                                                                           FILED
                             NOT FOR PUBLICATION                            JUL 06 2015

                                                                       MOLLY C. DWYER, CLERK
                    UNITED STATES COURT OF APPEALS                       U.S. COURT OF APPEALS



                             FOR THE NINTH CIRCUIT


COMMUNITIES FOR A BETTER                         No. 12-72358
ENVIRONMENT, a California non-profit
organization and CALIFORNIA
COMMUNITIES AGAINST TOXICS, an
unincorporated association,                      MEMORANDUM*

              Petitioners,

 v.

U.S. ENVIRONMENTAL PROTECTION
AGENCY; et al.,

              Respondents,

SOUTH COAST AIR QUALITY
MANAGEMENT DISTRICT,

              Respondent-Intervenor.


                    On Petition for Review of an Order of the
                  United States Environmental Protection Agency

                      Argued and Submitted October 22, 2014
                               Pasadena, California




        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
Before: THOMAS, Chief Judge and KOZINSKI and GOULD, Circuit Judges.

      Petitioners challenge the Environmental Protection Agency’s (“EPA”)

approval of South Coast Air Quality Management District (“District”) Rule 1315

into the California State Implementation Plan (“SIP”). Rule 1315 specifies the

district’s procedures for tracking and banking emissions reductions for later use as

offset credits for new sources of pollution. We conclude that the EPA was neither

arbitrary nor capricious in its approval of Rule 1315 into the California SIP. We

therefore deny the petition for review.

      1.     The EPA’s general practice is to review and approve the rules

governing the overall conduct of state offset programs, but not simultaneously to

pass judgment on individual transactions. See 54 Fed. Reg. 27286, 27294 n.8

(June 28, 1989). The agency’s practice is a permissible construction of § 173(a) of

the Clean Air Act, which obligates SIP permit programs to require new sources of

pollution to obtain “sufficient offsetting emissions reductions.” 42 U.S.C.

§ 7503(a)(1)(A). The EPA did not purport, nor was it required, to validate the

banked emissions reductions when it approved Rule 1315. Tracking procedures

such as those provided in Rule 1315 are not expressly required by the Clean Air

Act, the California SIP, or EPA rule. See Natural Res. Def. Council, Inc. v. S.

Coast Air Quality Mgmt. Dist. (NRDC), 651 F.3d 1066, 1073 (9th Cir. 2011). A

challenge to the sufficiency of offsetting emissions reductions may proceed when a
new source of pollution is permitted under the SIP. See id. at 1071–72. EPA did

not err by following its general practice when it approved Rule 1315.

      2.     The EPA acted within its authority when it approved the Rule 1315

SIP revision based on its conclusion that Rule 1315 is equivalent to federal

methods. See 42 U.S.C. § 7502(c)(8). Federal integrity criteria require offsets to

be quantifiable and surplus. See 40 C.F.R. § 51.165(a)(3)(ii)(C)(1)(I). EPA

concluded that Rule 1315 sets forth adequate procedures to quantify actual

emission reductions and ensure that such reductions are surplus. We accord this

conclusion deference, as it is not plainly erroneous or inconsistent with law. See

Comm. for a Better Arvin v. EPA, ___ F.3d ___, 2015 WL 2384556 at *3 (May 20,

2015).

      3.     We are similarly bound by the agency’s determination that Rule 1315

is consistent with the federal “base year” exception, which allows pre-base year

reductions to be credited if subsequent attainment demonstrations account for the

emissions notwithstanding their prior curtailment. See 40 C.F.R.

§ 51.165(a)(3)(ii)(C)(1)(ii). The EPA adequately reviewed the District’s most

recent attainment demonstrations and confirmed that each properly handled pre-

base year reductions banked under Rule 1315. Furthermore, any concern about

pre-base year reductions can be litigated when the district uses pre-base year
emissions offsets banked pursuant to Rule 1315 to authorize a new source permit.

See NRDC, 651 F.3d at 1071–72.

      4.     The EPA reasonably determined that the Rule 1315 SIP revision

would not interfere with reasonable further progress toward attainment. “[EPA]

shall not approve a revision of a plan if the revision would interfere with any

applicable requirement concerning attainment and reasonable further

progress . . . .” 42 U.S.C. § 7410(l). This appeal solely concerns the District’s

tracking procedures for emissions offsets, as set forth in Rule 1315. It is not an

appropriate vehicle to challenge the substance of the District’s attainment plans.

The EPA may approve a SIP in piecemeal fashion; different portions of a SIP may

be submitted at different times to be considered separately. See Hall v. EPA, 273

F.3d 1146, 1159 (9th Cir. 2001). The EPA reasonably concluded that Rule 1315

will assist the District in meeting its attainment plans, and that conclusion was

neither arbitrary nor capricious.


      PETITION DENIED.
