March 7, 2012

Ninth Circuit Decision in AIR v. EPA Threatens to Disrupt Federal Highway Funding and Transportation Improvement Projects

Holland & Knight Alert
Jennifer L. Hernandez

Southern California and 44 Other Metropolitan Areas Nationwide May Be Affected

Clean Air Act/Greenhouse Gas Reduction Strategies Force a Sea Change in Land Use and Transit Planning

On February 2, 2012, the Ninth Circuit published a decision that could disrupt federal highway funding and transportation improvement projects across the country. The court’s interpretation of the 1990 amendments to the Clean Air Act (CAA) in Association of Irritated Residents v. EPA, 2012 WL 251912 (January 27, 2012) means trouble for the 44 ozone nonattainment areas nationwide1 that have relied primarily on emission reductions from cleaner cars and fuels (so-called “fleet improvements”) and congestion management strategies such as carpool lanes to improve air quality from the automobile and light-duty truck transportation sector.

Fleet improvements and congestion management have allowed such nonattainment areas to avoid other transportation control measures (TCMs), most notably reductions in private automobile and light truck use based on mandated reductions in vehicle miles travelled (VMT), which are predicated on strategies such as changing land use (e.g., by increasing urbanized development and decreasing or eliminating suburban and exurban development), increasing investment in other modes of transportation (e.g., transit, bicycling and walking), and adopting new taxes or fees (e.g., on fuels, cars or parking) to discourage use of private automobiles and light trucks.

The Ninth Circuit decision arose in the context of a private enforcement lawsuit (often referred to as a “citizen suit”) filed by environmental advocates under the CAA to successfully challenge EPA’s approval of the South Coast Air Quality Management District (SCAQMD) State Implementation Plan (SIP) based in part on the failure of SCAQMD and EPA to calculate and require appropriate reductions in VMT. (The decision also found other legal deficiencies in EPA’s approval of the SCAQMD SIP, but the VMT component of the decision has the most far-reaching implications nationally.)

Clean Air Act Requirements for Transportation Funding

The Ninth Circuit decision threatens to disrupt federal highway funding and transportation projects because the CAA requires the Department of Transportation (DOT) to cut off such funding and halt such projects for nonattainment areas that do not have EPA-approved air quality improvement plans. The Ninth Circuit vacated EPA’s approval of the SCAQMD plan for Southern California, but nonattainment areas across the country will be at similar risk, as no nonattainment areas nor EPA itself has adopted or approved air quality plans that included the VMT calculations and reduction mandates that the Ninth Circuit has now concluded are statutorily required.

Lawsuits Will Rely on Clean Air Act to Force Changes in Land Use and Transit Planning

Other private enforcement lawsuits, including a longstanding dispute in the Atlanta region, are expected to follow. The goal of these lawsuits is to use the heavy hand of the CAA to force broad changes to land use and transportation patterns that aim to separate people from their cars - for example by requiring that new growth be limited to smaller homes or apartments in areas that are served by transit (or that could be served by transit if sufficient density increases can be achieved).

New Mandate for VMT Reductions May Extend Beyond State Law

The Ninth Circuit decision also gives a new federal boost to California’s climate change laws (AB 32 and SB 375), which are also being interpreted to mandate VMT reductions through higher density development and increased utilization of transit. By interpreting the federal CAA to require similar VMT-reduction mandates, advocates can use the Ninth Circuit decision in jurisdictions that have not adopted climate change laws to force reductions in automobile usage - and can use the Ninth Circuit decision in California to bolster efforts to require VMT reductions that may go beyond state law climate change mandates.

For a glimpse into the practical implications of a regional VMT reduction strategy, the Southern California Association of Governments (SCAG) is expected to approve a new Regional Transportation Plan (RTP) in April of 2012 which includes dramatic land use changes in the Sustainable Communities Strategy (SCS) component required by SB 375. The RTP/SCS concentrates new population growth into designated “high quality transit areas” in a small fraction of the 38,000-square-mile SCAG region, and dramatically reduces density elsewhere. The RTP/SCS conflicts with the land use designations and mandates in general plans (the “constitution” of land use under California) already adopted by the 191 cities and six counties that comprise the SCAG region. The RTP/SCS will be imported into the new Air Quality Management Plan (AQMP) required by the CAA for the SCAQMD, which will in turn be rolled into the State Implementation Plan (SIP) to be approved by EPA.

The Ninth Circuit’s disapproval of EPA’s last SIP for the SCAQMD places the region’s transportation funding at risk - and will likely accelerate the SCAQMD/EPA approval process for the AQMD and SIP. The new SCAG RTP/SCS generally includes the VMT metrics and reduction strategies - required under SB 375 - that the Ninth Circuit has now concluded are required under the CAA.

Expect New Fees and Lawsuits


The SCAG RTP/SCS is also likely to be the basis for a new indirect source review (ISR) fee, a proposed air pollution fee currently being developed by SCAQMD (proposed Rule 2301) to be charged for new residential and commercial development. This rule, modeled on a similar ISR rule adopted by the San Joaquin Valley Air Quality Management District (SJVAQMD Rule 9510), will impose a new fee which generally is not precluded by development agreements, and the fee amount will likely be higher for projects that do not comply with the densities called for in the RTP/SCS.

Significant land use conflicts are likely to arise as cities, counties and interested stakeholders learn of the new land use regime of GHG and CAA mandates. These could range from established neighborhoods that decline to approve, sue to block, or decline to fund higher density development or transit projects, to emerging communities that have planned, approved, funded and completed infrastructure predicated on continued growth in areas “downzoned” under this regional alphabet soup of regulatory plans (RTP/SCS, AQMD, SIP).

Conflicts, including lawsuits, are a certainty. Less certain is the level of impact these conflicts will have on the 18 million residents in California’s largest regional economy, which suffered 800,000 lost jobs during the recent recession. SCAG predicts that 4.2 million jobs will be created by its RTP/SCS plan, but implementing the plan requires an investment of $525 billion from primarily public financing sources.

For additional information, see:

1 As of August 30, 2011, areas designated nonattainment for ozone include, by state: Arizona (Phoenix region); California (the metropolitan regions of Sacramento, San Diego, San Joaquin Valley, San Francisco Bay Area, Los Angeles, Amador County, Calaveras County, Kern County, Mariposa County, Tuolumne County, Nevada County, Riverside County, Sutter County and Ventura County); Colorado (Denver-Boulder-Fort Collins regions); Connecticut (Greater Connecticut and New York-New Jersey regions); Delaware (Philadelphia and Atlantic City regions); District of Columbia (Washington, D.C., region); Georgia (Atlanta region); Illinois (Chicago and St. Louis regions); Louisiana (Baton Rouge region); Maryland (Baltimore and Philadelphia regions); Massachusetts (Boston and Springfield regions); Missouri (St. Louis region); Nevada (Las Vegas); New Hampshire (Boston-Manchester-Portsmouth regions); New Jersey (New York-New Jersey-Long Island and Philadelphia-Atlantic City regions); New York (Albany-Schenectady-Troy, Buffalo-Niagra Falls, Essex County, Jamestown, Jefferson County, New York-New Jersey-Long Island, Poughkeepsie and Rochester regions); North Carolina (Charlotte-Gastonia-Rock Hill regions); Pennsylvania (Philadelphia-Wilman-Atlantic City and Pittsburgh regions); Rhode Island (Providence region); South Carolina (Charlotte-Gastonia-Rock Hill regions); Texas (Dallas-Fort Worth and Houston-Galveston regions); Virginia (Washington, D.C., region); and Wisconsin (Milwaukee-Racine and Sheboygan regions). The complete list of nonattainment areas, including summary tables and maps are available on EPA's website at

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