Petition — E. I. du Pont de Nemours & Co. v. Train

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iu the Supreme Court of the United States

OCTOBER TERM, 1975

No 75-1473

E. I. DUPONT DE NEMOURS AND COMPANY, OLIN CORPORA-

TION, FMC CorPorRATION, AMERICAN CYANAMID COMPANY,

MONSANTO COMPANY, THE Dow CHEMICAL COMPANY,

ALLIED CHEMICAL CORPORATION, HERCULES INCORPORATED,

UNION CARBIDE CORPORATION, STAUFFER CHEMICAL COM-

PANY, DIAMOND SHAMROCK CORPORATION, PPG INDUSTRIES,

INCORPORATED, BASF WYANDOTTE CORPORATION, CITIES

SERVICE COMPANY, AND N L INDUSTRIES, INCORPORATED,

Petitioners,

Vv.

RussELt E. TRAIN, as Administrator,

Environmental Protection Agency,

Respondent.

Petition For A Writ Of Certiorari To The

United States Court Of Appeals

For The Fourth Circuit

ROBERT C. BARNARD

Douc.as E. KLIEVER

CHARLEs F. LETTOW

1250 Connecticut Avenue, N.W.

Washington, D. C. 20036

Attorneys for Petitioners

OF COUNSEL:

CLEARY, GOTTLIEB, STEEN & HAMILTON

1250 Connecticut Avenue, N.W.

Washington, D. C. 20036

APRIL 13, 1976

du the Supreme Court of the United States

- OCTOBER TERM 1975

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No.

E. |. DUPONT DE NEMOURS AND COMPANY, OLIN CoRPORA-

TION, FMC CorPorRATION, AMERICAN CYANAMID COMPANY,

MONSANTO COMPANY, THE Dow CHEMICAL COMPANY,

ALLIED CHEMICAL CORPORATION, HERCULES INCORPORATED,

UNION CARBIDE CORPORATION, STAUFFER CHEMICAL COoM-

PANY, DIAMOND SHAMROCK CORPORATION, PPG INDUSTRIES,

INCORPORATED, BASF WYANDOTTE CORPORATION, CITIES

SERVICE COMPANY, AND N L INDUSTRIES, INCORPORATED,

Petitioners,

vV.

RussELL E. Train, as Administrator, Envisonmental Pro-

tection Agency,

Respondent.

Petition For A Writ Of Certiorari To The

United States Court Of Appeals

For The Fourth Circuit

Petitioners E. I. duPont de Nemours and Company, et al.’

ask that a writ of certiorari issue to review the judgment

of the United States Court of Appeals for the Fourth Circuit

entered in this case on March 10, 1976.

Opinions Below

The opinion of the court of appeals is not yet officially

reported. It is unofficially reported at 8 E.R.C. 1718. The

' Petitioners are E. I. duPont de Nemours and Company, Olin Cor-

poration, FMC Corporation, American Cyanamid Company, Monsanto

Company, The Dow Chemical Company, Allied Chemical Corporation,

Hercules Incorporated, Union Carbide Corporation, Stauffer Chemical

Company, Diamond Shamrock Corporation, PPG Industries, Incorpo-

rated, BASF Wyandotte Corporation, Cities Service Company, and N L

Industries, Incorporated.

2

opinion and judgment of the court of appeals are annexed

hereto as Appendix A.

As noted infra the decision of the court of appeals is

closely tied to a prior decision of the same court, which

earlier decision is the subject of a pending petition for a

writ of certiorari. E. I. duPont de Nemours & Co. v. Train,

528 F.2d 1136 (4th Cir. 1975), petition for writ of certiorari

filed, No. 75-978.

Concurrently with the filing of this Petition, petitioners

are submitting to the Court a motion to consolidate the

present Petition with the Petition already docketed at

No. 75-978.

Jurisdiction

The judgment of the court of appeals here sought to be

reviewed was entered on March 10, 1976. The jurisdiction

of this court is invoked under 28 U.S.C. § 1254(1).

Questions Presented’

1. Whether district courts or courts of appeals have

initial jurisdiction to review regulations issued by the Ad-

ministrator of the Environmental Protection Agency under

the Federal Water Pollution Control Act, as amended, gov-

erning wastewater effluent discharges from existing plants.

2. Whether the Federal Water Pollution Control Act, as

amended, provides that regulations governing wastewater

effluent discharges from existing plants be issued in the

form of

(a) “effluent limitations” based upon an authoriza-

= said to be implied from Section 301(b) of the

ct, or

(b) “guidelines for effluent limitations” in com-

—— the express command of Section 304(b)

of the Act

oe, ae See © ee Sanee © as ae

E. I. duPont de Nemours & Co. v. Train, No. 75-978.

3

3. Whether when “the Act is not clear” in conferring

initial jurisdiction to review regulations for existing plants

upon the courts of appeals rather than in providing the

normal review in the district courts, the statute should be

construed on grounds of practicality to confer such initial

jurisdiction on the courts of appeals.

Statutes And Regulations Involved

1. The Federal Water Pollution Control Act, as amended.

Sections 101, 301, 302, 304, 306, 307, 309, 401, 402, 502,

505 and 509 of the Act (33 U.S.C. §§ 1251, 1311, 1312,

1314, 1316, 1317, 1319, 1341, 1342, 1362, 1365 and 1369)

are set forth in Appendix C to Petition, E. I. duPont de

Nemours & Co. v. Train, No. 75-978.

2. “Effluent Limitations Guidelines” for the Inorganic

Chemicals Manufacturing Point Source Category. The reg-

ulations issued by the Administrator which govern the

wastewater effluent discharges from existing plants in the

Inorganic Chemicals Manufacturing Point Source Category

are found at 39 Fed. Reg, 9611-9639 (March 12, 1974).

They are set forth in Appendix D to Petition, E. I. duPont

de Nemours & Co. v. Train, No. 75-978.

STATEMENT OF THE CASE

This case presents issues of the proper construction to

be accorded key sections of the Federal Water Pollution

Control Act, as amended (“the Act”), 33 U.S.C. §§ 1251

et seq. The issues concern the nature of the statutory

authority granted by Congress to the Administrator of the

Environmental Protection Agency (“EPA”) to issue regu-

lations governing wastewater effluent discharges from exist-

ing industrial plants and other existing facilities.

Like the Petition already on file in E. I. duPont de

Nemours & Co. v. Train, No. 75-978 (“duPont I”), this case

specifically relates to EPA’s regulations for wastewater

effluents from existing facilities in the inorganic chemicals

4

industry. After informal rulemaking proceedings, on

March 12, 1974, the Agency issued final regulations called

“(e]ffluent limitations guidelines” for existing facilities in

each of 22 product subcategories of the inorganic chemicals

industry. (39 Fed. Reg. 9611-9635.) EPA said these regu-

lations were being “promulgated pursuant to sections 301

[and] 304(b) . . . of the Federal Water Pollution Control

Act, as amended... .” (39 Fed. Reg. at 9612.)

The fifteen petitioner companies filed timely “protective”

petitions for review of the guideline regulations in the U.S.

Court of Appeals for the Fourth Circuit. E.g., E. I. duPont

de Nemours & Co. v. Train, No. 74-1261 (4th Cir. ).* Con-

temporaneously, eight of the fifteen companies filed a

complaint in the U.S. District Court for the Western Dis-

trict of Virginia seeking review of EPA’s guideline regula-

tions applicable to existing plants in the sulfuric acid

production subcategory of the inorganic chemicals indus-

try. E. I. duPont de Nemours & Co., et al. v. Train, et al.,

Civil Action No. 74-57-R (W.D.Va., filed April 1, 1974).

The companies asserted that the district court had juris-

diction of the review action based upon the provisions of

28 U.S.C. §§ 1331, 1332, 1337, 1361 and 1651, the Declara-

tory Judgment Act, 28 U.S.C. ¢§ 2201-2202, and Section 10

of the Administrative Procedure Act, now codified as 5

U.S.C. §§ 701-706.

On September 27, 1974, the district court issued an

opinion and order dismissing the complaint. E. I. duPont

de Nemours & Co. v. Train, *%3 F. Supp. 1244 (W.D.Va.

1974). The district court adc ed EPA’s contentions that

Section 509(b) of the Act, 33 U.S.C. § 1369(b), provided

for exclusive jurisdiction of any review action in the courts

of appeals. This conclusion by the court was based upon

the reference in Section 509(b)(1)(E) to effluent limita-

tions under Section 301, and upon the court’s acceptance

° EPA took the position that review was in the Court of Appeals under

Section 501(b)(1)(E). Where Section 509(b) governs review, para-

graph 509(b)(1) requires the filing of a petition for review “within

ninety days .. .”

5

of EPA’s argument that the Agency had an implied power

to issue effluent limitations by regulation for existing plants

under Section 301 of the Act, 33 U.S.C. § 1311. The com-

panies had argued that for such existing plants EPA was

explicitly mandated by express language in Section 304(b)

of the Act, 33 U.S.C. § 1314(b), to issue guideline regula-

tions. The companies contended that review of such guide-

line regulations did not fall within Section 509(b)’s special

provisions for review in the courts of appeals of certain

specified EPA actions. EPA had argued that the ostensible

mandate of Section 304(b) for guideline regulations should

be disregarded; instead, Section 304(b) should be con-

strued as merely providing a “definitional” basis for estab-

lishing effluent limitations by regulation.‘

An expedited appeal of the district court’s decision was

taken to the Fourth Circuit. That appeal was consolidated

for briefing and argument with the protective petitions for

review. The companies maintained their claim that the

Agency had not followed the Act in issuing its regulations

for existing plants, and they correspondingly contested the

jurisdiction of the court of appeals. The companies also

challenged the Agency's separate regulations for eleven of

the 22 product subcategories on the ground that the regula-

tions were not supported by the administrative record.

The court of appeals issued two decisions in the con-

solidated cases. In the first decision (duPont I) the court

dealt with the appeal. It upheld its own jurisdiction

to review EPA’s action in issuing existing plant regula-

tions and thus affirmed the district court’s dismissal of

the companies’ complaint. The court of appeals sepa-

rated the question of the Agency's authority from the

issue of jurisdiction. It ruled that promulgation by EPA

4 The dispute over the nature of EPA’s authority to issue regulations

for the wastewater discharges from existing plants had and has consid-

erable practical significance. EPA argued in the district court that its

limitation regulations were to be “mechanically cranked” into discharge

permits required under the Act for particular plants, without any special

reference to a plant's individual circumstances or to the statutory fac-

tors set out in Section 304(b)(1)(B) and 304(b)(2)(B).

6

of the mandated guideline regulations under Section 304

(b) was a necessary step to attainment of the objectives

for existing plants set out in Section 301. Consequently,

action by EPA under Section 304(b) “should properly be

considered to be pursuant to the provisions of [Section] 301

and, therefore, reviewable by this court under [Section]

509.” (528 F.2d at 1142: Petition in No. 75-978, Appen-

dix A, at 11-a.)

The petitioner companies filed with this Court the peti-

tion for writ of certiorari pending as No. 75-978 to review

the court of appeals’ duPont I decision.

Then, on March 10, 1976, the court of appeals rendered

its decision on the protective petitions for review. (“duPont

II”.) The court sustained EPA’s claim that it could issue

effluent limitations by regulation under Section 801, but it

ruled against the Agency on the role to be accorded those

regulations. The court held that such existing-plant regu-

lations were not binding on the permit-issuing authorities,

but rather were only “presumptively applicable.” (Appen-

dix A, at 10-a.) In administrative proceedings to establish

a discharge permit for a particular plant, the permit appli-

cant could adduce facts respecting the individual plant or

facility to rebut the presumption of applicability.

The court then turned to the challenge to specific aspects

of the regulations. It set aside the portions of EPA’s regula-

tions of general applicability dealing with “process waste

water, “process waste water pollutants,” and “catastrophic

rainfall.” (Appendix A, at 19-a to 20-a.) Then the court

focussed on the specific subcategory regulations. The com-

panies had challenged all or part of the regulations for

eleven different subcategories. In each instance, the court

set aside those portions of the subcategory regulations which

had been challenged, i.e., all or part of the regulations for

the production of chlorine, hydrochloric acid, hydrofluoric

acid, hydrogen peroxide, nitric acid, sodium carbonate,

sodium dichromate, sodium metal, sodium silicate, sulfuric

acid, and titanium dioxide. (Appendix A, at 32-a to 33-a.)

7

REASON FOR GRANTING THE WRIT

Consideration of This Case In Conjunction With duPont

I Would Resolve The Four-Way Conflict Among The

Courts Of Appeals Respecting The Statutory Responsi-

bilities Of The Administrator For Existing-Plant Regu-

lations.

The questions presented in this case are identical to

those posed in duPont I. The record is also identical for

both cases; they were consolidated in the court of appeals.

And petitioners are filing with this Petition a motion to

consolidate this case with No. 75-978.

This separate Petition is being filed only to ensure that

the Court has before it a consolidated case which fully

presents all aspects of the very important issues of the Ad-

ministrator’s implementation of Sections 301 and 304 of the

Act respecting regulations applicable to existing-plant dis-

charges. In the response to the Petition in duPont I, the

Solicitor General agreed that the Court should grant the

petition for a writ of certiorari there presented. (Respond-

ents’ Memorandum in No. 75-798, at 1.) He also agreed

that each of the three questions set out in the duPont I

Petition were properly presented and should be considered

by the Court. (Id., at 6.) However, he expressed the view

that this Court, like the Fourth Circuit, “need not decide the

question concerning the Administrator's authority” in re-

solving the conflict among the circuits over the jurisdic-

tional questions. (Id.)

However, as the Fourth Circuit said in duPont II, the

issue of the Administrator's power “goes to the heart of the

controversy.” (Appendix A, at 5-a.) There is a two-way con-

flict among the circuits on the jurisdictional questions, but

the circuits have split four different ways on the nature of

the Administrator's power to issue effluent regulations for

existing plants. Compare CPC International Inc. v. Train,

515 F.2d 1032 (8th Cir. 1975) (Administrator must issue

guideline regulations under Section 304), with American

Meat Institute v. Environmental Protection Agency, 526

8

y

F.2d 442 (7th Cir. 1975) (Administrator may issue limita-

tion regulations under Section 301), with American Iron

and Steel Institute v. Environmental Protection Agency,

526 F.2d 1027 (3d Cir. 1975) (Administrator may issue

regulations with Section 301 ceilings and Section 304(b)

guideline ranges beneath the ceilings), with duPont II

(Administrator may issue limitation regulations under Sec-

tion 301 but such regulations are not binding, rather they

are “presumptively applicable” ).

As noted, the petitioner companies prevailed in the court

of appeals on those issues which were dependent upon the

administrative record. And on the issue of the Administra-

tor’s power, the court of appeals did not accept the view of

either of the parties but rather adopted elements from each

of their positions. Given such results, and the pending Peti-

tion in duPont I, petitioners ordinarily would not seek

review of this case in this Court. However, because the

Respondent evidently would advocate 2 disposition of

duPont I which would leave outstanding the central issue

of the Administrator's power, the petitioner companies

have elected to submit this further Petition.

By granting this Petition in conjunction with the Petition

in duPont I, the Court can consider the matter of the Ad-

ministrator’s power without any constraints, either together

with or independent of the jurisdictional issues.

CONCLUSION

As a matter of judicial economy, this Court should grant

this Petition along with the previously filed Petition in

duPont I (No. 75-978). The record in each case is identical

as are the questions presented, and all of the petitioners in

duPont I are also petitioners here. The cases can be con-

solidated, as in the Fourth Circuit, and a single set of

briefs can then be filed.

Until this Court resolves the troublesome and very im-

portant issues here presented, the confusing and inconsis-

9

tent constructions of the key sections of the Federal Water

Pollution Control Act will cause delay in achieving the

purposes of the Act.

Respectfully submitted,

RoBERT C. BARNARD

Douc tas E. KLIEVER

CHARLES F. LETTOW

1250 Connecticut Avenue, N.W.

Washington, D. C. 20036

Attorneys for Petitioners

OF COUNSEL:

CLEARY, GOTTLIEB, STEEN & HAMILTON

1250 Connecticut Avenue, N.W.

Washington, D. C. 20036

APRIL 13, 1976

l-a

APPENDIX A

Anitedh States Court of Appeals

FOR THE FOURTH CIRCUIT

Nos. 74-1261, 74-1290,

74-1296-1304, 74-1357,

74-1406-7, 74-1588-90,

74-1670-1 and 74-1741

E. I. DUPONT DE NEMours & COMPANY

Petitioner,

v.

Russet E. TRAIN, as Administrator of the Environmental

Protection Agency,

Respondent,

On petitions for review of actions of the Administrator

of the Environmental Protection Agency.*

Argued April 22, 1975 Decided March 10, 1976

*The following Petitions for Review, all naming Train as Respondent,

were consolidated.

74-1261 and 74-1357—DuPont & Co.

74-1290 and 74-1299— Allied Chemical Corp.

74-1296 and 74-1303—-FMC Corp.

74-1297 and 74-1304— American Cyanamid Co.

74-1298 and 74-1301—Dow Chemical Co.

74-1300 and 74-1302—Olin Corp.

74-1406 and 74-1407—Stauffer Chemical Co.

74-1588— Diamond Shamrock Corp.

74-1589——-PPG Industries, Inc.

74-1590-—BASF Wyandotte Corp.

74-1670 and 74-1671—Cities Service Co.

74-1741—NL Industries, Inc.

Za

Before Rives** and BREITENSTEIN***, Serior Circuit

Judges, and WipENER, Circuit Judge.

Robert C. Barnard, Douglas E. Kliever and Charles F.

Lettow for the Petitioners.

Kathryn A. Oberly for Respondent. With her on the briefs

were Wallace H. Johnson, Assistant Attorney General,

Edmund B. Clark, Attorney, Department of Justice, Alan

G. Kirk, II, Assistant Administrator for Enforcement

and General Counsel, and Ray E. McDevitt, Attorney, Envi-

ronmental Protection Agency.

Briefs of Amici Curiae were filed by Angus Macbeth and

Edward L. Strohbehn, Jr., for Natural Resources Defense

Council, Frederick M. Rowe, Edward W. Warren, and

Robert F. VanVoorhees for American Petroleum Institute,

et al., Russell E. Leasure and Elliot S. Azoff for RMI Com-

pany, George C. Freeman, Jr., Turner T. Smith, Jr., and

William A. Anderson, II, for Allegheny Power System, Inc.,

et al., Milton A. Smith, Lawrence B. Kraus, James F. Rill,

Max N. Edwards, Richard E. Schwartz, and Collier, Shan-

non, Rill & Edwards for the Chamber of Commerce of the

United States, Robert H. Young, Kenneth R. Myers and

Archibald A. Campbell for New Jersey Zinc Company.

BREITENSTEIN, Senior Circuit Judge.

Companies engaged in the production of inorganic chem-

icals have filed 20 petitions for review of various regula-

tions promulgated by respondent Train as Administrator

of the Environmental Protection Agency. The petitions

have been consolidated for presentation and disposition.

The regulations were promulgated under the Federal Water

Pollution Control Act Amendments of 1972. 33 U.S.C.

§§ 1251-1376. Herein for brevity and clarity the Adminis-

trator at times will be referred to as EPA and the statutory

references will be those found in the Act as set out in

**Of the Fifth Circuit, sitting by designation.

***Of the Tenth Circuit, sitting by designation.

3-a

86 Stat. 816 et seq.' Petitioners will be referred to collec-

tively as Industry.

Industry's attack on the jurisdiction of the court of ap-

peals has been rejected by our opinion in No. 74-2237,

DuPont & Company v. Train.

The objective of the Act “is to restore and maintain the

chemical, physical, and biological integrity of the Nation’s

waters.” § 101(a). The goal is the elimination by 1985 of

“the discharge of pollutants into the navigable waters.”

§ 101(a)(1). Earlier legislation, which placed on the states

the primary responsibility to maintain water quality, had

proven inadequate. S. Rep. No. 92-414, 92 Cong. 2d Sess.,

2 U.S. Cong. & Adm. News °72 3674. The Act made “a

major change in the enforcement mechanism of the Fed-

eral water pollution control program from water quality

standards to effluent limits.” Ibid. at 3675.

Section 301(a) provides that except in compliance with

specified sections of the Act “the discharge of any pollutant

by any person shall be unlawful.” Section 301(b) says that

“to carry out the objective of this Act there shall be

achieved” stated effluent limitations. Not later than July 1,

1977, those limitations for point sources, except publicly

owned treatment works with which we are not concerned,

“shall require the application of the best practicable control

technology.” § 301(b)(1)(A). For July 1, 1983, the require-

ment is “the best available technology economically achiev-

able.” § 301(b)(2)(A).

The foregoing requirements apply to existing sources.

For new sources, § 306(a)(1) requires a standard of per-

1 The parallel U.S. Code citations for the most frequently mentioned

sections are:

Section 101—23 U.S.C. § 1251,

Section 301—33 U.S.C. § 1311,

Section 304—33 U.S.C. § 1314,

Section 306—33 U.S.C. § 1316,

Section 402—-33 U.S.C. § 1342,

Section 501—33 U.S.C. § 1361,

Section 502—33 U.S.C. § 1362,

Section 509—33 U.S.C. § 1369.

4-a

formance “which reflects the greatest degree of effluent

reduction which the Administrator determines to be achiev-

able through application of the best available demonstrated

control technology.” Section 306(b)(1)(A) directs the Ad-

ministrator within 90 days after enactment to publish a

list of categories which at the minimum shall include 27

named industries among which is “inorganic chemicals

manufacturing.” Within one year after publication of the

list of categories, the Administrator shall publish Federal

standards of performance for new sources within each

category. § 306(b)(1)(B).

Primary enforcement of the Act is secured through the

permit system established by § 402. Permits for pollutant

discharge may be issued by the Administrator, 4 402(a)\1),

or by a state which has adopted a permit program approved

by the Administrator. 4 402(b). The Administrator has

veto power over a state issued permit. § 402(d)(2). All

permits shall comply with the applicable provisions of

§§ 301, 306, and other specified sections not including

§ 304. See § 402(a)(1) and (b)(1)(A).

Section 304 is the cause of much of the controversy.

Within one year after enactment, the Administrator must

publish “criteria for water quality accurately reflecting

the latest scientific knowledge” on enumerated subjects.

§ 304(a)(1). Within the same period the Administrator

shall publish regulations “providing guidelines for effluent

limitations.” § 304(b). Subsection (b)(1)(A) applies to

the 1977 step and subsection (b)(2)(A) to the 1983

step. Each subsection mandates consideration of specified

factors.

The Administrator did not act within the one year re-

quirements of § 304. Compliance was not within the realm

of reality. There are some 28,000 industrial dischargers

and 27,000 others. About 30,000 applications for permits

were filed. EPA characterizes the Act as “incredibly com-

plex and demanding.” A private suit was brought to com-

pel compliance. The result was a court imposed time-

table. Natural Resources Defense Council, Inc. v. Train,

D.C. Cir., 510 F.2d 692, 710-714.

5-a

On March 12, 1974, EPA promulgated “effluent limita-

tions guidelines for existing sources and standards of per-

formance * * * for new sources in the inorganic chemicals

manufacturing category of point sources.” 39 Fed. Reg.

9612 et seq. These are the regulations under attack. In

so doing EPA stated that it acted “pursuant to sections 301,

304(b) and (c), 306(b) and (c) and 307(c).” We are not

concerned with § 307 which covers certain toxic pollutants.

The regulations prescribe “effluent limitations guidelines

for existing sources” and “standards of performance for

new sources.” 40 C.F.R. 401.10.

Industry attacks the regulations generally and specifi-

cally. We shall first consider the objections going to all

of the regulations and then discuss those applying to par-

ticular sources.

I

GENERAL VALIDITY OF REGULATIONS

(a) Notice.

Industry argues that the regulations are invalid because

of EPA’s failure to give the notice required by the Adminis-

trative Procedure Act, 5 U.S.C. § 553(b). In its October 11,

1973, notice of proposed rule-making, 38 Fed. Reg. 28174

et seq., EPA stated that its proposed action was taken pur-

suant to §4 301, 304(b) and (c), 306(b), and § 307(c).

Public comments received thereafter are contained in

pp. 4884-5346 of the Appendix. In its March 12, 1974,

promulgation of the regulations, EPA summarized the

comments. See 39 Fed. Reg. 9612-9615.

The rule-making and notice provisions of APA “were

designed to assure fairness and mature consideration of

rules of general application.” National Labor Relations

Board v. Wyman-Gordon Co., 394 U.S. 759, 764. Notice

is sufficient if it provides a description of the subjects and

issues involved. 5 U.S.C. § 553(b)(3) and California Citi-

zens Band Association v. United States, 9 Cir., 375 F.2d

6-a

43, 49, cert. denied 389 U.S. 844. Industry had adequate

notice and took advantage of it.

(b) EPA’s power to establish effluent limitations by

regulations.

This issue goes to the heart of the controversy. Industry

says that the Administrator promulgates guidelines to be

considered by the permit issuer. EPA says that the Admin-

istrator establishes effluent limitations by regulations

which, with exceptions to be noted later, have uniform

application throughout the nation and which must be

applied by the permit issuer.

(1) Applicable Law.

The Administrative Procedure Act, 5 U.S.C. 4 706

(2)(A), authorizes a reviewing court to set aside agency

action which is “arbitrary, capricious, an abuse of dis-

cretion, or otherwise not in accordance with law.” As

said in Citizens to Preserve Overton Park, Inc. v. Volpe,

401 U.S. 402, 416, “the court must consider whether the

decision was based on a consideration of the relevant

factors and whether there has been a clear error of judg-

ment.” See also Appalachian Power Company v. Environ-

mental Protection Agency, 4 Cir., 477 F.2d 495, 506-507.

The court may not substitute its judgment for that of the

agency. Overton Park, 401 U.S. at 416. If the agency’s

construction of the controlling statute is “sufficiently

reasonable” it should be accepted by the reviewing court.

Train v. Natural Resources Defense Council, Inc., 421 U.S.

60, 75.

The grounds upon which the agency acted must be

clearly disclosed in, and sustained by, the record. Federal

Trade Commission v. Sperry and Hutchinson Co., 405

U.S. 233, 249. The agency must “explicate fully its course

of inquiry, its analysis and its reasoning.” Ely v. Velde,

4 Cir., 451 F.2d 1130, 1139; see also Appalachian Power

Company v. Environmental Protection Agency, 4 Cir., 477

F.2d 495, 507. After the fact rationalization by counsel in

brief and argument does not cure non-compliance by the

7-a

agency with the stated principles. Dry Color Manufac-

turers’ Association, Inc. v. Department of Labor, 3 Cir.,

486 F.2d 98, 104, and particularly cases cited in n. 8.

The function of judicial review of agency action is to

determine (1) authority of the agency, (2) compliance

by the agency with the necessary procedural requirements,

and (3) any claim that agency action is arbitrary, capri-

cious, or an abuse of discretion. Citizens to Preserve

Overton Park, Inc., 401 U.S. at 415-417. With these prin-

ciples in mind, we turn to the regulations.

(2) Agency Authority.

The Eighth Circuit has held, CPC International Inc. v.

Train, 8 Cir., 515 F.2d 1032, that the Administrator may

not promulgate regulations establishing effluent limita-

tions for existing sources. The Third and Seventh Circuits

have held to the contrary. See American Iron and Steel

Institute v. Environmental Protection Agency, 3 Cir., slip

opinion filed November 7, 1975, p. 8; and American Meat

Institute v. Environmental Protection Agency, 7 Cir., slip

opinion filed November 24, 1975, p. 16. On the mentioned

point we disagree with the Eighth Circuit and agree with

the Third and Seventh Circuits. Our views on the effect

of the regulations will be stated later. The conflict among

the circuits emphasizes the confusion caused by this

poorly drafted and astonishingly imprecise statute.

The regulations impose “effluent limitations guidelines.”

The quoted term appears nowhere in the Act. Section 301

refers to “effluent limitations”; § 304 to “guidelines”; and

§ 306 to “standards of performance.” It may be that Con-

gress intended § 304 guidelines to precede § 301 limita-

tions. That did not occur. Under compulsion of a judici-

ally ordered timetable, EPA combined the two steps. The

question is the validity of the action taken. Nothing in the

Act forbids surmounting the two steps in one jump.

Each party spends much effort in sustaining its position

by analysis of the Act and its legislative history. Without

going into any details, it is enough to say that the Act is

8a

vague, uncertain, and inconsistent. Support can be had

for diametrically opposed conclusions. Except for some

statements in committee reports, see e.g. our opinion in

No. 2237—DuPont v. Train, the two-volume, 1766 page,

Legislative History is of little help. In it, statements can

be found to uphold almost any position which one cares

to take.

We are faced with the problem of making workable a

vague, regulatory statute so as to attain the congressional

objective that the discharge of pollutants be eliminated.

This end may not be reached by quibbling over semantics.

Ambiguity must be transformed into practicality.

Section 304(b) specifically authorizes the Administrator

to publish “regulations, providing guidelines for effluent

limitations.” Nothing is said in § 301 about regulations.

The source of power to impose § 301 limitations by regu-

lations can only come from § 501(a) which authorizes the

Administrator “to prescribe such regulations as are neces-

sary to carry out his functions under this Act.”

The question then is what are his functions. Section

101(d) says that he “shall administer this Act.” The

control technology mentioned in 4 301(b)(1)(A) and

(b)(2)(A) is that defined and determined by the Admin-

istrator under § 304. Section 301(e) refers to “[e)ffluent

limitations established pursuant to this section” but does

not say who does the establishing. The Act is unworkable

unless someone takes the initiative in deciding what limi-

tations are generally applicable to discharges, whether by

individual plants, categories, subcategories, classification,

or otherwise. Because the control technology is determined

by the Administrator, it is reasonable that he establish

the limitations generally applicable to categories. Such

action is within the performance of his functions.

From a practical standpoint we find no objection to

the combining of limitations and guidelines. The Admin-

istrator was faced with unrealistic statutory requirements

and a court imposed timetable. He had the duty to pro-

ceed. His action was “sufficiently reasonable” and should

da

be accepted by a reviewing court. Train v. Natural Re-

sources Defense Council, Inc., 421 U.S. 60, 75. We con-

clude that he had authority to promulgate regulations

establishing limitations for existing sources.

(3) Effect of Exercise of Authority.

The authority to promulgate the regulations must not

be confused with the effect of those regulations. Industry

says that the effect will violate the Act and, hence, the

regulations are invalid.

In part the controversy is whether the regulations are

§ 301 limitations or § 304 guidelines. The regulations im-

pose “effluent limitations guidelines.” EPA says in effect

that the regulations impose limitations which are appli-

cable uniformly throughout the nation and, with some

exceptions, must be mechanically cranked into each per-

mit by the issuer. Industry says that the regulations are

guidelines for the information of and consideration by,

but not binding on, the permit issuer. Inherent in this

dispute is the question of national uniformity versus state

power and responsibility.

Section 101(a) refers to the “integrity of the Nation's

waters, “the national goal,” and “the national policy.”

Section 101(b) says that the policy of Congress is “to

recognize, preserve, and protect the primary responsibili-

ties and rights of States to prevent, reduce, and eliminate

pollution.”

Subsections 402(a)(1) and (b)(1) say that the permits

shall comply with §{§ 301, 306, and other sections not in-

cluding § 304. If national uniformity is controlling, state

action in issuing permits is inhibited. If the regulations

are informational, the states may exercise reasonable dis-

cretion in permit issuance.

The Act, § 502(11), defines “efftuent limitation” to

mean “any restriction established by a State or the Admin-

istrator.” The pertinent regulation, 40 C.F.R. § 401.11(i),

defines the same term to mean “any restriction established

10-a

by the Administrator.” The conflict must be resolved in

favor of the statute. Accordingly, an effluent limitation

may be established either by a state or by the Adminis-

trator. However, we go around in a circle because

§ 402(d)(2) gives the Administrator veto power over state

action. Section 401.11(i) is set aside and remanded for

reconsideration.

For all sources, both existing and new, we believe that

the solution which most nearly satisfies congressional

intent is recognition that the regulations are presumptively

applicable to permit applications. The regulations control

unless that presumption is rebutted. Thus, national uni-

formity, subject to limited specific exceptions, is attained.

The balance of general rule and narrow exceptions assures

all possible uniformity without sacrifice of the flexibility

needed to adjust for disparate plants in dissimilar circum-

stances.

Both the Act and the regulations recognize permissible

variances. Section 301(c) empowers the Administrator to

modify the requirements of § 301(b)(2)(A), 1983 phase,

upon a showing that modified requirements “(1) will

represent the maximum use of technology within the eco-

nomic capability of the owner or operator; and (2) will

result in reasonable further progress toward the elimina-

tion of the discharge of pollutants.” Industry points out

that this does not apply to the 1977 limitations. However,

in each of the regulations applicable to the 1977 phase

for those subcategories under consideration, there is recog-

nition that adjustments may be appropriate for certain

plants and provision for pertinent procedures. See e.g.

40 C.F.R. § 415.62 applying to chlorine. The differences

between the provisions of the statute and those of the

regulations are of no present concern. Both recognize and

permit variances. In any event, the “best practicable con-

trol technology” for 1977 may not be construed more

stringently than the “best available technology economi-

cally achievable” as ameliorated by the qualification of

§ 301(c) for 1983 limitations.

ll-a

Provisions for var’ances, modifications, and exceptions

are appropriate to the regulatory process. See United

States v. Allegheny-Ludlum Steel Corp., 406 U.S. 742, 755.

They have been recognized in actions pertaining to en-

vironmental regulations. See e.g. Portland Cement Asso-

ciation v. Ruckelshaus, D.C. Cir., 486 F.2d 375, 399, cert.

denied 417 U.S. 921, and International Harvester Co. v.

Ruckelshaus, D.C. Cir., 478 F.2d 615, 641. The administra-

tion of these provisions in practice is a matter of specula-

tion at the present. The question will arise when a claim

for a variance is made in a permit application.

Neither the Act nor the regulations contain any variance

provision for new sources. The rule of presumptive appli-

cability applies to new sources as well as existing sources.

On remand EPA should come forward with some limited

escape mechanism for new sources.

In the discussion which follows we shall treat the regu-

lations as presumptively applicable to both existing and

' new sources.

(ce) Agency Compliance with Procedural Requirements.

The issues involved will be considered separately.

(1) Subcategories.

EPA imposed the limitations on the basis of subcate-

gories. Industry desires that the limitations be fixed on

the basis of individual plants.

The provision relating to the 1977 step, § 301(b)(1)(A),

refers to “effluent limitations for point .” For the

1983 step the provision, § 301(b)(2)(A), is “effluent limi-

tations for categories and classes of point sources.” The

section applicable to mew sources provides, { 306

(b)(1)(A), that the Administrator shall publish “a list of

categories of sources” which shall include specified indus-

tries.

“Point source” is defined, 4 502(14), as a “conveyance

*** from which pollutants are or may be discharged.”

12-a

Read literally the 1977 requirement is for determination

on the basis of individual discharges. The 1983 and new

source requirements are on the basis of categories. We

do not know the reason for the difference. Whatever it

may have been, July 1, 1977, approaches and a holding

that EPA must now start over and make the 1977 determi-

nations on the basis of many thousands of individual

plants would be chimerical. Practical considerations may

not be ignored. A remand of all of the regulations per-

taining to the 1977 step would result in administrative

delay, have the potential of judicial review, and further

postpone attainment of the Act’s objectives. In the cir-

cumstances we accede to the EPA procedure of promul-

gating general regulations which impose presumptively

applicable effluent limitations for all three steps on the

basis of categories.

With regard to the 1977 step, the reference in § 301

(b)(2)(A) to “point sources” is taken to mean that Con-

gress intended that the permit grantor should give indi-

vidual attention to each “point source” and apply the

factors specified in § 304(b)(1)(B). Some of those fac-

tors, e.g., “age of equipment and facilities involved,” can

only be applied on an individual basis. EPA recognized

this problem when it included variance provisions in its

regulations for the 1977 step: See e.g. 40 C.F.R. § 415.62

and the reference therein to factors which are “funda-

mentally different.”

For the inorganic chemical manufacturing industry

EPA established 22 subcategories based on the chemical

product manufactured. In addition where dissimilar pro-

cesses are used to manufacture the same product the

limitations are refined to provide separate limitations

within the subcategory.

The method of categorization adopted by EPA will

reasonably effectuate the congressional objectives. Further

subdivision might unduly complicate the administration

of the Act. Rulemaking of necessity is general. Problems

relating to specific factual situations 2re for determination

at the permit-issuing stage.

13-a

(2) Use of single numbers.

The regulations impose limitations in terms of single

numbers rather than in a range of numbers. Industry

attacks this method saying in effect that EPA promulgated

guidelines and that guidelines are not absolutes. Nothing

in the Act prohibits the Administrator from using single

numbers in establishing effluent limitations. The use of

a single number limitation for discharge, permits any dis-

charge from zero up to the allowed amount, subject always

to the principle of presumptive validity which we have

stated.

We are aware that the Third Circuit, American Iron

and Steel Institute v. Train, supra, has held that the regu-

lations there considered are invalid because “they failed

to provide meaningful ranges or guidance in considering

individual factors.” Slip opinion at p. 37. On the facts

presented to us, we cannot accept that conclusion. The

EPA has promulgated zero discharge limitations with

regard to many of the discharge sources which are before

us. If a range is required, a zero discharge provision vio-

lates the Act. An objective of the Act is the elimination of

all pollutant discharges by 1985. § 101(a)(1). The exper-

tise of the Administrator is persuasive as to whether the

limitations be fixed in single numbers or ranges. A claim

of arbitrary action in this regard may be considered in

court review under § 509(b)(1)(E) of the issuance or

denial of a permit. Then specific facts may be presented

and the problem will be actual rather than hypothetical.

It may be that with some categories ranges are desirable

and with others single numbers are appropriate. We are

dealing with the general problem and decline to make ad-

visory statements covering specific applicability. For the

purposes of the suit before us relating to “inorganic chem-

icals manufacturing,” we accept the Administrator’s use

of single numbers.

(3) Statutory Factors.

Section 304(b)(1)(B), 1977 step, and § 304(b)(2)(B),

1983 step, specify factors to be taken into account to

14-a

determine control measures. For existing sources, these

are essentially the same except in one respect. The 1977

step includes “consideration of the total cost of applica-

tion of technology in relation to the effluent reduction

benefits to be achieved from such application.” A _ bal-

ancing is required. For the 1983 step there is no reference

to balancing and the listed factors include “cost of

achieving such effluent reduction.” For new sources the

requirement is the effluent reduction “achievable through

application of the best available demonstrated control

technology, processes, operating methods, or other alter-

natives.” § 306(a)(1).

A basic problem is the effect to be given the factors

specified in § 304(b)(1)(B) and (2)(B). Section 301,

which provides for effluent limitations, says in its sub-

section (1)(A) that the 1977 step requires the technology

“as defined by the Administrator pursuant to section

304(b) of the Act.” For the 1983 step the language is “in

accordance with regulations issued by the Administrator

pursuant to section 304(b)(2) of this Act.” We know of

no reason for the change in language. Be that as it may.

The reference in § 301 to § 304 must mean that Congress

intended that the factors specified in § 304 are pertinent

to effluent limitations established under § 301. Some of

the specified factors are of practical applicability only to

individual plants, for example “age of equipment and

facilities involved.” We construe the congressional intent

to be that the specified factors shall be applied by the

permit issuer in determining whether the presumptively

valid effluent limitations should apply to a particular

source of discharge. This construction does not derogate

the power of the Administrator to issue general regulations

fixing presumptively valid effluent limitations on categories.

With reference to the cost-benefit provision Industry con-

tends that EPA must first make an overall cost/benefit

analysis and then elaborate how that analysis shall be

applied in the consideration of permits for individual

plants. We believe that an overall cost/benefit analysis for

each subcategory si ‘isfies the statutory requirements. Such

15-a

an analysis for each of the many thousands of dischargers

and permit applicants would be impractical for general

regulations. In acting on permit applications, the issuer

will properly consider cost/benefit analysis along with the

other factors specified in § 304(b).

We reject the argument of Industry that benefits must

be quantified in monetary terms. Nothing in the Act re

quires this action.

Industry says that as to existing sources EPA is confined

to “end of the pipe” treatment systems. The Act does not

so provide. The provisions applicable to both the 1977

and 1983 phases, § 304(b)(1)(B) and (2)(B) refer to

“measures and practices” and direct the Administrator to

consider “process changes.”

Both the mentioned subsections require EPA to consider

“non-water quality environmental impact (including energy

requirements ).” Pollutant wastes which may not be re-

cycled and for which there is no commercial market have

to be disposed of in some other way. They may be dis-

charged into water, vented into the air, or collected in a

land-fill. Air discharge brings into play the Clean Air Act,

42 U.S.C. § 1857 et seq. Land-fills present local problems

and the application of local laws. We believe that EPA has

given adequate consideration to the non-water environ-

mental impact except in the cases of certain subcategories

to be mentioned later.

Energy requirements present a serious problem in the

light of the existing energy crisis with spiraling prices.

Unquestionably, many of the regulations will require the

use of more energy. EPA and Industry are in sharp dispute

over the amounts and costs of the energy required. We do

not know which is right. One thing is certain. Costs to the

consumers will rise. So far as the inorganic chemical

manufacturing category is concerned we are satisfied with

the EPA actions, except insofar as later mentioned subcate-

gories raise problems.

For the 1977 phase the requirement is “the application

of the best practicable control technology currently avail-

16-a

able.” § 301(b)(1)(A). The Industry reply brief in Nos.

74-1261 etc. at 44 acknowledges that “the 1977 effluent

guidelines can be based on the performance of the best

plants or performance achieved by no plant if the Agency

finds that the level of achievement in the subcategory is

uniformly inadequate.” Industry conceives of problems

which will arise when plants in a subcategory use different

processes. This matter is best considered in connection

with the specific subcategories.

For the 1983 phase the requirement is “application of the

best available technology economically achievable.” § 301

(b)(2)(A). In this regard Industry concedes, Ibid., that

“the Agency may look to the best performer and even assess

technologies that have not been applied.” The concern of

Industry is the adequacy of the variance provisions. We

will not assume inadequacy. The problem can be consid-

ered when and if it arises.

For new sources, § 306(a)(1), standards of performance

must be both “available” and “demonstrated.” Problems

connected with new source standards for specific sub-

categories will be dealt with in our discussion of those

subcategories.

With the exceptions noted, we believe that EPA has satis-

fied the statutory procedural requirements.

(d) Relationship of the three steps.

The problem here is the relationship of the 1977 limita-

tions, the 1983 limitations, and the new source stundards.

The orderly progression is (1) 1977 limitations, (2) new

source standards, and (3) 1983 limitations. No instance

is called to our attention in which the 1977 limitations are

more strict than the new source standards or the 1983

limitations. At times the 1977 limitations are the same as

the new source standards.

The difficulty arises from uncertainty as to the relation-

ship of the 1983 limitations to the new source standards.

Industry says that the 1983 limitations may not be more

ce et

PS

17-a

stringent than the new source standards. We are thrust

into another area of confusion. Section 306(d) prescribes

a grace period. It concerns “standard of performance,” a

term specifically defined in § 306(a)(1). We do not know

whether Congress intended to equate “effluent limitations”

as used in § 301(b) and defined in § 502(11) with “stan-

dard of performance.” Nor do we know the intent of Con-

gress with reference to the applicability of the grace period

to plants the construction of which began after the passage

of the Act in 1972 and before the promulgation of the regu-

lations in 1974. All we can say is that nothing pertaining

to § 306(d) is before us. The construction and application

of § 306(d) is for decision when a specific controversy is

presented.

Improvements in the techniques of waste disposal can

be reasonably expected by 1983. Except for such situations

as are later determined to be within the § 306(d) grace

period, plants which go on the line between the passage

of the Act and 1983 are subject to the 1983 limitations.

The language of the Act is such that the 1983 limita-

tions, to some extent, must be anticipatory. We do not

know what will be “the best available technology economi-

cally achievable” in 1983. See § 301(b)(2)(A). Section

304(b) requires the publication of regulations within one

year. In 1974 the Administrator promulgated regulations

setting forth 1983 limitatiohs. Industry was under the

statutory compulsion of bringing a petition for review

within 90 days of promulgation. See 509(b)(1). The cir-

cumstances thus require speculation as to what will be the

1983 technology.

We are presented with an anomaly. We cannot deter-

mine the validity of an unknown. Industry is entitled to

know the limitations which will confront it in 1983. By

its regulations EPA has told Industry what to expect in

1983 and by so doing has given Industry lead time within

which to make such changes as may be necessary. For

practical purposes our review at this time must be confined

to a determination of whether the record discloses a rea-

18-a

sonable basis for belief that a new technology will be avail-

able and economically achievable.

Clarification may come through EPA review and revision

of the regulations as provided in §§ 301(d) and 304(b).

We assume EPA compliance with these provisions. See

United States v. Chemical Foundation, Inc., 272 U.S. 1,

14-15 and Douglas v. Noble, 261 U.S. 165, 170. Section

301(c) authorizes the Administrator to modify the 1983

requirements for a permit application filed after July 1,

1977. We assume that if industry believes that the tech-

nology on which the 1983 limitations are based is not

available or economically achievable, it will seek modifica-

tion. We realize that the modification procedure of § 301(c)

does not include situations where permit applications were

filed before July 1, 1977. If any controversy arises whether

a point source, the application for which is filed before

July 1, 1977, is entitled to a modification of the 1983 limita-

tions, that controversy will then have to be determined. It

- is not now before us. Our concern is with general regula-

tions.

Section 509(b)(1) permits a petition for review to be

filed after the mentioned 90 day period “only if such appli-

cation is based solely on grounds which arose after the

ninetieth day.” This provision, when coupled with the re-

view and revision provisions of §{ 301(d) and 304(b) pro-

vides a mechanism for future administrative and judicial

action on the basis of actual rather than anticipated con-

ditions.

In our later discussion of the 1983 requirements, we

recognize the problems which have been mentioned. In

each instance where we set aside a 1983 regulation we do

so on the basis of technical objections, either conceded or

presently apparent. We decline to engage in speculation.

(e) Arbitrary and capricious action.

EPA actions in promulgating the regulations may not be

arbitrary, capricious, or an abuse of discretion. Except as

noted in our discussion of specific subcategories, we believe

that the regulations do not violate the stated principle.

a —_

19-a

II

VALIDITY OF PARTICULAR REGULATIONS

PERTAINING TO MORE THAN ONE SUBCATEGORY

(a) Definitions of “process waste water” and “process

waste water pollutants.”

Each of the attacked subparts of 40 C.F.R. Part 415 in-

corporates the definitions found in 40 C.F.R. § 401. “Pro-

cess waste water” is defined by § 401.11(q) and “process

waste water pollutants” by § 401.11(r).

With particular reference to chlorine, EPA says (Brief in

Nos. 74-1261 etc., p. 97) that it will amend the “process

waste water” definition “to make clear that it does not ex-

tend, in the context of no discharge standards, to unavoid-

able leaks and spills.”

With particular reference to nitric acid, EPA says (Brief

in Nos. 74-1261, etc. at 118) that:

“***the Agency is preparing a proposed amendment

to the definition of ‘process waste water’ and ‘process

waste water pollutant.’ (40 C.F.R. sec. 401.11(q)(r) )

which will make clear that in the case of point sources

subject to a no discharge limitation, water which has

had only incidental contact with raw materials, inter-

mediate products, finished products, byproducts or

waste products will not constitute process waste

water.”

Accordingly, § 401.11(q) and (r) are set aside and re-

manded for reconsideration.

(b) Catastrophic rainfall.

A number of the regulations pertaining to 1983 limita-

tions and new source standards contain exceptions relating

to catastrophic rainfall. For example §{ 415.93(b)(2) and

415.95(b)(2), relating respectively to 1983 limitations and

new source standards for hydrogen peroxide production,

provide:

A process waste water impoundment which is de-

signed, constructed, and operated so as to contain the

precipitation from the 25 year, 24 hour rainfall event

as established by the National Climatic Center, Na-

20-a

tional Oceanic and Atmospheric Administration for

the area in which such impoundment is located ma

discharge that volume of waste water whic

is equivalent to the volume of precipitation that falls

within the impoundment in excess of that attributable

to the 25 year, 24 hour rainfall event, when such event

occurs.

The first difficulty is with the word “impoundment.” We

are not sure what it means in the context in which it is

used. Industry’s objections go to the extent of the included

area. In its discussion of hydrofluoric acid EPA says (Brief

in Nos. 74-1261, etc. p. 106) that it will propose an amend-

ment to 40 C.F.R. § 415.81 defining the term “within the

impoundment.” We believe that the new definition should

apply to all regulations now using the term.

Industry objects to the test stated as “the 25 year, 24 hour

rainfall event.” It says that this was added in the final regu-

lations and it did not have an opportunity to comment. We

are referred to nothing in the record which justifies the test.

The problem is for the experts and should be solved ad-

ministratively rather than judicially. Industry says that

in an area where precipitation exceeds evaporation the

regulation requires an infinitely expanding pond to contain

all rainfall (less evaporation) that may fall other than

during a catastrophic storm. Absent facts of which we are

not aware, the position of industry appears correct. The

catastrophic rainfall provisions should be the same for the

1983 phase and for new sources. Rain will affect each.

The various regulations pertaining to catastrophic rain-

fall are set aside and remanded for reconsideration. The

specific regulations affected will be mentioned in the dis-

cussion of pertinent subcategories.

Ill

SPECIFIC SUBCATEGORIES

(1) Chlorine—40 C.F.R. Part 415, Subpart F.

This subpart relates to discharges of pollutants from the

production of chlorine and sodium or potassium hydroxide

2l-a

by the diaphragm cell process and by the mercury cell

process. The regulations provide specified lir .ts for pol-

lutant discharge at the 1977 deadline (§ 415.62) and for

new sources (4 415.65). For the 1983 deadline the require-

ment is no discharge ({ 415.63).

The record pertaining to the 1983 no discharge provision

presents unexplained inconsistencies. The Development

Document says, App. 5778, that, “There is no known prob-

lem which has not been solved by at least one plant of this

survey.” Contrariwise, EPA in its preamble for proposed

rulemaking effluent limitations guidelines for the inorganic

chemical industry says, 38 Fed. Reg. 28180, with reference

to chlorine plants using the diaphragm and mercury process

that “no plants are currently achieving no discharge of

process waste water pollutants.” If EPA has any explana-

tion of the inconsistency, it is so hidden in a mass of tech-

nical detail that we cannot find it.

We have heretofore discussed the relationship between

the three steps, 1977, 1983, and new sources. We have also

mentioned the waste wate. definitions and the catastrophic

rainfall provisions, all of which are pertinent to § 415.63.

Until we know what changes EPA will make and what will

be the effect thereof, there is no need to consider the prob-

lem further.

Section 415.63 is set aside and remanded for reconsider-

ation.

(2) Hydrochloric Acid—40 C.F.R. Part 415, Subpart G.

This subpart relates to discharges of pollutants from the

production of hydrochloric acid by direct reaction of chlo-

rine and hydrogen. The regulations provide for no dis-

charge of pollutants by existing plants at both the 1977

(§ 415.72) and 1983 (§ 415.73) deadlines and by new

sources (4 415.75).

After referring to the waste water definitions, EPA says

(Brief in Nos. 74-1261 etc. at 104-105) that it did not intend

to subject hydrochloric acid plants to no discharge stan-

22-a

dards “for occasional sources of waste.” Accordingly, a

remand is required.

We doubt the propriety of EPA’s use of Hooker Chemical

plant as exemplary to support the no discharge require-

ments. The record shows that the Hooker plant has no

discharge of pollutants “during normal operation” but does

during “start-up of production runs.” The EPA explanation

of the technology applicable to the start-up discharges is

not convincing and we doubt whether Hooker can be treated

as an exemplary plant. On remand, EPA must clearly

articulate its position in these regards.

Sections 415.72, 415.73 and 415.75 are set aside and re-

manded for reconsideration.

(3) Hydrofluoric Acid—40 C.F.R. Part 415, Subpart H.

This subpart relates to discharges of pollutants from the

production of hydrofluoric acid. The regulations provide

specific limits for pollutant discharge at the 1977 deadline

(§ 415.82) and for no discharges at the 1983 deadline

(§ 415.83) and for new sources (§ 415.85). Provisions re-

lating to catastrophic rainfall are included in each of the

mentioned regulations.

On January 9, 1975, EPA published proposed new regu-

lations for hydrofluoric acid. See 40 Fed. Reg. 1712. The

comment period has expired but we do not know what will

be the ultimate result. EPA does not expect to promulgate

final amendments before March, 1976. In the circum-

stances, the preferable procedure is to nullify the existing

regulations.

Sections 415.82, 415.83, and 415.85 are set aside and

remanded for reconsideration.

(4) Hydrogen Peroxide—40 C.F.R. Part 415, Subpart I.

This subpart relates to discharges of pollutants from the

production of hydrogen peroxide by the electrolytic process

and by the oxidation of alkyl hydroanthraquinones (or-

ganic process). The regulations provide specified limits

23-a

for pollutant discharge at the 1977 (4 415.92) deadline and

no discharge at the 1983 ({ 415.93(a)) deadline and for

new sources (§ 415.95(a)) for plants using either process.

As to plants using the electrolytic process the no discharge

provisions for 1983 and for new sources contain cata-

re rainfall exceptions (§§ 415.93(b)(2) and 415.95

EPA says (Brief in Nos. 74-1261 etc. at 192 and Brief in

Nos. 74-1296 etc. at 42) that it will reevaluate the 1983 and

new source provisions pertaining to the organic process

($§ 415.93(a) and 415.95(a)).

Industry attacks the 1983 no discharge piovision for

plants using the electrolytic process. The FMC plant at

Vancouver, Washington, is the only plant in the United

States using this process for hydrogen peroxide production.

The purity of its product permits it to compete with plants

using the organic process. EPA’s analysis (App. 1182-

1183) shows that the differences in quality of influent well

water and effluent discharge into the Columbia River are

negligible. The discharges are environmentally insignifi-

cant. We cannot comprehend how a change from the

present process to the EPA technology, evaporation and

landfill, will be beneficial. Because EPA is to reexamine its

waste water definitions and because of the difficulties

which we have noted with the catastrophic rainfall provi-

sions, this regulation must be rema:ded. On reconsidera-

tion, EPA must give consideration to the total environ-

mental impact.

The no discharge regulation for new electrolytic plants

must also be remanded. Our comments on the definitions

of waste water and on the catastrophic rainfall provisions

are as applicable here as they are to the 1983 requirements

for existing plants.

Sections 415.93 and 415.95 are set aside and remanded

for reconsideration.

(5) Nitrie Acid —40 C.F.R. Part 415, Subpart J.

This subpart relates to the discharges of pollutants from

the production of nitric acid in concentrations up to 68 per-

24-a

cent. The regulations provide for no discharges at the 1977

and 1983 deadlines for existing plants (4§ 415.102 and

415.103) and for new sources (§ 415.105).

EPA concedes, with particular reference to nitric acid,

that the waste water definitions must be reconsidered both

as to existing plants (§{§ 415.102 and 415.103) and as to

new sources (§ 415.105). See EPA brief in Nos. 74-1261

etc. at 117-118 and in Nos. 74-1296 etc. at 66-67.

On the recycling problem, the record is so confused that

we cannot say with any certainty which party is right.

Hopefully, the remand will result in clarification. On the

cost analysis, Industry objects to EPA’s use oi information

obtained from sulfuric acid plants. EPA responds that in

the time available it had no alternative. Now, it has had

more time and should specify the facts and reasons on

which its conclusions are based.

Sections 415.102, 415.103 and 415.105 are set aside and

remanded for reconsideration.

(6) Sodium Carbonate—40 C.F.R. Part 415, Subpart O.

This subpart relates to discharges of pollutants from the

production of sodium carbonate by the Solvay process. The

regulations applicable to existing sources both at the 1977

and 1983 deadlines (§§ 415.152 and 415.153) specify the

permissible discharges with reference to both TSS and pH.

TSS means total suspended nonfilterable solids. § 401.11

(s)(5). The term pH is a logarithmic expression of the

concentration of hydrogen ions in water, with 7 pH indi-

cating a neutral condition. Lower pH values show acidity

and higher values alkalinity. For new sources the require-

ment is no discharge (§ 415.155).

EPA admits errors in the TSS requirements (Brief in

Nos. 74-1261 etc. at 134) and says (Ibid. at 135) it will “not

oppose a remand of the suspended solids limitations in 40

C.F.R. Section 415.152 and 415.153 for consideration of the

appropriate flow rate and the projected economic impact

on the industry.”

25-a

Industry contends that the pH requirement should also

be remanded. We agree. Nothing in the record sustains

the EPA conclusion that neutralization of the inherently

alkaline effluent from a sodium carbonate plant is prac-

ticable or economically achievable. The justification in the

brief is no substitute for agency action not sustained by

the record. Also, the cost of neutralization should be con-

sidered along with the cost of removal of suspended solids.

On remand EPA should make clear the technologies which

it deems available.

The regulation for new sources mandates that there be

no discharge. This is in conflict with the EPA statment,

38 Fed. Reg. 28179, that:

Ҥ ***no technology is available and ay ny |

achievable for the elimination of discharge from Sol-

vay plants.”

The EPA brief comments (Brief in Nos. 74-1296 at 93)

that “The Solvay process generates staggering quantities

of waste products.” It also says (Ibid. ):

“As has been seen, there are practicable alternatives

to discharge from a new Solvay plant if one is ever

built. The Agency properly set the standard of per-

formance for this unlikely plant.”

The EPA alternatives are (1) use of deep well injections

and (2) production of sodium «rbonate by the Trona ore

process. Both of these present non-water environmental

problems. Deep-well injection raises both federal and state

problems and has been the subject of EPA litigation. See

e.g. United States v. Armco Steel Corporation, S.D. Tex., 333

F. Supp. 1073. Trona plants present an air pollution prob-

lem which EPA has recognized. See 39 Fed. Reg. 25339.

Industry argues that EPA has no statutory power to force

industry to use a certain process. There is no need to ex-

plore the legal ramifications of this contention. It is enough

to say that the technology on which EPA bases its new

source standards is neither available nor demonstrated

when regard is had for non-water environmental impact.

26-a

Sections 415.152, 415.153, and 415.155 are set aside and

remanded for reconsideration.

(7) Sodium Dichromate—40 C.F.R. Part 415, Sub-

part Q.

This subpart relates to discharges of pollutants resulting

from the production of sodium dichromate and by-product

sodium sulfate. The regulations provide for permissible,

specified discharges by existing plants at the 1977 deadline

(§ 415.172) and by new sources (§ 415.175). No pollutant

discharge is permitted at the 1983 deadline except dis-

charges attributable to catastrophic rainfall (§ 415.173).

Industry attacks the 1983 no discharge provision. In its

discussion of sodium dichromate, EPA said, 39 Fed. Reg.

9614:

“The proposed new source performance standards

were based on evaporation to attain no discharge of

* process waste water pollutants. Considering nonwater

environmental aspects, the new source performance

standards have been revised to require good water con-

servation and best practicable technology.”

EPA’s rationalization of its actions is not convincing. It

says (Brief, Nos. 74-1261 etc. at 171) that “[a]s to the rea-

sonableness of the Administrator’s conclusion that evapora-

tion represents an available technology for 1983, there can

be no serious challenge.” It then says (Ibid. at 173) that

its new source provision was in response to Industry's con-

cern that “evaporation had not been sufficiently demon-

strated on the volumes encountered in the manufacture of

sodium dichromate.” It also says (Ibid. at 174) that it

deferred imposition of zero discharge for existing sources

until 1983 “because of its reassessment of the technological

development of evaporative systems on waste loads as large

as those generated by this subcategory, as well as energy

consumption demands in a time of general concern about

energy supply.” We are confused rather than convinced.

The manufacture of sodium dichromate produces large

quantities of waste discharges. Disposition of these wastes

by evaporation imposes a severe demand on use of energy.

27-a

EPA does not disclose what evaporative technology it uses

in making its cost analysis, its energy study, or its con-

sideration of the non-water environmental impact.

In essence EPA asks us to have faith in its expertise and,

on that ground, uphold its actions. Judicial review must

be based on something more than faith and respect. Con-

fidence and deference do not substitute for reasoned anal-

ysis sustained by the record. In the circumstances we see

no nee” to explore the technical arguments of the parties

going w environmental impact, costs, and energy require-

ments. We are hopeful that on remand EPA will give fur-

ther consideration to these problems.

Section 415.173 is set aside and remanded for recon-

sideration.

(8) Sodium Metal—40 C.F.R. Part 415, Subpart R.

This subpart relates to discharges of pollutants from the

production of sodium metal by the Downs cell process. The

regulations provide specified limits for pollutant discharge

at the 1977 deadline (4 415.182) and no discharge at the

1983 (§ 415.183) deadline and for new sources (4 415.185).

The no discharge provisions for 1983 and for new sources

contain catastrophic rainfall exceptions (44 415.183(b)

and 415.185(b)).

The pertinent Industry brief is presented by Stauffer

Chemical Company. EPA says that Stauffer has no stand-

ing because it is not a producer. Stauffer is admittedly a

purchaser and user of sodium metal. Section 509(b)(1)

of the Act authorizes review “by any interested person.”

Section 502(5) defines “person” to include “a corporation.”

Accordingly Stauffer has the requisite standing.

Industry attacks the 1977 requirement that the TSS aver-

age daily discharge shall not exceed 23 kilograms per 1,000

kilograms of product. EPA says that this can be achieved

by use of “well designed settling basins.” With general

reference to the inorganic chemical industry, the Develop-

ment Document says that the performance and cost of

28-a

settling basins “depends on the amount of waste involved

and the settling characters of the solids suspended.” The

trouble is that EPA does not demonstrate how this general

principle applies to sodium metal. EPA exemplary plant,

the DuPont plant at Memphis, does not achieve the require-

ment of the regulation.

Industry says that EPA imposed the no discharge limit

without regard for the environmental impact or the energy

costs, factors which 4 304(b)(2)(B) of the Act requires

EPA to specify. Specifically, Industry says that EPA did

not take into account the cost of solid waste disposal and

failed to consider energy requirements. The unsatisfactory

EPA response is that it did pay attention to these factors

and that it developed estimates for all treatment measures

of general application to the inorganic chemical industry.

It does not relate any of these to the particular conditions

found in the sodium metal industry.

EPA concedes (Brief in Nos. 74-1261 etc. at 167) that

the Development Document does not “include significant

energy costs associated with no discharge.” It goes on to

say that it estimated the capital cost of attaining no dis-

charge. An estimate of capital cost is not consideration of

the environmental impact or of the energy requirement.

Because we are convinced that the 1983 regulation must

be set aside, we need not delve into the detailed attack

made by Industry on the EP’. technology or the complex

answers thereto. On remand EPA must do a better job of

articulating the facts and reasons upon which its conclu-

sions are based.

EPA justifies its no discharge requirement for new

sources by reliance on the “technological basis” for the

1983 limitations (Brief in Nos. 74-1296 etc. at 30). Because

we set aside the 1983 regulation, no need exists for further

discussion of the problem in connection with new sources.

Our earlier action in regard to the catastrophic rainfall

provisions applies to both the 1983 and new sources pro-

visions.

a

ts br SF BT Rt te ANE tr

29-a

Sections 415.182, 415.183 and 415.185 are set aside and

remanded for reconsideration.

(9) Sodium Silicate—40 C.F.R. Part 415, Subpart S.

This subpart relates to the discharge of pollutants from

the production of sodium silicate. The regulations appli-

cable to existing sources by July 1, 1977, specify the per-

missible discharges. § 415.192. For 1983 and for new

sources no pollutant discharge is permitted. §§ 415.193 and

415.195.

Consideration of the sodium silicate regulations stretches

our patience to the breaking point. EPA did not furnish the

data on its exemplary plant until after the Industry's first

brief. After receipt of the data, counsel for Industry wrote

counsel for EPA expressing concern over the fact that the

EPA contractor (Industry reply brief in Nos. 74-1261 etc.

at App. F):

“viewed the plant as having exemplary recycle (when

the contractor’s sheets do not mention recvcle) and

evaporation (in an area where precipitation is twice

the evaporation rate ).”

After mentioning other matters the letter said:

“We hope that you will agree that the issues as to the

record and the basis for the sodium silicate guidelines

and standards of performance are matters better re-

solved by administrative than by judicial considera-

tion.”

We agree with counsel. The strained effort in the EPA

brief to justify the agency actions leaves us in a state of

extreme confusion. We have examined every record refer-

ence made by EPA. They are cryptic, mystic, and enig-

matic. If there is to be any worthwhile judicial review of

agency action, that action must be presented and sup-

ported in a manner capable of judicial understanding. It

is enough to say that EPA has not shown that its tech-

nology is available, achievable, or demonstrated. The man-

dates of the Act have not been obeyed.

30-a

Sections 415.192, 415.193, and 415.195 are set aside and

remanded for reconsideration.

(10) Sulfuric Acid—40 C.F.R. Part 415, Subpart U.

This subpart relates to discharges of pollutants from the

production of sulfuric acid in single and double adsorption

plants. The regulations provide for no discharge of pol-

lutants by existing plants at both the 1977 (§ 415.212)

and 1983 (§ 415.213) dates and by new sources (§ 415.215).

Industry objects to the inclusion of plants using certain

processes. On January 31, 1975, EPA amended the ap-

plicability section ({ 415.210) of this subcategory. See 40

Fed. Reg. 5523. We are not told what is the effect of the

amendment. Without this knowledge we cannot evaluate

the regulations as they now read.

Also we have the problem of the definitions of “process

waste water” and “process waste water pollutants.” These

are found in § 401.11(q) and (r) which we have set aside

and remanded. EPA should assess the effect of the defini-

tions on sulfuric acid plants. Because we do not know

what will be the result of changed definitions on the no

discharge requirements of §§ 415.212 and 415.213, those

regulations are set aside and remanded for reconsideration.

Industry and EPA are in apparent agreement that single

adsorption plants which are required to install tail gas

scrubbers should not be held to the zero discharge require-

ment (Briefs in Nos. 74-1261 etc., EPA at 126 and Industry

reply brief at 97). EPA says that such a plant would be

entitled to a variance from the 1977 requirement and that

the variance may be given by the permit issuer under the

provision of § 415.212. Industry points out that the vari-

ance procedure is not applicable to the 1983 requirement.

It would appear that the variance and review provisions of

§ 301(c) and (d) of the Act furnish adequate protection to

Industry. Because EPA must reconsider the zero discharge

provisions, it might be that the solution is to exclude the

plants in question from regulation coverage. On remand

EPA should consider this problem.

ne mall

Pre ee nes

3l-a

Industry raises two points in connection with the no

discharge requirement for new sources. The first refers to

the definition of process waste water which has been dis-

cussed in connection with other categories. With relation

to sulfuric acid EPA concedes (Brief in Nos. 74-1296 etc.

at 61) that “no discharge of contaminated cooling water is

practicable for all plants at all times.” The second relates

to the EPA redefinition of the applicability of the sulfuric

acid category. In this regard our statements in connection

with existing sources apply also to new sources.

Sections 415.210, 415.212, 415.213, and 415.215 are set

aside and remanded for reconsideration.

(11) Titanium Dioxide—40 C.F.R. Part 415, Subpart V.

This subpart originally r-'=ted to discharges of pollutants

from the production of ti.«nium dioxide by the sulfate

process and by the chloride process. For each process the

regulations specify permissible discharges for all three

steps. §§ 415.222, 415.223, and 415.225.

A 1975 amendment to the applicability clause, 40 Fed.

Reg. 5523-24, removed applicability “to wastes resulting

from discharges from production by processes in which

beneficiation of raw ilmenite ore and chlorination are

inseparably combined in the same process step.” We

understand that the amendment affects the chloride proc-

ess and we are not told what will be its effect. Industry

makes the reasonable request that the court remand the

chloride process regulations insofar as they apply to “a

process that combines beneficiation of low grade ilmenite

ore and chlorination.” Industry reply brief in Nos. 74-1261

etc. at 163. The request is granted.

With regard to the sulfate process, the charges and

countercharges of the parties are more theatrical than in-

formative. The discharge of pollutants from plants using

the sulfate process presents a serious problem. This fact

does not excuse EPA from failing to disclose and articulate,

in an understandable manner, its course of inquiry, anal-

32-a

ysis and reasoning. EPA relies on after-the-fact rationali-

zation and argument in its brief. The brief in turn places

heavy reliance on, and six times cites for record support,

“App. 2278.” This is a reproduction of a document which

was prepared by some undisclosed person and which

contains penciled notes made by an unknown writer.

The cryptic allusions mean nothing to us.

The technology used by EPA to justify its regulations is

not shown to be in use at any plant, either existing or

pilot. EPA’s continued reference to the American Cyana-

mid plant is unimpressive. That plant is not using the

technology on which EPA relies, and it intends to use a

proprietary treatment process which it refuses to disclose

because of a confidentiality agreement. EPA has not

demonstrated that the technology claimed to support its

regulations is either available, practicable, economically

achievable, or demonstrated. In the circumstances it is not

necessary to explore the lengthy, technical arguments of

the parties relating to costs and energy requirements.

Sections 415.220, 415.222, 415.223, and 415.225 are each

set aside and remanded for reconsideration.

IV

The following regulations, all contained in 40 C.F.R.,

are severally set aside and remanded for reconsideration

in the light of this opinion:

General

401.11(i)—Definition of “effluent limitation.”

401.11(q)—Definition of “process waste water.”

401.11(r)—Definition of “process waste water pollutants.”

Chlorine

415.63— 1983 step.

Hydrochloric Acid

415.72—1977 step.

415.73— 1983 step.

415.75—New sources.

Hydrofluoric Acid

415.82— 1977 step.

415.83— 1983 step.

415.85— New sources.

Hydrogen Peroxide

415.93— 1983 step.

415.95—New sources.

Nitric Acid

415.102— 1977 step.

415.103— 1983 step.

415.105—New sources.

Sodium Carbonate

415.152—1977 step.

415.153— 1983 step.

415.155—New sources.

Sodium Dichromate

415.173—1983 step.

Sodium Metal

415.182—1977 step.

415.183— 1983 step.

415.185—New sources.

33-a

Sodium Silicate

415.192—1977 step.

415.193— 1983 step.

415.195—New sources.

Sulfuric Acid

415.210—Applicability.

415.212—1977 step.

415.213—1983 step.

415.215—New sources.

Titanium Dioxide

415.220—Applicability.

415.222—1977 step.

415.223—1983 step.

415.225—New sources.

35-a

JUDGMENT

Anited States Court of Appeals

FOR THE FOURTH CIRCUIT

No. 74-1261

E. I. DUPONT DE Nemours & Co.,

Petitioner,

CHAMBER OF COMMERCE OF THE UNITED STATES OF AMERICA,

Amicus Curiae.

ALLEGHENY POWER SYSTEM, INC., ET AL,

Amicus Curiae.

New JERSEY ZINC COMPANY,

Amicus Curiae.

AMERICAN PETROLEUM INSTITUTE AND ELEVEN MEMBER

CoMPANIES. (ASHLAND OIL, INC.; CONTINENTAL OIL Com-

PANY; Exxon Corp.; GULF O1L CorpP.; PHILLIPS PETRO-

LEUM COMPANY; SHELL OIL Co.; STANDARD O11 Co. OF

CALIFORNIA; STANDARD OIL Co. OF OHIO; SUN OIL Co. oF

PENNSYLVANIA; TEXACO, INC.; UNION OIL OF CALIFORNIA )

Amicus Curiae.

RMI, INc.

Amicus Curiae.

versus

RussE.L E. TRAIN, as Administrator, Environmental Pro-

tection Agency,

Respondent.

NATURAL RESOURCES DEFENSE COUNCIL,

Amicus Curiae.

On Petition For Review Of An Order Of The

Environmental Protection Agency

THis CAUSE came on to be heard upon the petition of

E. I. duPONT de NEMOURS & Company, for review of

36-a

an order issued against it by the Environmental Protection

Agency on March 4, 1974; upon a certified list in lieu of a

transcript of the record; and the said cause was argued

by counsel.

ON CONSIDERATION WHEREOF, it is ordered, adjudged and

decreed by the United States Court of Appeals for the

Fourth Circuit, that the following regulations, all contained

in 40 C.F.R., are severally set aside and remanded for

reconsideration in light of this opinion.

General

401.11(i )—Definition of “effluent limitation.”

401.11(q)—Definition of “process waste water.”

401.11(r)—Definition of “process waste water pollutants.”

Chlorine

415.63— 1983 step.

Hydrochloric Acid

415.72—1977 step.

415.73—-1983 step.

415.75— New sources.

Hydrofluoric Acid

415.82—1977 step.

4.5.83— 1983 step.

415.85— New sources.

Hydrogen Peroxide

415.93— 1983 step.

415.95—New sources.

Nitric Acid

415.102—1977 step.

415.103— 1983 step.

415.105—New sources.

415.152— 1977 step.

415.153— 1983 step.

415.155—New sources.

Sodium Dichromate ;

415.173— 1983 step.

Sodium Metal

415.182— 1977 step.

415.183— 1983 step.

415.185—New sources.

Sodium Silicate

415.192— 1977 step.

415.193— 1983 step.

415.195—New sources.

Sulfuric Acid

415.210—Applicability.

415.212—1977 step.

415.213— 1983 step.

415.215—New sources.

Titanium Dioxide

415.220—Applicability.

415.222— 1977 step.

415.223— 1983 step.

415.225— New sources.

37-a

/s/ WituiaM K. State, ll

Clerk