Amicus Brief — Portland Cement Ass'n v. Train

128629.10.75

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Oct 22 85

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IN THE

Supreme Court of the Anited States

OcTOBER TERM, 1975

No. 75-415

PorTLAND CEMENT AssociATION, Petitioner

v.

Russe E. Train, Administrator, Environmental

Protection Agency, Respondent

On Petition for Writ of Certiorari to the United States Court

of Appeals for the District of Columbia Circuit

BRIEF OF THE AMERICAN MINING CONGRESS

AMICUS CURIAE IN SUPPORT OF PETITION

FOR WRIT OF CERTIORARI

Epwarp A. McCaBe

JOHN G. DEGOOYER

JOHN H. SPELLMAN

HAMEL, Park, MoCaBe & SAUNDERS

1776 F Street, N.W.

Washington, D.C. 20006

LAURENCE P. SHERFY

1100 Ring Building

Washington, D.C. 20036

Counsel for the

American Mining Congress

Press or Byron S. ApamMs Privtinc, Inc., Wasnincton, D. C.

IN THE

Supreme Court of the United States

OcToBER TERM, 1975

No. 75-415

PortTLAND CEMENT AssocrATION, Petitioner

Vv.

Russe. E. Tran, Administrator, Environmental

Protection Agency, Respondent

On Petition for Writ of Certiorari to the United States Court

of Appeals for the District of Columbia Circuit

CEE

BRIEF OF THE AMERICAN MINING CONGRESS

AMICUS CURIAE IN SUPPORT OF PETITION

FOR WRIT OF CERTIORARI

—

The American Mining Congress submits this brief

as amicus curiae in support of the petitioner in this

ease. The consents of the Solicitor General and of

counsel for petitioner to the filing of this brief have

been obtained and are on file with the Clerk of this

Court.

2

THE AMICUS AND ITS INTERESTS

The American Mining Congress is a national trade

association founded in 1897, whose membership consists

of hundreds of companies that produce most of the

Nation’s ferrous and non-ferrous metals, coal, indus-

trial and agricultural minerals, and cement. Its mem-

bership also includes more than 200 companies that

manufacture mining and mineral processing equipment

and supplies, as well as financial institutions with a

business interest in the mining industry.

The importance of mining to the United States can-

not be overstated. Mineral substances and the prod-

ucts derived from them form the material foundation

of our society; all Americans are totally dependent

upon these products not only for their standard of liv-

ing, but also for their survival. Minerals and metals are

woven into every pattern of our economy and technol-

ogy, and many of them are vital to national security.

The critical importance of mining to the United States

has been specifically recognized by Congress in the

Mining and Minerals Policy Act of 1970, 84 Stat. 1876,

and its legislative history. The significance of mining

is also apparent from its effect on our economy. Al-

though actual mineral production is slightly less than

3 percent of the U. S. gross national product, mining

has a direct impact on 40 percent of the GNP and an

indirect impact on 75 percent of the GNP.’

As the spokesman for the mining industry in the

United States, the American Mining Congress has a

1 Data as of 1969. See, Statement of Andrew Fletcher, Hearings

before the Subcommittee on Minerals, Materials, and Fuels of the

Senate Committee on Interior and Insular Affairs, 91st Cong., 1st

Sess. 33 (1969).

3

legitimate interest in any governmental or other action

affecting that industry. The decision below is one

such action. While the decision specifically involves

the cement industry, many of the issues presented by <

this case will affect every industry within the reach

of the Clean Air Act—among them virtually every

member of the American Mining Congress. Thus, each

member of the American Mining Congress has a sub-

stantial interest in the ultimate decision in this case,

and the American Mining Congress has accordingly

been authorized to submit this brief in support of the

petition for certiorari.

ARGUMENT

The American Mining Congress supports petitien-

er’s position that a comparative cost-benefit analysis

should have been employed by the Environmental Pro-

tection Agency as a part of its establishment of new

stationary source emission standards for the cement

industry under Section 111(a)(1) of the Clean Air

Act The EPA Administrator squarely rejected the

cost-benefit approach for establishing standards under

the Act and the United States Court of Appeals erred

in upholding that rejection. The failure of the court

below—the only court empowered to review this type of

EPA determination—to recognize the need for cost-

benefit analysis is a significant error which will have a

far-reaching impact throughout the industry and a

detrimental effect on the National economy. Conse-

2 Section 111(a)(1) of the Clean Air Act (42 U.S.C. § 1857e-

6(a)(1)) provides: ‘‘The term ‘standard of performance’ means a

standard for emissions of air pollutants which reflects the degree

of emission limitation achievable through the application of the

best system of emission reduction which (taking into account the

cost of achieving such reduction) the Administrator determines

has been adequately demonstrated.’’ [Emphasis added.]

4

quently, it is important that this court grant certiorari

and correct the error below.

1. Congress clearly stated that one of its purposes

in enacting ¢he Clean Air Act was ‘‘to protect and

.uhanee the quality of the Nation’s air resources 80

as to promote public health and welfare and the pro-

ductive capacity of its population.”* This statement

of purpose reveals an equal concern for (1) publie

health and welfare and (2) the economic well-being and

productive capacity of the nation. Furthermore, Sec-

tion 111(a) (1) of the Act requires the Administrator to

‘take into account the cost of achieving . . . [emission]

reduction” in determining a new source emission stand-

ard. Reading this specific provision in light of the

Act’s general purpose, the only meaningful interpreta-

tion is that the Congress intended that these environ-

mental standards be developed with a view towards

balancing the economic cost of controls with the pollu-

tion reduction to be achieved—in short, a cost-benefit

approach.*

$42 U.S.C. § 1857(b) (1).

4 The legislative history of the statute also shows congressional

recognition of the faci that the Act is both an economic measure

and an air pollution measure. In the floor debates before passage

of the 1970 amendments to the Act, Senators Jennings Randolph

and Edmund Muskie stated the following:

‘“Mr. Ranpoupu: ... I know at times on the subcommittee

and on the committee we have talked abovt the economics of

this legislation as well as the health standards of the legisla-

tion, and I know that the Senator from Maine has been one

of those who have recognized that this legislation is both

an economic measure and air pollution measure... .

‘‘Mr. Musxre: The Senator is eorrect.’’

(116 Cong. Ree. 42392, December 18, 1970).

It should also be noted that a proposal by Congressman Ryan of

New York to impose the most advanced environmental controls

5

Certainly, Congress realized that industry would be

required to spend money to meet new environmnetal

standards. Although these expenditures represent an

economic drain on the capital resources of industry and

inelude funds that could otherwise be invested in eco-

nomic growth, Congress concluded that the public bene-

fits to be derived from cleaner air justified certain

expenditures to be made to the extent that improve-

ment in air quality was reasonably related to the invest-

upon industry regardless of the economic consequences was re-

jected. 116 Cong. Ree. 19242-43, June 10, 1970.

Also the National Environmental Policy Act (NEPA) requires

that the Clean Air Act be read in such a way as to include a con-

sideration of economic factors. The United States Court of Ap-

peals for the District of Columbia Circuit has stated that the

Clean Air Act be read in pari materia with NEPA. Portland

Cement Association v. Ruckelshaus, 486 F.2d 375, 380 n.17 (D.C.

Cir. 1973), cert. denied, 417 U.S. 921 (1974). While the EPA is

admittedly not obligated to file a formal impact statement under

the NEPA requirements, it must nevertheless prepare a ** funce-

tional equivalent,’ (Environmental Defense Fund v. E. P. A.,

489 F.2d 1247, 1256 (D.C. Cir. 1973)) in which the economic and

technical considerations are important. (42 U.S.C. § 4332(2) (B).

See, e.g., Sierra Club v. Froehlke, 359 F. Supp. 1289, 1363-64 (S.D.

Texas 1973)). The EPA has evaluated the possible necessity of

compliance with NEPA cost analysis requirement. In February

1973, an EPA Task Force Report entitled ‘* Application of NEPA

to EPA’s Environmental Regulatory Activities,’’ stated at page

57 that ‘‘[f]ull compliance [with NEPA] might necessitate a

balancing of costs and benefits to the standards being considered.’’

We think that such a cost benefit analysis is required. In addi-

tion to the agency’s interpretation of the NEPA requirement, the

Council on Environmental Quality (CEQ), established under the

NEPA has formulated standards requiring that the proper method

for obtaining different levels of environmental quality is to weigh

the benefits against the costs. Environmental Quality, 1971, at 119

(U.S.G.P.0.) Thus it can be seen that the CEQ and to some ex-

tent EPA itself have recognized that the NEPA standards rein-

force the language of the Clean Air Act in requiring a balancing

of economic costs against the benefits derived in implementing

environmental protection legislation.

6

ment. Congress did not, however, contemplate the

expenditure of large sums to achieve negligible results,

at least where there is no overriding and compelling

danger to public health and safety involved.’ Con-

gress intended that the EPA give close scrutiny to the

cost of implementing EPA emission controls—scrutiny

of the type provided by cost-benefit analysis.

2. In its reply to the court below the EPA improp-

erly rejected the cost-benefit method of analysis.* The

agency also stated that it would seek to obtain the low-

est emission level feasible unless the costs were so great

that the industry could not bear the cost and survive.

Nowhere does the statute dictate such an extreme and

unrealistic approach. Nor does the statute give the

Administrator the discretion to impose such an ap-

proach on industry and thereby effectively shift to

5 There is no such contention in this case. The standard here

in issue involves only non-toxic particulate matter which is not

inherently deleterious to human existence.

*The EPA states: ‘‘We believe that Congress intended § 111

to be used to establish emission limitations which are the lowest

that can be achieved by that industry. Where the cost of meeting

such standards would be so great that the industry could not bear

the costs and survive, such standards could not be implemented

by the industry regardless of technological feasibility. There

are also cases where a reduction in emissions that would be

achieved by a particular control technique would be so grossly

disproportionate to the cost of the control technique that it would

not be required. However, these determinations are necessarily

judgmental and are left specifically to the Administrator in § 111.

EPA does not believe that cost-benefit analysis can be established

for standards under §111 nor does it believe that Congress in-

tended that standards be established or justified on the basis of

such an analysis."’ EPA response on remand ordered by United

States Court of Appeals for the District of Columbia Circuit in

Portland Cement Association v. Ruckelshaus, 486 F.2d 375 (D.C.

Cir. 1973).

zs

7

industry the burden of demonstrating that the require-

ments of section 111 have been met.’

The EPA did recognize, however, that ‘‘[t]here are

also cases where a reduction in emissions that would be

achieved by a particular control technique would be so

grossly disproportionate to the cost of the control tech-

nique that it would not be required.’’ [Emphasis

added.]* We fail to see how such a determination is to

be made if not under some type of cost-benefit analysis.

It would be necessary to measure the costs against the

benefits to determine when the ‘‘grossly disproportion-

ate’’ level had been reached. Thus, the agency itself

has recognized that such determinations are required

by the statute, but the Administrator in this case has

refused to give effect to this requirement in any mean-

ingful way by employing an actual cost-benefit anal-

ysis as a basis for establishing the emission standards

for the cement industry. In this case, the EPA merely

rejected® petitioner’s cost-benefit analysis which

7 EPA has stated in the most conclusory terms that its standard

will not drive the cement industry out of business and will not

impair the competitive position of cement vis-a-vis other struc-

tural materials. EPA reaches this conclusion by simply assert-

ing that any increased cost incurred by the industry in reaching

the level of particulate matter specified in the standard can be

passed through to customers and that this pass-through (increase

in price) will not cause cement consumers to turn away from

cement in favor of some other structural material. We think the

EPA thus overreaches when it purports to inject itself into the

competitive marketplace and justify a standard based on tts view

of what the industry can or should do as to the price of its products.

8 EPA response on remand ordered by United States Court of

Appeals for the District of Columbia in Portland Cement Associa-

tion v. Ruckelshaus, 486 F.2d 375 (D.C. Cir. 1973).

®In footnote 4 of the lower court opinion, the court erroneously

found that this rejection was made ‘‘rationally.’’ Petition, p. A-4

n. 4.

8

showed the regulation would result in a cost increase

of nearly twenty percent in order to achieve an emis-

sion reduction of less than two-tenths of one percent,

a cost effectiveness ratio of more than 100 to 1.” It is

difficult to imagine a more dramatic example of gross

disproportion between the emission reduction sought

to be imposed by EPA, and its cost.”

10Tn its response to the circuit court, the EPA also concluded

that ‘‘relating the cost of control to the benefits of control at least

at this time is a practical impossibility.’’ It reached this

conclusion because it found each emission source had its own

environmental surroundings which materially influenced the ef-

fect of emission controls for that source. Certainly, this problem

is not dispositive of the legal question of statutory interpretation.

Once this court properly interprets the statutory requirement under

the Clean Air Act, it will be necessary to devise an efficient method

for adequately comparing the costs to the industry with the de-

gree of improvement in air quality.

11 The record below discloses that, in cement plants using pre-

cipitators, each precipitator removes 70% of the particulate matter

in the exhaust gases it treats. Petitioner asserts that the EPA

standard requires six such precipitators, all having the same ap-

proximate cost. On this basis, rough calculations of cost/efficiency

(benefit) ratios can be made (percentage figures rounded to near-

est hundredth) :

(A) (B) (C) (D) (E) (F)

Particu Ratio of

late Increase

Removed Total in Cost to

by Each Particu Increase

Precipi late Percent in

Percent tator Removed Increase Efficiency

Precipi- Increase (asa % of (asa % of in (Col. B +

tator in Cost total) total) Efficiency Col. E)

1 70.00% 70.00% -- —

2 100.00% 21.00% 91.00% 30.00% 3 tol

3 50.00% 6.30% 97.30% 6.92% T tol

4 33.33 % 1.89% 99.19% 1.94% 17 tol

5 25.00% 0.57% 99.76% 0.57 % 44tol

6 20.00% 0.17% 99.93% 0.17% 118 tol

9

CONCLUSION

If the rejection by EPA of a cost-benefit analysis of

new source emission standards, as embodied in the deci-

sion of the court below, is permitted to stand, vast

expenditures may be imposed on all segments of basic

industry in this country, including the members of the

American Mining Congress, which are out of all reason-

able proportion to the benefits to be achieved. The

enormous and widespread impact of the error com-

mitted by the court below emphasizes the importance

of the question of federal law here involved—a ques-

tion which has not heretofore, but manifestly should be,

settled by this Court.’* The petition for writ of cer-

tiorari should therefore be granted.

Respectfully submitted,

Epwarp A. McCaBEe

JOHN G. DEGOOYER

JOHN H. SPELLMAN

HAMEL, Park, McCaBe & SAUNDERS

1776 F Street, N.W.

Washington, D.C. 20006

LAURENCE P. SHERFY

1100 Ring Building

Washington, D.C. 20036

Counsel for the

American Mining Congress

October 1975

12 This Court has recently recognized the importance of economic

considerations in the environmental area through its grant of cer-

tiorari in Union Electric Co. v. EPA (No. 74-1542), cert. granted,

October 6, 1975. That case, however, deals with economic consid-

erations under Section 110 of the Act and will not clarify the ex-

tent of the EPA’s obligations under Section 111—an issue squarely

presented here.