Reply Brief — Portland Cement Ass'n v. Train

Supreme Court, U. &

FiILED

DEC 2 1975

MICHAEL QOUAK, JR, CLERK

IN THE

Supreme Court of the Binited States

Ocroser Term 1975

No. 75-415

PORTLAND CEMENT ASSOCIATION

An Illinois Not-For-Profit Corporation

Petitioner

Vv.

ADMINISTRATOR, ENVIRONMENTAL

PROTECTION AGENCY

Respondent

MEDUSA CORPORATION

NORTHWESTERN STATES PORTLAND CEMENT CO.

Intervenors

PETITIONER’S REPLY MEMORANDUM

Rosert E. HayrHorne

200 East Randolph Drive

Chicago, Dlinois 60601

Epwarp W. Warren

1776 K Street N.W.

Washington, D.C. 20006

Counsel for Petitioner

Of Counsel:

Krexianp & Ex.uis

200 East Randolph Drive

Chicago, Illinois 60601

December 2, 1975

La Salle Street Press — Chicago Printed in U.S.A.

IN THE

Supreme Court of the Gnited States

Octoser Term 1975

No. 75-415

PORTLAND CEMENT ASSOCIATION

An Illinois Not-For-Profit Corporation

Petitioner

v.

ADMINISTRATOR, ENVIRONMENTAL

PROTECTION AGENCY

Respondent

MEDUSA CORPORATION

NORTHWESTERN STATES PORTLAND CEMENT CO.

Intervenors

PETITIONER’S REPLY MEMORANDUM

Respondent’s brief seriously misstates the decisions of

the court below, asserts those decisions are correct and that

they do not conflict “with any decision of this Court.” The

record below does not support those statements and asser-

tions. If Respondent’s contentions were credited and the

Writ denied:

—Meaningful consideration of the cost of pollution

control would be effectively removed from standard-

setting under § 111 of the Clean Air Act on the basis

of the decisions below which do not furnish adequate

judicial review under this Court’s Overton Park de-

cision. (401 U.S. 402 (1971)) Those decisions fail to

state amy affirmative finding that the Administrator

adequately considered the cost as. required by the

statute.

—A mass emission standard would be permitted to

stand despite the facts that it was amended by a process

which blatantly violated two statutes, the court below

refused to rule on this issue and the Solicitor General

offers no rationale to support this result.

—Plume opacity would be validated as a standard

when opacity does not reliably measure pollution and

the degree of opacity cannot be gauged with a reason-

able degree of accuracy. This would conflict with this

Court’s decision in Addison v. Holly Hill, 322 U.S. 607

(1944) and this Court’s “conclusive presumption” de-

cisions (Pet. 16) holding that administrative regula-

tions must conform to controlling statutes.

—Sources of less pollution would be controlled more

severely than those emitting a greater volume of the

same pollutant despite the fact that total pollution

would be reduced much more if this pattern of regula-

tion were reversed. The present result is irrational,

counter productive, unreasonable and constitutes regu-

latory discrimination in conflict with a long line of

this Court’s decisions the latest of which is Richardson

v. Belcher, 404 U.S. 788 (1971).

—A regulation would be validated despite an admin-

istrative record which the court below never really

found adequate. This result conflicts with this Court’s

decision in Camp v. Pitts, 411 U.S. 138 (1973).

Respondent’s brief is merely a repetition of the con-

clusions of the Agency and the court below. It advances no

persuasive rationale or other authority to support those

conclusions and does not respond to contentions made dur-

ing the administrative-judicial process and in the Petition

as summarized above.

3

The disquieting aspect of this case is that the regulation

has been permitted to remain effective on the basis of the

Agency’s representation that (in its unreviewable discre-

tion) it would not prescribe standards requiring costs

“grossly disportionate” to benefits! (A-61); it will not

enforce the opacity standard as written (Pet. 18, A-79);

and it may remove the discrimination between the particu-

late standards (A-3, A-63). Bureaucratic assurances that

regulations which do not conform to the controlling statute

will not be enforced and that those which violate constitu-

tional principles may be changed offend the Rule of Law

and are not acceptable alternatives to setting aside the

invalid regulations.

The Writ should issue to affirm constitutional and legisla-

tive principles which have not been respected by the Agency

or the court below.

THE COST OF ACHIEVING

POLLUTION REDUCTION

The “extensive economic analysis” referred to by the

Solicitor General was never found by the court below to

be an adequate consideration of cost as required by the

statute. On first hearing the court pointedly avoided such

a finding stating only that “the Administrator has obviously

given some consideration to economic costs.” (A-29) This

cost study was not specified for consideration on remand.

Thus, the later non-finding that “we find no reason to dis-

agree with the Administrator’s disposition of the remand’”

1 This assurance is not credible when, in this case, it has pre-

scribed a standard requiring a disproportion of more than 100

to 1. (Pet. 6)

2 Judge Leventhal, who wrote the remand opinion and heard

oral argument following remand, did not participate in this find-

ing. (A-1)

4

(A-4) did not touch on the adequacy of the study to satisfy

the statute.

This “analysis” was such a sham that it was virtually

abandoned during remand. It consisted of a 1971 report by

staff economists based on earlier data. Assuming a “model”

plant with less than one-half the expected capacity of future

plants*, the cost of building and operating future plants

which could meet the standards was estimated. The esti-

mate was based on predicted future interest rates and fuel

costs‘ and, therefore, became a parody when the Arabs cut

off the U.S. oil supply and these rates and costs skyrocketed.

No consideration was given to the ability of the industry to

secure the necessary capital although the EPA now says it

will evaluate this factor in future standard-setting.

The transparency of this specious exercise was revealed

during remand when the Agency said it believes that, “Con-

gress intended § 111 to be used to establish emission limita-

tions which are the lowest that can be achieved by that in-

dustry.” (A-61) EPA recognizes absolutely no limitation

based on cost except to state that, in its unreviewable dis-

cretion, it “‘would not” issue a standard requiring grossly

disportionate costs. A standard so issued would not be set

aside by the court below® unless the affected industry could

3 According to a report submitted to EPA by an agency retained

by it.

* The most distinguished economists in the world would disclaim

the ability to reliably predict future interest rates, fuel costs or

capital availability. How then, can an environmental agency, which

confesses its inability to gauge the environmental benefit of its own

regulations, perform an impossible economic evaluation?

5 That court has exclusive jurisdiction; and a petition challenging

a standard must be filed within 30 days after promulgation. (42

U.S.C. § 1857 h-5; A-112).

5

show inability to survive if it were required to comply.® It

is this state of the law which gives EPA the power to re-

quire millions to be wasted to accomplish only small benefit

to the environment. :

No industry can ever prove its inability to bear the costs

of pollution control.” As any high school economics student

knows, increased costs (as imposed by too strict controls)

will force weaker producers out of business. Their em-

ployees (or potential employees) will lose jobs, supply of

the product will be reduced and prices will rise. A smaller

industry consisting of fewer producers would survive and,

perhaps thrive. Only the public interest would be hurt—by

a decrease in national productivity, employment and stand-

ard of living.

This result is precisely what Congress intended to avoid

when it designated enhancement of national productivity as

a principal Clean Air Act purpose and directed the Agency

to take cost into account in setting standards. (42 USC

§ 1857(b), § 1857¢-6(a) (1); A-109; see Pet. 10-15) The na-

tional interest requires the intent of Congress to be restored

by this Court.

THE MASS STANDARD

EPA amended the mass standard by removing the two

hour averaging requirement without advance notice to per-

mit public comment as required in the Clean Air Act. (Pet. 7)

* This result is reached by statutory construction which conflicts

with this Court’s decision in U.S. v. Oregon, 366 U.S. 643, 648

(1961) ; see also Pipefitters v. U.S. 385, 446 (1971), by judicial re-

view which was inadequate under the requirements stated in

Overton Park, supra, and in conflict with the decision in Camp v.

Pitts, supra.

7 Consider the utility industry. No matter what the costs might

be, they would be passed to customers through rate increases. The

industry would be able to “adjust” nicely.

-a

Thus, that statute as well as the Administrative Proce-

dure Act were violated. (42 USC § 1857c-6(b)(1)(B), A-

111; 5 USC § 553(b), A-107) These actions occurred at a

time when the court below held jurisdiction over the Peti-

tion contesting the standard so amended.

Petitioner protested this amendment promptly upon com-

pletion of remand. Nevertheless, the court below refused to

deal with this question stating it “was not at issue on re-

mand.” (A-4) Thus, a regulation which was amended in

flagrant violation of two statutes has been validated by de-

fault.

Respondent relies on that court decision to remove the

issue from this proceeding, but does not advance any ra-

tionale or legal principle to support the action of the court

below. Respondent also asserts that the standard cannot

be violated by a momentary emission because a “test pro-

cedure” requires measurement over a longer period’.

(R. Br.2) But a test procedure is not a standard. Amoco

Ou Co. v. EPA, F2d 722, 743 (D.C. Cir., 1974) Such proce-

dures can apparently be changed at will and without re-

ceiving public comment or the Agency supplying a reason-

able explanation of the underlying rationale.

THE OPACITY STANDARD

Respondent insults the intelligence of this Court when it

argues that a plume opacity standard is not an “irrebut-

table presumption”. A simple reading of the standard and

the Act destroys this contention.

8 Even the three hour period is inadequate for a standard of per-

formance. EPA states, “since manual stack tests are only conducted

for a relatively short period of time (e.g., one to three hours), they

cannot be representative of all operating conditions.” (40 Fed. Reg.

46241)

——_ _ s

7

The standard states that no gasses shall be discharged

which “exhibit greater than 20% opacity”. (40 CFR 60.62

(a)(2); A-105) The Clean Air Act states it is unlawful for

a source to be operated “in violation of an standard of

performance applicable to such source”. (42 USC 41857

e-6(e); A-111) Therefore, emission of a plume which is

more than 20% opaque unavoidably and automatically vio-

lates the law. This creates a conclusive presumption that

the too-dense plume contains too much pollution.

Respondent’s further comment that EPA might accept

other evidence “as probative” that the source of a too

opaque plume is not polluting shows that the Agency

doesn’t consider opacity to be reliable and also concedes

that it might not enforce the law®. Obviously then, an opac-

ity standard is neither necessary for, nor reliable in the

enforcement of anti-pollution regulations.

Continuing his incredible assertions, the Solicitor General

argues that perhaps there is a conclusive presumption but

it should not apply to regulations concerning industry.

(R.B. 13-14) This argument overlooks two points:

—Selective application of the Fifth Amendment (ap-

plying it to protect some rights and denying its protec-

tion to others) would be disgusting, and

—Opacity standards can be used to close plants, de-

priving workers of jobs and imposing higher prices on

eonsumers. Thus, the application of the conclusive pre-

sumption doctrine here would serve the same purpose

as protecting the rights of pregnant teachers and food

stamp applicants.

Despite another Solicitor General’s argument, neither

EPA nor the court below actually found that opacity is a

®A court of law, however, is expected to enforce the law as

written.

8

reliable measure of pollution. EPA conceded particle size,

stack diameter and weather can produce different opacities

in plumes containing the same volume of pollution. (A-90)

The court below, in another non-finding, conditioned its

comments referring to its lack of expertise, expressed its

inability to find a basis to reject EPA’s conclusions (which

contradicted the results of its own factual findings) and

alluded to the possibility that somehow future learning

might support its conclusions.

By contrast, the U.S. Department of Commerce (parent

agency of the U.S. Bureau of Standards) comments that

“opacity limits have not been satisfactorily correlated” to

mass emission volumes and recommends “that opacity lim-

its not be adopted as a standard”. (39 F.R. 37466, 37923)

Characteristically, EPA, the court below and the Solicitor

General ignore this authoritative recommendation.

The “small margin of error” referred to by the Solicitor

General (Br. 14) is 40% of the reading. This is not a small

margin. (see Pet. 18, fn 63) Further, it is now time for

judicial “interference” in the “the technical aspects of

environmental control”. (R.B. 14, fn. 11) EPA has had

four years to support this standard.

Plume opacity is not in a “formative stage”. It has been

a legal standard in the U.S. since 1908. (see VII National

Resources Lawyer 457 (1974)) The U.S. Bureau of Mines

circular relating to its use specifically cautious against the

use to which EPA is now putting this test. Recent empirical

evidence (including that developed by EPA itself) uniform-

ly proves this caution to be correct. This Court should now

remove this controversial obstacle to sound environmental

control by rejecting plume opacity standards as “not pre-

cise enough to provide good emission control or reliable

enforcement” as recommended by the American Society for

Testing and Materials. (Pet. 18)

Finally, the Solicitor General argues opacity standards

are “crucial” to any regulatory scheme. (R.B. 15) Even his

client, EPA, does not agree with this. EPA states that it

can enforce its emission standards even “when opacity

standards may not be violated.” (39 Fed. Reg. 9309) Thus,

opacity standards are not necessary for enforcement.

DISCRIMINATION

It is irresponsible, fatuous and wrong for the Solicitor

General to tell this Court that the difference between

the cement and power plant standards was not proved “un-

reasonable”. It is unreasonable to curb sources of less pollu-

tion (cement plants) more severely than sources which emit

a greater volume of the same pollutant (power plants).

The purpose of the Act is to reduce total pollution. Oppres-

sive restriction of sources of lesser pollutant volume may

support the Agency’s image as a “tough regulator”, but it

will not reduce total pollution very much.

The principle of reducing pollution by controlling sources

of the greatest volume of pollutants is universally recog-

nized—except in this case:

—EPA, itself, supports its regulation of asphalt

concrete plant emissions on the basis that the industry

is a major source of pollution. (APTD-1352e, Vol. ITI,

p. 109 (EPA, 1974))

—EPA’s implementation plan regulations and those

of 32 states impose identical restrictions on all process

industries. (APTD-1334, Table ITI (EPA, 1972), BNA

Envir. Rptr., St. Air Laws, p. 301 Et Seq.)

—The Court below has suggested that recycle acid

plants might be relieved of all control because they emit

only about 2% of total sulphur dioxide pollution.

Essex Chemical Co. v. EPA., 486 F2d 427, 439 (D.C.

Cir., 1973)

10

—A senate committee currently proposes to relieve

manufacturers of fewer automobiles from stricter con-

trols applying to manufacturers of more vehicles.

Wall Street Journal 11-25-75, p. 7. What a parody if

moving sources of less pollution were subject to less

control and the opposite policy applied to stationary

sources!

Respondent’s contention simply cannot withstand rational

analysis.

Contrary to Respondent’s assertion, the court below did

not find EPA’s “factual explanation” of the differences

between the standards to be “reasonable”. (R.B. 11) The

court said, “Proof of unreasonableness in the diversity of

the standards referred to is lacking”. (A-3) This is not

a positive finding of reasonableness. The statement is also

wrong.

Precipitators and baghouses can control particulate emis-

sions from cement and power plants to the same degree.

Manufacturers of these devices confirm this conclusion

stating that the control technology is identical and the

equipment is similar (with only minor variations in ma-

terials and sizes). Their statements are in the record. And

the court below indicated (in its earlier decision) that the

efficiency of control devices applied in one industry can be

used to show their capability to control emissions of other

sources. (A-32) EPA agrees, stating:

It now appears that precipitator technology may

achieve [in power plants and incinerators] the same

levels of control . . . required of the Portland Cement

Industry and that baghouses can be applied to the other

industries.” (A-63)

This statement identifies a case of classic statutory dis-

crimination. There is no reason for the difference—and the

result of the difference runs counter to the statutory pur-

pose. Without controls, power plants would emit at least

2% times the volume of particulates that cement plants

11

would.’ After applying the current standards, power plants

would emit 10 times as much. This is not rational pollution

control.

Apparently the court below sensed this improper result.

Otherwise there would have been no reason for it to con-

template that the differences between the standards might

be reduced in the future. (A-3) But this expectation cannot

support the continuing validity of a discriminatory regula-

tion. The regulation has been in effect with the force of law

for four years. EPA could have removed the discrimination

at any time. Its statement that it will “consider” this matter

(A-63) is simply mot an adequate substitute for the due

process of law.

CONCLUSION

The cement standards must be vacated by this Court.

EPA has full authority and power under the Clean Air Act

to issue, in accordance with proper legal procedures, new

standards which reflect meaningful consideration of eco-

nomic cost, reliably measure pollution and do not discrimi-

nate in a manner contrary to the statutory purpose.

Respectfully submitted,

Rosert E. Hayrnorne

200 East Randolph Drive

Chicago, Illinois 60601

Epwarp W. Warren

1776 K Street N.W.

Washington, D.C. 20006

Counsel for Petitioner

Of Counsel:

Krexianp & Exuis

200 East Randolph Drive

Chicago, Illinois 60601

December 2, 1975

om The Economics of Clean Air, (G.P.0. 1971) pp. 44, 48, 4-18,