

                  UNITED STATES COURT OF APPEALS
                      FOR THE FIRST CIRCUIT

                                                                                                

No. 95-1780

                PAN AMERICAN GRAIN MFG. CO., INC.,

                           Petitioner,

                                v.

          UNITED STATES ENVIRONMENTAL PROTECTION AGENCY,

                           Respondent.

                                                                                                

            ON PETITION FOR REVIEW OF AN ORDER OF THE

          UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

                                                                                                

                              Before

                       Cyr, Circuit Judge,                                                   

            Coffin and Bownes, Senior Circuit Judges.                                                              

                                                                                                

   Romano A. Zampierollo-Rheinfeldt for petitioner.                                             
   Banumathi Rangarajan, Trial Attorney, U.S. Department of Justice,                                 
Environmental Defense Section, with whom Lois J. Schiffer, Assistant                                                                 
Attorney General, Joseph A. Siegel, Assistant Regional Counsel, U.S.                                          
Environmental Protection Agency, and Michael Prosper, Office of                                                            
General Counsel, U.S. Environmental Protection Agency, were on brief
for respondent.

                                                                                                

                        September 6, 1996
                                                                                                

          CYR,  Circuit Judge.    Petitioner  Pan American  Grain                    CYR,  Circuit Judge                                       

Manufacturing  Company,  Inc.  presents  two  claims  on  appeal.

First, it challenges  the United States Environmental  Protection

Agency's ("EPA") November 1991 designation of the Municipality of

Guaynabo, Puerto Rico ("Guaynabo"), as a nonattainment area under

the  National Ambient Air Quality Standards ("NAAQS") promulgated

by the EPA pursuant to the Clean Air Act, 42  U.S.C.    7401-7671

("CAA").  Second, petitioner contests the EPA's May 1995 approval

of  a revised  State Implementation  Plan ("SIP")  issued by  the

Commonwealth of Puerto  Rico, which banned  further use of  clam-

shell devices in grain removal operations to ensure attainment of

the NAAQS  PM10 standard prescribed  for Guaynabo.   We  conclude

that the first claim  is time-barred and reject the  second claim

on the merits. 

                            BACKGROUND                                      BACKGROUND                                                

          The  CAA  was  enacted  "to  protect  and  enhance  the

Nation's  air  quality, to  initiate  and  accelerate a  national

program  of  research and  development  designed  to control  air

pollution, to  provide technical and financial  assistance to the

States in  the execution  of pollution  control programs,  and to

encourage  the  development  of regional  pollution  control pro-

grams." Conservation  Law Found.,  Inc. v.  Busey, 79 F.3d  1250,                                                           

1256  (1st Cir. 1996)  (citing 42 U.S.C.    7401(b) (1988)).   In

furtherance of these objectives, the EPA promulgated NAAQS, which

prescribe, inter alia, maximum allowable concentration  levels of                               

fine particulate matter with  an aerodynamic diameter not greater

                                2

than  a  nominal  ten micrometers  ("PM10").    See  42 U.S.C.                                                                

7409(a); see also id.    7407(d)(4)(B).  The CAA  requires States                               

to  develop  and  maintain  implementation  plans  for  achieving

compliance with the NAAQS.  See id.   7410(a).  Accordingly, each                                             

State, as  well  as the  Commonwealth  of Puerto  Rico  ("Common-

wealth"),  is required  to submit  for EPA  approval a  SIP which

specifies  the manner  in which  compliance with  NAAQS is  to be

achieved.  See id.   7407;  American Auto. Mfr. Ass'n. v. Commis-                                                                           

sioner, Mass. Dept.  of Environmental Protection, 31  F.3d 18, 21                                                          

(1st Cir. 1994); Sierra Club v. Larson, 2 F.3d 462, 464 (1st Cir.                                                

1993).  A region  that has not attained compliance with  NAAQS is

designated a "nonattainment" area, see 42 U.S.C.   7407(d)(1)(A),                                                

which  imposes  upon the  State  the obligation  to  include more

stringent provisions in its SIP.  See id.   7513.                                                   

          Under the 1990 amendments  to the CAA, by operation  of

law, Guaynabo  became a  designated nonattainment area  for PM10,

based upon NAAQS  violations which had occurred prior  to January

1, 1989.  See id.    7407(d)(4)(B), 7513(a); 56 Fed. Reg. 11,105.                           

Accordingly, on March 15,  1991, the EPA published notice  in the

Federal Register announcing  its initial designation  of Guaynabo                          

as a  "moderate" nonattainment  area for PM10.   See 42  U.S.C.                                                                

7502(a)(1)  (permitting EPA  to "classify"  nonattainment areas).

On November 6, 1991,  the EPA issued  a final rule codifying  its

PM10  nonattainment   designation  for  Guaynabo.     See  id.                                                                          

7407(d)(2); 56 Fed. Reg. 56,694.  

          Thereafter, the Puerto Rico Environmental Quality Board

                                3

("EQB")  conducted a  public hearing and  received comments  on a

proposed  SIP revision  which  would achieve  PM10 compliance  in

Guaynabo.   On  November  14, 1993,  the  EQB submitted  its  SIP

revision  to the  EPA;  in March  of  1994, it  supplemented  the

revised SIP.   On August 11, 1994, the EPA  published for comment

its proposed full approval of the SIP revision.  See 59 Fed. Reg.                                                              

41,265.   On May 31,  1995, after conducting  public meetings and

evaluating the  comments received,  including those  submitted by

petitioner, the EPA approved the revised SIP and published notice

of its approval and promulgation.  See 60 Fed. Reg.  28,333.  The                                                

instant petition for review was filed on July 28, 1995.

                            DISCUSSION                                      DISCUSSION                                                

          A petition to review  a final EPA action must  be filed

in the  appropriate  court of  appeals  within sixty  days  after

notice of  the action appears  in the Federal  Register.  See  42                                                                       

U.S.C.   7607(b)(1); e.g., Harrison v. PPG Indus., Inc., 446 U.S.                                                                 

578, 588-92 (1980).  Appellate review is governed by the Adminis-

trative Procedure Act ("APA"), 5 U.S.C.   706(2)(A), and substan-

tial deference  is accorded final agency actions,  which will not

be set aside unless "`arbitrary,  capricious, an abuse of discre-

tion, or  otherwise not in  accordance with the  law.'" Citizen's                                                                           

Awareness Network, Inc.  v. United States Nuclear Reg. Comm'n, 59                                                                       

F.3d  284, 290 (1st  Cir. 1995) (citations  omitted); Puerto Rico                                                                           

Sun Oil Co. v. EPA, 8 F.3d 73, 77 (1st Cir. 1993).  The deference                            

due  "is  magnified when  the agency  interprets its  own regula-

tions."   Puerto Rico Aqueduct  &amp; Sewer Auth.,  EPA, 35 F.3d 600,                                                             

                                4

604  (1st Cir. 1994) (citing  Arkansas v. Oklahoma,  503 U.S. 91,                                                            

111-12 (1992)).  

          We inquire whether the  challenged EPA action was based

on  the wrong factors or whether there  has been a clear error in

judgment.  Citizens to  Preserve Overton Park v. Volpe,  401 U.S.                                                                

402, 416  (1971).  Although  searching and careful,  review under

the  `arbitrary and capricious' standard is narrow in scope.  See                                                                           

Adams v. EPA, 38 F.3d 43,  49 (1st Cir. 1994).  Moreover,  we are                      

not  empowered to substitute our judgment for that of the agency.

See id.; Caribbean  Petroleum Corp. v. EPA, 28 F.3d 232, 234 (1st                                                    

Cir. 1994) (citing Motor  Vehicle Mfrs. Ass'n v. State  Farm Mut.                                                                           

Auto Ins. Co., 463 U.S. 29, 43 (1983)).                         

                                I                                          I

          Petitioner's challenge to the EPA's 1991 designation of

Guaynabo as  a PM10  nonattainment area  is  time-barred, see  42                                                                       

U.S.C.     7607(b)(1)  (prescribing  60-day  period),  since  the

petition  for review was filed  in July 1995,  three and one-half

years  after the  designation.   Consequently, we  lack appellate

jurisdiction.  Petitioner attempts  to circumvent the time-bar by

claiming  that the  1991 PM10  nonattainment designation  did not

constitute "final agency action"  for purposes of judicial review

under 42 U.S.C.    7607(b)(1), but became final in May  1995 when

the EPA  approved  the revised  SIP issued  by the  Commonwealth.

Petitioner's  interpretation  lacks   supporting  authority   and

conflicts with the plain language of the statute.

          In its  1990 amendments  to the CAA,  Congress directed

                                5

the EPA to publish notice in the Federal Register announcing non-                                                           

attainment designations under 42 U.S.C.   7407(d)(4)(B).  See id.                                                                          

  7407(d)(2)(A).  On November 6, 1991, the EPA published its PM10

nonattainment  designation for Guaynabo, thereby constituting its

designation a  final  EPA action  in accordance  with its  terms:                                                                          

"today's codification  of the initial designations for PM10 in 40

CFR part 81  represents final  agency action for  the purpose  of                                                      

section 307(b)  of the CAA  [42 U.S.C.    7607(b)(1).]"   56 Fed.

Reg. 56,706 (emphasis  added).  Cases in  other circuits likewise

indicate  that such  nonattainment designations  constitute final

agency action.   See Dressman v. Costle,  759 F.2d 548, 553  (6th                                                 

Cir.  1985); City of  Seabrook v. EPA,  659 F.2d 1349,  1370 (5th                                               

Cir.  1981)   ("We  think   that  the  designations   [as  NAAQs'

nonattainment areas] were `final  actions' subject to  immediate,

direct  review under  [42  U.S.C.    7607(b)(1)]  when they  were

promulgated."), cert. denied, 459  U.S. 822 (1982); United States                                                                           

Steel Corp.  v. EPA, 595  F.2d 207, 211, clarified,  598 F.2d 915                                                            

(5th Cir. 1979).  See also  United States Steel Corp. v. EPA, 605                                                                      

F.2d 283, 290 (7th Cir. 1979) (assuming, without discussion, that

designations [of NAAQS nonattainment  areas] were open to immedi-

ate  judicial review),  cert. denied,  445 U.S.  939 (1980).   We                                              

believe this to be  both a permissible construction of  the stat-

ute,  see  Chevron, U.S.A.,  Inc.  v.  Natural Resources  Defense                                                                           

Council,  Inc., 467 U.S. 837,  843 (1984), and,  from an adminis-                        

trative  efficiency  perspective,  entirely  rational.    As  the

required SIP  revision process  itself is protracted,  it is  not

                                6

irrational  to conclude that Congress  did not intend  that it be

further extended  indefinitely.  See,  e.g., FTC v.  Standard Oil                                                                           

Co.,  449 U.S.  232,  243 (1980)  ("final  agency action"  status             

designed to promote  "administrative efficiency").   Petitioner's

counterargument that  Congress intended to  defer judicial review

until the revised SIP has been promulgated is untenable, since it

misconstrues the plain language  of the statute and misapprehends

the equally clear intent of Congress.   Cf. Garcia v. Cecos Int'l                                                                           

Inc., 761  F.2d 76,  79  (1st Cir.  1985) (plain  language of  42              

U.S.C.    6972(b), requiring sixty days'  notice before commence-

ment of "private  citizen" suit  is "not a  technical wrinkle  or

superfluous formality that federal courts may waive at will . . .

[but]  part of  the jurisdictional  conferral from  Congress that

cannot be altered by the courts.").

          As the  EPA points out, Congress well understood how to

defer review had that  been its intent.  Indeed,  it specifically

provided for deferred judicial  review of classifications of PM10                                                                   

nonattainment areas until agency action has been taken on the SIP

or any  SIP revision.  Compare  42 U.S.C.   7502(a)(1)(B)  with                                                                           

7407(d)(2)(B);  see also  supra  p.3.   Thus,  the absence  of  a                                         

similar deferment for  nonattainment designations affords confir-                                                           

mation that these EPA actions were meant to be subject to immedi-

ate  review.  We  therefore conclude that  the PM10 nonattainment

designation for Guaynabo became a final agency action for purpos-

es of judicial review upon its publication by  EPA in the Federal                                                                           

                                7

Register  as directed  in the  1990 CAA  amendments.1   Thus, the                  

petition for review is time-barred. 

                                II                                          II

          Petitioner  next  claims  that  it  was "arbitrary  and

capricious" to approve the revised SIP  issued by the EQB.  Since

the  revised  SIP comports  with  the  statutory requirement  for

ensuring  attainment of  the NAAQS  for PM10  in a  moderate non-

attainment area, this claim fails on the merits. 

          Congress has mandated various SIP criteria as prerequi-

sites  to EPA approval.  See 42  U.S.C.    7410, 7513(a) and (b).                                      

The CAA  generally allows States considerable  latitude in deter-

mining how  to meet  these SIP criteria.   See  Train v.  Natural                                                                           

Resources  Defense Council, Inc., 421 U.S. 60, 65, 79, 87 (1975).                                          

In the instant  case, the  revised SIP submitted  by the  Common-

wealth won  EPA approval following an agency review for complete-

ness  and a finding that it reasonably ensured PM10 attainment in

Guaynabo.  

          Petitioner contends  that  the EPA  failed  to  provide

adequate responses to its objections to EPA's assessment of  PM10

violations,  its "modeling"  of grain processing  operations, and
                                                  

     1Petitioner's argument  that  the EPA  "reopened"  its  non-
attainment designation during the SIP revision process is without
merit.  Petitioner cannot revive  its time-barred claim by solic-
iting  an EPA  response to  petitioner's comment  challenging the
designation, especially since the EPA in this case simply reiter-
ated its original position.   See, e.g., American Iron  and Steel                                                                           
Institute  v. EPA, 886 F.2d 390, 398 (D.C. Cir. 1989) (permitting                           
such bootstrapping would be  contrary to congressional efforts to
secure prompt  and final  review of agency  decisions; petitioner
cannot goad  agency into  replying, then claim  agency "reopened"
issue), cert. denied, 497 U.S. 1003 (1990).                              

                                8

the  resulting RACT/RACM ("reasonably available control technolo-

gy/reasonably available  control measures") requirements.   We do

not agree.  

                                9

          In each  instance the  EPA presented  reasoned explana-

tions for approving the  revised SIP notwithstanding petitioner's

objections.  See 60 Fed. Reg. 28,335-37.   Moreover, petitioner's                          

criticisms, which go to the heart of the EPA's approval methodol-

ogy, involve areas in which  "EPA's `expertise is heavily  impli-

cated,' and  we may not  substitute our judgment for  that of the

Administrator." Mision Industrial, Inc. v. EPA, 547 F.2d 123, 129                                                        

(1st Cir. 1976) (citations omitted).  Following a thorough review

of the record, and  careful consideration of petitioner's claims,

we are not persuaded  that petitioner has demonstrated "arbitrary

and capricious"  agency  action which  would  warrant  disturbing

EPA's approval and promulgation of the revised SIP.  See Citizens                                                                           

to Preserve Overton Park, Inc., 401 U.S. at 415.                                        

          The petition for review is denied.                    The petition for review is denied.                                                     

                                10
