# Petitioners Brief — Costle v. Pacific Legal Foundation

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Petitioners Brief
- **Published:** January 1, 1980
- **Citation:** 445 U.S. 198

## Text

Ah EILED’
SE |
No. 78-1472 | P 4 1979
Eee ROBAK JR., CLERI

Iu the Supreme Court of the United States

OCTOBER TERM, 1978

DOUGLAS M. COSTLE, ADMINISTRATOR OF THE
ENVIRONMENTAL PROTECTION AGENCY, PETITIONER

vi

PACIFIC LEGAL FOUNDATION, JOHN B. KILROY, THE
CITY OF TORRANCE, AND THE CITY OF LOS ANGELES

ON WRIT OF CERTIORARI TO THE UNITED STATES
COURT OF APPEALS FOR THE NINTH CIRCUIT

BRIEF FOR THE PETITIONER

WADE H. MCCREE, JR.
Solicitor General

JAMES W. MOORMAN
Assistant Attorney General

LOUIS F. CLAIBORNE
Deputy Solicitor General

WILLIAM ALSUP
Assistant to the Solicitor General

ANGUS MACBETH
RAYMOND W. MUSHAL
Attorneys
Department of Justice
Washington, D.C. 20530
JOAN Z. BERNSTEIN
General Counsel

WILLIAM F.. PEDERSEN
Deputy General Counsel

LIsA K. FRIEDMAN
Attorney
Environmental Protection Agency
Washington, D.C. 20460

INDEX.

Page
Opinion below ____. 1
5 EER aa or a ET 1
Question presented _.....____.__. 2
Statutes and regulations involved _....__________ 2
SNORE aise acrecttonines 6
Introduction and summary of argument ____. 17
Argument 21
I. An agency may subject a statutory “op-
portunity for public hearing” to reason-
able threshold requirements including a
requirement that the applicant file a
request setting forth a material issue
Oe csicenasatecen 21
II. EPA’s regulations are consistent with
the legislative history of the Act __._. 26
III. There is no presumption that Congress
mandated adjudicatory hearings in all
ee ee iain a 29
Conclusion 37
CITATIONS
Cases:
Bowles v. Willingham, 321 U.S. 503 _._. 34
Camp v. Pitts, 411 U.S. 138. 29, 33
Citizens to Preserve Overton Park, Ine.
v. Volpe, 401 U.S. 402 ; ae 33
Denver Stock Yard v. Livestock Associa-
Cie Ge ee ee 19, 22

Dunlop v. Bachowski, 421 U.S. 650 ___ 33

0
Cases—Continued Page
Dyestuffs and Chemicals, Inc. v. Flem-
ming, 271 F.2d 281, cert. denied, 362
US. OER nn 25
E. I. duPont de Nemours & Co. v. Train,
430 US. 193 cutee 21, 33, 34, 36
EPA v. State Water Resources Control
Board, 426 U.S. 200 0 10, 36
FCC v. Pottsville Broadcasting Co., 309
110 Se! | nm 19, 21
FCC v. Schreiber, 381 U.S. 279 21, 22
FPC v. Texaco Inc., 377 U.S. 33 — 20, 22
ITT v. Local 134, Int'l Bro. of Elec. Work-
ers, 419 US. 68... 29
Independent Bankers Association of Geor-
gia v. Board of Governors, 516 F.2d
1906 30
Marathon Oil Co. v. EPA, 564 F.2d 1253.. 31
National Coal Operators’ Association v.
Kleppe, 423 U.S. 388 — 20, 23, 24, 34
New England Divisions Case, 261 U.S.
184 te 34
Pacific Legal Foundation v. Quarles, 440
F. Supp. 316, appeal pending, No. 77-
8844 (Sth Clr.) ice. 15
PLF v. Andrus, Civ. No. C-78-3464 AAH
(C.D. Cal., filed Sept. 7, 1978) — 15
Permian Basin Area Rate Cases, 390 U.S.
747 = 34
Seacoast Anti-Pollution League v. Costle,
G73 FBE BiB. cickcncadeeeae 31
Sun Oil Co. v. FPC, 256 F.2d 233, cert.
denied, 358 U.S. 872 25
Touche Ross & Co. v. Redington, No. 78-
30% (June 18, 1979) —... ; 28

Cases—Continued Page
Train v. NRDC, 421 U.S. 60 —. 36
United States v. Allegheny-Ludlum Steel

ANNE MEI IE «cscs cciancesseiansecanseasnees 29, 30

United States v. City of Los Angeles, No.
77-3047 HP eae Cal., filed Aug. 12,

8 es a ie ae 17
United States v. Consolidated Mines &

Smelting Co., 455 F.2d 4382 25
United States v. Florida East Coast Ry.,

teins . 29, 31
United States v. Southwestern Cable Co. “

SIE IR a ee 34
United States v. Storer Broadcasting Co.,

I 19, 22
United States Steel Corp. v. Train, 556

Sa NE 31, 34
Vermont Yankee Nuclear Power Corp. v.

aan Gee Us O10 —.................. 21, 23
Weinberger v. Bentex Pharmaceuticals,

RO RN I cries 34
Weinberger v. Hynson, Westcott & Dun-

ving, Inc., 412 U.S. 609 ——........ 20, 24, 25
Wong Yang Sung v. McGrath, 339 U.S.

3 Oe 30

Statutes, rules and regulations:

Administrative Procedure Act, 5 U.S.C.
551 et seq.:

Saree wears) 32
OS ae 32
ae 31, 32, 35
“SS ae 32
oa 35
| eee 37
Oe 82, 33

5 U.S.C. 706 82

Iv
Statutes, rules and
regulations—Continued

Endangered Species Act, 16 U.S.C. 1536..

Federal Coal Mine Health and Safety Act,
ee oe gg oy ee ee

Federal Clean Water Act, Pub. L. No. 95-
217, 91 Stat. 1566 (33 U.S.C. 1251
OS GUE skint Sececaeecenee

Federal Clean Water Act (Federal Water
Pollution Control Act), 33 U.S.C. 1251
et seq.:

Section 101(a)(1), 338 U.S.C. 1251
TD > cineca tecnico
Section 101(e), 33 U.S.C. 1251(e)....
Section 301, 33 U.S.C. 1811 —
Section 301(a), 33 U.S.C. 1311(a)..
Section 301(b), 33 U.S.C. 1311(b)..
Section 301(b)(1)(B), 33 U.S.C.
pi be ok) eae ine ee
Section 301(h), 33 U.S.C. 1311(h)..
Section 307(a) (2), 33 U.S.C. 1317

I ih ise eccsielapintaentorinimnicn 20,

Section 307(b) (1), 33 U.S.C. 1317

(b) (1) —_—______
Section 311(b) (6), 33 U.S.C. 1321

OL | PRs ae ea a Rae
Section 311(h), 33 U.S.C. 1311(h),
as amended by Pub. L. No. 95-217,
Section 44, 91 Stat. 1584
Section 311(i), 33 U.S.C. 1811(i),
as amended by Pub. L. No. 95-217,
Section 45, 91 Stat. 1584

Section 312(g), 33 U.S.C. 1822(g)..

Section 312(j), 33 U.S.C. 1822(j) ~

Section 316(a), 33 U.S.C. 1326(a)..

Page
15

24

——

28, 31

Statutes, rules and
regulations—Continued Page

Section 316(d), 33 U.S.C. 1326(d).. 28
Section 402, 33 U.S.C. 1342 _6, 7, 20, 22, 24,

26, 29, 30, 32, 35
Section 402(a)(1), 33 U.S.C. 1342
ee ena 2 2, 6, 7, 16, 17

Section 402(b), 38 U.S.C. 1342(b).. 36
Section 402(b)(3), 33 U.S.C. 13842

CORP D _ erniivichissiocssteninisstanagsgene 36
Section 403(a), 38 U.S.C. 1848(a).. 11
Section 404(a), 33 U.S.C. 1844(a).. 27, 28
Section 404(c), 33 U.S.C. 1344(c).. 27
Section 502(7), 33 U.S.C. 1862(7).. 6
Section 502(8), 33 U.S.C. 1862(8).. 6
Section 502(9), 33 U.S.C. 1862(9).. 6
Section 502(10), 33 U.S.C. 13862

CGD ~ insisisaribidinccuiiccigpinniseneiciaeeeeiamaca 6
Section 502(12), 33 U.S.C. 13862

CRIRY .sicasscsbisedblaccoossigninitcelpialicaiamaananemn 6
Section 507(b), 33 U.S.C. 1867(b).. 27, 28
Section 507(e), 33 U.S.C. 1367(e).. 31
Section 509(b), 33 U.S.C. 1869(b).. 17
Section 509(b) (1), 33 U.S.C. 1369

COPE) tinct 9
Section 509(b) (2), 33 U.S.C. 1369
tL} { Spenneer ene te RE a 9,12
Section 511(c), 33 U.S.C. 1371(c).. 15
OG TG, Te ase nctkcne cae 28
ie | eer LE. 28
Cal. Water Code § 13260 (West 1971) _ 10
OG, Te Ss ee tee est 24
Beko ORP fT) | Rca orm oe : 25
GO Gi SE fii ee 36
CP a FOS Se. deh ae

40 C.F.R. 125.32. ne

vI
Statutes, rules and
regulations—Continued

40 C.F.R. 125.32(a)(2)
0 OF R 1M

40 C.F.R. 125.85
40 C.F.R. 125.35(d) (2)

Page

Siidbeias 12, 36

40 C.F.R. 125.36 _

40 C.F.R. 125.36(b)

40 C.F.R. 125.36(b) (1)

40 C.F.R. 125.36(b) (2)

40 C.F.R. 125.36(c) (1) (ii)

40 C.F.R. 125.36(c) (i)

40 C.F.R. 125.36(c) (ii)

40 C.F.R. 125.36(m)
40 C.F.R. Part 133 _

Miscellaneous

A Legislative History of the Water Pollu-

tion Control Act Amendments of 1972,

93d Cong., Ist Sess. (1973) _20, 27, 29, 31, 32
Administrative Procedure Act, Legisla-

tive History, 79th Cong., 2d Sess.

(1944-1946)

30

Attorney General’s Manual on the Ad-
ministrative Procedure Act (1947) __. 30

39 Fed. Reg. 27079 (1974)

44 Fed. Reg. (1979):

oe
pp. 32884-32885

sisal 2

p. 32885
p. 32887

pp. 32887-32892

pp. 32931-32933 ____

» Oe ee

pp. 32939-32940 ___

co CO GS CO CO CO CO YY

a ee pwrenmnenreaenay

oo Renee

VII

Miscellaneous—Continued

p. 34784

Iu the Supreme Court of the United States

OCTOBER TERM, 1978

No. 78-1472

DOUGLAS M. COSTLE, ADMINISTRATOR OF THE
ENVIRONMENTAL PROTECTION AGENCY, PETITIONER

Vv.

PACIFIC LEGAL FOUNDATION, JOHN B. KILROY, THE
CITY OF TORRANCE, AND THE CITY OF LOS ANGELES

ON WRIT OF CERTIORARI TO THE UNITED STATES
COURT OF APPEALS FOR THE NINTH CIRCUIT

BRIEF FOR THE PETITIONER

OPINION BELOW

The opinion of the court of appeals is reported at

586 F.2d 650.
JURISDICTION

The judgment of the court of appeals was entered
on August 9, 1978. The government’s timely petition
for rehearing with suggestion of rehearing cii banc
was denied on November 24, 1978. By order dated
February 12, 1979, Mr. Justice Rehnquist extended
the time within which to file a petition for a writ of
certiorari on March 23, 1979, and the petition was
filed on that date. The petition was granted on June
11, 1979. The jurisdiction of this Court is invoked
under 28 U.S.C. 1254(1).

(1)

2

QUESTION PRESENTED

Whether Section 402(a)(1) of the Federal Clean
Water Act, 33 U.S.C. 1342(a)(1), which requires
the Environmental Protection Agency to provide “op-
portunity for public hearing” prior to any issuance,
denial, or modification of a discharge permit, requires
EPA to conduct APA-type adjudicatory hearings be-
fore taking acticn on such permits where, after due
notice of the proposed action, the only request for a
hearing raises no material issue of fact.

STATUTES AND REGULATIONS INVOLVED

1. Section 402(a)(1) of the Federal Clean Water
Act, 33 U.S.C. 1342(a)(1), provides in part as
follows:

[T]he Administrator may, after opportunity
for public hearing, issue a permit for the dis-
charge of any pollutant, or combination of pol-
lutants * * *,

2. Sections 125.32, 125.34, and 125.36 of Title 40,
Code of Federal Regulations, as promulgated by the

Environmental Protection Agency on July 24, 1974,
state in part as follows (39 Fed. Reg. 27079) :'

§ 125.32 Public notice.

(a) Public notice of the proposed issuance,
denial or modification of every permit or denial
shall be circulated in a manner designed to in-

1 These regulations have since been revised, but none of the
revisions affects any of the matters at issue here. See 44 Fed.
Reg. 32854 (June 7, 1979) and note 5, infra.

ete

3

form interested and potentially interested per-
sons of the discharge and of the proposed
determination to issue, deny, or modify a permit
for the discharge. * * * Procedures for the
circulation of public notice shall include at least
the following:

(1) Notice shall be circulated within the geo-
graphical area of the proposed discharge; such
circulation shall include any one of the following:

* * * * *

(iii) Publishing in local newspapers and
periodicals, or, if appropriate, in a daily news-
paper of general circulation.

(2) Notice shall be mailed to the applicant,
Federal and State fish, shellfish and wildlife re-
source agencies, and other appropriate govern-
ment agencies, and to any person or group upon
request and shall provide an opportunity to sub-
mit their written views and recommendations on
each proposed issuance.

* * * * *

§ 125.34 Public hearings.

(a) Except as provided in paragraph (d) of
this section, where the Regional Administrator
finds a significant degree of public interest in a
proposed permit or group of permits, he shall
hold a public hearing to consider such permit or
permits.

* * * * *

§ 125.36 Adjudicatory hearings.
* * * * *
(b) Requests for adjudicatory hearings and
legal decisions. (1) Within 10 days following
the date of determination with regard to a per-

4

mit pursuant to § 125.35(a) or any modification
thereto, any interested person may submit to the
Regional Administrator a request for an ad-
judicatory hearing pursuant to paragraph (b)
(2) of this section or a legal decision pursuant
to paragraph (m) of this section, to reconsider
the determination with regard to a permit and
the conditions contained therein.

(2) Requests for an adjudicatory hearing
shall:

7 * * ~ *

(v) State with particularity the reasons for
the request;

(vi) State with particularity the issues pro-
posed to be considered at the hearing; and

(vii) Include proposed terms and conditions
which, in the judgment of the requestor, would
be required to carry out the intendment of the
Act.

(c) Decision on a request for a hearing. (1)
Within ten (10) days following the expiration
of the time allowed by paragraph (b) of this
section for submitting a request for an adjudica-
tory hearing, the Regional Administrator shall
graut the request and shall promptly assign the
matter for hearing if he determines that a sub-
mitted request:

(i) Meets the requirements of paragraph (b)
of this section and,

(ii) Sets forth material issues of fact relevant
to the questions of whether a permit should be
issued, denied or modified.

(2) If the Regional Administrator determines
that the request fails to meet the requirements
of paragraph (c)(1) of this section, he shall
deny the request.

a

5

(m) Decision of the Assistant Administrator
for Enforcement and General Counsel on ques-
tions of law. (1) Issues of law, including ques-
tions relating to the interpretation of provisions
of the Act, and the legality and interpretation of
regulations promulgated pursuant to the Act,
shall be decided in accordance with this subsec-
tion and shall not be considered at the adjudica-
tory hearing.

* * * * *

(2) The Presiding Officer shall determine
which issues, if any, submitted by the parties
fall into the category specified in paragraph
(m)(1) of this section, and shall refer such
issues to the Assistant Administrator for En-
forcement and General Counsel for resolution.
Such referral may be accompanied by briefs,
filed with the Assistant Administrator for En-
forcement and General Counsel within twenty
(20) days of the removal of the referred issues
from the adjudicatory hearing by the Presiding
Officer pursuant to paragraph (m)(2) of this
section. * * *

* * * * *

(3) Where no adjudicatory hearing has been
granted, /issues of law may be referred by the
Regional Administrator to the Assistant Admin-
istrator for Enforcement and General Counsel
for a decision in the manner specified in para-
graph (m) (2) of this section.

(4) The Assistant Administrator for En-
forcement and General Counsel shall provide the
Regional Administrator, the Presiding Officer,
where appropriate, and each party with a writ-
ten decision with respect to each referred issue
of law. A written opinion setting forth the

6

reasons and basis for the decision shall also be
provided. The decision of the Assistant Admin-
istrator for Enforcement and General Counsel
shall be final with respect to each referred issue
of law as it relates to the particular permit in
question and shall be relied upon by the Regional
Administrator in rendering the initial decision.

STATEMENT

1. The Federal Clean Water Act (also known as
the Federal Water Pollution Control Act),? 33 U.S.C.
1251 et seg., establishes “the national goal that the
discharge of pollutants into the navigable waters be
eliminated by 1985.” 33 U.S.C. 1251(a) (1). Section
301(a) of the Act, 33 U.S.C. 1811(a), makes un-
lawful the discharge of any pollutant into the naviga-
ble waters of the United States, the contiguous zone,
or the ocean,*® except in compliance with the specific
requirements of the Act. One such requirement is to
obtain a permit issued by the Administrator under
Section 402 of the Act, 33 U.S.C. 1342 and adhere
to its terms.

Section 402 establishes the National Pollutant Dis-
charge Elimination System (NPDES). Section 402
(a)(1) authorizes the Administrator, “after oppor-
tunity for public hearing,” to issue a permit for the
discharge of any pollutant, on the condition, among
others, that the discharge will meet the requirements

2See 91 Stat. 1566.

8 See the definitions in Section 502(7), (8), (9), (10), and
(12) of the Act, 33 U.S.C. 1862(7), (8), (9), (10), and (12).

7

of Section 301(b) of the Act, 33 U.S.C. 1811(b). At
all times material to this case, Section 301(b) (1) (B)
required that no later than July 1, 1977, “publicly
owned treatment works” meet “effluent limitations
based upon secondary treatment” as defined by the
Administrator (see 40 C.F.R. Part 133).*

In 1973 EPA promulgated regulations, 40 C.F.R.
Part 125, implementing the “opportunity for pub-
lic hearing” required by Section 402(a)(1).° The

*On October 18, 1977, Congress amended the Act to permit
the Administrator to grant extensions of this deadline
through, but no later than, July 1, 1983. Pub. L. No. 95-217,
Section 45, 91 Stat. 1584 (33 U.S.C. 1311(i)). The amend-
ment also permits the Administrator to modify the effluent
limitations of Section 1311(b)(1)(B) with respect to dis-
charges by publicly owned treatment works into marine
waters. Section 44, 91 Stat. 1584 (33 U.S.C. 1811(h)). Al-
though in September 1978 Los Angeles submitted to EPA a
preliminary request for a waiver under Section 301(h), it
has yet to submit a final request under the regulations imple-
menting that statutory provision, which were published on
June 15, 1979 (44 Fed. Reg. 34784). EPA’s regulations re-
garding “effluent limitations based upon secondary treatment”
appear at 40 C.F.R. Part 133. They are not at issue in this
suit.

Section 402 requires that NPDES permitees who discharge
into “the contiguous zone” meet certain additional ‘ocean
discharge” criteria. See Section 402(a) (1). When the sub-
stantive permit terms were set, EPA had promulgated valid
regulations defining these criteria. They were withdrawn for
revision at the time of the permit extension at issue here, how-
ever. PLF argued below that EPA had no authority to impose
any conditions on ocean discharges in the absence of such
regulations. The court of appeals found against it on this
point, on which no cross-petition was filed.

5 EPA’s NPDES regulations have been comprehensively
amended since the events at issue here, but these amendments
do not affect the present or future importance of the issues

8

regulations provide for three types of hearings. First,
public notice is given of EPA’s proposed issuance,
denial, or modification of a permit and comments are
solicited. 40 C.F.R. 125.32. If EPA’s regional ad-
ministrator finds that there is “a significant degree
of public interest” in the proposed action, he must
hold a public hearing of the “legislative” type (at
which any interested person may submit oral or writ-

involved in this case. These amendments retain the “material
issue of fact” test for granting a hearing which is at issue
here. See Section 124.75, 44 Fed. Reg. 329389 (1979). Evi-
dentiary proceedings will therefore still be denied where (or
to the extent that) no factual issues are raised, see 44 Fed.
Reg. 32887 (1979). Concerning legal objections to proposed
permits, the regulations specifically provide that where the
regional administrator denies a hearing, he must state the
reasons, see Section 124.75(d), that this denial may then be
appealed to the Administrator, that the administrator may
review and change “policy or legal conclusions” on which the
regional administrator relied in deciding not to grant a hear-
ing, see Section 124.101(a) (3), 44 Fed. Reg. 32944 (1979),
and that the General Counsel’s office shall have lead responsi-
bility for deciding these legal issues, see Section 124.101(e).

Beyond this preservation of the essentials of the previous
regulations at issue here, the new regulations go further
than the old in adapting the traditional form of evidentiary
hearing to better fit with EPA’s experience. They now require
points to be raised at the “notice-and-comment,” informal
stage of permit issuance before they may be raised at an
evidentiary hearing, see Section 124.76, 44 Fed. Reg. 32884-
32885, 32939-32940 (1979), provide for automatic admission
in the evidence at the “evidentiary” stage of the process of the
“administrative record” of the earlier, informal, proceedings,
see Section 124.85(d) (2), 44 Fed. Reg. 32885, 32942 (1979),
and, most significantly, establish new, less formal hearing pro-
cedures for “initial licensing,” see 44 Fed. Reg. 32887-32892,
32944-32947 (1979).

9

ten statements and data). 40 C.F.R. 125.34. Second,
after that hearing, if one is held (or, if not, after the
notice), the regional administrator must determine
what action to take with respect to the proposed per-
mit. 40 C.F.R. 125.35. Within ten days after this
determination, any interested person may request an
adjudicatory hearing with respect to any “material
issues of fact relevant to the questions of whether a
permit should be issued, denied or modified.” 40
C.F.R. 125.36(b), (c) (i). A request for an adjudica-
tory hearing must state with particularity the rea-
sons for the request and the issues proposed to be
considered. 40 C.F.R. 125.86(b)(2). Third, any
interested person may also request legal rulings by
EPA’s General Counsel with respect to the proposed
action pursuant to 40 C.F.R. 125.36(m), under which
hearing requests which raise only legal issues in effect
are treated as requests for legal opinions.

Within 90 days after EPA makes a final determi-
nation, any interested person may obtain judicial re-
view in the appropriate court of appeals of the
Administrator’s issuance, denial, or modification of
a permit. 33 U.S.C. 1869(b)(1). Otherwise, the
terms and conditions of the permit are not subject to
judicial review. 33 U.S.C. 1369(b) (2).

2. Since 1960, sewage from Los Angeles has been
processed at the Hyperion Wastewater Treatment
Plant in Los Angeles and discharged into the Pacific
Ocean. Most of the sewage has received only primary
treatment. About one-third of the sewage has re-
ceived additional secondary treatment. The metals

10

and other solids removed during treatment, called
“sludge,” have been pumped through a seven-mile
outfall pipe and discharged into the Pacific Ocean.
The treated sewage has been discharged into the
ocean through a five-mile outfall. A one-mile outfall
has been used only in emergencies. (See Pet. App.
3a-6a).

In November 1974 EPA issued to respondent City
of Los Angeles a permit to discharge treated sewage
from its Hyperion treatment plant into the Pacific
Ocean. EPA published notice of its intent to issue

® Section 402(b) provides that the responsibility for issuing
NPDES permits for discharges into navigable waters may be
assumed by a state if it has an approved program, as Cali-
fornia does. See generally EPA vy. State Water Resources
Control Board, 426 U.S. 200, 202-209 (1976). A federal per-
mit is still required for discharges more than three miles from
the coastline. Therefore, EPA permits are required for
Hyperion’s discharges through its five- and seven-mile out-
falls. The California Water Quality Control Board also
requires a state permit for these outfalls under a state
water pollution statute. Cal. Water Code § 13260 (West
1971).

Altogether there have been twelve actions by federal and
state authorities affecting the Hyperion discharge permit—
four by EPA and eight by the California Regional Water
Quality Control Board (the Board). All four of the federal
actions were taken jointly with four of the state actions.
On November 18, 1974, a permit which covered the one-
and five-mile outfalls, but not the seven-mile sludge out-
fall, was issued jointly by EPA and the State (Board
Order No. 74-329) (see Pet. App. 4a). On August 18, 1975,
the 1974 permit was rescinded by the two authorities and was
replaced by a joint permit which included the requirement
of a gradual elimination of the secondary sludge discharge
from the seven-mile outfall (Board Order No. 75-100) (App.

11

the permit, provided an opportunity to submit writ-
ten comments, and held a public hearing on its action.
(Id. at 4a.)

On August 18, 1975, EPA rescinded the 1974 per-
mit and issued a new permit with a compliance
schedule that gradually reduced the amount of sewage
sludge which could be discharged from the Hyperion
plant (A. 3-50). EPA published advance public
notice of its tentative determination to revise the
permit and held a hearing on the proposed revisions

8-50). On January 24, 1977, the two authorities extended
the 1975 permit until June 30, 1977 (A. 93-95), and on
June 2, 1977, they extended the expiration date of that same
permit until December 17, 1979 (Board Order Nos. 77-1 and
77-84) (A. 149-156). (The federal permit has retained the
same number, CA0109991, throughout.)

During this time the Board also issued four other orders
which affected only the state’s compliance schedule for the
sludge management project. On December 1, 1975 (Order No.
75-165), the State substituted definite dates for the measured
time periods in that compliance schedule (A. 51-53). On
May 24, 1976 (Order No. 76-80), the compliance dates in the
schedule were extended because the City had failed to meet
the initial deadlines (A. 54-58). On November 22, 1976
(Order No. 76-202), the State again extended the compliance
schedule because of delays by the City (A. 59-62). On
February 28, 1977 (Order No. 77-29), a progress reporting
requirement was added to the State permit (A. 102-107).

7The 1975 permit set target dates for eliminating the
sludge in three phases: (a) elimination of no less than one-
third of the sludge by April 1, 1977; (b) elimination of no
less than an additional one-third by October 1, 1977, and
(c) termination of the discharge of sludge by April 1978
(A. 18). This schedule would have resulted in compliance
with Section 301 effluent limitations and Section 403 ocean-
discharge criteria. 33 U.S.C. 1811, 1343.

12

(App. 6). None of the respondents presented either
written or oral objections to the new permit or re-
quested an adjudicatory hearing. No one sought
judicial review of EPA’s issuance of this permit, and
90 days thereafter its terms and conditions were no
longer subject to judicial review. 33 U.S.C. 1369
(b) (2).

3. On April 26, 1977, EPA advised the City of
Los Angeles that EPA proposed to modify the 1975
permit by extending its expiration date to December
17, 1979, without otherwise disturbing its terms and
conditions (A. 115-120).* Public notice of EPA’s
proposed action, including an invitation to submit
comments and to request a hearing, was published in
the Los Angeles Times, April 27, 1977 (A. 117-120,
126-128).° Neither respondents nor anyone else filed
written comments or requested a hearing, and no
hearing was held (Pet. App. 6a). On June 2, 1977,
EPA issued a final determination to extend the per-
mit (A. 149-150).

8 Permits may be issued for any period up to five years. 33
U.S.C. 1342(b) (1) (B). The 1975 permit originally had an
expiration date of February 1, 1977. On January 24, 1977,
EPA extended the permit to June 30, 1977 (A. 93-95).

*In addition to requiring EPA to publish its notice in a
newspaper of general circulation, 40 C.F.R. 125.32(a) (2)
permits any person to request in advance that EPA send him
individual notice of any proposed action within a designated
state or geographical area. Respondents made no such request
for individual notice of proposed actions concerning the
Hyperion plant. The City of Los Angeles, as the permittee,
received an individual notice (A. 115-120). The other respond-
ents received no notice other than the published notice
(A. 117-120, 126-128).

13

On June 13, 1977, respondent John B. Kilroy, Sr.,
represented by attorneys for respondent Pacific Legal
Foundation (PLF), filed a timely “request for an
adjudicatory hearing pursuant to 40 CFR Section
125.36” (A. 159-165). A hearing request was filed
only by Kilroy, a resident of the Los Angeles area
(PLF Pet. For Review 2). None of the other re-
spondents—PLF, the City of Los Angeles, and the
City of Torrance—made such a request. Kilroy’s
request automatically stayed the effectiveness of the
permit modification pending disposition of the re-
quest. See 40 C.F.R. 125.35(d) (2).

The regional administrator determined that Kil-
roy’s request raised only issues of law, which he
certified to the EPA General Counsel in accordance
with 40 C.F.R. 125.36(m) (A. 168-170). Kilroy
then submitted a brief to the General Counsel in
support of his argument that the permit modification
was defective as a matter of law (A. 173-180).
His brief did not contend that he desired to raise
anything other than the following issues of law (A.
173-174) :

1. Whether there is authority under either the
applicable statutes or regulations to extend

10The request stated (A. 160) that the “issues to be
raised” at the adjudicatory hearing would be (1) “whether
the requirements of the permit should be modified in that the
project that is the subject of the compliance schedule set
forth in the NPDES permit * * * is being evaluated in an EIS
and * * * [whether] the compliance schedule should not be
mandated * * * until the EIS is completed,” and (2) “whether
the procedures used and the record developed were adequate
[to issue] an NPDES permit.”

14

the expiration date of an existing National
Pollutant Discharge Elimination System
(NPDES) permit, or whether the action
taken by EPA with regard to Permit No.
CA0109991 was the issuance of a new per-
mit; and

2. Whether EPA should require that a permit-
tee go forward with a project contained in an
NPDES compliance schedule when that proj-
ect is being studied in an environmental
impact statement (EIS) pursuant to the re-
quirements of the National Environmental
Policy Act (NEPA), 42 U.S.C. §§ 4332, et
seq., and Federal Water Pollution Control
Act (FWPCA), 33 U.S.C. §§ 1281, et seg."

The General Counsel ruled (A. 194-199) that
EPA may extend the expiration date of a permit
through a modification. Section 402 permits may be
issued for terms up to five years. As long as the total
duration of the extended permit does not exceed
five years, she reasoned, a modification may include
a time extension. The General Counsel also held
that the fact that an environmental impact statement
was being prepared in connection with the funding

11 Kilroy’s brief made four arguments (A. 173-180): (1)
EPA has no authority to extend the expiration date of a
permit because it is authorized only to issue a new permit,
(2) although the Act permits “modifications,” a time exten-
sion is not a “modification,” (3) the action taken by the
regional administrator therefore was the issuance of a new
permit, and (4) the permit contained a sludge-out schedule
that was then under evaluation in an environmental impact
statement in connection with the funding of the ijandfill, and
no decision on the schedule should be made pending comple-
tion of the environmental impact statement.

15

of the landfill project did not preclude extension of
the permit. The Act expressly provides that EPA’s
actions on permits (other than permits to industrial
dischargers which are “new sources”) are exempt
from NEPA. 33 U.S.C. 1871(c).

4. A petition for review of the administrator’s
action was filed in the court of appeals by PLF,
Kilroy, and the City of Torrance (No. 77-2909).”
A similar petition was filed by the City of Los

12 The present proceeding is the second of three proceedings —
PLF has brought against EPA regarding sludge disposal by
the City of Los Angeles wherein it has sought to prevent the
City of Los Angeles from using a landfill located in Palos
Verdes for the disposal of sludge. The first lawsuit unsuc-.
cessfully sought to enjoin EPA from funding the iandfill
project on the theory, among others, that no environmental
impact statement was prepared by EPA with respect to its
decision to fund the project. EPA voluntarily agreed, how-
ever, to prepare such a statement. Pacific Legal Foundation
v. Quarles, 440 F.Supp. 316 (C.D. Cal. 1977), appeal pending,
No. 77-3844 (9th Cir.). PLF’s third action (the instant one
being the second) was filed in the district court in Los
Angeles. PLF v. Andrus, Civ. No. C-78-3464 AAH (C.D. Cal.,
filed Sept. 7, 1978). It alleged, among other things, that di-
version of sludge from the ocean to the landfill, allegedly due
to the sludge-out schedule in the 1975 permit, violated the En-
dangered Species Act, 16 U.S.C. 1536, because gray whales
feed on plankton, which feeds on the sludge; because brown
pelicans feed on anchovies, which feed on plankton, which feed
on the sludge; and because trucks going to and from the land-
fill kill the E] Segundo Butterfly. On May 3, 1979, the district
court entered an order granting PLF’s motion for partial sum-
mary judgment and requiring, inter alia, that a hearing on
the NPDES permit extension, at issue here, be extended to
include considerations under the Endangered Species Act.
The Government is appealing that ruling.

16

Angeles (No. 77-3008), and the petitions were con-
solidated (A. 1).

The court of appeals did not question that EPA
had complied with its notice-and-hearing regulations
(see 586 F.2d at 653-654). Neither did the court
take issue with EPA’s interpretation of Kilroy’s
hearing request as raising only legal issues, or with
the ruling of EPA’s General Counsel rejecting Kil-
roy’s legal arguments (see 7d. at 654).

Nonetheless, the court held that EPA had denied
petitioners an “opportunity for public hearing”
within the meaning of Section 402(a) (1) (id. at 657-
660). The court held that EPA, before it may issue,
‘evoke, or modify an NPDES permit, generally must
hold an adjudicatory hearing, even when no one has
requested one. For EPA to escape this general rule
in a particular case, ‘“[i]t must be shown that the
material facts supporting the decision are not subject
to dispute” (7d. at 658-659) and that a hearing would
be “futile” and would serve “absolutely no purpose”
(id. at 659). The court acknowledged that “this is a
not inconsiderable burden to place on the agency,”
but considered it “appropriate in view of the strong
policy in favor of holding public hearings before an
adjudicative decision is made” (ibid.).

The court suggested that there were certain facts
“that may be disputed and with respect to which
the record in this case is silent” that would affect
the reasonableness of the compliance schedule in the
extended permit (ibid.). The court said it could
“conclude unequivocally neither that the parties have

17

no dispute about these matters nor that they do”
(ibid.). Consequently, the court was “unable to deny
an adjudicatory hearing on the ground that none of
the material facts upon which the EPA’s decision
rests are disputed” (ibid.). In remanding the pro-
ceeding to the administrator to conduct such a hear-
ing, the court did not limit the remand to the factual
issues it had suggested. Perding the disposition of
the case on remand, the court continued its stay of
the compliance schedule embodied in the extended
NPDES permit for the Hyperion plant.”

INTRODUCTION AND SUMMARY OF ARGUMENT

The issue presented in this case is whether EPA’s
regulations (40 C.F.R. Part 125) provide a sufficient
“opportunity for public hearing” within the meaning
of Section 402(a)(1) of the Act, 33 U.S.C. 1342
(a)(1). Those regulations provide for three types
of “hearings”: (1) a “legislative-type” hearing at
which interested persons may submit information
and comments to the agency, 40 C.F.R. 125.34; (2)

13 The court also continued its stay (by orders dated De-
cember 23, 1977, and March 29, 1978) of EPA’s separate
enforcement action against the City of Los Angeles for
alleged violations of that schedule. United States v. City of
Los Angeles, No. 77-8047 HP (C.D. Cal., filed Aug. 12, 1977).
The court of appeals stayed that action, despite the fact that
the enforcement action involved violations of the Hyperion
permit which predated any of the governmental actions at
issue in this case (the latest of those dates being January 1,
1977). Thus, it involves enforcement of permit conditions
which never were challenged under 33 U.S.C. 1369(b) (see
A. 1, 2, 181-191).

18

an “adjudicatory” hearing for the trial-type determi-
nation of “material issues of fact relevant to the
questions of whether a permit should be issued, de-
nied or modified,” 40 C.F.R. 125.36(b), (c) (ii); and
(3) a procedure for the submission to and determi-
nation by the agency of any issue of law concerning
the issuance, revocation, denial or modification of
permits, 40 C.F.R. 125.36(m).

Each type of hearing has its own prerequisites.
A legislative-type hearing is required only when the
regional administrator finds that there is enough
public interest in the proposed action, after public
notice, to warrant such a hearing. 40 C.F.R. 125.34.
An adjudicatory hearing is required only if an in-
terested person presents a request for an adjudicatory
hearing which states with particularity the reasons
for the request and the factual issues to be con-
sidered (40 C.F.R. 125.36(b) (1), (b)(2)), and the
regional administrator determines that the request
presents material issues of fact concerning whether
a permit should be issued, denied or modified. 40
C.F.R. 125.36(c) (1) (ii). Determinations of issues
of law are made only upon request by an interested
party who sets forth the legal ground for objection
to the agency actions. 40 C.F.R. 125.36(m).

In the present case, EPA determined, after public
notice, that a legislative-type hearing on its time
extension of the Hyperion permit was not warranted.
The agency held no adjudicatory hearing because no
one tendered a request presenting material issues of
fact. The only request for a hearing raised only

19

questions of law, not of fact?-The agency considered
the issues and resolved them on the merits. No other
objection—factual or legal—was presented. The
court of appeals did not question EPA’s decision not
to hold a legislative-type hearing or its resolution of
the issues of law presented to it.

Accordingly, had the court of appeals confined its
review to those issues tendered to the agency, it would
have affirmed EPA’s extension of the Hyperion per-
mit. Instead, the court construed the phrase “op-
portunity for public hearing” to require an auto-
matic adjudicatory hearing in virtually all instances
—even when no one advances any factual issue ma-
terial to the case. Where the agency does not hold
such a hearing, any person—even a stranger to the
administrative proceedings—may, under the decision
below, successfully set aside the administrative action
by plausibly suggesting in the court of appeals that
an adjudicative hearing could have uncovered a ma-
terial issue of fact.

This holding was error. First, absent constitutional
or specific statutory constraints, agencies are “free to
fashion their own rules of procedure * * *.” FCC v.
Pottsville Broadcasting Co., 309 U.S. 184, 148
(1940). Accordingly, even when a statute calls with
seemingly unequivocation for a “full hearing” before
denial of a license, the agency may condition such a
hearing on filing an application that pleads facts that
would warrant a license. Denver Stock Yard v. Live-
stock Association, 356 U.S. 282, 287 (1958); United
States v. Storer Broadcasting Co., 351 U.S. 192, 204-

20

205 (1956). Otherwise, there might be a “vast
proliferation of hearings” serving no purpose, a result
Congress could not have intended. FPC v. Texaco
Ine., 377 U.S. 38, 39, 44 (1964). Where the statute
merely calls for an “opportunity” for a hearing, it is
all the clearer that the agency may impose reasonable
threshold requirements. Specifically, the Court has
held that a statutory “opportunity” for a hearing
may be conditioned by an agency (i) on the submis-
sion of a request for a hearing, National Coal Opera-
tors’ Association v. Kleppe, 423 U.S. 388, 398 (1976),
and (ii) on the submission of a request or application
that sets forth material issues of fact. Weinberger
v. Hynson, Westcott & Dunning, Inc., 412 U.S. 609,
620-621 (1973). These holdings are dispositive here.

Second, nothing in the legislative history of the
Act suggests that Congress intended to depart from
these holdings or to preclude EPA’s regulations. To
the contrary, the only committee report to address
Section 402’s hearing provision stressed the word
“opportunity.” A Legislative History of the Water
Pollution Control Act Amendments of 1972, 93d
Cong., 1st Sess. 1490 (1973) (‘‘Leg. Hist.”). More-
over, Congress clearly knew how to require a hearing
in all instances when it wanted to. The pre-1977 Act
elsewhere (Section 307(a) (2) ) plainly stated that the
administrator “shall” hold a hearing and the legisla-
tive history correspondingly recognized that a hearing
was “required.” Id. at 312. Section 402 significantly
avoids such mandatory language. Finally, the Court
has traditionally refused to impute to Congress any

21

intent to impose an “impossible burden” on an agency.
E.. I. duPont de Nemours & Co. v. Train, 430 U.S.
112 (1977). EPA normally grants about 100 re-
quests for adjudicatory hearings per year in NPDES
cases. The decision below would require thousands
per year—even though in the vast majority no re-
quest for a hearing is ever made. Congress could not
have intended to handicap the agency by imposing
such a burden.

ARGUMENT

I. An Agency May Subject A Statutory “Opportunity
For Public Hearing” To Reasonable Threshold Re-
quirements Including A Requirement That The Appli-
cant File A Request Setting Forth A Material Issue
Of Fact

Absent constitutional or specific statutory con-
straints, administrative agencies are “free to fashion
their own rules of procedure and to pursue methods
of inquiry capable of permitting them to discharge
their multitudinous duties.” FCC v. Pottsville Broad-
casting Co., 309 U.S. 134, 148 (1940); FCC v.
Schreiber, 381 U.S. 279, 290 (1965) ; Vermont Yankee
Nuclear Power Corp. v. NRDC, 435 U.S. 519, 524-
525, 543 545 (1978). This principle of administra-
tive law derives from “the congressional determination
that administrative agencies and administrators will
be familiar with the industries which they regulate
and will be in a better position than [the] federal
courts or Congress itself to design procedural rules
adapted to the peculiarities of the industry and the

22

tasks of the agency involved.” FCC v. Schreiber,
supra, 381 U.S. at 290.

Only where Congress has unmistakably directed an
agency to follow certain procedures is an agency
deprived of its traditional authority to fashion its
own procedure. Even then, the agency may adopt a
practical view of the procedural directive. Thus,
where a statute requires “a full hearing” before a
license may be denied, the agency is free to deny the
license without a hearing when the application shows
an essential prerequisite cannot be met. United States
v. Storer Broadcasting Co., 351 U.S. 192, 204-205
(1956). Even where the statute seemingly directs a
“full hearing in all instances” the Court “never pre-
sume[s] that Congress intended an agency ‘to waste
time on applications that do not state a valid basis
for a hearing.’” Denver Stock Yard v. Livestock As-
sociation, 356 U.S. 282, 287 (1958). The agency may
thus impose a procedural prerequisite to such a
seemingly mandatory hearing, such as a requirement
that the applicant plead facts that would warrant an
administrative waiver of its substantive rules pre-
cluding substantive relief. FPC v. Texaco Inc., 377
U.S. 33, 39-41 (1964). Otherwise, there might be a
“vast proliferation of hearings” serving no useful
purpose. Jd. at 44.

In Section 402, Congress directed that EPA may
grant or deny an NPDES permit after “opportunity
for public hearing.” Although the statute itself does
not state whether the “hearing” must be a legisla-
tive-type or an adjudicatory-type hearing, EPA’s reg-

23

ulations provide both if certain threshold requirements
are met. Assuming arguendo that the statute refers
to an adjudicatory hearing—as the Ninth Circuit has
held—the cases just cited establish that EPA may con-
dition the “opportunity” on (i) the presentation of
a request (ii) which sets forth a material issue of
fact.

First, as explained, even where the statute literally
insists on a “full hearing,” it is well established that
the agency may condition the hearing on a request.
A fortiori, where the statute merely requires the
agency to provide an “opportunity,” the agency may
key the hearing to a request. Any other construction
would read the word “opportunity” out of the Act.
National Coal Operators’ Association v. Kleppe, 423
U.S. 388, 389 (1976)."* Indeed, Kleppe forecloses any
challenge to EPA’s request requirement. There,

are the statute required an “opportunity for a public

144The court of appeals’ decision, in practice, will require
EPA routinely to hold adjudicatory hearings on NPDES
permit actions, even where no one requests a hearing and even
where, as here, the proposed action is, for example, only a
time extension of a permit whose conditions have been fully
considered at previous “legislative” hearings. Thus, if EPA
holds no adjudicatory hearing, all a complainant need do in
order to set aside the agency’s action, under the court’s de-
cision, is to suggest plausibly in the court of appeals that
some members of the public might disagree concerning fac-
tual matters relevant to the Agency’s action. Compare Ver-
mont Yankee Nuclear Power Corp. v. NRDC, supra, 435 U.S.
at 553-554. This effectively means that EPA must hold an
adjudicatory hearing in every instance and reduces the word
“opportunity” to a nullity.

24

hearing” before the agency fined mine operators for
violations of the Federal Coal Mine Health and
Safety Act, 30 U.S.C. 801 et seg. The agency adopted
a regulation providing that its proposed determina-
tion of a violation and proposed fine would become
final without a hearing if the operators did not re-
quest an administrative adjudication within 15 days
after receipt of the proposed order. The Court held
that this procedure provided operators with an “op-
portunity” for a hearing within the meaning of the
statute. Likewise, Section 402 of the Clean Water
Act requires “no more than ‘an opportunity’ for a
hearing.” National Coal Operators’ Association v.
Kleppe, supra, 423 U.S. at 398.

Second, EPA is similarly entitled to condition an
adjudicatory hearing on the identification of a dis-
puted issue of material fact. The whole point of an
adjudicatory hearing is to resolve issues of contested
fact. If the material facts are not disputed, no ad-
judicatory hearing is needed. Cf. Fed. R. Civ. P. 56.
Precisely such a threshold requirement was sustained
in Weinberger v. Hynson, Westcott & Dunning, Inc.,
412 U.S. 609 (1973). There, the statute required the
FDA to give “ ‘due notice and opportunity for hear-
ing to the applicant’ ” before withdrawing a new drug
application (id. at 620). In a threshold regulation
serving the identical screening purpose as EPA’s
regulation, however, the FDA required any applicant
who desired a hearing to submit reasons “ ‘why the
application * * * should not be withdrawn, together
with a well-organized and full-factual analysis of the

25

clinical and other investigational data he [was] pre-
pared to prove in support of his opposition to the
notice of opportunity for a hearing * * *. When it
clearly appear[ed] from the data in the application
and from the reasons and factual analysis in the re-
quest for the hearing that there [was] no genuine
and substantial issue of fact * * *, e.g., no adequate
and well-controlled clinical investigations to support
the claims of effectiveness,’” the FDA was free to
deny a hearing and enter an order withdrawing the
application based solely on these data. 21 C.F.R.
130.14(b). (Emphasis added.) 412 U.S. at 620.

The Court sustained this regulation against the
challenge that it denied the statutory “opportunity”
for hearing. The Court held that the type of regula-
tion was well within the authority of agencies under
Storer and Texaco to particularize statutory stand-
ards and to bar “at the threshold those who neither
measure up to them nor show reasons why in the
public interest the rule should be waived.” Jbid. The
Court refused to “impute to Congress the design of
requiring * * * a hearing when it appears conclu-
sively from the applicant’s ‘pleadings’ that the ap-
plication cannot succeed.” Jd. at 621. Accord, United
States v. Consolidated Mines & Smelting Co., 455
F.2d 432, 453 (9th Cir. 1971) ; Dyestuffs and Chemi-
cals, Inc. v. Flemming, 271 F.2d 281, 286-287 (8th
Cir. 1959), cert. denied, 362 U.S. 911 (1960); Sun
Oil Co. v. FPC, 256 F.2d 238, 240-241 (5th Cir.),
cert. denied, 358 U.S. 872 (1958).

The same is true here. EPA’s regulation condi-
tions a hearing on the presentation of a “material

26

issue[] of fact relevant to the questions of whether a
permit should be issued, denied or modified.” 40
C.F.R. 125.36(c) (1) (ii). As in Hynson, this re-
quirement avoids unnecessary and time-consuming
hearings where, as here, no one challenges proposed
agency action on disputed factual grounds.

In sum, in construing administrative statutes the
Court has regularly construed them to permit agencies
to condition statutory hearings on reasonable thres-
hold requirements. Even where an act provides for
a “full hearing” this canon of construction has been
consistently applied. Here the language is even
plainer—all that the agency need provide is an “op-
portunity” for a hearing. Unless that word is read
out of Section 402, EPA is entitled to condition the
right to an adjudicatory hearing (i) on the presen-
tation of a request (ii) that frames a material issue
of fact.

Il. EPA’s Regulations Are Consistent With The Legis-
lative History Of The Act

Several pointers in the legislative history support
the Administrator’s regulations. First, nothing in it
suggests that Congress meant to dispense with the
traditional power of an agency to impose reasonable
threshold requirements for a hearing. To the con-
trary, the Senate Report—the only report to address
the phrase as used in Section 402—while stressing
the importance of public participation in the permit-
ting process, also stressed the word “opportunity”:

SS eee

27

An essential element in any control program
involving the nation’s waters is public partici-
pation. The public must have a genuine oppor-
tunity to speak on the issue of protection of its
waters. The Committee has therefore estab-
lished requirements to provide opportunity for
public hearing by the Federal Government, or
if State participation is approved by the Admin-
istrator, the State, and other provisions to make
available to the public all relevant information
surrounding a discharge source and the control
requirements placed on it.

Leg. Hist. 1490. The word “opportunity” in both the
statute and its legislative history cannot be ignored.
An opportunity is provided by granting a hearing
when reasonable threshold requirements are satisfied.
That the public fails to make a satisfactory request
does not mean that it was not provided with an oppor-
tunity to do so. To the contrary, the opportunity was
provided, but not accepted. The legislative history
uses the word “opportunity” in this traditional and
natural sense.

S--ond, Congress used the phrase “opportunity for
[public] hearing[s]” seven other times in the 1972
Act (see Sections 307(b) (1); 311(b) (6); 312(g);
316(a); 404(a) and (c); 507(b)). Nowhere in the
legislative history of these seven provisions is there
the slightest suggestion that EPA could not impose
threshold requirements or condition the hearing on a
request. Instead, in discussing Section 311(b) (6),
which also used the phrase, the relevant report recites
that EPA should adopt “procedures which are expe-

28

ditious” and specifically disclaims any intent to apply
the strict adjudicatory hearing requirements of 5
U.S.C. 554. Leg. Hist. 804 (House Report). Al-
though the comment does not address our specific
issue, the committee’s statement plainly evidences an
intent not to dispense with the administrative flexi-
bility this Court has long recognized in the phrase
“opportunity for public hearing.” *®

Third, where Congress intended elsewhere in the
Act to require hearings, it said so. For example,
Section 307(a) (2), as originally enacted, provided
that EPA, after publishing certain proposed effluent
standards, “shall publish a notice for a public hearing
on such proposed standard[s] to be held within thirty
days.” 86 Stat. 857. The Conference Report recog-
nized that the agency was “required to hold a hear-
ing” by this language. Leg. Hist. 312.*° Congress’
differentiation of “required” hearings and “opportu-
nities” for hearings—both in the statutory language
and the legislative history—makes clear that Congress
understood the distinction. Cf. Touche Ross & Co. v.
Redington, No. 78-309 (June 18, 1979), slip op. 11.

15 Otherwise the committee reports ignored the phrase, e.g.,
Leg. Hist. 313, 800, 1479 (Section 307 (b) (1) ) ; 317-318, 805,
1485 (Section 312(j)); 329, 822, 1500-1501 (Section 507
(b)); or simply repeated the statutory language, 746 (Sec-
tion 316(d)); 324, 817 (Section 404(a)); 324-325 (Section
404(c)).

16 Section 307 (a) (2) was amended in 1977 to eliminate the
mandatory hearing requirement. The amended provision ex-
pressly makes a hearing available only on request. 91 Stat.
1589.

et ee

29

In sum, the indications in the legislative history
are all to the effect that Congress did not intend, in
Section 402, to shackle the agency with a needless re-
quirement in all cases. It remains only to determine
whether such a mandate can be derived—as the court
of appeals believed—from some generalized “strong
policy” in favor of adjudicatory hearings.

III. There Is No Presumption That Congress Mandated
Adjudicatory Hearings In All Situations

A. The court below based its interpretation prin-
cipally on “the strong policy in favor of holding
[formal] public hearings before an adjudicative deci-
sion is made” (586 F.2d at 659). The origins of
this policy were not identified except by a citation
to the discussion concerning the Administrative Pro-
cedure Act in the court’s earlier opinion in Marathon
Oil. The APA, however, does not establish any such
policy. With certain exceptions not material here
(see note 21, infra), the APA merely describes the
rulemaking or adindicatory procedures to be followed
when the relevant substantive statute provides for
such hearings. Camp v. Pitts, 411 U.S. 188, 141 n.3
(1973); United States v. Allegheny-Ludlum Steel
Corp., 406 U.S. 742, 757 (1972); United States v.
Florida East Coast Ry., 410 U.S. 224, 238-246
(1973); ITT v. Local 134, Intl Bro. of Elec. Work-
ers, 419 U.S. 428, 488-441 (1975). A hearing vol-
untarily provided by agency regulation is not gov-

30

erned by the APA. Wong Yang Sung v. McGrath, 339
U.S. 38, 50 (1950).

As we have seen, there is no suggestion in the
statutory language or the legislative history estab-
lishing any public policy in favor of adjudicatory
hearings in derogation of agencies’ traditional power
to set reasonable threshold requirements. To the con-
trary, the substantive statute provides only for an
“opportunity” for a public hearing. That does not
connote any automatic requirement of an adjudica-
tory hearing. “[T]he formal procedural require-
ments of the [APA] are invoked only where agency
action ‘on the record after opportunity for an agency
hearing’ is required by some other statute.” Attor-
ney General’s Manual on the Administrative Proce-
dure Act 41 (1947) (emphasis in original) ; see also
Administrative Procedure Act, Legislative History,
79th Cong., 2d Sess. 22, 79, 226, 260, 359 (1944-
1946). The absence of the phrase “on the record”
from Section 402 demonstrates that Congress did not
intend the APA-trial-type procedures for adjudica-
tory hearings to apply. See United States v. Alle-
gheny-Ludlum Steel Corp., 406 U.S. 742, 757 (1972) ;

17The Ninth Circuit’s reliance (586 F.2d at 658) on
Independent Bankers Association of Georgia Vv. Board of Gov-
ernors, 516 F.2d 1206 (D.C. Cir. 1975), is misplaced. There,
a request was made which set forth material issues of fact.
The court acknowledged that even where a statute confers a
right to “a full hearing” the agency need not provide one
where the agency’s action does not rest on disputed issues of
fact. Id. at 1220. As the concurrence in that decision put it,
Congress normally does not require a hearing “that will be
an empty sound, * * * signifying nothing.” Jd. at 1227.

31

United States v. Florida East Coast Ry., 410
U.S. 224, 288 (1973).*° Any doubt on this score is
eliminated by the fact that twice elsewhere the 1972
Act explicitly requires proceedings to be “on the rec-
ord” and subject to 5 U.S.C. 554” and by the fact
that the legislative history specifically disclaims that
the phrase “opportunity for public hearing” (used
in a different section of the same Act) is intended to
invoke the “on the record” provisions of 5 U.S.C.
554.” Thus, contrary to the Ninth Circuit’s starting

18 But see United States Steel Corp. v. Train, 556 F.2d 822
(7th Cir. 1977) ; Marathon Oil Co. v. EPA, 564 F.2d 1253
(9th Cir. 1977); Seacoast Anti-Pollution League v. Costle,
572 F.2d 872 (1st Cir. 1978).

19 Prior to the 1977 Amendments, Section 307(a) (2) re-
quired toxic pollutant effluent standards to be set “on the
record.” Section 507(e) specifically requires hearings under
that subsection to be “of record and * * * subject to section
554 of title 5 * * *. The authors of the FWPCA clearly knew
how to invoke the APA’s formal adjudication requirements
when they wished to.

20 The phase “opportunity for a [public] hearing[s]” is used
in seven other provisions in the 1972 Act (see page 27).
The only passage in the committee reports to discuss the
phrase (as used in Section 311(b) (6)) was “not intended to
impose in every instance the complex procedural requirements
associated with formal adjudicatory hearings on the record
* * *. The committee believes that effective administrative
enforcement will be enhanced by assessment procedures which
are expeditious.” Leg. Hist. 804 (House Report).

The report goes on to state that “[p]rovisions of title 5 of
the United States Code commonly referred to as the Adminis-
trative Procedure Act, as amended, will nevertheless apply
to assure due process and protection of a respondent’s rights.”
Leg. Hist. 804. In view of the prior sentence’s disclaimer that

32

premise, the Section 402 hearing is not an APA-type
adjudicatory hearing.”

Instead, the hearing contemplated by Section 402
combines both elements of a rulemaking proceeding
and an adjudicatory hearing. Congress’ emphasis on
an opportunity for public participation in determin-
ing whether applicants may pollute the navigable
waters illustrates the rulemaking aspects of the pro-
ceeding (see 33 U.S.C. 1251(e). The possible ex-
istence of factual issues and the fact that it is a
permitting proceeding illustrate the adjudicatory
aspects of the proceeding (see 5 U.S.C. 551(6), (7)).
EPA did the practical thing and provided for both
types of hearings, depending on what is appropriate
in the circumstances of the case. The threshold re-
quirements merely insure that the type of hearing,
if any, provided fits the occasion. This type of hybrid
procedure, which assimilates the statutory require-
ment into the practical administration of the statute,
illustrates the wisdom of the Court’s traditional
deference to agencies in devising practical proce-
dures to carry out their substantive duties. There
is, however, no overriding public policy in favor of

the proceeding would be “on the record,” this reference to the
APA was presumably to 5 U.S.C. 555(e), 558(c), and 706
(see note 21, infra).

21 Although the rigid strictures of Section 554 do not apply
to NPDES proceedings, other provisions of the APA are
applicable: Notice of the denial of an NPDES application
made in connection with any agency proceeding must be made
promptly and accompanied by a brief statement of the
grounds for denial (Section 555(e)) and licenses, once

_

33

APA-type adjudicatory hearings in licensing pro-
ceedings.”

B. Far from indulging a presumption that Con-
gress always insists on full adjudicatory hearings,
the Court has regularly refused to impute to Congress
any rule that would place an “impossible burden” on
the agency. Thus, in E. I. duPont de Nemours &
Co. v. Train, 480 U.S. 112 (1977), the industrial
petitioner argued that in issuing permits under the
Federal Water Pollution Control Act Amendments
of 1972 EPA was required to give individual con-
sideration to the circumstances of each of the more
than 42,000 dischargers who have applied for NPDES

granted, may be revoked or suspended only. after notice
by the agency in writing of the facts which warrant the
action and an opportunity to demonstrate or achieve compli-
ance with all lawful requirements (Section 558(c))}. These
provisions do not apply here because the city’s application was
not denied, revoked or suspended.

22The court also reasoned (586 F.2d at 660) that an
adjudicatory hearing would yield a record “that will provide
the reasons” for the agency’s action. This ignores a number
of points. To begin with, the agency stated, in general, the
reasons for the proposed extension in its initial notice of the
proposed extension (A. 117). When Kilroy made legal
objections to the proposed action, the agency fully explained
its reasons for rejecting those legal grounds (A. 194-199).
Thus, the agency stated its reasons for rejecting every ob-
jection presented to it. Furthermore, even if a sufficient basis
for the agency’s action was not clear to the court of appeals,
the proper procedure was to remand to the agency for an
explanation of its decision to extend the permit not to require
a hearing on unrelated (and unspecified) issues. See Citizens
to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 420
(1971) ; Camp v. Pitts, 411 U.S. 188, 148 (1973) ; cf. Dunlop
v. Bachowski, 421 U.S. 560, 572-574 (1975).

34

permits rather than set effluent limitations primarily
by classes and categories. Jd. at 132-133. This con-
struction, the Court said, would “place an impos-
sible burden on EPA.” Such “considerations of feas-
ibility and practicality” led the Court to conclude
“that Congress would [not] have failed so conspic-
uously to provide EPA with the authority needed to
achieve the statutory goals.” Jd. at 133. Accord,
New England Divisions Case, 261 U.S. 184, 197
(1923); Bowles v. Willingham, 321 U.S. 5038, 517
(1944); Permian Basin Area Rate Cases, 390 U.S.
747, 777 (1968); United States v. Southwestern
Cable Co., 392 U.S. 157, 177-178 (1968) ; Weinberger
v. Bentex Pharmaceuticals, Inc., 412 U.S. 645, 653
(1973); National Coal Operators’ Association v.
Kleppe, supra, 423 U.S. at 399; United States Steel
Corp. v. Train, 556 F.2d 822, 834 n.14 (7th Cir.
1977).

The court of appeals’ decision, if followed, would
place an intolerable burden on EPA. In United States
Steel Corp. v. Train, supra, 556 F.2d at 834 n.14,
the Seventh Circuit noted that of more than 42,000
dischargers who had applied for NPDES permits,
only a “relatively small percentage of cases”—“about
2,000”—had involved requests for adjudicatory hear-
ings. In fact, EPA now grants about 100 requests
per year for adjudicatory hearings under the NPDES
program. The court observed that if EPA were re-
quired to conduct an adjudicatory hearing on “a
substantia! proportion” of permit proceedings, “the
entire permit program would have become hopelessly
bogged down before the agency * * *.”

35

It is easy to see why this would be so. All NPDES
permits involve at least the potential for factual dis-
pute. For example, questions can arise concerning the
nature of given industrial processes, their similarity
to or difference from other industrial processes, and
how this should affect control requirements or classi-
fication under effluent guidelines; concerning the eco-
nomic impact of the proposed discharge requirement,
and alternative discharge requirements; concerning
the plant itself and the company and community in-
volved; concerning the dispersal and persistence of
the discharge in the receiving waters, and its effect
there on numbers of different species and concerning
the eco-system generally. Therefore, if the court of
appeals’ decision stands and “[i]t must be shown
that the material facts supporting the decision are
not subject to dispute,” 586 F.2d at 558-659, EPA
would be required to hold an APA-type adjudicatory
hearing covering such issues on every permit issued
by it.** The court of appeals’ ruling would require
EPA to hold adjudicatory hearings in tens of thou-
sands of cases whether or not such hearings were
requested. The Court should not impute to Congress
an intent to weaken enforcement of the Act by plac-
ing such an intolerable burden on EPA.

C. Finally, EPA’s consistent interpretation of the
Act--that the statutory “opportunity” for a hearing

23 In this case and in Marathon Oil Co. v. EPA, supra, the
Ninth Circuit has held that the “hearing” referred to in
Section 402 must comply with the full panoply of procedural
rights provided by the Administrative Procedure Act, 5 U.S.C.
554, 556 and 557. 586 F.2d at 658.

36

is satisfied by requiring parties to request a hearing
and to identify in advance material issues of desig-
nated fact—is entitled to deference. This is particu-
larly appropriate where, as here, the statutory scheme
is characterized by an unusual “complexity and tech-
nical nature,” and “there has undoubtedly been re-
liance upon [the agency’s] interpretation by the
States” in implementing parallel provisions for State
NPDES programs under Section 402(b).% Train v.
NRDC, 421 U.S. 60, 87 (1975); EF. I. duPont de
Nemours & Co. v. Train, supra, 430 U.S. 134-135 &
n.26; see EPA v. State Water Resources Control
Board, 426 U.S. 200 (1976).

We conclude that, once EPA published notice of
its proposed action,” it was not required to hold any
adjudicatory hearing at all unless one was requested
to determine a material issue of fact. No such issue
was tendered. As a result, the court of appeals should

2 Under Section 402(b) (3) of the Act, 33 U.S.C. 1842
(b) (3), a state which administers an approved NPDES pro-
gram must

insure that the public, and any other State the waters
of which may be affected, receive notice of each applica-
tion for a permit and * * * provide an opportunity for
public hearing before a ruling on each such application.
[Emphasis added. ]

25 EPA’s notice-and-hearing regulations, as mentioned above
(note 9, swpra), give any person or organization the right
to request in advance that EPA mail them individual notice
concerning any matter. 40 C.F.R. 125.32(a) (2). Respondents
made no such request. Persons who choose not to make such
a request rely on newspaper notice. Jbid. The new regula-
tions continue this basic structure. See 40 C.F.R. 124.41, 44
Fed. Reg. 32931-32933 (1979).

37

have confined its review to the legal issues properly
presented to the agency. Because the court of ap-
peals did not disagree with EPA’s resolution of these
legal issues, the court should affirm EPA’s extension
of the Hyperion permit.

CONCLUSION

For the foregoing reasons, petitioner respectfully
requests that the decision below be reversed and that
this case be remanded to the court of appeals.

Respectfully submitted.

WADE H. MCCREE, JR.
Solicitor General

JAMES W. MOORMAN
Assistant Attorney General

LOUIS F.. CLAIBORNE
Deputy Solicitor General

WILLIAM ALSUP
Assistant to the Solicitor General

ANGUS MACBETH
RAYMOND W. MUSHAL
Attorneys
JOAN Z. BERNSTEIN
General Counsel

WILLIAM F.. PEDERSEN
Deputy General Counsel

LIsA K. FRIEDMAN
Attorney
Environmental Protection Agency

SEPTEMBER 1979

WW ov. S. GOVERNMENT PRINTING orrice; 1979 300120 65

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385006_0087%3A06. Public record. Not legal advice.