Sixth Circuit Vacates EPA’s Determination Over Agency’s Interpretation of “Adjacent”

In a 2-1 decision, the Sixth Circuit in Summit Petroleum Corporation v. U.S. Environmental Protection Agency, Case Nos. 09-4348; 10-4572, vacated the EPA’s determination that Summit’s facilities constituted a single stationary source under the EPA’s Clean Air Act Title V permitting program.  Summit owns and operates a natural gas plant and connected production wells which are located over an area of approximately forty-three square miles.  The wells are located between five-hundred feet and eight miles from the plant and Summit does not own the property between the individual well sites and the plant.  At issue was whether Summit’s sites were “adjacent” to one another, thus aggregating the sites and converting them into a “major source” under Title V.  The EPA determined they were, and Summit appealed.  It argued that the EPA’s determination that the physical requirement of adjacency can be established through function relatedness was unreasonable and contrary to the plain meaning of the term “adjacent.”  Two judges agreed.

The majority gave no deference to the EPA’s determination because the term adjacent was unambiguous.  “We conclude that the EPA’s interpretation of [“adjacent”], i.e. that activities can be adjacent so long as they are functionally related, irrespective of the distance that separates them, undermines the plain meaning of the text, which demands, by definition, that would-be aggregated facilities have physical proximity.”  The majority vacated the EPA’s determination and remanded the case to the EPA to determine whether Summit’s sites were “sufficiently physically proximate” to be considered “adjacent” within the ordinary meaning of that requirement.

In dissent, Judge Karen Nelson Moore found the EPA’s interpretation reasonable.  “The EPA’s aggregation decisions reflect its institutional expertise regarding how various industrial operations affect air quality.”  Deference was warranted, she argued, because “adjacent” was ambiguous as to how to determine whether two properties are close enough to each other to be considered adjacent.  She took issue with the majority’s misunderstanding of the EPA’s position and found that the “EPA uses interrelatedness only to determine whether two properties were close enough to each other to be considered adjacent.”