Court Upholds Pay to Pollute Rule

Last week, the Ninth Circuit ruled that the federal Tract HomesClean Air Act does not preempt the San Joaquin Valley Air Pollution Control District (Air District) from requiring certain developers to either reduce their polluting emissions from their construction activities or pay a fee. The case (National Association of Home Builders v. San Joaquin Valley Unified Air Pollution Control District, et al.) arose from a challenge by the National Association of Home Builders (NAHB) to the Air District’s Rule 9510.


The Air District had determined that construction and development sites contributed significantly to the San Joaquin Valley’s pollution emissions, including emissions that were chemical precursors to both ozone and particulate matter. To address this problem, the Air District adopted Rule 9510. Rule 9510 regulates emissions from certain development projects, such as projects with at least 50 residential units, 2,000 square feet of commercial space or 25,000 square feet of light industrial space. The rule applies to “construction equipment emissions” (emissions from construction equipment of greater than 50 horsepower used or associated with the development project) and “operation emissions” (emissions that occur once the development is done). NAHB, a trade organization representing the home building industry, only challenged the construction equipment emissions requirement of the rule. The Environmental Defense Fund and the Sierra Club joined the suit to defend the rule along with the Air District.

The construction equipment emission requirement mandates developers either reduce their emissions from their construction activities or pay a fee to the Air District to fund emissions reductions elsewhere. Under the Clean Air Act, states have the responsibility to determine how to meet the air standards set by the federal government. The Air District argued that the rule was a proper use of this authority. NAHB argued that the Clean Air Act preempted the rule because the rule regulates non-road vehicles, which the federal government regulates.

The Ninth Circuit upheld the district court’s determination that the Clean Air Act did not preempt the rule. The court found that the rule does not target vehicles or emissions from engines or vehicles. Instead, the rule requires emission reductions from the development site as a whole. Under this decision, home builders and other developers will have to significantly reduce their polluting emissions or pay a fee.