author: TROTT, Circuit Judge:

text:
    Edward M. OBER; Robin D. Silver, Petitioners, v. UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, Respondent.
    No. 95-70352.
    United States Court of Appeals, Ninth Circuit.
    Argued and Submitted Feb. 13, 1996.
    Decided May 14, 1996.

      David Baron, Arizona Center for Law in the Public Interest, Tucson, Arizona, for petitioners.
    Karen L. Egbert, Environmental Defense Section, United States Department of Justice, Washington, D.C., for respondents.
    Alan Waltner, Law Offices of Alan Walt-ner, Oakland, California, for Amici Curiae.
    Before: SCHROEDER and TROTT, Circuit Judges, and REED, District Judge.

       Honorable Edward C. Reed, Jr., Senior United States District Judge for the District of Nevada, sitting by designation.

   TROTT, Circuit Judge:

OVERVIEW

This is a petition to review a final decision rendered by the Environmental Protection Agency (EPA) under the Clean Air Act. The EPA approved Arizona’s State Implementation Plan (Implementation Plan or SIP) for the control of airborne particulate matter in Phoenix, determining that it complied with the requirements of the Clean Air Act and the guidelines promulgated thereunder. Petitioners, Phoenix residents adversely affected by excessive levels of airborne particulates, believe that the EPA’s approval of Arizona’s Implementation Plan violated the Clean Air Act and the Administrative Procedure Act. The American Lung Association and the American Lung Association of Arizona filed an amicus curiae brief in support of this petition. We grant the petition, vacate EPA’s approval of the PM-10 Implementation Plan for Phoenix, and remand to EPA

STATUTORY OVERVIEW

Pursuant to the Clean Air Act, the EPA identified particulate matter under ten microns in size (PM-10) as a criteria pollutant to be regulated under state and federal programs. The EPA promulgated the National Ambient Air Quality Standards (NAAQS) to specify the maximum permissible concentrations of the criteria pollutants in the ambient air. For PM-10, the EPA adopted two NAAQS, an annual standard and a 24-hour standard. See 40 C.F.R. § 50.6 (1994). To ensure compliance with the NAAQS, each state must submit to the EPA an implementation plan that meets certain substantive requirements. See 42 U.S.C. § 7410. The EPA reviews each submitted implementation plan and approves or disapproves it. If approved in whole or in part, the approved provisions become federally enforceable. 42 U.S.C. § 7413. If disapproved, the state is subject to sanctions and the control measures of the Federal Implementation Plan. 42 U.S.C. §§ 7410(c), 7509.

When an area fails to meet the NAAQS, it is designated a “nonattainment area,” and the Clean Air Act imposes additional requirements on implementation plans in those areas. For PM-10, the Clean Air Act classifies nonattainment areas as “moderate” or “serious.” Under the 1990 Amendments, each PM-10 nonattainment area was initially classified as “moderate,” with an attainment date no later than December 31, 1994. 42 U.S.C. § 7513(a), (c)(1).

In April 1992, EPA issued a General Preamble describing EPA’s interpretation of the 1990 Amendments and review of implementation plans. 57 Fed.Reg. 13498 (April 16,1992). States with moderate PM-10 non-attainment areas must submit implementation provisions including: 1) provisions to assure that the state will implement “reasonably available control measures” no later than December 10,1993; 2) a demonstration that the plan will provide for attainment as expeditiously as practicable, but no later than December 31,1994, OR a demonstration that attainment by that date is impracticable; and 3) qualitative milestones which are to be achieved every three years and which demonstrate “reasonable further progress” toward attainment by December 31, 1994. Id. at 13538-40; 42 U.S.C. §§ 7502(c), 7513a(a) & (e). The implementation plan must also provide “necessary assurances” of resources and of state responsibility for implementing the plan. 42 U.S.C, § 7410(2)(E).

If an area cannot practicably attain the NAAQS by the December 31, 1994 deadline, the EPA Administrator may reclassify it as a “serious” nonattainment area. 42 U.S.C. § 7513(b)(2). A “serious” nonattainment designation requires the state to submit additional plan provisions demonstrating the use of the “best available control measures” to reduce PM-10 emissions. . 42 U.S.C. § 7513a(b)(l). The state must submit a revised implementation plan demonstrating attainment of the NAAQS in the “serious” nonattainment area as expeditiously as possible, but no later than December 31, 2001. 42 U.S.C. § 7513(c)(2).

The Clean Air Act provides for review by the court of appeals of the Administrator’s action approving an implementation plan. 42 U.S.C. § 7607(b). The court may award the costs of litigation “whenever it determines that such an award is appropriate.” 42 U.S.C. § 7607(f).

FACTS AND PRIOR PROCEEDINGS

According to the American Lung Association, which filed an amicus curiae brief, the PM-10 pollution in the Phoenix area presents a serious health risk to asthmatic children and adults and to people with chronic lung disease. Pursuant to the 1990 Amendments-to the Clean Air Act, the Phoenix area was originally designated a moderate nonat-tainment area for PM-10, with an attainment date of December 31, 1994. See 40 C.F.R. § 81.303 (1994). On July 28, 1994, the EPA proposed to approve Arizona’s PM-10 Implementation Plan revision for Phoenix based on the EPA’s preliminary finding that the State’s submittal met the requirements of the Clean Air Act.

During the public comment period, EPA received comments from several groups, including Petitioners, protesting approval of the Implementation Plan. On April 10, 1995, EPA issued its final approval of the moderate PM-10 Final State Implementation Plan Revision for Phoenix. As a result of EPA’s approval of Arizona’s demonstration of the impracticability of attainment" of the PM-10 annual standard, EPA proposed to reclassify Phoenix from a “moderate” to a “serious” nonattainment area for PM-10. 60 Fed.Reg. 30046 (June 7,1995).

On May 1,1995, Petitioners filed this timely petition for review asking this court to vacate EPA’s approval and remand to EPA to disapprove the plan. Petitioners further request that they be awarded the costs of litigation, including reasonable attorney and expert witness fees.

STANDARD OF REVIEW

The standard of review is whether EPA’s actions were either (a) arbitrary, capricious, an abuse of discretion or contrary to law; or (b) in excess of statutory jurisdiction, authority, or limitations, or short of statutory right. Abramowitz v. United States Envtl. Protection Agency, 832 F.2d 1071, 1074-75 (9th Cir.1987). When the court reviews an agency’s construction of a statute that is silent or ambiguous with respect to an issue, “the question for the court is whether the agency’s answer is based on a permissible construction of the statute.” Chevron U.S.A v. Natural Resources Defense Council, 467 U.S. 837, 843, 104 S.Ct. 2778, 2782, 81 L.Ed.2d 694 (1984).

DISCUSSION

I

Violations of the Clean Air Act

Petitioners argue that the EPA’s approval of the Phoenix PM-10 Implementation Plan violated the Clean Air Act because the Implementation Plan: 1) failed to address the 24-hour standard; 2) failed to consider transportation control measures as presumptively “reasonably available control measures”; and 3) failed to provide adequate state assurances for implementation of the plan.

A State’s Failure to Address 2Jf-Hour Standard

Arizona’s Implementation Plan demonstrated the impracticability of attainment of the PM-10 annual standard by December 31, 1994, but did not separately address: 1) “reasonably available control measures” targeting the 24-hour standard; 2) attainment of or the impracticability of attainment of the 24-hour standard; or 3) “reasonable further progress” for the 24-hour standard. As a result, Petitioners contend that the Phoenix PM-10 Implementation Plan failed to comply with the mandates of the Clean Air Act, and that the EPA abused its discretion by approving a deficient implementation plan. The EPA, on the other hand, argues that Arizona’s Implementation Plan did not need to separately address the 24-hour standard because the Phoenix area would be redesignated a “serious” nonattainment area for PM-10 unless the plan provided for attainment of both the annual and the 24-hour NAAQS.

To resolve the issue of whether the Clean Air Act requires a separate demonstration of attainment or the impracticability of attainment for the annual standard and the 24-hour standard, we must examine in detail the various statutory provisions concerning implementation plans. In the most general sense, the Clean Air Act requires that implementation plans provide for the attainment of the NAAQS. 42 U.S.C. § 7410(a)(1), (2)(C). All implementation plans must also “provide for the establishment and operation of appropriate devices, methods, systems and procedures necessary to ... monitor, compile, and analyze data on ambient air quality.” 42 U.S.C. § 7410(a)(2)(B)(i). The attainment date for an area designated “nonattainment” for an air quality standard “shall be the date by which attainment can be achieved as expeditiously as practicable.” 42 U.S.C. § 7502(a)(2)(A). Nonattainment area implementation plans must contain provisions that: 1) “provide for the implementation of all reasonably available control measures as expeditiously as practicable ... and ... provide for attainment of the national ambient air quality standards”; 2) “require reasonable further progress”; and 3) include “other control measures, means or techniques ... as well as schedules and timetables for compliance, as may be necessary and appropriate to provide for attainment of such standard in such area by the applicable attainment date specified in this part.” 42 U.S.C. § 7502(c)(1), (2), (6).

These general provisions are followed by more specific provisions for moderate and serious nonattainment areas for the various criteria pollutants. For a moderate PM-10 area, “the attainment date shall be as expeditiously as practicable ... [and] shall not extend beyond December 31,1994.” 42 U.S.C. § 7513(c)(1). An implementation plan in a moderate PM-10 area must include “[ejither (i) a demonstration (including air quality modeling) that the plan will provide for attainment by the applicable attainment date; or (ii) a demonstration that attainment by such date is impracticable.” 42 U.S.C. § 7513a(a)(l)(B). The EPA Administrator “may reclassify as a Serious PM-10 nonat-tainment area ... any area that the Administrator determines cannot practicably attain the national ambient air quality standard for PM-10 by the attainment date ... for Moderate areas.” 42 U.S.C. § 7513(b)(1) (emphasis added to demonstrate that statute provides for a single PM-10 standard).

The EPA, relying on the last two provisions, argues that once Arizona demonstrated that attainment of the annual PM-10 standard in Phoenix was impracticable, the area would automatically be redesignated a “serious” nonattainment area for PM-10 and, therefore, a separate demonstration of the practicability or impracticability of attaining the 24-hour standard was unnecessary. Petitioners argue that such an interpretation violates the Clean Air Act’s other provisions and its overriding requirement that implementation plans provide for the attainment of all of the NAAQS as expeditiously as practicable.

The statute does not directly speak to this issue. There are two NAAQS for PM-10, and we find the statute silent as to whether an implementation plan must independently address both if it demonstrates the impracticability of attaining one of the standards. Therefore, we must determine whether the EPA’s interpretation is based on a permissible construction of the statute. See Chevron, 467 U.S. at 842-43, 104 S.Ct. at 2781-82.

The Clean Air Act designates an area as an attainment or a nonattainment area for each criteria pollutant, not for the individual 24-hour or annual air quality standard. We accept the EPA’s interpretation that unless an area can attain both the 24-hour and the annual standard for PM-10 by the statutory deadline, it will be reclassified as a “serious” nonattainment area. We find this to be a reasonable interpretation of the Clean Air Act, and agree that Phoenix will be redesig-nated as a “serious” nonattainment area for PM-10 based on the Implementation Plan’s demonstration that attainment of the PM-10 annual standard is impracticable.

We agree with Petitioners, however, that Phoenix’s inability to attain the annual PM-10 standard did not relieve Arizona’s duty to independently examine and implement “reasonably available control measures” targeting the 24-hour standard, to independently demonstrate attainment of or the impracticability of attainment of the 24-hour standard, and to independently demonstrate “reasonable further progress” for that standard. The general provisions of the Clean Air Act repeatedly emphasize that implementation plans must provide for the attainment of the NAAQS as expeditiously as practicable. For PM-10, the EPA promulgated two separate NAAQS-the annual standard and the 24-hour standard-whieh differ in the following respects. First, the 24-hour standard offers protection against dangerous short-term exposures to high PM-10 levels, a protection that is distinct from the protection against chronic degradation in lung function provided by the annual standard. Second, the sources of PM-10 violations differ for the annual and the 24r-hour standard: violations of the 24-hour standard are generally caused by localized sources such as construction projects, whereas violations of the annual standard tend to be caused by more diverse, dispersed sources. Third, control measures differ in effectiveness for the 24-hour standard and the annual standard.

These differences emphasize the importance of viewing PM-10’s two NAAQS individually and of requiring independent treatment of them in an implementation plan. The Clean Air Act specifically requires the attainment of all of the NAAQS as expeditiously as practicable. If the 24-hour standard could have been attained by December 31,1994, or if it can be attained more expeditiously than the annual standard, the Clean Air Act requires the implementation plan to provide for such attainment. Such independent treatment furthers the Clean Air Act’s goals of protecting health and achieving clean air. See 42 U.S.C. § 7401. The fact that the area will be redesignated as a “serious” non-attainment area for a pollutant because the state demonstrates that it cannot practicably attain one of the NAAQS does not absolve the state’s responsibility to address the NAAQS for that pollutant separately and to demonstrate that the state will provide for attainment of each standard as expeditiously as practicable.

Here, Arizona failed to independently examine the 24-hour standard. First, the State did not evaluate the impact of certain control measures on the 24-hour standard. The EPA summarily dismisses any distinction between “reasonably available control measures” for the 24-hour standard versus the annual standard, stating that “the justifications for rejecting measures as [‘reasonably available control measures’] are identical regardless of whether attainment of the 24-hour standard or the annual standard is at issue.” EPA Brief, at 42 n. 33. However, independent testing of control measures targeting the 24-hour standard was necessary to determine which control measures were “reasonably available” in relation to the 24-hour standard. It is possible that some control measures directed at controlling emissions on construction sites would have significantly alleviated violations of the 24-hour NAAQS. For instance, Petitioners assert that the prohibition of tilling on windy days reduces violations of the 24-hour standard, while it would have only a de minimis effect on the annual standard. Similarly, installing windbreaks and paving roads, which would help reduce the 24-hour standard, are economically infeasible on a large scale, but may be reasonable on a localized scale. Control measures were not evaluated for their reasonableness in relation to the 24-hour standard, but only based on the modeling and data developed for the annual standard. As a consequence, certain measures may have been rejected because they provide only de minimis benefit or are economically or technologically infeasible in relation to the annual standard, but would be reasonable in relation to the 24-hour standard.

Second, Arizona did not perform air quality modeling for the 24r-hour standard or demonstrate attainment of or the impracticability of attaining that standard. The Clean Air Act requires an implementation plan to include schedules and timetables for compliance to provide for attainment of the NAAQS, as well as “air quality modeling” when demonstrating attainment. 42 U.S.C. §§ 7410(a), 7502(c)(6), 7513a(a)(l)(B). Modeling inventories are used for attainment demonstration, evaluation of control measures, projections for future years, and other emissions information. See PM-10 Emission Inventory Requirements Final Report, p. 7 (July 1994) {Emission Report). The Emission Report, which was prepared for the EPA, states that in the temporal resolution of inventory:

States will have to model short-term (daily) and long-term (annual) air quality for PM-10 to assure that both standards will be protected, even if air quality measurements show exceedances for only one time period.

Emission Report at 9. This report emphasizes the importance of conducting modeling for both standards to ensure that both will be protected.

In reference to the air quality modeling it conducted, the Arizona Department of Environmental Quality explained in the Implementation Plan submittal:

[T]he annual averaging period was selected for initial modeling in preference to the less instructive 24-hour period. This decision is based on the fact that the candidate peak 24-hour periods are significantly influenced by local construction activities for which very little specific information is available for modeling purposes. The annual period is much less influenced by local construction and allows the use of the existing emission inventory and receptor modeling data.

Final Implementation Plan Revision, at 9-16 (Feb.1994). This passage demonstrates that the state did not perform air quality modeling for the 24-hour standard. The development of independent data for the 24-hour standard, however, was necessary to determine whether attainment of the 24-hour standard was in fact practicable by the statutory deadline or, alternatively, to help achieve attainment as expeditiously as would be practicable. The State was not relieved of this burden simply because it could analyze the annual standard using “existing emission inventory and receptor modeling data.”

Finally, Arizona also neglected to meet the “reasonable further progress” requirements for the 24-hour standard. 42 U.S.C. § 7502(c)(2). Progress toward attainment of the 24r-hour standard will differ from that for the annual standard. The State will have to demonstrate qualitative milestones toward attainment of the 24-hour standard in light of implementing “reasonably available control measures” targeting the 24-hour standard and attainment information revealed by the independent modeling and testing for the 24-hour standard.

Accordingly, the EPA’s interpretation of the Implementation Plan’s attainment demonstration requirements for the 24-hour standard was not based on a permissible construction of the Clean Air Act. The EPA’s rationalization that because the area will be redesignated “serious,” an independent analysis of the 24-hour standard is unnecessary does not further the Clean Air Act’s ultimate goal of attainment of each of the NAAQS as expeditiously as possible or comply with the strict provisions related to achieving that attainment. We conclude that because there are two separate NAAQS for PM-10, the Clean Air Act requires an implementation plan to address each of them. Thus, EPA’s approval of an implementation plan that failed to independently address the 24-hour standard violated the Clean Air Act. We remand to the EPA for the EPA, in turn, to require the State to submit an independent demonstration of: 1) the implementation of all “reasonably available control measures” targeting attainment of the 24-hour standard; 2) attainment of or the impracticability of attainment of the 24r-hour PM-10 standard; and 3) “reasonable further progress” for that standard.

B. Transportation Control Measures

Petitioners argue that Transportation Control Measures are presumptively “reasonably available control measures” under Delaney v. Environmental Protection Agency, 898 F.2d 687 (9th Cir.), cert. denied, 498 U.S. 998, 111 S.Ct. 556, 112 L.Ed.2d 563 (1990). In Delaney, which was similar to this case, the petitioners challenged EPA’s approval of Arizona’s Carbon Monoxide Implementation Plans for Maricopa and Pima Counties. One of the petitioners’ primary contentions was that the plans failed to provide for sufficient control measures. The court noted that an EPA guidance document provided that the measures listed in 42 U.S.C. § 7408 were presumed reasonably available, and that a state could “reject one of th[o]se measures only by showing that the measure either would not advance attainment, would cause substantial widespread and long-term adverse impact, or would take too long to implement.” Id. at 692. Petitioners argue that Arizona did not presume the Transportation Control Measures to be “reasonably available control measures” or meet the requirements for rejection of those control measures.

Delaney, however, was decided before the 1990 Amendments to the Clean Air Act. The EPA promulgated the General Preamble to describe its interpretation of the amendments and to instruct on the provisions concerning implementation plan revisions for nonattainment areas. 57 Fed.Reg. 13498 (April 16, 1992). The General Preamble stated that the EPA was changing its prior interpretation that Transportation Control Measures listed in section 108(f) were “reasonably available control measures” for all areas:

[B]ased on experience with implementing [Transportation Control Measures] over the years, EPA now believes that local circumstances vary to such a degree from city-to-city that it is inappropriate to presume that all section 108(f) measures are reasonably available in all areas.

Id. at 13560. The General Preamble noted that the EPA was free to change its interpretation of the “reasonably available control measures” provision. Then, specifically rejecting Delaney’s holding, it stated that the Transportation Control Measures should be considered on an area-specific basis. Id. at 13560-61.

Accordingly, after the 1990 Amendments and the General Preamble, Delaney no longer accurately reflects the EPA’s interpretation of the requirements for a state’s rejection of Transportation Control Measures as “reasonably available.” The EPA had the discretion to alter its previous policy of presuming all of the Transportation Control Measures to be “reasonably available” on a national scale. Current EPA guidance provides that the state must address the “reasonableness” of all control measures, including the Transportation Control Measures, based on the local circumstances, and then either implement them or provide a justification for their rejection. This represents a reasonable interpretation of the Clean Air Act and the control measures provisions. Therefore, the EPA did not abuse its discretion by rejecting Petitioners’ argument that the Transportation Control Measures are presumptively “reasonably available.”

C. State Assurances to Implement Plan

Petitioners contend that the EPA’s approval of the Implementation Plan violated the Clean Air Act because the plan failed to provide necessary assurances by the State for the implementation of plan provisions that rely on a local or regional government or agency, as required by 42 U.S.C. § 7410(a)(2)(E)(iii). EPA asserts that Arizona’s statutory scheme addressing the implementation of control measures and emission limitations provides adequate assurances. Specifically, the Arizona statute states that if the Director of the Arizona Department of Environmental Quality determines that a control measure is not being implemented, he must make a finding to this effect and provide an opportunity to confer. If the Director subsequently finds that the failure has not been corrected, the State must file an action for injunctive relief. Ariz.Rev.Stat. Ann. § 49-406. J.

Petitioners argue that this Arizona statute provides no assurance of state responsibility because the Director is not legally bound to act under the statute and no time limits apply to the process. Petitioners believe that this statutory scheme gives the state officials discretion to ignore the law’s requirements. Thus, according to Petitioners, the Implementation Plan did not provide adequate assurances and did not meet the Clean Air Act’s mandates for enforceability, timely implementation of control measures, and expeditious attainment.

We defer to EPA on this issue. EPA examined Arizona’s statute, procedures, and commitment to enforcement and found that they comply with the Clean Air Act. The Clean Air Act’s requirement of state assurances is general, requiring the state to ensure its responsibility for implementing the plan provisions that rely on a local or regional government or agency. In Arizona, if the Director of Arizona’s Department of Environmental Quality finds that a control measure is not being implemented and that failure is not corrected, the State must file an action for injunctive relief. Thus, Arizona’s statute clearly addresses state responsibility and action for enforcing plan provisions that rely on local and regional entities. It is only reasonable that the State await a preliminary finding by the Director that the local or regional government is not implementing a control measure before filing for injunctive relief. Therefore, we conclude that EPA did not abuse its discretion by finding that the Implementation Plan provided adequate assurances.

II

Violations of Administrative Procedure Act

The EPA’s approval of the PM-10 Implementation Plan was a rulemaking action subject to the requirements of the Administrative Procedure Act (APA). The APA requires an agency to: 1) publish a general notice of proposed rulemaking in the Federal Register; 2) give interested parties an opportunity to participate in the rulemaking through submission of data, views, and arguments; and 3) after consideration of the relevant matter presented, incorporate in the rules a concise general statement of the rules’ basis and purpose. 5 U.S.C. § 553(b)-(c).

Petitioners contend that the EPA violated the notice and comment provisions of the APA when it: 1) accepted and relied on additional information justifying the rejection of certain control measures submitted after the comment period; 2) substituted its own determination of “reasonable further progress” and granted the State more credit than the State itself had claimed; and 3) included in the PM-10 Implementation Plan measures from the Carbon Monoxide and Ozone Implementation Plans.

A Post-Comment Period Justifications for Rejecting Certain Control Measures

The Clean Air Act requires “moderate” area implementation plans to include:

Provisions to assure that reasonably available control measures for the control of PM-10 shall be implemented no later than December 10,1993....

42 U.S.C. § 7513a(a)(l)(C). For each of the available control measures, the state must either implement the measure or provide a reasoned justification for rejecting it. A state may show that a measure is unreasonable because it provides only de minimis benefit or because it is technologically or economically infeasible. General Preamble, 57 Fed.Reg. 13540-41.

The EPA proposed approval of the Phoenix Implementation Plan on July 28, 1994 and set August 29, 1994 as the deadline for public comment. 59 Fed.Reg. 38402. In December 1994, long after the close of the comment period, the director of the Arizona Department of Environmental Quality sent approximately 300 pages of documents to the EPA in response to the EPA’s request to submit additional justifications for rejecting specific control measures. These documents demonstrated the State’s view that several control measures identified by Petitioners were not reasonably available. They were not part of the Implementation Plan submit-tal and were not on record during the public comment period. Petitioners first learned of the additional documents when the EPA announced its final decision.

Petitioners assert that more than 160 control measures were identified for PM-10. The precise number of control measures that were implemented or were rejected as unreasonable is not clear. What is clear is that the EPA requested and accepted justifications for rejecting certain measures after the comment period closed. Petitioners argue that the EPA’s acceptance of these “post hoc” justifications violated the Clean Air Act and the APA. We agree.

This circuit has previously addressed when an agency can consider additional information after the close of a public comment period when making a final rule. In Idaho Farm Bureau Fed’n v. Babbitt, 58 F.3d 1392 (9th Cir.1995), the Idaho Conservation League and Committee for Idaho’s High Desert appealed the district court’s judgment setting aside the final rule that listed the Bruneau Hot Springs Snail as an endangered species. The district court determined that the U.S. Fish and Wildlife Service (FWS) had committed several procedural errors during the period between the initial proposal and the final listing. One of the errors involved the FWS’s failure to provide the public with notice of and an opportunity to comment on a relevant report from the U.S. Geological Survey (USGS). On appeal, the Ninth Circuit stated that:

An agency may use supplementary data, unavailable during the notice and comment period, that expands on and confirms information contained in the proposed rulemak-ing and addresses alleged deficiencies in the pre-existing data, so long as no prejudice is shown.

Id. at 1402 (quoting Solite Corp. v. Environmental Protection Agency, 952 F.2d 473, 484 (D.C.Cir.1991)).

Then, as to the USGS report, the court explained that the necessity for notice and opportunity to comment was heightened because “FWS relied largely on the USGS study to support its final rule,” and “the USGS report was critical to FWS’ decision.” Id. at 1403. The court also noted that “[o]p-portunity for public comment is particularly crucial when the accuracy of important material in the record is in question.” Id. Ultimately, the court held that FWS violated the APA by making its listing decision “without observance of procedure required by law.” Id. at 1404 (quoting 5 U.S.C. § 706(2)(D)).

Here, the post-comment period information involved justifications for rejecting “reasonably available control measures.” Control Measures are the backbone of the implementation plan because they are the device by which attainment of the NAAQS is achieved. A state must justify its rejection of a control measure, and these justifications are integral to compliance with the Clean Air Act. Obviously, Arizona had not adequately addressed its rejection of certain control measures if it needed 300 pages of post-comment period documentation to justify its rejection of some of those measures. The challenged post-comment period justifications did not merely expand on prior information and address alleged deficiencies. Instead, they addressed the submitted Implementation Plan’s failure to comply with an essential provision of the Clean Air Act. Therefore, they were relied on and were critical to the EPA’s approval of the Implementation Plan. Furthermore, the accuracy of the additional information submitted after the comment period is in question because Petitioners argue that many of the asserted justifications do not in fact support rejection of the control measures. These justifications should have been available for public comment before the EPA proposed approval of the Implementation Plan.

EPA argues that the 300 pages of justifications represent the type of supplementary information that is permissible under Idaho Farm Bureau because they “expand[ ] on and eonfirm[ ] information contained in the proposed rulemaking and address[ ] alleged deficiencies in the pre-existing data.” 58 F.3d at 1402. The EPA argues that under Petitioners’ view, there would be an endless cycle of comments back and forth. See Rybachek v. Environmental Protection Agency, 904 F.2d 1276, 1286 (9th. Cir.1990).

In Rybachek, 904 F.2d 1276 (9th Cir.1990), the petitioners argued that they had been denied a meaningful opportunity for comment when the EPA added over 6000 pages to the administrative record after the public comment period had ended. Rybachek involved a mining association’s challenge to regulations promulgated by the EPA related to sluice-box discharge water. During the rulemaking process, commenters expressed concerns about the proposed regulations’ effect on smaller mines. As a result, the EPA solicited further public comment on that issue. Following the special comment period, EPA published a notice stating that it had determined not to modify the rule, and it made available the record construing the data and analyses that the EPA had generated in response to the comments. The petitioners alleged that those procedures violated their participation rights. The court disagreed, stating that “the additional material was the EPA’s response to comments made during a public-comment period,” and that “[njothing prohibits the Agency from adding supporting documentation for a final rule in response to public comments.” Id. at 1286. The court concluded that petitioners had a right to “comment on the proposed regulations, not to comment in a never-ending way on the EPA’s responses to their comments.” Id.

The instant case is distinguishable from Rybachek. In Rybachek, the added materials were the EPA’s own responses to comments received during the public comment period. Here, in contrast, the additional documentation was submitted by the State in response to the EPA’s request for further information related to the rejection of control measures. Thus, the additional materials in Rybachek involved the EPA’s internal assessment of comments from the public; whereas, here, the new information was solicited by the EPA from an interested party.

Furthermore, in Rybachek, the EPA’s responses related to the economic impact of the regulations on one group of miners. The additional information was not relied on or critical to the EPA’s decision. Instead, the EPA decided not to alter the regulation based on the additional information it developed in response to the comments. Here, on the other hand, the added material related to the Implementation Plan’s compliance with a critical statutory provision. Control measures effectuate attainment of the NAAQS, and justifying their rejection is essential under the Clean Air Act. Petitioners should have had the opportunity to comment on the new information and data which was relied on in the EPA’s final approval of the Implementation Plan.

Although there is merit to EPA’s argument that agencies are not required to review an endless cycle of comments from interested parties, the nature and extent of the additional information in this case required another round of comment and review. Petitioners were prejudiced when they did not have notice of or an opportunity to comment on the post-comment period justifications which were submitted by the State and were critical to the EPA’s approval decision. Accordingly, we remand to the EPA to provide an opportunity for public comment on the justifications submitted by the State in December 1994.

B. EPA’s Finding of Annual Reductions in PM-10 Emissions

The Clean Air Act requires nonattainment area Implementation Plans to provide for “reasonable further progress.” 42 U.S.C. § 7502(c)(2). “Reasonable further progress” is defined as “such annual incremental reductions in emissions of the relevant air pollutant as are required ... for the purpose of ensuring attainment of the applicable” NAAQS by the applicable date. 42 U.S.C. § 7501(1).

Petitioners contend that EPA wrongfully approved a showing of “reasonable further progress” by granting the State 70% more emission reduction credit than the State itself was willing to claim. Specifically, the EPA recalculated the amount of emissions credit that the Implementation Plan deserved and credited substantial emission reductions in the entire nonattainment area, including rural parts of the nonattainment area. The State had not claimed credit for reductions in rural PM-10 emissions because it found that those reductions would have only minor impacts in reducing ambient PM-10 levels in the urban area, which is where the PM-10 violations occur. In substituting its own finding of “reasonable further progress,” the EPA stated in the Final Rule:

EPA disagrees with the commentator’s assertion that the SIP does not demonstrate reasonable further progress in reducing PM-10 emissions. While the State’s demonstration showed a small reduction in PM-10 emissions from the implementation of Maricopa County’s Rule 310-Fugitive Dust, EPA believes that the emission reduction that the State associated with this rule was overly conservative.

60 Fed.Reg. 18018. The EPA viewed the State’s failure to include the rural impacts as a mere oversight.

This substitution of a new “reasonable further progress” finding by the EPA constituted a failure to observe the procedure required by law and an abuse of discretion. The public did not have notice that EPA would reevaluate the State’s conclusion and substitute a different finding. The demonstration of “reasonable further progress” was critical to the EPA’s approval of the Implementation Plan. The EPA’s evaluation did not expand on or supplement existing information. Instead, it altogether changed the prior information and findings available to the public. Furthermore, the accuracy of the information was obviously in question because the State and the EPA found different amounts of reduction. Therefore, the “opportunity for public comment [wa]s particularly crucial.” See Idaho Farm Bureau, 58 F.3d at 1403. Therefore, we remand to EPA to provide an opportunity for public comment on the “reasonable further progress” demonstration.

C. Approval of Measures from the 1993 Carbon Monoxide and Ozone Implementation Plans

Petitioners contend that the inclusion of 41 measures from the 1993 Carbon Monoxide and Ozone Implementation Plans as “reasonably available control measures” for PM-10 was impermissible because: 1) the EPA included them of its own volition; and 2) the EPA’s notice of proposed rulemaking did not formally propose to add these measures to the PM-10 Implementation Plan. As a consequence, Petitioners argue that members of the public did not have the opportunity to comment on the measures’ inclusion.

EPA submits that it did in fact adequately give notice of its proposal to include the contested measures in the PM-10 Implementation Plan. When addressing “reasonably available control measures” in its Proposed Rule, EPA stated:

[T]he SIP revision includes 58 measures developed by [the Maricopa Association of Government (MAG)] for the 1988 MAG particulate plan (MAG Measures).... These MAG measures include those designed specifically to reduce particulate matter emissions, as well as those developed for MAG’s 1987 carbon monoxide SIP revision that could also reduce particulate matter emissions.
Of the remaining 62 measures submitted during the public comment period, ... 9 measures were to be addressed in the State’s 1993 SIP revisions for carbon monoxide and ozone.
43 of the MAG measures were specifically adopted for the State’s 1987 carbon monoxide (CO) SIP_ These CO measures are included in the PM-10 SIP revision because they could also reduce particulate matter emissions.... Many of these measures are transportation control measures (TCMs)....

59 Fed.Reg. 38402, 38404 (July 28,1994).

We agree with EPA that the Proposed Rule gave adequate notice that if measures from the other implementation plans also reduced PM-10 emissions, they would be included in the PM-10 Implementation Plan. Clearly, this would include measures from later versions or revisions of the 1987 Implementation Plans, such as the 1993 Carbon Monoxide Implementation Plan. Accordingly, Petitioners were not denied their opportunity to comment on those provisions. Therefore, the inclusion of control measures from the 1993 Carbon Monoxide and Ozone Implementation Plans did not violate the APA

III

Fees and Costs of Litigation

The Clean Air Act authorizes a court to “award costs of litigation (including reasonable attorney and expert witness fees) whenever it determines that such award is appropriate.” 42 U.S.C. § 7607(f). Accordingly, we award Petitioners the costs and fees related to this appeal. The determination of an appropriate amount of fees on appeal is referred to the court’s special master, Appellate Commissioner Peter L. Shaw, who shall conduct whatever proceedings he deems appropriate, and who shall have. authority to enter an order awarding fees. See Introduction to Ninth Circuit Rules § C(2); 9th Cir. Gen. Orders 1.8, 6.3(e), 6.10.

CONCLUSION

In sum, we: 1) remand to EPA and require the State to submit a separate demonstration of the implementation of all “reasonably available control measures” targeting the 24-hour standard violations; attainment or the impracticability of attainment for the 24r-hour standard; and “reasonable further progress” for the 24-hour standard; 2) remand this ease to EPA to provide for an opportunity for public comment on the post-comment period justifications for rejecting control measures and on the “reasonable further progress” demonstration; and 3) award costs and fees to Petitioners.

Petition granted in part and denied in part.

      . The 24-hour standard is attained when the expected number of days per calendar year with a 24-hour average concentration above 150 micrograms per cubic meter is equal to or less than one. The annual standard is attained when the expected annual arithmetic mean concentration is less than or equal to 50 micrograms per cubic meter. 40 C.F.R. § 50.6.

      . While we realize that the December 31, 1994 deadline for attainment has passed and that the EPA has proposed to reclassify Phoenix as a "serious" nonattainment area, the state must still comply with the "moderate" area implementation plan provisions. See 42 U.S.C. § 7513a(b)(l). Therefore, despite the fact that the December 31, 1994 deadline has passed, Arizona’s Implementation Plan must address the implementation of all "reasonably available control measures” targeting the 24 — hour standard, attainment of the 24-hour standard as expeditiously as practicable, ánd "reasonable further progress” for that standard in order to be in compliance with the "moderate” area implementation plan provisions. This should not be construed to prevent or stay the EPA’s reclassification of the Phoenix area to a "serious” nonat-tainment area for PM-10.

      . This panel will not reach the issue of the adequacy of Arizona’s assurances of funding and enforcement resources pursuant to 42 U.S.C. § 7410 (a)(2)(E) (i). The EPA will have to reevaluate Arizona’s resource commitments in light of any new control measures that are implemented or any other changes that occur in the Implementation Plan as a result of our decision here today.


source: Caselaw Access Project

author: FARRIS, Circuit Judge:

license: Public Domain

text:
    Kay V. KUEHNER, Plaintiff-Appellant, v. DICKINSON & COMPANY, an Iowa corporation, Defendant-Appellee.
    No. 94-56529.
    United States Court of Appeals, Ninth Circuit.
    Argued March 6, 1996.
    Decided May 17, 1996.
    As Amended July 5, 1996.

      Michael E. Merrill, Stephen J. Schultz, Mark T. Bennett, John M. Julius III, Merrill, Schultz & Wolds, San Diego, California, for plaintiff-appellant.
    Lori A. Bowman, William W. Oxley, Scott G. Lawson, Orrick, Herrington & Sutcliffe, Los Angeles, California, for defendant-appel-lee.
    Before BROWNING, WALLACE and FARRIS, Circuit Judges.
   FARRIS, Circuit Judge:

I.

Kay Kuehner sued Dickinson & Co. for violations of the Fair Labor Standards Act and wrongful discharge under California tort law. She appeals the district court’s interlocutory order staying proceedings pending the arbitration of her claims. We have jurisdiction pursuant to 28 U.S.C. § 1292(b) and 9 U.S.C. § 16(b). We affirm.

Dickinson & Co. hired Kuehner as a securities sales representative on September 14, 1992. Kuehner alleges that two months after she was hired, she requested pay at a minimum wage for all of the hours she worked. Kuehner alleges that Dickinson & Co. refused, and terminated her on November 18, 1992.

Kuehner had registered with the National Association of Securities Dealers at the beginning of her employment by signing a Form U-4, a standardized contract used throughout the securities industry. Paragraph 5 provides:

I agree to arbitrate any dispute, claim or controversy that may arise between me and my firm, or a customer, or any other person, that is required to be arbitrated under the rules, constitutions, or by-laws of the [NASD] as may be amended from time to time and that any arbitration award rendered against me may be entered as a judgment in any court of competent jurisdiction.

The SEC approved amendments to the NASD Code of Arbitration Procedure after Dickinson & Co. fired Kuehner but before Kuehner sued. At the time of Kuehner’s termination, Part I, § 1 provided that:

This Code of Arbitration Procedure is prescribed ... for the arbitration of any dispute, claim, or controversy arising out of or in connection with the business of any member of the [NASD], with the exception of disputes involving the insurance business of any member which is also an insurance company:
(1) between or among members;
(2) between or among members and public customers, or others; ....

Part II, § 8 provided that:

Any dispute, claim, or controversy eligible for submission under Part I of this Code between or among members and/or associated persons, and/or certain others, arising in connection with the business of such member(s) or in connection with the activities of such associated person(s), shall be arbitrated under this Code, at the instance of:
(1) a member against a member;
(2) a member against a person associated with a member or a person associated with a member against a member....

The SEC approved amendments to these provisions on August 31, 1993. The new Part I, § 1 makes eligible for arbitration “[a]ny dispute, claim, or controversy ... arising out of the employment or termination of employment of associated person(s) with any member.” The new Part II, § 8 requires arbitration for “any dispute, claim, or controversy ... eligible for submission under Part I of this Code between or among members and/or associated persons ... or arising out of the employment or termination of employment of such associated person(s) with such member....” These amendments became effective on October 1,1993.

Kuehner sued Dickinson & Co. on November 17, 1993, claiming unpaid minimum wages and overtime in violation of FLSA §§ 6, 7 and retaliatory discharge in violation of FLSA § 15(a)(3), see 29 U.S.C. §§ 201 et seq., and wrongful discharge under California tort law. Kuehner demanded a jury trial. The district court granted Dickinson & Co.’s motion to stay proceedings pending arbitration pursuant to 9 U.S.C. § 3. The district court concluded that Kuehner entered an enforceable arbitration contract, that the new NASD rule governed Kuehner’s suit, and that even if it did not, the old NASD rule required arbitration. The district court amended its order by adding the following language:

Because this order presents controlling questions of law as to which there is substantial ground for difference of opinion and because an immediate appeal herefrom may materially advance the ultimate termination of the litigation, it is hereby ordered, pursuant to 28 U.S.C. § 1292(b), that this order is certified for interlocutory appeal to United States Court of Appeals for the Ninth Circuit.

A motions panel for the Ninth Circuit granted Kuehner’s petition for permission to appeal.

II.

A Jurisdiction

Dickinson & Co. contends that we lack jurisdiction. It argues that the order certified by the district court does not involve a “controlling question of law.” See 28 U.S.C. § 1292(b). Although we give deference to the ruling of the motions panel, we have an independent duty to confirm that our jurisdiction is proper. We hold that the motions panel did not err.

Dickinson & Co. argues that under In re Cement Antitrust Litigation, 673 F.2d 1020 (9th Cir.1982), no question of law can be controlling unless it determines who will win on the merits. But in Cement Litigation we stated that “issues collateral to the merits” may be the proper subject of an interlocutory appeal. 673 F.2d at 1027 n. 5. We agree with the district court that an order may involve a controlling question of law if it could cause the needless expense and delay of litigating an entire case in a forum that has no power to decide the matter. A contrary holding would render meaningless the acknowledgment in 9 U.S.C. § 16(b) that an interlocutory order pursuant to the Federal Arbitration Act may in some circumstances satisfy the requirements of 28 U.S.C. § 1292(b).

B. Knowing Waiver

Kuehner contends that the district court failed to recognize that Congress has restricted the enforcement of contracts to arbitrate FLSA claims by requiring a “knowing waiver” of the right to a judicial forum.

The FAA provides that “a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction ... shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” 9 U.S.C. § 2. The FAA not only reversed the judicial hostility to the enforcement of arbitration contracts, but also created a rule of contract construction favoring arbitration. Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 24-25, 111 S.Ct. 1647, 1651, 114 L.Ed.2d 26 (1991) (FAA manifests a “liberal federal policy favoring arbitration agreements”); Moses H. Cone Memorial Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24-25, 103 S.Ct. 927, 941-42, 74 L.Ed.2d 765 (1983) (“any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration”).

The Supreme Court has held that despite the FAA, contracts to arbitrate statutory claims are unenforceable if Congress intended to preclude a waiver of the plaintiff’s right to a judicial forum. Shearson/American Express Inc. v. McMahon, 482 U.S. 220, 226, 107 S.Ct. 2332, 2337, 96 L.Ed.2d 185 (1987). But the Supreme Court has seldom found congressional intent to preclude such a waiver, and has enforced contracts to arbitrate claims under the Sherman Act, the-Racketeer Influenced and Corrupt Organizations Act, and the Securities Exchange Act of 1934. See Gilmer, 500 U.S. at 26, 111 S.Ct. at 1652 (citing cases). It has also enforced a contract to arbitrate claims under the Age Discrimination in Employment Act. Id. at 33, 35, 111 S.Ct. at 1655, 1656 (“Mere inequality of bargaining power ... is not a sufficient reason to hold that arbitration agreements are never enforceable in the employment context.”).

Just as Congress may preclude a waiver of the plaintiffs right to a judicial forum, it may create other restrictions to the enforcement of arbitration contracts. In Prudential Ins. Co. v. Lai, we held that it was “apparent from the text and legislative history of Title VII” that Congress had required a “knowing” waiver of the right to a judicial forum. 42 F.3d 1299, 1304 (9th Cir.1994), cert. denied, — U.S.-, 116 S.Ct. 61, 133 L.Ed.2d 24 (1995). Lai reversed the district court order staying proceedings and directing arbitration because the employees who had signed the Form U-4 lacked specific knowledge that they might have to arbitrate sexual discrimination claims; neither the Form U-4 nor the old NASD rule it incorporated “refer[ed] to employment disputes” or “deserib[ed] any disputes the parties agreed to arbitrate.” Id. at 1305. Lai implied that by imposing a knowing waiver requirement, Congress had relaxed the federal rule of contract construction favoring arbitration in the Title VII context.

Kuehner bears the burden of proving that Congress restricted the enforcement of contracts to arbitrate FLSA claims. See McMahon, 482 U.S. at 227, 107 S.Ct. at 2337. Unable to identify support in the text or legislative history of the FLSA, she cites dieta in Barrentine v. Arkansas-Best Freight Sys., Inc. that questions the competence of arbitrators to decide FLSA claims. 450 U.S. 728, 743, 101 S.Ct. 1437, 1446, 67 L.Ed.2d 641 (1981). Kuehner’s reliance on Barrentine is unpersuasive. The Supreme Court wrote in Gilmer that its previous expressions of “mistrust of the arbitral process” had been “undermined” by subsequent cases, 500 U.S. at 34 n. 5, 111 S.Ct. at 1656 n. 5, and that Barrentine provides “no basis” for the refusal to enforce an arbitration contract because it was “not decided under the FAA.” Id. at 35, 111 S.Ct. at 1657.

Kuehner fails to carry her burden of showing that when Congress enacted the FLSA, it imposed a knowing waiver requirement similar to that which exists under Title VII.

C. The New NASD Rule

Kuehner and Dickinson & Co. agree that the new NASD rule requires arbitration of employment disputes. Kuehner contends, however, that under the Form U-4 the old NASD rule governs. She relies on the fact that her termination occurred before October 1, 1993. Dickinson & Co. counters that the new NASD rule governs, and that even if it does not, the old NASD rule requires arbitration. Because we hold that the new NASD rule governs, we need not interpret the old NASD rule.

Kuehner agreed in signing the Form U-4 to be bound by the NASD rules “as may be amended from time to time.” A new procedural rule will usually govern suits filed after its effective date regardless of when the relevant conduct occurred. Landgraf v. USI Film Prods., — U.S.-,-, 114 S.Ct. 1483, 1502, 128 L.Ed.2d 229 (1994). Although we have not yet addressed the issue, two district courts have applied the new NASD rule to suits filed after October 1, 1993, even though the relevant conduct occurred earlier. See Pitter v. Prudential Life Ins. Co., 906 F.Supp. 130, 134-35 (E.D.N.Y.1995) (directing arbitration of Title VII claim on the grounds that “it is entirely appropriate to hold Pitter to compliance with non-substantive rules that took effect almost six months before he filed his lawsuit”); Wojcik v. Aetna Life Ins., 901 F.Supp. 1282, 1289 (N.D.Ill.1995) (directing arbitration of state fraud and contract claims because “Wojcik filed his claim after the effective date of the [new NASD rule]”).

We must decide whether the new NASD rule deprives Kuehner of substantive rights. An employee who sues under the FLSA has the right to a jury trial, see Lorillard v. Pons, 434 U.S. 575, 580 n. 7, 98 S.Ct. 866, 870 n. 7, 55 L.Ed.2d 40 (1978); Lehman v. Nakshian, 453 U.S. 156, 164 n. 11, 101 S.Ct. 2698, 2703 n. 11, 69 L.Ed.2d 548 (1981), and may be entitled to a broad range of legal and equitable remedies. See 29 U.S.C. § 216(b). Kuehner does forfeit her right to a jury trial, but this right is not substantive. See Landgraf, — U.S. at-, 114 S.Ct. at 1505 (statutory inclusion of right to a jury trial is a “procedural change of the sort that would ordinarily govern in trials conducted after its effective date”); See Gilmer, 500 U.S. at 26, 111 S.Ct. at 1652 (“by agreeing to arbitrate a statutory claim, a party does not forgo the substantive rights afforded by the statute”). Kuehner does not forfeit her right to the FLSA’s remedies. Recent Supreme Court cases confirm that an arbitrator would have the full power to provide the legal and equitable remedies available. See Mastrobuono v. Shearson Lehman Hutton, Inc., — U.S.-,-, 115 S.Ct. 1212, 1218-19, 131 L.Ed.2d 76 (1995) (absent contrary contractual provision, arbitrator has power to award punitive damages); Gilmer, 500 U.S. at 32, 111 S.Ct. at 1655 (arbitrator has power to fashion equitable relief).

The new NASD rule governs under the Form U-4. Because the rule does not affect Kuehner’s substantive rights, and because Kuehner sued Dickinson & Co. after October 1, 1993, the date the new rules became effective, the rule requiring arbitration governs Kuehner’s suit.

AFFIRMED.

      . The Tenth, Eleventh, and Seventh Circuits have split on whether the old NASD rule requires arbitration of employment disputes, each circuit interpreting the rule differently. See Armijo v. Prudential Ins. Co., 72 F.3d 793, 798-800 (10th Cir.1995) (arbitration required); Kidd v. Equitable Life Assurance Soc'y, 32 F.3d 516, 518-20 (11th Cir.1994) (arbitration required); Farrand v. Lutheran Bhd., 993 F.2d 1253 (7th Cir.1993) (arbitration not required).


author: MICHAEL DALY HAWKINS, Circuit Judge:

text:
    UNITED STATES of America, Plaintiff-Appellee, v. Roger V. CHASTAIN, Defendant-Appellant.
    No. 95-10267.
    United States Court of Appeals, Ninth Circuit.
    Argued and Submitted March 12, 1996.
    Decided May 17, 1996.

      Ann C. MeClintock and Mamie L. Sayles, Assistant Federal Public Defenders, Sacramento, California, for defendant-appellant.
    Benjamin B. Wagner, Assistant United States Attorney, Sacramento, California, for plaintiff-appellee.
    Before CHOY, BEEZER and HAWKINS, Circuit Judges.
   MICHAEL DALY HAWKINS, Circuit Judge:

Appellant Roger V. Chastain (“Chastain”) was convicted pursuant to 26 U.S.C. § 7203 of five misdemeanor counts of willfully faihng to timely pay income taxes. Chastain contends (1) the magistrate judge who presided over Chastain’s trial abused his discretion by failing to instmct the jury regarding the relationship between § 7203’s “willfulness” requirement and Chastain’s “good faith” defense; (2) the magistrate judge abused his discretion by refusing to strike the government’s allegedly inaccurate summary of the evidence during closing argument; and (3) the district court erred in vacating the magistrate judge’s downward sentencing departures. We affirm.

I. FACTUAL AND PROCEDURAL HISTORY

Chastain is an attorney in Northern California. Evidence at trial established that although he filed accurate tax returns for years 1984-1989, he failed to pay taxes total-ling over $100,000. Despite making over $50,000 a year and taking at least five trips to Europe between 1985 and 1989, Chastain told the IRS he did not have enough money to pay his taxes.

In September 1993, Chastain was charged with five misdemeanor counts of willfully failing to timely pay income tax. Chastain consented to proceed before a magistrate judge and pleaded not guilty. The focus of the trial was the “willful” element of the offense. Perhaps elevating hope over common sense, Chastain contended that the “willful” element of § 7203 was negated by his good faith belief that he could treat the IRS “like any other general creditor.”

The jury convicted Chastain on all counts. At sentencing, the magistrate granted a two-level reduction in the base offense level for acceptance of responsibility pursuant to U.S.S.G. § 3E1.1. The magistrate then departed downward two months from the low end of the 4-10 month guideline range in order to facilitate the payment of approximately $118,000 restitution to the IRS. Chastain appealed his conviction to the district court, and the government cross-appealed the sentence.

The district court affirmed Chastain’s conviction after rejecting his claim of instructional error on the willfulness element of § 7203. The district court granted the gov-emment’s cross-appeal and vacated the magistrate’s two-level reduction for acceptance of responsibility and the magistrate’s two-month downward departure.

Chastain timely appealed. We have jurisdiction pursuant to 28 U.S.C. § 1291, and we affirm the district court.

II. DISCUSSION

A. Jury Instructions

Chastain contends that the magistrate judge should have instructed the jurors that a good-faith belief that Chastain was not violating the law would “directly negate” the willfulness element of § 7203. We review whether a trial court’s instructions adequately covered a defendant’s proffered defense de novo, United States v. Warren, 25 F.3d 890, 895 (9th Cir.1994), and review a district court’s formulation of jury instructions for an abuse of discretion, United States v. Vaandering, 50 F.3d 696, 702 (9th Cir.1995).

The magistrate judge instructed the jury that accepting Chastain’s good-faith defense would require acquittal. The instruction gave the government the burden of proving Chastain did not have a good-faith belief and explicitly included the government’s burden on the good faith issue among the other elements of the offense. The instruction adequately covered Chastain’s good-faith defense, and the magistrate did not abuse his discretion in declining to further instruct the jury regarding the relationship between willfulness and good faith.

B. Closing Argument

Chastain contends that during closing argument the government mischaraeter-ized evidence regarding Chastain’s use of his disposable income. Chastain specifically challenges the prosecutor’s assertion that “defendant got a windfall of $80,000, threw a bone to the IRS, went out and spent over $60,000 buying a new car, a bunch of furniture.” The trial court’s decision to allow a jury to consider comments made by one party in closing argument to which the other party objects is reviewed for an abuse of discretion. United States v. Diaz, 961 F.2d 1417, 1418 (9th Cir.1992).

Chastain’s argument is without merit. The prosecutor’s assertions were reasonable inferences drawn from trial testimony, including the testimony of Chastain himself. See United States v. Birges, 723 F.2d 666, 671-72 (9th Cir.) (noting that attorneys may draw reasonable inferences from the evidence during closing argument), cert. denied, 466 U.S. 943, 104 S.Ct. 1926, 80 L.Ed.2d 472, and cert. denied, 469 U.S. 863, 105 S.Ct. 200, 83 L.Ed.2d 131 (1984). The prosecutor’s reference to an $80,000 “windfall” related to Chastain’s share of a client’s award in a personal injury case. The prosecutor’s characterization of Chastain’s effort to “throw the IRS a bone” referred to Chastain’s attempt, after he had received the $80,000, to settle his debt with the IRS for $20,000. Finally, the reference to a new ear and new furniture came from the testimony of IRS Agent Sandra Mohan, who testified that Chastain told her after he had received the $80,000 that “he had purchased a brand-new 1993 automobile that he paid cash for. He had gotten furniture. He sent money to his kids, paid other creditors, and he had some money left over he wanted to ask the IRS to consider compromising his liability with.” Because each of the alleged mischaracterizations finds support in the record, the trial court did not abuse its discretion in allowing them.

C. Sentencing Guidelines

1. Two-Level Reduction for Acceptance of Responsibility

At sentencing, the magistrate granted Chastain’s request for a two-level sentence reduction based on the § 3E1.1 Acceptance of Responsibility guideline. The magistrate judge based his § 3E1.1 two-level reduction on three factors: (1) Chastain demonstrated an acceptance of responsibility by never contesting that he owed taxes, (2) deterrence interests had already been served by the negative publicity and legal fees associated with Chastain’s case, and (3) a longer sentence would damage Ms law practice and thus constitute a “financial death penalty.” The sentencing court’s interpretation and application of the Sentencing Guidelines are reviewed de novo. United States v. Basinger, 60 F.3d 1400, 1409 (9th Cir.1995).

The reasons cited by the magistrate in support of Ms decision to grant an acceptance of responsibility reduction are not legitimate grounds for a § 3E1.1 reduction. Although it is true that Chastain never de-med that he had tax liability, Chastain never accepted responsibility for the offense of willful failure to pay. See U.S.S.G. § 3El.l(a) (providmg that defendant is eligible for reduction only if defendant accepts responsibility for his criminal conduct). Chastain’s failure to accept responsibility for Ms crime was manifest in his decision to take the case to trial, where he vigorously demed the “willful” element of the offense. See U.S.S.G. § 3E1.1 n. 2 (specifying that only in “rare situations” will a defendant qualify for a reduction after “put[ting] the government to its burden of proof at trial by denymg the essential factual elements of guilt”).

The other grounds upon wMch the magistrate based Ms reduction are even more suspect. Whether deterrence interests have been served by other means (public approbation, financial loss, etc.) may be relevant to a § 5K2.0 departure, but the § 3E1.1 acceptance of responsibility guideline does not permit a sentence reduction for circumstances unrelated to whether Chastain acknowledged his guilt. The final ground cited by the magistrate, Chastain’s payment of restitution, is mentioned m § 3E1, but only in a very narrow sense. Application Note 1(b) permits the judge to consider a defendant’s “voluntary payment of restitution pri- or to adjudication of guilt” in determining whether a defendant has clearly accepted responsibility for Ms crimmal acts. In tMs case, Chastain made no voluntary restitution. Because the acceptance of responsibility guideline does not permit a reduction to facilitate post-conviction payment of restitution, the magistrate erred m using § 3E1.1 m an attempt to avoid a “financial death penalty.”

In sum, Chastain’s conduct fell well short of manifesting the “clear acceptance of responsibility” required by § 3E1.1.

2. Departure to Facilitate Payment of Restitution

After granting a two-level departure for acceptance of responsibility, the magistrate departed downward an additional two months m order to facilitate payment of restitution. In lieu of a Guideline provision that explicitly permits departure based on the amount of restitution required, Chastam relies on Guideline § 5K2.0 m combmation with 18 U.S.C. § 3553(a)(7) to justify the magistrate’s decision to depart. Guideline § 5K2.0 permits departure based on “ ‘mitigating circumstance[s] of a kind, or to a degree, not adequately taken into consideration by the Sentencing Commission.’ ” U.S.S.G. § 5K2.0 (quoting 18 U.S.C. § 3553(b)).

The sentencing judge may not depart unless he or she has legal authority under the Guidelines to do so. United States v. Lira-Barraza, 941 F.2d 745, 746 (9th Cir.1991) (en banc) (notmg that “legal authority” is first of three-part test for departure under the Guidelines). Although in United States v. Miller, 991 F.2d 552 (9th Cir.1993), and United States v. Berlier, 948 F.2d 1093 (9th Cir.1991), we analyzed the related question of the scope of § 3E1.1 departures based on pre-trial restitution efforts, we have not decided under what, if any, circumstances a § 5K2.0 departure is appropriate to permit a defendant to make restitution payments after conviction.

We join the Second, Fourth, Sixth, and Seventh circuits in holding that a sen-tencmg judge may not depart to facilitate payment of restitution. See United States v. Broderson, 67 F.3d 452, 458 (2d Cir.1995) (“Ordinarily, payment of restitution is not an appropriate basis for downward departure under Section 5K2.0.”); United States v. Bolden, 889 F.2d 1336, 1340 (4th Cir.1989) (“[W]e do not think that the economic desirability of attempting to preserve [defendant’s] job so as to enable him to make restitution warrants a downward adjustment from the guidelines.”); United States v. Seacott, 15 F.3d 1380, 1388-89 (7th Cir.1994) (holding that restitution is not a proper ground for departing downward from the Guidelines range); United States v. Harpst, 949 F.2d 860, 863 (6th Cir.1991) (holding that district court may not depart downward to preserve defendant’s ability to make restitution). Guideline § 5K2.0 requires that the mitigating circumstance that forms the basis for departure must be “of a kind, or to a degree, not adequately taken into consideration by the Sentencing Commission.” We have held, however, that restitution was taken into consideration by the Commission under Guideline § 3E1.1, which permits a downward departure when voluntary restitution paid before trial demonstrates an acceptance of responsibility. See Miller, 991 F.2d at 553 (“The Sentencing Commission considered the possibility that a defendant’s payment of restitution might be a mitigating factor [in § 3E1.1]_ A court’s discretion in departing because of restitution is therefore constrained [by the requirements of § 3E1.1].”); see also United States v. Crook, 9 F.3d 1422, 1426 (9th Cir.1993) (,fWe recently held in [Miller ] that extraordinary restitution is a basis for downward departure only ‘to the extent it shows acceptance of responsibility.’” (quoting Miller)), cert. denied, — U.S. -, 114 S.Ct. 1841, 128 L.Ed.2d 467 (1994). Our determination that the Commission took restitution into consideration in § 3E1.1 is in accord with the decisions of other circuits that have considered the relationship between § 3E1.1 and a court’s § 5K2.0 authority to depart on the basis of restitution. See, e.g., Broderson, 67 F.3d at 458 (“Ordinarily, payment of restitution is not an appropriate basis for downward departure under Section 5K2.0 because it is adequately taken into account by Guidelines Section 3E1.1, dealing with acceptance of responsibility.”); Seacott, 15 F.3d at 1388 (citing § 3E1.1 in support of the proposition that Commission considered and rejected restitution as a mitigating circumstance). Because restitution was adequately taken into consideration by the Sentencing Commission as a ground for departure, a § 5K2.0 departure based on restitution is not legitimate.

In addition to the explicit incorporation of restitution considerations into § 3E1.1, the Commission also implicitly considered departures based on ability to pay restitution in formulating Guideline § 5H1.10. Section 5H1.10, a Guideline policy statement, provides that socio-economic status is “not relevant in the determination of a sentence.” Allowing a sentencing judge to reduce a defendant’s sentence to preserve a defendant’s job and facilitate restitution would introduce precisely the type of socio-economic disparity into sentencing that the Guidelines were designed to eliminate. Cf. United States v. DeMonte, 25 F.3d 343, 347 (6th Cir.1994) (“In accordance with U.S.S.G. § 5H1.10, we may not sentence a poor convict more harshly than a rich convict simply because the rich convict is better able to make restitution.”); Harpst, 949 F.2d at 863 (“Furthermore, it seems that the Sentencing Commission considered including the ability to make restitution as a possible mitigating circumstance, yet rejected it as a basis for departure from the guidelines.” (citing U.S.S.G. § 5H1.10)).

Finally, the Commission’s decision to separate the calculation of restitution from the sentencing determination evinces an intent to prevent restitution considerations from influencing the guideline sentence. Although ability to pay and the “financial needs of the defendant and bis dependents” must be considered by a sentencing judge in fashioning a restitution order, see Commentary to U.S.S.G. § 5E1.1, the restitution guideline found in § 5E is entirely independent of the § 3E1.1 reduction and § 5K2.0 departure provisions. Cf. Crook, 9 F.3d at 1426 (examining structure of Guidelines to determine whether extraordinary forfeiture is a valid ground for downward departure).

18 U.S.C. § 3553(a)(7) is not in conflict with the proposition that restitution is not a legitimate ground for departure from the guideline sentencing range. Section 3553(a)(7) instructs that “[t]he court, in determining the particular sentence to be imposed, shall consider—... (7) the need to provide restitution to any victims of the offense.” (emphasis added). Section 3553(a)(7) applies to the sentencing determination once the sentencing range has been established. See Bolden, 889 F.2d at 1341 (holding that although restitution is not valid ground for a § 5K2.0 departure, 18 U.S.C. § 3553(a)(7) permits the sentencing court to consider restitution “in deciding what sentence within the guidelines to impose”). Departure from the applicable sentencing range is controlled not by § 3553(a)(7), but rather by § 3553(b), which contains the familiar refrain that departure from the guideline range is appropriate only in the presence of aggravating or mitigating circumstances of a kind or degree not considered by the Commission. In short, § 3553(a)(7) applies to setting a sentence within a guideline range, but may not be used as a basis for departure from a guideline range.

On the foregoing bases — § 3El.l’s inclusion of restitution as a sentencing factor, § 5H1.10’s exclusion of socio-economic status as a guideline variable, and the Commission’s decision to separate the calculation of restitution from the guideline range determination — we hold that the magistrate judge had no authority to depart to facilitate the payment of restitution. Accordingly, the district court’s decision to vacate the magistrate’s two-month departure is affirmed.

AFFIRMED.

      . Chastain was sentenced under the 1992 version of the Guidelines. Any reference in this disposition to the Guidelines is to the 1992 edition.

      . On remand, Chastain was resentenced to four months in prison and a one-year term of supervised release. The magistrate stayed his incarceration pending appeal.

      . Because Chastain attacked the government’s proof on willfulness, which is a specific, factual element of a § 7203 offense, he was not in one of the "rare situations” that would qualify him for a reduction under Guideline § 3E1.1. See U.S.S.G. § 3E1.1 n. 2.