Petition — Union Electric Co. v. Environmental Protection Agency

IN THE

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1978

UNION ELECTRIC COMPANY,

Petitioner,

Vv

ENVIRONMENTAL PROTECTION AGENCY,

Respondent.

PETITION FOR WRIT OF CERTIORARI

To the United States Court of Appeals

for the Eighth Circuit

WILLIAM. FERRELL

314 North Broadway

St. Louis, Missouri 63102

Counsel for Petitioner

STEWART W. SMITH, JR. and

SCHLAFLY, GRIESEDIECK, FERRELL & TOFT

Of Counsel

St. Louis Law Printing Co.. Inc.. 812 Olive Street 63101 314-231-4477

—p-

INDEX

Page

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ED ob vic be Sh ates Pea e arose ee Gok’ Viveeke as 2

I SED oe a Lace Vb pb'e 02 .0-0.0:0 80-6 6 0046's 2

Constitutional and Statutory Provisions ............... 2

LC h 5 Au yg a's'y care e st sus vescees 3

Reasons for Granting the Writ ................0.5. Pete

LC Ela iis A's 65 6.5-0's\0's &. 0-600 9-5.008 606 on ae

see Lh at" p'g:d a 3.9.0 he bud bo 60 4,060 #0 A-1

CNC a dae ck eh swe W deco es eocrveens A-19

i ar Sy Se a er a ar A-20

MLL Sas a ast pina sedastessdegeea A-21

Citations

Cases

Brown & Williamson Tobacco Corp. v. Engman (2nd CCA,

i975), 527 F(2) 1115, cert. denied, 427 U.S. 911, 96

a GEES EG ra Pre eee ree eae 11

Ex Parte Young, 209 U.S. 123, 28 S.Ct. 441 (1908). .2, 3, 7, 10

Hovey v. Elliott, 167 U.S. 409, 17 S.Ct. 841 (1897) ...... 13

Lioyd A. Fry Roofing Co. v. United States EPA, (8th CCA,

EN 8

Oklahoma Operating Co. v. Love, 252 U.S. 331, 40 S.Ct.

Ee SCL AGA ha oka 66 oMe vee sccdees 7

Union Electric Co. v. EPA, 427 U.S. 246, 96 S.Ct. 2518

gE Pe tee Sark: err iy See ee a a Eee 8,13

Wadley Southern Railway Co. v. Georgia, 235 U.S. 651,

Ps OEE 6 sre VG a aes CON ve bad gus ees 7,10

Constitutional and Statutory Provisions

Due Process Clause, Sth Amend. to U.S. Constitution . . . 2

et es UIE. i'n ah he tu a Re 2

a a a a a cg 3

ee as Res eka 504 oe hd beh eecn. ree 3

Clean Air Act, as amended

Section 110(a)(1) and (2) (42 U.S.C, Sections 7410(a)

PS CA ah peg We FON 4 4-6 wale 0 20 63 11

RR EE NS re 4

meee RRs OO) OME GE) onc mace cc cccccccas 3

ED Wie cree Pe eat od'cb sp bbcbe oben s 4

Oe Nels ok ko KK Oe se Kole 08 4,8, 12

EEE EO ee

I Oe a ite oe ey 5

As ot ke ere es et 9

Report of House Committee

Report No. 95-294 of the House Committee on Interstate

and Foreign Commerce, Ist Session, dated May 27,

Ry a PRP TORS SOK eh ae WS Baiciee b Walaa 4a 9

Supreme Court Rules

SL Aelia a Ra a Se 7

halite y Manon acre yc eet ae 3

IN THE

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1978

Mo prea kc orecd

UNION ELECTRIC COMPANY,

Petitioner,

v

ENVIRONMENTAL PROTECTION AGENCY,

Respondent.

PETITION FOR WRIT OF CERTIORARI

To the United States Court of Appeals

for the Eighth Circuit

Petitioner Union Electric Company respectfully prays that

a Writ of Certiorari be issued to review the amended judgment

of the United States Court of Appeals for the Eighth Circuit

entered in this case as of February 20, 1979. A Petition for

Rehearing With Suggestion That the Case Be Reheard by the

Court En Banc was denied on March 15, 1979.

OPINION BELOW

The opinion of the United States Court of Appeals for the

Eighth Circuit, which was entered on February 20, 1979, is re-

we Maing

ported at 593 F(2) 299 (advance sheet of April 30, 1979) and

is printed as Appendix A.

JURISDICTION

The amended judgment of the United States Court of Appeals

for the Eighth Circuit, which was entered as of February 20,

1979, is printed as Appendix B; and Union Electric Company's

Petition for Rehearing With Suggestion That the Case Be Re-

heard by the Court En Bane was denied by an Order entered

March 15, 1979 and printed as Appendix C. The jurisdiction

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

QUESTION PRESENTED

Does the due process clause of the Fifth Amendment to the

United States Constitution, as interpreted and applied by this

Court in Ex parte Young, 209 U.S. 123, 28 S.Ct. 441 (1908 )

and subsequent decisions, protect a person from incurring the

risk of severe and confiscatory civil and criminal penalties for

violations of SO, provisions in the Missouri implementation

plan,' while he is legally testing the validity of the application

to him of those provisions and when his actual SO, emissions

present no danger to the public health or welfare?

CONSTITUTIONAL AND STATUTORY PROVISIONS

The Fifth Amendment to the United States Constitution says

that:

' References to such implementation plan are to the plan as a

proved by the United States Environmental Protection Agia (EPA),

“No person shall . . . be deprived of life, liberty or

property without due process of law . . .”

Section 113(a), (b) and (c) of the Clean Air Act, as

amended (42 U.S.C. Section 7413(a), (b) and (c))—the

“Act”—sets forth enforcement and penalty provisions and is,

therefore, pertinent to this petition. It is printed us Appendix D.

STATEMENT OF THE CASE

In this suit, which was filed in the Federal District Court at

St. Louis, Missouri, on February 8, 1978, petitioner Union Elec-

tric Company sought a declaratory judgment and a preliminary

and permanent injunction prvhibiting the EPA from enforcing

against the Company and its responsible corporate officers SO,

emission regulations in the implementation plan during the time

the Company was seeking an appropriate revision to that part

of the plan.2. The Company asserted that the requested relief

stemmed from the due process clause in the Fifth Amendment

to the United States Constitution, as interpreted by this Court in

Ex parte Young, 209 U.S. 123, 28 S.Ct. 441 (1908) and later

decisions. Consequently jurisdiction of the Federal District Court

was properly based on the Federal Question Act (28 U.S.C. Sec.

1331) and the Declaratory Judgment Act (28 U.S.C. Sec.

2201).

The Complaint alleges that the implementation plan’s SO,

emission regulation, which applies to the Company's Labadie

2 Pursuant to Supreme Court Rule 21.1 and by a letter dated May

4, 1979, counsel for petitioner Union Electric Company requested

the Clerk of the United States Court of Appeals for the Eighth Cir-

cuit to certify and transmit the record in this case to the Supreme

Court. Such counsel was advised by a letter dated May 8, 1978

from said Clerk that the Clerk of the Supreme Court had directed

him not to forward such Record unless and until so requested by the

Supreme Court. In view of the foregoing, this Petition does not in-

clude citations to such Record.

=e ee

and Sioux power plants, is more stringent than necessary to

maintain Federal (and Missouri) Ambient Air Quality Stand-

ards; and it further alleges that more relaxed emission regula-

tions would permit the maintenance of those standards. In sup-

port of such allegations, the Complaint states that the Company

and the EPA itself had on several occasions determined that the

actual SO, emissions from those plants would not prevent the

maintenance of such Air Quality Standards" and that a relaxa-

tion of the SO, emission regulations by the Missouri Air Com-

mission would be proper.*

As the Complaint alleged, on January 13, 1978, the EPA

issued to the Company a Notice of violations of the Clean Air

Act, as amended. This Notice which was sent pursuant to

Section 113(a)(1) of the Act, listed four Labadie units and two

Sioux units as in violation of this unduly stringent SO, regula-

tion. The Notice pointed out that if any of these violations con-

tinued more than 30 days after such Notice the EPA was re-

quired by the Act to commence a civil suit for a permanent or

temporary injunction or to assess a civil penalty of not more

than $25,000 per day of violation or both. (See Section 113(b)

of the Act).°

Section 113(c)(1) of the Act also provides criminal penalties

for any person who knowingly continues a violation more than

30 days after the EPA Notice. Since there was no question

* One of the EPA determinations had been made in response to an

Act of Congress—the Energy Supply and Environmental Coordina-

tion Act of 1974, which amended Section 110(a)(3)(B) of the

Clean Air Act.

* At the hearing on the preliminary injunction, the Company pre-

sented evidence in support of these allegations, as well as: evidence

in support of the other allegations of the Complaint.

5 While this “requirement of a civil suit extends only to a “major

stationary source” everyone agrees that Labadie and Sioux are major

stationary sources (See Appendix A, p. A-9).

wa

|

but that Union Electric officers knew the Company's Labadie

and Sioux plants violated the emission regulation, the Company

and its responsible corporate officers* would be subject to such

criminal penalties, if any violation so continued.

The criminal penalties for the first offense are a fine of up to

$25,000 per day of violation or imprisonment for up to one

year or both. After the first conviction the fine goes to $50,000

and imprisonment to two years.‘

On February 3, 1978, the EPA indicated in a conference

with Union Electric personnel that it would commence civil

enforcement proceedings without awaiting the result of legal

proceedings, which the Company was then, and for over a

year had been, pursuing for the purpose of obtaining an ap-

propriate revision of the implementation plan.*

The Company alleged in its Complaint that it was physically

impossible to discontinue such violations within the 30 day

period or a considerable time thereafter without shutting down

the Labadie and Sioux plants." The shutting down of those

plants would result in dropping over 50% of the Company's

base electrical load and would be an enormous hardship to the

people of the St. Louis Metropolitan Area. Additionally, it

would constitute a grave danger to the entire Mid-west.

® Section 113(c)(3) of the Act says that the term “person” insofar

as criminal penalties are concerned, includes any “responsible cor-

porate officer.’ As stated in the Complaint, no Union Electric officers

were joined, since no one knew the scope of the phrase “responsible

corporate officer”. However, an offer was there made to join the

Company's officers as party plaintiffs.

* Section 113(c)(1) of the Act.

* See Appendix A, p. A-9.

” While the Court of Appeals opinion (Appendix A, p. A-10) gen-

crally covers these allegations, it failed to mention the allegation that

FGD equipment is not a shelf item and that its installation requires

about five years.

=

Since the only choice the Company and its. responsible offi-

cers had was to bring about this catastrophe or run the risk

of the severe civil and criminal penalties we have mentioned,

the Company sought a declaratory judgment and injunction

prohibiting EPA enforcement while it was pursuing (through

administrative and, if need be judicial, proceedings) an appro-

priate revision to the implementation plan. And as we men-

tioned earlier, no question of public health was involved since

the Air Standards were then being, and would continue to be,

maintained regardless of the fact that the Company's Labadie

and Sioux plani» were not meeting the implementation plan

regulation.

The Company alleged irreparable injury and inadequacy of

legal remedies and it Sought and obtained a preliminary in-

junction, limited, however, to State proceedings. But that pre-

liminary injunction no longer constitutes the only aspect of this

case, because in addition to reversing such injunction the opinion

of the 8th Circuit directed (Appendix A, p. A-3) and its amended

judgment ordered (Appendix B) the dismissal of the entire Com-

plaint. No doubt that dismissal was occasioned by the fact that

the 8th Circuit did not consider the Complaint as affording any

basis for relief. Our petition for certiorari seeks review of this

amended judgment of the 8th Circuit.

REASONS FOR GRANTING THE WRIT

We respectfully submit that the requested writ should be

granted because the Court of Appeals decided the federal ques-

tion presented to it in a way in conflict with applicable deci-

sions of this Court.'° The pertinent federal question is whether

the due process clause in the Fifth Amendment to the United

States Constitution protects a person from incurring the risk

of severe and confiscatory civil and criminal penalties as a con-

dition to legally testing the validity of the application to him

of federal administrative regulations. And as we previously

pointed out, the Ambient Air Standards are being and will con-

tinue to be maintained. Thus no one could rightly claim that

the public health or welfare would be endangered during the

testing period.

We submit that the decision of this Court in Ex Parte Young,

209 U.S. 123, 28 S.Ct. 441 (1908) and its later decisions

approving the principle there established'' squarely hold that

a person is constitutionally so protected. The decision of the

Court of Appeals in the instant case is in conflict with the

Young decision and abrogates the principle there established.

We respectfully submit that if a constitutional principle, which

has been established by this Court, is to be abrogated or modi-

fied it should be done by this Court, not by a Court of Appeals.

Therefore we urge that the requested writ be granted.

Before returning to the precise point in this case, we believe

that an essential, though perhaps somewhat corollary, point

should be mentioned.'? We do not believe that any United

'” See Supreme Court Rule 19.1(b).

'' See, for instance Wadley Southern Railway Company v. Georgia,

235 U.S. 651, 35 S.Ct. 214, 218 (1915) and Oklahoma Operating

Co. v. Love, 252 U.S. 331, 40 Sup.Ct. 338, 340 (1920).

'2 The Court of Appeals felt the same way, since this “corollary”

point was covered in its opinion (Appendix A, pp. A-16-17).

States Court or citizen would question the proposition that it

would be unconstitutional to apply a Federal Administrative

regulation to a person, which would confiscate his property and

place him in prison, when such application was not in further-

ance of the public health or welfare. And the quest by the

Court of Appeals for a forum in which petitioner could pre-

sent and be heard on the constitutionality of such an applica-

tion constitutes a concession of this principle (See Appendix

A, pp. A-16 and 17)

While the Court of Appeals said that the proper forum was

the Federal District Court (where we already were), it further

said that the only federal proceeding in which such a consti-

tutional right could be raised, heard and considered was an

enforcement proceeding brought by the EPA.'* Its conclusion

to that effect was not based upon any decision of this Court.

To the contrary this Court stated at the end of footnote 18 of

its decision in Union Electric Company v. EPA, 427 U.S. 246,

268, 96 Sup.Ct. 2518, 2531 (1976) that it was not addressing

this question. |

The Court of Appeals conclusion as to the forum and the

nature of the proceeding for raising the constitutional question

was based on its previous decision in Lloyd A. Fry Roofing

Co. v. United States EPA (8th CCA 1977), 554 F(2) 885,

891.'* And it further attempted to buttress that conclusion by

a post-argument letter from the Department of Justice Attorney

'* The Court's intimation (Appendix A, pp. 11 and 16) that a state

court would be a proper forum can hardly be taken seriously. We do

not believe that a state court has jurisdiction to enjoin a Federal

Agency from taking enforcement action under a Federal Statute in a

Federal Court. (See Section 113(b) of the Act.)

14 The Fry case was not commenced in the District Court until

after the enforcement proceeding was underway and an EPA abate-

ment order had been issued. Thus, it could be said that Fry had

passed up his opportunity to obtain the relief we are here seeking.

Additionally the 8th Circuit did not mention in its Fry opinion the

constitutional principle on which we rely.

on Se

representing the EPA (Appendix A, p. A-17). Assuming the

propriety and strength of such authority, we read that letter as

Stating that in the opinion of the Assistant Attorney General

who wrote the letter questions of constitutionality and validity

cannot be raised in an enforcement proceeding (Appendix A,

p. A-17).'°

On this general point we mention finally the contention gin-

gerly but oft advanced that raising a constitutional point in a

Court (even though the Court is not permitted to hear or con-

sider it) satisfies constitutional requirements. Of course, this

contention is a patent denial of constitutional rights.

Turning directly to the precise point of this case, the Court

of Appeals seems to place some reliance for its holding on a

letter dated September 13, 1978, from the “Director, Enforce-

ment Division, EPA Region VII" to Petitioner.'* We respect-

fully submit that this letter is untenable from the standpoints

of purpose, scope and legality.'* As a matter of fact, the 8th

Circuit itself expressed some question about its “legality” (Ap-

pendix A, p A-16, footnote 8).

As we stated at the outset of this part of our petition, the

specific federal question is whether the Federal Constitution

'* Such an opinion would accord with the opinion stated on page

68 of the Report of the House Committee on Interstate and Foreign

Commerce concerning the Clean Air Act Amendments of 1977 (H.R.

Report 95-294, 95th Congress, Ist Session, dated May 27, 1977).

This report was also submitted to the 8th Circuit in a post-argument

letter but was not mentioned in its opinion.

'® See Appendix A, p. A-16 and its footnote 8. This letter, which,

among a number of other things, purports to grant a “limited admin-

istrative reprieve”, got into the case through the procedure of the

Assistant Attorney General attaching a copy of it to his Reply Brief

in the 8th Circuit.

“e 1" letter from personnel in an EPA regional office

could hardly we a defense to a citizen's suit brought under

Section 304(a)(2) of the Act to compel the EPA Administrator to

enforce emission standards in the implementation plan.

ee

protects a person from the risk of severe and confiscatory pen-

alties while legally testing the validity of the application to him

of Federal Administrative Regulations although during the

testing process there is no danger to the public health or wel-

fare.

The decision in Ex parte Young, 209 U.S. 123, 28 S.Ct.

441 (1908), which we consider in point, is discussed and

quoted in the Court of Appeals opinion (Appendix A, pp. A-3

and 15). Consequently we do not repeat it here. The principle

there established was subsequently explained in the decision of

Wadley Southern R. Co. v. Georgia, 235 U.S. 651, 35 S.Ct. 214,

218 (1915) as follows:

“These cases do not proceed upon the idea that there

is any want of power to prescribe penalties heavy enough

to compel obedience to administrative orders, but they

are all based upon the fundamental proposition that un-

der the Constitution penalties cannot be collected if they

operate to deter an interested party from testing the va-

lidity of legislative rates or orders legislative in their na-

ture. Their legality is not apparent on the face of such

orders, but depends upon a showing of extrinsic facts. A

statute, therefore, which imposes heavy penalties for vio-

lation of commands of an unascertained quality is, in its

nature, somewhat akin to an ex post facto law, since it

punishes for an act done when the legality of the com-

mand has not been authoritatively determined. Liability

to a penalty for violation of such orders, before their va-

lidity has been determined, would put the party affected

in a position where he himself must, at his own risk, pass

upon the question. He must either obey what may finally

be held to be a void order, or disobey what may ultimately

be held to be a lawful order. If a statute could constitu-

tionally impose heavy penalties for violation of commands

of such disputable and uncertain legality, the result in-

evitably would be that the carrier would yield to void

sia A cea

orders, rather than risk the enormous cumulative or con-

fiscatory punishment that might be imposed if they should

thereafter be declared to be valid.” (emphasis added).

The foregoing quotation is inserted because it clearly demon-

Strates (1) that this principle applies to administrative action

(with which we are here confronted) as well as to legislative

enactments, and (2) that the constitutional protection is against

the risk of incurring severe penalties, not against the necessity

or certainty that they will in fact be incurred.

The Court of Appeals distinguishes the Young decision on

the ground that Union Electric will be able to test this part of

the implementation plan in an enforcement proceeding “with-

out necessarily incurring confiscatory fines and penalties” (Ap-

pendix A, p.47$).'* The decision of the 2nd Circuit in Brown

& Williamson Tobacco Corp. v. Engman, 527 F(2) 1115

(1975), cert. denied, 426 U.S. 911, 96 S.Ct. 2237 is the only

authority the 8th Circuit cites in support of its statement.

Following the above quoted statement in the 8th Circuit

opinion, the Court says that the EPA Administrator has the

alternative of either seeking injunctive relief or imposing civil

or criminal penalties. We do not know whether the Court is

implying that injunctive relief does not come under the cate-

gory of “severe and confiscatory penalties”. But if that is its

intent, we respectfully submit that there are few things more

confiscatory than compelling a person to shut down his plant

because he is physically unable to comply with an unsupport-

able regulation."

's In the event a point were to be made about it, everyone agrees

that there was no real opportunity for a testing during the formula-

tion or EPA approval of the initial implementation plan (See Section

110(a)(1) and (2) of the Act. 42 U.S.C. Section 7410(a)(1) and

(2)). Additionally circumstances have changed materially since this

1972 approval.

' On the question of confiscation, see this Court’s discussion of

the Company's dilemma in that part of the Young opinion which is

quoted by the 8th Circuit at p. A-14 of Appendix A.

~~ Oe

However, this is not the real point of our case. The consti-

tutional protection is against the risk of incurring severe and

confiscatory fines and penalties, not the certainty or necessity

that they will in fact be assessed. Of course we all know that

for one reason or another this result may never happen, and

this Court so indicated in its Young and Wadley opinions.

wefore moving on, we believe it proper to finish that part

of the Brown & Williamson opinion from which the 8th Cir-

cuit obtained the phrase “without necessarily incurring con-

fiscatory fines and penalties.” The immediately following sen-

tence says

“The Constitutional requirement is satisfied by a statutory

scheme which provides an opportunity for testing the va-

lidity of the statutes or administrative orders without in-

curring the prospect of debilitating or confiscatory pen-

alties.”” (emphasis added—527 F(2) at p. 1119.)

We submit that this is an accurate statement of the constitu-

tional requirement and that such requirement was not met in

the instant case.

As the 8th Circuit Court of Appeals pointed out (Appendix

A, pp. A-11 and 12), Section 113(b) of the Act says that

“In determining the amount of any civil penalty to be

assessed under this subsection, the courts shall take into

consideration (in addition to other factors) the size of

the business, the economic impact of the penalty on the

business, and the seriousness of the violation.”

This possibility of judicial grace does not apply to suits for

injunctive relief or criminal penalties. Certainly such a limited,

statutory possibility of judicial grace, or even an inherent ju-

dicial grace, does not dispense with constitutional requirements.

American Jurisprudence has taught us that the Due Process

de A

clause in the Fifth Amendment applies to all three branches

of our Federal Government.*°

In conclusion we refer briefly to a part of the earlier opinion

of this Court in Union Electric Company v. EPA, 427 U.S.

246, 266-7, 96 Sup.Ct. 2518, 2529-2530 (1976). The Court

there said:

“. . . we do not hold that claims of infeasibility are

never of relevance in the formulation of an implementa-

tion plan or that sources unable to comply with emission

limitations must inevitably be shut down.

“Perhaps the most important forum for consideration

of claims of economic and technological infeasibility is

before the state agency formulating the implementation

plan. So long as the national standards are met, the State

may select whatever mix of control devices it desires,

. and industries with particular economic or technical

problems may seek special treatment in the plan itself.

. . Moreover, if the industry is not exempted from, or

accommodated by, the original plan, it may obtain a vari-

ance, as petitioner did in this case; and the variance, if

granted afier notice and a hearing, may be submitted to

the EPA as a revision of the plan. . . . Lastly, an in-

dustry denied an exemption from the implementation plan,

or denied a subsequent variance, may be able to take its

claims of economic or technological infeasibility to the

the state courts. . =

As Union Electric's complaint alleges, shortly after this sug-

gestion from the Supreme Court the Company followed it by

filing a petition with the Missouri Air Conservation Commis-

sion seeking an appropriate change in the existing SO, regula-

tions. In doing so and in pursuing such request, neither the

Company nor its responsible corporate officers believed they

2” See Hovey v. Elliot, 167 U.S. 409, 17 S. Ct. 841, 844-5 (1897).

a"

were incurring the risk of severe and confiscatory penalties,

and perhaps even being met with the prospect of continuing

their quest after fines had been imposed and collected and

while responsible corporate officers were serving penitentiary

sentences. We are confident that if any member of this Court

had thought that such a risk existed he would have mentioned

it. But none did.

CONCLUSION

For the reasons set forth above, we respectfully pray that

this Petition for Writ of Certiorari be granted.

Respectfully submitted,

WILLIAM H. FERRELL

314 North Broadway

St. Louis, Missouri 63102

Counsel for Petitioner

STEWART W. SMITH, JR.

and

SCHLAFLY, GRIESEDIECK, FERRELL

& TOFT

Of Counsel

APPENDIX

Sa

APPENDIX A

Opinion of the United States Court of Appeals for the Eighth

Circuit, Entered on February 20, 1978 and Reported

at 593 F.2d 299 (Advance Sheet of April 30, 1979)

UNION ELECTRIC COMPANY,

Appellee,

V.

ENVIRONMENTAL PROTECTION AGENCY,

Appellant.

No. 78-1357.

United States Court of Appeals,

Eighth Circuit.

Submitted Nov. 16, 1978.

Decided Feb. 20, 1979.

Rehearing and Rehearing En Banc

Denied March 15, 1979.

Environmental Protection Agency appealed from a judgment

of the United States District Court for the Eastern District of

Missouri, Roy W. Harper, Senior District Judge, 450 F.Supp.

805, which enjoined it from instituting an enforcement proceed-

ing under the Clean Air Act against an electric utility. The Court

of Appeals, Heaney, Circuit Judge, held that Environmental

Protection Agency was not subject to injunction prohibiting it

from instituting enforcement proceeding under Clean Air Act

against electric company or its officers even though the company

was actively and in good faith pursuing a revision or variance

of sulfur dioxide regulations of the Missouri Implementation

a a

Plan in administrative agencies and/or courts of State of Mis-

souri.

Reversed.

1. Health and Environment Key 28

Question of whether noncomplying polluter may continue op-

erations without change if such change is not technologically or

economically feasible may be raised in enforcement proceeding

instituted by Environmental Protection Agency under Clean Air

Act. Clean Air Act Amendments of 1977, § 101 et seq., 42

U.S.C.A. § 7401 et seq.

2. Health and Environment Key 28

Environmental Protection Agency was not subject to injunc-

tion prohibiting it from instituting enforcement proceeding under

Clean Air Act against electric company or its officers even

though company was actively and in good faith pursuing revision

or variance of sulfur dioxide regulations of Missouri Implemen-

tation Plan in administrative agencies and/or courts of State of

Missouri. Clean Air Act Amendments of 1977, § 101 et seq.,

42 U.S.C.A. § 7401 et seq.

William H. Ferrell of Schlafly, Griesedieck, Ferrell & Toft,

St. Louis, Mo., for appellee; James J. Virtel, Jerry B. Wamser,

St. Louis, Mo., on the brief.

Martin Green, Atty., Dept. of Justice, Washington, D. C.,

for appellant; Sanford Sagalkin, Deputy Asst. Atty. Gen., Wash-

ington, D. C., Robert D. Kingsland, U. S. Atty., Joseph B.

Moore, Asst. U. S. Atty., St. Louis, Mo., George R. Hyde, Bar-

bara Brandon, Attys. Dept. of Justice, Washington, D. C., on the

brief; Joan Z. Bernstein, Gen. Counsel, Ronald C. Hausmann,

a

Atty., Environmental Protection Agency, Washington, D. C.,

of counsel.

Before LAY and HEANEY, Circuit Judges, and HANSON, *

Senior District Judge.

HEANEY, Circuit Judge.

The Environmental Protection Agency appeals from a judg-

ment of the United States District Court for the Eastern District

of Missouri which enjoined the EPA from instituting an enforce-

ment proceeding under the Clean Air Act, 42 U.S.C. § 7401

et seq., against the Union Electric Company or its officers while

that Company is actively and in good faith pursuing a revision

or variance of the sulfur dioxide (SO, regulations of the Mis-

souri Implementation Plan in the administrative agencies and/or

courts of the State of Missouri. We reverse the judgment of the

District Court and direct that the complaint of Union Electric

be dismissed.

Union Electric serves the metropolitan St. Louis area and

parts of Illinois and Iowa. Its three coal-fired generating plants,

Labadie, Meramec and Sioux, are subject to the SO, and opacity

restrictions in the Missouri Implementation Plan as approved

by the EPA on May 31, 1972.

Union Electric did not seek review of the approved Missouri

Implementation Plan within thirty days as it was entitled to do

under § 307(b)(1) of the Act, 42 U.S.C. § 1857h-5(b)(1).’

* WILLIAM C. HANSON, United States Senior District Judge

for the Southern District of lowa, sitting by designation.

' tion 307(b)(1) was revised by the Clean Air Act Amend-

aaa 1977, PULL. No 95-95, 91 Stat. 685 (1977), and the new

version of this section now appears at 42 U.S.C. § 7607. We note

that in Union Electric Co. v. EPA, 427 U.S. 246, 96 S.Ct. 2518, 49

L.Ed.2d 474 (1976), the Supreme Court held that questions of eco-

nomic or technological infeasibility cannot be raised in proceedings

under this section. /d. at 265-266, 96 S.Ct. 2518.

sins a cine

It did, however, obtain one-year variances from the appropriate

state and county agencies which eased the emission limitations

affecting its three plants. The variances for two of the three

plants had expired and Union Electric was applying for exten-

sions when, on May 31, 1974, the Administrator of the EPA

notified the Company that the SO, emissions from its plants

violated the emission limitations contained in the Missouri

Implementation Plan, and advised it of the probability that en-

forcement proceedings would soon be instituted.

On August 18, 1974, Union Electric sought review in this

Court, contending that the SO, emission regulations contained

in the Missouri Implementation Plan were economically and

technologically infeasible and that its emissions were not inter-

fering with attainment or maintenance of the National Ambient

Air Quality Standards (NAAQS). We held that the claims of

infeasibility did not afford a basis for review under § 307(b) (1)

of the Act, 42 U.S.C. § 1857h-5(b)(1), and dismissed Union

Electric’s petition for lack of jurisdiction. Union Electric Co. v.

Environmental Pro. Agcy., 515 F.2d 206 (8th Cir. 1975).

Our decision was affirmed by the Supreme Court on October

6, 1975. Union Electric Co. v. EPA, 427 U.S. 246, 96 S.Ct.

2518, 49 L.Ed.2d 474 (1976). In that opinion, the Supreme

Court stated:

[C]laims of economic or technological infeasibility may not

be considered by the Administrator in evaluating a state

requirement that primary ambient air quality standards be

met in the mandatory three years. * * * [T]he States may

submit implementation plans more stringent than federal

law requires and * * *the Administrator must approve such

plans if they meet the minimum requirements of § 110(a)

(2), * * * [thus] the language of § 110(a)(2)(B) pro-

vides no basis for the Administrator ever to reject a state

implementation plan on the ground that it is economically

nig ME ie

or technologically infeasible. Accordingly, a court of ap-

peals reviewing an approved plan under § 307(b) (1) can-

not set it aside on those grounds, no matter when they are

raised.

Our conclusion is bolstered by recognition that the Amend-

ments do allow claims of technological and economic in-

feasibility to be raised in situations where consideration of

such claims will not substantially interfere with the primary

congressional purpose of prompt attainment of the national

air quality standards. Thus, we do not hold that claims of

infeasibility are never of relevance in the formulation of an

implementation plan or that sources unable to comply with

emission limitations must inevitably be shut down.

Perhaps the most important forum for consideration of

claims of economic and technological infeasibility is before

the state agency formulating the implementation plan. So

long as the national standards are met, the State may select

whatever mix of control devices it desires, * * * and in-

dustries with particular economic or technological problems

may seek special treatment in the plan itself. * * * More-

over, if the industry is not exempted from, or accommo-

dated by, the original plan, it may obtain a variance, as

petitioner did in this case; and the variance, if granted after

notice and a hearing, may be submitted to the EPA as a

revision of the plan. § 110(a)(3)(A), as amended, 88

Stat. 256, 42 U.S.C. § 1857c-5(a)(3)(A) (1970 ed.,

Supp. IV.) Lastly, an industry denied an exemption from

the implementation plan, or denied a subsequent variance,

may be able to take its claims of economic or technological

infeasibility to the state courts. See, e. g., § 203.130, Mof.]

~ Rev{.] Stat[.] (1972); Cal[.] Health & Safety Code § 39506

(1973); Paf.] Stat[.] Ann[.] Tit. 71, § 1710.41 (1962).

(Citations and footnotes omitted, and emphasis added. )

Id. at 265-267, 96 S.Ct. at 2529-30.

—_ vee

Union Electric petitioned the Supreme Court for a rehearing,

which was subsequently denied. The Regional Administrator

for EPA wrote a letter to the chairman of the Missouri Air Qual-

ity Commission, which stated in part:

The EPA has reviewed the SO, monitoring data for the

area around three UECO plants and performed some dif-

fusion modeling calculations. The results of this review and

these calculations indicates [sic] that UECO was correct in

the contention that its SO, emissions were not interfering

with the attainment or maintenance of the NAAQS for SO,.

€ * * * * * *

The EPA has no objections to your amending Regulation

X to relax the SO, emission standard for the three UECO

plants which were mentioned previously. The new SO,

emission standard’ must still provide for attainment and

maintenance of the NAAQS and this must be demonstrated

by a revision to the Control Strategy Section of the Mis-

souri State Implementation Pan.

If you decide not to follow the above course of action or

place the UECO on a compliance schedule to comply

with Regulation X, the EPA has no alternative but to issue

an Administrative Order, pursuant to Section 113 of the

Clean Air Act, which requires the UECO to comply with

the SO, emission standard specified by Regulation X. This

enforcement action is necessary because the EPA cannot

allow an emission source to violate an emission standard

in a federally approved SIP [State Implementation Plan]

unless there is an approved expeditious compliance sched-

ule.

Because of the seriousness and magnitude of this prob-

lem, it is imperative for the Missouri Air Conservation

Commission (MACC) and the EPA to be on the same wave

length. I will be looking forward to hearing from you on

a Ye

any decisions the MACC may make. If we can help, let

me know.

In September, 1976, Union Electric filed a petition with the

Missouri Air Conservation Commission for a relaxation of the

existing regulations for SO., or, in the alternative, for a variance

from existing regulations for the Company's plants. In April,

1977, the Commission tabled the Company’s request to change

the existing SO, emission limitations and denied the Company's

request for a variance for its St. Louis plant. The Commission

indicated, however, that it would consider the Company’s peti-

tion for variances for the Sioux and Labadie plants. A repre-

sentative of the EPA was present and indicated agreement with

that procedure.* Variance petitions for the Sioux and Labadie

plants were filed by the Company in September, 1977.

On November 11, 1977, the Regional Administrator of the

EPA wrote a letter to the Director of the Missouri Division of

Environmental Quality which stated, in pertinent part:

Based on inspections conducted by the Environmental

Protection Agency in the Fall of 1976, the Portage Des

Sioux and Labadie power plants are both in violation of

the SO, emission limitation in the approved Missouri Im-

plementation Plan. As you know, Union Electric petitioned

the Missouri Air Conservation Commission in the Fall of

1976 for a relaxation of the existing regulation for SO, or,

in the alternative, for a variance from the existing regula-

tion for the individual Union Electric plants. The Commis-

sion voted not to change the SO, emission limitations for

the St. Louis metropolitan area, but indicated they would

* A variance shall be considered as a revision of the State Imple-

mentation Plan and approved as such by the EPA if, in addition to

meeting procedural requirements, it will not prevent the maintenance

of National Air Quality Standards. Train v. Natural Resources Def.

Council, 421 U.S. 60, 95 S.Ct. 1470, 43 L.Ed.2d 731 (1975).

pe ae

consider the company’s petition for a variance for the Sioux

and Labadie plants.

In a letter to you dated May 31, 1977, Mr. Charles V.

Wright, Acting Regional Administrator, stated that since

the Commission had voted not to change the SO, emission

limitation in the St. Louis regulation, the State was expected

to act promptly to either bring the Union Electric plants

into compliance with the existing limitation or to adopt

and justify less stringent limitations in accordance with

Federal requirements. Five months have passed and the

State has yet to take any action with regard to the Labadie

and Sioux power plants.

I have asked my staff to inspect the Union Electric

Meremac [sic], Sioux, and Labadie plants within the next

forty-five (45) days to verify and formally document their

current status of compliance with all applicable emission

limitations in the State plan. If these sources are found to

be in violation, this office will be required to take appro-

priate action under Sections 113(a)(1) and 113(b) of

the Act in the absence of any formal action by the Com-

mission on the Union Electric variance petitions.

On January 13, 1978, the EPA notified Union Electric of its

alleged violations of the SO, and opacity standards of the Mis-

souri Implementation Plan. The EPA stated that Union Elec-

tric’s Labadie and Sioux power plants were in violation of SO,

and opacity regulations, and that the Meramec plant was in

violation of opacity regulations.* The notice invited Union Elec-

tric to a conference to discuss the violations, and set forth the

% Prior to this date, the Meramec plant started using low sulfur

coal which resulted in that plant being in compliance with the SO.

emission limitation.

ae ee

statutory responsibilities of the Agency if the matter was not re-

solved within thirty days.*

On February 3, 1978, the EPA held the conference with

Union Electric. At this conterence, the EPA indicated that it

would commence enforcement proceedings without waiting for

the decision of the Missouri Commission on the Company's re-

quest for variances for its plants. The EPA indicated that it

was required to proceed with enforcement by § 111(b) of the

Clean Air Act Amendments of 1977, 42 U.S.C. § 7413(b)

(2)(B).

On February 8, 1978, Union Electric brought this action in

federal District Court for the Eastern District of Missouri,

seeking a declaratory judgment and temporary and permanent

injunctive relief. It simultaneously sought action by the State

of Missouri on its variance requests.

' This notice stated, in relevant part:

Section 113(b) of the Clean Air Act, as extensively revised

by the recent 1977 Clean Air Act Amendments, now provides

that whenever any person violates a requirement of an applicable

implementation plan more than 30 days after having been noti-

fied of the violation, the Administrator shall, in the case of a

major stationary source, and may, in the case of any cther per-

son, commence a civil action for a permanent or temporary in-

‘ junction or to assess and recover a civil penalty of not more

than $25,000 per day of violation, or both. A major stationary

source is defined as any source which directly emits or has the

potential to emit, one hundred tons per year or more of any air

pollutant. The Administrator may also issue an order to require

immediate compliance under Section 113(a) or an order speci-

fying a delayed compliance date in accordance with specific re-

quirements of Section 113(d) of the criminal penalties in certain

cases.

In accordance with Section 113(a)(4) of the Act, we are

offering you an opportunity for a conference to discuss the vio-

lations which are the subject of this Notice. The conference will

afford Union Electric an opportunity to present information

upon the findings of violation, on the nature of the violations, on

any prior efforts made to achieve compliance or on steps the

company has taken or will take to comply with the applicable

regulations.

— A-10 —

On March 16, 1978, the District Court granted the prelim-

inary injunction requested by Union Electric 450 F.Supp. 805.

The court found: (1) that Union Electric was in the unenvi-

able position of having daily penalties for noncompliance with

the Missouri Implementation Plan accrue while it sought vari-

ances pursuant to the statutorily authorized procedure con-

tained in Mo.Ann.Stat. § 203.110 (Vernon); (2) that the failure

of Union Electric to comply with any governmental directive

could constitute an act of default under its first mortgage and

deed of trust and make its bonds callable, and that a calling

of the bonds could force it into brankruptcy; (3) that compli-

ance with the SO. regulations is not possible because compli-

ance can be achieved only by installing flue gas desulfurization

(FGD) equipment at an initial cost of $713 million and an-

nual operating costs of $137 million, that the FGD equipment

could not be relied upon to operate continually or satisfacto-

rily, that the use of low sulfur coal as an alternative was not

possible because the annual cost of such coal would be $179

million per year and would require a capital investment of

$49 million, resulting in a rate increase of twenty-five percent,

assuming that there was no reduction in the use of electricity,

and that, in any event, it was impossible to obtain a sufficient

supply of low sulfur coal to meet the SO, emission regulations;

(4) that compliance with SO. regulations could be achieved

only by a shutdown of the Union Electric plants which would

result in a widespread electrical breakdown throughout the

Midwest and drastic financial consequences to Union Electric;

(5) that the injury to the EPA was not substantial because

Union Electric’s plants did not violate the National Air Qual-

ity Standards for SO.; and (6) that Union Electric had a sub-

stantial likelihood of success on the merits because the Missouri

Air Conservation Commission had informally indicated it would

approve the variance.

The court concluded that: (1) considerations of procedural

due process required that Union Electric be permitted to seek

aos "5, . ae

a variance under state procedures for SO, emissions’ prior to

suffering a grievous loss which may result from an enforce-

ment proceeding by the EPA; (2) that it had the general equi-

table power to stay an enforcement proceeding to prevent ir-

reparable harm while Union Electric seeks the variances, in

good faith, under state procedures; and (3) that the only fair

interpretation of the Clean Air Act is to allow the variance

proceeding to proceed to completion prior to the initiation of

an enforcement action. This appeal was filed on May 15, 1978.

On July 26, 1978, more than two months after this appeal

was filed, the Missouri Air Conservation Commission granted

the variance in the SO. standards requested by Union Electric

for its Sioux and Labadie plants. A petition to review that

variance was subsequently filed in the Circuit Court of Cole

County, Missouri, by the Coalition for the Environment and

by the State of Illinois. That action is still pending.

In Lloyd A. Fry Roofing Co. v. United States E.P.A., 554

F.2d 885 (8th Cir. 1977), we held that pre-enforcement ju-

dicial review of an abatement order on grounds of technological

or economic infeasibility is inconsistent with the enforcement

mechanism established by Congress in the Clean Air Act. Sen-

ior Judge M. C. Matthes, writing for the Court, pointed out

that a company seeking to have these issues reviewed could do

so in state court, or could present its cause as a defense to any

enforcement proceedings initiated by the EPA in federal dis-

trict court. He also noted that if the Agency seeks retroactive

civil penalties, a company can protect itself by invoking the

equitable doctrine of laches if the Agency failed to promptly

seek enforcement." /d. at 891 & n.4.

* Union Electric concedes that the District Court did not enjoin

the EPA from enforcing opacity regulations.

® Civil or criminal penalties are not required by the Act. The Ad-

ministrator thay seek injunctive relief instead. 42 U.S.C. § 7413(b).

If the Administrator seeks a civil penalty, the court is required to

— A-12 —

Union Electric would have us distinguish Fry on the grounds

that the plaintiff in Fry sought pre-enforcement review of an

EPA compliance order while, here, it seeks only a temporary

stay of any enforcement action which may be undertaken by

the EPA pursuant to the notice of violation while a state vari-

ance from the emission limitations is sought.

Certainly this case cannot be distinguished from Fry on the

grounds that Fry involved a compliance order and this case

involves a notice of violation. If an abatement order may not

be the subject of an anticipatory lawsuit enjoining its enforce-

ment, then surely a notice of violation, which is a procedural

prerequisite to an abatement order, may not be the subject of

such a suit.‘

Nor can it be distinguished from Fry on the grounds that

Fry involved an attempt to obtain a pre-enforcement decision

in Federal court on the merits of the Missouri Implementation

Plan, while here, the attempt is only to secure a temporary

stay of any further enforcement procedures while the Company

is actively and in good faith pursuing a revision of the SO.

emission regulations in state administrative agencies or courts.

This distinction, of course, exists. However, it is not one which

permits us to reach a result different than that which was reached

in Fry. Section 7413(b) specifically requires the Administra-

tor to commence a civil action for injunctive relief or for the

take into consideration “(in addition to other factors) the size of the

business, the economic impact of the penalty on the business, and the

seriousness of the violation.” /d.

* If a violation of the Act continues unabated for more than thirty

days after issuance of a notice of violation, the Agency may either

(1) immediately commence a civil action for injunctive or other re-

lief; or (2) issue a compliance order, which is not effective until after

an informal administrative conference. Under the second alternative,

if the order issued by the Agency is not met within the specific time

or informal efforts to abate prove unsatisfactory, the Agency is au-

thorized to initiate an action in district court to compel compliance.

42 U.S.C. § 7413(a),(b).

— A-13 —

assessment of civil or criminal penalties thirty days after notice

of violation has been given to a major stationary source. One

purpose of this section is to require the states to act promptly

in granting or denying variance requests. This purpose would

be thwarted if federal courts were permitted to remove the

pressures that Congress clearly thought necessary to accom-

plish the objectives of the Clean Air Act. The heart of the

decision in Fry is that federal courts should not interfere with

the pre-enforcement procedures established by the Act to ob-

tain compliance. Fry recognized that Congress intended the

1970 Amendments to the Clean Air Act to “expedite the im-

plementation and enforcement of air quality standards” and that

the Amendments were “‘a drastic remedy to what was per-

ceived as a serious and otherwise uncheckable problem.’” /d.

at 889, 891.

No case could better illustrate the need for expeditious en-

forcement than this one. The Missouri Implementation Plan

was approved on May 31, 1972. Now, nearly seven years

later, Union Electric is still not in compliance with the plan’s

SO. emissions limitations at its Labadie or Sioux plants, and

the State of Missouri has yet to finally approve or disapprove

its request for a variance from existing standards.

This statement of fact is not necessarily intended to point

the finger at Union Electric, the State of Missouri or the EPA.

All have been responsible in one way or another for the delays

that have occurred. It is only to emphasize that we can only

be faithful to the mandate of Congress if we require strict ad-

herence to the procedural routes which it established for bring-

ing clean air to the nation.

In Fry, we did not consider a contention by Union Electric

which was deemed important by the District Court, i. e., that

Union Electric has a due process right to contest the validity

of the emission standard without necessarily having to face

— KO

ruinous penalties if it loses its action. The District Court re-

lied on Ex Parte Young, 209 U.S. 123, 28 S.Ct. 441, 52 L.

Ed. 714 (1908), in so holding. In Young, the State of Min-

nesota enacted a number of statutes which established mini-

mum rates which could be charged by railroads within the

State and which fixed penalties for the railroads’ failure to com-

ply. Railroad officials contended that the statutes were invalid

because the penalties imposed were so severe that no company

official would run the risk of violating the statutes in order to

test their validity. The Supreme Court sustained their conten-

tion. It stated:

Another Federal question is the alleged unconstitution-

ality of these acts because of the enormous penalties de-

nounced for their violation, which prevent the railway

company, as alleged, or any of its servants or employees,

from resorting to the courts for the purpose of determin-

ing the validity of such acts. The contention is urged by

the complainants in the suit that the company is denied

the equal protection of the laws and its property is liable

to be taken without due process of law, because it is only

allowed a hearing upon the claim of the unconstitution-

ality of the acts and orders in question; at the risk, if mis-

taken, of being subjected to such enormous penalties, re-

sulting in the possible confiscation of its whole property,

that rather than take such risks the company would obey

the laws, although such obedience might also result in the

end (though by a slower process) in such confiscation.

[W]hen the penalties for disobedience are by fines so enor-

mous and imprisonment so severe as to intimidate the

company and its officers from resorting to the courts to

test the validity of the legislation, the result is the same

as if the law in terms prohibited the company from seek-

ing judicial construction of laws which deeply affect its

rights.

— A-15 —

Now, to impose upon a party interested the burden of

obtaining a judicial decision of such a question (no prior

hearing having ever been given) only upon the condition

that, if unsuccessful, he must suffer imprisonment and pay

fines, as provided in these acts, is, in effect, to close up

all approaches to the courts, and thus prevent any hear-

ing upon the question whether the rates as provided by

the acts are not too low, and therefore invalid. The dis-

tinction is obvious between a case where the validity of

the act depends upon the existence of a fact which can

be determined only after investigation of a very compli-

cated and technical character, and the ordinary case of

statute upon a subject requiring no such investigation,

and over which the jurisdiction of the legislature is com-

plete in any event.

Id. at 144-145, 148, 28 S.Ct. at 447-449. See also St. Regis

Paper Co. v. United States, 363 U.S. 208, 82 S.Ct. 289, 7

L.Ed.2d 240 (1961); Oklahoma Operating Co. v. Love, 252

U.S. 331, 40 S.Ct. 338, 64 L.Ed. 596 (1920); Wadley S. R.

Co. v. Georgia, 235 U.S. 651, 35 S.Ct. 214, 59 L.Ed. 405

(1915).

We do not believe Young to be applicable here. Union Elec-

tric has an opportunity to test the validity of the Missouri Im-

plementation Plan without necessarily incurring confiscatory

fines and penalties. See Brown & Williamson Tobacco Corp. v.

Engman, 527 F.2d 1115 (2d Cir. 1975), cert. denied, 426

U.S. 911, 96 S.Ct. 2237, 48 L.Ed.2d 837 (1976). The Ad-

ministrator of the EPA, as we pointed out in note 6, supra, has

two alternatives. He can either seek injunctive relief or can

seek to impose civil or criminal penalties. We should not antici-

pate what the Administrator will seek in advance of his decision.

Thus, it cannot be said that confiscatory fines and penalties will

necessarily be incurred. Indeed, the Administrator apparently

feels. in this case, that he has a third alternative—that of staying

— A-16 —

enforcement until the resolution of Union Electric’s variance

request.*

Union Electric makes a corollary argument that it must, at

some point, have a forum in which to raise its contention that

compliance with the Missouri Implementation Plan is eco-

nomically and technologically infeasible, and that denial of such

a forum results in its property being taken without due process

of law. Without ruling on the merits of this issue, the Supreme

Court stated in Union Electric Co. v. EPA, supra, that such a

forum is available to alleged violators because contentions of

economic and technological infeasibility can be raised in state

court. Union Electric Co. v. EPA, supra, 427 U.S. at 266-267,

96 S.Ct. 2518. See also West Penn Power Company v. Train,

522 F.2d 302, 311-313 (3d Cir. 1975), cert. denied, 426 US.

947, 96 S.Ct. 3165, 49 L.Ed.2d 1183 (1976). Moreover, this

Court held in Fry that such issues can be raised as a defense in

an enforcement proceeding.*® Lloyd A. Fry Roofing Co. v. United

States E.P.A., supra at 891. The EPA conceded at oral argu-

ment that these issues can be raised in an enforcement proceed-

ing. It affirmed that position in a post-argument memorandum

which states:

8 On September 13, 1978, the EPA notified Union Electric that it

will not initiate any enforcement proceedings against that Company

with respect to its alleged violations of the existing SO, emission

limitations until the Regional Administrator of the EPA has informed

Union Electric, in writing, of its decision regarding a recommended

approval or disapproval of the variance. The Company was further

notified that if EPA’s Regional Office recommended approval, the

enforcement stay would be extended until such time as the Admin-

istrator of EPA has taken final action on the variance request. This

notification would also appear to eliminate any risk that the Com-

pany’s bonds would be called for failure to follow a governmental

directive. We express no opinion as to whether this stay is authorized

by the Act.

® In Union Electric Co. v. EPA, supra, 427 U.S. at 268 n. 18,

96 S.Ct. 2518, the Supreme Court declined to decide whether ques-

tions of economic and technological infeasibility can be raised in an

enforcement proceeding.

ie poe

Our position remains that, as was stated in Union Elec-

tric v. Environmental Protection Agency, 427 U.S. 246,

268 [96 S.Ct. 2518, 49 L.Ed.2d 474] (1976), “claims of

technological or economic infeasibility * * * are relevant

to fashioning an appropriate compliance order under § 113

(a)(4)”. And, of course, when a compliance order be-

comes the subject of an enforcement proceeding, then those

same claims may be considered by the courts. Concededly,

the Supreme Court, in footnote 18 of the Union Electric

decision, supra at page 268 [96 S.Ct. 2518], expressly de-

clined to address the question whether economic or tech-

nological infeasibility may be raised as a defense in civil

or criminal enforcement proceedings. In our opinion, how-

ever, the correct rule must be that while such matters may

not be raised in defense when the purpose of the defense

is to contest the validity or constitutionality of an order,

they may be raised as matters to be considered where the

object of the proceeding is to fashion a schedule and plan

which a company can comply with.

[1,2] We cannot, of course, read more into Fry or into the

EPA's concession than was intended. We do not now hold that

the Clean Air Act will ultimately permit a non-complying pol-

luter to continue operations without change if such change is not

technologically or economically feasible. We do hold, however,

that this question can be raised in any future enforcement pro-

ceeding, and that Union Electric at that time will be able to

argue that Congress did not intend that result or that, if it was

intended, the statute is unconstitutional.'® We reserve our de-

cision on that issue until it is properly presented to us.

‘© Mr. Justice Powell, concurring in Union Electric Co. v. EPA,

supra at 271-272, 96 S.Ct. at 2532, stated:

Environmental concerns, long neglected, merit high priority,

and Congress properly has made protection of the public health

its paramount consideration. * * * But the shutdown of an urban

area’s electrical service could have an even more serious impact

on the health of the public than that created by a decline in

ai el ie

We reaffirm our decision in Lloyd A. Fry Roofing Co. vy.

United States E.P.A., supra, and reverse the District Court. Any

other course of action would be inconsistent with the enforce-

ment mechanism which Congress has established in the Clean

Air Act and would unreasonably delay achieving the objectives

of that Act.

ambient air quality. The result apparently required by this

legislation in its present form could sacrifice the well-being of a

large metropolitan area through the imposition of inflexible de-

mands that may be technologically impossible to meet and in-

deed may no longer even be necessary to the attainment of the

goal of clean air.

I believe that Congress, if fully aware of this Draconian possi-

bility, would strike a different balance.

— A-19 —

APPENDIX B

Amended Judgment of the United States Court of Appeals

for the Eighth Circuit Entered as of February 20, 1979

United States Court of Appeals

For the Eighth Circuit

No. 78-1537 September Term, 1978

Union Electric Company, Appellee,

v.

Environmental Protection Agency, Appellant.

AMENDED JUDGMENT

APPEAL FROM the United States District Court for the

Eastern District of Missouri.

THIS CAUSE came on to be heard on the original designated

_ record of the United States District Court for the Eastern Dis-

trict of Missouri and briefs of the respective parties and was

argued by counsel.

ON CONSIDERATION WHEREOF, it is now here ordered

and adjudged by this Court, that the judgment of the said Dis-

trict Court, in this cause, be, and the same is hereby, reversed

and that the complaint of Union Electric be dismissed.

February 20, 1979

— se

APPENDIX C

Order of the United States Court of Appeals for the

Eighth Circuit, Dated March 15, 1979, Denying

the Petition for Rehearing

United States Court of Appeals

For the Eighth Circuit

78-1357 September Term, 1978

Union Electric Company, Appellee, )

Appeal from the

’ United States District

Environmental Protection Agency, Court for the Eastern

Appellant, ) District of Missouri

V.

The Court having considered petition for rehearing en banc

filed by counsel for appellee and, being fully advised in the

premises, it is ordered that the petition for rehearing en banc

be, and it is hereby, denied.

Considering the petition for rehearing en banc as a petition

for rehearing, it is ordered that the petition for rehearing also

be, and ig is hereby, denied.

March 15, 1979

— A-21 —

APPENDIX D

Section 113(a), (b) and (c) of the Clean Air Act, as Amended

(42 U.S.C. Section 7413(a), (b) and (c))

(a)(1) Whenever, on the basis of any information available

to him, the Administrator finds that any person is in violation

of any requirement of an applicable implementation plan, the

Administrator shall notify the person in violation of the plan

and the State in which the plan applies of such finding. If such

violation extends beyond the 30th day after the date of the Ad-

ministrator’s notification, the Administrator may issue an

order requiring such person to comply with the requirements

of such plan or he may bring a civil action in accordance with

subsection (b) of this section.

(2) Whenever, on the basis of information available to him,

the Administrator finds that violations of an applicable imple-

mentation plan are so widespread that such violations appear

to result from a failure of the State in which the plan applies

to enforce the plan effectively, he shall so notify the State. If

the Administrator finds such failure extends beyond the 30th

day after such notice, he shall give public notice of such finding.

During the period beginning with such public notice and ending

when such State satisfies the Administrator that it will enforce

such plan (herafter referred to in this section as “period of

federally assumed enforcement”), the Administrator may enforce

any requirement of such plan with respect to any person—

(A) by issuing an order to comply with such require-

ment, or

(B) by bringing a civil action under subsection (b) of

this section.

(3) Whenever, on the basis of any information available to

him, the Administrator finds that any person is in violation of

~ GR @

section 741 1(e) of this title (relating to new source performance

standards), section 7412(c) of this title (relating to standards for

hazardous emissions), or section 119(g) (relating to energy-re-

lated authorities) is in violation of any requirement of section

7414 of this title (relating to inspections, etc.), he may issue an

order requiring such person to comply with such section or

requirement, or he may bring a civil action in accordance with

subsection (b) of this section.

(4) An order issued under this subsection (other than an order

relating to a violation of section 7412 of this title) shall not

take effect until the person to whom it is issued has had an

opportunity to confer with the Administrator concerning the

alleged violation. A copy of any order issued under this sub-

section shall be sent to the State air pollution control agency

of any State in which the violation occurs. Any order issued

under this subsection shall state with reasonable specificity the

nature of the violation, specify a time for compliance which the

Administrator determines is reasonable, taking into account

the seriousness of the violation and any good faith effort to

comply with applicable requirements. In any case in which an

order under this subsection (or notice to a violator under para-

graph (1) is issued to a corporation, a copy of such order (or

notice) shall be issued to appropriate corporate officers.

(5) Whenever, on the basis of information available to him,

the Administrator finds that a State is not acting in compliance

with any requirement of the regulation referred to in section

129(a)(1) of the Clean Air Act Amendments of 1977 (relating

to certain interpretative regulations) or any plan provisions re-

quired under section 7410(a)(2)(I) of this title and part D of

this subchapter, he may issue an order prohibiting the construc-

tion or modification of any major stationary source in any area

to which such provisions apply or he may bring a civil action

under subsection (b)(5) of this section.

a . om

Violations by owners or operators of major

stationary sources

(b) The Administrator shall, in the case of any person which

is the owner or operator of a major stationary source, and may,

in the case of any other person, commence a civil action for a

permanent or temporary injunction, or to assess and recover

a civil penalty of not more than $25,000 per day of violation,

or both, whenever such person—

(1) violates or fails or refuses to comply with any order

issued under subsection (a) of this section; or

(2) violates any requirements of an applicable implemen-

tation plan (A) during any period of Federally assumed

enforcement, or

(B) more than 30 days after having been notified by the

Administrator under subsection (a)(1) of this section of a

finding that such person is violating such requirements; or

(3) violates section 741 1(e) of this title, section 7412(c)

of this title, section 119(g) (as in effect before August 7,

1977), subsection (d)(5) of this section relating to coal con-

version) section 7620 of this title (relating to cost of certain

vapor recovery), section 7419 of this title (relating to

smelter orders) or any regulation under part B of this

subchapter (relating to ozone);

(4) fails or refuses to comply with any requirement of

section 7414 of this title or subsection (d) of this section;

or

(5) attempts to construct or modify a major stationary

source in any area with respect to which a finding under

subsection (a)(5) of this section has been made.

The Administrator may commence a civil action for recovery

of any noncompliance penalty under section 7420 of this title

or for recovery of any nonpayment penalty for which any person

—

is liable under section 7420 of this title or for both. Any action

under this subsection may be brought in the district court of

the United States for the district in which the violation occurred

or in which the defendant resides or has his principal place of

business, and such court shall have jurisdiction to restrain such

violation, to require compliance, to assess such civil penalty

and to collect any noncompliance penalty (and nonpayment

penalty) owed under section 7420 of this title. In determining

the amount of any civil penalty to be assessed under this sub-

section, the courts shall take into consideration (in addition

to other factors) the size of the business, the economic impact

of the penalty on the business, and the seriousness of the viola-

tion. Notice of the commencement of such action shal! be given

to the appropriate State air pollution control agency. In the

case of any action brought by the Administrator under this

subsection, the court may award costs of litigation (including

reasonable attorney and expert witness fees) to the party or

parties against whom such action was brought in any case where

the court finds that such action was unreasonable.

Penalties

(cl) Any person who knowingly—

(A) violates any requirement of an applicable implemen-

tation plan (i) during any period of Federally assumed en-

forcement, or (ii) more than 30 days after having been

notified by the Administrator under subsection (a)(1) of

this section that such person is violating such requirement,

or

(B)- violates or fails or refuses to comply with any order

under section 7419 of this title or under subsection (a)

or (d) of this section.

(C) violates section 741 1(e) section 7412(c) of this title;

or

— A-25 —

(D) violates any requirement of section 119(g) (as in

effect before August 7, 1977) subsection (b)(7) or (d)(5)

of section 7420 of this title (relating to noncompliance

penalties or any requirement of part B of this subchapter

(relating to ozone).

shall be punished by a fine of not more than $25,000 per day

of violation, or by imprisonment for not more than one year,

or by both. If the conviction is for a violation committed after

the first conviction of such person under this paragraph, punish-

ment shall be by a fine of not more than $50,000 per day of

violation, or by imprisonment of not more than two years, or

by both.

(2) Any person who knowingly makes any false statement,

representation, or certification in any application, record, re-

port, plan, or other document filed or required to be maintained

under this chapter or who falsifies, tampers with, or knowingly

renders inaccurate any monitoring device or method required

to be maintained under this chapter; shall upon conviction, be

punished by a fine of not more than $10,000, or by imprison-

ment or not more than six months, or by both.

(3) For the purpose of this subsection, the term “person” in-

cludes, in addition to the entities referred to in section 7602(e)

of this title, any responsible corporate officer.