Petition — Costle v. Pacific Legal Foundation

%§-1472 FT FTveD

No. MAR 28 1979

” ~ CLERK

Iu the Supceme Cont of the Stata :

OCTOBER TERM, 1978

DOUGLAS M. CoSTLE, ADMINISTRATOR OF THE

ENVIRONMENTAL PROTECTION AGENCY, PETITIONER

VU.

PACIFIC LEGAL FOUNDATION, JOHN B. KILROY, THE

CITY OF TORRANCE, AND THE CITY OF LoS ANGELES

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR

THE NINTH CIRCUIT

WADE H. MCCREE, JR.

Solicitor General

JAMES W. MOORMAN

Assistant Attorney General

WILLIAM ALSUP

Assistant to the Solicitor General

ANGUS MACBETH

RAYMOND W. MUSHAL

Attorneys

Department of Justice

Washington, D.C. 20580

JOAN Z. BERNSTEIN

General Counsel

ANTHONY O. GARVIN

Acting Regional Counsel

LIsA K. FRIEDMAN

Attorney

Environmental Protection Agency

Washington, D.C. 20460

oo la tara caida bptlasie cndeinanstenesions

licence sundclasheberesseenseeseuaheninn

ELST ee

Nee a ecmcsanmvenees

Reasons for granting the petition ~...................

SIE ES EC

CITATIONS

Cases:

Denver Union Stock Yard Co. v. Produc-

ers Livestock Marketing Ass’n, 356

SO TES Et See

Dyestuffs & Chemicals, Inc. v. Flemming,

271 F.2d 281, cert. denied, 362 U.S.

ECS SE ee

E. I. duPont de Nemours & Co. v. Train,

EE CRATE

EPA v. State Water Resources Control

Pee ae wae eee

FPC v. Colorado Interstate Gas Co., 348

SEES ee

FPC vy. Texaco, Inc., 377 U.S. 38 .-...........

Marathon Oil Co. v. EPA, 564 F.2d 1253..

12,13

17

II

Cases—Continued Page

McGee v. United States, 402 U.S. 479........ 15

National Independent Coal Operators’ As-

sociation v. Kleppe, 423 U.S. 388 .......... 13, 14

Pacific Legal Foundation v. Quarles, 440

F. Supp. 316, appeal pending, No. 77-

gE: 8 A ree ee 8

Save the Bay, Inc. v. Administrator of

EPA, 556 F.2d 1282, reh’g en banc de-

me, GD Fe Oe sania kecs.. 15

Sun Oil Co. v. FPC, 256 F. 2d 233, cert.

| BD. > Rn ene ROO 13

United States v. City of Los Angeles, No.

77-3047HP (C.D. Cal., filed Aug. 12,

| 8 | GRRE AENORERE Un DONE SPT RRR OE 11

United States v. Consolidated Mines &

Smelting Co., 455 F.2d 432 .................- 13

United States v. Storer Broadcasting Co.,

aie IE iad Slain <Secnkistaincnnnncccinte 12,13

United States Steel Corp. v. Train, 556

ME IEE = wick siccieliciidecigabblansahs nels clapiiieaaaibeiied 16,17

Vermont Yankee Nuclear Power Corp. v.

Peg GP I, ID vicetinccennsengindinicegiame 15, 16

Weinberger v. Hynson, Westcott and Dun-

SO, TD BEB CB. DOD once liicctncsnccws 12

Statutes, rule and regulations:

Administrative Procedure Act, 5 U.S.C.

551 et seq.:

Bl 7 ie | RRAOS Ree Uae om NT ne 17

Seas EE wttincdtlineantnemncens 17

III

Statutes, rule and regulations—Continued

Clean Water Act of 1977, Pub. L. No. 95-

217, 91 Stat. 1583 et seq.:

Section 44, 91 Stat. 1584 (33 U.S.C.

I RSH sh SE

Section 45, 91 Stat. 1584 (33 U.S.C.

| ETRY RAE OCR ener

Section 56(c), 91 Stat. 1593 0...

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

Federal Clean Water Act, 33 U.S.C. 1251

et seq.:

Section 101(a) (1), 33 U.S.C. 1251

Oh CS eee

Section 301, 338 U.S.C. 1811 -....00.......

Section 301(a), 33 U.S.C. 1311 (a)...

Section 301(a)(1)(B), 38 U.S.C.

Re acdaetiesnetnieeneennconins

Section 301(b), 38 U.S.C. 1811 (b)....

Section 402, 33 U.S.C. 1842 _............

Section 402(a)(1), 33 U.S.C. 1842

Page

EE SG RSIE etedlles 2, 10, 12, 14, 15

Section 402(b)(1)(B), 338 U.S.C.

DE CUE kccsahoaciine.

Section 402(b) (3), 88 U.S.C. 1843

CF ID secs cae teeseeetven sein incecareegene

Section 403, 33 U.S.C. 1348 -..........

Section 502(7), 83 U.S.C. 1862(7)..

Section 502(8), 83 U.S.C. 1862(8)..

Section 502(9), 38 U.S.C. 1362(9)..

Section 502(10), 88 U.S.C. 1862

FEE ee Re ee

Section 502(12), 88 U.S.C. 1862

UN did isis Lissa eshccnaasiebbaaaiaditaasatianninen

or)

IV

Statutes, rule and regulations—Continued Page

Section 509(b)(1), 33 U.S.C. 1369

0) 0) 2 ee, 4

Section 509(b) (2), 33 U.S.C. 1369

(Bd) CB) aman ens atisitienes 4,6

Section 509(c), 33 U.S.C. 1869(c).... 10

Federal Coal Mine Health and Safety Act

of 1969, 30 U.S.C. 819(a) (3) 0002... 13

Cal. Water Code § 13260 (West 1971).... 5

Fed. &. Ap. 2. BF cccecnane aes 6

40 C.F.R.:

Punt BOD nccaciasincdeeeae eee 3

8 rm tale 3

sSpeteen TEAS | ceesessccicectesestiencn 7,15

Seatiems TT seccinteihesandaee 4

SSuttieth - GY sticihieneiidinn cnesoc 4

Section 126.86(d) (2) —................... 8

eam TK teats 15

sSectemh: RIG cscs 4,13,17

Section 125.36(b) (2) —..................... 4

SSoctiom LRG accents 4,13,17

Section USG.0G(ma) nice... 4,8

Miscellaneous:

Los Angeles Times, April 27, 1977 .......... 7

In the Supreme Court of the United States

OCTOBER TERM, 1978

No.

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

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR

THE NINTH CIRCUIT

The Solicitor General, on behalf of Douglas M.

Costle, Administrator of the United States Environ-

mental Protection Agency, petitions for a writ of

certiorari to review the judgment of the United

States Court of Appeals for the Ninth Circuit in

this case.

OPINION BELOW

The opinion of the court of appeals (App. A, infra)

is reported at 586 F.2d 650.

(1)

2

JURISDICTION

The judgment of the court of appeals was entered

on August 9, 1978. The government’s petition for

rehearing with suggestion of rehearing en banc was

denied on November 24, 1978. By order dated Feb-

ruary 12, 1979, Mr. Justice Rehnquist extended the

time within which to file a petition for a writ of

certiorari to March 23, 1979. The jurisdiction of this

Court is invoked under 28 U.S.C. 1254(1).

QUESTION PRESENTED

Whether Section 402(a)(1) of the Federal Clean

Water Act, 33 U.S.C. 1342(a)(1), in requiring the

Environmental Protection Agency to provide “op-

portunity for public hearing” prior to any issuance,

denial, or modification of a discharge permit, re-

quires EPA to conduct adjudicatory hearings before

taking action on such permits where, after due

notice of the proposed action, no one requests a hear-

ing before the action is taken and a request made

subsequently raises no material issue of fact.

STATEMENT

1. The Federal Clean Water Act (also known as

the Federal Water Pollution Control Act), 33 U.S.C.

1251 et seqg., 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 navi-

gable waters of the United States, the contiguous

zone, or the ocean,’ except in compliance with the

1 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).

specific requirements of the Act. Such compliance

may be achieved by obtaining a permit issued by the

Administrator under Section 402 of the Act, 33 U.S.C.

1342. ,

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

of Section 301(b), 338 U.S.C. 1311(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” and defined by the Ad-

ministrator.’

EPA has promulgated regulations (40 C.F.R. Part

125) implementing the “opportunity for public hear-

ing” required by Section 402(a) (1). The regulations

provide for three basic steps. First, public notice is

given of EPA’s proposed issuance, denial, or modi-

fication of a permit. 40 C.F.R. 125.32. Second, if

EPA’s regional administrator finds that there is “a

significant degree of public interest” in the proposed

2 In 1977, Congress amended the Act to permit the Adminis-

trator to grant extensions of this deadline through, but no

later than, July 1, 1983. Pub. L. No. 95-217, Section 56(c), 91

Stat. 1598. Section 45, 91 Stat. 1584 (33 U.S.C. 1311(i)).

The amendment also permits the Administrator to modify the

effluent limitations of Section 1311(a)(1)(B) with respect

to discharges by publicly owned treatment works into marine

waters. Section 44, 91 Stat. 1584 (33 U.S.C. 1311(h)).

4

action, he must hold a public hearing of the “legis-

lative” type (at which any interested person may

submit oral or written statements or data). 40

C.F.R. 125.34. Third, after that hearing, if one is

held (or, if not, after the notice), the administrator

must determine what action to take with respect to

the proposed permit. 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. 125.86(b), (c). A request for

an adjudicatory hearing must state with particularity

the reasons for the request and the issues proposed to

be considered. 40 C.F.R. 125.36(b) (2). Any inter-

ested person may also request legal rulings by EPA’s

General Counsel with respect to the proposed action.

40 C.F.R. 125.36(m). Within 90 days after EPA

makes a final determination, any interested person

may obtain judicial review in the appropriate court

of appeals of the Administrator’s issuance, denial, or

modification of a permit. 33 U.S.C. 1369(b) (1).

Otherwise, the terms and conditions of the permit are

not subject to judicial review. 33 U.S.C. 1369(b)

(2).

2. In November 1974, EPA issued to respondent

City of Los Angeles a permit to discharge treated

sewage from the city’s Hyperion treatment plant

into the Pacific Ocean.* EPA published notice of its

8 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

wr ree —

5

intent to issue the permit, provided an opportunity

to submit written comments, and held a public hear-

ing on its proposed action (App. A, infra, 4a).

Neither the City of Los Angeles nor any other re-

spondent filed written comments on the proposed

permit or voiced objections at the public hearing.

No one requested an adjudicatory hearing.

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.t Once again, EPA published advance public

received only primary treatment. About one-third of the

sewage has received additional secondary treatment. The

metals 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

App. A, infra, 3a-4a).

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 v. State Water Resources Con-

trol Board, 426 U.S. 200, 202-209 (1976). A federal permit

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 outfalls. The Cali-

fornia Water Quality Control Board also requires a state per-

mit for these outfalls under a state water pollution statute.

Cal. Water Code § 18260 (West 1971).

* The 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) termina-

tion of the discharge of sludge by April 1978 (A.R. Exh. 1 at

6

notice of its tentative determination to revise the

permit and held a hearing on the proposed revisions

(See A.R. Exh. 1 at 4).° Once again, none of the

respondents presented either written or oral objec-

tions to the new permit or requested 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.R. Exh. 9-10).° Public notice of EPA’s

proposed action, including an invitation to submit

16, 16; see note 5, infra). This schedule would have resulted

in compliance with Section 301 effluent limitations and Section

403 ocean-discharge criteria.

5“A.R.” refers to the administrative record certified to the

court of appeals by EPA pursuant to Rule 17 of the Federal

Rules of Appellate Procedure. This record includes the 1975

permit and materials pertaining to the time extensions made

in 1976 and 1977. The evidentiary materials relied on in 1975

in establishing the compliance schedule are part of a separate

administrative record not certified to the court of appeals. In

the court of appeals, the record was supplemented to include

the materials reproduced in Appendices B-E, infra. These

materials include Mr. Kiiroy’s request for an adjudicatory

hearing, his brief in support of that request and EPA’s

responses.

* Permits may be issued for any period up to five years. 33

U.S.C. 1342(b) (1) (B). The 1975 permit originally bad an

expiration date of February 1, 1977. On application by the

City of Los Angeles for an extension, on January 24, 1977,

EPA extended the permit to June 30, 1977 (A.R. Exh. 7).

7

comments and to request a hearing, was published

in the Los Angeles Times, April 27, 1977 (A.R.

Exh. 12)." Neither respondents nor anyone else filed

written comments or requested a hearing, and no

hearing was held (App. A, infra, 6a). On June 2,

1977, EPA issued a final determination to extend the

permit (A.R. Exh. 15).

On June 13, 1977, respondent John B. Kilroy, Sr.,

represented by attorneys for respondent Pacific Legal

Foundation (PLF), filed a “request for an adjudica-

tory hearing pursuant to 40 C.F.R. Section 125.36”

(App. B, infra). Pacific Legal Foundation is a

public-interest law firm located in Sacramento, Cali-

fornia (PLF Pet. For Review at 1-2). Mr. Kilroy is a

resident of the Los Angeles area (id. at 2). The

present proceedings is the second of three proceedings

PLF has brought against EPA regarding sludge dis-

posal by th2 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 (id. at 3).° In the present case, the

7In addition to requiring EPA to publish its notice in a

newspaper of general circulation, 40 C.F.R. 125.32(a) permits

any person to request in advance that EPA send him indi-

vidual 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. The other respondents received no notice

other than the published notice (A.R. Exh. 12).

8 The first lawsuit unsuccessfully sought to enjoin EPA

from funding the landfill 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 volun-

8

hearing request was filed only by Kilroy. None of

the other respondents—PLF, the City of Los Angeles,

and the City of Torrance—made such a request. Kil-

roy’s request automatically stayed the effectiveness

of the permit modification pending disposition of the

request. 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). See App. C, infra, 29a-

30a.° 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 (App.

D, infra, 3la-4la). His brief did not contend that he

tarily agreed, however, 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 most

recent complaint is pending in the district court in Los

Angeles. PLF v. Andrus, No. 78-3463 (C.D. Cal.). It alleges,

among other things, that diversion of sludge from the ocean

to the landfill, allegedly due to the sludge-out schedule in the

1975 permit, violates the Endangered 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 landfill kill the El Segundo

Butterfly.

®° The request stated (App. C, infra, 26a) 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 sched-

ule 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.”

cor gErTeTT Mee =

9

desired to raise anything other than the following

issues of law (App. D, infra, 31a-32a) :

1. Whether there is authority under either the

applicable statutes or regulations to extend

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 per-

mittee go forward with a project contained

in an NPDES compliance schedule when that

project 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 (App. E, infra) that

EPA may extend the expiration date of a permit

through a modification. Section 301 permits may be

issued for terms up to five years. So long as the

10 The brief made four arguments (App. D, infra, 33a-41a) :

(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 landfill, and

no decision on the schedule should be made pending comple-

tion of the environmental impact statement.

10

total duration of the extended permit does not ex-

ceed five years, she reasoned, a modification may in-

clude a time extension. The General Counsel also

held that the fact that an environmental impact state-

ment was being prepared in connection with the fund-

ing of the landfill project did not preclude extension

of the permit. The Act expressly provides that

EPA’s actions on permits 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 PFL,

Kilroy, and the City of Torrance (No. 77-2909). A

similar petition was filed by the City of Los Angeles

(No. 77-3008), and the petitions were consolidated.

The court of appeals did not question that EPA

had complied with its notice-and-hearing regulations

(see App. A, infra, 4a-7a). The court did not 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 Kilroy’s legal

arguments (see id. at 7a).

Nonetheless, the court held that EPA had denied

petitioners an “opportunity for public hearing” with-

in the meaning of Section 402(a)(1) (App. A, infra,

16a-22a). The court held that EPA, before it may

issue, revoke, 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

ee

A AEN EG TT oie

11

material facts supporting the decision are not subject

to dispute” (id. at 19a) and that a hearing would be

“futile” and would serve “absolutely no purpose” (7d.

at 20a). 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 ad-

judicative decision is made” (id. at 19a-20a).

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 ex-

tended permit (id. at 20a). The court said it could

“conclude unequivocally neither that the parties have

no dispute about these matters nor that they do”

(id. at 21a). 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

proceeding to the Administrator “to conduct such a

hearing” (id. at 21a), the court did not limit the

remand to the factual issues it had suggested. Pend-

ing the disposition of the case on remand, the court

continued its stay of the compliance schedule em-

bodied in the extended NPDES permit for the Hyper-

ion plant.”

1 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. 77-83047HP (C.D. Cal., filed Aug. 12, 1977).

12

REASONS FOR GRANTING THE PETITION

The decision of the court of appeals that EPA

must hold an adjudicatory hearing before taking

action on an NPDES permit whenever there are is-

sues of material fact that “may be disputed,” regard-

less of whether anyone has requested such a hear-

ing, is contrary to the express language of Section

402(a)(1) and to decisions of this Court. The de-

cision places an intolerable burden on the operations

of EPA—and of state agencies as well—in adminis-

tering the NPDES system.

1. Section 402(a)(1) requires the Administrator

to provide an “opportunity for public hearing’’ be-

fore taking action on an NPDES permit. A statutory

“opportunity” for a hearing is an opportunity; it does

not require a hearing in every instance. FPC v.

Texaco, Inc., 377 U.S. 38, 39-44 (1964); Denver

Union Stock Yard Co. v. Producers Livestock Mar-

keting Ass’n, 356 U.S. 282, 287 (1958); United

States v. Storer Broadcasting Co., 351 U.S. 192

(1956). Nor does it preclude an agency from es-

tablishing reasonable prerequisites for granting a

hearing, and “barring at the threshold those who [do

not] measure up to them.” FPC v. Texaco, Inc.,

supra, 377 U.S. at 39; see also Weinberger v. Hynson,

Westcott and Dunning, Inc., 412 U.S. 609, 620-621

(1973) ; United States v. Storer Broadcasting Co.,

supra, 351 U.S. at 205.

13

A requirement such as that provided in 40 C.F.R.

125.86(b) and (c), supra, requiring that interested

persons submit a request for a hearing and set forth

the material issues of facts involved, is a reasonable

prerequisite. Federal agencies need not conduct an ad-

judicatory hearing when no disputed issues of fact

have been raised. F'PC v. Texaco, Inc., supra; United

States v. Storer Broadcasting Co., supra; United

States v. Consolidated Mines & Smelting Co., 455

F.2d 482, 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 decision of the court of =ppeals conflicts in

particular with this Court’s decision in National In-

dependent Coal Operators’ Association v. Kleppe, 423

U.S. 388, 397-398 (1976). The statute involved

there, Section 109(a) (3) of the Federal Coal Mine

Heaith and Safety Act of 1969, 30 U.S.C. 819(a)

(3), provides (423 U.S. at 397):

A civil penalty shall be assessed by the Secretary

only after the person charged with a violation

under this Act has been given an opportunity

for a public hearing and the Secretary has de-

termined, by decision incorporating his findings

of fact therein, that a violation did occur, and

the amount of the penalty which is warranted

* * *

The mine operators in Kleppe, who had not re-

quested a hearing, argued in this Court for “the

14

same type of formal findings of fact that are the

usual product of the adversary hearing to which they

have an absolute right, but which was waived by

failure to make a request” (ibid.). In unanimously

rejecting the argument, the Court stated (id. at 398) :

Section 109(a)(3) provides the mine opera-

tors with no more than “an opportunity” for a

hearing. The word “opportunity” would be

meaningless if the statute contemplated formal

adjudicated findings whether or not a requested

evidentiary hearing is held.

* * * * *°

We therefore agree with the Court of Appeals

that the language of the statute, especially when

read in light of its legislative history, requires

the Secretary to make formal findings of fact

specified in §109(a)(3) only when the mine

operator requests a hearing. The requirement

for a formal hearing under § 109(a) (3) is keyed

to a request, and the requirement for formal

findings is keyed to the same request.

So, here, where Section 402(a)(1) similarly pro-

vides no more than an “opportunity for public hear-

ing,” the hearing requirement “is keyed to a request.”

The power to compel a hearing by receiving notice

and requesting a hearing, with a statement of the

material issues of fact, constitutes the “opportunity”

that the statute provides. The right to a hearing is

waived by failure to request one.

Accordingly, since in this case no one requested a

hearing in response to EPA’s published notice of its

Dee

15

proposed action,” and even after that action no one

requested a hearing to resolve issues of fact, no hear-

ing on factual issues was required. The court of

appeals erred in ruling otherwise. Indeed, the court

should have limited its review of EPA’s action to

those issues that had been properly presented to the

Agency, and thus should have determined only

whether EPA correctly resolved the legal questions

that Kilroy had raised.”

In holding that the “opportunity for public hear-

ing” in Section 402(a)(1) need not be “keyed to a

request,” the court of appeals read the word “op-

portunity” out of the Act. Its decision will, in

practice, require EPA routinely to hold adjudica-

tory hearings on NPDES permit actions, even where

12 EPA’s notice-and-hearing regulations, as mentioned

above (note 7, supra), 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). Respond-

ents made no such request. Persons who choose not to make

such a request must rely on newspaper notice. [bid.

18 Since the court of appeals did not question the validity of

the notice procedure followed by EPA (40 C.F.R. 125.36), and

since PLF, the City of Los Angeles, and the City of Torrance

had presented no objections concerning the permit extension

to the Agency, their petitions for review should have been

dismissed. McGee v. United States, 402 U.S. 479 (1971) ; Save

the Bay, Inc. v. Administrator of EPA, 556 F.2d 1282, 1289

(5th Cir.), reh’g en banc denied, 560 F.2d 1023 (1977). Kilroy

did object to the proposed action before the Agency, but

only on two legal grounds. The only question properly pre-

served by Kilroy for judicial review, therefore, was the

validity of EPA’s determinations of these two issues. F’PC V.

Colorado Interstate Gas Co., 848 U.S. 492, 499-500 (1955) ;

McGee v. United States, supra; Vermont Yankee Nuclear

Power Corp. v. NRDC, 485 U.S. 519, 553-554 (1978).

16

no one requests a hearing and even where the pro-

posed action is, for example, only a time extension

of a permit whose conditions have been fully con-

sidered at previous “legislative” hearings.“ For if

EPA holds no adjudicatory hearing, all a complain-

ant need do in order to set aside the Agency’s action,

under the court’s decision, is to suggest plausibly

in the court of appeals that some members of the

public might disagree concerning factual matters im-

plicated by the Agency’s action. Compare Vermont

Yankee Nuclear Power Corp. v. NRDC, 485 U.S. 519,

553-554 (1978).

2. The court’s acknowledgement that its decision

places “a not inconsiderable burden” (App. A, infra,

19a-20a) on EPA is an understatement. In the next

three years, EPA must reissue or extend an esti-

mated 7,200 NPDES permits—600 of them within

the Ninth Circuit.” In United States Steel Corp.

v. Train, 556 F.2d 822, 834 n.14 (7th Cir. 1977),

the Seventh Circuit noted that of more than 42,000

dischargers who had applied for NPDES permits,

a “relatively small . percentage of cases”—“about

2,000’—had involved requests for adjudicatory hear-

ings. The court observed that if EPA were re-

quired to conduct an adjudicatory hearing on “a

substantial proportion” of permit proceedings, “the

entire permit program would have become hopelessly

1* A public hearing of that type was held in 1975 on the

terms and conditions of the permit at issue here. See pages

5-6, supra.

** These figures do not encompass an estimated 20,000 dis-

chargers who are required to obtain NPDES permits but have

not yet been issued one.

eee

17

bogged down before the agency * * *.” Id. at 834

n.14; see also E.J. duPont de Nemours & Co. v. Train,

430 U.S. 112, 182-133 (1977).”

Moreover, it is not only EPA’s permit proceedings,

but also proceedings conducted by state agencies under

the NPDES program, that will be affected by the

court’s decision. Under Section 402(b) (3) of the Act,

33 U.S.C. 1342(b) (3), a state which administers an

approved NPDES program must

insure that the public, and any other State the

waters of which may be affected, receive notice

of each application for a permit and * * * pro-

vide an opportunity for public hearing before a

ruling on each such application. [Emphasis

added. |

Since the italicized language is the same as the lan-

guage in Section 402(a) (1) that was construed by the

court of appeals, the court’s decision apparently means

that state agencies administering NPDES programs

will be under the same burden the court has imposed

on EPA.

16 In this case and in Marathon Oil Co. v. EPA, 564 F.2d

1253 (1978), 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 Pro-

cedure Act, 5 U.S.C. 554, 556-557 (see App. A, infra, 17a).

If, however, EPA regulations implementing the hearing re-

quirement of Section 402 are valid, as we contend, an adju-

dicatory hearing need only be held upon a request which pre-

sents material issues of fact. 40 C.F.R. 125.36(b), (c).

18

CONCLUSION

The petition for a writ of certiorari should be

granted.

Respectfully submitted.

WADE H. McCREE, Jr.

Solicitor General

JAMES W. MOORMAN

Assistant Attorney General

WILLIAM ALSUP

Assistant to the Solicitor General

ANGUS MACBETH

RAYMOND W. MUSHAL

Attorneys

JOAN Z. BERNSTEIN

Genera Counsel

ANTHONY O. GARVIN

Acting Regional Counsel

LISA K. FRIEDMAN

Attorney

Environmental Protection Agency

MARCH 1979

la

APPENDIX A

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

No. 77-2909

PaciFIC LEGAL FOUNDATION, a nonprofit California

corporation; JOHN B. KILROY, SR.; and CITY OF

TORRANCE, a municipal corporation, PETITIONERS

vs.

DouGLAs M. COsTLE, in his official capacity as Ad-

ministrator of the United States Environmental

Protection Agency; and UNITED STATES ENVIRON-

MENTAL PROTECTION AGENCY, RESPONDENTS

No. 77-3008

THE CiTy oF Los ANGELES,

a municipal corporation, PETITIONER

v8.

DouGLas M. COSsTLE, in his official capacity as Ad-

ministrator of the United States Environmental

Protection Agency; and UNITED STATES ENVIRON-

MENTAL PROTECTION AGENCY, RESPONDENTS

Before: MERRILL and SNEED, Circuit Judges, and

EAST,* District Judge.

[Aug. 9, 1978]

SNEED, Circuit Judge:

This case presents a challenge to the Environmental

Protection Agency’s (EPA) action in extending the

* Hon. William G. East, Senior United States District Judge

for the District of Oregon, sitting by designation.

2a

terms of the National Pollutant Discharge Elimination

System (NPDES) permit applicable to the Hyperion

Wastewater Treatment Plant in Los Angeles for an

additional two and one-half years. Petitioner City of

Los Angeles argues that the State of California, not

the EPA, has jurisdiction over the discharges in ques-

tion and that the joint permitting procedure used

by the state and the EPA is not authorized by the sta-

tute. Petitioner Pacific Legal Foundation (PLF)

initially questions EPA authority to extend the ex-

piration date of an NPDES permit PLF also argues

that the extension process was procedurally inade-

quate because no hearing was held and that the Ad-

ministrator’s action in extending the permit was

arbitrary, capricious, an abuse of discretion and

otherwise not in accordance with law. We have care-

fully considered these challenges, but must reject most

of them. We do, however, remand this proceeding

to the Administrator for an adjudicatory hearing as"

required by the Administrative Procedure Act (APA),

5 U.S.C. §§ 554, 556 and 557, with respect to EPA’s

extension of the NPDES permit.

I.

Background

A. Statutory Framework.

The Federal Water Pollution Control Act Amend-

ments of 1972, 33 U.S.C. § 1251 et seq., (FWPCA)

provides that the discharge of any pollutant shall be

unlawful except as in compliance with the specific

3a

requirements of the act. Section 301, 33 U.S.C.

§ 1311. The statute also specifically provides that

obtaining an NPDES permit authorizes such dis-

charge. Section 402, 33 U.S.C. § 1342. The FWPCA

further allows the states to assume responsibility for

granting NPDES permits for discharges into navi-

gable waters within the state’s jurisdiction. Section

402(b).

These NPDES permits can only be obtained if the

resulting discharge will meet other applicable re-

quirements of the FWPCA. One of these requirements

is that publicly-owned treatment works achieve efflu-

ent limitations based upon secondary treatment by

July 1, 1977. Section 301(b)(1)(B). Ocean dis-

charges are further required to be in compliance with

guidelines developed by the EPA after consideration

of a wide range of environmental, health, esthetic,

recreational and economic values. Section 403, 33

U.S.C. § 1848. Disposal of sewage sludge which would

result in any pollutant from such sewage sludge en-

tering the navigable waters is also prohibited except

pursuant to a permit. Section 405(a), 33 U.S.C.

§ 1345.

B. Physical Setting.

Sewage from Los Angeles is processed at the Hy-

perion Wastewater Treatment Plant and the resulting

products are discharged into the Pacific Ocean. Most

of the sewage receives only primary treatment; the

resulting effluent is discharged into the ocean through

an outfall extending five miles into the Pacific. About

4a

one-third of the sewage is given additional secondary

treatment and the resulting sludge is discharged

through a seven mile long outfall. A third outfall of

one mile is used only in emergencies.

C. Administrative Action.

On March 26, 1973, the EPA and the California

State Water Resources Control Board entered into

an understanding which gave the state primary re-

sponsibility for administering the NPDES program

in California, but allowed the EPA to retain jurisdic-

tion over discharges beyond the limits of the three-

mile territorial sea. See p. 9 infra. The initial

NPDES permit for the Hyperion plant was jointly is-

sued by the EPA and the California Regional Water

Quality Control Board, Los Angeles Region

(CRWQCB). This permit, issued after a public hear-

ing, authorized discharges from the one and five mile

outfalls on the condition that effluent limitations based

on full secondary treatment be attained by October

1, 1979. On August 18, 1975, a new permit was

jointly issued which authorized discharges from all

three outfalls. The 1974 permit was explicitly re-

scinded at this time. The new permit retained the

compliance schedules designed to achieve full second-

ary treatment of wastewater and added a compliance

schedule designed to eliminate all ocean discharge of

sewage sludge within thirty months after concept ap-

proval of a plan for alternate disposal of the sludge.

Conditional approval of the use of the Palos Verdes

5a

landfill as an alternate disposal site was given by

the EPA on October 11, 1975.

During the next two years the CRWQCB, appar-

ently acting alone, amended the compliance schedule

contained in the 1975 permit three times. The first

change was to insert definite dates in the sludge-out

compliance schedule, with elimination of sludge dis-

charge into the ocean required by April 1, 1978. After

the city missed the first interim deadlines in early

1976, the compliance schedule was again amended by

the state to delay final elimination of slude discharge

until April 1, 1980. The final change, made in late

1976, merely extended one of the interim dates in the

compliance schedule, while retaining April 1980 as

the ultimate sludge-out date.

On July 29, 1976, the EPA notified the City of Los

Angeles that the NPDES permit for Hyperion would

expire on February 1, 1977 and that a new permit

would have to be obtained if discharges were to con-

tinue past that date. On July 30, 1976, the city sub-

mitted an application for a new permit to the

CRWQCB. A duplicate copy of this application was

sent to the EPA. However, on January 24, 1977, after

a public hearing, the EPA and the CRWQCB jointly

changed the expiration date of the existing permit

from February 1, 1977 to June 30, 1977. The stated

reason for the extension was that adequate review

time for a new permit was not available. The

record also indicates that both agencies were aware of

action in Congress which might extend the compli-

ance dates applicable to this project. The extension

was seen as a way of avoiding issuing a new permit

6a

that might be quickly outdated by changes in the

underlying law.

Prior to the extention of the permit expiration

date to June 30, 1977, petitioner PLF had written to

the Regional Administrator of the EPA protesting the

secondary treatment and sludge-out requirements in

the Hyperion permit. This letter asserted that the

EPA was misinterpreting the requirements of the

FWPCA and that a proper interpretation required

that ocean discharge limitations be imposed only after

a complete environmental, economic, and social assess-

ment of the factors involved. This letter did not in-

clude any specific objection to the proposed extension

of the permit, but instead objected generally to the

existing permit conditions. The EPA responded to

this letter after the January 24, 1977 extension had

been granted, saying that it still held to its interpre-

tation of the FWPCA and therefore would not change

any of the permit conditions.

By the end of April 1977 the EPA had decided to

extend the existing permit until December 17, 1979.

The City of Los Angeles was notified of this proposal

and a general public notice was published in the Los

Angeles Times. PLF, because it had not specifically

requested to be on the mailing list for notice of pro-

posed action regarding the Hyperion plant, did not re-

ceive individual notice of this proposal. No written

objections to the extension were filed nor was a pub-

lic hearing requested. On May 23, 1977, at a public

hearing, the CRWQCB officially extended the expira-

tion date of its permit until December 17, 1979. The

Ta

EPA permit was officially extended on June 2, 1977

with no further public notice or hearing. Petitioner

Kilroy requested an adjudicatory hearing on the per-

mit extension on June 13, 1977. The EPA denied this

request because it found that no factual questions

suitable to resolution at an adjudicatory hearing were

presented by the request. The legal questions raised

by Kilroy regarding the proper interpretation of the

FWPCA were certified to the EPA General Counsel.

EPA’s legal position was set forth in a memo from the

General Counsel issued on October 18, 1977.

On August 18, 1977, a petition for review of the

Administrator’s action was filed in this court by PLF

and Mr. Kilroy. A similar petition was filed by the

City of Los Angeles on August 31, 1977. These peti-

tions were consolidated by order of this court on De-

cember 23, 1977. That order also stayed the terms,

conditions and requirements of the permit pending

final disposition of these consolidated cases.

II.

Appellate Court Jurisdiction.

A. Modification or Issuance.

We are faced initially with the question of whether

we have jurisdiction to hear this case. Section 509(b)

(1) (F) of the FWPCA, 33 U.S.C. § 1369(b) (1) (F),

provides that “review of the Administrator’s action in

issuing or denying any permit under section 402 may

be had by any interested person in the Circuit Court of

Appeals of the United States for the Federal judicial

8a

district in which such person resides or transacts

such business” (emphasis added). The Administra-

tor’s extension of the expiration date of a permit

clearly is not expressly included in the list of re-

viewable actions.

Section 509 generally has been strictly construed.

The Second Circuit has held that it does not grant ju-

risdiction to review state action in issuing or denying

an NPDES permit under section 402(b). Mianus

River Preservation Committee v. EPA, 541 F.2d 899

(2d Cir. 1976). Both this Circuit and the Fifth

Circuit have held that the Administrator’s action in

vetoing or failing to veto a permit granted by a state

does not come within the scope of the term “issuing or

denying any permit.” State of Washington v. EPA,

573 F.2d 583 (9th Cir. 1978); Save the Bay, Ine. v.

EPA, 556 F.2d 1282 (5th Cir. 1977). Focusing on the

fact that section 509 provides only for review of the

Administrator’s action, the Mianus River court held

that since the permitting action involved in that case

was carried out solely by the state, there was no action

by the Administrator to review. Both State of Wash-

ington and Save the Bay reasoned that section 509

applies only to direct permitting activities of the Ad-

ministrator and not to his discretionary review of

state permitting decisions.

Here the question is different. The action is that

of the Administrator and consists of extending a per-

mit. As will appear in Part II.B. of this opinion, this

extension by the Administrator is more than failing

to veto the state-granted extension. The critical is-

9a

sue, as we see it, is whether for the purposes of sec-

tion 509(b)(1)(F) an extension amounts to an is-

suance. We know of no authority directly in point

nor is the legislative history helpful. The proper res-

olution, we believe, is to treat a permit extension the

same as a permit issuance. Functionally, there is no

difference between reissuance of a permit for a cer-

tain period from the date of its expiration and an ex-

tension of the same permit for the same period.

Therefore, we hold that we have jurisdiction under

section 509(b)(1)(F) to review the Administrator’s

action in extending the permit.

‘This holding is a narrow one; it is not intended to

suggest that any modification of an existing permit

amounts to an issuance of the entire permit for the

purposes of section 509(b)(1)(F). Modification al-

ters the meaning and scope of only those provisions

modified; extension affects all provisions by project-

ing their life.

An extension remains an issuance even when ac-

companied by modifications authorized by section 402

(a) (3), 33 U.S.C. § 1342(a) (3); such modifications,

however, when unaccompanied by an extension are

not an issuance. The hallmark of issuance is its pro-

jection into the future beyond the reach of an existing

permit. Modifications do not so project. In this man-

ner a section 402(a) (1) issuance can and should be

distinguished from a section 402(a) (3) modification.

Therefore, we repeat, the June 2, 1977 permit

extension by the EPA was the issuance of a permit for

the purposes of section 509(b) (1) (F).

10a

B. Authority of EPA to Extend Permit.

Although the EPA in fact granted an extension of

the permit, which for purposes of section 509(b) (1)

(F) we are prepared to treat as an issuance, the City

of Los Angeles sharply challenges the authority of

the EPA to so issue such permit. It contends that

authority to issue permits such as that with which

we are concerned has been delegated to the State of

California under Section 402(b) of the FWPCA, 33

U.S.C. § 1342(b), and that, as a consequence, the

sole jurisdictionally effective extension was accom-

plished by the state. Under these circumstances,

State of Washington, supra and Mianus River, supra,

would deprive this court of jurisdiction to review

state action under section 509(b) (1) (F).

The flaw in this argument, however, is that the

state’s extension was not the only juridically ef-

fective extension. The permit, as extended, applies

to discharges beyond the “territorial seas,’ defined

in section 502(8), 33 U.S.C. § 1862(8), as “the belt

of the seas . . . extending seaward a distance of three

miles.” We hold that only the Administrator has au-

thority to grant permits to such areas. Therefore,

even if the Administrator’s power over those portions

of the permit applicable to navigable waters within

the “territorial seas” is limited to vetoing state action,

State of Washington, supra at 586-87, the permit ex-

tension, to be juridically effective in its entirety, re-

quires additional action by the Administrator. This

action is subject to review because, within the limits

lla

of the Administrator’s power, all provisions of the

permit were reissued by the extension. |

Our holding that only the Administrator has au-

thority to grant permits beyond the “territorial seas”

is required by the FWPCA. Section 402(b), 33 U.S.C.

§ 1342(b), authorizes a state “desiring to administer

its own permit program for discharges into navigable

waters within its jurisdiction” (italics supplied) to

submit such a program to the Administrator for ap-

proval. The legislative history of the FWPCA makes

clear that Congress intended for the states to the pri-

mary permitting authority. Section 101(b), 33 U.S.C.

§ 1251(b); A Legislative History of the Water Pol-

lution Control Act Amendments of 1972, Serial No.

93-1, 93rd Cong., 1st Sess. (1973) Vol. 1 2t-262

(hereinafter Leg. History). Nonetheless, “navigable

waters” is defined to mean “waters of the United

States, including the territorial seas,” section 502(7),

83 U.S.C. §1362(7), but not including explicitly

either the “contiguous zone” or the “ocean,” both of

which, under the definitions of the FWPCA, occupy

areas beyond the “territorial seas.”

The “contiguous zone” embraces “the entire zone

established or to be established by the United States

under article 24 of the Convention of the Territorial

Sea and the Contiguous Zone.” Section 502(9), 33

U.S.C. § 1862(9). Article 24 of the Convention de-

scribes the “contiguous zone” as “a zone of the high

seas contiguous to its territorial sea... .” 15 United

States Treaties and Other International Agreements,

Part 2, 1612 (1964). Finally, “ocean” is defined by

12a

the FWPCA to mean “any portion of the high seas

beyond the contiguous zone.” Section 502(1), 33

U.S.C. § 1362(10). These two areas, the “contiguous

zone” and the “ocean,” clearly extend beyond the

“navigable waters,” the outer limits of which mark

the extent of the power of the states to administer

their own permit programs. Had Congress intended

the power of the states to extend beyond the territorial

seas it easily could have so provided. Having not done

so, we can hold only as we have indicated. Beyond

the territorial seas only the Administrator, we repeat,

has authority to issue permits.

Our conclusion is further strengthened by the

FWPCA’s definition of the EPA’s permit granting

authority. The Administrator is authorized “to issue

a permit for the discharge of any pollutant.” Section

402(a) (1), 33 U.S.C. § 1842(a) (1). The term “dis-

charge of a pollutant” is thereafter defined to mean

“(A) any addition of any pollutant to navigable

waters from any point source, (B) any addition of

any pollutant to the waters of the contiguous zone or

the ocean from any point source other than a vessel

or other floating craft.” (Italics supplied). Section

502(12), 33 U.S.C. § 1362(12). Again it is apparent

that “ocean” and “contiguous zone” waters are not

included within the scope of the term “navigable

waters” as it is used in the FWPCA and therefore

cannot be required by the state. Federal action is

required.

Our view regarding the scope of the state’s per-

mitting authority is also supported by the legisla-

tive history. Section 402(a) (5), 33 U.S.C. § 1842(a)

13a

(5), provides authorization for states to grant permits

on an interim basis “for discharges into the navigable

waters within the jurisdiction of such State.” This

description of the scope of state permitting authority

is similar to the state authority granted by section

402(b) on a permanent basis. In the Report of the

House Committee on Public Works, the subsection (a)

(5) permit authority is limited to “discharges into

the navigable waters within the jurisdiction of such

State (but not in the contiguous zone or the ocean).”

Leg. History at 813. Congress, no doubt, intended a

similar limitation on state jurisdiction under section

402(b).

This conclusion is not undermined by section 402

(c) which provides for the suspension of EPA per-

mitting authority once a state permit program is au-

thorized. The suspension affects only that which the

state is permitted to exercise. EPA v. State Water

Resources Control Board, 426 U.S. 200 (1976) is

relevant. There the Supreme Court ruled that state

permitting authority did not extend to discharges

from federal installations located in the state. The

Court rejected an argument that section 402(c) neces-

sarily required the EPA to suspend completely the

issuing of permits for discharges in that state. Id. at

224-26 n.39. The Court found that since Congress did

not intend for the states to have permitting authority

over federal installations, permit authority over

those installations should remain with the EPA. Sim-

ilarly here, inasmuch as Congress did not intend for

state jurisdiction to apply to discharges past the three-

mile territorial sea, it is appropriate to hold that the

14a

EPA retains jurisdiction to grant permits for such

discharges."

Inasmuch as the Administrator’s June 2, 1977

action amounted to the issuance of a valid permit, we

hold that under section 509(b)(1)(F) we have ju-

risdiction to consider the petitions before us.

ITI.

Federal-State Coordination of Permit Actions.

Our analysis results in the EPA retaining juris-

diction over both the five and seven mile outfall dis-

charges, while the State of California has permitting

authority over the one mile emergency outfall because

it is within the three-mile territorial sea. Joint action

seems the most sensible way of dealing with the prob-

lems created by this splitting of jurisdiction. We find

nothing in the legislative history to suggest that such

joint action is contrary to Congressional intent. On

the contrary, there is strong support in the legislative

history for a conclusion that Congress wanted to en-

courage a federal-state partnership for the control

1 Petitioners point out the extensive debate in Congress

over the interaction between the FWPCA and the Marine

Protection, Research and Sanctuaries Act of 1972. They argue

that since the FWPCA controls all discharges from outfall

pipes, no matter how far out into the ocean the pipe extends,

while the MPRSA covers all other ocean dumping, all juris-

diction retained in the FWPCA should be delegable to the

states. We fail to see the logic of this reasoning. The regula-

tion of ocean dumping is totally unrelated to the specific ques-

tion here being considered.

15a

of water pollution. Leg. History at 1279 (comments

of Senator Montoya).

The Supreme Court in EPA v. State Water Re-

sources Control Board, supra, recognized that prob-

lems of coordination might result from allowing both

the EPA and the state to issue permits for discharges

within the state. This did not impel the Court to al-

ter its conclusion. It observed that “these possible

problems of coordination . . . fail to provide an ade-

quate basis for finding a clear congressional intention

to subject federal dischargers to the degree of con-

trol inherent in adhering to state permit requirements

..” Id. at 221. Similarly here, we recognize the

problems involved in coordinated action; nevertheless,

we cannot hold under the terms of the FWPCA that

joint action is improper and that all authority must

be turned over to the state to avoid conflicts.

Joint action in this particular case is complicated

by the structure of California law which in effect

requires that all discharges from the Hyperion plant

be covered by a state permit. The Porter-Cologne Act

imposes on “any political agency or entity of this state

discharging waste . . . outside the boundaries of the

state in a manner that could affect the quality of the

waters of the state” the duty to file information re-

garding the discharge. Calif. Water Code § 13260.

Thereupon the regional water quality control boards

are empowered to prescribe requirements governing

the discharge. Calif. Water Code § 13263. Discharges

from the five and seven mile outfalls “could affect the

quality of the waters of the state”; thus, they are per-

16a

haps subject to state permitting. The extent to which,

and the circumstances under which, state authority

over discharges at the five and seven mile outfalls

may be preempted is not an issue before us.

Here we need only point out that, given the split

jurisdiction over discharges from the Hyperion plant,

coordination between the federal and state authorities

is imperative. The record here, despite suggestions by

the petitioners to the contrary, does not reflect a con-

tumacious refusal by either authority to recognize this

necessity.

IV.

Availability of an “Opportunity For Public Hearing.”

Having held in Part II of this opinion that our

jurisdiction properly was invoked pursuant to section

509(b) (1) (F), 33 U.S.C. § 1369(b) (1) (F), it fol-

lows that our review of the extension must consider

the issues that ordinarily arise on petitions to review

the issuance of any permit pursuant to the authority

of section 402, 33 U.S.C. § 1342.

Initially, this means that the application for review

must have been made within ninety days of the is-

suance. This requirement was met in this case. The

petitions were filed on August 18 and 31, 1977, well

within ninety days from the June 2, 1977 date of is-

suance. Next, issuance must follow an “opportunity

for public hearing.” Section 402(a)(1). We hold

that no proper “opportunity for public hearing” was

provided in this case.

peel meses beats

17a

The analysis supporting this conclusion must com-

mence with Marathon Oil Co. v. EPA, 564 F.2d

1253, 1262 (9th Cir. 1977), in which we held that

the hearing provisions of the APA, 5 U.S.C. §§ 554,

556 and 557 were applicable to the issuance of section

402 permits.’ Section 554(c) provides:

“The agency shall give all interested parties op-

portunity for—(1) the submission and considera-

tion of facts, arguments, offers of settlement, or

proposals of adjustment when time, the nature

of the proceeding, and the public interest per-

mit; and (2) to the extent that the parties are

unable so to determine a controversy by consent,

hearing and decision on notice and in accord-

ance with sections 556 and 557 of this title.”

The “opportunity” of which section 554(c) of the

APA speaks is, by reason of Marathon Oil Co. v. EPA,

supra, the “opportunity for public hearing” of which

section 402(a)(1) of the FWPCA speaks.

In this case all parties agree that the EPA never

conducted a hearing regarding the extension of the

permit. The Administrator contends, however, that

an “opportunity” was provided notwithstanding the

absence of a hearing. He points to the fact that notice

of the proposed extension and the availability of a

hearing was published in the Los Angeles Times.

Since no one requested a hearing, EPA argues, there

was not significant public interest to necessitate hold-

ing a hearing. See 40 C.F.R. § 125.34(a).

* Similar holdings have been made in U.S. Steel Corp. v.

Train, 556 F.2d 822 (7th Cir. 1977) and Seacoast Anti-

Pollution League v. Costle, 572 F.2d 872 (1st Cir. 1978).

18a

The Administrator misconceives the showing that

must be made to demonstrate that adequate oppor-

tunity for a hearing has been given. The necessity of

a hearing turns not only on the vigor with which in-

terested parties clamor for one, but also on whether

a showing has been made demonstrating that a hear-

ing is unnecessary. See United States v. Consolidated

Mines & Smelting Co., 455 F.2d 432, 453 (9th Cir.

1971); American Bancorporation, Inc. v. Board of

Governors of the Federal Reserve System, 509 F.2d

29, 37-38 (8th Cir. 1974). We find ;; -suasive the

observations of the court in Independent Bank Ass’n

of Georgia v. Board of Governors of the Federal Re-

serve System, 516 F.2d 1206 (D.C. Cir. 1975) con-

cerning the “opportunity for hearing” provision of

section 4(c)(8) of the Bank Holding Company Act,

12 U.S.C. § 1843(c) (8). The court stated:

“The case law in this Circuit is clear that an

agency is not required to conduct an evidentiary

hearing when it can serve absolutely no purpose.

In such a circumstance, denial of a hearing may

be proper even though adjudicatory proceedings

are provided for by statute. The agency, how-

ever, carries a heavy burden of justification.

Where Congress has plainly given interested

parties the right to a full hearing, the agency

a=-must show that the parties can gain nothing

thereby, because they disputed none of the ma-

terial facts upon which the agency’s decision

could rest.”

Id. at 1220.

19a

The fact that no one requested a hearing prior to

the decision is appropriately considered in this

analysis, but it is not decisive." It must be shown

that the material facts supporting the decision are

not subject to dispute.* We realize that this is a

* We recognize that National Independent Coal Operators

Association v. Kleppe, 423 U.S. 388, 397-98 (1976) suggests

in dictum that a failure to request a hearing waives any

right to a hearing and that the power to require a hearing by

a request therefor constitutes “an opportunity” for a hearing.

That case, however, involved the assessment of penalties

against coal mine operators found to have unsafe conditions

in their mines pursuant to the Federal Coal Mine Health and

Safety Act of 1969. The failure of the operator in that situa-

tion to object to the fine almost inevitably leads to the con-

clusion that he is not disputing any of the facts underlying

the action. In the case before us, while the failure of the city

to request a hearing may suggest that it does not contest any

of the facts supporting the issuance of the permit, the failure

of PLF and Kilroy to request a predecision hearing does not

lead to the. same conclusion. Newspaper notice may not reach

all interested parties. Interested citizens may not realize that

they need to request a hearing if they are interested in an

issue. Particularly in light of the known public opposition to

use the Palos Verdes landfill, we are unwilling to say that

the mere failure to request a predecision public hearing is

decisive of the question whether a hearing need be held.

*The Supreme Court has held that in some situations the

burden of demonstrating that there are disputed issues of

material fact may be placed on the party challenging the

agency’s action. Weinberger v. Hynson, Westcott & Dunning,

Inc., 412 U.S. 609, 620 (1973) ; United States v. Storer Broad-

casting Co., 351 U.S. 192, 205 (1956). These cases are in-

apposite here, however, because they involved situations in

which established regulations clearly applied to preclude the

petitioner’s arguments from succeeding. In such a situation,

placing the burden on the petitioner to show in fairly precise

terms why a particular exception should be made will save the

20a

not inconsiderable burden to place on the agency, but

it is appropriate in view of the strong policy in favor

of holding public hearings before an adjudicative

decision is made. Marathon Oil, supra, at 1261-62.

We cannot say a hearing prior to the June 2,

1977 extension would have served “absolutely no

purpose” nor can we say that a hearing subsequent

to a remand of this case would be futile. We reach

this conclusion after assuming, arguendo, that sec-

tion 301 of the FWPCA, 33 U.S.C. § 1311, requires

the elimination of the discharge of sludge in the

ocean and that the water pollution problems of dis-

posal of sludge on land have been made a responsi-

bility of the State of California pursuant to the sec-

tion 402(b) delegation discussed in Part II.B., supra.

See Pacific Legal Foundation v. Quarles, 440 F.

Supp. 316 (C.D. Cal. 1977). Nonetheless, inasmuch

as the permit given by the EPA and reissued by its

letter of June 2, 1977 inevitably required cooperation

between the EPA and the state with respect to the

EPA’s termination of the discharge of sludge in the

ocean and its disposal by the state on the land, it is

apparent to us that the reasonableness of the EPA’s

compliance schedule depends upon facts that may be

disputed and with respect to which the record in this

agency from having to conduct full evidentiary hearings only

to deny routinely the application of the challenging peti-

tioner for failure to meet an initial prerequisite. In the case

before us, however, there is no such established rule setting

forth specific prerequisites to a hearing. Whether an adequate

“opportunity” has been provided must turn on a more subtle

analysis of the entire situation.

2la

case is silent. Such facts as the adequacy of the

Palos Verdes or other landfill site, the ability of the

city to acquire the capacity to transport the sludge

within the time limits fixed by the permit, and the

possible effect on navigable waters of land disposal

are relevant to determining whether the sludge-out

compliance schedule is supported by “substantial evi-

dence.” 5 U.S.C. § 706(a)(E) (1970).

Yet, on this record we can conclude unequivocally

neither that the parties have no dispute about these

matters nor that they do. Under these circumstances

we are unable to deny an adjudicatory hearing on

the ground that none of the material facts upon which

the EPA’s decision rests are disputed. Although or-

dinarily we might conclude that a silent record re-

flects no disagreement as to material facts, the special

circumstances of this case cautions us against that

course here. We acknowledge that, should a show-

ing on remand be made in a proper manner that no

dispute as to material facts exists, it would be neces-

sary for us to reconsider our holding that no ‘“‘op-

portunity for hearing” was provided.

Among the special circumstances of this case is

the division of jurisdiction over discharges in the

ocean between the federal and state authorities which

significantly complicates compliance by an affected

agency. It becomes both possible and tempting for

each authority to deny responsibility by attributing

the command in question to the other. The ease with

which this can be done increases as the opportunities

for confrontation in a hearing setting diminish. Con-

22a

siderations such as these may properly influence our

decision about whether a hearing in the situation be-

fore us would be useless.

We also note that petitioner Kilroy requested an

adjudicatory hearing pursuant to 40 C.F.R. § 125.36

ten days after the decision to extend the permit was

announced. A hearing allowing for reconsideration

of the decision is clearly preferable to no hearing at

all.

Finally, we are influenced by the fact that the

record before us is barren of any explanation of the

extension of June 2, 1977. Even if this were treated

as a “modification” of a pre-existing permit under

section 402(a) (3), we would confront a serious prob-

lem in determining whether the extension was ar-

bitrary, capricious, or an abuse of discretion. 5

U.S.C. § 706(2)(A). An adjudicatory hearing un-

doubtedly will yield a record that will provide the

reasons for the extension.

V.

Absence of Ocean Discharge Guidelines.

Before framing our remand of this case we must

consider the petitioner’s contention that the extension

of the permit was invalid because it occurred at a

time during which no guidelines established under

section 403(c) of the FWPCA, 33 U.S.C. § 1843(c)

existed. Section 403(a) provides:

“No permit under section 402 of this title for

a discharge into the territorial sea, the waters

of the contiguous zone, or the oceans shall be

23a

issued, after promulgation of guidelines estab-

lished under subsection (c) of this section, ex-

cept in compliance with such guidelines. Prior

to the promulgation of such guidelines, a permit

may be issued under such section 402 of this

title if the Administrator determines it to be in

the public interest.”

At the time the original permit was issued ocean

discharge guidelines were in effect. These were re-

scinded on January 11, 1977 and new guidelines did

not exist on June 2, 1977. The original permit was

in compliance with the then existing guidelines.

Petitioners contend, and we agree, that the last

sentence of section 403(a) does not provide the answer

to their assertion of invalidity. This sentence is

specifically designed to cover only the period befor

the promulgation of the initial guidelines. Leg. His-

tory at 324. The problem we confront is different.

Specifically, it is whether a permit, issued in com-

pliance with then existing guidelines, validly can be

reissued at a time during which the previous guide-

lines have been withdrawn for revision. We hold

such reissuance to be valid. It is, by relation back to

the original issuance, “in compliance with such guide-

lines” as the statute requires. We need not consider

in this case the circumstances under which relation

modifications that accompanied the extension. At

some point an “extension” may become an original

issuance rather than a reissuance. Such circum-

stances do not exist here, however.

24a

VI.

The Remand.

The absence of a proper hearing requires us to re-

mand this proceeding to the Administrator to conduct

such a hearing.

This Court, by an order of December 23, 1977,

stayed the NPDES permit pending the disposition of

this case. Our order provided that the “terms, con-

ditions and requirements” of the NPDES permit

applicable to the Hyperion Treatment Plant are stayed

with the “exception that effluent limitations which

were applicable to the Hyperion Plant and which

were in effect for the discharges from the Hyperion

Plant on January 1, 1977, and monitoring and report-

ing requirements related thereto shall remain in ef-

fect to maintain the status quo and to ensure con-

tinued protection of the marine environment.” This

stay, again subject to the above exception, 1s Con

tinued pending a proper hearing. It shall terminate

at such time following the hearing as the Adminis-

trator promulgates a new permit, extends that in

effect on January 1, 1977, or terminates the permit.

REMANDED.

25a

APPENDIX B

June 13, 1977

PMS PAUL DEFALCO JR REGIONAL DIRECTOR RE-

GION IX UNITED STATES ENVIRONMENTAL PROTEC-

TION AGENCY, RDM REPORT DELIVERY BY MAIL-

GRAM, DLR

100 CALIFORNIA ST -

SAN FRANCISCO CA 94111

REQUEST FOR AN ADJUDICATORY HEARING PUR-

SUANT TO 40 CFR SECTION 125.36

1. NAME AND ADDRESS OF REQUESTOR

JOHN B KILROY SR

870 STRADA VECCHIA

LOS ANGELES CA 90024

2. INTERESTS OF REQUESTOR

MR KILROY AS A RESIDENT OF LOS ANGELES IS

DIRECTLY AFFECTED BY ANY PROPOSAL SIGNIFI-

CANTLY AFFECTING THE OPERATION OF THE HY-

PERION TREATMENT PLANT AND THE ENVIRON-

MENT OF THE LOS ANGELES AREA

3. PARTICIPATION BY REQUESTOR

REQUESTOR AGREES TO COMPLY WITH THE TERMS

OF 40 CFR SECTION 125.86 (B) (2) (IV)

4. REASONS FOR THE REQUEST

REQUESTOR ASKS THAT THE DECISION OF EPA

TO EXTEND THE EXPIRATION OF NPDES PERMIT

CA010991 BE SET ASIDE FOR THE FOLLOWING

REASONS:

1. THE 80 DAY NOTICE PRIOR TO HEARING (SEC-

TION 125.82(A)) AND THE 80 DAY PERIOD FOR

PUBLIC INPUT MANDATED BY 40 CFR SECTION

125.32(B) (1) WERE NOT COMPLIED WITH THERE-

26a

FORE DENYING REQUESTOR AN OPPORTUNITY

TO BE HEARD.

2. THE PROCEDURES FOR ISSUANCE OF AN

NPDES PERMIT PURSUANT TO 40 CFR SECTION

125.2 ET SEQ. WERE NOT FOLLOWED, THERE ARE

NO PROVISIONS IN THE REGULATIONS FOR THE

EXTENSION OF THE EXPIRATION OF AN NPDES

PERMIT.

5. ISSUES TO BE RAISED

REQUESTOR WOULD RAISE THE FOLLOWING

ISSUES:

1. WHETHER THE REQUIREMENTS OF THE PER-

MIT SHOULD BE MODIFIED IN THAT THE PROJECT

THAT IS THE SUBJECT OF THE COMPLIANCE

SCHEDULE SET FORTH IN NPDES PERMIT

CA010991 IS BEING EVALUATED IN AN EIS BY THE

EPA PURSUANT TO THE REQUIREMENTS OF

NEPA, THE COMPLIANCE SCHEDULE SHOULD NOT

BE MANDATED IN AN NPDES PERMIT UNTIL THE

NEPA STUDY IS COMPLETED; AND

2. WHETHER THE PROCEDURES USED AND THE

RECORD DEVELOPED WERE ADEQUATE ISSU-

ANCE OF AN NPDES PERMIT.

REQUESTOR WOULD PROPOSE TO SET ASIDE THE

ACTION TAKEN TO EXTEND THE EXPIRATION DATE

OF NPDES PERMIT CA010991 AND PROVIDE FOR FULL

ADMINISTRATIVE PROCEDURES REQUIRED FOR THE

ISSUANCE OF AN NPDES PERMIT.

DONALD M PACH ATTORNEY FOR JOHN B KILROY

SR. PACIFIC LEGAL FOUNDATION 455 CAPITOL MALL

SUITE 465 SACRAMENTO CA 968]4

27a

APPENDIX C

UNITED STATES

ENVIRONMENTAL PROTECTION AGENCY

REGION IX

100 California Street

San Francisco, California 94111

In Reply E-2

Refer to: HEA-1

CERTIFIED MAIL NO. 474688

RETURN RECEIPT REQUESTED

June 23, 1977

Donald M. Pach, Esq.

Pacific Legal Foundation

455 Capitol Mall, Suite 465

Sacramento, CA 95814

Subject: NPDES Permit No. CA0109991—

City of Los Angeles.

Dear Mr. Pach:

We are in receipt of your telegram dated June 13,

1977, requesting an adjudicatory hearing on the above

subject permit on behalf of John B. Kilroy, Sr.

I have determined that the request does not set forth

material issues of fact relevant to the question of

whether a permit should be issued or modified, and

that the request does not meet the requirements of

28a

40 CFR 125.36(c) (1) (ii). I therefore deny the re-

quest, and my final determination remains in effect.

The request does, however, present issues of law re-

lating to interpretations of regulations promulgated

under the Federal Water Pollution Control Act which

should be referred to the General Counsel for deci-

sion pursuant to 40 CFR 125.36(m) (3). Therefore,

I am certifying to the General Counsel for decision the

issues of law raised by your request. A copy of my

certification is enclosed.

Sincerely,

Original signed by

R. L. O’Connell

for Paul De Falco, Jr.

Regional Administrator

Enclosure

ec: City of Los Angeles (w/enc.)

29a

UNITED STATES

ENVIRONMENTAL PROTECTION AGENCY

REGION IX

Docket No. [X-WP-77-4

IN THE MATTER OF:

National Pollutant Discharge

Elimination System (NPDES)

Permit No. CA0109991 Issued

to CITY oF LoS ANGELES

CERTIFICATION OF ISSUES OF LAW

A request for an adjudicatory hearing, dated June

13, 1977, was received from Donald M. Pach, on be-

half of John B. Kilroy, Sr., that raises the following

issues of law which require a decision of the Gen-

eral Counsel pursuant to 40 CFR 125.36(m) (3):

1. Must EPA conduct an informal public

hearing prior to taking action to extend the ex-

piration date of an NPDES permit where public

notice of the proposed action was published more

than 30 days in advance of the action?

2. Must a detailed factual record be developed

prior to modification of an NPDES permit where

the only modification made to the permit is the

extension of the permit’s expiration date?

3. May the expiration date of'an NPDES per-

mit be extended where a project covered by the

compliance schedule of the permit is being evalu-

ated by EPA in an Environmental Impact State-

ment for the purpose of determining whether a

80a

grant should be made to assist in the construction

of the project?

Pursuant to 40 CFR 125.36(m) (2), each party

may file a brief with the General Counsel within

twenty (20) days of the date of this certification. The

briefs shall contain:

(1) A subject index of the issues presented

in the brief, with page references, and a table

of statutes, cases, textbooks, and other material

cited, with page references;

(2) A concise statement of each referred is-

sue;

(3) A discussion of each issue, including argu-

ments in favor of the referring party’s position

and citations to cases, statutes, legislative history,

etc., tending to support such positions; and

(4) A recommended decision for each referred

issue. : ’

Forwarded herewith is a copy of the record of pro-

cedures and action taken in the modification of the

subject permit by extending the termination date.

Dated: June 23, 1977

/s/ R. L. O’Connell

for PAUL DEFALCO, JR.

Regiona! Administrator

3la

APPENDIX D

UNITED STATES

ENVIRONMENTAL PROTECTION AGENCY

Docket No. [X-WP-77-4

IN THE MATTER OF

National Pollutant Discharge

Elimination System (NPDES)

Permit No. CA0109991 Issued

To City of Los Angeles

BRIEF OF PACIFIC LEGAL FOUNDATION ON

BEHALF OF JOHN B. KILROY ON CERTI-

FIED QUESTIONS TO GENERAL COUNSEL

[Table of Contents and Authorities Omitted]

INTRODUCTION

The issues of law certified to the General Counsel

by the Environmental Protection Agency (EPA) Re-

gional Administrator of Region IX are not an accu-

rate reflection of the issues which would have been

raised at the adjudicatory hearing requested pursu-

ant to 40 C.F.R. § 125.36. Requestor of the adjudi-

catory hearing, John B. Kilroy, proposed to raise

two basic issues:

1. Whether there is authority under either the

applicable statutes or regulations to extend the ex-

piration date of an existing National Pollutant Dis-

charge Elimination System (NPDES) permit, or

whether the action taken by EPA with regard to

Permit No. CA0109991 was the issuance of a new

permit; and

32a

2. Whether EPA should require that a permittee

go forward with a project contained in an NPDES

compliance schedule when that project is being

studied in an environmental impact statement (EIS)

pursuant to the requirements of the National Envi-

ronmental Policy Act (NEPA), 42 U.S.C. §§ 4832,

et seq., and Federal Water Pollution Control Act

(FWPCA), 33 U.S.C. §§ 1281, et seg. (See Attach-

ment A.)

ISSUES PRESENTED

John B. Kilroy (hereinafter requestor) will ad-

dress, in part, issues two and three certified to the

General Counsel. Issue two is as follows:

“2. Must a detailed factual record be de-

veleoped prior to modification of an NPDES per-

mit where the only modification made to the

permit is the extension of the permit’s expira-

tion date?”

In issue two, the Regional Administrator makes

two assumptions: (1) that the extension of the expi-

ration date of an NPDES permit is authorized, and

(2) that it could be construed as a modification. Re-

questor denies the validity of both assumptions and

will present his arguments in I and II below.

Issue three certified to the General Counsel is as

follows:

“3. May the expiration date of an NPDES

permit be extended where a project covered by

the compliance schedule of the permit is being

33a

evaluated by EPA in an Environmental Im-

pact Statement for the purpose of determining

whether a grant should be made to assist in the

construction of the project?”

For clarity, requestor will divide his discussion of

issue three into two parts. First, may the expiration

date of an NPDES permit be extended (i.e., without

issuing a new permit) and second, should a project

which is the subject of an EIS be mandated in a

compliance schedule of an NPDES permit which is

being newly issued where such schedule would re-

quire implementation prior to completion of the

NEPA-EIS process? These issues will be addressed

in arguments III and IV below.

ARGUMENT

I

EPA HAS NO AUTHORITY TO EXTEND

THE EXPRIATION DATE OF AN NPDES

PERMIT

Pursuant to 33 U.S.C. §1342(a)(2), “the

[NPDES] permit program of the Administrator. . .

shall be subject to the same terms, conditions, and

requirements as ... permits issued . . . under sub-

section (b) ....” Subsection (b) is entitled “State

permit programs.” The Regional Administrator is

subject to the requirements set out in subsection (b)

and the regulations adopted pursuant to the appli-

cable statutes.

34a

Title 33, United States Code, § 1342(b) (1) (B)

provides that NPDES permits are to be for fixed

terms not exceeding five years. The regulations

adopted pursuant to this authority, as set out in 40

C.F.R. §§ 124.517 and 125.25(c)*, make it clear that

it is the intent of EPA to issue an NPDES permit

for a fixed term. The use of “term” in this context

is separate and distinct from the use of the word

“terms” found in other parts of the applicable stat-

utes and regulations. As used to describe the dura-

tion of an NPDES permit, “fixed term” is clear and

unambiguous. The date of issuance will fix the be-

ginning date and the ending date will fix the expira-

tion date. Upon the expiration of the fixed term, set

forth in the permit pursuant to the mandates of 33

U.S.C. § 1842(b) and 40 C.F.R. §§ 124.51 and 125.25

(c), the permit will no longer be in force. To con-

tinue to discharge after the expiration date of the

fixed term, the permittee must apply for issuance of

a new permit.*

140 C.F.R. § 124.51. “Duration of issued NPDES permits.”

“Any State or interstate agency participating in the NPDES

shall provide that each issued NPDES permit shall have a

fixed term not to exceed 5 years.”

240 C.F.R. § 125.25(c). “Duration of permits.”

“(c) All permits will be for a fixed term.”

3 See Attachment B hereto, correspondence from Stanley

Leibowitz, Chief, General Services Section, EPA, to Donald

Tillman, Los Angeles City Engineer, regarding the expiration

of Permit No. CA0109991 and the necessity to obtain a new

permit and Donald Tillman’s response to that communication.

35a

EPA is bound by both the applicable statutes and

regulations. Both the statutes and regulations man-

date that an NPDES permit be for a fixed term,

which by definition precludes EPA from extending

the expiration date of an existing permit. An exam-

ple would be appropriate to ilustrate the abuses

which could result if EPA were allowed merely to

extend the expiration date of a permit. Suppose that

an NPDES permit were issued for a 90 day fixed

term. The public would not be too alarmed at such

a short duration, and there would probably be no

challenge to the pollutants being discharged. If at

the end of the 90 day period, EPA extended the ex-

piration date for four years and nine months, which

period would not exceed the maximum duration of a

permit, then the public could only contest the exten-

sion of the permit and not the limitations, restric-

tions, conditions, and other terms in the permit.* It

was not the intent of Congress to allow for this type

of absurd situation to arise, and yet, if the Regional

Administrator’s interpretation of his action is al-

lowed to stand it is possible for it to occur. It is

recommended that the General Counsel issue a deci-

sion that EPA is without authority to extend the

expiration date of an existing NPDES permit be-

cause of the clear and unambiguous language of the

applicable statutes and regulations and the possi-

bility for excessive abuses on the part of EPA.

*40 C.F.R. § 125.36, Adjudicatory Hearings.

36a

II

THE ACTION TAKEN BY THE REGIONAL

ADMINISTRATOR CANNOT BE CONSTRU-

ED AS A MODIFICATION TO AN ISSUED

NPDES PERMIT

In question two* certified to the General Counsel,

the position taken by the Regional Administrator is

that the extension of the expiration date of an

NPDES permit is a modification of the permit. In-

corporating Argument I above, it is contended that

the extention of an expiration date cannot be a mod-

ification within the framework of the applicable

statutes or regulations.

The statutes * are definite as to what modifications

may be made to an issued NPDES permit. Subpart

5 “Must a detailed factual record be developed prior to modi-

fication of an NPDES permit where the only modification

made to the permit is the extention of the permit’s expiration

date?”

* Title 33, United States Code, § 1811(c) provides:

““(c) The Administrator may modify the requirements of

subsection (b)(2)(A) of this section with respect to any

point source for which a permit application is filed after

July 1, 1977, upon a showing by the owner or operator of

such point source satisfactory to the Administrator that such

modified requirements (1) will represent the maximum use

of technology within the econmoic capability of the owner or

operator; and (2) will result in reasonable further progress

toward the elimination of the discharge of pollutants.”

Title 33, United States Code, § 1342 (b) (1) (C) (iii) provides

that a permit can be terminated or modified for:

“(iii) change in any condition that requires either a

temporary or permanent reduction or elimination of the per-

mitted discharge.” See also 33 U.S.C. §§ 1842 (b) (1) (C) (i),

1842 (b) (1) (C) (ii).

37a

C (40 C.F.R. §§ 125.21-125.28) of the regulations

adopted by EPA sets forth the terms and conditions

of an NPDES permit. The regulations allow for

modification of effluent limitations (40 C.F.R.

§ 125.28), treatment standards (40 C.F.R. § 125.28

(a) (2)), and schedules of compliance (40 C.F.R.

§ 125.23(d)), which are the terms and conditions

upon which an NPDES permit will be issued for a

fixed term. It would be anomalous indeed for the

expiration date of a permit to be modifiable in the

face of the statutes and regulations which provide

for issuance of a new permit upon expiration and

the statutes and regulations which set out the specific

terms and conditions of a permit which are modifi-

able. The expiration date is conspicuously omitted

as a modifiable term.

It is urged that the General Counsel determine that

the expiration date of an NPDES permit is not sub-

ject to modification. By definition the expiration date

must be fixed and is thus not modifiable. Upon ex-

piration, issuance of a new permit is the statutorily

and regulatory prescribed method of action.

III

THE ACTION TAKEN BY THE REGIONAL

ADMINISTRATOR WAS THE ISSUANCE OF

AN NPDES PERMIT

Incorporating the above arguments, the action

taken by the Regional Administrator regarding

NPDES Permit No. CA0109991 was the issuance of

88a

a new NPDES permit. This conclusion is supported

by the provisions of 40 C.F.R. § 125.2(a)(1). The

regulations in 40 C.F.R. § 125 “do not prescribe pol-

icy or procedures for the issuance of permits by States

under programs approved by the Administrator. .. .”

(40 C.F.R. §125.2(b).) NPDES Permit No.

CA0109991 was issued by EPA and it appears that

the position taken by EPA is that 40 C.F.R. § 125

would apply. (See Attachment B.)

It is recommended that the General Counsel de-

termine that the action taken by the Regional Ad-

ministrator was to issue a new NPDES permit for

discharges of pollutants from the Hyperion Treat-

ment Plant previously permitted under NPDES Per-

mit No. CA0i09991 which expired on February 1,

1977. As such, the Administrator failed to comply

with applicable regulations and erroneously denied

John B. Kilroy’s petition for an adjudicatory hearing.

IV

A PERMITTEE SHOULD NOT BE FORCED

TO IMPLEMENT A PROJECT CONTAINED

IN A COMPLIANCE SCHEDULE WHEN

THAT PROJECT IS BEING STUDIED IN AN

EIS

NPDES Permit No. CA0109991, issued to the City

of Los Angeles for the Hyperion Treatment Plant, in-

cludes in the schedule of compliance an interim sludge

management project which is to be evaluated in an

EIS being prepared by EPA in compliance with the

39a

requirements of NEPA and FWPCA. (See Attach-

ment C at 3-4.) If EPA continues to mandate the

interim sludge management project and the EIS pre-

pared for the project indicates another preferred,

more environmentally sound alternative, an irrever-

sible commitment of resources may occur and the

NEPA process rendered purely academic, contrary to

the intent and policies of NEPA.

On June 3, 1977, the State Water Resources Con-

trol Board of California determined that the Second-

ary Treatment Standards set pursuant to Pub. L.

No. 92-500 would require large expenditures for no

measurable water quality benefit. (See Attachment

D at 2.) The interim sludge management project for

the Hyperion Treatment Plant is primarily based

on requirements set pursuant to EPA’s interpreta-

tion of 33 U.S.C. § 1311(b)(1)(B). If the primary

basis for a project is determined in an EIS to be en-

vironmentally unsound, the project’s adverse environ-

mental impacts should be mitigated, where feasible.

In the instant case, evidence has been presented which

casts doubt on the propriety of going forward with

this project. Moreover, implementation of the project

prior to completion of the NEPA process forecloses

any opportunity to expeditiously mitigate any nega-

tive environmental consequences. It is incumbent

upon EPA to avoid taking action which could cause

an irreversible and irretrievable loss of resources.

There is the absence of any compelling need to im-

plement the interim sludge management project prior

to completion of the NEPA process. In Flint Ridge

40a

v. Scenic Rivers Association, —— US. —, 8

E.R.C. 2137 (1976), the Supreme Court held that

where statutory limitations preclude preparation of

an EIS, then the absence of an EIS will not bar an

agency action. In the instant case there is no statu-

tory or regulatory time limit on implementation of

the project. NEPA requires that all federal agencies

comply “to the fullest extent possible” with the direc-

tives of 42 U.S.C. § 4832. Here, EPA has not com-

plied with the dictates of NEPA. An interim project

is being mandated which could cause an irreversible

and irretrievable commitment of resources when there

is no stautory time limit to preclude the prior prep-

aration of an EIS and full evaluation of each al-

ternative, including no project.

Requestor recommends that General Counsel de-

termine that a project which is being studied in an

EIS should not be mandated until the EIS has been

completed and comments received.

CONCLUSION

There is no statutory authority for the Regional

Administrator to extend the expiration date of an

NPDES permit, or to treat the extension of the ex-

piration date as a modification. The statutes and

regulations unambiguously provide for issuance of

a permit for a fixed term, and upon expiration of the

term for the issuance of a new permit.

The Regional Administrator has not complied to

the fullest extent possible with the dictates of NEPA.

4la

The potential irreparable and irreversible commit-

ment of resources mandated by the implementation of

the interim sludge project prior to completion of an

KIS defies both logic and the law. It is recommended

that the General Counsel adopt this position and pro-

vide guidance for future disputes which may arise

under FWPCA.

DATED: July 12, 1977.

Respectfully submitted,

RONALD A. ZUMBRUN

ROBERT K. BEST

THOMAS E. HoOKANO

By /s/ Thomas E. Hookano

THOMAS E. HoOKANO

Attorneys for Requestor

Pacific Legal Foundation

455 Capitol Mall, Suite 465

Sacramento, California 95814

Telephone: (916) 444-0154

[Attachments Omitted]

42a

APPENDIX E

UNITED STATES

ENVIRONMENTAL PROTECTION AGENCY

Washington, D.C. 20460

DECISION OF THE GENERAL COUNSEL

ON MATTERS OF LAW PURSUANT TO

40 C.F.R. SECTION 125.36(m)

No. 66

In the matter of National Pollutant Discharge

Elimination System Permit for the City of Los An-

geles, CA0109991, the Regional Administrator has

certified three issue of law to the Office of General

Counsel for decision pursuant to 40 C.F.R. Section

125.36(m). The parties, having had the opportunity

to provide written briefs in support of their re-

spective positions,’ present the following issues.

ISSUES OF LAW NO. I AND II

Questions Presented

1. Must EPA conduct an informal public hearing

prior to taking action to extend the expiration date

of an NPDES permit where public notice of the

proposed action was published more than 30 days in

advance of the action?

1 Briefs were filed by EPA Region IX and by the Pacific

Legal Foundation on Léhalf of John B. Kilroy.

43a

2. Must a detailed factual record be developed prior

to modification of an NPDES permit where the only

modification made to the permit is the extension of

the permit’s expiration date? ’

Decision

EPA has the authority to extend the expiration

date of an NPDES permit by modification of the per-

mit. In any permit modification proceeding an op-

portunity for public hearing must be provided, but

a hearing must be held only if the Regional Adminis-

trator finds that there is a significant degree of pub-

lic interest in the permit modification. Since Kilroy

does not specifically argue that the record supporting

the permit modification is inadequate this question

need not be addressed.

Discussion

On April 27, 1977 a notice of a proposed modifica-

tion of the NPDES permit issued to the City of Los

Angeles for its Hyperion sewage treatment plant was

published in the Los Angeles Times. The proposed

change was to the expiration date of the permit,

which was then June 30, 1977. On June 2, 1977, the

2 Kilroy urges that I address the following issue:

Whether there is authority under the applicable statutes

or regulations to extend 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. CAO109991 was the issuance

of a new permit.

44a

permit was modified to extend its expiration date to

December 17, 1979. No requests for a public hear-

ing prior to modification of the permit pursuant

to 40 C.F.R. § 125.34 were made. On June 13, #77,

John B. Kilroy requested an adjudicatory hearing

pursuant to 40 C.F.R. § 125.36. That request was

denied but three issues of law were referred to the

General Counsel.

Kilroy is correct in arguing that federally-issued

NPDES permits, no less than State-issued permits,

are subject to the requirement that they be for fixed

terms not exceeding five years. FWPCA § 402(b) (1)

(B) read in conjunction with § 402(a) (3)), 40 CFR

§ 125.25. But this does not resolve the questions he

raises. This requirement of the statute, and EPA

regulations, does not forbid modification of the ex-

piration date of a permit, so long as the permit, as

modified, as a fixed expiration date and that date

is no more than five years from the date it was es-

tablished. The purpose of § 402(b)(1)(B) is clear;

to insure that at intervals not greater than five years

the terms and conditions of a permit be subject to

reevaluation by the Agency (or State) and that the

public have an opportunity to participate in this re-

evaluation.* This purpose is not compromised by a

modification of an expiration date such as occurred

here, since in no event will more than five years elapse

8’ While the proposed change in a permit may be only to its

expiration date, any issue relevant to the extension, such

as whether the requirements placed on the discharger should

be modified, could be raised.

45a

between opportunities for the Agency, and the pub-

lic, to decide whether the requirements placed on the

discharger should be changed.*

Kilroy also argues that the FWPCA and EPA reg-

ulations provide authority to modify only certain pro-

visions of a permit and do not provide such authority

with regard to the expiration date. But the Act, in

§ 402(b) (1) (C), says only that permits must be sub-

ject to modification for cause, without restricting the

power to modify to any particular terms of a permit.

Similarly, the three specific causes for modification set

out in § 402(b)(1)(C) are clearly inclusive, rather

than exclusive. And 40 C.F.R. § 125.22(a) (2) pro-

vides that a permit may, for cause, be modified “in

whole or in part”. Nothing in the statute or regul-

lations expressly or implicitly forbids modification of

expiration dates of permits.°

* Kilroy argues that the ability to modify the expiration

date can be abused and used to frustrate the public participa-

tion requirements of the Act. Kilroy argues primarily in terms

of hypothetical situations, however, and has failed to show

that the practical ability of the public to participate in this

particular proceeding was infringed. Whether or not abuse

may occur in another situation must await another day.

5 The provisions of 40 C.F.R. § 125.23(d) cover a particular

situation when permits may be modified but do not in any

way limit the Agency’s ability to modify other terms and

conditions. Section 125.28, characterized by Kilroy as a permit

modification provision, is actually a provision for adjustment

of effluent limitations or standards to reflect, on a case by

case basis, credit for pollutants in intake water. It serves the

function, therefore, of defining the terms of a permit, rather

than of changing them subsequent to permit issuance. Sec-

tion 301(c) of the Act serves a similar function with respect

46a

With regard to any permit modification, including

a modification of an expiration date, the Agency is

required to provide public notice of its intent to

modify the permit and must provide an opportunity

for a public hearing See 40 CFR §§ 125.22(a) (2),

125.32, 125.34. In addition, any interested person

may request an adjudicatory hearing pursuant to

§ 125.36. Thus, the right of the public to be periodic-

ally apprised of the status of a discharger’s permit

and to participate in the permitting process is amply

assured. But a public hearing need not necessarily be

held. Section 402(b)(3) of the Act provides only

that the public “receive notice of each application for

a permit and... an opportunity for a public hearing

before a ruling on each application. ...” (emphasis

added.)* This is precisely what the Agency’s regula-

tions provide. Section 125.32 requires public notice of

the proposed issuance or modification of a permit

while § 125.34 of EPA’s NPDES regulations provides

that the Regional Administrator may hold a public

hearing when he determines either that there is a

significant degree of public interest in a permit

(§ 125.34(a)) or when he determines that a hear-

ing may provide useful information (§ 125.34(d) ).

At least where there is little or no public interest ex-

to defining BATEA for dischargers who lack the economic

capability to meet the national effluent limitations guidelines.

Section 301(c) variances will not modify permits, but will be

relevant to the requirements to be established in permits

which will expire on or after July 1, 1983.

* Cf. The Administrative Procedure Act, 5 U.S.C. §§ 553 (c),

554 (a), 554(c).

47a

pressed after public notice of a proposed modification

the question of whether to hold a public hearing prior

to modification of the permit is wholly discretionary.

Finally, it may be observed that Kilroy has failed

to show that his legal arguments have any practical

implications. Whether EPA modified the old permit

or issued a new one has not been shown to have any

bearing on the public participation procedures to be

followed. In either case public notice would be given

and opportunity for public and/or adjudicatory hear-

ings provided. In particular, it does not appear that

Kilroy’s own request for an adjudicatory hearing

would have had to be handled any differently.

Issue of Law No. III

Question Presented

May the expiration date of an NPDES permit be

extended where a project covered by the compliance

schedule of the permit is being evaluated by EPA in

an Environmental Impact Statement for the purpose

of determining whether a grant should be made to as-

sist in the construction of the project?”

7 Kilroy phrases the issue as:

Whether EPA should require that a permittee go for-

ward with a project contained in an NPDES compliance

schedule when that project is being studied in an environ-

mental impact statement (EIS) pursuant to the require-

ments of the National “Environmental Policy Act

(NEPA), 42 U.S.C. §§ 4332, et seq., and the Federal

Water Pollution Control Act (FWPCA), 33 U.S.C.

§ 1281, et seq.

48a

Decision

EPA has the authority to extend the expiration

date of a permit which orders a permittee to go for-

ward with a project despite the fact that the same

project is being evaluated in an Environmental Im-

pact Statement (EIS) for the purpose of determin-

ing whether a grant should be made to assist in the

project’s construction.

Discussion

The only legal obstacle to requiring Los Angeles

to proceed with the sludge management project which

Kilroy appears to raise is that it would conflict with

NEPA. But §511(c) of the FWPCA clearly pro-

vides that the EIS requirements of NEPA do not

apply to the permit at issue here. The permit for the

Hyperion plant is neither a grant of federal financial

assistance nor a permit for a new source as defined in

Section 306(a)(2) of the FWPCA. Obviously, if

NEPA does not apply to the permit issuance it does

not apply to extension of the expiration date.

Recently, in Pacific Legal Foundation v. Quarles,

No. 77-521-HP (C.D. Cal. July 20, 1977) the court,

dealing with issues raised with regard to the very

permit involved here, held that, “the language of

Section 511(c) leads to the conclusion that the EPA

can, without an EIS, order Los Angeles to build the

interim sludge disposal project while the EPA is

prevented, until it prepares an EIS, from awarding

a grant to help pay for the project.” Slip op. at 6.

49a

There thus appears to be no reason why the pen-

dency of the EIS concerning funding of the sludge

management project causes any legal problems to

arise with regard to the NPDES permit.

October 18, 1977

/s/ Joan Z. Bernstein

* U. S&S, GOVERNMENT PRINTING OFFICE; 1979 2e9411 364