Opposition — Exxon Corp. v. Environmental Protection Agency

Supreme Court, U.S, |

FILED

FEB s 1977

No. 76-781

MICHAEL RODAK. JR. CLERK |

In the Supreme Court of the United States

OctToper TERM, 1976

ExxXON CORPORATION AND SHELL O1t COMPANY,

PETITIONERS

Vv.

ENVIRONMENTAL PROTECTION AGENCY, ET AL.

ON PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS FOR

THE TENTH CIRCUIT

BRIEF FOR THE ENVIRONMENTAL PROTECTION

AGENCY IN OPPOSITION

DANIEL M. FRIEDMAN,

Acting Solicitor General,

Peter R. Tart,

Assistant Attorney General,

AcrreD T. Guiorz1,

Micuaet D. Graves,

Attorneys,

Department of Justice,

Washington, D.C : 205 30.

In the Supreme Court of the Hnited States

OcToBeR TERM, 1976

No. 76-781

ExxON CORPORATION AND SHELL O1L COMPANY,

PETITIONERS

Vv.

ENVIRONMENTAL PROTECTION AGENCY, ET AL.

ON PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS FOR

THE TENTH CIRCUIT

BRIEF FOR THE ENVIRONMENTAL PROTECTION

AGENCY IN OPPOSITION

OPINION BELOW

The opinion of the court of appeals (Pet. App. A, pp.

la-30a) is reported at 540 F. 2d 1023.

JURISDICTION

The judgment of the court of appeals was entered on

August 11, 1976. On November |, 1976, Mr. Justice

White extended the time within which to file a petition

to and including December 9, 1976. The petition for a

writ of certiorari was filed on December 9, 1976. The

jurisdiction of this Court is invoked under 28 U.S.C.

1254(1). °

(1)

2

QUESTIONS PRESENTED

|. Whether the Administrator of the Environmental

Protection Agency may promulgate effluent limitations for

existing industrial sources of water pollution as national

minimum requir-ments under Section 301 of the Federal

Water Pollution Control Act Amendments of 1972

(F WPCA).

2. Whether the court of appeals properly refused to pass

upon the interpretation and application of the variance

regulations for the 1977 pollution reduction step.

3. Whether the FWPCA requires that EPA develop

effluent limitations for petrochemical operations based

upon limitations promulgated for organic chemical, and

other non-petrochemical, operations.

STATEMENT

The Federal Water Pollution Control Act Amendments

of 1972 (FWPCA), 86 Stat. 816, 844 er seqg., as amended, 33

U.S.C. (Supp. V) 1311 ef seg., require the Administra-

tor of the Environmental Protection Agency (EPA) to

promulgate, for categories of sources, effluent limitations

guidelines reflecting a technological standard of pollution

control for existing sources to achieve by July 1, 197/.

Sections 301(b) and 304(b), 33 U.S.C. (Supp. V) 1311(b) and

1314(b). On May 9, 1974, the Administrator promulgated

such regulations for petroleum refineries. 39 Fed. Reg.

16560. The oil industry then submitted more than 1100

pages of comments on those regulations, and the Agency

reconsidered them. Amended regulations were promulgated

on May 20, 1975. 40 Fed. Reg. 21939.

[he petroleum refining regulations divide the industry

into five subcaiegories of similar sources, and provide

effluent limitations for each pertinent pollutant within each

subcategory. The applicable limitations are to be placed in

permits issued to each source (Section 402 (b)(1)A), 33

3

U.S.C. (Supp. V) 1342(b)(1)(A)), unless more stringent

limitations are necessary to protect water quality (Section

302, 33 U.S.C. (Supp. V) 1312) or are required pursuant to

water quality standards or state law (Sections 301(b)(1)(C)

and 510, 33 U.S.C. (Supp. V) 1311(b)(1)(C) and 1370), or

unless the source demonstrates it is entitled to a variance

from the regulations. !

The effluent limitations guidelines for the petroleum

refining industry are based upon data gathered from

operating refineries in each subcategory, and represent

refinery operation in every part of the country (Pet. App. A,

p. 23a). They reflect the actual performance of well-

operated refineries within each subcategory (Pet. App. A, p.

19a). Two of the five subcategories relate to refineries that

engage in petrochemical operations. The average refinery

with petrochemical operations is more complex than the

average comparable non-petrochemical refinery. This fact

was taken into account by the Agency and actual differences

between types of refineries are reflected in the limitations for

each subcategory. See 40 Fed. Reg. 21948-21949 (May 20,

1975).

‘Although the FWPCA does not expressly mention variances for

sources seeking to comply with the 1977 effluent reduction step.

the Administrator recognized that despite consideration of relevant

technological and economic factors affecting subcategorization and

effluent levels, some relevant data may not have been available and,

as a result, the limitations might have to be adjusted for certain

plants. A discharger may submit evidence to the state or federal

permit issuer that factors related to such discharger are fundamentally

different from the factors considered in the establishment of the

guidelines. Limitations which are less stringent than the regulations

then may be established for that discharger by the permit issuer.

upon a_ finding that such fundamental differences exist. and upon

approval by the Administrator. Whether a discharger is “fundamen-

tally different” is determined by reference to the Development

Document which accompanies each set of regulations. See. ¢.g., 40

C.F.R. 419.12.

4

Petitioner Shell Oil Company, various other companies

engaged in refining operations, and an oil industry

organization filed timely petitions to review the FWPCA

regulations promulgated by the Administrator in the United

States Court of Appeals for the Tenth Circuit. Petitioner

Exxon Corporation, and Shell Oil Company, filed timely

petitions to review such regulations in the United States

Court of Appeals for the Fifth Circuit, which petitions were

transferred to the Tenth Circuit and consolidated with the

petitions in that court. The petitioners challenged, inter alia,

the Administrator’s authority to promulgate national

effluent limitations guidelines (Pet. Br., pp. 15-39). Asa part

of their argument on authority, petitioners contended that

the variance provided for the 1977 pollution reduction step

was inadequate (Pet. Reply Br., pp. 11-15). Petitioners also

challenged the size and process configuration tables

developed for the subcategories with petrochemical re-

fineries, conteriding that those tables placed petrochemi-

cal refineries at a competitive disadvantage with other

refineries and organic chemicals plants (Pet. Tech. Br.,

pp. 51-56).

The court of appeals held “that the Administrator had

authority to promulgate the limitations for existing sources

and that the effect of the regulations so promulgated is not

contrary to the Act” (Pet. App. A, p. I la). It found “the 1977

variance provisions [to be] a valid exercise of EPA’s rule-

making authority under §SO01(a)” (Pet. App. A, p. 16a), and

held that “the regulatory variance provisions for the 1977

phase are reasonable” but “(t]heir interpretation and

application must await action on a variance claim asserting

specific facts” (Pet. App. A, p. 17a). The court also found

that the limitations for petrochemical refineries were

supported by the relevant data for the subcategories (Pet.

App. A, p. 25a), that “nothing in the Act or its legislative

history * * * requires EPA to consider the competitive

effect of its regulations” (Pet. App. A, p. 25a), and that, in

e— —?

=

5

any event, since the effluent limitations for the organic

chemicals industry had been set aside by judicial action,

there is no way to know “what will be the regulations

applicable to that industry” (Pet. App. A, p. 24a).

ARGUMENT

As petitioners point out (Pet. 8), the question raised in

their petition (id. at 2) regarding the Administrator's

authority to promulgate national effluent limitations guide-

lines pursuant to Sections 301 and 304 of the FWPCA is

before this Court in the context of the inorganic chemical

industry in E./. duPont de Nemours and Co. v. Train, Nos.

75-978, 75-1473 and 75-1705, certiorari granted April 19 and

June 21, 1976. The Court heard oral argument in du Pont on

December 8, 1976. We therefore agree with petitioners that

it would be appropriate for the Court to defer consideration

of this aspect of the petition until duPont is decided.

In all other respects the petition should be denied.

|. The court below did not have before it any request for

a 1977 reduction step variance from either of the two

petitioners or from any of the other industrial parties.

Despite this, petitioners seek to have this Court resolve the

question whether the variance clause is too “restrictive”

(Pet. 14).

The question is premature. As petitioners recognize, the

Act provides for judicial review of a denial of a permit.

Section 509(b)(1), 33 U.S.C. (Supp. V) 1369(b)(1) (Pet. 15).

Therefore, questions regarding the scope and effect of the

variance clause for the 1977 pollution reduction step should

await a concrete case. As the Court of Appeals for the

Second Circuit said in Natural Resources Defense Council,

Inc. v. Environmental Protection Agency, 537 F. 2d 642,

647:

It would be premature at this point to consider

whether the variance clause will be interpreted with

6

sufficient liberality to accommodate all legitimate

demands tor flexibility. Such questions should await

the disclosure and development of concrete factual

controversies involving a single point source and its

permit.

The court below agreed with this sound approach (Pet. App.

A, p. 17a) and further review is unnecessary.

2. The FWPCA requires the technology-based effluent

limitations for 1977 to be based upon “the best practicable

control technology currently available.” Section 301

(b)( 1A), 33 U.S.C. (Supp. V) I311(b)(1)(A). The

regulations for the petroleum refining industry are, as the

court of appeals correctly held, based upon and supported

by actual industry data (Pet. App. A, pp. 22a-25a).

Although they do not dispute that the effluent limitations

are achievable by all subcategories of refineries (Pet. App.

A, p. 25a), petitioners seek to invalidate the regulations by

arguing that EPA failed to consider whether certain

refineries will be economically disadvantaged vis-a-vis

organic chemicals plants.

First, petitioners never presented any data to the EPA

showing that the regulations will have such an effect.

Second, the court of appeals found that EPA did in fact

consider the industry’s views prior to promulgation (Pet.

App. A, p. 25a); the court found that EPA had “used the

same general approach in setting the limitations” for petro-

chemical and organic chemical operations alike (ibid.).

Third, there are presently no organic chemical regulations

to which the petroleum refining regulations may be

compared. Finally, as the court below correctly held (ibid.),

"The United States Court of Appeals for the Fourth Circuit set

aside effluent limitations promulgated by the EPA for the organic

chemicals industry. Union Carbide Corp. \. Train, 541 F. 2d 1171

(C.A. 4). a fact which the court below noted in rejecting petitioners’

challenge to the present regulations (Pet. App. A, p. 24a).

J

the FWPCA does not require effluent limitations for one

industry to be developed based upon their impact upon

other industries.’

CONCLUSION

The Court should defer consideration of the petition in

regard to the first issue presented (Pet. 2) until duPont is

decided. The petition for a writ of certiorari should be

denied in all other respects.

Respectfully submitted.

DANIEL M. FRIEDMAN,

Acting Solicitor General.

Peter R. TAFT,

Assistant Attorney General.

ALFRED T. GHIORZI,

MICHAEL D. GRAVES,

Attorneys.

FEBRUARY 1977.

’The cases relied upon by petitioners to support their proposition

were shown by the court of appeals to be inapposite (Pet. App. A,

pp. 24a-25a):

Refineries’ reliance on /ndustrial Union Department, AFL-CIO

v. Hodgson, 162 U.S. App. D.C. 331, 499 F. 2d 467, and Portland

Cement Association v. Ruckelshaus, 158 U.S. App. D.C. 308,

486 F. 2d 375, cert. denied, 417 U.S. 921, 94 S.Ct. 2628, 41

L.Ed. 2d 226, is misplaced. Industrial Union was involved with

the Occupational Safety and Health Act. With reference to

industrial standards the court said, 499 F. 2d at 480:

“Separate standards for different industries would not

appear to create opportunities for employers in one industry

to challenge their standards on the grounds that standards

for another industry were less demanding.”

Portland Cement was concerned with the Clean Air Act.

The court said, 486 F. 2d at 389, that “the Administrator is not

required to present affirmative justifications for different

standards in different industries.”

Accord, American Meat Institute v. Environmental Protection Agency,

526 F. 2d 442, 466 (C.A. 7).

DOJ-1977-02