The opinion filed on March 3, 2015, and published at 778 F.3d 1119, is hereby amended as follows:
On page 1132, the following text should be placed in a new footnote inserted after the words <is the Truck Association's own doing.>:
With this amendment, the petition for panel rehearing is denied. Judge Silverman voted to deny the petition for rehearing en banc and Judges Noonan and Huck so recommend. The full court has been advised of the petition for rehearing en banc and no judge of the court has requested a vote on whether to rehear the matter en banc. Fed. R.App. P. 35.
Appellees' petition for rehearing and petition for rehearing en banc are
HUCK, Senior District Judge:
The California Dump Truck Owners Association (Truck Association) appeals the dismissal of its federal preemption challenge to a California environmental regulation.
The CAA creates a partnership between the federal government and the states to combat air pollution. Natural Res. Def. Council, Inc. v. U.S. Dep't of Transp., 770 F.3d 1260, 1264 (9th Cir. 2014). Under the CAA, the EPA must prescribe national ambient air quality standards (NAAQS) for certain air pollutants, and each state is responsible for implementing those standards within its borders. 42 U.S.C. §§ 7409-10. Specifically, each state must adopt, and submit for the EPA's approval, a SIP that provides for the "implementation, maintenance, and enforcement" of the NAAQS. Id. § 7410(a)(1). While a state has considerable discretion in formulating its SIP, the SIP must include "enforceable emission
In 2008, the California Air Resources Board (CARB) adopted the Truck and Bus Regulation (Regulation), Cal.Code Regs. tit. 13, § 2025, for incorporation into California's SIP.
In April 2011, the Truck Association filed an amended complaint in district court to enjoin enforcement of the Regulation. It claimed that, under the Supremacy Clause of the United States Constitution, the Regulation was preempted by the Federal Aviation Administration Authorization Act (FAAAA), which prohibits states from enacting regulations "related to a price, route, or service of any motor carrier ... with respect to the transportation of property." 49 U.S.C. § 14501(c)(1). The Truck Association alleged that its motor carrier members would have to increase prices and alter their routes and services to offset the costs of complying with the Regulation. The Truck Association sought a declaration that the FAAAA preempted the Regulation and an injunction against its enforcement by CARB. The Natural Resources Defense Council, Inc. (NRDC) intervened on CARB's behalf.
In November 2011, the Truck Association filed a motion for summary judgment as well as a motion for preliminary injunction to enjoin enforcement of the Regulation until dispositive motions could be decided. The following month, the NRDC filed a cross-motion for summary judgment. The district court denied the Truck Association's motion for preliminary injunction and took the motions for summary judgment under submission.
Throughout this time, the Regulation had progressed through the EPA's SIP approval process. In May 2011, a month after the Truck Association filed its amended complaint, CARB submitted the Regulation to the EPA.
On May 24, 2012, while the parties' summary judgment motions remained pending, the NRDC filed a notice of supplemental authority informing the district court of the EPA's approval of the Regulation as part of California's SIP. At the court's request, the parties submitted briefing on whether the EPA's action affected the posture of the case. On December 19, 2012, the court dismissed the suit, finding that it no longer had subject matter jurisdiction under § 307(b)(1) of the CAA. It further found that, even if it retained jurisdiction, dismissal was proper under Federal Rule of Civil Procedure 19 because the EPA was a necessary and indispensable party. The Truck Association appealed both grounds for the district court's dismissal.
Shortly after filing this appeal, the Truck Association separately filed a petition in this Court under § 307(b)(1) and Rule 15(a) of the Federal Rules of Appellate Procedure, seeking review of the EPA's approval of the Regulation. Petition for Review, Cal. Constr. Trucking Ass'n v. EPA, No. 13-70562 (9th Cir.2013). We dismissed the petition as untimely because it was not filed within sixty days of the EPA's notice of final rule, as required by § 307(b)(1). Order, Cal. Constr. Trucking Ass'n, No. 13-70562. The Truck Association also filed a petition with the EPA requesting reconsideration of its approval of the Regulation.
We review a district court's dismissal of a complaint for lack of subject matter jurisdiction de novo. Carolina Cas. Ins. Co. v. Team Equip., Inc., 741 F.3d 1082, 1086 (9th Cir.2014).
Section 307(b)(1) of the CAA states:
42 U.S.C. § 7607(b)(1) (emphasis added). As a result, "invalidation of an EPA-approved SIP may only occur in the federal appellate courts on direct appeal from the Administrator's decision." United States v. Ford Motor Co., 814 F.2d 1099, 1103 (6th Cir.1987); see also Sierra Club v. Ind.-Ky. Elec. Corp., 716 F.2d 1145, 1152 (7th Cir.1983) ("Once a plan is adopted by the state and it withstands any subsequent
The Truck Association, however, argues that it is not challenging the SIP, or the EPA's approval thereof. It claims that its suit, which it filed before the EPA's final action approving the Regulation as part of California's SIP, challenges only the state Regulation, which is distinct from the federal SIP. The Truck Association contends that invalidating the Regulation would render it unenforceable by CARB, but "would not prohibit enforcement of the SIP" by the EPA and private citizens. Truck Association members would still purportedly benefit from the Regulation's invalidation because of the "enormous difference in the enforcement mechanisms between the state regulation and the federalized SIP." Specifically, the Truck Association points out that under the CAA, citizen suits may not be commenced without first providing the alleged violator with sixty days' notice.
The Truck Association relies heavily on the fact that its complaint, on its
In Virginia v. United States, for example, the Fourth Circuit held that § 307(b)(1) applied to Virginia's claim that provisions of the CAA were "unconstitutional on their face." Virginia, 74 F.3d at 522. After the EPA took final action finding deficiencies in Virginia's pollution programs, Virginia filed suit in district court alleging that the CAA sanctions that would be triggered by the EPA's actions were unconstitutional. Virginia sought an injunction preventing the EPA from enforcing those sanctions. The district court dismissed Virginia's suit under § 307(b)(1), and the Fourth Circuit affirmed. The Fourth Circuit explained that "the practical objective of the complaint [was] to nullify final actions of EPA," and held that Virginia could not "circumvent direct review in the circuit court" by "framing its complaint as a constitutional challenge to the CAA." Id. at 522-23 (emphasis added).
The Eighth Circuit reached a similar conclusion in Missouri v. United States, 109 F.3d 440 (8th Cir.1997). There, Missouri challenged the constitutionality of the CAA's sanctions scheme after the EPA found Missouri to be noncompliant with the CAA. The Eighth Circuit held that § 307(b)(1) applied to Missouri's suit, stating:
Id. at 442.
In New England Legal Foundation v. Costle, 666 F.2d 30 (2d Cir.1981), the Second Circuit found § 307(b)(1) to apply to a
Finally, in Benning v. Browner, No. Civ. A. 97-CV-7058, 1998 WL 717436 (E.D.Pa. Sept. 24, 1998), the court applied the reasoning of Virginia and Missouri to a suit alleging that a regulation incorporated into Pennsylvania's SIP violated the Equal Protection Clause. The court found the plaintiffs were "essentially challenging the appropriateness of the EPA Administrator's action in approving a regulation they believe to be unconstitutional." Id. at *3. It concluded that the plaintiffs' "practical objective [was] to nullify the EPA's final action," and dismissed the suit under § 307(b)(1).
These cases demonstrate that a claim need not be framed as a challenge to the EPA for § 307(b)(1) to apply. Instead, § 307(b)(1)'s scope extends to claims that, as a practical matter, challenge an EPA final action, including its approval of a SIP.
The Truck Association seeks to enjoin CARB from enforcing the Regulation, which the Association alleges is preempted by federal law. However, the EPA's approval of the Regulation made it part of California's SIP, and the SIP's effectiveness depends largely on its enforcement by the state. Enjoining enforcement of the Regulation by CARB would effectively nullify that provision of California's SIP. Furthermore, in alleging that the Regulation is preempted, the Truck Association is also effectively challenging the EPA's determination that federal law does not prohibit the Regulation. Thus, while the Truck Association had no "secret intent" of challenging the EPA when it filed suit, and it does not now seek to prohibit the EPA's enforcement of the SIP, the practical, and therefore legal, effect of the Truck Association's suit is to challenge both the EPA and the SIP.
While the Truck Association asserts that "[t]he validity of the SIP is not at issue,"
Indeed, the EPA approved the Regulation in part because it concluded that CARB could effectively enforce it. The EPA stated:
76 Fed.Reg. 40659 (emphasis added). Clearly, the SIP's effectiveness in attaining the EPA's NAAQS is directly tied to its enforceability by CARB, and would be vitiated if such enforcement were enjoined.
Furthermore, the Truck Association's assertion that it is not challenging the SIP is belied by its acknowledgment that the invalidation of the state Regulation that it desires would make the SIP's enforcement more difficult, and that such circumstances would be beneficial to its members. While touting the continued viability of the SIP via EPA actions and citizen suits, the Truck Association readily admits that such enforcement will be largely ineffective, with SIP violations likely to go undetected for months if not years. Thus, if successful, the Truck Association's suit would severely undermine the SIP's ability to achieve federal air quality standards. Because the Truck Association's practical objective is to dismantle the SIP's primary enforcement apparatus, its suit is subject to § 307(b)(1) and must be brought in this Court.
Id. at 1148.
Even if we were to agree with the Seventh Circuit that a SIP provision may be invalidated in state court on state procedural grounds, this would not help the Truck Association, whose suit does not raise a state law procedural challenge. And, as explained by the Seventh Circuit, "[o]nce a plan is adopted by the state and it withstands any subsequent procedural challenge, then § 7607(b)(1) [CAA § 307(b)(1)] provides that invalidation may occur only in the federal appellate courts." Id. at 1152. Thus, if anything, Sierra Club supports the application of § 307(b)(1) to the Truck Association's suit.
United States v. Ford Motor Co., 814 F.2d 1099 (6th Cir.1987), similarly acknowledged the very limited circumstances in which a SIP may be invalidated by a state court. There, the EPA had sued Ford in district court for violations of Michigan's SIP, and Ford subsequently filed suit in Michigan state court to enjoin state environmental agencies from enforcing the SIP. Ford and the state agencies negotiated a consent judgment purporting to vacate the SIP, and Ford sought to use the consent judgment to defeat the EPA's enforcement action. Id. at 1101. The Sixth Circuit held that the consent judgment did not preclude EPA's enforcement of the SIP because "revisions of State Implementation Plans are ineffective until approved by EPA," and "invalidation of an EPA-approved SIP may only occur in the federal appellate courts" under § 307(b)(1). Id. at 1102-03. The Sixth Circuit distinguished Sierra Club, noting that Ford's challenge to the SIP was not based on procedural grounds. Id. at 1103.
The Sixth Circuit did not address whether the consent judgment could preclude enforcement of the SIP by state agencies. If it could, Ford would arguably support the Truck Association's assertion that a non-appellate court may render a SIP unenforceable by the state. However, the court in Ford was not confronted with this question. To the extent that any inferences can be drawn from the opinion, they
It is also clear that jurisdiction for the Truck Association's claim exists exclusively under § 307(b)(1) because the Truck Association's preemption claim effectively challenges the EPA's legal determination that federal law does not prohibit the Regulation. When the EPA proposed approving the Regulation, it explicitly stated that it knew of "no obstacle under Federal or State law in CARB's ability to implement" the Regulation. 76 Fed.Reg. at 40658. The EPA reiterated this conclusion in its final approval, finding that the state had provided adequate assurances that it was not prohibited from carrying out the Regulation by "any provision of Federal or State law." 77 Fed.Reg. 20311, 20313. In alleging that the Regulation violates the Supremacy Clause because it is preempted by the FAAAA, the Truck Association effectively challenges the validity of the EPA's determination. See New England Legal Found., 666 F.2d at 33. Under § 307(b)(1), such a challenge must be brought in this Court. See Virginia, 74 F.3d at 523 (explaining that appellate courts' exclusive jurisdiction extends to "`legal issues pertaining to final [actions] — whether or not those issues arise from the statutes that authorized the agency action in the first place'") (alteration in original) (emphasis added) (quoting Palumbo v. Waste Techs. Indus., 989 F.2d 156, 161 (4th Cir.1993)).
In sum, the practical objective of the Truck Association's preemption suit is to nullify the SIP and challenge the EPA's legal determination regarding its validity. Thus, it is the type of action to which § 307(b)(1) applies. Although this case is somewhat unique, in that the EPA approved the SIP after the Truck Association filed suit, subsequent EPA action can divest a district court of jurisdiction. See City of Seabrook v. Costle, 659 F.2d 1371, 1373 (5th Cir.1981) ("Even if we assume... that the district court had jurisdiction of plaintiffs' claim ... the publication of the `final rule' clearly left the district court
In establishing the CAA's jurisdictional scheme, "Congress wanted speedy review of EPA rules and final actions in a single court," thereby avoiding "duplicative or piecemeal litigation, and the risk of contradictory decisions." Virginia, 74 F.3d at 525 (internal quotation marks and citation omitted); see also Harrison v. PPG Indus., Inc., 446 U.S. 578, 593, 100 S.Ct. 1889, 64 L.Ed.2d 525 (1980) ("The most obvious advantage of direct review by a court of appeals is the time saved compared to review by a district court, followed by a second review on appeal."). Allowing the Truck Association's suit to proceed in district court would undermine these policy objectives. The district court's decision on whether the Regulation is preempted would be subject to appeal, during which time the enforceability of the SIP would be in limbo. This would frustrate Congress's goal of having prompt and final review of decisions regarding SIPs. Moreover, even if the Truck Association successfully enjoined enforcement of the Regulation by CARB, a separate suit would be required to enjoin enforcement by the EPA and private citizens, potentially resulting in re-litigation of the same issues in multiple courts, with the concomitant risk of conflicting decisions. Indeed, the Truck Association admitted to the district court that it "may challenge the approval of the SIP ... in a different forum... on similar or different grounds," and it subsequently did bring such other challenges.
The Supreme Court's analysis in Douglas v. Independent Living Center of Southern California, Inc., ___ U.S. ___, 132 S.Ct. 1204, 182 L.Ed.2d 101 (2012) supports this conclusion. In Douglas, Medicaid providers and beneficiaries brought suit under the Supremacy Clause alleging that California's Medicaid statutes conflicted with, and were preempted by, federal Medicaid law. After the Supreme Court granted certiorari, the federal agency responsible for administering the Medicaid program approved the state statutes, having determined that they complied with federal law. Id. at 1208-09. The Supreme Court found that as a result of the agency's approval, the case was "now in a different posture" and "may require respondents now to proceed by seeking review of the agency determination under the Administrative Procedure Act rather than in an action against California under
Id. at 1210-11 (citation omitted). Similarly, here, the EPA's approval of the Regulation has changed the posture of the case, such that a different avenue of judicial review is appropriate to avoid potentially conflicting decisions on the underlying question of whether the Regulation is preempted by the FAAAA. Moreover, proceeding under § 307(b)(1) is preferable because the EPA would be a party to litigation that would decide whether a regulation it approved violates federal law.
The Truck Association correctly notes that the instant case differs from Douglas in that the EPA does not administer the FAAAA. Thus, the EPA's determination that the Regulation does not conflict with federal law may not be the "kind of legal question that ordinarily calls for APA review," because it does not fall within the EPA's expertise. Douglas, 132 S.Ct. at 1210. Nevertheless, the congressional interests in uniformity and finality discussed in Douglas apply here with equal force, and are better served by requiring challenges such as the Truck Association's to be heard in this Court.
Finally, the Truck Association argues that applying § 307(b)(1) to its suit would be unfair and leave it with no forum in which to pursue its claim. The Truck Association points out that when it filed suit, jurisdiction in this Court was unavailable because the EPA had not taken final action on the Regulation. Requiring the Truck Association to wait for final action would mean that it could not enjoin the Regulation from taking effect, thereby imposing heavy costs on its members, as the EPA did not approve the Regulation until several months after it became effective. Furthermore, the Truck Association argues, dismissing its suit on jurisdictional grounds would unfairly penalize it for the district court's delay in rendering a decision. According to the Truck Association, had the court adjudicated the case promptly, "judgment likely would have predated the EPA action." Lastly, though not raised by the Truck Association, the district court's dismissal of the Association's suit eight months after the EPA's final action arguably prejudiced the Association because by then, the sixty-day window in which it could seek review in this Court under § 307(b)(1) had closed, leaving the Association with no court in which to bring its claim.
These arguments, though somewhat sympathetic, are ultimately unpersuasive. The Truck Association is mistaken that § 307(b)(1)'s application would deny it a forum in which to enjoin the
Moreover, any unfairness to the Truck Association is further mitigated by the fact that it was on notice, from the Regulation's inception, that the Regulation was intended to be incorporated into California's SIP. When CARB first proposed adopting the Regulation, it issued a public notice explaining that "[t]he [CAA] requires U.S. EPA to establish NAAQS for pollutants," that "Federal law mandates the development of State Implementation Plans documenting the actions the state will take to attain the federal air quality standards," that CARB's "SIP submittals to U.S. EPA... adopted 2014 reduction commitments for both [ozone] and PM[]," and that "the proposed regulation would provide the necessary emissions reductions by the mandatory deadlines for meeting the NAAQS for PM[] and ozone."
For these reasons, we affirm the district court's dismissal for lack of subject matter jurisdiction under CAA § 307(b)(1).
77 Fed.Reg. at 20313.