## Facts

- Jefferson County, Kentucky (including Louisville) and Floyd County, Indiana border each other along the Ohio River and share regional air resources.
- The Public Service Company of Indiana operated the Gallagher Power Station, a coal-fired facility in Floyd County near the Kentucky border.
- Indiana and Kentucky initially adopted identical sulfur dioxide (SO₂) limits in their State Implementation Plans (SIPs), including limits applicable to Gallagher.
- Indiana later revised its SIP to exempt Gallagher from earlier SO₂ limitations; EPA approved the exemption after finding it would not interfere with attaining or maintaining SO₂ standards.
- Jefferson County adopted stricter SO₂ limits but remained in nonattainment for the SO₂ National Ambient Air Quality Standards (NAAQS).
- Jefferson County asserted it had adopted stricter limits to preserve a “margin for future growth,” and claimed Gallagher’s emissions consumed that margin.
- In 1979, Jefferson County filed a Clean Air Act (CAA) § 126 petition seeking interstate abatement, alleging Gallagher’s SO₂ emissions (i) prevented attainment/maintenance of the SO₂ NAAQS and (ii) would hinder prevention of significant deterioration after attainment.
- EPA modeled Gallagher’s downwind impact and concluded Gallagher contributed about 3% of SO₂ concentrations at Jefferson County nonattainment receptors.
- EPA denied the § 126 petition, finding Gallagher did not “cause or substantially contribute” to a NAAQS violation; Jefferson County petitioned for review in the Sixth Circuit.

## Issues

1. Whether EPA reasonably interpreted CAA § 126 to address only interstate emissions that cause or significantly contribute to NAAQS violations, not emissions that erode a downwind area’s self-imposed “margin for growth.”
2. Whether EPA’s determination—based on technical modeling—that Gallagher’s roughly 3% contribution was not a “substantial” or “significant” contribution was arbitrary, capricious, or contrary to law.

## Decision

- The Sixth Circuit denied the petition for review and affirmed EPA’s final order denying § 126 relief.
- The court held that § 126 is triggered only by interstate emissions that cause or significantly contribute to NAAQS violations in the complaining state.
- The court upheld EPA’s rejection of the “margin for growth” theory as beyond § 126’s statutory focus on NAAQS attainment and maintenance.
- The court concluded EPA reasonably exercised technical and policy judgment in finding that Gallagher’s contribution did not rise to a “substantial” or “significant” contribution.

## Legal Principles

- CAA § 126 provides an interstate abatement mechanism only when an upwind source’s emissions cause or significantly contribute to a downwind state’s NAAQS violation.
- Section 126 does not require EPA to restrict upwind emissions solely because they reduce a downwind jurisdiction’s voluntary air-quality buffer above federal standards or constrain future economic development plans.
- Where the statute leaves the degree of “significant contribution” undefined, EPA may make a reasoned significance determination, and courts will uphold it if consistent with the statutory scheme and not arbitrary or capricious.
- EPA’s technical modeling and related factual judgments concerning source contribution receive judicial deference absent a showing of irrationality, improper factors, or clear inconsistency with the statute.

## Conclusion

The Sixth Circuit sustained EPA’s denial of Jefferson County’s CAA § 126 petition, holding that the statute targets interstate emissions that significantly contribute to NAAQS violations and does not protect a downwind area’s extra “margin for growth” beyond federal requirements; EPA’s determination that a roughly 3% contribution was not substantial was upheld as reasonable and nonarbitrary.


Air Pollution Control Dist. of Jefferson Cnty. v. EPA, 739 F.2d 1071 (6th Cir. 1984)