# Reply Brief — Navistar International Transportation Corp. v. United States Environmental Protection Agency > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385002_0884%3A3 ## Record - **Collection:** Supreme Court brief - **Document type:** Reply Brief - **Published:** January 1, 1989 - **Citation:** 490 U.S. 1039 ## Text | FILES APR 19 498° a_™ 4 No. 88-1321. ee me were ee JOSEPH F. CPANIOL, JR. CLERK a Supreme Court of the United States OCTOBER TERM, 1988 IN THE —_——— NAVISTAR INTERNATIONAL TRANSPORTATION i CORPORATION, ~ Petitioner, VS. UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, Respondent. ON PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT REPLY BRIEF IN SUPPORT OF PETITION STEVEN A. SMITH (Counsel of Record) JAMES H. SCHINK KIRKLAND & ELLIS 200 East Randolph Drive Chicago, Illinois 60601 (312) 861-2000 Of Counsel: STEVEN K. COVEY NAVISTAR INTERNATIONAL TRANSPORTATION CORPORATION 401 N. Michigan—24th Floor Chicago, Illinois 60611 DATED: April 19, 1989 Pandick Midwest, Inc., Chicago * (312) 733-6000 TABLE OF CONTENTS Page |. Respondent’s interpretation of the Ohio adminis- trative regulation is in derogation of the State’s role IE I ie Fe HU varies ncticcnesentsidsininccaniisnnncres 2 2. The liability determination made by respondent i should not be accorded considerable deference ....... 4 3. Respondent’s interpretation of the Ohio adminis- trative regulation is plainly erroneous and incon- sistent with the terms of that regulation.................... 5 4. There is a direct conflict between the Sixth and SI II cia ics aciigaglecnitscenccadatiincpusdietcpaasasindian 8 The listing of parties appears at page ii of the Petition ( hereafter “Pet.”). :s TABLE OF AUTHORITIES Cases: Page AFL-CIO v. Donovan, 757 F.2d 330 (D.C. CAE, Fe ickscsencavicinsiceiceeneeiannaion 5 Alabama Power v. Costle, 636 F.2d 323 (D.C. Cae GTP isccietsiscntrcettdanantadepisieeaiaeecgtalamenians 3 Bethlehem Steel Corp. v. Gorsuch, 742 F.2d ORD Ct Fe GOR Fe cision: 2 Bethlehem Steel Corp. v. EPA, 638 F.2d 994 "- FG Cee hisuasiontintiebcihndniasenedn 9 Dirks v. SEC, 463 U.S. 646 (1983) .........cecceee Dougherty v. Torrence, 2 Ohio St. 3d 69, 442 PE E.2e TABS CTE) cacerciecctnicasgnpwiliccnicditinninn 6 Edward J. DeBartolo Corp. v. Florida Gulf Coast Bldg. & Constr. Trade Council, 108 S. C6 TC eitactnccinccnnieannnnsinnnss 4,5 Florida Power & Light Co. v. Costle, 650 F.2d ST CI Be D eiiccciceaiececisindspstiontilaneninsann 2 Indiana & Michigan Elec. Co. v. EPA, 509 ee Fe to a: . 5 Paencenmeemm eee 9 Industrial Union Dep’t v. American Petroleum Bronk, GER UE: Ge CED Setntcttentcttieeenes 4 INS v. Cardoza—Fonseca 480 US. 421 © ERI B vccskccosactneh nares aodeetdinetnimnetetes 4 L. R. Willson & Sons, Inc. v. Donovan, 685 Fe Gs Me RED icstiinsinetieaenctaintnnes 6 Lewis v. Buena Vista Mut. Ins. Ass’n, 183 N.W.2d 198 (Towa 1971) ...........cccccssssssseeeees 10 National Steel Corp., Great Lakes Steel Div. v. Gorsuch, 700 F.2d 314 (6th Cir. 1983)......... 3 Cases —Continued Page Newport News Shipbldg. & Dry Dock Co. v. BEGC, 462 US. 669 ( 1963) ................0....... 4 NLRB v. Yeshiva Univ., 444 U.S. 672 (1980) . 4 Ohio Envtl. Council v. United States EPA, 593 Pe Ey PFT DP idicsniccseencsiocescseccsoncses 2 Train v. Natural Resources Defense Council, Rk SL LS i) 2,3 United States v. Interlake, Inc., 432 F. Supp. I I a enc antuiniaaensinnees 2 United States v. Louisiana-Pacific Corp., 682 F. Supp. 1141 (D. Colo. 1988)... 9 United States v. Menasche, 348 U.S. 528 (8 NOSES RUD g a ee ee 6 United States v. Riverside Laboratories, Inc., 678 F. Supp. 1352 (N.D. Ill. 1988) ...00000...... 2 United States v. Town of N. Hempstead, 610 rede SU CE GER, BOF D cvvccccsesrscvsessescacecseses 9 United States v. West Penn Power Co., 460 F. I Ce 0 WP Py, FOTO) vcccncneccccccescsoseees 9 Statutes and regulations: Clean Air Act, 42 U.S.C. 7401 ef seg. .....00..00... passim Bo Sak 8 oly” oy FS ee 2 Nt, FEU cieninasecessscsnacosecesssonte 3 § 110(a)(2), 42 U.S.C. 7410(a)(2) o0...... 3 IS Irs WUMIIID ickhitacssiacencasinncsccnccsesss | Ohio Admin. Code ( 1987): EID isiiscnicersnsvessascsiccesceses 5,6 5 SS 8 § 3745-21-09( U)(1)(a) (iii) «ee. 6,7 Peo kb) | cre 7,8 a | IN THE Supreme Court of the Gnited States OCTOBER TERM, 1988 NAVISTAR INTERNATIONAL TRANSPORTATION CORPORATION, Petitioner, vs. UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, Respondent. ON PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT REPLY BRIEF IN SUPPORT OF PETITION This is a watershed case in federal environmental law respecting Clean Air Act noncompliance proceedings. It is one of the first noncompliance proceedings brought to a liability determination pursuant to Section 120 of the Clean Air Act, 42 U.S.C. 7420. The case is being widely followed by segments of the business community, the environmental bar, and the gener- al press. 2 To avoid the significant questions presented for review, respondent has been compelled to refashion for this Court several of its arguments raised below. Respondent now urges that this Court’s previous decisions allowing de novo review of administrative interpretations should properly be read to accord considerable deference to the respondent’s liability determina- tion below. Similarly, in a revealing volte face, respondent now argues that the exclusion of evidence of technological and economic infeasibility comported with constitutional due pro- cess since such evidence was to be retained in the record for the penalty phase of the noncompliance proceeding. Issnirsinnieansinneseeeneiieniaiaieenteiiaill 1. Respondent’s interpretation—of the Ohio administrative regulation is in derogation of the State’s role under the Clean Air Act. Respondent first argues that Congress placed the primary responsibility for enforcement of the Clean Air Act on EPA, and that considerable deference should thus be paid the respondent’s interpretation of the Ohio administrative regu- lation. (Resp. Br. 6) On the contrary, courts have consistently recognized that it is for the state, not EPA, to interpret its SIP, and that EPA’s interpretation is entitled to no deference.’ Thus, for example, the Fifth Circuit in Florida Power & Light Co. v. Costle, 650 F.2d 579 (Sth Cir. 1981), clearly stated that a State’s interpretation of its state implementation plan is of great moment in contrast to EPA’s secondary role under the Clean Air Act: {I]t must be emphasized that EPA is to be accorded no discretion in interpreting state law. Quite the contrary is true: ‘[the United States] should defer to the state’s interpretation of the terms of its air pollution control plan when said interpretation is consistent with the Clean Air Act.” United States v. Interlake, Inc. 432 F. Supp. 985, 987 (N.D. Ill. 1977). See also Ohio Envtl. Council [v. EPA}, 593 F.2d [24] at 29 [(6th Cir. 1979)] (EPA reliance on state’s interpretation of state law is consistent with the agency’s secondary role under the Clean Air Act). 650 F.2d at 588. As this Court noted in Train v. Natural Resources Defense Council, 421 U.S. 60, 64 (1975), Section 107(a) of the Clean Air Act, 42 U.S.C. 7407(a), importantly provides that “[{e]ach State shall have the primary responsibility for assuring air quality within the entire geographic area comprising such ' See, e.g., Bethlehem Steel Corp. v. Gorsuch, 742 F.2d 1028, 1035-36 ( 7th Cir. 1984); United States v. Riverside Laboratories, Inc., 678 F.Supp. 1352, 1355-57 (N.D. Ill. 1988). 3 State... .”” The Aet accords to the states the responsibility and discretion to formulate acceptable plans, subject only to the limitations of the Act itself: Under § 110(a)(2) [of the Act (42 U.S.C. § 7410(a) (2))], the Agency is required to approve a State plan which provides for the timely attainment and subsequent maintenance of ambient air standards, and which also Satisfies that section’s other general requirements .... [SJo long as the ultimate effect of a State’s choice of emission limitations is compliance with the national stan- dards for ambient air, the State is at liberty to adopt whatever the mix of emission limitations it deems best Suited to its particular situation. 421 U.S. at 79. Thus, while we agree with respondent that EPA reviewed the Ohio SIP prior to its approval ( Resp. Br. 6), EPA’s review was limited to whether the several conditions set forth in Section 110(a)(2) of the Act, 42 U.S.C. 7410(a)(2), had been met. None of those threshold conditions involved the appropri- ate definition of a “coating line” or the application of the Ohio SIP to refinishing or non-metallic part spraying operations at issue here. EPA’s review of the Ohio SIP consequently did not encompass the instant matters to be construed, for which EPA has no special competence. EPA’s role is hence limited to one of oversight—to ensur- ing in the first instance that the state plan satisfies the general requirements of the Clean Air Act and will enable the state to achieve attainment of national air quality standards. See Train, supra, 421 U.S. at 66, 79; National Steel Corp., Great Lakes Steel Div. v. Gorsuch, 700 F.2d 314, 322 (6th Cir. 1983). This principle has been employed to invalidate EPA attempts to interfere in state regulatory structures in various contexts. See, e.g., Alabama Power v. Costle, 636 F.2d 323, 364 (D.C. Cir. 1979) (EPA may not dictate to state how it will manage internal growth by use of available increments ). 4 The decision by the Sixth Circuit in this case, which would allow EPA to essentially rewrite Ohio’s regulation defining a coating line and effecting the refinishing exemption and the metallic parts provision, is in derogation of the State’s Tole under the Clean Air Act. EPA’s secondary role in narrowly reviewing the Ohio SIP to determine its conformity with general requirements of the Act exhibits no special competence and does not warrant considerable deference. 2. The liability determination made by respondent should not be accorded considerable deference. Respondent’s protestations to the contrary notwithstanding (Resp. Br. 8-9), this Court in INS v. Cardoza-Fonseca, 480 U.S. 421, 440 (1987), unequivocally held that where purely legal questions are at issue, the court has broad authority to conduct an independent and de novo review of agency deci- sions. In like fashion, this Court has regularly endorsed independent and de novo reviews of legal questions, substituting its judgment for that of an agency, whose interpretations were accorded no deference. See Dirks v. SEC, 463 U.S. 646, 655-64 (1983) (de novo review of securities regulation ); Newport News Shipbldg. & Dry Dock Co. v. EEOC, 462 U.S. 669, 673-84 (1983) (same); NLRB v. Yeshiva Univ., 444 U.S. 672, 678-80 (1980) (same); Jndustrial Union Dep’t v. American Petroleum Inst., 448 U.S. 607, 695 n.9 (1980) (same). Further, this Court in Edward J. DeBartolo Corp. v. Florida Gulf Coast Bldg. & Constr. Trade Council, 108 S. Ct. 1392 (1988), did not defer to an administrative interpretation as respondent has represented. (Resp. Br. 8) Rather, this Court rejected the NLRB’s construction of a statutory provision, holding that the Board’s interpretation would “raise serious constitutional problems. ...” Jd. at 1397. In the instant matter, constitutional considerations are likewise implicated by re- spondent’s broad construction of the coating line definition and its exclusion of infeasibility evidence below. Consequently, respondent’s interpretation of the Ohio regulation should be rejected just as the DeBartolo Court dismissed the Board’s unduly broad construction of the National Labor Relations Act. In the above cases, the courts used traditional tools of construction to ascertain intent. Respondent has not demon- strated how the instant issues respecting regulatory definitions and exemptions are anything less than legal questions to which independent and de novo review should be applied. Moreover, no aspect of the instant issues regarding administrative defini- tions and exemptions implicates the respondent’s special com- petence. In fact, respondent’s limited review of the Ohio SIP afforded it no special competence in interpreting the coating line definition, refinishing exemption or metallic part provision in issue here. Respondent’s interpretation of the Ohio SIP should thus not be accorded considerable deference. 3. Respondent’s interpretation of the Ohio administrative regulation is plainly erroneous and inconsistent with the terms of that regulation. The Sixth Circuit held that two of petitioner’s coating operations were regulated despite the absence of bake ovens in the coating process. 828 F.2d at 287, Pet. App. A-10. This finding is inconsistent with the terms of Ohio Administrative Code Rule 3745-21-01(D)(8), which makes clear that paint booths must have bake ovens to be regulated. Respondent’s argument (Resp. Br. 9-10) that Rule 3745-21-01(D)(8) must be interpreted to include petitioner’s paint booths R004 and ROOS in order to effectuate the broad purposes of the Clean Air Act rings hollow. This, because the plain meaning of Rule 3745-21-01(D)(8) suggests otherwise. The first source in interpreting a statute or regulation is the language of the provision at issue. See AFL-CIO v. Donovan, 757 F.2d 330, 334 (D.C. Cir. 1985). It is a basic tenet of ae neil statutory construction that, whenever possible, effect must be given to every word and clause of a statute or regulation. United States v. Menasche, 348 U.S. 528, 538-39 (1955). ‘‘When the wording of a statute is clear and unambiguous on its face, judicial interpretation is not required; rather, the court must give effect to the words used.” Dougherty v. Torrence, 2 Ohio St. 3d 69, 70, 442 N.E.2d 1295, 1296 (1982). Here, the specific SIP provision EPA seeks to enforce against petitioner applies only to miscellaneous metal part or product coating lines. See O.A.C. § 3745-21-09(U)(1)(a)(im). In turn, the plain language of the SIP makes clear that a coating line must have three separate components—a coating appli- cator, a flash-off area and an oven: (8) “Coating line” means a series of one or more coating applicators, flash-off areas and ovens wherein a sur- face coating is applied, dried and/or cured. O.A.C. § 3745-21-01(D)(8) (emphasis added). The defini- tion specifies that the components must be in a series, and provides that a single coating line may contain one or more of each of the required elements. A coating line thus consists of a series consisting of one or more coating applicators, one or more flash-off areas, and one or more ovens. Because the definition of coating line in the Ohio SIP clearly requires bake ovens, the respondent’s reliance on ex- trinsic evidence of EPA’s intent in construing the regulation is unfounded. “It is well-settled that regulations cannot be construed to mean what an agency intended but did not adequately express.” L.R. Willson & Sons, Inc. v. Donovan, 685 F.2d 664, 675 (D.C. Cir. 1982). Extrinsic evidence that EPA intended the SIP to apply to booths without ovens cannot change the fact that the SIP provision at issue simply does not regulate petitioner’s booths R004 and ROOS, which do not have ovens. Accordingly, the eR TT ot respondent’s determination that these booths are in violation of O.A.C. § 3745-21-09(U)(1)(a)(iii) is plainly erroneous as a matter of law. Respondent makes no attempt (Resp. Br. 9-10) to argue that its interpretation of the refinishing exemption was neces- sary to effectuate the assertedly broad goals of the Clean Air Act. The Ohio SIP expressly exempts “application of a refinishing coating to motor vehicles” from the requirements of O.A.C. § 3745-21-09( U)(1)(a) (iii). O.A.C. § 3745-21- 09(U)(2)(c). Petitioner’s refinishing operations clearly fall within the terms of this exemption. Nevertheless, the respond- ent held the exemption does not apply to petitioner because petitioner refinishes trucks prior to sale and because the ex- emption assertedly was not intended to apply to petitioner. (Pet. App. E-21, 22) Neither of the respondent's reasons is sufficient to overcome the plain language of the regulation. The respondent’s finding that petitioner does not “refinish” trucks is based on an erroneously narrow interpretation of the term “fmish.” EPA erroneously determined below that trucks that have not been finished (completed) cannot be refinished. In doing so, EPA ignored that the verb “finish” also means to apply paint to a surface. Petitioner refinishes “finished” (painted) trucks to correct paint defects prior to releasing the trucks for sale in three of the paint booths at issue here. These refinishing operations, which are similar to those performed at body shops, clearly fall within the common meaning of the refinishing exemption in O.A.C. § 3745-21-09( U)(2)(c). The EPA’s finding that the exemption applies only to body shops and does not apply to petitioner is likewise unfounded. Whether the refinishing operations at the petitioner’s facility fall within the refinishing exemption is certainly a situation that easily could have been foreseen. Had Ohio intended the refinishing exemption to apply only to body shops—and not to refinishing operations at petitioner’s facility—it could have included such a limitation in the rule. In short, Ohio readily could have defined “refinishing” in any fashion it wished and it would have been equally easy for respondent to have dis- approved the exemption proposed by Ohio. Instead, Ohio did not define “refinishing” to limit its application only to body shops and EPA approved the broad exemption. In bnef, respondent’s determination that the refinishing exemption in O.A.C. § 3745-21-09(U)(2)(c) applies only to body shops and not to the refinishing operations conducted at the petitioner’s facility is plainly erroneous and inconsistent with the terms of that regulation. The rule simply is not so limited. Further, certain parts coated on several of petitioner’s lines are made only of non-metallic materials and have no metal formed on them. Emissions from these non-metallic painting operations are clearly not regulated under the Ohio administrative rule, which plainly pertains solely to emissions from the coating of miscellaneous metal parts. O.A.C. § 3745- 21-09(U). EPA’s finding that non-metallic coating operations are regulated is again plainly erroneous and inconsistent with the terms of Ohio’s administrative regulation. 4. There is a direct conflict between the Sixth and Seventh Circuits. Respondent argues (Resp. Br. 11) that no due process considerations were implicated by the exclusion of evidence of technological and economic infeasibility below because peti- tioner can raise its infeasibility claims during the penalty phase of the Section 120 proceeding. Yet, respondent fails to explain how and in what manner petitioner’s infeasibility claims can be raised during the penalty phase. Nor does respondent cite any authority for its proposition that due process considerations are inapposite where infeasibility claims can be made during the penalty, but not the liability, phase of Section 120 proceedings. In short, respondent identifies no decisional law suggesting that due process concerns are met simply by deferring infeasibility claims until the penalty calculation stage of noncompliance proceedings. On the issue of admissibility of evidence of infeasibility, the Sixth Circuit’s decision sharpens a clear conflict in the circuits. The Seventh Circuit held in Indiana & Michigan Elec. Co. v. EPA, 509 F.2d 839, 844-45 (7th Cir. 1975), that US. EPA is not required to consider technological feasibility and economic reasonableness prior to approval of a state impiemen- tation plan only because arguments concerning technological feasibility and economic unreasonableness are allowed to be raised as to a specific source in the course of an enforcement proceeding. See also, United States v. Louisiana-Pacific Corp., 682 F. Supp. 1141, 1166 (D. Colo. 1988) (noncompliance begins only when air emission control equipment becomes “technically available”); United States v. West Penn Power Co. 460 F.Supp. 1305, 1307-12 (W.D. Pa. 1978) (same); United States v. Town of N. Hempstead, 610 F.2d 1025, 1027 and n.3 (2d Cir. 1979) (same). The Seventh Circuit réaffirmed that technological infeasibility and economic unreasonableness are relevant in an enforcement proceeding in Bethlehem Steel Corp. v. EPA, 638 F.2d 994, 1005 (7th Cir. 1980). These authorities reflect the basic constitutional tenet that application of a regulation (whether adopted through the legislative or administrative process) is permissible only if reasonable and not arbitrary or capricious as specifically ap- plied. In this proceeding, petitioner contends that the Ohio regulation is unreasonable as specifically applied to petitioner because its compliance with the rule is technologically in- feasible and economically unreasonable. Because compliance with the Ohio regulation would be infeasible, its provisions cannot be applied to petitioner. Because petitioner had no meaningful opportunity to present its claims of technical and economic infeasibility during the Ohio SIP adoption process, constitutional due process 10 safeguards require that such claims be considered during the liability phase of this proceeding. The EPA’s exclusion of evidence of these issues improperly “chok[ed] off an entire claim or defense,” Lewis v. Buena Vista Mut. Ins. Ass’n, |83 N.W.2d 198, 200-01 (Iowa 1971), and rendered arbitrary and capricious the application of the Ohio regulation to petitioner. The Sixth Circuit’s decision affirming this exclusion should therefore be reviewed. CONCLUSION We respectfully submit that certioran should be granted. Respectfully submitted, STEVEN A. SMITH (Counsel of Record) JAMES H. SCHINK KIRKLAND & ELLIS 200 East Randolph Drive Chicago, Illinois 60601 (312) 861-2000 Of Counsel: STEVEN K. COVEY NAVISTAR INTERNATIONAL TRANSPORTATION CORPORATION - 401 N. Michigan—24th Floor Chicago, Illinois 60611 DATED: April 19, 1989 --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385002_0884%3A3. Public record. Not legal advice.