Spitzer Great Lakes Ltd., Company v. United States Environmental Protection Agency

RYAN, Circuit Judge,

dissenting.

To borrow an expression originally coined, insofar as I know, by our distinguished former colleague, the Honorable Bailey Brown, the court today applies “a little fireside equity” to justify reversing the judgment of the Environmental Appeals Board. The Board’s decision to decline to entertain the petitioner Spitzer’s request for review was based on an abso *418 lutely correct, indeed indisputably correct, application of its own regulations, 40 C.F.R. § 22.30 , because the request was filed 20 days too late. But this court reverses the Board’s decision upon the following “fireside” reasoning: the Board had discretion to suspend the application of its rules and allow the late filing, and since it did so in another case, albeit in significantly different circumstances, it was an abuse of discretion not to do so in this case. That is an understanding of the concept of abuse of discretion with which I am not familiar and, not surprisingly, for which the majority opinion cites no authority.

This court has no authority to disturb the judgment of the Environmental Appeals Board, unless the court is able to say that the Board’s decision is “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law.” 5 U.S.C. § 706 (2)(A). Relying upon that authority, the court holds that the Board abused its discretion in not sua sponte “waiving” (that is to say disregarding) the provision of 40 C.F.R. § 22.30 (a) which establishes the filing deadline for an appeal from a decision of the Board. The rather convoluted route the majority takes to get there is fully set out in the majority opinion and need not be recounted here. The predicate for the majority’s reasoning is language found in the final sentence of the administrative law judge’s 16-page opinion and order holding Spitzer liable for a violation of the Environmental Protection Act and imposing a civil penalty of $166,000. The offending sentence is quoted in the majority opinion, but what is not quoted is the single-sentence paragraph that immediately precedes it. Together, the two-paragraphs read as follows:

Failure upon the part of respondent to pay the penalty within the prescribed statutory time frame after entry of the final order may result in the assessment of interest on the civil penalty. 31 U.S.C. § 3717 ; 4 C.F.R. § 102.13 .

Pursuant to 40 C.F.R. § 22.27 (c), this initial decision shall become the final order of the Environmental Appeals Board within forty-five (45) days after its service upon the parties and without further proceeding unless (1) an appeal to the Environmental Appeals Board is taken from it by a party to this proceeding or (2) the Environmental Appeals Board elects, sua sponte, to review this initial decision.

(Emphasis added.)

Only when the two paragraphs are read together, does the significance of the statement in the final paragraph that “this initial decision shall become the final order of the [Board] within forty-five (45) days” become apparent: it tells Spitzer that the 45th day after the initial decision is the time when the clock starts to run for the 60 days (“prescribed statutory time frame”) within which it must pay the assessed penalties in order to avoid additional interest penalties.

The majority’s view, as I understand it, is that the ALJ’s indisputably correct advice as to the date his decision would become a final order, misled and deceived Spitzer, and more than that, established a new “implied deadline” for Spitzer to file its appeal. However, the majority opinion also states that the ALJ’s advice to Spitzer was “not technically erroneous” and was “technically] accurate].”

Spitzer claims it was “misled” by the language of the ALJ’s order, because both Spitzer and its counsel were led to believe that the 45-day deadline — the date upon which the ALJ’s order would become final — was also the deadline for filing an appeal from the ALJ’s order. Nevermind that there is nothing whatever in any of the 16 pages of the ALJ’s opinion and order, and particularly nothing in the sentence in question, which speaks to the subject of the deadline for filing an appeal.

Spitzer’s claim that it was misled and this court’s appellate finding of fact that it was, is particularly unpersuasive in light of *419 the history of advice given Spitzer, early on in the case, that it should acquaint itself with the Rules of Practice before the EPA.

When the EPA filed its complaint, it sent Spitzer a copy of the agency’s Consolidated Rules of Practice, 40 C.F.R. part 22, which explicitly spells out the time within which an appeal from an ALJ decision must be taken in order that it be timely— either 20 or 25 days from the date of the initial decision. And just in ease that gratuitous legal advice might not be heeded, the EPA supplied Spitzer with a cover letter advising it to “carefully read and analyze the enclosed Complaint and Rules of Practice.” (Emphasis added.) Notwithstanding all this advice, Spitzer and its counsel disregarded the deadline for taking an appeal as stated in 40 C.F.R. § 22.30 , and further disregarded the option of moving for an extension of time for filing a notice of appeal as provided for in 40 C.F.R. § 22.07 (b).

Confronted with Spitzer’s argument that it had been “misled” about the time within which it must take an appeal, the Board exercised its discretion to follow the language of the regulation, rather than waive it, and to hold that Spitzer’s appeal was filed out of time, as indeed it was.

The court now declares that it was an abuse of discretion for the Board to apply the deadline as provided in section 22.30 because, in an unrelated earlier case, it exercised its discretion to “waive” the deadline. The earlier case, In re BASF Corp. Chem. Din, 2 E.A.D. 925 , 1989 WL 266771 (Oct. 3, 1989), according to my colleagues, is an “EPA[ ] precedent” case in which the Board waived “strict compliance” with the filing deadline established in section 22.30. Therefore, the court holds, since the Board exercised its discretion in BASF to “waive strict compliance with the filing deadline,” it had no discretion not to do so in this case. The trouble with that reasoning, quite aside from its obvious misunderstanding of the doctrine of “abuse of discretion,” is that BASF is plainly distinguishable from this case. In BASF the ALJ gave patently inaccurate and erroneous advice, stating in a cover letter that a petition for review would be timely if “postmarked” within a 30-day period, even though the rule required actual filing within that period. 1989 WL 266771 at *2 n. 3. In this case, as the majority opinion acknowledges, the ALJ (1) gave no inaccurate or erroneous advice concerning the subject he addressed — the date upon which the ALJ’s decision would become a “final order” — and (2) indeed, gave no advice at all concerning the subject addressed in BASF, ie., the time for filing an appeal. Thus BASF, both on the facts involved and the law announced, is distinguishable from this case and is not “an EPA administrative precedent.”

But even if BASF were a precedent of some sort, it is a strange and novel notion of the doctrine of abuse of discretion that because the Board waived the appeal deadline in BASF in which incorrect advice concerning the appeal deadline was given, it has forever after lost its discretion not to waive the deadline for filing an appeal in subsequent cases; particularly subsequent cases in which indisputably correct advice is given on a subject having nothing to do with the deadline for filing an appeal.

Today’s decision adds to the books another case in which a federal court substitutes its own discretionary judgment for that of an adjudicating administrative agency with which it disagrees, while paying lip service to the law of “abuse of discretion.” Of course the court has the “power” to do a little “fireside equity” today, but certainly not the “authority” to do so. See Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402 , 91 S.Ct. 814 , 28 L.Ed.2d 136 (1971).

I would affirm.