protocol’s requirements, orfails to meet the eight-hour ozonestandard by December 31, 2007, itsnonattainment designation defer-ment expires, and it will becomesubject to all applicable nonattain-ment area requirements under theClean Air Act.67

In addition to the required sub-missions, early action compactscontain an assortment of provisionsdesigned to assure compliance withthe eight-hour standard by the endof 2007. First, compact areas mustcomplete a variety of emissionsinventories,68 which are “compre-hensive estimates of all air pollu-tants emitted from all sources in agiven area during a given time peri-od.”69 Thus, when this analysis isperformed for days during whichozone levels were elevated, emis-sions inventories allow authoritiesin a compact area to understandwhich kinds of sources of NOx and

VOCs are contributing the most toozone exceedances.70 Data obtainedfrom emissions inventories are thenused in air quality modeling analy-ses, which simulate a range of mete-orological conditions, emissions lev-els, and atmospheric chemicallevels to gauge the relative effective-ness of potential early action planstrategies.71

In a requirement analogous tothe Act’s obligatory ten-year main-tenance plans for nonattainmentareas, the compacts require thatearly action plans include mainte-nance plans that address how theareas will combat future emissionsgrowth.72 These maintenance plansremain in effect for five years afteran area’s redesignation to attain-ment, and must establish a contin-uous planning process, whereincontrol measures adopted in theearly action plans are modified asnecessary to ensure continuedattainment.73

Another important requirementin the early action compact processis the facilitation of public involve-ment. The EPA’s guidelines for thecompact process provide that thepublic must be involved “in allstages of the planning and imple-mentation process.”74 To this end,the EPA requires participating local-ities to educate the public about theearly action compact program andopportunities to become involved,open all meetings regarding earlyaction plan development to the pub-lic, allow for public comment oncompact proposals, and make pub-licly available all draft plans andsemiannual progress reports.75

On April 15, 2004, the EPA final-ized the early action compact pro-gram by deferring nonattainmentdesignations for thirteen participat-ing areas.76 Of the twenty remainingcompact areas, all but three success-fully attained the eight-hour stan-dard.77 Moreover, all seventeenattaining compact areas have agreedto continue to abide by their com-pact commitments.78 In exchange,the EPA has indicated that, shouldone of these areas fall into nonat-

tainment during the compact peri-od, the fact that the area has contin-ued to implement its early actionplan “should weigh in favor of notredesignating the area to nonattain-ment immediately, but rather wait-ing to see if the programs the areaputs in place will bring it back intoattainment.”79

The EPA dropped three compactareas from the program after findingthat they had failed to submitacceptable early action plans.80

These failures were due in part totheir inability to convincinglydemonstrate through air qualitymodeling that their early action planmeasures would lead to attainmentby 2007.81 The EPA also expressed itsdissatisfaction with the strength ofthe air quality control measuresadopted by these three areas and thelack of local initiatives in each earlyaction plan.82 Because each of theseareas failed to meet the eight-hourstandard, the EPA designated themall nonattainment.83

Problems with the EarlyAction Compact Program

Legal Issues

Whether or not early actioncompacts are in fact a good idea,they are almost certainly illegal.Thus far, the EPA has not attemptedto elucidate a statutory basis forearly action compacts.84 Further,courts have generally showed hos-tility toward previous efforts by thatagency to avoid the designation ofnonattainment areas under theClean Air Act. The District ofColumbia Circuit’s recent decisionin Sierra Club v. EPA85 illustratesthis principle.

Sierra Club arose out of thesame Subpart 2 ozone attainmentschedule discussed above. Pursuantto the 1990 amendments to theClean Air Act, in 1991 the EPA des-ignated the Washington metropoli-tan area in “serious” nonattainmentfor ozone under the Clean Air Act.86

As a serious nonattainment area,the region was to be brought intocompliance “as expeditiously as



practicable but not later than”November 15, 1999.87 The Act fur-ther provides that serious nonat-tainment areas which fail to attainNAAQS by the statutory deadlinemust be reclassified as “severe”nonattainment areas.88 In additionto extending the attainment dead-line until November 15, 2005,reclassification also requires theresponsible state to revise its SIP toinclude more aggressive pollutionreduction programs.89

Acknowledging that ozone trans-port — migration of pollution fromoutside the area — plays a signifi-cant role in the ability of downwindareas to meet the NAAQS, the EPAconcluded that such areas “fac[ed]the prospect of being reclassi-fied…to a higher nonattainmentclassification in spite of the fact thatpollution that is beyond their con-trol contributes to the levels ofozone they experience.”90 As aresult, the EPA extended the attain-ment deadline for the Washingtonarea to November 15, 2005 withoutreclassifying the region to severenonattainment.91

On July 2, 2002, the D.C. Circuitvacated the EPA’s extension of thestatutory deadline. The court heldthat the plain language of the CleanAir Act precluded the EPA fromextending the deadline absent areclassification.92 The court notedthat the Act does provide for theextension of attainment deadlineswithout reclassification whenupwind pollution sources inhibit adownwind area’s ability to attain aNAAQS, but only in certain situa-tions, such as when the emissionscausing a downwind violation origi-nate outside of the United States.93

The court then reasoned, “[w]ecannot but infer from the presenceof…specific exemptions that theabsence of any other exemption forthe transport of ozone was deliber-ate, and that the [EPA’s] attempt togrant such a dispensation is con-trary to the intent of Congress.”94

Following Sierra Club, theSeventh, Fifth, and EleventhCircuits all reached similar rulings

in cases challenging the EPA’s deci-sion to extend an area’s attainmentdeadline without reclassifying thatarea to a higher level of nonattain-ment.95 Like the D.C. Circuit, eachcourt concluded that the plain lan-guage of the Clean Air Act trumpedthe EPA’s policy-based arguments infavor of its extension policy.96

One possible response to theSierra Club line of cases is thatthose cases all dealt with the EPA’sfailure to reclassify, pursuant toSubpart 2, an area already designat-ed as nonattainment, whereas theearly action compact programavoids the initial nonattainmentdesignation that is governed by sec-tion 107 of the Act.97 The language ofsection 107 does not entirely pre-clude the EPA from exercising dis-cretion in making nonattainmentdesignations. That section simplyrequires that the EPA expeditiouslypromulgate nonattainment designa-tions based on state recommenda-tions.98 Further, section 107 alsobestows discretion on the EPA to“make such modifications as [theagency] deems necessary” to thestate designation recommendations,“including to the boundaries of suchareas.”99 By specifically referring toboundary changes within a clauseheaded by the non-exclusive“including,” section 107 arguablyrecognizes an extensive degree ofagency discretion in promulgatingnonattainment designations.

However, such a reading of sec-tion 107 seems wholly at odds withthe elaborate scheme that Congressestablished to govern nonattain-ment areas. As noted above, inAmerican Trucking, the SupremeCourt chastised the EPA for “con-stru[ing] the statute in a way thatcompletely nullifies textually appli-cable provisions meant to limit itsdiscretion.”100 Courts may thus beunwilling to look favorably on theearly action compact program, as itis subject to the same criticism.

Recognizing the difficulty ofasserting a valid legal basis for theearly action compact program incourt, the EPA has sought approval

from environmental groups for theprogram as a sound environmentalpolicy. For example, the agency’sApril 15 promulgation of eight-hourozone nonattainment designationswas required pursuant to a consentdecree, after delays in the designa-tion process prompted a suit.101

Before deferring the effective date ofthe nonattainment designations forcompact areas, however, the EPAsecured the consent of all nine envi-ronmental groups that had broughtthe suit to require designations.102

Thus, it may be that a truly effectiveearly action compact program is theEPA’s best defense against a courtchallenge. As one environmentalgroup put it: “we want these [com-pacts] to work too, so legally chal-lenging the rules won’t happen untilenvironmental and health groupssee serious failures to meet the[compact] deadlines and ensuresuccess.”103

Possible Ineffectiveness of Early Action Compacts

Although the EPA has presentedearly action compacts as a vehiclefor obtaining “clean air sooner,”104 inseveral respects the program has thepotential to result in “dirty airlonger.” If an early action plan is notsufficiently stringent, it may not leadto attainment of the eight-hour stan-dard by December 31, 2007. In thatcase, a SIP revision complying withall Clean Air Act nonattainment pro-visions would not be required until2009.105 Thus, merely by goingthrough the motions of a compact,an area can delay the Clean Air Act’snonattainment provisions for morethan a year, as the SIP revisions fornonattainment areas not participat-ing in the compact program are dueby June 2007.106

Moreover, by granting nonattain-ment designation deferments, theEPA gives compact areas a free passfrom many of the Clean Air Act’smost burdensome, but also mosteffective nonattainment area air pol-lution control strategies. For exam-

continued on page 8


ple, under the statutory nonattain-ment scheme, within one year ofreceiving a nonattainment designa-tion, that area must begin applyingconformity analyses to transporta-tion projects.107 Thus, areas designat-ed nonattainment in June 2004would ordinarily be required toimplement transportation conformi-ty analyses by June 2005. However,the deferment of the compact areas’nonattainment designations obviatesthis requirement for participatinglocalities.108 As a result, if an area’searly action plan fails to bring thatarea into attainment by December2007, no transportation conformityanalysis for that area would berequired until 2009.109 Similarly, byparticipating in the early actioncompact program, compact areasescape the imposition of the CleanAir Act’s nonattainment New SourceReview program.110 Thus, compactareas that do not meet the program’sDecember 2007 attainment deadlinewill have until 2008 to begin nonat-tainment New Source Review.111

With automobile and truck trafficand large stationary sources of pollu-tion contributing significantly toemissions of NOx and VOCs, theearly action compact program thusundercuts important statutory airpollution control strategies.112

In a sense, however, the verynature of the early action compactprogram mitigates concerns regard-ing the suspension of statutory airpollution control measures, eventhough such measures have workedwell in the past. Both transportationconformity analysis and New SourceReview represent effective methodsof reducing emissions of NOx andVOCs, but the whole point of theearly action compact program is toallow compact areas to develop theirown approaches to air pollution con-trol. So long as these localities faith-fully develop and implement earlyaction plans that are sufficient tobring them into attainment byDecember 2007, the achievement ofthe program’s “clean air sooner”

objective is at least arguably moreimportant than the methodsemployed to reduce pollution.

More troubling, however, is thatthe early action compact programnarrows the scope of the Clean AirAct’s maintenance plan require-ment. Under the Act, nonattain-ment areas must submit two con-secutive ten-year maintenanceplans providing for continuedattainment.113 In contrast, compactareas need only generate mainte-nance plans covering the first fiveyears after attainment.114 Not onlydoes the failure to require long-termcontinuous planning increase thelikelihood that an area could slipback into nonattainment, it alsomakes it difficult to gauge the last-ing effectiveness of the creativeapproaches to air pollution controlthat the program seeks to foster. Asone commentator has noted, “withlocal governments taking experi-mental steps that have not beenproven successful — unlike thosecontained within the Act itself —monitoring for the long runbecomes even more important.”115

Another potential problem is thatozone design values for a few com-pact areas are high enough to leadsome to conclude that attaining theeight-hour standard by 2007 isimpossible for those areas.116 In itsrevision of the Subpart 2 classifica-tion table, the EPA assigned onlythose areas with eight-hour designvalues between 0.085 and 0.092parts per million to the lowest nonat-tainment classification — margin-al.117 Areas with design valuesbetween 0.092 and 0.107 parts permillion fall into the moderate nonat-tainment category and are notrequired to meet the ozone NAAQSuntil 2010.118 Although the EPA hasnot indicated the range of currentozone design values for compactareas, five counties that have sincereceived nonattainment deferralsexperienced eight-hour ozone designvalues in excess of the moderatenonattainment threshold throughthe end of 2002, with one participat-ing North Carolina county reportinga 0.095 design value through the

same period.119 However, as the EPAnoted in justifying theImplementation Rule, current airquality modeling demonstrates thatmost eight-hour ozone nonattain-ment areas that are not also violatingthe one-hour standard will attain theeight-hour standard by the end of2007, even without the adoption ofadditional controls, thanks to exist-ing federal and state air pollutioncontrol measures.120 Thus, the EPA,at least, appears confident that allcompact areas are capable of meet-ing the 2007 attainment deadline.

RoanokeThe Roanoke Metropolitan Statis-

tical Area (“Roanoke MSA”) is com-prised of the Cities of Roanoke andSalem, the Town of Vinton, and theCounties of Roanoke and Bote-tourt.121 The Roanoke MSA’s loneozone monitor is situated in theTown of Vinton.122 Taking the averageof the Roanoke MSA’s fourth-highesteight-hour ozone averages from2001, 2002, and 2003 yields a designvalue of 0.085 parts per million, indi-cating that Roanoke does not meetthe NAAQS for ozone, as measuredby the eight-hour standard.123

To oversee the development ofRoanoke’s early action plan, theRoanoke Valley Area MetropolitanPlanning Organization establishedthe Ozone Early Action Task Force(“Task Force”), which all interestedstakeholders were welcome tojoin.124 The Task Force thus repre-sented a diverse array of interests,with members hailing from environ-mental groups, the business com-munity, and local, state, and federalgovernment offices.125 After a longseries of public meetings, the TaskForce submitted a final version ofthe Roanoke early action plan toeach municipality within the MSA,all of whom approved the plan byindividual resolutions.126

In cataloging emissions of ozoneprecursors, the emissions invento-ries performed as part of theRoanoke MSA’s compact reveal agreat deal about the area’s ozonepollution problem. For instance,



sources within the Roanoke MSAemit roughly fifty tons of NOx perday, with on-road mobile sources —motor vehicles on public roads —responsible for nearly thirty ofthose tons.127 Meanwhile, the area’s28 major stationary sources, suchas facilities for cement productionand metal works, provide anotherseven tons, and the next largestsource, non-road mobile sources,such as lawn, garden, and construc-tion equipment and recreationalvehicles, contribute five and a halftons of NOx daily.128

As for emissions of VOCs, on-road mobile sources again rank asthe single largest source of theroughly 45 tons emitted daily in theRoanoke MSA.129 However, solvent-based products, such as paints andcleaning agents also contribute sub-stantially to that total.130 Finally, atabout five-and-a-half tons per dayeach, gasoline storage and distribu-tion and non-road mobile sourcesaccount for much of the remainingVOC emissions.131

The Roanoke MSA early actionplan’s emissions reduction strate-gies break generally into three kindsof control measures: federal, state,and local. The federal control meas-ures include a variety of EPA initia-tives to reduce emissions of ozoneprecursors, including the NOx SIPcall, programs to reduce emissionsfrom solvents, evolving motor vehi-cle emissions standards, and theadoption of new emissions stan-dards for lawn, garden, and con-struction equipment, marineengines, and locomotives.132 Virginiahas also made recent strides in reg-ulating ozone precursors by optinginto the National Low EmissionsVehicle Program, requiring vaporrecovery systems at Roanoke areagas stations, and mandating imple-mentation of Reasonably AvailableControl Technology in Roanoke’sindustrial facilities.133

Of these measures, air qualitymodeling indicates that by the endof 2007, improvements in motorvehicle emissions will have themost dramatic impact, reducing

VOC emissions by more than fivetons per day and NOx emissions bynearly seven tons per day.134

However, several other state andfederal programs also promise sig-nificant reductions in ozone precur-sor emissions. For example, theadoption of Reasonably AvailableControl Technology stands to elimi-nate more than one ton per day ofboth NOx and VOC emissions, whilegas station vapor recovery systemsand emissions standards for smallgasoline-powered engines figure toeach reduce VOC emissions bynearly two tons per day.135

Perhaps it would be unrealisticto expect local control measures tohave as great an impact as federaland state strategies, but accordingto air quality modeling results, theRoanoke early action plan’s two-dozen local control measures doappear likely to have a measurableimpact. The most substantial emis-sions reductions are likely to origi-nate in the Roanoke MSA’s OzoneAction Days Program, a series ofpublic education, transportation,and incentive-based programsaimed at reducing emissions ondays when meteorological condi-tions favor excessive ozonebuildup.136 Another potentiallyeffective local control measurerequires all jurisdictions within theRoanoke MSA to adopt rules pro-hibiting or restricting open burning,at least during times when thisactivity can have the greatestimpact on ozone levels.137

ConclusionIf the air quality modeling is cor-

rect, it appears that the RoanokeMSA’s early action plan, even withits fairly modest local control meas-ures, should be adequate to bringRoanoke back into attainment withthe Clean Air Act’s health-basedozone standard.138 Assuming that itdoes succeed in bringing “clean airsooner,” the potential illegality ofthe entire program may neverbecome an issue. Should it fail, andshould the EPA not act promptly torevoke Roanoke’s nonattainment

deferral, lawyers can expect contin-ued employment.

What has received little atten-tion in the discussion surroundingearly action compacts, however, isthat nothing previously preventedlocal governments from workingtogether to find ways to clean upthe air around them. The adversehealth effects of exposure to excessozone levels are well known, andthe EPA determined nearly sevenfull years ago that the eight-hourstandard was necessary to protectthe public health. Yet, only whenthe specter of the Clean Air Act’snonattainment provisions became arealistic possibility did municipali-ties move to find solutions to theirozone problems.

1 Deferral of Effective Date of NonattainmentDesignations for 8-Hour Ozone NationalAmbient Air Quality Standards for EarlyAction Compact Areas, 68 Fed. Reg.70,108, 70,110 (proposed Dec. 16, 2003)(to be codified at 40 C.F.R. pt. 81).

2 Winchester, Virginia is also participating inthis program.

3 42 U.S.C. § 7409 (2004).4 42 U.S.C. § 7410(a)(2)(A) (2004). If a statefails to submit an adequate SIP, the EPAmay adopt an implementation plan for thatstate. 42 U.S.C. § 7410(c) (2004).

5 See 42 U.S.C. § 7501(2) (2004) (defining anonattainment area as “an area which isdesignated ‘nonattainment’” pursuant to42 U.S.C. § 7407(d)); 42 U.S.C. §7407(d)(1)(A)(i) (2004) (indicating that anonattainment designation is appropriatefor “any area that does not meet (or thatcontributes to ambient air quality in a near-by area that does not meet)” one of theNAAQS).

6 See, e.g. 42 U.S.C. § 7502 (2004) (dealingwith nonattainment in general).

7 See National Ambient Air QualityStandards for Ozone, 62 Fed. Reg.38,856 (Jul. 18, 1997) (codified at 40C.F.R. pt. 50).

8 Proposed Rule to Implement the 8-HourOzone National Ambient Air QualityStandard, 68 Fed. Reg. 32,802, 32,804(proposed Jun. 2, 2003) (to be codified at40 C.F.R. pt. 51).

9 See Thomas O. McGarity, MissingMilestones: A Critical Look at the Clean Air

continued on page 10


Act’s VOC Emissions Reduction Programin Nonattainment Areas, 18 VA. ENVTL. L.J. 41, 45 (1999) (explaining that evenmoderate exercise during periods of ele-vated ozone levels leads to “immediatechanges in lung function and increasedrespiratory problems” for healthy adults);MARK S. SQUILLACE & DAVID R. WOOLEY, AIRPOLLUTION 6 (3d ed. 1999) (explaining thatbreathing ozone-laden air “over a period ofmonths or years can produce permanentstructural damage in the lungs and accel-erate the rate of lung function decline andthe aging of the lungs”); Air QualityDesignations and Classifications for the 8-Hour Ozone National Ambient Air QualityStandards; Early Action Compact Areaswith Deferred Effective Dates, 69 Fed.Reg. (forthcoming 2004) (to be codified at40 C.F.R. pt. 81) (noting that when ozoneconcentrations are elevated, “more peoplewith asthma have attacks that require adoctor’s attention or the use of additionalmedication”), at http://www.epa.gov/ozonedesignations/nfr41604.pdf at 10-11 (last visited Apr. 19, 2004).

10 40 C.F.R. § 50.9 (2004).11 40 C.F.R. § 50 app. I (2004).12 Id.13 See 40 C.F.R. § 50.10 (2004). “Design

value” is also the term that applies to thedeterminative numerical limit under theone-hour ozone standard. The designvalue under the one-hour standard is thefourth-highest hourly ozone monitor read-ing from the most recent three years. FinalRule to Implement the 8-Hour OzoneNational Ambient Air Quality Standard –Phase 1, 69 Fed. Reg. (forthcoming 2004)(to be codified at 40 C.F.R. pts. 50, 51, &81), at http://www.epa.gov/ozonedesig-nations/finalrule.pdf at 34 n.6 (last visitedApr. 19, 2004).

14 See National Ambient Air QualityStandards for Ozone, 62 Fed. Reg.38,856, 38,859-74 (July 18, 1997) (codi-fied at 40 C.F.R. pt. 50) (explaining theEPA’s rationale for the more stringenteight-hour standard).

15 531 U.S. 457 (2001).16 See id. at 472 (overturning a decision of

the United States Court of Appeals for theDistrict of Columbia Circuit, which hadruled that the EPA’s adoption of the eight-hour ozone standard violated the non-del-egation doctrine of the United StatesConstitution).

17 Deferral of Effective Date of NonattainmentDesignations for 8-Hour Ozone NationalAmbient Air Quality Standards for Early

Action Compact Areas, 68 Fed. Reg.70,108, 70,110 (proposed Dec. 16, 2003)(to be codified at 40 C.F.R. pt. 81).

18 See Air Quality Designations andClassifications for the 8-Hour OzoneNational Ambient Air Quality Standards;Early Action Compact Areas with DeferredEffective Dates, 69 Fed. Reg. (forthcoming2004) (to be codified at 40 C.F.R. pt. 81)(designating 94 areas as nonattainmentunder the eight-hour standard that hadbeen in attainment of the one-hour stan-dard), available at http://www.epa.gov/ozonedesignations/part81r8c.pdf (lastvisited Apr. 19, 2004).

19 See 42 U.S.C. §§ 7501-15 (2004).20 See 42 U.S.C. §§ 7501-09a (2004)

(“Subpart 1 – Nonattainment Areas inGeneral”); 42 U.S.C. §§ 7511-11f (2004)(“Subpart 2 – Additional Provisions forOzone Nonattainment Areas”); 42 U.S.C.§§ 7512-12a (2004) (“Subpart 3 –Additional Provisions for CarbonMonoxide Nonattainment Areas”); 42U.S.C. §§ 7513-13b (2004) (“Subpart 4 –Additional Provisions for Particulate MatterNonattainment Areas”); 42 U.S.C. §§7514-14a (2004) (“Subpart 5 – AdditionalProvisions for Areas DesignatedNonattainment for Sulfur Oxides, NitrogenDioxide, or Lead”).

21 See Proposed Rule to Implement the 8-Hour Ozone National Ambient Air QualityStandard, 68 Fed. Reg. 32,802, 32,811(proposed Jun. 2, 2003) (to be codified at40 C.F.R. pt. 51) (explaining that the morespecific requirements of Subpart 2 dis-place the more general requirements ofSubpart 1 to the extent that the two areinconsistent).

22 Whitman v. Am. Trucking Assocs., Inc.,531 U.S. 457, 482 (2001) (construing 42U.S.C. § 7511(a)(1) tbl.1).

23 See 42 U.S.C. § 7511(a)(1) tbl.1 (2004).Although this provision actually sets attain-ment deadlines as a fixed number of yearsafter November 15, 1990 (the date ofenactment of the 1990 Amendments to theClean Air Act), section 7511(b) providesthat, for areas that are not designatednonattainment until after the adoption of the1990 Amendments, the attainment dead-lines are tolled until the date when an areais designated nonattainment. Thus, “3years after November 15, 1990,” becomes“3 years after the date the area is designat-ed nonattainment.” See 42 U.S.C.§ 7511(b) (2004); Proposed Rule toImplement the 8-Hour Ozone NationalAmbient Air Quality Standard, 68 Fed. Reg.at 32,817 (explaining this aspect of§ 7511(b)). This subsection appears tohave escaped the notice of the SupremeCourt, however, which pointed to the expi-

ration of deadlines for marginal, moderate,and serious nonattainment areas underSubpart 2’s classification system as evi-dence of the ill regulatory fit betweenSubpart 2 and the eight-hour standard. SeeAm. Trucking Assocs., 531 U.S. at 483-84(contending that for areas designated asnonattainment in 2000, “many of the[Subpart 2] deadlines would have alreadyexpired at the time of classification”).

24 See 42 U.S.C. § 7511(a)(1) (2004)(emphasis added); Am. Trucking Assocs.,531 U.S. at 482 (expounding on this prob-lem).

25 See National Ambient Air QualityStandards for Ozone, 62 Fed. Reg.38,856, 38873 (July 18, 1997) (codified at40 C.F.R. pt. 50) (explaining that “[o]nce anarea attains [the one-hour ozone] stan-dard…the purpose of the provisions ofsubpart 2 will have been achieved andthose provisions will no longer apply.However, the provisions of [Subpart 1]would apply to the implementation of thenew 8-hour [ozone] standards”).

26 See Am. Trucking Assocs., 531 U.S. at481 (holding the EPA’s initial eight-hourozone standard implementation strategyunlawful).

27 Id. at 484.28 Id. (emphasis added).29 See Proposed Rule to Implement the 8-

Hour Ozone National Ambient Air QualityStandard, 68 Fed. Reg. 32,802, 32,811(proposed Jun. 2, 2003) (to be codified at40 C.F.R. pt. 51) (explaining that theAmerican Trucking decision “left it to [theEPA] to develop a reasonable resolution ofthe roles of [S]ubparts 1 and 2”).

30 See Am. Trucking Assocs., 531 U.S. at484 (explaining that “[t]he principal distinc-tion between Subpart 1 and Subpart 2 isthat the latter eliminates regulatory discre-tion that the former allowed”).

31 Id. at 485.32 Id.33 Final Rule to Implement the 8-Hour Ozone

National Ambient Air Quality Standard –Phase 1, 69 Fed. Reg. (forthcoming 2004)(to be codified at 40 C.F.R. pts. 50, 51, &81), available at http://www.epa.gov/ozonedesignations/finalrule.pdf.

34 Id. at 16. Technically, the ImplementationRule classifies eight-hour ozone nonattain-ment areas according to their one-hourozone design value, not their one-hourozone attainment status. The Implementa-tion Rule provides that areas with one-hourdesign values “at or above 0.121 [parts permillion] (the lowest 1-hour design value inTable 1 of [S]ubpart 2) will be classified



under [S]ubpart 2…. All other areas will becovered under [S]ubpart 1.” Id.

35 Air Quality Designations and Classificationsfor the 8-Hour Ozone National Ambient AirQuality Standards; Early Action CompactAreas with Deferred Effective Dates, 69Fed. Reg. (forthcoming 2004) (to be codi-fied at 40 C.F.R. pt. 81), available athttp://www.epa.gov/ozonedesignations/nfr41604.pdf at 25 (last visited Apr. 19,2004).

36 Final Rule to Implement the 8-Hour OzoneNational Ambient Air Quality Standard –Phase 1, at 16.

37 See 42 U.S.C. § 7502(a)(2)(A) (2004) (pro-viding that attainment must “be achievedas expeditiously as practicable, but nolater than 5 years from the date [an] areawas designated nonattainment”). Theeffective date of both the ImplementationRule and the nonattainment designationsmade pursuant to the eight-hour standardis June 15, 2004, so basic nonattainmentareas will have five years from this date tocomply. Subpart 1 also provides the EPAwith the authority to extend this nonattain-ment deadline for an additional five years.Id. On top of this, both Subparts 1 and 2provide for two additional one-year exten-sions, but the EPA’s interpretation of theseextension provisions limits the agency’sextension authority to instances in whichrecent air quality improvements indicatethat attainment within the extension periodis likely. See Final Rule to Implement the 8-Hour Ozone National Ambient Air QualityStandard – Phase 1, at 19 (explaining howthe EPA interprets the one-year extensionprovisions in sections 172(a)(2)(C) and181(a)(5) of the Act).

38 The EPA acknowledged that its revision ofthe Subpart 2 table amounted to rewritingthe statute, but claimed that doing so wasnecessary to avoid the absurd results thatthe Supreme Court had predicted. FinalRule to Implement the 8-Hour OzoneNational Ambient Air Quality Standard –Phase 1, at 66 (explaining that the EPAhas the authority to apply a statute otherthan as written when adhering to the text“would produce absurd results”). The EPAalso justified its revision of the table asconsistent with legislative intent, pointingout that the revised table squares withCongress’ broad desire for nonattainment“classifications to approximate the attain-ment needs of areas.” Id. at 68.

39 Although this example results in a reduc-tion of nonattainment classification underthe Implementation Rule, an area couldjust as easily move to a higher nonattain-ment classification, should its eight-hourozone design value reflect a more criticalozone problem than its one-hour design

value. To the extent that some ozonenonattainment areas, because of their fail-ure to meet previous attainment deadlines,may presently be in a higher nonattain-ment category than their one-hour ozonedesign values would indicate, theImplementation Rule may have the effectof returning these areas to a lesser nonat-tainment status. See infra notes 85-96,and accompanying text (discussing theEPA’s earlier difficulties with Subpart 2’sreclassification penalty provisions).

40 Final Rule to Implement the 8-Hour OzoneNational Ambient Air Quality Standard –Phase 1, at 104.

41 Id. at 101-02.42 Id. at 113.43 Much of the Implementation Rule is devot-

ed to the minutiae of the transitionbetween the one-hour and eight-hourstandards, and thus exceeds the relativelynarrow scope of this article. However, theimportance of some of the ImplementationRule’s regulatory changes to the future ofClean Air Act implementation certainlymerits a more thorough discussion. Forinstance, section 172(e) of the Act pro-vides that, if the EPA “relaxes” a NAAQS,it must then “promulgate requirementsapplicable to all areas which have notattained that standard as of the date ofsuch relaxation. Such requirements shallprovide for controls which are not lessstringent than the controls applicable toareas designated nonattainment beforesuch relaxation.” 42 U.S.C. § 7502(e)(2004). Acting in apparent consistencywith this provision, the EPA justifies its rev-ocation of the one-hour standard byclaiming that the Implementation Rule’s“anti-backsliding provisions will ensurethat mandatory [S]ubpart 2 control meas-ures that applied due to an area’s classifi-cation under the 1-hour NAAQS will con-tinue to apply after the 1-hour NAAQS isrevoked.” Final Rule to Implement the 8-Hour Ozone National Ambient Air QualityStandard – Phase 1, at 105. In otherwords, the revocation of the one-hourstandard will not result in a regulatory roll-back for one-hour ozone nonattainmentareas that would open up the revocationto a possible challenge based on section172(e). However, the EPA’s definition of“mandatory Subpart 2 control measures”excludes New Source Review. “[NewSource Review] offset ratios and majorstationary source applicability provisionsunder the 1-hour standard are not beingdefined as ‘applicable requirements.’” Id.at 24. Thus, rather than forcing ozonenonattainment areas to continue to imple-ment a level of New Source Review thatreflects the severity of their one-hourozone pollution problem, “anti-backsliding

provisions” notwithstanding, theImplementation Rule effectively resetsNew Source Review to the level requiredby the area’s eight-hour ozone nonattain-ment status. It is at least arguable that thistreatment of New Source Review violatessection 172(e).

44 See infra note 54, and accompanying text(explaining that early action compactareas’ eligibility to participate in the pro-gram hinges on their attainment of theo4ne-hour standard).

45 42 U.S.C. § 7502(a)(2)(A) (2004).46 42 U.S.C. § 7502(b), (c)(1) (2004).47 42 U.S.C. §§ 7501(1), 7502(c)(1)-(2)

(2004).48 42 U.S.C. § 7502(c)(5) (2004).49 42 U.S.C. § 7506(c)(1) (2004).50 Id.51 42 U.S.C. § 7505a(a) (2004).52 42 U.S.C. § 7505a(b) (2004).53 Deferral of Effective Date of Nonattainment

Designations for 8-Hour Ozone NationalAmbient Air Quality Standards for EarlyAction Compact Areas, 68 Fed. Reg.70,108, 70,111 (proposed Dec. 16, 2003)(to be codified at 40 C.F.R. pt. 81).

54 Id.55 Id.56 See, e.g. Roanoke Area Metropolitan

Planning Organization, et al, THE EARLYACTION COMPACT FOR THE ROANOKEMETROPOLITAN STATISTICAL AREA (MSA) IN THECOMMONWEALTH OF VIRGINIA (committing theparties to the development of an earlyaction plan), at http://www.epa.gov/ttn/naaqs/ozone/eac/eac_va_roanoke.pdf(Dec. 23, 2002).

57 Id. at 5.58 See, e.g. id. at 8-15 (setting forth the

requirements applicable to the local gov-ernments, the Virginia Department ofEnvironmental Quality, and the EPA).Actually, this initial deferment of the nonat-tainment designation expires September30, 2005. Air Quality Designations andClassifications for the 8-Hour OzoneNational Ambient Air Quality Standards;Early Action Compact Areas with DeferredEffective Dates, 69 Fed. Reg. (forthcoming2004) (to be codified at 40 C.F.R. pt. 81), available at http://www.epa.gov/ozonedesignations/nfr41604.pdf at 1-2(last visited Apr. 19, 2004). The EPA intendsto issue a second deferment “for thoseareas that continue to fulfill all compact obli-gations” prior to the expiration of the first,and then a third deferment to the appropri-



ate compact areas prior to the expiration ofthe second. Deferral of Effective Date ofNonattainment Designations for 8-HourOzone National Ambient Air QualityStandards for Early Action Compact Areas,68 Fed. Reg. 70,108, 70,110-11 (proposedDec. 16, 2003) (to be codified at 40 C.F.R.pt. 81).

59 Deferral of Effective Date of NonattainmentDesignations for 8-Hour Ozone NationalAmbient Air Quality Standards for EarlyAction Compact Areas, 68 Fed. Reg. at70,112 tbl.1.

60 Id. at 70,111. 61 Id.62 Id.63 Id.64 Id.65 Id.66 Id.67 Id. at 70,11768 See Environmental Protection Agency,

PROTOCOL FOR EARLY ACTION COMPACTSDESIGNED TO ACHIEVE AND MAINTAIN THE 8-HOUR OZONE STANDARD 2 (2002) (discussingthe requirements pertaining to emissionsinventories), at http://www.epa.gov/ttn/naaqs/ozone/eac/20020619_eac_proto-col.pdf (Jun. 19, 2002).

69 Roanoke Ozone Early Action Plan TaskForce, 1ST SEMI-ANNUAL STATUS REPORT FORTHE ROANOKE OZONE EARLY ACTION COMPACTAREA (2003), at http://www.epa.gov/ttn/naaqs/ozone/eac/pr030630_eac_va_roanoke.pdf (Jun. 30, 2003). The Act’sSubpart 1 provisions contain a similarrequirement applicable to all nonattainmentareas. See 42 U.S.C. § 7502(c)(3) (2004)(providing that nonattainment area SIP revi-sions “shall include a comprehensive, accu-rate, current inventory of actual emissionsfrom all sources of the relevant pollutant orpollutants in such area”).

70 See Environmental Protection Agency,supra note 68, at 2 (explaining the needfor emissions inventories).

71 See id. (explaining the use of emissionsinventories in air quality modeling);Roanoke Ozone Early Action Plan TaskForce, supra note 69, at 12 (discussingthe simulations produced through air qual-ity modeling).

72 Environmental Protection Agency, supranote 68, at 3-4.

73 Id.74 Id. at 4.

75 Id.76 Air Quality Designations and Classifications

for the 8-Hour Ozone National Ambient AirQuality Standards; Early Action CompactAreas with Deferred Effective Dates, 69Fed. Reg. (forthcoming 2004) (to be codi-fied at 40 C.F.R. pt. 81), available athttp://www.epa.gov/ozonedesignations/nfr41604.pdf at 44-50 tbl.3 (last visitedApr. 19, 2004). The Roanoke and Winches-ter Metropolitan Statistical Areas in Virginiawere among this group. Id.

77 Id.78 Id. at 52. Only two counties in one five-

county compact area (the Mountain Areaof Western North Carolina) elected to optout of the program on finding that theyhad attained the eight-hour standard. Id.

79 Id. at 65.80 Id. at 43. The three areas that failed to

submit adequate plans were the Knoxville,Memphis, and Chattanooga, Tennesseecompact areas. Id.

81 Id. at 42. Two other compact areas, theDenver, Colorado area and the Triad(Greensboro-Winston-Salem-High Point),North Carolina area, also submitted airquality modeling that did not project attain-ment in 2007. Id. at 43. However, the EPA determined that these areas had sup-plied “compelling…additional information”demonstrating that they would attain theeight-hour standard by 2007, in partbecause each had “provided more mean-ingful local control measures than the threeTennessee compact areas.” Id. at 42-43.

82 Id.83 Id. at 43.84 Even in the final rule implementing the

early action compact program, the EPAresponded to comments questioning thelegal validity of nonattainment defermentswith a policy-based argument:

We continue to believe that the com-pact program, as designed, gives localareas the flexibility to develop their ownapproach to meeting the 8-hour ozonestandard, provided the participatingcommunities are serious in their com-mitment to control emissions from localsources earlier than the [Clean Air Act]would otherwise require. By involvingdiverse stakeholders, including repre-sentatives from industry, local and Stategovernments, and local environmentaland citizens’ groups, a number of com-munities are discussing for the first timethe need for regional cooperation insolving air quality problems that affectthe health and welfare of its citizens.People living in these areas that realizereductions in pollution levels sooner willenjoy the health benefits of cleaner airsooner than might otherwise occur.

Id. at 56.85 294 F.3d 155 (D.C. Cir. 2002).86 Id. at 159.87 Id. at 158 (quoting 42 U.S.C. §§ 7511(a)(1),

7511a(c)(2)(A)). 88 Id. at 159 (construing 42 U.S.C. § 7511

(b)(2)(i)).89 Id. (construing 42 U.S.C. § 7511(b)(2)(A)(i)).90 Id. (quoting Extension of Attainment Dates

for Downwind Transport Areas, 64 Fed.Reg. 14,441, 14,442 (Mar. 25, 1999)).

91 Id.92 Id. at 160. 93 Id. (citing 42 U.S.C. § 7509a(b))94 Id.95 See Sierra Club v. EPA, 311 F.3d 853 (7th

Cir. 2002) (rejecting extension of attain-ment deadline for St. Louis, Missouri);Sierra Club, Clean Air & Water, Inc. v. EPA,314 F.3d 735 (5th Cir. 2002) (same as toBeaumont, Texas); S. Org. Comm. forEcon. & Soc. Justice v. EPA, 333 F.3d1288 (11th Cir. 2003) (same as to Atlanta,Georgia).

96 See Sierra Club v. EPA, 311 F.3d at 862;Sierra Club, Clean Air & Water, Inc., 314F.3d at 741; S. Org. Comm. for Econ. &Soc. Justice, 333 F.3d at 1290.

97 Cf. 42 U.S.C. § 7511(b)(2)(A) (2004) (gov-erning reclassification of nonattainmentareas), with 42 U.S.C. § 7407(d) (2004)(governing initial nonattainment designa-tions).

98 42 U.S.C. § 7407(d)(1)(B)(i) (2004).99 42 U.S.C. § 7407(d)(1)(B)(ii) (2004).

100 Am. Trucking Assoc., 531 U.S. at 485.101 See Air Quality Designations and

Classifications for the 8-Hour OzoneNational Ambient Air Quality Standards;Early Action Compact Areas with DeferredEffective Dates, 69 Fed. Reg. (forthcoming2004) (to be codified at 40 C.F.R. pt. 81)(discussing the consent decree), availableat http://www.epa.gov/ozonedesigna-tions/nfr41604.pdf at 56-57 (last visitedApr. 19, 2004).

102 Id. at 57.103 Letter from Southern Alliance for Clean

Energy, to EPA, Region Four (Mar. 25,2003), at http://www.epa.gov/ttn/naaqs/ozone/eac/c_eac_sace-epa_20030325.pdf.

104 See, e.g. Mike Leavitt, EPA Administrator,The Clean Air Rules of 2004: The NextChapter in America’s Commitment toClean Air, Address Announcing thePromulgation of the Clean Air Rules of2004 (Apr. 14, 2004), (announcing that, as



a result of the early action compact pro-gram, “[a]pproximately 10 million peoplewill have cleaner air, faster”), athttp://yosemite.epa.gov/administrator/speeches.nsf/b1ab9f485b098972852562e7004dc686/393855f25023abdb85256e7600589dbe?OpenDocument.

105 See Air Quality Designations andClassifications for the 8-Hour OzoneNational Ambient Air Quality Standards;Early Action Compact Areas with DeferredEffective Dates, at 63 (providing that if acompact area fails to attain the eight-hourstandard by December 2007, the EPA will“take action by April 15, 2008, to removethe deferral which would trigger the effec-tive date of their nonattainment designa-tion”); Id. at 64 (explaining that once theEPA revokes a compact area’s deferral, aSIP revision demonstrating attainment willbe due “within 1 year of the effective dateof designation”).

106 See 42 U.S.C. § 7502(b) (2004) (providingthat nonattainment area SIP revisions aredue no later than three years after theeffective date of designation).

107 See 42 U.S.C. § 7506(c)(6) (2004) (trans-portation conformity requirement does notapply to nonattainment areas until oneyear after designation).

108 See Air Quality Designations and Classifi-cations for the 8-Hour Ozone NationalAmbient Air Quality Standards; EarlyAction Compact Areas with DeferredEffective Dates, at 66 (noting that compactareas need not adhere to Clean Air Acttransportation conformity requirements).

109 See supra note 105 (explaining the proce-dures that the EPA envisions should acompact area fail to meet the eight-hourstandard by December 2007).

110 See 42 U.S.C. § 7502(c)(6) (2004) (requir-ing the implementation of New SourceReview in nonattainment areas).

111 Neither the Act nor the EPA’s implementingregulations contemplate a delay betweendesignation and the implementation ofNew Source Review. See id.; 42 U.S.C. §7503 (2004) (statutory New Source Reviewpermit requirements); 40 C.F.R. § 51.165(2004) (regulations governing New SourceReview).

112 See, e.g. infra notes 127-31, and accom-panying text (discussing the primarysources of Roanoke’s ozone pollutionproblem).

113 42 U.S.C. § 7505a(a), (b) (2004).114 Environmental Protection Agency, supra

note 68, at 3-4.115 Letter from J. David Farren & Sierra

B. Weaver, Southern Environmental LawCenter, to James A. Joy, III, PE, Chief,

Bureau of Air Quality, South CarolinaDepartment of Health and EnvironmentalControl 4 (May 15, 2003), athttp://www.epa.gov/ttn/naaqs/ozone/eac/c_eac_selc-sc_20030515.pdf.

116 See Letter from Southern Alliance for CleanEnergy, to EPA, Region Four 1 (Mar. 25,2003) (noting that “[s]ome areas receivingEPA approval for early action exceed the 8-hour standard by a margin so large thatthey cannot realistically meet the require-ment to clean up voluntarily by 2007”), athttp://www.epa.gov/ttn/naaqs/ozone/eac/c_eac_sace-epa_20030325.pdf.

117 Air Quality Designations and Classificationsfor the 8-Hour Ozone National Ambient AirQuality Standards; Early Action CompactAreas with Deferred Effective Dates, 69Fed. Reg. (forthcoming 2004) (to be codi-fied at 40 C.F.R. pt. 81), available athttp://www.epa.gov/ozonedesigna-tions/nfr41604.pdf at 28 tbl.1 (last visitedApr. 19, 2004).

118 Id.119 The counties mentioned, with their 2002

eight-hour design value in parentheses:Forsyth County (94), Davie County (95), andGuilford County (93), North Carolina, whichare part of the Triad (Greensboro-Winston-Salem-High Point) compact area, RichlandCounty (93), South Carolina, which is partof the Central Midlands (Columbia) com-pact area, and Sullivan County (92),Tennessee, which is part of the JohnsonCity-Kingsport-Bristol compact area.Deferral of Effective Date of NonattainmentDesignations for 8-Hour Ozone NationalAmbient Air Quality Standards for EarlyAction Compact Areas, 68 Fed. Reg.70,108, 70,114-15 tbl.3 (proposed Dec.16, 2003) (to be codified at 40 C.F.R. pt.81); see also Air Quality Designations andClassifications for the 8-Hour OzoneNational Ambient Air Quality Standards;Early Action Compact Areas with DeferredEffective Dates, at 44-50 tbl.3 (deferringdesignation of these three compact areas).

120 Final Rule to Implement the 8-Hour OzoneNational Ambient Air Quality Standard –Phase 1, 69 Fed. Reg. (forthcoming 2004)(to be codified at 40 C.F.R. pts. 50, 51, &81), available at http://www.epa.gov/ozonedesignations/finalrule.pdf at 53(last visited Apr. 19, 2004).

121 Deferral of Effective Date of NonattainmentDesignations for 8-Hour Ozone NationalAmbient Air Quality Standards for EarlyAction Compact Areas, 68 Fed. Reg. at70,113 tbl.3.

122 Roanoke Area Metropolitan PlanningOrganization et al, supra note 56, at 3.

123 See Roanoke Valley Area MetropolitanPlanning Organization, OZONE EARLY

ACTION PLAN FOR THE ROANOKE EARLY ACTIONCOMPACT AREA (Mar. 31, 2004), athttp://www.epa.gov/ttn/naaqs/ozone/eac/m040331_eac_va_roanoke.pdf.

124 Id. at 8. The Roanoke Valley MetropolitanPlanning Organization is one of twenty-oneregional Planning District Commissions inVirginia created “to facilitate local govern-ment cooperation and state-local coopera-tion in addressing on a regional basis prob-lems of greater than local significance.”Virginia Association of Planning DistrictCommissions, What is a PDC? (quoting VA.CODE ANN. § 15.2-4207(A)), available athttp://www.institute.virginia.edu/vapdc/Whatis.html (last visited Apr. 20, 2004).

125 Roanoke Valley Area Metropolitan PlanningOrganization, supra note 123, at 9.

126 Id. at 9-12.127 Id. at 25. Interestingly, interstate highway

traffic, which in the Roanoke MSA consistsof a high percentage of truck freight,appears to account for nearly two-thirds ofthe area’s on-road mobile source NOxemissions, while, despite the area’s sub-stantial railroad traffic, locomotives, aircraft,and boats combined contribute only abouttwo and a half tons of NOx per day. SeeRoanoke Ozone Early Action Plan TaskForce, supra note 69, at 11 fig.2 (interstatehighway motor vehicle traffic contributed18.03 tons of NOx per day in 1999, the lasttime during the compact process that theRoanoke MSA’s motor vehicle emissionswere classified by road category); RoanokeValley Area Metropolitan Planning Organi-zation, supra note 123, at 25 (providing2002 locomotive emissions figure); StarSolutions, DETAILED PROPOSAL FOR IMPROVE-MENTS TO THE INTERSTATE 81 CORRIDOR AT 4-1 (Sept. 5, 2003) (noting that truck trafficroutinely exceeds 40% of all vehicle trafficon Interstate 81 in the Roanoke area), athttp://www.virginiadot.org/business/resources/I-81FINALSTAR.pdf. In spite ofthe clear air pollution reduction advantagesof shifting freight from trucks to rail, how-ever, the Virginia Department of Trans-portation has recently announced its sup-port for a plan to widen Interstate 81 totwelve lanes through Roanoke to facilitategrowth in truck freight. See Press Release,VDOT Commissioner Reaches Decision onI-81 PPTA Proposals (Mar. 5, 2004)(announcing Virginia Department of Trans-portation’s approval of Star Solutions pro-posal to widen Interstate 81), athttp://www.virginiadot.org/infoservice/news/newsrelease.asp?ID=CO-010; StarSolutions, supra, at A-5 (proposing twelvelanes for Interstate 81 through Roanokearea); Id. at 4-2 (discussing benefits to thetrucking industry of widening Interstate 81).




129 See id. at 24 (demonstrating that on-roadmobile sources account for 36% of theRoanoke MSA’s VOC emissions).

130 See id. (showing solvents accounting forroughly one quarter of VOCs).

131 Id.132 Id. at 16. The NOx SIP call is a 1998 EPA

regulation requiring twenty-two states andthe District of Columbia to submit SIP revi-sions addressing ozone transport. Findingof Significant Contribution and Rulemakingfor Certain States in the Ozone TransportAssessment Group Region for Purposes ofReducing Regional Transport of Ozone, 63Fed. Reg. 57,356 (Oct. 27, 2998) (codifiedat 40 C.F.R. pts. 51, 72, 75, & 96).

133 Roanoke Valley Area MetropolitanPlanning Organization, supra note 123, at16. The National Low Emissions VehicleProgram is a voluntary program, in whichmanufacturers commit to comply withtougher emissions standards for newmotor vehicles sold in participating states.Control of Air Pollution from New MotorVehicles and New Motor Vehicle Engines:Voluntary Standards for Light-DutyVehicles, 62 Fed. Reg. 31,192 (June 6,1997) (codified at 40 C.F.R. pts. 85 & 86).


135 Id.136 See id. (showing that this measure can

reduce ozone precursor emissions by oneand a half tons per day); Id. at 14-15(explaining Air Quality Action Day programmeasures).

137 See id. at 30 (showing that this measurecan reduce ozone precursor emissions byslightly less than one ton per day); Id. at 15-16 (explaining what this measure entails).

138 Air quality modeling predicts that theRoanoke MSA’s 2007 ozone design valuewill be 0.070 parts per million. Environmen-tal Protection Agency, EVALUATION OF CON-TROL STRATEGIES AND TECHNICAL ASSESSMENTS

FOR EARLY ACTION COMPACT LOCAL PLANS 4(Apr. 15, 2004), at http://www.epa.gov/t t n / n a a q s / o z o n e / e a c / T S D _ C h 7 _4-16a-04.pdf.


Standards ofReview inChallenges toEnvironmentalAgency Actionsby Michael S.Whitlow

Introduction

When challenging Virginiaenvironmental agencyactions, such as issuance of

a permit or agency determinationsunder pertinent regulations, thecharacterization of the particularissue involved as one of law or fact,and therefore the particular judicialstandard of review applied to theagency action, can greatly affect theoutcome. A recent Virginia Court ofAppeals case1 highlights the difficul-ty faced by the courts when con-fronted with questions of law thatinclude analysis of an agency’s find-ings of fact.

This article briefly discusses thescope and different standards ofjudicial review of agency actions inVirginia, discusses several of therecent cases involving environmen-tal agencies, and attempts to gleanguiding principles that may be use-ful to practitioners in challengingenvironmental agency actions inVirginia.

Scope and Standards of Review

Scope of Judicial Review

The scope of review of agencyaction is governed by the VirginiaAdministrative Process Act (“APA”),as interpreted by Virginia Courts.2

The standards of judicial review haveevolved through court decisions.3

The APA lists four areas subjectto judicial review:

(i) accordance with constitu-tional right, power, privilege, orimmunity, (ii) compliance withstatutory authority, jurisdictionlimitations, or right as providedin the basic laws as to subjectmatter, the stated objectives forwhich regulations may be made,and the factual showing respect-ing violations or entitlement inconnection with case decisions,(iii) observance of required pro-cedure where any failure there-in in not mere harmless error,and (iv) the substantiality of theevidentiary support for findingsof fact.4

The courts have essentiallyboiled those down to two “errors oflaw” subject to judicial review:(1) whether the agency acted withinthe scope of its authority, and(2) whether the decision itself wassupported by substantial evidence.5

The former encompasses issues oflaw; the latter addresses an agency’sfact findings.

Whether the agency acted withinthe scope of its authority, i.e. issuesof law, includes constitutionalissues and statutory interpretationissues, as well as whether theagency properly followed the perti-nent statutes. In reviewing the fac-tual findings of an agency, i.e. issuesof fact, the courts look only towhether the agency reasonablycould have made a particular find-ing of fact under the deferential“substantial evidence” test.

Standards of Judicial Review

If the issue falls within the scopeof review, courts have adopted dif-ferent standards of review, depend-ing upon the particular issue. Anoften-cited articulation of thesestandards comes from Johnston-Willis v. Kenley:6

Where the issue is whether thereis substantial evidence to sup-port findings of fact, great defer-ence is to be accorded theagency decision. Where the issuefalls outside the specialized com-petence of the agency, such asconstitutional and statutory

Michael S. Whitlow is a partner and co-chair of the environmental departmentwith the firm of Gentry, Locke, Rakes &Moore in Roanoke, VA. He received a B.A.from the Virginia Polytechnic Institute &State University in 1990 and a J.D. fromUniversity of Richmond T.C. WilliamsSchool of Law, cum laude, in 1994.


interpretation issues, little defer-ence is required to be accordedthe agency decision. Where,however, the issue concerns anagency decision based on theproper application of its expertdiscretion, the reviewing courtwill not substitute its own inde-pendent judgment for that of theagency but rather will reversethe agency decision only if thatdecision was arbitrary and capri-cious. Finally, in reviewing anagency decision, the courts arerequired to consider the experi-ence and specialized compe-tence of the agency and the pur-poses of the basic law underwhich the agency acted.7

The APA also states that, inreviewing an agency decision “thefunction of the court shall be todetermine only whether the resultreached by the agency could reason-ably be said, on all such proofs [bothin the agency record and supplemen-tal proofs adduced in court], to bewithin the scope of the legal authori-ty of the agency.”8 Finally, the APAprovides that in reviewing fact issues“the court shall take due account ofthe presumption of official regularity,the experience and specialized com-petence of the agency, and the pur-pose of the basic law under whichthe agency has acted.”9

The APA speaks in general termsof “within the scope of the legalauthority of the agency” and taking“due account” of the presumptionupholding agency action, theexpertise of the agency, and thepurpose of the underlying statute.10

These more general articulations ofjudicial review are invoked by thecourts when the more detailed stan-dards became problematic, particu-larly when mixed questions of lawand fact are being reviewed.

Taking the APA and the case lawtogether, the following principlesapply:

1. If a challenged action involvesan issue of law, the courts willgrant little deference to theagency, unless the issuerelates to the agency’s deci-sion while applying its expertdiscretion.

2. Where an agency is applyingits expert discretion, even in

interpreting a statute or regu-lation, courts will defer to theagency’s expertise and onlyreverse agency action if theaction was arbitrary andcapricious.

3. The courts will generallyaccord great deference to anagency’s findings of fact underthe “substantial evidence”standard, which is “‘such rele-vant evidence as a reasonablemind might accept as ade-quate to support a conclusion.Under this standard…thecourt may reject the agency’sfinding of fact only if, consid-ering the record as a whole, areasonable mind would neces-sarily come to a different con-clusion.’”11

In applying the substantial evi-dence test, the APA requires thatthe court take into account the pre-sumption of correctness of agencyaction, the expertise of the agency,and the purpose of the law underwhich the agency is acting.12

Thus, the standards of review aredifferent for issues of law versusissues of fact. However, courts havestruggled with the proper standardof review when mixed questions oflaw and fact are involved:

[The] dichotomy [betweenissues of law and fact]…is some-what a fiction, is too simplistic,and involves the difficulty ofdrawing lines between legal andfactual issues. That difficultyarises because many issues aremore accurately described asmixed questions of law and fact.The legal/factual distinction isnevertheless instructive.13

In theory, the legal issues and factissues in these mixed questions oflaw and fact are to be segregated, andthe appropriate standard of reviewand degree of deference applied toeach one.14 However, this has provendifficult, if not impossible.

Examples of Application ofStandards in EnvironmentalCases

Issues of Fact —Substantial Evidence Standard

Aegis Waste Solutions v. Con-cerned Taxpayers of BrunswickCounty,15 is a classic example of the“substantial evidence” standard.Aegis was awarded a permit to con-struct and operate a landfill by theVirginia Department of Environ-mental Quality (“VDEQ”). The issuewas whether the landfill permitissued by VDEQ included three out-parcels, which were owned by Aegisand adjacent to the landfill facilitybut were not included as part of thecertification by Brunswick Countythat the landfill location and opera-tion complied with all local ordi-nances, as required pursuant to Va.Code § 10.1-1408.1(B)(1). Oppo-nents argued that the outparcelswere not in the certification (thiswas undisputed) but were neverthe-less improperly included in the per-mit, thus voiding the permit. Aegisand VDEQ argued that the out-parcels were not included in the per-mit and therefore not required to bein the Brunswick County certifica-tion.

The Supreme Court had littletrouble in concluding that the out-parcels were not included in the per-mit because maps that were part ofthe record clearly delineated theoutparcels as being outside the facil-ity boundary. The Court held thatwhether a given parcel of land isincluded in a permit but not includ-ed in the certification of a local gov-erning body is an issue of fact.16

Applying the “substantial evidence”standard to the VDEQ’s finding offact that the outparcels were notpart of the permit, the SupremeCourt reversed the Court of Appeals,holding that “we have no difficultyin finding there was substantial evi-dence in the agency record uponwhich VDEQ as the trier of the factscould reasonably find that theOutparcels were not included in thepermit issued to AEGIS.”17



Contrast Aegis with May Depart-ment Stores Co. v. Virginia Depart-ment of Environmental Quality,18

where the Court of Appeals found aVDEQ finding of fact unsupported bythe evidence.19 In May, the VDEQrefused reimbursement under theVirginia Petroleum Storage TankFund (“Tank Fund”) based on a find-ing that May had excavated belowthe water table, which according toVDEQ “was not standard practiceand was not reimbursable.”20 TheVDEQ attributed the finding to datacontained in May’s site characteriza-tion report. The Court reviewed thereport as part of the record, andfound that the report did not identi-fy the water table, but ratherperched ground water.21 Absent anyevidence in the record regarding thelevel of the water table, the Courtruled that “DEQ’s determination thatMay excavated below the water tableis unsupported by evidence….”22

So while the findings of agenciesare accorded great deference underthe “substantial evidence” test,courts will examine the record tolook for some support for theagency finding, and will reverse theagency in cases where the evidencesimply does not exist.

Issues of Law

In reviewing an agency’s compli-ance with statutory and regulatorymandates, the courts are, for themost part, less deferential and willscrutinize agency action moreclosely.

In Browning-Ferris Industries v.Residents Involved in Saving theEnvironment, Inc.,23 the SupremeCourt held that the director of theVDEQ failed to make an explicitfinding that a proposed landfillwould not harm human health orthe environment prior to issuing apermit.24 The finding was requiredby Va. Code §10.1-1408.1(D), whichprovided, at the relevant time, inpertinent part that: “[n]o permit fora new solid waste management facil-ity shall be issued until the director

has determined, after investigationand evaluation of comments by localgovernment, that the proposed facil-ity proposes no substantial presentor potential danger to human healthor the environment.”25

Opponents of the landfill chal-lenged the issuance of a permit onthe basis that the director made nosuch determination. In the proceed-ings below, the director concededthat he did not make an explicitdetermination to this effect in theagency record.26 The VDEQ arguedthat an explicit determination is notrequired by the statute, that thedirector made an implicit determi-nation by issuing the permit, andthat the decision was supported bythe agency record.27

The Court held that the issuewas “purely one of law, containingno underlying factual issues,” andtherefore did not “apply a presump-tion of official regularity or takeaccount of the experience and spe-cialized competence of the adminis-trative agency.”28 The Court thenheld that the director had failed tocomply with a substantive statutorydirective, i.e. making an explicitdetermination.29 The Court heldthat the requirement of the deter-mination was a “substantive safe-guard” which was a “prerequisite tothe issuance of a permit.”30

Other cases also illustrate theCourt’s willingness to overturnagency action not in compliancewith statutes or regulations.31

Mixed Questions of Law and Fact

The relatively straightforwardanalysis employed by the courts inreviewing agency actions dealingwith pure issues of law or pureissues of fact, respectively, con-trasts sharply with judicial review ofmixed issues of law and fact. Asnoted above, courts have recog-nized that the legal/fact dichotomyis “simplistic” and “involves the dif-ficulty of drawing lines betweenlegal and factual issues.”32

In Environmental Defense Fund,Inc. v. Virginia State Water ControlBoard,33 the Court reviewed a chal-

lenge by the Environmental DefenseFund (“EDF”) and others to theState Water Control Board’s adop-tion of a water standard for dioxin of1.2 parts per quadrillion. The stan-dard generated a lot of controversy,and “the resulting record [was] volu-minous and complex.”34 The dioxinwater standard was adopted aftersignificant public hearings and pub-lic comment from the Environmen-tal Protection Agency (“EPA”), theVirginia Department of Health(“VDH”), EDF, industry, and others.In setting the dioxin standard, theBoard was carrying out its duty,under Virginia Code section 62.1-44.15(3a), to establish water qualitystandards, giving due considerationto economic and social costs andbenefits reasonably expected.35

The Court reviewed in somedetail portions of the record thatreflected VDEQ’s consideration ofstandard calculations by EPA andothers, as well as the voluminouscomments from the various stake-holders. EDF argued that the Boardarbitrarily responded only to eco-nomic and technological factors andtherefore violated its statutory dutyto fix a standard that consideredand protected reasonable publicstream uses.36

The Court noted that “EDF’schallenge in the instant caseadvances a legal issue, the Board’sfailure to comply with its statutorymandate.”37 However, the Courtnoted that the “…argument…pres-ents a mixture of legal and factualquestions, each indispensable to acorrect analysis of the substantivelegal issue and, as expressed inJohnston-Willis, illustrates the diffi-culty with the legal/factual dichoto-my.”38 The Court then stated that,pursuant to section 2.2-4027,“[p]roper judicial review of theBoard’s action must not be restrict-ed to legal issues, but must encom-pass ‘all…proofs’ found within theentire record.”39 The Court alsonoted that

[i]nterrelated factual and legalissues must be consideredtogether in the context of theentire record, with each exam-ined under the appropriatestandard of review. The court

Standards of Reviewcontinued from page 15


may then discharge its statutoryduty and “determine…whetherthe result reached…could rea-sonably be said,…to be withinthe scope or the legal authorityof the agency.”40

Based on this standard, andaccording due deference to theBoard’s factual findings, the Courtheld that there was substantialcredible evidence to support the 1.2dioxin water quality standard, andthat “based on the entire record,including ‘all…proofs,’ it can ‘rea-sonably be said’ that the Boardacted within its ‘legal authority’without error.”41 In upholdingVDEQ’s adoption of the dioxin stan-dard, and treating it as a mixedquestion of law and fact, the Courtappeared to rely more on the gener-al language in the APA, rather thanon any of the articulated standardspreviously expressed by the courts.

The clearest example of the diffi-culty attending judicial review ofagency decisions involving mixedquestions of law and fact can beseen by comparing two recent Courtof Appeals cases involving reim-bursements from the Tank Fund.

In Holtzman Oil Corp. v.Commonwealth,42 the Court ofAppeals reviewed the VDEQ’s denialof reimbursement from the TankFund requested by Holtzman OilCorp. After reviewing the Johnston-Willis articulation of the standardsof review, the Court of Appeals stat-ed that, with respect to administer-ing the Tank Fund:

The DEQ possesses the requisiteexperience and competencenecessary to determine levels ofcontamination and the reim-bursement due “owners andoperators” for the reasonablecosts incurred for their environ-mental cleanup efforts. As such,its interpretation of the statutesand regulations governing theTank Fund’s reimbursementpolicies are entitled to deferenceby a reviewing court that shouldonly be overturned when foundto be arbitrary and capricious.43

The Court reviewed in somedetail VDEQ’s rationale for denyingreimbursement, which was that theabatement measures taken byHoltzman were not corrective action

activities that were approved orwould have been approved had theybeen reviewed by the VDEQ prior tobeing carried out. As such, Holtzmanwas not entitled to reimbursement.

The Court also reviewed VDEQ’srationale for determining thatHoltzman’s activities did not consti-tute corrective action activities, andupheld the denial of reimburse-ment, stating that the Court accords“great deference to an administra-tive agency’s interpretation of theregulations it is responsible forenforcing” and that the Court wouldnot “substitute [its] own independ-ent judgment for the factual deter-minations of the DEQ.”44

The Court essentially held thatVDEQ has special expertise indetermining contamination levelsand the reimbursement due ownersand operators under the Tank Fund,VDEQ determinations in this areautilize its expertise and the VDEQmade the determination using itsexpertise. The Court therefore willnot substitute its judgment for thatof VDEQ and will accord VDEQ’sdecision great deference.

In December 2003, however, in7-Eleven v. Department of Environ-mental Quality,45 the Court ofAppeals reversed VDEQ’s partialdenial of 7-Eleven’s request forreimbursement under the TankFund, Virginia Code section 62.1-44.34:11(A)(2)(b).46 The Court hadgranted a rehearing of a previouspanel decision, and was sitting enbanc. The 7-3 decision includedtwo lengthy and strongly wordeddissents.

Significantly, and in contrast toHoltzman Oil Corp., the majority in7-Eleven concluded that VDEQ’spartial denial of reimbursement wasnot an issue of fact or even a mixedissue of fact and law, but rather wassolely an issue of law, i.e. statutoryinterpretation.47 As such, the Courtconcluded that even if there wassubstantial evidence in the recordsupporting VDEQ’s decision, theagency action should be set aside ifthe Court concludes that the agencyfailed to comply with a substantivestatutory directive.48

The Court held that in consider-ing the reimbursement amount duefrom the Tank Fund to 7-Eleven,VDEQ failed to consider the reason-ableness of a settlement paid by 7-Eleven to Hechinger (an adjoininglandowner whose property was con-taminated by the release), and thatthe VDEQ was statutorily requiredto do so. Simply put, the Court heldthat VDEQ misinterpreted VirginiaCode §62.1-44.34:11(A)(2)(b). TheCourt further held that VDEQ’sinterpretation was not entitled todeference.

The majority stated the issue asfollows: “In simple terms, the issuein this appeal is whether, in evaluat-ing the ‘reasonable and neces-sary…costs’ 7-Eleven incurred incompensating Hechinger for prop-erty damage caused by the petrole-um release, the Department coulddisregard the reasonableness of the$575,000 settlement.”49 The majori-ty held that “reasonable and neces-sary…costs” necessarily includedcosts incurred as a result of a settle-ment, because the statute specifi-cally includes as reasonable andnecessary costs the “payment ofjudgments for bodily injury andproperty damage caused by therelease of petroleum….”50 Thus, theCourt found that

the wording of the statute leavesno doubt that the legislatureenvisioned legal actions beingbrought against…the responsi-ble parties…and that the legisla-ture intended that the monetaryresult of those legal actions…,including settlements, be includ-ed as a cost to be reimbursed.51

In both Holtzman Oil Corp. and7-Eleven, the Court of Appeals wasreviewing the VDEQ’s compliancewith the statutory authority vestedin it under the Tank Fund.Notwithstanding the finding inHolztman Oil Corp. that VDEQshould be accorded great deferencein determining reimbursementsunder the Tank Fund, the majorityin 7-Eleven declared that the issuebeing reviewed was essentially anissue of law, i.e. statutory interpre-tation, and therefore did not requiredeference to VDEQ, nor application



of the “substantial evidence” test.52

This conflict between the differingstandard of review and level of def-erence in the two cases was notedby one of the dissents in 7-Eleven.53

As can be seen from HoltzmanOil Corp., 7-Eleven, and Browning-Ferris, the Court’s characterizationof the “error of law” being reviewedcan greatly impact the Court’s ulti-mate disposition of challenges toagency action, or at least the extentto which deference will be accordedthe agency findings and action.While the courts are at least attempt-ing to segregate the legal issues fromthe factual issues, these cases reflectthe difficulty in characterizing theissues involved. When the issueinvolves a mixed question of law orfact, courts at times apply the moregeneral standard found in the APA todetermine “whether the resultreached by the agency could reason-ably be said, on all such proofs, to bewithin the scope of the legal authori-ty of the agency.”54 The invocation ofthat standard appears to be a nebu-lous catch-all that is more easily metthan a torturous, if not impossible,parsing of legal and factual issues.

SummaryRead together, the APA and the

case law yield the following guidingprinciples practitioners should con-sider when contemplating challengesto agency action:

• Challenges to agency find-ings of fact likely will beunsuccessful under the “sub-stantial evidence” test ifthere is any substantive sup-port for the agency’s findingin the evidentiary record.Practitioners should ensurethat the pertinent facts anddocuments supportive of theclient’s position are in therecord for consideration bythe Court.

• If an agency’s factual findingsare simply not supported byany evidence in the agencyrecord, as in May, a chal-

lenge likely will be success-ful.

• Review the governing statuteand regulations carefully. Ifthe agency materially depart-ed from statutory or regulato-ry directives, the agencyaction may be overturned. Ofcourse, keep in mind that inmany cases the agency cansimply undertake the actionagain and get it right.55 A suc-cessful challenge may do nomore than buy time.

• When considering a chal-lenge to agency action thatinvolves both questions oflaw and fact, attempt to char-acterize the agency action asan issue of law. Even if thereis substantial evidence inthe record to support theagency’s fact finding, a find-ing that the agency failed tocomply with statutory orregulatory directives ren-ders the action invalid.

1 7-Eleven, Inc. v. Dep’t of Envtl. Quality,590 S.E.2d 84 (Va. App. 2003).

2 See VA. CODE § 2.2-4000–2.2-4031 (pro-viding procedures for administrative rule-making and adjudication).

3 See, e.g., Scheer v. Commonwealth ex rel.State Water Control Bd., 2001 WL803840, at *1 (Va. App. 2001); Johnston-Willis, Ltd. v. Kinley, 369 S.E.2d 1 (Va.App. 1988).

4 VA. CODE § 2.2-4027.5 Envtl. Defense Fund, Inc. v. Virginia StateWater Control Bd., 422 S.E.2d 608, 611(Va. App. 1992) (quoting Johnston-Willis,Ltd., 369 S.E.2d at 7).

6 369 S.E.2d 1 (Va. App. 1988).7 Johnston-Willis, Ltd., 369 S.E.2d at 9.8 VA. CODE § 2.2-4027.9 Id. In Johnston-Willis, Ltd., the Court ofAppeals characterized those considera-tions as pertinent in reviewing “an agencydecision.” Johnston-Willis, Ltd., 369S.E.2d at 8. However, section 2.2-4027arguably limits these considerations toreview of fact issues, not legal issues.

10 VA. CODE § 2.2-4027.11 Aegis Waste Solutions v. Concerned

Taxpayers of Brunswick County, 544S.E.2d 660, 665 (Va. 2001) (alteration in

original) (quoting Virginia Real EstateComm’n v. Bias, 308 S.E.2d 123, 125 (Va.1983)).

12 VA. CODE § 2.2-4027.13 Johnston-Willis, Ltd., 369 S.E.2d at 7.14 Id. at 9 (“In summary, the four issues of law

subject to judicial review pursuant to [sec-tion 2.2-4027] present distinct legal issuesthat must be reviewed by the court utiliz-ing separate standards.”). See also Envtl.Defense Fund, Inc., 422 S.E.2d at 612(“Interrelated factual and legal issues mustbe considered together in the context ofthe entire record, with each examinedunder the appropriate standard ofreview.”).

15 544 S.E.2d 660 (Va. 2001).16 Aegis Waste Solutions, 544 S.E.2d at 665.17 Id. at 666.18 2002 WL 1792095, at *1 (Va. App. 2002).19 May Dept. Stores Co. v. Commonwealth,

2002 WL 1792095, at *1, *3 (Va. App.2002) (not selected for publication).

20 Id. at *2.21 Id. at *4. “Perched ground water is a con-

tainment or pooling of water not connect-ed to the water table.” Id.

22 Id.23 492 S.E.2d 431 (Va. 1997).24 Browning-Ferris Indus. v. Residents

Involved in Saving the Env’t, Inc., 492S.E.2d 431, 435 (Va. 1997).

25 VA. CODE § 10.1-1408.1(D).26 Browning-Ferris Indus., 492 S.E.2d at

433.27 Id.28 Id. at 434.29 Id. at 435. Interestingly, VA. CODE § 10.1-

1408.1(D) did not and still does not usethe word “explicit,” and does not requirethat the determination be in writing.Nevertheless, the Court held that thedetermination “must appear on the face ofthe agency record. Unlike other statutoryprovisions…, Virginia Code § 10.1-1408.1(D) does not mandate that thedirector’s determination be reduced towriting. Thus it may be preserved as partof the DEQ record in a recorded or writtenformat.” Id. at 435. The VDEQ argued thatthe determination could be gleaned fromthe record as a whole. The Court seemedto say not only did the Director have tomake the determination; the Director hadto say in some form that he made it. Id.

30 Id. at 435.




News fromPractitioners

Federal ActivityReportby James T. Morgan, Jr. (“J.T.”)

Cross Media ElectronicReporting and RecordKeeping Rule

The Environmental ProtectionAgency’s (EPA) Cross MediaElectronic Reporting and

Record Keeping Rule (CROMERRR)which is intended to promote elec-tronic reporting and record keep-ing by the regulated community iscurrently at the Office ofManagement and Budget (OMB)undergoing review.

The primary objectives of theCROMERRR proposal, first pub-lished in the Federal Register onAugust 31, 2001, are:

• remove regulatory obstaclesto voluntary participationin electronic reporting andrecordkeeping for all EPAand EPA-approved stateprograms;

• require that all electronicsubmissions be made throughEPA or EPA-approved stateelectronic data systems and

• establish standards and prac-tices for implementing EPA’selectronic data system andevaluating EPA-approvedstate systems.

The rule will apply to the regu-lated community and States/locali-ties implementing EPA programs.EPA has received numerous com-

ments from the industry and theStates as the proposed rule willhave a substantial impact on howthese entities transition to, andimplement, electronic reporting. Itis intended that the CROMERRRwill provide a streamlined, crossmedia process for approving Stateelectronic reporting as well as pro-viding legal certainty to States,local agencies, the regulated com-munity, and software vendors so asto promote investment in the toolsto implement electronic reporting.Further, it is anticipated that a pre-dictable and efficient electronicreporting system will reduce costsfor both regulators and the regulat-ed community and therebyenhance reporting. Because therule affects all media, it will impactall EPA programs which presentlyrequire submission of paperreports.

Legal issues of particular con-cern have included the matter ofidentity proofing for enforcementpurposes. EPA needs to have ameans of assuring that the individ-ual who is attesting to the accuracyof the electronic submission is infact the party responsible for thereport. This is particularly impor-tant from an evidentiary perspec-tive. For example, in submission ofDischarge Monitoring Reports(DMRs) required under the CleanWater Act, EPA must be able to ver-ify who submitted the report,whether they are the person legal-ly responsible for its submission,and be able to hold that personaccountable for the accuracy of themonitoring data. In the absence ofpaper copies with signatures, thesequestions will be of significant con-sequence in any enforcementaction.

The rule is presently at OMBundergoing a 90-day review. It isanticipated that OMB will completeits review by mid-November andbaring any last minute changes,EPA expects to begin acceptingelectronic reports in 2005.

Clean Air Act RulesIn early 2004, EPA issued a

number of major rules intended toimprove air quality. These rulesare intended as a comprehensiveapproach to provide national toolsfor achieving significant improve-ments in air quality. Among themost significant of these rules are:

• Interstate Air Rule

• Mercury Rule, and

• Nonroad Diesel Rule

Interstate Air Quality Rule

In January 2004, EPA issued theproposed Interstate Air QualityRule which will result in the deepestcuts in sulfur dioxide (SO2) andnitrogen oxides (NOx) emissions inmore than a decade. The proposedrule will reduce SO2 and NOx emis-sions in 29 eastern states. SO2 emis-sions would be reduced by 3.6 mil-lion tons in 2010 and by another 2million tons each year once therules are fully implemented. Inaddition, NOx emissions would becut 1.5 million tons in 2010 and 1.8million tons annually in 2015.These cuts are significant from ahealth and environment perspec-tive because SO2 and NOx con-tribute to the formation of groundlevel ozone and particulate pollu-tion. Moreover, both SO2 and NOxcan be carried far from their pointof origin contributing to health andenvironmental problems hundredsof miles away. The rule calls for thestates to revise their state imple-mentation plans to include controlmeasures to meet specific statewideemission reduction requirements.The proposal allows the states toregulate power plant emissionsunder a cap and trade program sim-ilar to the Acid Rain approach.Because the rule allows for the flex-ibility of cap and trade, EPAbelieves this will allow for the mostcost effective way to achieve therequired reductions. Regardless of


J.T. Morgan, Jr. is with the Legal Counsel& Resource Management Division Office ofCriminal Enforcement of the Environmen-tal Protection Agency, Washington, DC.


how the states choose to move for-ward, emissions would be perma-nently capped and could notincrease.

Utility Mercury Reductions Rule

On January 30, 2004, and a fol-low on supplemental proposal ofFebruary 23, 2004, EPA proposed tosubstantially cut mercury emissionsfrom coal-fired power plants. TheUtility Mercury Reductions propos-al would cut mercury emissions byalmost 70 percent when fully imple-mented. EPA’s proposal calls for twoalternatives for controlling mercu-ry. The first would require powerplants to install what is known as“maximum allowable control tech-nology” (MACT) under section 112of the Clean Air Act and it is antici-

pated that implementation wouldreduce mercury by 14 tons by early2008. The second approach, out-lined in EPA’s February proposal,would create a market-based “capand trade” program that, if fullyimplemented, would reduce nation-wide utility emissions of mercuryby 33 tons. The cap and trade pro-gram is intended to add cost effec-tive flexibility as it will allow statesto choose whether or not to adoptthe program.

Nonroad Diesel Equipment Rule

In May 2004, EPA finalized acomprehensive rule to reduce emis-sions from nonroad diesel engines.The rule requires integration ofengine and fuel controls as a systemto gain the greatest emission reduc-tions. Nonroad diesel engines areused in construction equipmentsuch as backhoes and tractors, fork-lifts, industrial equipment such as

airport service vehicles and utilityequipment such as pumps and gen-erators. Nonroad diesel engines canproduce significant quantities ofNOx and particulate matter (PM),both of which contribute to seriouspublic health problems. Of particu-lar concern is the contribution ofNOx and other pollutants to the for-mation of ground level ozone, whilePM is a major contributor to healthproblems associated with asthmaand heart disease. The new enginestandards will reduce NOx and PMemissions by 90 percent and closelyrelated new fuel requirements willdecrease the allowable levels of sul-fur in fuel used in nonroad dieselengines by 99 percent. These newemission standards and the dieselfuel sulfur reductions complementthe similar program aimed at reduc-ing emissions and fuel sulfur forhighway diesel engines and fuel.

31 See, e.g., May Dept. Stores Co., 2002 WL1792095, at *3 (holding that the VDEQmisconstrued Tank Fund regulations in rul-ing that the regulations required prior writ-ten authorization for initial abatementactions).

32 Johnston-Willis, Ltd., 369 S.E.2d at 7.33 422 S.E.2d 608 (1992).34 Envtl. Defense Fund, Inc. v. Virginia State

Water Control Board, 422 S.E.2d 608,609 (Va. App. 1992).

35 Id. at 609; see VA. CODE § 62.1-44.15(3a)(“To establish such standards of qualityand policies for any state waters consis-tent with the general policy set forth in thischapter….”).

36 Id.37 Id. at 612.38 Id.39 Id.40 Envtl. Defense Fund, Inc., 422 S.E.2d at

612 (citing Va. Code § 9-6.14:17 (recodi-fied at VA. CODE § 2.2-4027)).

41 Id. at 612-13.42 529 S.E.2d 333 (2000).

43 Holtzman Oil Corp. v. Commonwealth,529 S.E.2d 333, 337 (Va. App. 2000) (cita-tion omitted).

44 Id. at 339–340 (citations omitted).45 590 S.E.2d 84 (2003).46 7-Eleven, Inc., 590 S.E.2d at 94.47 Id. at 88.48 Id.49 Id. at 87.50 Id. (citing VA. CODE § 62.1-44.34:11

(A)(2)(b)).51 Id. at 89.52 7-Eleven, Inc., 590 S.E.2d at 88. Also

considered on appeal was the VDEQ’sdetermination that 7-Eleven was entitledonly to the value of the permanent dam-ages caused to Hechinger’s property as aresult of 7-Eleven’s release. VDEQ deter-mined that only permanent damages wererecoverable because there was no evi-dence showing when, if at all, the contam-ination would naturally attenuate. Thus,the VDEQ considered the damage perma-nent, and applied the permanent dam-ages formulation in Packett v. Herbert, 377S.E.2d 438 (Va. 1989). Id. at 93. This find-ing was likewise reversed by the majority.Id. at 94.

53 Id. at 94–99 (Humphreys, J., dissenting).Judge Humphreys noted that “[t]his Courtspecifically recognized, in Holtzman Oil

Corp.…that ‘[t]he [Department] possessesthe requisite experience and competencenecessary to determine levels of contami-nation and the reimbursement due‘owners and operators’ for the reason-able cost incurred for their environmentalcleanup efforts,’…. I would find that theDepartment likewise possesses the requi-site experience and competence neces-sary to determine appropriate reimburse-ment under [the Tank Fund statute].”7-Eleven, Inc., 590 S.E.2d at 95(Humphreys, J., dissenting) (alterations inoriginal) (internal citations omitted) (quot-ing Holtzman Oil Corp., 529 S.E.2d at337).

54 VA. CODE § 2.2-4027.55 After the decision in Browning Ferris

Indus., that is exactly what VDEQ did withrespect to the Director’s determinationrequired under VA. CODE § 10.1-1408.1(D).See Residents Involved in Saving theEnv’t, Inc. v. Commonwealth, 2000 WL1015829, at *1, *2, *5 (Va. App. 2000) (notselected for publication) (finding theDirector’s actions following remand fromthe Supreme Court of Virginia satisfied the“‘statutorily mandated explicit finding’”required to issue a permit).


News from Practitionerscontinued from page 19


exceptions and entered the SpecialMaster’s proposed decree.

Virginia and Maryland have disput-ed control of the Potomac River forover 300 years because of conflictingcharters granted by different BritishKings. Virginia’s Constitution of 1776waived its claims to the river to theextent that the river was included inMaryland’s 1632 charter from KingCharles I, but the scope of the 1632charter was contested. Virginia v.Maryland, 540 U.S. 56, 56–57 (2003)(citing VA. CONST., ART. XXI (reprint-ed in 9 W. HENING’S STATUTES AT LARGE118 (1821))). Furthermore, Virginiadid not cede its property on the Vir-ginia shore or improvements con-structed thereon. Maryland, however,claimed exclusive rights to the river.

In 1785, Virginia and Marylandentered into the 1785 Compact,which settled many disputed issues.Article Seven of the 1785 Compactprovided that the citizens of eachstate would have full property rightsin the shores of the river adjoiningtheir lands and could build improve-ments that would not obstruct naviga-tion of the river. See VA. CODE. ANN. §7.1-7. The disputed boundary line wasfinally settled by binding arbitrationin the Black-Jenkins Award of 1877(“Award”). The Award placed theboundary at the low-water mark onthe Virginia shore, but Article Fourthof the Award also provided thatVirginia had “a right to such use of theriver beyond the line of low-watermark as may be necessary to the fullenjoyment of her riparian ownership,without impeding the navigation orotherwise interfering with the properuse of it by Maryland, agreeably tothe” 1785 Compact. Virginia, 540U.S. at 58 (quoting Act of Mar. 3,1879, ch. 196, 20 Stat. 482). TheAward was approved by Congress pur-suant to its constitutional authority.U.S. CONST., art. I, § 10, cl. 3. Act ofMar. 3, 1879, ch. 196, 20 Stat. 481.The Court noted that this approvalhas been held to have implicitly con-sented to the 1785 Compact. SeeWharton v. Wise, 153 U.S. 155, 173(1894).

Maryland did not dispute that Vir-ginia had the right to withdraw waterfrom the Potomac or constructimprovements appurtenant to itsshore. Maryland did argue, however,

that these rights were subject to Mary-land regulation because of Maryland’ssovereignty over the Potomac. Alter-natively, Maryland argued that even ifVirginia had unrestricted rights underthe 1785 Compact and the Award, itlost these rights by submitting toMaryland regulations. Virginia andMaryland both agreed that the 1785Compact and the Award governed thedispute.

The Court concluded that Vir-ginia’s rights to the river were not sub-ject to regulation under the 1785Compact and the Award. Because ofcongressional approval of the twoagreements, the Court interpreted theagreements as if they were federalstatutes. The Court pointed out that,unlike other articles in the 1785 Com-pact, Article Seventh did not say thatthe rights granted therein were sub-ject to regulation. Maryland arguedthat such regulatory power should beread into the 1785 Compact becauseits sovereignty over the river was wellsettled in 1785. The Court rejectedthis argument because sovereigntyover the river was in dispute until theAward in 1877. Article Fourth of theAward also did not mention Marylandhaving regulatory powers over Vir-ginia’s rights. Furthermore, theAward’s arbitrators explained that theright to construct improvementsbeyond the low-water mark was“inseparable from…the ‘full enjoy-ment of [Virginia’s] riparian owner-ship.’” Virginia, 540 U.S. at 63 (quot-ing Black-Jenkins Opinion, App. toReport, p. D-2 (1877)). Because theAward settled a dispute between sov-ereigns, the Court also rejected Mary-land’s contention that the Award onlyconfirmed private property rights.Finally, the Court rejected Maryland’sargument that Article Fourth limita-tions on Virginia’s use of the Potomacimplied Maryland regulatory authori-ty over these uses.

The Court also rejected the argu-ment that Virginia’s rights were sub-ject to regulation through acquies-cence. Acquiescence requires anassertion of sovereignty by one stateand an acquiescence by the other thatis “long and continuous.” Id. at 65.The Court said that only acquies-cence to regulation of waterway con-

FederalCourtsVirginia’s Rights to WithdrawWater From and ConstructImprovements On PotomacRiver Not Subject ToMaryland Regulation

Virginia v. Maryland, 540 U.S. 56 (2003).

by Michael Spencer, ’05L

In 1933, Maryland created a permitsystem for water withdrawal andwaterway construction within Mary-land’s territory. Between 1957 and1996, Virginia entities were granted,without objection, permits to with-draw water from, and constructwaterways on, the Potomac River.This string of permit grants was bro-ken in 1996, when Maryland’s Depart-ment of the Environment denied Fair-fax County’s permit request forconstruction of a water intake struc-ture. Virginia pursued administrativeappeals for two years, and in 2000invoked the original jurisdiction ofthe United States Supreme Court. TheCourt referred the matter to a SpecialMaster, who proposed a decree grant-ing Virginia’s request for recognitionof its right to withdraw water from theriver and construct improvements onthe Virginia shore free from Marylandregulations. Maryland filed exceptionsto the report, but a seven membermajority of the Court overruled these

CaseDigest



struction and water withdrawal wasrelevant here. Furthermore, acquies-cence would require a showing thatVirginia failed to protest Maryland’sassertion of sovereignty during theentire period. Although Virginia enti-ties submitted to Maryland regula-tions for approximately forty years,the Court decided that Virginia’sacquiescence was not proved becauseVirginia had asserted its sovereignauthority to withdraw water from thePotomac during negotiations leadingto the passage of section 181 of theWater Resources Development Act of1976, 90 Stat. 2917, 2939-40 (codi-fied at 42 U.S.C. § 1962d-11a). TheCourt did not decide, and consideredunclear, whether a forty-year periodof acquiescence would have been suf-ficient for prescription.

The principles of interpretationthe Court used in construing ArticleSeventh of the 1785 Compact andArticle Fourth of the Award will giveguidance on interpreting other arti-cles in these documents. Also,although the Court did not decide theissue, it signaled its hesitancy in find-ing prescriptive rights in disputesbetween states, even after decades ofacquiescence.

Fourth Circuit Finds Expert’sTestimony InadmissibleUnder Daubert

Marsh v. W.R. Grace & Co., 80Fed. Appx. 883 (4th Cir. 003).

by Jimmy Braswell, ’05L

In 1990, Halia S. Marsh, execu-trix ofthe estate of Robert Marsh, TheodoreMcLeod and Thomas R. Speer, execu-tor of the estate of Beulah M. McLeod,(“plaintiffs”), filed a products liabilitysuit against Frit Industries, W.R.Grace & Co., and Continental Casual-ty Company (collectively “defen-dants”), alleging that they had con-tracted cancer from the use ofdefendants’ tobacco fertilizer, whichwas contaminated by the broadleafherbicide picloram. At trial, the U.S.District Court for the Middle District

of North Carolina found that the testi-mony of plaintiffs’ expert, a physician,was inadmissible because it did notmeet the standards for expert testi-mony set out in Daubert v. MerrellDow Pharmaceuticals, Inc., 509 U.S.579 (1993). In addition, the districtcourt denied two of the plaintiffs’motions to amend their complaints onthe basis that they had undulydelayed making the motion and thatthe defendants would be prejudiced.The U.S. Court of Appeals for theFourth Circuit affirmed both of thedistrict court’s decisions.

The Court of Appeals firstreviewed the plaintiffs’ contentionthat the district court had erroneous-ly excluded their expert’s testimony.Citing Daubert, 509 U.S. at 589, thecourt noted that a district court mustact as a gatekeeper and only admitexpert testimony that is both reliableand relevant. Marsh v. W.R. Grace &Co., 80 Fed. Appx. 883, 885 (4th Cir.2003). The court only examined thereliability of the testimony, however,because the relevancy of the profferedtestimony was not in question. Inevaluating the reliability of theexpert’s testimony, the court used thefollowing four non-exclusive factors:“(1) whether the evidence can be test-ed, (2) whether the theory has beensubjected to peer review or publica-tion, (3) the known or potential rateof error of the technique, and(4) whether the relevant scientificcommunity has generally acceptedthe theory.” Id. at 886 (citingDaubert, 509 U.S. at 593-94).

The Court of Appeals agreed withthe district court’s ruling that theexpert’s opinion was unreliablebecause he had only conducted onetest on the plaintiffs — a test that didnot identify the agent that caused thecancer. Moreover, the expert had notrefuted possible alternative causes forthe plaintiffs’ cancer proposed by thedefendants. An expert need not ruleout all alternative causes, but must atleast explain why his opinion remainssound in light of alternative causesproposed by other parties. Id. at 887.

The court also agreed that theexpert’s theories, which served to sup-port his conclusion, had not been“subject to peer review or publica-tion.” Id. Furthermore, the courtnoted that neither the National Toxi-

cology Program nor the Environmen-tal Protection Agency had listed piclo-ram as a carcinogen. Because of theexistence of literature and findingscontradictory to the expert’s determi-nation, the court found that the dis-trict court was not in error in findingthat the expert had failed the secondDaubert factor.

The third Daubert factor, poten-tial rate of error of a technique, wasnot applicable because the expert’stechnique was not susceptible to ameasurable rate of error. The districtcourt did find that the expert’s failureto identify a no-effect level for piclo-ram, and his untested assumptionswith respect to the amounts of piclo-ram to which the plaintiffs wereexposed, had introduced an unac-ceptable potential for error. Therecord therefore supported the dis-trict court’s decision that “this meansof analysis by assumption could leadto an unacceptable potential forerror.” Id. at 887.

The court also agreed with the dis-trict court’s determination that, withrespect to the fourth Daubert factor,the expert’s methods were not gener-ally accepted by the medical commu-nity. Specifically, the expert hadfailed to demonstrate that his meth-ods were used by other experts in thefield. Furthermore, his opinion thatpicloram is a carcinogen is one that isnot generally accepted in the scientif-ic community. Because the expert’stestimony did not meet the four fac-tors listed in Daubert, the FourthCircuit found that the district courtdid not abuse its discretion in exclud-ing the testimony of the plaintiffs’expert witness.

The Fourth Circuit also agreedwith the district court’s decisiondenying leave to amend the com-plaints. Generally, leave to amendshould be granted unless the motionwas made in “bad faith or after unduedelay…or the amendment wouldcause undue prejudice to the non-moving party” Id. at 888. A finding ofundue delay must be “accompaniedby prejudice, bad faith, or futility.” Id.The district court found that allowingthe plaintiffs to add the chemical “2,4-D” as a possible source of plaintiffs’cancer at that point in the trial wouldhave prejudiced the defendants byforcing them to start a new discovery

Case Digestcontinued from page 21


process. The Fourth Circuit agreed,finding that there was no justifiablereason for waiting to file the motionsto amend, because plaintiffs hadknown of “2,4-D” since the beginningof the proceeding.

Fourth Circuit Rules thatSome Degree of Success onthe Merits Does Not EntitleCitizen Complainants toAttorney’s Fees AwardWithout Finding ofSubstantial ContributionUnder SMCRA

West Virginia HighlandsConservancy, Inc., v. Norton,343 F.3d 239 (4th Cir. 2003).

by Grace Doe, ’05L

The Department of the Interior’sOffice of Surface Mining Reclamationand Enforcement (“OSM”) rejectedthe West Virginia Highlands Conser-vancy’s and the National Wildlife Fed-eration’s (collectively “WVHC”) citi-zen complaint against Valley CampCoal Co. (“Valley Camp”). WVHCalleged that Valley Camp violated theSurface Mining Control and Reclama-tion Act (“SMCRA”), 30 U.S.C. § 1201et seq., for owning or controlling asubsidiary mining company that wasin violation of the SMCRA, and forfailing to disclose in its permit appli-cation its ownership or control. Underthe SMCRA, no mining permits maybe issued to a company that owns asubsidiary that is itself in violation ofthe SMCRA. On appeal, the InteriorBoard of Land Appeals (“Board”)remanded the case because OSM’sdecision was inadequately supportedand of questionable reliability. TheBoard, however, denied WVHC’smotion for attorney’s fees. WVHCnext filed an action in the UnitedStates District Court for the SouthernDistrict of West Virginia against GaleA. Norton (“the Secretary”), the Sec-retary of the Interior, seeking reviewof the Board’s denial of attorney’s fees.The district court granted WVHC’smotion for summary judgment, find-ing attorney’s fees appropriatebecause WVHC achieved some degree

of success on the merits and made asubstantial contribution to the deter-mination of the issues. The Secretaryappealed and the United States Courtof Appeals for the Fourth Circuitaffirmed with respect to the determi-nation of success on the merits butvacated the finding of substantial con-tribution.

The Fourth Circuit noted that “anagency’s interpretation of its own reg-ulation is binding on a court ‘unless[the interpretation] is plainly erro-neous or inconsistent with the regula-tion.’” West Virginia Highlands, 343F.3d at 245 (alteration in original)(quoting Bowles v. Seminole Rock &Sand Co., 325 U.S. 410, 414 (1945)).Further, the court found that defer-ence to an agency is not requiredwhen an interpretation is based oncommon law principles and is not amatter of specialized expertise. Ittherefore concluded that the lowercourt’s de novo review of OSM’s legaldetermination regarding attorney’sfees was appropriate.

Under SMCRA’s fee-shifting provi-sion, 30 U.S.C. § 1275(e), the Secre-tary of the Interior may assess rea-sonable fees against either party to anadministrative proceeding. The Sec-retary delegated to the Board thistwo-step fee assessment authority,thereby enabling the Board to holdOSM liable, provided that the plaintiffattained some degree of success onthe merits (so as to meet the eligibil-ity requirement) and substantiallycontributed to a determination of theissues (in order to satisfy the entitle-ment requirement). 43 C.F.R.§ 4.1101(a)(7); 43 C.F.R. § 4.1294(b).The Fourth Circuit ruled that theBoard’s decision to remand signifiedpartial success on the merits. Theadministrative remand required thatOSM develop a complete record andreconsider the merits of the case,thereby ensuring that the agencyresponsibly carried out its duties.The court “concluded that theremand obtained by the plaintiffs‘serve[d] a key purpose of the citizensuit provisions which is to ensurethat the agencies fulfill their dutiesunder the [Clean Water Act] respon-sibly.’” West Virginia Highlands, 343F.3d at 246 (alteration in original).The court held, therefore, that theremand represented sufficient suc-

cess on the merits to warrant anaward of attorney’s fees.

Additionally, the Court ruled thatthe district court had no authority toconclude whether WVHC satisfiedthe entitlement requirement. Bystatute, the factual finding of substan-tial contribution is subject to the Sec-retary’s discretion and determina-tion. Because issues specificallydesignated for agency determinationby Congress may not be decided by areviewing court, the Fourth Circuitremanded the question of substantialcontribution to the Board for furtherproceedings.

VirginiaCourtsCounty Fee Schedule forWaste Disposal Based onClassifications of EntitiesFound to Violate EqualProtection Clause

Estes Funeral Home v.Adkins, 266 Va. 297 (2003).

by Tiffany Davidson, ’05L

Several businesses challenging WiseCounty (“County”) waste disposalfees appealed a decision by the Cir-cuit Court of Wise County, whichhad dismissed the businesses’motion for declaratory judgmentagainst the County and the membersof the County Board of Supervisors(“Board”). The circuit court, basedon a finding that the methodologyused to establish the classificationsand the associated fee schedule wasreasonable, held County OrdinanceNo. 3-1993 (amended 2001) (“Ordi-nance”) valid and constitutional. TheSupreme Court of Virginia reversed.It held that there was no evidenceshowing that the classifications inthe Ordinance bore a reasonablerelationship to the County’s statedgovernment objective.

In order to address increasingamounts of solid waste disposal in the



County, the Board amended CountyOrdinance No. 3-1993, and estab-lished a new fee schedule for disposalto be levied on users of the County’swaste disposal facilities. The feeschedule made distinctions amongtypes of businesses and between busi-nesses and households. While theOrdinance established a range of feesfor most business classifications, itimposed flat fees on “Institutional,”“Small Retail,” “Small Service,”“Household,” and “Other” classifica-tions.

A group of Wise County businesseschallenged the Ordinance on equalprotection grounds, alleging thatthere were no true differencesbetween the classifications of house-holds and businesses and among dif-ferent types of businesses to warrantdifferent fees. The County contendedthat the classifications, which theBoard alleged were made by separat-ing types of businesses and assigningrates based on the number of weeklypick-ups and the size of disposal con-tainer used, were reasonable. TheBoard admitted, however, that it hadretained the flat fee charged to house-holds that had been adopted in 1993to retire a county loan debt. Accord-ing to the County, the methodologyand the classifications were “directlyrelated to the purpose of the Ordi-nance[,] which [was] to collect and torecover costs of waste disposal in amanner that distributes the costsamong the more intense” waste pro-ducers. Estes Funeral Home v.Adkins, 266 Va. 297, 303 (2003).

On appeal, the Supreme Court ofVirginia found that the businesses hadpresented enough evidence to estab-lish the unreasonableness of theOrdinance. The court noted that alegislature may classify entities withregard to legislation if “the govern-mental objective is legitimate and theclassifications bear a reasonable orsubstantial relation” to the govern-mental objective. Id. at 304 (citationsomitted). Equal protection requiresthat “classification[s] rest on real andnot feigned differences, that the dis-tinction have some relevance to thepurpose for which the classification ismade, and that the different treat-

ments not be so disparate, relative tothe difference in classification, as tobe wholly arbitrary.” Id. (citationsomitted). Because of the presumedvalidity associated with legislativeaction, the complainants had the bur-den of establishing the unreasonable-ness of the classifications.

Applying this test, the court foundthat while levying fees in order toaddress increasing amounts of wastewas a legitimate government objec-tive, and it was rational to base thosefees on the number of pick-ups andcontainer size, the actual fee scheduleand classifications used did not bear areasonable relation to that objective.The stated reason for the flat feeapplicable to households was to leavethe rate as it was before amendmentof the Ordinance. According to thecourt, this rationale did not bear anyrelation to the County’s stated govern-mental objective of establishing a feeschedule based on the number ofpick-ups and container size in orderto address increasing amounts of solidwaste. In addition, the County provid-ed no explanation for why householdswere treated differently than busi-nesses. With regard to the distinctionsamong businesses, both the Ordi-nance itself and the fee schedule con-tradicted the assertion that fees werebased on container size and the num-ber of pick-ups. There was also noexplanation in the record for whysome businesses were charged a flatfee and others a range of fees whenthe stated reasons for the classifica-tions were size of container and num-ber of pick-ups per week. Thus, thecourt held that complainants had suc-cessfully rebutted the Ordinance’spresumption of validity.

Because the complainants pre-sented sufficient evidence to over-come the presumption of validity, theburden then shifted to the County topresent evidence sufficient to makereasonableness debatable. Here, theBoard failed to present such evidence.Accordingly, the court found that theclassifications in the Ordinance werenot based on true differences and,therefore, violated the EqualProtection Clause. The court reversedthe judgment of the circuit court andentered judgment in favor of the busi-nesses.

DEQ Must ConsiderSettlements WhenDeterminingReimbursements from Tank Fund

7-Eleven, Inc. v. Dept. ofEnvtl. Quality, 590 S.E.2d 84(Va. App. 2003).

by April Ballou, ’05L

7-Eleven, Inc. (“7-Eleven”) appealed adecision by the Virginia Department ofEnvironmental Quality (“DEQ”) sub-stantially denying the company’srequest for reimbursement from thePetroleum Tank Storage Fund (“TankFund”) for settlement expensesincurred as a result of a petroleum spill.After a rehearing en banc, the Court ofAppeals of Virginia reversed the lowercourt’s decision, which had affirmedthe DEQ award. The Court of Appealsheld that: (1) DEQ erred in not consid-ering the reasonableness of the settle-ment when calculating 7-Eleven’s enti-tlement to reimbursement; and (2)DEQ improperly limited 7-Eleven’sreimbursement to the diminution inthe value of the damaged property. 7-Eleven, Inc. v. Dept. Envtl. Quality,590 S.E.2d 84 (Va. App. 2003). Thecourt remanded the case to the trialcourt for reconsideration.

In June of 1990, 7-Eleven discov-ered that a gasoline leak on its land hadpolluted nearby property owned byHechinger, Inc. (“Hechinger”).Hechinger filed suit against 7-Elevenfor property damage; however, the par-ties agreed to a settlement of $575,000during trial. After settling the dispute,7-Eleven sought reimbursement fromDEQ pursuant to VA CODE ANN § 62.1-44.34:11(A)(2)(b), which provides thatapplicants may recover the “reason-able and necessary…costs incurred forreleases [of petroleum]…includingpayment of judgments for…propertydamage.” VA CODE ANN. § 62.1-44.34:11(A)(2)(b) (Supp. 2003). DEQreimbursed 7-Eleven $103,117, basedon the diminution in market value ofHechinger’s property.

The Court of Appeals began it analy-sis by finding that the issues before itwere questions of statutory interpreta-tion and did not fall within the scope ofDEQ’s expertise. Specifically, the court

Case Digestcontinued from page 23


concluded that DEQ had erred bynegating 7-Eleven’s claim throughstatutory interpretation, rather thanmaking a factual finding regarding thereasonableness of the settlement.Because statutory interpretation is theprerogative of the judiciary where nospecial agency expertise is necessary toresolve the issues, the court accordedlittle deference to DEQ’s interpretation.

The court next determined that VACODE ANN. § 62.1-44.34:11(A)(2)(b)required DEQ to consider settlementexpenses when assessing the “reason-able and necessary…costs” incurred incompensating third parties as a resultof petroleum spills. Neither the ordi-nary meaning of the word “costs,” norany other language in the statute, sug-gested that the reimbursement schemepertained exclusively to judgments orexcluded settlement expenses. Basedon the plain language of the provision,the court concluded that the statute

manifested a legislative intent toinclude settlements in the class ofpotentially reimbursable “costs.”

In addition, the court found that aremedial statute like the Tank Fundshould be construed liberally to giveeffect to its underlying legislative pur-pose. The legislature established theTank Fund as a prompt and efficientmeans to serve the public’s interest byprotecting the environment and com-pensating parties injured as a result ofpetroleum releases from undergroundstorage tanks. The court ruled that thispolicy would be promoted only if DEQconsidered settlement costs. Other-wise, parties would have little incentiveto accept reasonable settlementsinstead of proceeding with adjudica-tion, which in turn would result in DEQpaying more out of the Tank Fund. Thecourt also noted that DEQ had changedits policy in 1998 and now considersthe reasonableness of settlements

when assessing reimbursements. Thus,the court held that DEQ erred by con-cluding that the full amount of 7-Eleven’s settlement was not a reim-bursable cost.

Next, the court found that DEQimproperly interpreted its internalthird-party assessment guidelines tolimit recovery for permanent propertydamage to those costs listed specifical-ly in those guidelines. DEQ failed toconsider that 7-Eleven was sued byHechinger, in accordance with Virginiatort law, for other expenses resultingfrom the property damage. Thus, DEQerred in limiting 7-Eleven’s reimburse-ment to the diminution in value ofHechinger’s property without consider-ing whether any of the other allegedexpenses were caused by the spill andwere, therefore, properly reimbursedby the Tank Fund.

SummerRegulatoryReview

Federal RegulationsDioxins in Land-AppliedSewage SludgeStandards for the Use orDisposal of Sewage Sludge:Decision Not To RegulateDioxins in Land-Applied SewageSludge, 68 Fed. Reg. 61,083(October 24, 2003)(to be codi-fied at 40 CFR pt. 62).

The U.S. Environmental ProtectionAgency (EPA) has decided not to reg-ulate the application of sewage sludgeto crops as fertilizer or to limit its useas animal feed based on dioxin con-tent. The Agency concluded that thedioxins found in sewage sludge do notpose a significant risk to humanhealth or the environment.

In reaching its decision, EPA con-sidered the effects of a theoreticalfarm family’s exposure to dioxin.

According to its model, individualswho live and work on a farm, usesewage sludge as a fertilizer on theircrops and as feed for their animals,and then consume the resultant cropsand meat products would, over theirlifetimes, constitute those personsmost likely be exposed to high levelsof dioxins. The EPA’s analysis showedthat even for this theoretical popula-tion, only 0.003 new cases of cancercould be expected to occur each yearor 0.22 new cases of cancer over aspan of 70 years. By comparison, therisk of developing new cases of cancerin the general population resultingfrom exposure to dioxin-laced sewagesludge would be even lower due to sig-nificantly lower rates of exposure todioxin in land-applied sewage sludge.

WetlandsAfter the U.S. Supreme Court in SolidWaste Agency of Northern CookCounty v. U.S. Army Corps ofEngineers, 531 U.S. 159 (2001) (alsoknow as SWANCC) overturned theCorps’ assertion of federal jurisdictionover certain isolated wetlands basedon the presence of migratory birds,EPA and the Corps issued new inter-nal guidance to be followed by theirfield offices, while reaffirming federal

jurisdiction over the majority of wet-lands not impacted by the Court’sdecision. In January, 2003, the EPAissued more agency guidelines thatwould have removed protections fromselected small tributaries, isolatedintrastate wetlands that are discon-nected from major rivers and lakes,and selected isolated non-navigableintrastate waters such as prairie pot-holes and playa lakes.

In addition to the internal guid-ance, EPA proposed a rule that wouldchange regulations under the CleanWater Act, 33 USCS §§ 1251 et seq.specifically aimed at protecting isolat-ed waters. After soliciting public com-ments on the proposed rule to excludeisolated streams and other isolatedwaters from regulation, the Adminis-tration faced strong opposition fromstates, sportsmen, and even a biparti-san majority of Congress andannounced on December 16, 2003 thatEPA and the Corps would not issue thenew rule limiting federal regulatoryjurisdiction over isolated wetlands.

Air Toxics RequirementsNational Emission Standards forHazardous Air Pollutants: Site



Remediation, 68 Fed. Reg.58,172 (October 8, 2003)(to becodified at 40 CFR pt. 63).

The EPA promulgated several nationalemission standards for hazardous airpollutants. As a result, the followingindustrial operations must meet haz-ardous air pollutant emission stan-dards by using maximum achievablecontrol technology: Gasoline Distribu-tion, Benzene Waste Operations,Asbestos, Chlorine and HydrochloricAcid Emissions from Chlorine Produc-tion, Stationary Combustion Tur-bines, Miscellaneous Coating Manu-facturing, Plastic Parts and Products(Surface Coating), Iron and SteelFoundries, Lime Manufacturing, Pri-mary Magnesium Refining, MercuryEmissions from Mercury Cell Chlor-Alkali Plants, Organic Liquids Distrib-ution (Non-Gasoline), MiscellaneousOrganic Chemical Manufacturing,Taconite Iron Ore Processing, SiteRemediation: Air Toxics Require-ments, Miscellaneous Metal Parts andProducts (Surface Coating), ChemicalRecovery Combustion Sources atKraft, Soda, Sulfite, and Stand-AloneSemichemical Pulp Mills, SurfaceCoating of Metal Cans.

The standards applied to site reme-diation exempt Superfund remedia-tion undertaken as actions pursuantto the Comprehensive EnvironmentalResponse, Compensation, and Liabil-ity Act (CERCLA), 42 U.S.C.A. §§9601 et seq., and the Resource Con-servation and Recovery Act (RCRA),42 U.S.C.A. §§ 6901 et seq.

Motorcycle EmissionsControl of Emissions FromHighway Motorcycles, 69 Fed.Reg. 2,397 (January 15,2004)(to be codified at 40 CFRPts. 9, 86, 90 & 1051).

The EPA promulgated new federalexhaust emissions standards for allclasses of highway motorcycles. Thesestandards parallel those being imple-mented in California, but will notbecome effective nationally until the

2006 model year. Motorcycles withengine displacement of less than279 cc must now meet exhaust emis-sion standards of 1.0 g/km of HC (pre-viously 5.0 g/km) and 12.0 g/km of CO(same standard). While motorcycleswith engine displacements of less than50 cc (previously unregulated) mustmeet the regulations, the useful lifeover which they must comply is set at6,000 km. The EPA also adopted anoptional HC+NOx standard of 1.4 g/kmfor under-279 cc motorcycles, whichwill be required of manufacturerswishing to average their emissions ortransfer emission credits across class-es. For Class III motorcycles, in addi-tion to meeting the HC and CO stan-dards, manufacturers must, on acorporate-average basis, comply with a“Tier-1’’ standard of 1.4 g/km HC+NOxstarting in the 2006 model year, and a“Tier-2’’ standard of 0.8 g/km startingin the 2010 model year. The processby which manufacturers certify theirmotorcycles — the test procedures,the driving cycle and other elements ofthe federal program — also remainsunchanged.

Monitoring RequirementsRevisions To Clarify the Scopeof Certain MonitoringRequirements for Federal andState Operating PermitsPrograms, 69 Fed. Reg. 3,201(January 22, 2004)( to be codi-fied at 40 CFR pts. 70 & 71 ).

The EPA declined to adopt changes toregulatory text implementing title V ofthe Clean Air Act, 42 U.S.C. § 7401 etseq., suggested by a proposed rule. SeeProposed Revisions To Clarify theScope of Sufficiency MonitoringRequirements for Federal and StateOperating Permits Programs, 67 Fed.Reg. 58,561(September 17, 2002).Specifically, the proposed rule wouldhave deleted language requiring title Vpermits to contain monitoring provi-sions, consistent with paragraph(a)(3), sufficient to assure compliancewith the terms and conditions of thepermit. The EPA decided that deletingthe text was unnecessary to reduceconfusion.

Rather the EPA determined thatnotwithstanding the textual recitation

in 40 CFR 70.6(c)(1) and 71.6(c)(1) ofmonitoring as a permit element, thecorrect interpretation is that thesesections do not require or authorizeadditional review and enhancement ofexisting monitoring in title V permits.Other review and enhancement maybe required under the periodic moni-toring rules and other laws.

Emission Standards forStationary CombustionTurbinesNational Emission Standards forHazardous Air Pollutants forStationary CombustionTurbines, 69 Fed. Reg. 10,511(March 5, 2004) (to be codifiedat 40 CFR Pt. 63).

The EPA promulgated national emis-sion standards for hazardous air pollu-tants (HAP) for stationary combustionturbines. Stationary combustion tur-bines are major sources of emissionssuch as formaldehyde, toluene, ben-zene, and acetaldehyde. Standards willrequire all major sources to meet HAPemission standards reflecting theapplication of the maximum achiev-able control technology (MACT) forcombustion turbines.

The EPA has also adopted a finalemission standard requiring control offormaldehyde emissions for all new orreconstructed stationary combustionturbines in certain types of turbines.

Virginia RegulationsStationary SourceEmissions Control ZonesExisting Stationary Sources,20:12 Va. R. 1498 (February 23,2004)(amending 9 VAC 5-40-300, 9 VAC 5-40-240, 9 VAC 5-40-310, 9 VAC 5-40-5200, and 9VAC 5-40-5220).Effective March 24, 2004, theDepartment of Environmental Qualityremoved the exemptions for sources inJames City County, York County,Poquoson City, and Williamsburg Cityto render those sources subject to the

Summer Regulatory Reviewcontinued from page 25


volatile organic compounds (VOC)standards for existing sources, as is thecase in the other jurisdictions withinthe Hampton Roads Emissions VOCControl Area.

DEQ also added one new VOC andone new NOx Emissions Control Area:the Western Virginia Emissions Con-trol Area (Counties of Botetourt, Fred-erick, and Roanoke, and Cities ofRoanoke, Salem and Winchester).

In addition, DEQ subjected affectedfacilities to additional regulation fordifferent pollutants. Previously, a facil-ity was not subject to standards for aparticular pollutant if it was alreadysubject to other emission standards.The new language only exempts facili-ties from additional standards for thesame pollutant.

DEQ also added four new standardsfor emission sources in the NorthernVirginia volatile organic compoundsemissions control area. The new stan-dards affect portable fuel containerspillage control (Rule 4-42), solventcleaning (Rule 4-47), mobile equip-ment repair and refinishing (Rule 4-48), and architectural and industrialmaintenance coatings (Rule 4-49).

Emissions Credit TradingRegulation for EmissionsTrading, 20:11 Va. R. 1222(February 9, 2004)(to be codi-fied 9 VAC 5-140-421).

Effective beginning January 12, 2004,DEQ established a NOx BudgetTrading Program, by which DEQ canauction allocated NOx emissions set-asides. These auctions will be subjectto reserve prices and proceeds accrueto the state treasury.

Solid Waste FacilitiesSolid Waste ManagementRegulations, 19:25 Va. R. 3782(August 25, 2003)(amending 9VAC 20-80-10, and numerousother provisions of 9 VAC 20-80; adding 9 VAC 20-80-105 and9 VAC 20-80-205).

To address statutory changes enactedby the General Assembly, DEQ prom-

ulgated several regulations which(i) require the Director of DEQ tomake a needs determination for addi-tional solid waste disposal capacity;(ii) require additional documentationfrom landfill operators for permitapplications; (iii) require operators toguarantee disposal capacity to locali-ties; (iv) require a host communityagreement between the locality andthe operator; (v) require solicitationof comments from geographicallycontiguous jurisdictions; (vi) estab-lish minimum numerical inspectionfrequencies; (vii) address how thedepartment responds to citizen com-plaints; (viii) require implementationof a remedy within a specific period ifa methane gas release is discovered;and (ix) add a schedule for evaluationof presumptive remedy for violationof ground water protection standards.The changes took affect onSeptember 24, 2003.

Water QualityWater Quality Standards, 19:25Va. R. 3285 (August 25,2003)(amending 9 VAC 25-260-5 through 9 VAC 25-260-30, 9VAC 25-260-50, 9 VAC 25-260-140, 9 VAC 25-260-170, [9 VAC25-260-300, ] 9 VAC 9 VAC 25-260-310, 9 VAC 25-260-320, 9VAC 25-260-380 through 9 VAC25-260-450, and 9 VAC 25-260-470 through 9 VAC 25-260-540,[adding 9 VAC 25-260-415 ];repealing 9 VAC 25-260-150, 9VAC 25-260-190 through 9 VAC25-260-240, and 9 VAC 25-260-340;). 9 VAC 25-280.

The State Water Control Board prom-ulgated several regulations that (i) addnew definitions; (ii) modify the mixingzone and antidegradation policies;(iii) update the Table of Parameterswith new and revised criteria; (iv) statethat the taste and odor criteria apply atthe drinking water intake; (v) movethe groundwater standards to a newregulation; (vi) delete and modify spe-cial standards; (vii) add a site-specificcriterion for copper in HamptonRoads; (viii) update use designationsfor trout streams and public water sup-plies; (ix) identify Class VII swamp

waters in the Chowan basin; and(x) rearrange the Middle and LowerJames River basin tables. The changestook effect on February 12, 2004.

Underground Storage TanksUnderground Storage Tanks:Technical Standards andCorrective ActionRequirements, 20:12 Va. R.1505 (February 23,2004)(amending 9 VAC 25-580-10, 9 VAC 25-580- 50, 9 VAC25-580-130, 9 VAC 25-580-270,9 VAC 25-580- 320; repealing 9 VAC 25-580-290).

Effective on March 24, 2004, DEQchanged underground storage tanks(UST) technical standards and cor-rective action requirements intoagreement with the Code of Virginiaand the federal UST regulation anddeleted the requirement for tankowners/operators to obtain aCorrective Action Permit from thedepartment prior to initiating correc-tive actions.

Sewage TreatmentSewage Collection andTreatment Regulations, 20:9 Va.R. 891 (January 12, 2003)(to becodified 9 VAC 25- 790-10through 9 VAC 25-790-1000).

Effective on February 12, 2004, theSewage Collection and Treatment(SCAT) regulation transferred respon-sibility for supervision and control ofsewerage and sewage treatment worksfrom the Virginia Department ofHealth to the State Water ControlBoard. The regulation is recodifiedfrom the Virginia Department ofHealth 12 VAC 5-581 to State WaterControl Board 9 VAC 25-790. SWCBand DEQ adopted changes to makethe regulation conform to the StateWater Control Board’s statutoryauthority, code citations, organizationand terminology.


Environmental Law NewsVirginia State BarEighth & Main Building707 E. Main Street, Ste. 1500Richmond, VA 23219-2800

PRST STDU.S. POSTAGE

PAIDPERMIT NO. 709

RICHMOND

Virginia State Bar Environmental Law Section2004-05 Board of Governors

Karen L. LeboChairHunton & Williams951 East Byrd StreetRichmond, VA 23219(t) 804/787-8953(f) 804/[email protected]

Karla C. HaynesVice ChairCity Attorney’s OfficeReal Estate Annex, Building 202412 North Landing RoadVirginia Beach, VA 23456(t) 757/427-4531(f) 757/[email protected]

Heather Nixon StevensonSecretaryMcGuire Woods LLP901 E. Cary StreetRichmond, VA 23219-4030(t) 804/775-1380(f) 804/[email protected]

Barbara M. RoseEditorCounty Attorney’s OfficePO Box 470Hanover, VA 23069-0470(t) 804/537-6035(f) 804/[email protected]

Marina L. PhillipsImmediate Past ChairKaufman & Canoles150 West Main St., Suite 2100Norfolk, VA 23510(t) 757/624-3279(f) 757/[email protected]

Manning Gasch, Jr. (“Chip”)Hunton & Williams 951 E. Byrd StreetRichmond, VA 23219-4074(t) 804/788-8342(f) 804/[email protected]

Kathy R. FrahmDept. of Environmental QualityPO Box 10009Richmond, VA 23240-0009(t) 804/698-4376(f) 804/[email protected]

James T. Morgan, Jr. (“J.T.”)Environmental Protection AgencyMailcode 2232 A1200 Pennsylvania Ave. NWWashington, DC 20004(t) 202/564-7684(f) 202/[email protected]

Kelley Anne KlineSmithfield Foods200 Commerce StreetSmithfield, VA 23430(t) 757/365-3027(f) 757/[email protected] R. LinkerDept. of Environmental QualityPO Box 10009Richmond, VA 23240(t) 804/698-4000(f) 804/[email protected] B. GrahamKaufman & Canoles4801 Courthouse St., Suite 300Williamsburg, VA 23188(t) 757/259-3855(f) 757/[email protected] M. SmithHunton & WilliamsRiverfront Plaza, East Tower951 E. Byrd St.Richmond, VA 23219-4074(t) 804/787-8086(f) 804/[email protected] C. ShaffnerVSB LiaisonVirginia State Bar707 E. Main St., Suite 1500Richmond, VA 23219-2800(t) 804/775-0514(f) 804/[email protected]

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