Petition — Indianapolis Power & Light Co. v. United States Environmental Protection Agency

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Text

preme Court, U.S.

ELLED

QCT 380 1979

IN THE

Supreme Court of the Gnited

OCTOBER TERM, 1979

0 Ee ee

No. 29-69]

INDIANAPOLIS POWER & LIGHT COMPANY anp

INDIANAPOLIS CHAMBER OF COMMERCE INC.,

Petitioners,

VS.

UNITED STATES ENVIRONMENTAL PROTECTION

AGENCY,

Respondent.

PETITION FOR WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

JERRY P. BELKNAP,

BRYAN G. TABLER,

1313 Merchants Bank Building,

Indianapolis, Indiana 46204,

Telephone: (317) 638-1313,

Attorneys for Petitioners.

Marcus E. Woops,

ARNOLD A. GORDUS,

Indianapolis Power & Light Company,

Post Office Box 1595B,

Indianapolis, Indiana 46206,

Telephone: (317) 261-8261,

BARNES, HICKAM, PANTZER & Boyp,

1313 Merchants Bank Building,

Indianapolis, Indiana 46204,

Telephone: (317) 638-1313,

Of Counsel.

Gunthorp-Warren Printing Company, Chicago e Financial 6-6565

“Migtrama porn i Cl TPs

ge ei laut ALAS

pf ee sence eeceeees

RP MO OI ee eee ee ee

Rs i

Questions Presented for Review.....................

ee te kaos tre cece

EE re

eer

II.

The Court of Appeals’ Disregard of a Valid State

Court Judgment Conflicts with Applicable

Decisions of This Court, with 28 U. S.C. § 1738,

and with the Principles of Collateral Estoppel.

If Allowed to Stand, It Will Drastically Reorder

the System of Cooperative Federalism Estab-

lished by the Clean Air Act................

The Court Below Has Interpreted 42 U.S.C.

§ 7607(d) and the “Good Cause” Exceptions to

the Notice and Comment Procedures of 5

U.S. C. § 553, Questions of Central Importance

to the Administration of the Clean Air Act, in

a Way That Directly Conflicts with Decisions

Rendered Upon Nearly Identical Facts by the

Courts of Appeals for the Third and Fifth

ee ies Sk cain seis cece es

I Se Sa ys i

Appendix

_ ea

Judgment of the Court of Appeals...........

Opinion of the Court of Appeals.............

Opinion of the Court of Appeals in the Related

Case of United States Steel Corporation v. United

States Environmental Protection Agency......

“4 fh WwW NY NO —

mA eS

Judgment of the Hancock Circuit Court....... A32

Findings of Fact and Conclusions of Law of the

oe Be er ore A35

Relevant Portions of the Order of the Admin-

istrator, EPA, Published at 43 Fed. Reg. 8962,

I eI an Eats bee ans A52

Relevant Portions of the Order of the Admin-

istrator, EPA, Published at 43 Fed. Reg. 45993,

CE a NT in ae lanes os kee awe A65

Relevant Portions of the Administrative Proce-

ew eas Vis 5 a bo wd pw eae OS A74

y SR RS er eee eee ey Tes eee A76

Se hs cc ee RVs aS he en ee 8A A76

Relevant Portions of the Clean Air Act........ A77

Relevant Portions of the Indiana Rulemaking

eee ee Pee: Pe pe re ee eee ee A106

ili

TABLE OF AUTHORITIES

Cases

Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U. S.

We ROOED “Siw oS nase he Cok ees be ee eas PR Ae 12

Commissioner v. Estate of Bosch, 387 U. S. 456 (1967).. 12

Consumers Union of the United States v. Consumer Product

Safety Commission, 590 F. 2d 1209 (D.C. Cir. 1978),

cert, granted, 47 U.S. L. W. 3747 (May 14, 1979)... 11

~Deposit Bank v. Board of Councilmen of Frankfort, 191

s & gs RR etre eres yt ee sore ee 13

Durfee v. Duke, 375 U.S. 106 (1963)............... 10

Fidelity Union Trust Co. v. Field, 311 U.S. 169 (1940).. 12

Huron Holding Corp. v. Lincoln Mine Operating Co., 312

Se. a Oe EE Stk a ee ro we ak CRS EE ROE he as 13

Indiana & Michigan Electric Co. v. EPA, 509 F. 2d 839

4. LR, > ee re ert es, Semen 7 eee ee ern 11

Montana v. United States, 47 U.S.L.W. 4190 (Feb.

Oe ret ee re Pree na 10, 11

Nill v. Comparet, 16 Ind. 107 (1861)................ 13

Parklane Hosiery, Inc. v. Shore, 47 U. S. L. W. 4079 (Jan.

et Ss PAREN CRE ORED LA wees bees 10, 11

Rooker v. Fidelity Trust Co., 263 U.S. 413 (1923)..... 10

Sea-Land Services, Inc. v. Gaudet, 414 U. S. 573 (1974).. 11

Sharon Steel Corporation v. Environmental Protection

Agency, S57 F. de 377 (SGC. F979)... 2.2.6... 14

Southwest Airlines Co. v. Texas International Airlines,

546 F.2d 84 (Sth Cir.), cert. denied, 434 U.S. 832

SES sa ise eae a OA ea Sean wee oe 11

Train v. Natural Resources Defense Council, 421 U.S. 60

CEPTS) ccavisivesine coun ten pee eee 8,9, 11

Union Electric Co. v. EPA, 427 U.S. 246 (1976)

Pe Pe er re es ey ym eS ey:

United States Stee] Corporation v. U.S. Environmental

Protection Agency, 595 F. 2d 207 (Sth Cir. 1979).... 14

United States Statutes

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

§ U. BC. See woes ns eee eee dy'dy ay 14

5 U.S.€. SRG cs sn kaksee eee 6

SU. 3 €. §S350G).. ieee 6

S$ US. Bia a inocu eae eee 3

28 U.S.C. © BGBR. oo ous cwcaeceeteee eee 4,12

28 U3. C. 3 1B a wo 00a 5 sees eee 2% 7, 9,29

Clean Air Act U. S. C. § 7401 et seq.

§ 107, 42 U. 2 C.. 8 Pile cose nc ceesee ean y

§ 107(4), 42 U. 3 GC. § Tara =. wes 0 5c.. a ae Fe

§ 107(d) (1), 42 U.S.C. § 7407(d) (1) ......... 4

§$ 107(d) (2), 42 U.S.C. § TA07EE) GE) ......... 4

§ 107(d}(S), 42 U.S.C. § F4O7CE)(S) ....5.... 15

$109, 42.U. 3. § POR iia cn sew ewiwssss sup ees 3

$120, 42 Wa. OP erie veassecascacaes 3

§ 110(a) (2), 42 U.S.C. § 7410(a)(2) ......... 8

§ 110(c), 42 CAS. Ge § PRR) x nn cc cee cannes 12

Si7k, 2 WSC. Se ko eee eans senses

$ 172, @ VU. 3 C.. 2 Pe ee uae sence eehas 3

$§ 172-178, 42 U. S.C. §§ 7502-7506........... 4

$ U7, 42 U.S0. 9 Willes csc0e tes ces vas cess 3

§ SO7T(B), 42 Ui. eC. § Fe 6 ese eve nsee sess 5

§ 307(b) (1), 42 U.S.C. § 7607(B) (1) ......... 5

Serene, Ge OU. oO. § GOT) once feet sce e 14

§ 307(d) (1), 42 U.S.C. § 7607(d)(1) ......... 3

§ 307(d) (9), 42 U.S.C. § 7607(d)(9) ..... 2, 3, 6, 14

Code of Federal Regulations

ne a ge a we wy ek veka

eg was kw wba ak ocm #40 40 09 le a

The Federal Register

So Pee. Ree, S962 (iharen 3, 1978)... 2. ok ceca 2

Indiana Statutes

I IG sy a'n-a Baia poaees a ho oP eww a Sew 4,3

NL gata, SG re hae ke thle eee as 12

Oe aT Oe Geo wis a) ke 0 a eee 10

Miscellaneous

R. Stern & E. Gressman, Supreme Court Practice 448 (Sth

ait aad sha ge k sh oa a RS OSL Ae ow R'Os 15

IN THE

Supreme Court of the Anited States

OCTOBER TERM, 1979.

INDIANAPOLIS POWER & LIGHT COMPANY anp

INDIANAPOLIS CHAMBER OF COMMERCE, INC.,

Petitioners,

VS.

UNITED STATES ENVIRONMENTAL PROTECTION

AGENCY,

Respondent.

PETITION FOR WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

Petitioners Indianapolis Power & Light Company and Indian-

apolis Chamber of Commerce, Inc. pray that a writ of certiorari

issue to review the judgment of the Court of Appeals for the

Seventh Circuit in this case.

ORDERS AND OPINIONS BELOW

The opinion of the Court of Appeals in /ndianapolis Power

& Light Company and Indianapolis Chamber of Commerce,

Inc. v. U. §. Environmental Protection Agency is not officially

reported but is reprinted in the Appendix at pages A2-A11 and

is unofficially reported at 13 ERC 1461. The same court's

opinion in the related cases of United States Steel Corporation

and Youngstown Sheet and Tube Company v. U.S. EPA is not

yet reported but is in the Appendix at pages A12-A31.

The order of the United States Environmental Protection

Agency (“EPA”) reviewed by the Seventh Circuit appears at

43 Fed. Reg. 8962 (March 3, 1978) and is reprinted in the

Appendix at A52-A64.

JURISDICTION

The judgment of the Court of Appeals (Appendix, Al) was

entered on August 2, 1979. The jurisdiction of this Court is

invoked pursuant to 28 U.S.C. § 1254(1).

QUESTIONS PRESENTED FOR REVIEW

Pursuant to its obligation under § 107 of the Clean Air

Act to designate areas which do not meet national air quality

standards, EPA promulgated a list of designations submitted

by an Indiana agency, which list an appropriate Indiana court

adjudicated to have been unlawfully issued without compliance

with requirements of notice and hearing mandated by Indiana

law. In addition, EPA made the designation immediately effec-

tive, dispensing with publication of proposed rulemaking and

acceptance of prior public comments. The Court of Appeals for

the Seventh Circuit held that neither it nor EPA need honor the

decision of the Indiana court. It also ruled that EPA’s procedure

was justified under “good cause” exemptions in 5 U. S.C. § 553

and that judicial review thereof was limited by 42 U.S.C.

§ 7607(d) (9). The questions presented for review are:

1. Whether, despite the fuii faith and credit mandate

of 28 U.S.C. § 1738, the principle of collateral estoppel

by judgment, and the system of cooperative federalism

ordained in the Clean Air Act, the Seventh Circuit prop-

erly affirmed EPA’s promulgation of an area classification

list submitted by the Indiana agency pursuant to Clean Air

Act Section 107(d), when there was a final judgment from

an Indiana court of general jurisdiction holding the sub-

mitted list to be void as an act of the State for noncom-

pliance with Indiana law requirements of notice and hear-

ing.

2. Whether the failure of EPA to comply with the

Administrative Procedure Act requirements for notice and

comments prior to rulemaking was excused, contrary to

decisions of the United States Court of Appeals for the

Third and Fifth Circuits, by the “good cause” of statutory

deadlines and self-imposed delay, where EPA had by

statute 60 days following submission to EPA by the states

of suggested designations to promulgate designations of the

attainment status of various areas under the Clean Air Act.

3. Whether the limitations on judicial review of pro-

cedural defects in EPA rulemaking set forth in 42 U.S.C.

§ 7607(d)(9) are applicable to rulemaking procedures

which Congress omitted from the enumeration in 42

U.S.C. § 7607(d)(1) of those proceedings to which the

subsection applies.

Question 1 above is presented in this Petition only. Questions

2 and 3 are also presented in the Petition in No. 79-486,

United States Steel Corporation and Youngstown Sheet and

Tube Company v. U.S. EPA.

STATUTES INVOLVED

The provisions of the Clean Air Act, 42 U.S.C. § 7401

et seq., primarily involved herein, §§ 7407, 7409, 7410, 7501,

7502, and 7607, are set forth at Appendix, A77-A106.

The relevant portions of the Administrative Procedure Act,

5 U.S.C. $551 et seg., §§ 553 and 706, are set forth at

Appendix, A74-A76.

28 U.S. C. § 1738 is set forth at Appendix, A76. 28 U.S. C.

§$ 1652 is set forth at Appendix, A76-A77.

Pertinent provisions of the Indiana rulemaking statute, IC 4-

22-2-1 et seq., are set forth at Appendix, A106-A111.

STATEMENT OF THE CASE

The Clean Air Act Amendments of 1977 (P.L. 95-95, 91

Stat. 685 (August 7, 1977)), require a combined state-federal

effort to classify each area of the country as to whether its air

quality meets the national ambient air quality standards. Section

107(d)(1) of the Act, 42 U.S.C. § 7407(d) (1), directs each

State to submit to EPA, within 120 days of enactment of the

1977 Amendments, a list of those areas of the State that as of

August 7, 1977, did not meet a national ambient air quality

standard, a list of those areas with air quality better than re-

quired by the national standards on that date, and .a list of

those areas which cannot be classified for lack of information.

Section 107(d)(2) requires EPA, within 60 days of receiving

a State’s list of designations, to promulgate it, or after further

proceedings, to promulgate it with modifications deemed neces-

sary. Designation of an area as nonattainment triggers imposi-

tion of severe constraints on sources located or planning to locate

in that area. 42 U.S. C. §§ 7502-7508.

On December 2, 1977, and January 17, 1978, staff members

of the Indiana Air Pollution Control Division submitted to EPA

a list of recommended attainment status designations for the

entire State. Both submissions proposed that Marion County be

classified nonattainment for sulfur dioxide. On March 3, 1978,

without providing prior public notice or opportunity for public

comment, the EPA Administrator published as final, immedi-

ately effective rules a list of Section 107 designations for the

entire United States. 40 C.F.R. Part 81. Marion County

was classified nonattainment for sulfur dioxide. (40 C.F. R.

§ 81.315, Appendix, A63.) The Administrator invited post hoc

public comments by May 2, 1978, which was also the last date

for filing a petition for judicial review of the rule. 42 U. S.C.

$ 7607(b) (1).

On April 28, 1978, Indianapolis Power & Light Company,

which operates sulfur dioxide-emitting generating stations in

Marion County, petitioned the Court of Appeals for the Seventh

Circuit to review and set aside EPA’s March 3, 1978, final

regulation designating Marion County as nonattainment for

sulfur dioxide. Indianapolis Chamber of Commerce, Inc. was

later granted leave to intervene as a petitioner. Jurisdiction in

the Court of Appeals was founded upon 42 U.S. C. § 7607(b).

On October 5, 1978, while the review petition was pending,

EPA republished the classification at issue, stating that the

evidence supported a finding that the air quality in Marion

County was not in compliance with the national primary ambient

standard for sulfur dioxide. (Appendix, A65-A73.)

In the Court of Appeals, Petitioners assailed EPA’s classifica-

tion of Marion County as nonattainment on three grounds. First,

Petitioners pointed out that the rule should be set aside as being

without basis and as issued otherwise than in accordance with

law, because the Indiana decuments relied upon by EPA as the

sole basis for the rule were not promulgated in accordance with

the Indiana rulemaking statute, IC 4-22-2-1 et seq., were accord-

ingly void as utterances of the State, and could not be adopted

by EPA as State action under Clean Air Act Section 107(d).

Second, Petitioners contended that the March 3, 1978, classifica-

tion should be set aside as violating the prior notice and com-

ment requirements of 5 U.S. C. § 553. Third, Petitioners main-

tained that EPA’s classification of Marion County as nonattain-

ment was not the product of reasoned decisionmaking.

The Court of Appeals heard argument on Petitioners’ case on

April 18, 1979, together with argument on petitions filed by

United States Steel Corporation and Youngstown Sheet and Tube

Company to review EPA’s contemporaneous designation of

part of Lake County, Indiana, as nonattainment.

Concurrently, as was noted in the briefs of both Petitioners

and Respondent below, Petitioners challenged in State court the

Indiana Air Pollution Control Board’s transmittal of the classi-

fications for noncompliance with State rulemaking procedures.

On May 6, 1979, the Circuit Court of Hancock County, Indi-

ana, rendered a final judgment in that suit. Sustaining Petitioners’

interpretation of State law, the State court declared the classi-

fication list submitted to and adopted by EPA “absolutely void

and of no effect as an act of the State of Indiana or for any other

purpose,” and enjoined State officials from taking or withhold-

ing any action premised on Marion County’s having been duly

designated a nonattainment area. (Appendix, A32.) Pursuant to

the Court of Appeals’ request at oral argument, Petitioners

advised it of the State court judgment on May 15, 1979, by

submitting as additional authority both the State court’s judg-

ment and its detailed findings of fact and conclusions of law.

(Appendix, A35-A51.)

On August 1, 1979, the Court of Appeals issued an opinion

denying the petitions of United States Steel Corporation and

Youngstown Sheet and Tube Company to set aside EPA’s Lake

County nonattainment designation. (Appendix, Al2.) The

court held that the agency had “good cause” to dispense with

proposed rulemaking and prior public comment under 5 U. S. C.

$§ 553(b)(B) and 553(d)(3). As an alternative ground of

decision, the court ruled that Clean Air Act Section 307(d) (9),

42 U.S.C. § 7607(d) (9), which restricts reversal of EPA rule-

making for procedural errors, applied and mandated affirm-

ance.

On August 2, 1979, the Court of Appeals issued an unsigned

Order rejecting Petitioners’ challenges to EPA’s March 3, 1978,

classification of Marion County. (Appendix, A2.) Citing its

day-old opinion in United States Steel, et al. v. EPA, the court

summarily dismissed Petitioners’ contention that EPA’s March

3, 1978, regulations were adopted in contravention of the Ad-

ministrative Procedure Act. The court then rejected Petitioners’

position that the Indiana Air Pollution Control Board’s attain-

ment status designations were invalid under State law. In the

first place, the court ruled, this contention was waived by Peti-

tioners’ failure to raise it during the comment period, which

began after EPA’s promulgation of the final rules and coincided

with the time for seeking judicial review thereof. Secondly, the

Court of Appeals declined to respect the decision of the Circuit

Court of Hancock County, stating that as “a decision of a nisi

prius court, it is not binding on us . . . unless the decision is

affirmed on appeal,” and opining that the State court's interpre-

tation of the State rulemaking statute was doubtful. Lastly, the

court ruled that Section 107(d) of the Clean Air Act does not

authorize the Administrator to disapprove attainment status

designations submitted to him merely because the State authori-

ties “may not have complied strictly with state procedural re-

quirements.” (Appendix, A6-A7.)

REASONS FOR GRANTING THE WRIT

The Court of Appeals’ Disregard of a Valid State Court Judg-

ment Conflicts with Applicable Decisions of This Court, with

28 U.S.C. § 1738, and with the Principles of Collateral

Estoppel. If Allowed to Stand, It Will Drastically Reorder the

System of Cooperative Federalism Established by the Clean

Air Act.

By choosing to ignore the final judgment of the Indiana

court, the Court of Appeals has violated the express mandates

of 28 U. S.C. § 1738 (1976) and this Court, both of which re-

quire federal courts to give final judgments of State courts full

faith and credit. In addition, in rendering its decision, the Court

of Appeals disregarded the state-federal division of jurisdiction

provided by Congress in the Clean Air Act and articulated by

this Court in Union Electric Co. v. EPA, 427 U.S. 246 (1976).

Petitioners were thereby denied any effective review of the

EPA’s nonattainment designation and were denied the important

State law remedies expressly reserved to them in Union Electric,

supra.

This Court has had occasion to construe the Clean Air

Amendments of 1970 (P. L. 91-604, 84 Stat. 1676 (December

31, 1970)). E.g., Union Electric Co., supra; Train v. Natural

Resources Defense Council, 421 U.S. 60 (1975). The heart of

the 1970 Amendments, this Court has held, is the requirement

that each State formulate a plan to achieve federally established

air quality standards. Under Section 110(a)(2) of the Act, the

EPA Administrator is required to approve a State plan which

provides for the timely attainment of national air quality stand-

ards and which satisfies that section’s other specifically enumer-

ated requirements. Union Electric Co., supra, at 250, 256, 265.

Applying this principle, this Court held in Union Electric

that the Administrator lacks authority to disapprove a State-

submitted plan on the ground that compliance therewith would

be economically or technologically infeasible or on any ground

except the plan’s failure to meet the specific criteria set forth in

Section 110(a)(2)(A)-(H). Since matters extraneous to those

criteria cannot be considered by the Administrator in exercising

his approval authority, this Court held that neither may a federal

court of appeals consider such matters in exercising its Section

307(b) reviewing authority. Union Electric, at 256, 265-66.

Rather, “sources objecting to such a[n infeasible] state scheme

must seek their relief from the State.” Union Electric, at 265

n. 14. If State law permits, a source may “take its claims of

economic or technological infeasibility to the state courts.”

Union Electric, at 266-67.

This Court has thus construed the congressional scheme as

giving the State courts the ultimate authority to determine the

validity of the State action to be approved or acted upon by the

Administrator. In the case at bar, Petitioners properly availed

themselves of the State law remedies stressed by the Court in

Union Electric as the only available remedies. But the Court of

Appeals wholly eviscerated that remedy by denying full faith

and credit to the State court judgment on the lawfulness of the

State’s portion of the joint state-federal effort called for by the

Clean Air Act. Indeed, the Court of Appeals went even further.

After deciding that the Administrator has no authority under

Section 107(d) to disapprove a purportedly official State sub-

mittal because it might be void under State law, the lower court

proceeded itself to consider the State law question and to de-

cide it, without mentioning any reason grounded in State law,

squarely contrary to a final State court judgment on the precise

issue.’ (Appendix, A7 n. 4).

The result is a situation which neither the scheme of the

Clean Air Act nor constitutional federalism can tolerate: The

Court of Appeals has upheld EPA’s promulgation of an Indiana

classification which should serve as the basic premise of Clean

Air Act Implementation Plan provisions to be developed by the

State, while the State court has held the classification invalid and

has enjoined State officials from acting upon the classification.

Clearly, the mechanism of state-federal cooperation articu-

lated in Union Electric and Train vy. NRDC, supra, cannot op-

erate without regard for the full faith and credit requirement of

28 U.S.C. § 1738. That statute commands federal courts to

accord a State court judgment the same full faith and credit—

the same collateral estoppel effect—it merits in the rendering

1. As noted in the Statement of the Case, the Court of Appeals

also stated that Petitioners’ attack on the procedures followed by the

State board “comes too late” since this point was not raised with

EPA. (Appendix, A6.) At this juncture, the court may have nodded.

Petitioners were, after all, challenging a final, immediately effective

rule and were also challenging EPA’s failure to give any notice or

accept any comments before making the rule effective. The court

may have been referring to the opportunity for comment EPA

allowed after the designation became effective, but at this point the

chance for meaningful dialogue had passed. Further, it should be

noted that the Court of a ang unprecedented “waiver” theory

is inconsistent with its view that EPA has no authority to consider

State law objections to State submisions. If this extraordinary for-

feiture theory is to be the law in notice and comment rulemaking, it

should be this Court that says so.

State. Durfee v. Duke, 375 U.S. 106 (1963). Here a State

court of general jurisdiction? reviewed the record purported to

constitute a solemn, official act of the State, found it instead

merely to reflect the unauthorized action of errant State em-

ployees, and declared it void as an act of the State. The Court

of Appeals, reviewing less than the whole record, held the same

act to be cognizable as official State action. The mandate of full

faith and credit at 28 U.S.C. § 1738 does not countenance

this denigration of State judicial proceedings, and the delicately

balanced division of State and federal responsibilities Congress

set up in the Clean Air Act cannot tolerate such a disregard for

the laws and judicial proceedings of the States.

The collateral-estoppel-by-judgment rule has been equally

violated. This Court recently applied the doctrine of collateral

estoppel to bar a party from relitigating issues decided against

it in a prior suit against a federal agency not a party to the

second action. In Parklane Hosiery, Inc. v. Shore, 47 U.S. L. W.

4079 (Jan. 9, 1979), at 4080-81, n.5, the Court described

collateral estoppel and the related doctrine of res judicata as

follows:

Under the doctrine of res judicata, a judgment on the

merits in a prior suit bars a second suit involving the same

parties or their privies based on the same cause of action.

Under collateral estoppel, on the other hand, the second

action is upon a different cause of action and the judgment

in the prior suit precludes relitigation of issues actually

litigated and necessary to the outcome of the first action.

In Montana v. United States, 47 U.S. L.W. 4190 (Feb. 22,

1979), the Court held the U.S. Government collaterally es-

topped from relitigating in federal court a question decided

adversely to its privy in a prior State court judgment.

The same principles apply in the case at bar, and the decision

below conflicts with them. Here the issue whether the classifica-

2. The Hancock Circuit Court is such a court. See Rooker

v. Fidelity Trust Co., 263 U.S. 413, 414 (1923); IC 33-4-4-3.

tion adopted by EPA as Indiana action in fact constituted valid

State action was actually litigated and decided in the State court

and was necessary to the outcome there since it was the only

thing at issue. (Appendix, A35-A5).) Parklane Hosiery, Inc.,

supra, and Montana v. United States, supra, bar not only the

State court defendant but also its privies from relitigating the

issue in federal court. On March 3, 1978, EPA uncritically

adopted and promulgated a purported State classification without

seeking or even giving opportunity for submittal of other in-

formation on the subject. Accordingly, the question whether

the underlying papers were duly submitted by the State

or by someone else is at once fundamental to the validity of

EPA’s action and a pure matter of State law upon which EPA,

as the mere recipient of the papers, can Shed no light not al-

ready cast by the responsible State officials and the State At-

torney General, whose task it was to defend in State court the

validity of the classification transmitted to and adopted by EPA.

In these circumst ‘ices, binding EPA to the State court judgment

is proper because its legal interests are entirely congruent with

the State agency’s interests. Southwest Airlines Co. v. Texas

International Airlines, 546 F.2d 84, 91-101 (Sth Cir.), cert.

denied, 434 U.S. 832 (1977); cf. Consumers Union of the

United States v. Consumer Product Safety Commission, 590 F.

2d 1209, 1217-23 (D.C. Cir. 1978), cert. granted, 47 U.S.

L. W. 3747 (May 14, 1979). Indeed, under the Clean Air

Act, EPA has no independent legal interest in State-submitted

attainment designations or implementation plans. EPA gets

what it gets from the State, however flawed or deficient. Union

Electric Co., supra at 266-67; Train v. NRDC, supra at 79;

Indiana & Michigan Electric Co. v. EPA, 509 F. 2d 839, 847

(7th Cir. 1975). Accordingly, EPA’s purely derivative interest

must be concluded by the State court judgment. Sea-Land Serv-

ices, Inc. v. Gaudet, 414 U.S. 573, 593-95 (1974). EPA may

have been at liberty to take steps to make attainment status

designations for Indiana in the face of the State’s failure timely

to perform its task of recommending designations. See 42

U.S. C. § 7410(c). However, it was not free, nor was the Court

of Appeals free, to determine on its own the validity of the sub-

mission as a legal act of the State of Indiana. This Court should

grant the writ to make unmistakably clear what is fairly implicit

in Union Electric—that derivative interests of federal agencies

in State administrative proceedings are necessarily concluded in

State court proceedings involving their State level counterparts.

The Court of Appeals offered only cursory justification for

its disregard of the State court judgment. Citing this Court’s

decision in Commissioner v. Estate of Bosch, 387 U.S. 456

(1967), the court below remarked that “[bJeing a decision of

a nisi prius court, [the state court judgment] is not binding

on us... unless the decision is affirmed on appeal.” (Appendix,

A7.)

This completely misses the point. The Court of Appeals was

not deciding a question of State law as it would in a diversity

action;® it should have been considering the effect of a State

court judgment. Under Indiana law, the judgment of the Circuit

Court of Hancock County was final and the possibility of an

appeal in no way changed the situation. Until annulled or re-

versed on appeal, that judgment is binding upon the parties as

3. Even if some strained logic could furnish a reason for the

Court of Appeals to have reconsidered the State law question settled

by the Hancock Circuit Court, Fidelity Union Trust Co. v. Field,

311 U.S. 169 (1940), Commissioner v. Estate of Bosch, 387 U.S.

456, 465 (1967) itself, and 28 U.S.C. § 1652 all provide that the

opinion of a State trial court must be respected by a federal court

unless other persuasive State law data convinces the court that the

highest court of the State would decide otherwise. The Court of

Appeals looked to no such data; instead it decided the Indiana statu-

tory question solely by reference to this Court’s opinion in Citizens

to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402 (1971),

which is quite irrelevant to Indiana law because it is based on the

Federal Administrative Procedure Act, which differs from the

Indiana Act in defining a “rule” subject to rulemaking procedure.

IC 4-22-2-3 says that a rule includes “any classification . . . designed

to have or having the effect of law or interpreting, supplementing or

implementing any statute.” Area classifications implementing the

Clean Air Act cannot by any stretch escape this definition.

to every question directly decided. Nill v. Comparet, 16 Ind.

107, 109 (1861). Full faith and credit requires that it be given

the same effect here.

Application of the principle of collateral estoppel leads to the

same conclusion. As this Court stated in Deposit Bank v. Board

of Councilmen of Frankfort, 191 U.S. 499 (1903):

“It is urged that the state judgment upon which the

Federal decree of 1808 is based was afterwards reversed

by the highest court of Kentucky, and, therefore, the foun-

dation of the decree has been removed, and the decree itself

must fall. But is this argument sound? When a plea of res

judicata is interposed, based upon a former judgment be-

tween the parties, the question is not what were the reasons

upon which the judgment proceeded, but what was the

judgment itself; was it within the jurisdiction of the court

between the same parties, and is it still in force and effect?

The doctrine of estoppel by judgment is founded upon the

proposition that all controversies and contentions involved

are set at rest by a judgment or decree lawfully rendered

which, in its terms, embodied a settlement of the rights of

the parties. * * * We are unable to find reason or authority

supporting the proposition that because a judgment may

have been given for wrong reasons or has been subse-

quently reversed, that it is any the less effective as an es-

toppel between the parties while in force.” (191 U.S.

510-511.) (Emphasis added.)

This holding was approved in Huron Holding Corp. v. Lincoln

Mine Operating Co., 312 U.S. 183, 189 (1941).

The Court Below Has Interpreted 42 U.S.C. § 7607(d) and

the “Good Cause” Exceptions to the Notice and Comment

Procedures of 5 U. 8. C. § 553, Questions of Central Import-

ance to the Administration of the Clean Air Act, in a Way

That Directly Conflicts with Decisions Rendered Upon Nearly

Identical Facts by the Courts of Appeals for the Third and

Fifth Circuits.

The court below ruled that tight statutory deadlines and the

States’ need for immediate guidance in the preparation of im-

plementation plans gave EPA “good cause” to dispense with the

notice and comment requirements of 5 U.S.C. § 553. This

question is of immense importance to administration of the

Clean Air Act and other statutes that prescribe deadlines for

agency action.

The court below also ruled that the limitations on judicial

review of agency rulemaking contained in 42 U.S.C. § 7607

(d)(9) apply even though the rulemaking at issue here is

without the scope of 42 U.S. C. § 7607(d). This tour de force

unsettles the rulemaking procedures of the Clean Air Acct.

These rulings both conflict directly with the decisions in

Sharon Steel Corporation v. Environmental Protection Agency,

597 F.2d 377 (3d Cir. 1979) and United States Steel Cor-

poration v. United States Environmental Protection Agency,

595 F. 2d 207 (Sth Cir. 1979).

As noted above, these important rulings first were announced

by the court below in its opinion in United States Steel Corpora-

tion and Youngstown Sheet and Tube Company vy. United States

Environmental Protection Agency, (Appendix, Al2), and were

applied in the present case simply by reference to that decision.

United States Steel Corporation and Youngstown Sheet and

Tube Company have petitioned this Court to issue a writ of

certiorari to review these rulings. United States Steel Corporation

v. United States Environmental Protection Agency, No. 79-486

(petition filed September 21, 1979). Their petition ably expli-

cates the reasons why this Court should review these questions.

To spare the Court needless repetition, Petitioners hereby in-

corporate by reference pages 8-19 of that petition. R. Stern &

E. Gressman, SUPREME CourT PRACTICE 448 (5th Ed. 1978).

CONCLUSION

The Court of Appeals below decided two questions important

to administration of the Clean Air Act in conflict with Third

and Fifth Circuit decisions. The Court of Appeals also sought

to redetermine the validity of State action on which the agency

order involved was founded, in ihe face of a State court judg-

ment holding the action invalid for want of notice and hearing

required by State law.

The questions raised by the decision below are of both im-

mediate and continuing importance. In Indiana alone there are

460 separate entries (ninety-two areas times five pollutants) on

the classification lists called for by Section 107(d). Since the

Section 107 classification process is a continuing one, 42 U. S.C.

§ 7407(d) (5), the questions raised herein are likely to recur

again and again within Indiana and the rest of the Seventh

Circuit. Moreover, the decision below raises serious questions

pertinent to the process of state implementation plan develop-

ment, approval, and judicial review under the Clean Air Act.

The Clean Air Act Amendments of 1977 require wholesale re-

visions of the State plans on a nationwide basis. The process is

nearing conclusion, with EPA continually issuing approvals,

disapprovals, and conditional approvals. It is fair to expect State

courts and federal appeals courts to receive a virtual deluge of

review petitions within the near future. The decision below has

unsettled the law applicable to these proceedings in the Seventh

Circuit—made it different from the law in the Third and Fifth

Circuits—and the guidance of this Court is urgently needed.

The writ should accordingly be granted to resolve the conflict

among the Circuits, to dispel uncertainties in an important area

of the law, and to compel proper recognition of the function of

the State in administration of the Clean Air Act.

Respectfully submitted,

JERRY P. BELKNAP,

BRYAN G. TABLER,

1313 Merchants Bank Building,

Indianapolis, Indiana 46204,

Telephone: (317) 638-1313,

Attorneys for Petitioners.

Marcus E. Woops,

ARNOLD A. GORDUS,

Indianapolis Power & Light Company,

Post Office Box 1595B,

Indianapolis, Indiana 46206,

Telephone: (317) 261-8261,

BARNES, HICKAM, PANTZER & BoyD,

1313 Merchants Bank Building,

Indianapolis, Indiana 46204,

Telephone: (317) 638-1313,

Of Counsel.

APPENDIX.

Unpublished Per Curiam Order

UNITED STATES COURT OF APPEALS

For the Seventh Circuit

Chicago, Illinois 60604

August 2, 1979

Before

Hon. LATHAM CASTLE, Senior Circuit Judge

Hon. WALTER J. CUMMINGS, Circuit Judge

Hon. RoBERT A. SPRECHER, Circuit Judge

INDIANAPOLIS POWER & LIGHT ,

COMPANY,

Petitioner,

INDIANAPOLIS CHAMBER OF Petition for Enforce-

COMMERCE, INC., ment of an Order of

Intervenor, . the United States

No. 78-1555 ou Environmental Pro-

tection Agency.

UNITED STATES ENVIRONMENTAL

PROTECTION AGENCY,

Respondent. }

This cause came on to be heard on the transcript of the

record from the United States Environmental Protection Agency,

and was argued by counsel.

On consideration whereof, it is ordered and adjudged by this

court that the judgment of the United States Environmental

Protection Agency in this cause appealed from be, and the same

is hereby, AFFIRMED, with costs, in accordance with the order

of this court entered this date.

UNITED STATES COURT OF APPEALS

Unpublished Order Not to Be Cited per Circuit Rule 35

For the Seventh Circuit

Chicago, Illinois 60604

Argued April 18, 1979

Decided August 2, 1979

Before

Hon. LATHAM CASTLE, Senior Circuit Judge

Hon. WALTER J. CUMMINGS, Circuit Judge

Hon. RoBERT A. SPRECHER, Circuit Judge

INDIANAPOLIS POWER & LIGHT CoMm- )

PANY AND INDIANAPOLIS CHAMBER

OF COMMERCE, INC. ae ;

. ‘ Petition for Review

of an Order of the

No. 78-1555 VS. - United States En-

vironmental Protec-

tion Agency.

Petitioners,

UNITED STATES ENVIRONMENTAL

PROTECTION AGENCY,

Respondent. J

ORDER

On March 3, 1978, the Administrator of the Environmental

Protection Agency approved the determination of the State of

Indiana that air quality in Marion County, Indiana, did not

meet the standards required by the Clean Air Act (42 U.S.C.

§ 7401 et seq.) because of concentration of sulfur dioxide (Pet.

App. Al, A5). On October 5, 1978, he again designated

Marion County as a nonattainment area for the primary sulfur

dioxide standard. At the same time he reclassified Marion

County as attainment for the secondary sulfur dioxide standard."

(EPA App. B1, B4.)

Petitioners have challenged the designation principally on the

ground that it was based on an illegal Indiana classification.

Most of the other grounds raised by petitioners in their attack

on the EPA’s designation were rejected in the recent cases of

United States Steel Corporation v. United States Environmental

Protection Agency, 7th Cir. Nos. 78-1563 and 1564, and

Oscar Mayer and Company, Inc. v. Costle, 7th Cir. No. 78-

1548, decided by this Court by opinion of July ............ , 1979,

and order of July ............ , 1979, respectively. We affirm the

decisions of the Administrator.

Proceedings of Indiana Air Pollution Control Board

Support Nonattainment Designation.

The statutory scheme was fully described in our aforemen-

tioned opinion and order and will not be redescribed herein.

When the Administrator published the attainment status desig-

nation for the entire Marion County on March 3, 1978, he was

adopting the recommendation of the Indiana Air Pollution Con-

trol Board (see Pet. App. A3). This is the board designated

by the Indiana legislature as the air pollution agency for the

state for all purposes of the federal Clean Air Act. Indiana

Code 13-7-2-10. Therefore, under Section 107(c) of the Clean

Air Act (42 U.S.C. 7447(c)) it was the “appropriate State

authority” for the EPA Administrator to consult before making

his designation.? On December 2, 1977, Harry D. Williams, the

Director of the Air Pollution Control Division of the Indiana

State Board of Health sent the EPA a November 23, 1977,

Draft Support Document (Pet. App. A25-A34) with respect to

nonattainment areas in Indiana (Pet. App. A24). This showed a

1. For sulfur dioxide, the pollutant involved in this case, the

EPA regulations establish a primary annual standard at 80 micro-

(Footnote continued on next page.)

(Footnote continued from preceding page.)

grams per cubic meter and a primary maximum 24-hour concen-

tration standard of 365 micrograms per cubic meter (40 C. F.R.

50.4). The secondary standard is not involved in this petition for

review.

2. In their reply brief petitioners concede that the Indiana Air

Pollution Control Board is “the legitimate Indiana authority” to

make designation recommendations to the EPA (Reply Br. 9).

nonattainment sulfur dioxide designation for Marion County

(Pet. App. A27, A32). This Draft Support Document was

formally submitted to an EPA Regional official in Chicago by

Ralph C. Pickard, Technical Secretary of the Pollution Control

Board of Indiana on December 5, 1977 (Pet. App. A24,

A106).

On January 17, 1978, Mr. Pickard sent a copy of a more

detailed Support Document (Pet. App. A36-A102) to EPA

Regional Administrator Alexander. Mr. Pickard noted that the

prior recommended designations had not been amended but that

“the order of discussion of the specific counties and supporting

data differs slightly from the original submittal.” (Pet. App.

A106; EPA Br. Exhibits 1-2). Another enclosure or list

entitled “Proposed Indiana Nonattainment Areas” stated that

“Preliminary modeling studies were utilized to designate * * *

Marion [County] as [a] nonattainment region in accordance with

U.S. EPA guidelines” (Pet. App. 106, 107, 109). On January

23, 1978, EPA Region V submitted a report to EPA officials

designating attainment and nonattainment areas in its six-state

region. This report also showed that Marion County’s sulfur

dioxide exceeded both EPA’s primary and secondary standards

(Pet. App. A110, A114).

Mr. Williams’ December 2, 1977, submittal of the November

23, 1977, Draft Support Document was ratified by the Indiana

Air Pollution Control Board on December 14, 1977 (Pet. App.

A103), and the Board reconfirmed its approval of the January

17 version of the Support Document on January 25, 1978, after

a public hearing thereon. As the Technical Secretary of the

Board stated, the Support Document submitted on January 17

differed from the earlier submission that it designated Jefferson

County as attainment rather than nonattainment of sulfur

dioxide, Also on January 25, in order to put EPA on notice of

its concerns, the Board adopted a motion that Marion County

be listed as unclassifiable for sulfur dioxide but nevertheless did

not change the previous recommendations that it be designated

as nonattainment. The letter describing this action stated that

the Board’s staff would present its concerns to the EPA during

the public comment period following EPA’s publication of the

nonattainment designations (Pet. App. A120-121.)

At a February 22, 1978, meeting the Indiana Air Pollution

Control Board adopted a motion requesting the EPA to advise

the Board whether it could modify the January 17 Support

Document or could recall it (Pet. App. A122). Two days later

the EPA advised the Board that since the EPA Administrator

had already signed the nonattainment area designations nation-

wide [on February 23] any modification or recall with respect to

Indiana’s January 17 submittal would require Indiana to submit

additional technical information during the 60-day public com-

ment period following the March 3, 1978, promulgation of a

nationwide attainment status, or would require Indiana to

formally petition for redesignation pursuant to Section 107(d)

(5) of the Clean Air Act (42 U.S.C. § 7407(d)(5)) and

simultaneously submit sufficient technical support to justify a

repromulgation (Pet. App. A123).

On March 9, 1978, the Board wrote the EPA that on January

25 the Board had adopted the nonattainment area designations

and Support Document submitted to the EPA on January 17 by

Technical Secretary Pickard. The letter also stated that at its

February 22 meeting, the Board moved to change Marion

County from nonattainment sulfur dioxide to unclassified even

though the enclosed supplemental Support Document had only

recommended modifying slightly the boundaries of the non-

attainment designation area for Marion County and even though

there was no support in the technical documents for designating

Marion County as unclassified. (EPA App. B54 and EPA

Br. 10.)

On June 12, 1978, Technical Secretary Pickard wrote the

EPA that at its March 22 meeting the Board “reaffirmed its

March 9 comment that Marion County [sulfur dioxide] should

be changed from nonattainment to unclassified.” However,

Pickard added that the Board was not petitioning EPA to make

this change “since Air Pollution Control Division staff cannot

provide adequate technical support for said redesignation.”

(EPA App. B55-56.) As previously noted, on October 5,

1978, after a 60-day comment period and after consideration of

challenges to the validity of the monitored data, the EPA

Administrator reaffirmed his March 3, 1978, promulgation of

Marion County as nonattainn:ent because “The overwhelming

weight of evidence supports primary SO: nonattainment in

Marion County... .” For want of testing he reclassified Marion

County as attainment with respect to the secondary standard for

sulfur dioxide. (EPA App. B4.) As a result, Indiana must

determine what revisions must be made in its 1972 Air Pollu-

tion Control Implementation Plan (SIP) so that the air quality

in Marion County will improve sufficiently to meet the national

primary sulfur dioxide standards by the December 31, 1982,

statutory deadline for national primary standard compliance

(42 U.S.C. § 7502(a)(1).) At the time of the oral argument

we were not advised whether Indiana has as yet submitted a

revised plan setting forth new requirements to be imposed on

pollution sources or whether EPA has approved such a plan.’

Petitioners’ main argument is that the Administrator’s desig-

nation of Marion County as a nonattainment area was based

upon Indiana recommendations that assertedly fall short of

certain procedural requirements imposed by state law. However,

in petitioners’ comments to EPA attacking the designation of

Marion County as a nonattainment area, they did not challenge

the authority of the Board to submit the recommended desig-

nations or the procedures followed by the Board. Therefore,

their attack on the designation by the Board comes too late.

Portland Cement Association v. Ruckelshaus, 486 F.2d 375,

394; Weyerhauser Company v. Costle, 590 F.2d 1011, 1028

n. 15 (D.C. Cir. 1978); 42 U.S.C. § 7607(d) (7) @B).

3. The deadline for such revising of the SIP was July 1, 1979.

Section 172(a)(1) of the Act (42 U.S.C. § 7562(a)(1)).

Subsequent to the oral argument we were advised that the

Circuit Court of Hancock County, Indiana, has decided that in

making its recommendations to EPA the Indiana Air Pollution

Control Board did not properly comply with Indiana law

(Indianapolis Chamber of Commerce, Inc. and Indianapolis

Power & Light Company vy. Air Pollution Control Board of the

State of Indiana, Cause No. 38084, decided May 11, 1979) and

that its designation of Marion County as a nonattainment area

is therefore void. That court’s findings of fact and conclusions

of law supporting its injunction against the Board’s Marion

County sulfur dioxide nonattainment area designation were

those submitted by Indianapolis Power & Light Company. Being

a decision of a nisi prius court, it is not binding on us (Commis-

sioner V. Estate of Bosch, 387 U.S. 456, 465) unless the

decision is affirmed on appeal.*

If, as a result of the final outcome of the Indiana litigation,

the Indiana Air Pollution Control Board develops different

supporting technical information, the EPA Administrator will

evaluate the new submission and possibly change the Marion

County designation under Section 107(d)(5) (42 U.S.C.

7407(d)(5)). However, Section 107(d) does not give him the

authority to disapprove the prior Indiana designation of Marion

County as a sulfur dioxide nonattainment area merely because

the Indiana Air Pollution Control Board may not have com-

plied strictly with state procedural requirements.

4. The Indiana Attorney General is presently considering an

appeal. We certainly doubt that the documents sent by the Air

Pollution Control Board to the EPA and upon which the EPA

designated Marion County as nonattainment for sulfur dioxide can

be deemed “rules” within Indiana Code 4-22-2-3 so that under

IC 4-22-2-5 they must be submitted to the Indiana Attorney General

and approved by the Governor and filed with the Secretary of State

before they can be effective as urged by petitioners. See Citizens to

Preserve Overton Park v. Volpe, 401 U.S. 402, 414.

The EPA Administrator's Designation of Marion County as a

Nonattainment Area is Neither Arbitrary nor Capricious.

In addition to arguments that have been rejected by this

Court in United States Steel Corporation v. United States Envi-

ronmental Protection Agency and Oscar Mayer & Company,

Inc. Vv. Costle, supra, petitioners contend that the EPA’s desig-

nation of Marion County as a nonattainment sulfur dioxide area

is arbitrary and capricious. This is one of the grounds for which

a court may reverse an action of the Administrator. Section

307(d)(9)(D) (i) of the Clean Air Act (42 U.S.C. § 7607

(d)(9)(D)(i). Petitioners’ argument may not be sustained.

The controversy centers on the validity of the monitoring results

underlying the nonattainment designation. As the Government

notes (Br. 16), petitioners have commented extensively before

the Indiana Air Pollution Control Board and the EPA concern-

ing the former’s January 17, 1978, recommended sulfur dioxide

nonattainment designation for Marion County and the Board’s

technical Support Document.® Although the state agency later

sought to withdraw the nonattainment designation, it acknowl-

edged that it had no technical support for doing so (EPA App.

B54-56). Moreover, both the state agency and the EPA deter-

mined that the monitoring data relied upon by the State is valid

for the purpose of designating Marion County asa sulfur dioxide

nonattainment area. Petitioners have disregarded the monitor-

ing information supporting that designation.

In its first Draft Support Document the Indiana Air Pollution

Control Division explained that in designating sulfur dioxide

nonattainment areas such as Marion County within Indiana

its staff

“has followed a set of criteria designed to accommodate

(a) the exact EPA, Region V, guidelines, (b) physical

5. See EPA App. B16-B20, B74-B78 and Record Document

Nos. 34 (44) and (51) for comments before the Indiana agency.

See EPA App. B44-B46-B49-B51 and Record Document Nos. 26

and 27 for comments before the EPA.

6. As explained in its March 3, 1978, decision, in making non-

attainment determinations the EPA “considered all available moni-

toring data where it was determined to be valid” (Pet. App. A3).

realities that produced “freak and unavoidable” violations

of the air quality standards, and (c) isolated, non-comply-

ing emission sources causing the violations (which could be

eliminated in the future by corrective enforcement action

permitted by existing SIP)” (Pet. App. A30).

As a result, this draft showed all Marion County to be non-

attainment as to sulfur dioxide (Pet. App. A32).

As shown in the state agency’s Support Document, the Board

relied upon monitoring data and modeling studies in recom-

mending that Marion County be designated as a nonattainment

area (Pet. App. A80). These are the methods specified by

Section 171(2) of the Clean Air Act (42 U.S.C. 7501(2))

for determining areas to be designated nonattainment under

Section 107(d) (42 U.S.C. § 7407(d)). Thus in that Support

Document the following explanation is given for determining

whether Marion County should be a nonattainment area for

sulfur dioxide:

“Violations of the primary short-term SOz standards

were indicated by the 1976 November 27, 28, and 29 data

from Marion County SAROAD site 5240-033-HO1 at

7436 Mann Road, which is a suburban site. Annual average

SO. estimates using 1975 average emissions and 1975

actually sampled SOz results indicate concentrations as

high as 119°ug/m? in the southwest industrial region of the

city. Projected 24-hour and 3-hour levels by this CDM

study, using U.S. Environmental Protection Agency ap-

proved statistical transformations (Larsen’s transforma-

tions), are well in excess of NAAQS ceilings. Preliminary

short-term estimates also agree with these projections and

tend to suggest potentially high SOs levels within the

county’s industrial area. These estimates were made using

1975 emission figures supplied to the Indiana Air Pollution

Control Division by the various emission sources within the

county in August 1977. Final results of the Indiana Air

Pollution Control Division studies showing potential SO»

levels in Indianapolis will be available after the accuracy of

these emission figures is established by mutual consul-

tations between the sources, the city agency, and the State

Air Pollution Control Division.” (Pet. App. A80.)

ALO

Although the City of Indianapolis’ Air Pollution Control Divi-

sion subsequently criticized the aforesaid November 1976 moni-

toring data because of an alleged monitor malfunction, the

Indiana Air Pollution Control Board did not reverse its non-

attainment designation and did not change its final technical

report. The Indiana Air Pollution Control Board refused to

alter the nonattainment designation based on the City of Indian-

apolis Air Pollution Control Division’s claim of November 1976

monitor malfunction because the city agency “could not produce

strip chart recordings and logs for the high SOz days in ques-

tion” (Pet. App. A142). Therefore the EPA found there was

insufficient evidence to discount the monitoring violations shown

in the final technical report. (Pet. App. Al43; EPA App. B52-

B53.)

In opposing the Indiana Air Pollution Control Board’s use

of its modeling to support the Marion County nonattainment

designation, petitioners offered their own monitoring studies in

an effort to show that the area of Marion County was cleaner

than required. However, EPA rejected petitioners’ studies

because of at least four serious technical deficiencies. (EPA

App. B27-B28.)

In adhering to the Marion County nonattainment classifica-

tion for sulfur dioxide in October 1978, the EPA Administrator

stated:

“Four commenters recommended redesignation of Marion

County from nonattainment for primary and secondary SO:

standards to unclassifiable. Commenters challenged the

validity of the monitored data which demonstrated viola-

tions of the 24-hour primary SO: standard and the accuracy

and validity of dispersion models which predicted viola-

tions of the annual and short-term primary SO: standards.

Upon evaluation, EPA finds that the monitored data is

valid and the dispersion modeling done for Marion County

used an accepted model (CDM), which predicted annual

violations of the SO2 standard. These results have been

supplemented by urban RAM runs which predicted short-

term violations of the SO. standard. The overwhelming

weight of evidence supports primary SOe nonattainment in

All

Marion County and that designation will remain unchanged.

Since secondary violations have been neither monitored nor

predicted by dispersion modeling, Marion County is being

reclassified as attainment for the secondary SO: standard.”

(EPA App. B4.)

Such data reinforces the Administrator's March 1978 primary

sulfur dioxide nonattainment designation for Marion County

and “is pertinent to show the validity of the EPA actions.”

American Petroleum Institute v. EPA, 540 F.2d 1023, 1034

(10th Cir. 1964); see also Amoco Oil Co. v. EPA, 501 F. 2d

722, 729 and n. 10 (D.C. Cir. 1974). These authorities were

followed in our Oscar Mayer & Company decision, supra at

7n. 10.

Since Marion County has been designated as a nonattainment

sulfur dioxide area, under Section 172(b)(3) of the Act (42

U.S.C. § 7502(b)(3)) the Air Pollution Control Division has

prepared a new draft report for the Indiana Air Pollution Con-

trol Board and the State, using the latest methods for determin-

ing sulfur dioxide concentrations in Marion County. This showed

that “sources in Marion County would cause violations of 24-

hour primary NAAQS [national ambient air quality standards]

for SOz at several locations in the [deadline] year 1982.”

Consequently a revised SIP will be prepared for Indiana in

order to protect the health and welfare of Marion County resi-

dents. (EPA Br. Exhibits 3-4.) Petitioners will be able to com-

ment on the revised SIP by participating in the state hearings

thereon and by commenting on the proposed federal action once

the SIP is submitted to EPA. This further undercuts petitioners’

claim that EPA has acted in an arbitrary and capricious fashion

in thus far adhering to the Indiana Air Pollution Control Board’s

recommended designation of Marion Couity as a sulfur dioxide

area. At present the EPA Administrator has no justification

for rejecting Indiana’s technically supported recommendation

that Marion County be designated a nonattainment area for

sulfur dioxide purposes.

The March 3, 1978, decision of the EPA Administrator

is affirmed.

Al2

IN THE UNITED STATES COURT OF APPEALS

For the Seventh Circuit

Nos. 78-1563 and 78-1564

UNITED STATES STEEL CORPORATION, and YOUNGSTOWN SHEET

AND TUBE COMPANY,

Petitioners,

vs.

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY,

Respondent.

Petitions for Review of an Order from the

United States Environmental Protection Agency

ARGUED APRIL 18, 1979—Decided AuGusT 1, 1979

Before CASTLE, Senior Circuit Judge, CUMMINGS and

SPRECHER, Circuit Judges.

SPRECHER, Circuit Judge. This case arises from the Environ-

mental Protection Agency’s promulgation of a list designating

those areas which do not meet national primary or secondary

ambient air quality standards. The petitioners attack these

designations on both substantive and procedural grounds.

We find both claims to be without merit, and we uphold the

agency's designations.

Under the Clean Air Act, 42 U.S.C. § 7401-7626, the

Administrator of the EPA was required to promulgate national

primary and secondary ambient air quality standards. 42

Al3

U.S.C. § 7409(a). The Administrator has promulgated these

standards and they are codified at 40 C.F.R. § 50.1-50.11

(1978). After these standards were established, the states had a

statutory responsibility to develop implementation plans to

achieve these standards, See 42 U.S.C. § 7410. The Act re-

quired the state plans to provide for the attainment of these

standards no later than 1975. However, in 1977 it became clear

that these standards had not yet been achieved. Accordingly,

Congress amended the Act to restructure the scheme for attain-

ing these standards. Clean Air Act Amendments of 1977,

P. L. 95-95, 91 Stat. 685 (August 7, 1977). These amendments

pushed the primary standard compliance deadline forward to

1982. 42 U.S.C. § 7502(a)(1). Further, to insure that this

deadline would be met, Congress established a new implementa-

tion process. This implementation process was to begin with a

combined state and federal effort for the designation of those

areas not in compliance with air quality standards. 42 U.S.C.

§ 7407(d)(1).? The designation of an area as “nonattainment”

1. The text of the provision is set out below:

List of noncomplying regions

(d)(1) For the purpose of transportation control planning, part D

of this subchapter (relating to nonattainment), part C of this sub-

chapter (relating to prevention of significant deterioration of air

quality), and for other purposes, each State, within one hundred and

twenty days after August 7, 1977, shall submit to the Administrator

a list, together with a summary of the available information, identify-

ing those air quality control regions, or portions thereof, established

pursuant to this section in such State which on August 7, 1977—

(A) do not meet a national primary ambient air quality

standard for any air pollutant other than sulfur dioxide or

particulate matter;

(B) do not meet, or in the judgment of the State may not in

the time period required by an applicable implementation plan

attain or maintain, any national primary ambient air quality

standard for sulfur dioxide or particulate matter;

standard;

(D) cannot be classified under subparagraph (B) or (C) of

this paragraph on the basis of available information, for ambient

air quality levels for suifur oxides or particulate matter; or

(Footnote continued on next page.)

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imposes upon the state the obligation to include certain more

stringent provisions in its implementation plan. 42 U.S.C.

§ 7502.

Under the scheme established by § 7407(d)(1), the states

were required to submit to the EPA, within one hundred and

twenty days after the passage of the Act, a list identifying the

attainment status of all air quality control regions within the

state. Pursuant to this requirement, Harry D. Williams, director

of the Air Pollution Control Division of the Indiana State Board

of Health submitted a draft copy of the state of Indiana’s desig-

nations, indicating that a final copy would be sent on December

5, 1977, the statutory deadline. The final report designated por-

tions of Northern Indiana in which petitioners operate steel

works as nonattainment areas.

The EPA published its list of attainment designations, based

on the state’s submissions, on March 3, 1978. 43 Fed. Reg.

8962." This list accepted the state of Indiana’s designation of

(Footnote continued from preceding page.)

(E) have ambient air quality levels better than any national

primary or secondary air quality standard other than for sulfur

dioxide or particulate matter, or for which there is not sufficient

data to be classified under subparagraph (A) or (C) of this

paragraph.

(2) Not later than sixty days after submittal of the list under

paragraph (1) of this subsection the Administrator shall promulgate

each such list with such modifications as he deems necessary. When-

ever the Administrator proposes to modify a list submitted by a

State, he shall notify the State and request all available data relating

to such region or portion, and provide such State with an oppor-

tunity to demonstrate why any proposed modification is inappropriate.

(4) Any region or portion thereof which is not classified under

subparagraph (B) or (C) of paragraph (1) of this subsection for

sulfur dioxide or particulate matter within one hundred and eighty

days after August 7, 1977, shall be deemed to be a region classified

under subparagraph (D) of paragraph (1) of this subsection.

(5) A State may from time to time review, and as appropriate

revise and resubmit, the list required under this subsection. The

Administrator shall consider and promulgate such revised list in

accordance with this subsection.

2. The statutory deadline for promulgating these designations

was February 3, 1978. As mentioned later in the text, infra p. 9, th’

(Footnote continued on next page.)

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certain portions of Northern Indiana as “nonattainment.” Fur-

thermore, the EPA indicated that although these designations

were to be immediately effective, it was soliciting comments on

these designations for 60 days. Comments were submitted by the

petitioners in this case and by other interested parties, and on

October 5, 1978, the EPA reaffirmed its designation of certain

portions of Northern Indiana as nonattainment, although it did

make alterations in designations with respect to other areas.

43 Fed. Reg. 46007.

Petitioners contend that the EPA’s promulgation of these

attainment designations violated the procedural requirements of

5 U.S.C. § 553 by not providing for notice and comment prior

to the effective dates of the designations.* We reject this conten-

(Footnote continued from preceding page.)

failure to meet the deadline may have been due in part to late

submissions by states.

3. The threshold issue posed by this contention—viz., that the

designations constituted rulemaking—is not without difficulty, despite

the Fifth Circuit’s unanalyzed assertion that “the designations clearly

come within the broad statutory definition.” United States Sieel Corp.

v. EPA, No. 78-1922, at 7-8 (Sth Cir., May 3, 1979). The Adminis-

trative Procedure Act defines a “rule” as “an agency statement of

general or particular applicability and future effect designed to

implement, interpret, or prescribe law or policy... .’ 5 U.S.C.

§ 551(4). Although the words “or particular applicability” perplex-

ingly appear to expand this definition beyond useful perimeters, the

legislative history demonstrates that these words were added late in

the consideration of the act to prevent legislative-type promulgations

from falling outside the definition of “rule” when they were directed

to “named persons.” S. Rep. No. 248, 79th Cong. 2d Sess. 283

n.1 (1946); K. Davis, Administrative Law Treatise § 5.02, at

295-96 (1958). Thus, where a general statement of policy is directed

to a group of multiple, but specified, parties, the statement is a rule.

However, a designation, such as the one in this case, that applies

solely to a specific, delimited situation is an entirely different matter.

Indeed, the EPA’s designation of areas as nonattainment is directly

analogous to the Secretary of Transportation’s designation of areas

in public parks as necessary routes for the construction of highways,

a function which the Supreme Court termed as “plainly not an

exercise of a rulemaking function.” Citizens to Preserve Overton

Park v. Volpe, 401 U.S. 402, 414 (1971). Under this theory, the

(Footnote continued on next page.)

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tion on two grounds. First, we hold that the agency had “good

cause” to postpone the proceeding within the meaning of section

553’s specific exemption. Second, we find that even if the

agency lacked “good cause” within the terms of section 553, we

are precluded from reversing by the Clean Air Act. The Act

limits the circumstances in which rules promulgated by the

EPA may be reversed for procedural errors.

Section 553(d) of the Administrative Procedure Act contains

two “good cause” exceptions. The first, section 553(b)(B)

provides that notice of, and public comment on, agency rules

may be dispensed with “when the agency for good cause finds

.., that notice and public procedure thereon are impracticable,

unnecessary or contrary to the public interest.” The second,

section 553(d)(3), provides that “[t]he required publication or

service of a substantive rule shall be made not less than 30

days before its effective date except . . . (3) as otherwise

provided by the agency for good cause found and published with

the rule.” Accordingly, in a case such as the one before us

where a regulation is made effective before notice and comment,

the agency could rely on either “good cause” provision. Thus,

the EPA made its attainment designations immediately effective,

stating:

The States are now preparing revisions to their State

implementation plans (SIPs) as required by sections 110

(a)(2)(1) and 172 of the Act. This enterprise, which

must be completed by January 1, 1979, requires that the

States have immediate guidance as to the attainment status

of the areas designated under section 107(d). Congress

has acknowledged this by imposing a tight schedule on the

designation process and requiring EPA to promulgate the

list within 180 days of the enactment of the amendments.

—

(Footnote continued from preceding page.)

agency’s designation of attainiment areas would not be subject to the

requirements of section 553. Since the agency, however, has termed

these designations as rules, we need not reach this issue.

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Under these circumstances it would be impracticable and

contrary to the public interest to ignore the statutory sched-

ule and postpone publishing these regulations until notice

and comment can be effectuated. For this good cause, the

Administrator has made these designations immediately

effective.

The agency's statement of “good cause” does not reveal on

which of the two provisions the agency was relying. Although at

least two commentators have suggested that the two provisions

provide the same standard of good cause,' we believe that the

standards are distinct and that the agency action, while justifiable

under the (b)(B) standard, is unquestionably justifiable under

the broader standard set out by (d) (3).

Turning first to whether the agency action here was justified

under the narrower (b)(B) standard, we find that such justifica-

tion existed under the impracticability standard embodied in the

statutory language of the first good cause exception. The legis-

lative history of this impracticability standard reveals that

Congress intended this exemption to operate when the regular

course of rulemaking procedure would interfere with the

agency’s ability to perform its functions within time constraints

imposed by Congress. Early versions of this provision allowed

public participation to be dropped where it was “impracticable

because of unavoidable lack of time or other emergency.”

S. Doc. No. 248, 79th Cong., 2d Sess. 140, 148, 157 (1946).

The exception was broadened by the elimination of this quali-

fying language. The Senate and House Reports interpreted

“impracticable” in this broader formulation as a situation “in

which the due and required execution of the agency functions

would be prevented by its undertaking public rule-making

proceedings.” /d. at 200, 258.

Two other courts have agreed that the “good cause” exception

may be utilized to comply with the rigors of a tight statutory

4. See K. Davis, Administrative Law of the Seventies § 6.01-11

at 207 (1976); Bonfield, Public Participation in Federal Rulemaking

Relating to Public Property, Loans, Grants, Benefits, or Contracts,

118 U. Pa. L. Rev. 540, 599-600 (1970).

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schedule. In Clay Broadcasting Corp. v. United States, 464 F. 2d

1313 (Sth Cir. 1972), rev’d on other grounds sub nom.

National Cable Television Assn., Inc. v. United States, 415 U. S.

336 (1974), the court held that the FCC had good cause to

dispense with rulemaking before altering a license fee schedule

since |

(1) wide-spread notice in fact would be provided affected

parties; (2) a first of the month effective date was re-

quired for administrative pro-ration of yearly fees; and

(3) that in accordance with Congressional directives the

Commission wanted the fee schedule to cover as much of

fiscal 1971 as reasonably possible.

Id. at 1320. Likewise, in Energy Reserves Group v. FEA, 447

F. Supp. 1135 (D. Kan. 1978), the Court found that promul-

gation without rulemaking proceedings of regulations defin-

ing a congressional exemption to its oil price control scheme

was justified under the “good cause” exemption. Congress

required these regulations to be promulgated in 15 days, leading

the court to find “good cause” to rely on “the legislative require-

ment of expeditious promulgation.” Jd. at 1150.

The legislative scheme involved in this case also confronted

the EPA with a series of tight statutory deadlines. The EPA was

given 60 days after the date on which states were required to

provide lists of nonattainment areas to promulgate final desig-

nations of nonattainment areas. 42 U.S.C. § 7407(d)(2).

More importantly, the states were required to have promul-

gated implementation plans for designated nonattainment areas

by January 1, 1979. 42 U.S.C. § 7502 (annotation) [Pub.

L. 85-85, § 129(c)]. These plans are to provide for attainment

in these areas “as expeditiously as practicable . . . [but] not

later than December 31, 1982.” 42 U.S.C. § 7502(a)(1).

Furthermore, the development of these plans is a time-consuming

process, requiring formal involvement by the public, local gov-

ernments and state legislative bodies as well as the redevelop-

ment of current emissions inventories. Jd. at § 7502(b). These

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deadlines were a response to the failure of the states to meet

prior attainment deadlines and represent Congressional concern

over the seriously adverse health consequences of continued

nonattainment.° H. Rep. No. 294, 95th Cong., Ist Sess. 207-211

5. Ironically, much of the Congressional concern over delays in

meeting ambient air quality standards was directed at the failure of

the petitioners in this case to reach compliance. The only specific

example of nonattainment given by the House Report was contained

in the following passage:

The committee is also mindful of the fact that several

categories of major polluters have not complied with emissions

limits in nonattainment areas. The 1975 subcommittee hearings

reflect this disturbingly high incidence of non-compliance. In

particular, the following testimony is of great concern:

Mr. Rogers: Let’s see, we have had the law 5 years

now. Could you tell me company by company, how many

of your plants are in compliance presently and how many

are not?

Mr. Armour [Interlake, Inc.]: I think we have to define

in compliance with what.

Mr. Rogers: The Clean Air Act?

Mr. Armour: We do not have any in compliance.

Mr. Anderson [Bethlehem Steel Corp.]: None.

Mr. Jaicks [Inland Steel Co.]: None.

Mr. Mallick [U. S. Steel Co.]: None.

Mr. Tucker [National Steel Corp.]: We have no plants

in compliance.

Mr. Jaicks: It sounds terrible. But these are hard value

money expenditures.

H. Rep. No. 294, 95th Cong., Ist Sess. 210-11 (1977). Given that

the strict deadlines were intended to force compliance by U. S. Stecl

and others, we are hesitant to allow U.S. Steel to again delay

compliance through its procedural challenges. We note that if we

were to remand in this case, the entire deadline scheme would be

thrown into complete disarray. State Implementation Plans, which

were scheduled to be (and presumably were) formulated by January

1, would have to be further delayed while the EPA proceeded with

yet another notice and comment period, and after promulgation of

those designations states would have to repeat the hearing-consulta-

tion process in order to resubmit implementation plans. In the Fifth

Circuit’s remand of the rulemaking now before us, the court delayed

the state deadline until nine months after the second “final” promul-

gation. This, of course, would (given four months to receive and

evaluate comments) throw off the statutory scheme by almost two

years. See United States Steel Corp. v. EPA, No. 78-1922 (Sth Cir.,

May 3, 1979). Thus, remand in this case would permit U. S. Steel to

continue the very procrastination which Congress sought to end.

A20

(1977). Thus, the EPA was properly concerned that these

explicit deadlines be met. This concern was magnified by the

fact that some states, such as Wisconsin, were almost 2 months

late in submitting their proposed designations. See Oscar Mayer

Co. v. Costle, No. 78-1548 (7th Cir. 1978) (decided with this

case). Since some of these designations had to be rejected by

the EPA,® more time was required between the state submission

and EPA publication. Adding one month for comment and four

months to review and respond to these comments,’ compliance

with notice and comment procedures would have delayed

promulgation by five months or more, leaving the states with

less than 6 months to formulate implementation plans. Thus,

given the “legislative requirement of expeditious promulgation,”®

the need for the states to begin promptly their own planning

process,® and the continuing adverse impact on health that any

6. For example, the state of Wisconsin’s designation of Madison

had to be altered. See Oscar Mayer Co. v. Costle, No. 78-1548 (7th

Cir. 1978) (decided with this case).

7. This is the time that it actually took the EPA to review these

comments. The Third Circuit in its computation of the time that

pre-promulgation notice and comment would have required in this

case allowed the EPA only ninety days to evaluate. Sharon Steel

Corp. v. EPA, No. 78-1522 (3d Cir., April 25, 1979). We see no

reason to adopt this apparent presumption that the EPA was dilatory

or inefficient in reviewing the comments. As discussed further in

note 14 infra, we believe that the Third Circuit ignored applicable

law in its remand of the designations at issue in this case, and we

have declined to adopt its reasoning or its result. See also note

11 infra.

8. Other cases finding that the agency had sufficient opportunity

to meet deadlines and still supply prior comment opportunity are

distinguishable in that they involved much longer time periods than

the instant case. In American Iron & Steel Institute vy. EPA, 568

F, 2d 284 (3d Cir. 1977), the EPA knew of its duty to promulgate

regulations three years before the deadline. Likewise in Consumer

Union of U.S., Inc. v. Sawhill, 393 F. Supp. 639 (D. D.C.), aff'd,

523 F.2d 1404 (Emer. Ct. App. 1975) there was more than one

year between passage of the act and the final deadline.

9. The need to supply information promptly to facilitate planning

has been recognized by Congress as creating “good gttuse.” A House

Oversight Committee approved the Department of Agriculture’s use

(Footnote continued on next page.)

A2l

further delays would entail,"’ we hold that the administrator

(Footnote continued from preceding page.)

of the exception to make last-minute changes in acreage allotments

and marketing quota regulations without prior comment in order to

facilitate farmers’ planting decisions. Staff of House Comm. on

Gov’t Operations, 85th Cong., Ist Sess., survey and study of Adminis-

trative Organizations, Procedure and Practice in the Federal Agen-

cies 26-27 (Comm. Print 1957), as cited in Bonfield, supra note 3,

at 595.

10. The magnitude of this impact was set out in the most

compelling terms by the House Report on the amendments:

In one of these studies, the National Environmental Research

Center (1974) evaluated the potential public health effects of

increased emissions of sulfur oxides from steam electric power-

plants, attributable largely to increased use of coal in the

absence of sulfur oxide stack gas cleaning. Excess mortality and

illness rates were calculated by obtaining a damage function for

each of five health effects associated with sulfur oxide exposure.

Damage functions were based upon published results from

studies in 2 to 6 geographic areas per adverse health effect.

Population size and exposure for each electric power region east

of the Mississippi River were considered, and estimates of

illness attributable to sulfur oxides were derived. A portion cf

the results is shown in the following table:

ESTIMATES OF ADVERSE HEALTH EFFECTS

ATTRIBUTABLE TO SULFUR OXIDE

EXPOSURES IN THE EASTERN UN!ITED STATES

Estimate of illness attributable

to acid sulfates

Adverse health effects Standards met Standards not met

1975 1980 1975 1980

Million days of aggravated

heart and lung disease...... Rae 8.2 24.4 33.8

Increased number (millions )

of asthma attacks.......... y Ee 8 8.8 11.5

Thousands of lower respiratory

diseases in children......... 48.0 0 486.0 888.0

As shown, nonattainment of air quality standards in a wide

and densely populated region could result in a phenomenal

health impact, measured in terms of millions of days of aggra-

vated disease, asthma attacks and lower respiratory disease

episodes. Obviously, these are only projections, not predictions,

of the impact of increased sulfur oxide emissions in an area

that is already heavily impacted with emission sources. (1977

House hearings, American Lung Association, pp. 3-4).

(Footnote continued on next page.)

A22

had “good cause” to exempt these designations from § 553."

Even if the EPA’s actions here were not justified by the

impracticability standard of the § 553(b)(B) exemption, we

nonetheless hold that it had “good cause” within the meaning of

553(d)(3). We disagree that the phrase “good cause” should

be interpreted similarly in both provisions. First, Congress inten-

tionally added modifying language giving specific instances of

good cause to 553(b)(B), i.e., where notice and comment are

“impracticable, unnecessary, or contrary to the public interest.”

That language is missing in (d) (3). Furthermore, since (d) (3)

only dispenses with prior notice and comment, and not notice

and comment altogether there is sound reason to believe that

“good cause” should encompass more situations in (d)(3) than

in (b)(B). Finally, the legislative history of (d)(3) shows that

Congress considered a broader category of “good cause” for

(Footnote continued from preceding page.)

H. Rep. No. 294, 95th Cong., Ist Sess. 209 (1977). The Fifth

Circuit in United States Steel v. EPA, No. 78-1922 (Sth Cir., May 3,

1979), discussed and rejected at notes 11 & 14 infra, declined to

apply the “good cause” exception in its review of the EPA rule under

review here, holding that it was a “safety valve to be used where

delay would do real harm” and citing as an example regulations

designed to alleviate gas shortages and consequent violence at gas

stations. See Reeves v. Simon, 507 F. 2d 455, 458-59 (Emer. Ct.

App. 1974), cert. denied, 420 U. S. 991 (1975). We are at a loss to

understand how gas shortages and fistfights constitute ‘real harm”

whereas mortality and illness resulting from continued high levels of

air pollution do not.

11. Of course, a remand at this point would intolerably delay

the implementation of the statutory scheme and completely frustrate

the Congressional purpose. For example, the Fifth Circuit in United

States Steel v. EPA, No. 78-1922 (Sth Cir. May 3, 1979), admitted

that this remand would delay state implementation plans by more

than seven months. Slip op. at 14. This admission was somewhat

conservative since the new time scheme dictated by the court to

replace the Congressional scheme would have involved at least 13

months from the date of decision not counting the notice and com-

ment period which we have suggested would add four to five more

months. See text accompanying note 7 supra. Thus, the Fifth

Circuit’s remand will set back the schedule by almost two years

behind the January 1, 1978 implementation date. Further, the Third

Circuit’s approach to this problem strikes us as unsound. Recogniz-

(Footnote continued on next page.)

A23

this exemption than those specified in the three instances set out

in (b)(B). The House Report on the APA stated:

Many rules . . . may be made operative in less than

30 days because of inescapable or unavoidable limitations

of time, because of the demonstrable urgency of the condi-

tions they are designed to correct, and because the parties

subject to them may during the usually protracted hearing

and decision procedures anticipate the regulations.

S. Doc. No. 248, 79th Cong., 2d Sess. 260 (1946). In par-

ticular, the reference to “demonstrable urgency” appears to per-

mit findings of “good cause” in more situations than (b)(B)

would permit, and certainly such urgency exists in this case

where any delay in the EPA’s designation would run the risk

of delaying the formulation of state implementation plans and

the consequent health detriment of delayed nonattainment.

Even if the agency’s procedures here were not in technical

compliance with § 553 of the APA, we would still not be able

to reverse the Administrator’s action in this case. We have al-

ready noted the Congressional concern manifest in the Clean

Air Act that national attainment be achieved as expeditiously

as practicable. This concern was reflected in the desire that

the due administration of the statutory scheme not be im-

peded by endless litigation over technical and procedural irregu-

larities. As the House Report to the Amendments stated:

(Footnote continued from preceding page.)

ing that the remand of the proceedings might “endanger the Con-

gressional scheme for the control of air pollution,” the [hird Circuit

attempted to resolve this difficulty by leaving the designations in

effect except as to the two petitioners in the case before the court.

Sharon Steel Corp. v. EPA, No. 78-1522, slip op. at 9 (3d Cir.

April 25, 1979). If the rule is defective, however, we see no reason

why anyone, whether they filed suit or not, should be subject to it.

We, of course, have found the designation procedure valid and

decline to follow the Third and Fifth Circuits. See also note 14 infra.

This opinion has been circulated among all judges of this Court in

regular service. A majority did not favor a rehearing in banc on the

question of this difference among circuits.

A24

Under the flexible procedures specified by the commit-

tee, disputed questions of classification may arise concern-

ing, for example, whether a given question involves “facts”

or “policy” or whether a given fact is “legislative” or “ad-

judicative.” To prevent rulemaking from bogging down in

arguments about such matters, and to underline that the

agency is authorized to adopt rule-making procedures to

the individual case, the committee has limited the extent

to which the Administrator’s decisions on such procedural

Matters may be reversed during judicial review.

H. Rep. No. 294, 95th Cong., Ist Sess. 322 (1977).

Accordingly, the following limitations on review were enacted.

Section 7607(d)(9) provides:

In the case of review of any action of the Administrator

to which this subsection applies, the court may reverse any

such action found to be—

(D) without observance of procedure required by law, if

(i) such failure to observe such procedure is arbitrary or

capricious, (ii) the requirement of paragraph (7) (B)

[that “only an objection to a . . . procedure which was

raised .. . during the period for public comment. . .” may

be raised during judicial review] has been met, and (iii)

the condition of the last sentence of paragraph 8 [that the

procedural errors “were so serious and related to matters

of such central relevance to the rule that there is a sub-

stantial likelihood that the rule would have been signifi-

cantly changed if such errors has not been made” is met.

Even if this rulemaking procedure is not one of those specified

in subsection(d),’* the legislative report’s reference to the legis-

12. Arguably these designations fit within the subsection’s appli-

cation to “the promulgation or revision of an implementation plan

by the Administrator under section 7410(c) ...” or to the “promul-

gation or revision of regulations under subtitle C of subchapter I of

this chapter (relating to prevention of significant deterioration of ait

quality and protection of visibility).” 42 U.S.C. § 7607(d)(1)(B),

(1). The designation of areas as “attainment” or “nonaitainment” is

an integral part of the promulgation of implementation plans and of

regulations designed to prevent significant deterioration of air quality.

(Footnote continued on next page.)

A25

lative-adjudicative distinction (a procedural issue which is not

addressed in subsection (d) and which relates to the propriety

of any rulemaking at all) suggests that Congress meant this

limitation on review of procedural errors to extend to all rule-

making by the EPA whether or not it is in the explicit categories

covered by all the provisions of section 7607(d). Thus, section

7607(e) provides:

Nothing in this chapter shall be construed to authorize

judicial review of regulations or orders of the Administra-

tor under this chapter [i.e., the Clean Air Act of 1970},

except as provided in this section.

Applying section 7607(d) (9) to the alleged procedural errors

in this case, we find that none of the prerequisites for reversal

fave been satisfied. First, given the statutory time constraints

and the delays that would be occasioned by prior notice and

comment, we cannot say that it was arbitrary and capricious for

the Administrator to postpone notice and comment until after

the effective date. Second, we find no evidence in the record that

the petitioners ever raised these procedural matters in the notice

and comment period. The only issues raised by them during

that period related to the substantive validity of the designations.

Finally, we cannot say that the rule under review would have

been any different if notice and comment had occurred before

the effective date. It is important to realize that the rule under

review here is the rule as finally promulgated in October 1978

and reflects many final changes made in the rule as a result of the

EPA’s consideration of submitted comments. Compare 43 Fed.

(Footnote continued from preceding page.)

See especially 42 U.S.C. § 7407(d)(1), stating that the desig-

nations are “[fjor the purpose of .. . part C of this subchapter

(relating to prevention of significant deterioration of air quality).”

Subchapter C, for example, (42 U.S.C. § 7470-91) sets out the

provisions applicable to areas designated “attainment.” 42 U.S.C.

§ 7471. Likewise, state implementation plans must have special

provisions for nonattainment areas. 42 U.S.C. §§ 7501-08. Thus,

no regulations with respect to implementation plans under subchapter

C or subchapter D (§§ 7501-08) can be promulgated without these

designations.

A26

Reg. 8963 (1978) with 43 Fed. Reg. 45988 (1978).* Given

that the agency was clearly willing to consider, fully and objec-

tively, all comments in the post-promulgation period, there is

no reason to believe that its consideration of the comments

would have been any different if completed before the effective

date. Thus, we cannot make the required finding that the rule

would have been different if the notice and comment period

had occurred earlier."*

The petitioners also challenge the designation of the north-

ern portion of Lake County, Indiana as “nonattainment,” argu-

ing that the failure of the designation to delimit an even smaller

portion of Lake County as the only nonattainment area was

arbitrary and capricious. The designation was based on the

following data. First, violations of sulfur dioxide primary stand-

ards were monitored at the Hammond continuous monitor dur-

ing April 1976 as well as April and May 1977. Second, “the

results of short-term modeling studies carried out for various

sources in the area using the 1974 emissions . . . [indicated] the

potential of reaching some very high level values .. .” in the

northern portion of Lake County. See Indiana Air Pollution

13. Numerous pending challenges to the attainment designations

were dropped as a result of the EPA’s revision of the designations.

See Bethlehem Steel Co. v. EPA, No. 78-1556 (7th Cir., Nov. 28,

1978); Central Phosphate, Inc. v. Costle, No. 78-1929 (Sth Cir.,

October 16, 1978); CF Chemicals, Inc. v. Costle, No. 78-1931 (Sth

Cir., Oct. 16, 1978); Occidental Oil Shale, Inc. v. EPA, No. 78-

1325 (10th Cir., October 6, 1978); National Zinc Co. v. EPA, No.

78-1327 (10th Cir., Oct. 6, 1978); Gulf Oil Corp. v. EPA, No.

78-1323 (10th Cir., Oct. 6, 1978); Board of County Comm'rs vy.

EPA, No. 78-1326 (10th Cir., Oct. 6, 1978).

14. The two cases reaching contrary results and remanding these

designations to the EPA for notice and comment prior to etiective

issuance neither mention nor apply the special review provisions of

section 7607(d)(9)(D). Sharon Steel Corp. v. EPA, No. 78-1522

(3d Cir., Apiil 25, 1979); United States Steel Corp. v. EPA, No.

78-1922 (Sth Cir., May 3, 1979). Since we believe this provision to

be applicable and controlling, we reach a different result than these

cases. See footnote 11 supra.

A27

Control Division, Proposed Nonattainment Areas in Indiana:

A Support Document, IV-183 (1977) [Pet. Appendix at 56].

Since monitors only indicate air quality at the monitoring site

alone, modeling studies are necessary to extrapolate from the

monitor data to determine air quality throughout a larger region.

The use of such studies. to assess air quality throughout wide

regions has been approved in Cleveland Electric Illuminating

Co. v. EPA, 572 §. 2d 1150, 1160-64 (6th Cir.), cert. denied,

ee, Smee

The petitioners forward three arguments as to why this fac-

tual basis is insufficient to support the designation under review.

First, they point out that the modeling studies were based on

1974 data and did not take into account any emission reductions

that may have occurred since then. Second, the petitioners rely

on their own modeling studies. Petitioner Youngstown cites its

own study, prepared by Arthur D. Little, Inc., as allegedly sup-

porting the conclusion that the major contributors to this high

monitor reading were two oil refineries near the Hammond

monitor and that other sources in the area are not major con-

tributors. Petitioner United States Steel likewise claims that its

own study, prepared for it by Equitable Environmental Health,

concludes that the days on which violations were recorded at

the Hammond monitor were days on which the prevailing wind

direction would preclude any impact by the petitioner’s source

and that on the days that the wind would have permitted such

an impact, no violations were recorded. Finally, the petitioners

cite the conclusion of a subsidiary EPA official that data for the

Lake County area was insufficient and that, pending more ex-

tensive studies, only the area directly around the Hammond

monitor should be designated nonattainment.

We do not find these arguments to be a persuasive basis for

overturning the designations. First, the petitioners’ argument

that the modeling was based on outdated data is not compelling.

Any strength that it might have could only be based on peti-

tioners’ assertion that improvements in emissions have been

A28

effected since 1974. There is, however, no support for this

assertion in the record. Petitioners’ comments on the proposed

designations do not even make this assertion, much less provide

any factual support for it. Indeed, the comments do not squarely

raise the objection that the data is too old, and thus the peti-

tioners are arguably precluded from raising this objection be-

fore this court. Finally, since the designation of an area as non-

attainment triggers the requirement that the state engage in

comprehensive current monitoring in order to define more pre-

cisely the attainment status of various regions, see 42 U.S.C.

$ 7502(b)(3), the use of three-year-old data to make this

initial designation can hardly be said to be arbitrary or capri-

cious,

Nor do we find that the petitioners’ studies compel a different

conclusion. The gist of these studies is that other sources were

the principal contributors to the measured excesses. This argu-

ment assumes that the designation process is designed to define

those areas in which the principal offending sources are con-

tained. The statute does not expressly state the standards or

methods by which areas are to be designated. Although one

method would be to designate the areas containing the principal

offenders as nonattainment, another approach would be to look

simply at the expected air quality throughout a region and des-

ignate noncomplying areas, regardless of the origin of the non-

compliance, as “nonattainment.”’ The EPA has clearly adopted

the latter approach. In its response to comments made before

issuance of the final designations, the EPA stated:

The purpose of the designations is to identify air quality

problem areas for which the States and EPA must seek

solutions . . . . The area designation . . . thus does not

in and by itself dictate the applicable new or existing source

requirement. There are essentially three reasons for this.

First, because air pollution emissions are transported

from one area to another, the sources that cause or con-

tribute to a violation, or affect a clean locality, may be in

different locations from the violation or clean locality it-

A29

self. Controls will therefore often have to apply to sources

outside of the area that the controls are intended to protect.

Second, States may choose to impose requirements over

a broader or narrower geographic region than the precise

area where sources exist that directly contribute to particu-

lar concentrations of a pollutant. For example, for reasons

of equity, simplicity of administration, or to allow more

growth in clear areas, states may choose to make their

revised emission limitations applicable statewide, rather

than restricting the requirement to sources that directly

cause or contribute to violations.

Finally, section 107(d) of the Act provides that attain-

ment status designations were to be made within a very

short time period, and were to be composed of air quality

control regions (or portions thereof), which are often

based on State, county, or other political jurisdictional

boundaries. This process is bound to include pockets where

the air quality does not correspond to the designation of

the area. These anomalies can be taken into account in

the more elaborate and thorough proceedings required

under the Act for development of plans and issuance of

individual permits.

43 Fed. Reg. 40413 (Sept. 11, 1978) (emphasis added).

The EPA specifically used this approach with respect to the

designation at issue here. In reply to comments on the Lake

County designation, the EPA stated:

Ten commenters requested revisions to the size of the

sulfur dioxide (SOz) primary nonattainment area in Lake

County . . . . [EJach commenter recommended that the

city where the commenter was located be excluded from the

nonattainment area . . . [because] most of the heavy in-

dustry in the area was not responsible for the violations

which were monitored... .

The northern portion of Lake County, Indiana, is heavily

industrialized with a significant number of large SOz emis-

sion sources and relatively few continuous SO2 monitors

in operation. Despite the scarcity of the monitors, violations

of the standard have been monitored. For this reason, the

area must remain nonattainment for SOs.

A30 A31

Clearly, therefore, the EPA treats the designation process as Accordingly, the petitions to set aside the § 7407(d) designa-

defining areas with problematic air quality and not merely pin- tions are denied.

pointing those areas which contain problematic sources. Since

“the construction of a statute by those charged with its execu-

tion should be foilowed unless there are compelling indications Teste:

that it is wrong,” Red Lion Broadcasting Co. v. FCC, 395 U.S.

367, 381 (1969), we must accept the EPA’s interpretation of OE SRS REE EINES CN EES “angen

the designation process. Accordingly, the petitioners’ conten- Clerk of the United States Court of

tions here that the problems of air quality found within Lake Appeals for the Seventh Circuit

County may be traced to sources other than the petitioners and

in a definable area are irrelevant to the designations adopted by

the EPA. The monitored exceedances and the modeling studies

demonstrated, and petitioners do not really contest, that the air

quality in northern Lake County did not meet applicable stand-

ards, and that is sufficient to support the designations regardless

of the source of the noncompliance.

A true Copy:

The petitioners finally rely on the conclusion of an EPA

employee to support their conclusion that a smaller area should

have been designated nonattainment. Specifically petitioners cite

a report by Gerald Regan, Chief of the Air Surveillance Branch

for Region V of the EPA, made after reading the research

study submitted by United States Steel discussed above and in

which he recommended that the nonattainment designation be

restricted to the “immediate vicinity” of the Hammond monitor.

However, he also stated in this report that “it is probable that :

the primary SOs standard is being exceeded at locations other

than the .. . [monitoring] site in Hammond.” As we note above,

those probable excesses are sufficient to support nonattainment

designations, and thus any suggestion by Mr. Regan to limit

the nonattainment area must be based on the theory, which

we have rejected, that the designation process is designed to

pinpoint the principal offending sources. Therefore, nothing in

this recommendation provides any reason to overturn the desig-

nations under review.

A32

IN THE HANCOCK CIRCUIT COURT

State of Indiana ois

County of Hancock

INDIANAPOLIS CHAMBER OF COM- )

MERCE, INC. and INDIANAPOLIS

POWER & LIGHT COMPANY,

Plaintiffs,

Vs, - Cause No. 38084

AIR POLLUTION CONTROL BOARD OF

THE STATE OF INDIANA,

Defendant. )

JUDGMENT

The Court, having examined the record, and being duly

advised, now enters summary judgment for the plaintiff Indian-

apolis Power & Light Company and against the defendant in

the above cause. It is hereby ORDERED, ADJUDGED and DECREED

that:

1. Plaintiff Indianapolis Power & Light Company is entitled

to and is hereby granted judgment against defendant Air Pollu-

tion Control Board of the State of Indiana.

2. All action of or on behalf of the State of Indiana in

implementing Section 107(d) of the Clean Air Act, as amended,

42 U.S.C. A. § 7407(e), by classifying Indiana counties as to

whether their ambient air meets or does not meet national

ambient air quality standards promulgated under the federal

Clean Air Act, as amended, is and may only be, under the laws

of the State of Indiana, administrative action subject to the laws

of the State of Indiana governing issuance of rules, regulations

and standards by agencies of the State of Indiana.

3. The actions taken by or on behalf of the Air Pollution

Control Board of the State of Indiana in sending to the U.S.

Environmental Protection Agency documents classifying Marion

A33

County and other Indiana counties as to whether the ambient

air in such counties meets or does not meet national ambient air

quality standards under the federal Clean Air Act, as amended,

which actions purported to be taken in implementation of

Section 107(d) of the Clean Air Act, as amended by the

Clean Air Act Amendments of 1977, 42 U. S.C. A. § 7407(d),

were taken in violation of, and without compliance with, the

applicable statutes governing the adoption of administrative

rules, regulations and standards, and such actions and such docu-

ments are accordingly, absolutely void and of no effect as an

act of the State of Indiana or for any other purpose, and Marion

County has not been duly classified or identified as a non-attain-

ment area for any purpose under the Clean Air Act, as amended,

42 U.S.C. A. §§ 7401 et seq.

4. Defendant Air Pollution Control Board of the State of

Indiana and its respective members, agents, employees, staff

and representatives are permanently enjoined from taking any

step or action and from withholding or refusing to take any

step or action, or refusing to grant any permit, on the basis or

ground that Marion County, Indiana, has been duly classified,

designated, or identified as a “nonattainment area” for any pur-

pose under the Clean Air Act, as amended, 42 U.S.C. A.

§§ 7401 et seq.

Dated this 6 day of May, 1979.

/s/ Ronald L. Gottschalk

Ronald L. Gottschalk

Judge, Hancock Circuit Court

Copies to:

Michael Schaefer, Esquire, Assistant Attorney General, Office

of the Attorney General, 219 State House, Indianapolis,

Indiana 46204

Jerry P. Belknap, Esquire, Barnes, Hickam, Pantzer & Boyd,

1313 Merchants Bank Building, Indianapolis, Indiana 46204

George J. Lewis, Esquire, Lineback & Lewis, P. C., 2 Masonic

Building, Greenfield, Indiana 46140

A34

State of Indiana ”

County of Hancock

I, Shirley Riddle, Clerk of Hancock County, do hereby certify

this to be a true and correct copy of Judgment as the same

appears on record in this office in Order Book 69 Page 44.

Witness my hand and seal at Greenfield, Indiana this 11 day

of May 1979,

/s/ Shirley Riddle

Clerk of Hancock County

A35

IN THE HANCOCK CIRCUIT COURT

State of Indiana

County of Hancock o

INDIANAPOLIS CHAMBER OF COM- )

MERCE, INC. and INDIANAPOLIS

POWER & LIGHT COMPANY,

Plaintiffs,

VS. - Cause No. 38084

AIR POLLUTION CONTROL BOARD OF

THE STATE OF INDIANA,

Defendant. 5

PLAINTIFF INDIANAPOLIS POWER & LIGHT COM-

PANY’S PROPOSED FINDINGS OF FACT AND CON-

CLUSIONS OF LAW [AS ADOPTED BY THE COURT]

This matter comes before the Court on plaintiff Indianapolis

Power & Light Company’s Motion for Summary Judgment.

Based upon the pleadings, affidavits, exhibits and admissions

filed in this action, and being duly advised in the premises, the

Court makes the following findings of fact and conclusions

of law.

FINDINGS OF FACT

1. Plaintiff Indianapolis Power & Light Company (“IPL’’)

is an Indiana corporation engaged as a public utility in gen-

erating and distributing electric energy to and for the public

in Marion County, Indiana, and adjoining areas, and in generat-

ing and distributing steam to and for the public in the central

core of the City of Indianapolis. IPL’s headquarters and prin-

cipal place of business are located in the City of Indianapolis,

Marion County, Indiana. IPL is a member of the Indianapolis

Chamber of Commerce, Inc. and is the electric and steam utility

company serving the City of Indianapolis, Marion County, and

A36

the Indianapolis Chamber of Commerce referred to in the

Verified Complaint, as amended, filed herein by plaintiff Indian-

apolis Chamber of Commerce, Inc. In such capacity, IPL owns

and operates three generating facilities located in Marion

County, each of which necessarily in its operation emits or con-

tributes to the formation of sulfur dioxide, particulate matter,

carbon monoxide, nitrogen oxides, and ozones.

2. (a) Defendant APC Board is an agency of the State of

Indiana and was created by the Indiana Air Pollution Control

Law, IC 13-1-1.

(b) The APC Board is authorized by IC 13-1-1-5 to:

. adopt and promulgate rules and regulations which

shall create air quality basins based upon scientific study of

geographical topographical, meterorological data, and shall

adopt and promulgate standards for ambient air quality for

each basin. ...

among others, the requirements of IC 4-22-2-1 to 4-22-2-12

and IC 13-7-7-1 to 13-7-7-4.

(d) The Indiana Environmental Management Board (the

“Management Board”) is an agency of the State of Indiana

created by IC 13-7-2.

(e) The APC Board and the Mangement Board are author-

ized under IC 13-7-5-1(e) to:

Act for the state in the adoption of standards pursuant

to any federal law regarding environmental protection. . .

(f) The Clean Air Act, 42 U.S.C. A. §§ 7401 et seq. (1977

Supp.) as amended by the Clean Air Act Amendments of

1977, Pub. L. No. 95-95, 91 Stat. 712 (Aug. 7, 1977) and

the Safe Drinking Water Amendments of 1977, Pub. L. No.

95-190, § 14, 91 Stat. 1399 (Nov. 16, 1977) is a federal law

regarding environmental protection, and is hereinafter called

“Clean Air Act.”

(g) Ralph C. Pickard is, and [was] at all times pertinent

hereto, the Technical Secretary of the APC Board. Ralph C.

A37

Pickard is not and never has been a member of the APC Board

or the Management Board, but is a member of the staff of

both such boards.

(h) Harry D. Williams is, and was at all times pertinent

hereto, employed by the Indiana State Board of Health as the

Director of the Air Pollution Control Division of the Indiana

State Board of Health. Harry D. Williams is not, and was not

at any time pertinent hereto, a member of the APC Board or the

Management Board, but is a member of the staff of the APC

Board.

3. (a) On or about December 2, 1977, a member of the

staff of the APC Board sent or caused to be sent to Region V

of the U. S. Environmental Protection Agency (“EPA’’) a list

of each of Indiana’s 92 counties, which list purported to set

forth, pursuant to Section 107(d) of the Clean Air Act, as

amended, 42 U.S.C. A. § 7407(d)(1) classifications as to

whether national ambient air quality standards (“NAAQS”)

promulgated under the Clean Air Act were or were not met

in such respective counties on August 7, 1977, or as to whether

such counties could not be so classified on the basis of available

information.

(b) The list of county classifications referred to in paragraph

3(a) and sent to EPA was set forth in a document entitled

“Proposed Nonattainment Areas in Indiana

A Support Document

Modeling & Data Analysis Section

Air Pollution Control Division

November 23, 1977”

on or about December 2, 1977, is attached to the Complaint in

this action as Exhibit 1.

(d) On or about December 8, 1977, in Indianapolis, a

member of the staff of the APC Board gave to Robert Miller, an

official of EPA, another list of each of Indiana’s 92 counties,

A38

which list purported to set forth, pursuant to 42 U.S.C.A.

$ 7407(d)(1), classifications as to whether NAAQS were or

were not met in such respective counties on August 7, 1977, or

as to whether such counties could not be so classified on the

basis of available information.

(e) The list of county classifications referred to in paragraph

3(d) of these Findings of Fact and sent to EPA was set forth in

a document bearing the same title and date as the list referred

to in paragraph 3(b).

(f) A copy of the list referred to in paragraphs 3(d) and (e)

hereof is attached to the Complaint in this action as Exhibit 2.

(g) With respect to whether Marion County had on August

7, 1977, attained or not attained NAAQS for the respective

pollutants for which NAAQS have been promulgated under the

Clean Air Act, both lists of county classifications given to EPA

and referred to above contained the following classifications:

(i) Total suspended particulate matter—Primary and

secondary NAAQS not attained.

(ii) Sulfur dioxide—Primary and secondary NAAQS

not attained.

(iii) Carbon monoxide—Primary NAAQS not attained

in central business district.

(iv) Ozone (Photochemical oxidants) — Primary

NAAQS not attained.

(v) Nitrogen oxides—NAAQS attained.

4. (a) At the time the same two lists of county classifi-

cations referred to in paragraph 3 were sent to EPA, the APC

Board had not directed or authorized anyone to send them

to EPA.

(b) At the time the same two lists of county classifications

were Originally sent to EPA, the APC Board had not reviewed

or approved them.

cations were originally sent to EPA, the APC Board had not

even authorized or directed that such lists be prepared.

A39

(d) At the time the same two lists of county classifications

were Originally sent to EPA, no member of the APC Board

had seen them.

(e) At the time the same two lists of county classifications

were sent to EPA, the Management Board had not seen them,

had not reviewed them, had not authorized or directed that they

be prepared, and had not authorized that either list be sent to

EPA as an act of the State of Indiana.

(f) At the time the same two lists of county classifications

were sent to EPA, neither their contents nor their existence had

been the subject of any public notice or announcement.

5. (a) By letter dated November 17, 1977, Harry D. Wil-

liams informed William E. Allis, Administrator of the Air

Pollution Control Division of the City of Indianapolis, that “the

state will propose to the U.S. EPA that Marion County be

designated as a nonattainment area” for particulate matter,

sulfur dioxide, carbon monoxide and ozone, and sent a copy of

such letter to Robert Miller of EPA. Mr. Williams stated in

such letter of November 17, 1977, that monitored air quality

data for the year 1976 shows that Marion County is a non-

attainment area for sulfur dioxide.

(b) William E. Allis wrote a member of the staff of the APC

Board on November 28, 1977, stating that he did not recognize

Marion County to be a nonattainment area for sulfur dioxide or

carbon monoxide and requested copies of all monitoring data in

1976 for each month in which a violation of NAAQS occurred.

data showing NAAQS violations. For 1976 the only sulfur

dioxide NAAQS recorded by any of the monitors in the Marion

County air quality sampling network was shown to have occurred

on November 28, 29, and 30 in a location in southwestern

Marion County on Mann Road.

(d) Mr. Allis informed Harry D. Williams or his subordi-

nates that the reported violations of sulfur dioxide NAAOS for

A40

November 28-30, 1976, were erroneous and invalid because the

monitoring device at the Mann Road monitoring site had been

in a state of disrepair in late November, 1976.

6. (a) On December 14, 1977, the APC Board held a

meeting and was informed that the list of county classifications

had been transmitted to EPA.

(b) The APC Board was not advised at its December 14;

1977, meeting that William E. Allis, the head of the agency

responsible for gathering the data, had repudiated the November

28, 29, 30, 1976, recorded violations of sulfur dioxide NAAQS

in Marion County.

authorized that the list of county classifications be officially

submitted to EPA,

(d) Prior to ratifying transmission to EPA of the lists of

county classifications, the APC Board did not take into account

with respect to Marion County or any other county the matters

required by IC 13-7-7-2 to be taken into account by it in

adopting rules, regulations or standards.

(e) At its meeting on December 14, 1977, the APC Board

also adopted and resolved to hold a public heaving on the list of

county classifications and appointed H. Earl Capehart, Jr., the

Chairman of the APC Board, as hearing officer.

(f) Ralph C. Pickard and Robert Miller of EPA told the

APC Board on December 14, 1977, that the State was required

to submit the list of county classifications in order to implement

Section 107 of the Clean Air Act.

7. (a) On December 20, 1977, Mr. Allis informed Harry

D. Williams that all the citations of sulfur dioxide NAAQS

violations in Marion County for the period of January, 1975,

through June, 1977, were erroneous. The errors cited were

as follows:

(i) A 1977 violation of the annual average standard

was based on only five readings.

A4l

(ii) A 1977 violation of the annual average standard

was supposed to be based on sampling data for the period

January-June, 1977, but no readings from January were

included in the averaging.

(iii) The only 1976 violations were the result of the

broken monitor at Mann Road.

(iv) A 1975 annual average was based on only 26 days

of data on a continuous monitor and s, therefore,

invalid,

(v) A 3-hour standard violation in 1975 was indicated

as a result of an error in transcribing the data.

(b) On December 23, 1977, Stephen B. Dixon, one of Harry

D. Williams’ subordinates, wrote William E. Allis responding to

his November 28, 1977, request for data indicating NAAQS

violations in Marion County. For sulfur dioxide violations, he

cited only the 1975 violations and 1976 violations referred to in

paragraph 7(a) above, and he cited no 1977 violations.

computer modeling of sulfur dioxide levels in Marion County

had not been completed as of such date so that he could not

supply modeling information requested by Mr. Allis.

(d) On January 13, 1978, Harry D. Williams wrote William

FE. Allis and acknowledged that “the computer printouts for

1975 indicated problems that did not really exist.”

8. No monitored violation of a sulfur dioxide NAAOS was

recorded in Marion County on August 7, 1977.

9. On January 14, 1978, Robert L. Duprey of EPA wrote

to Ralph C. Pickard the letter attached to the Complaint in this

action as Exhibit 3, stating that EPA had completed its evalua-

tion of Mr. Williams’ December 2, 1977, submittal and that:

The designations of the State of Indiana will be those

submitted by you on December 2, 1977, with the exception

of those noted above (unless the problems are resolved

by January 19, 1978).

A42

10. Public notice of the public hearing held on January 17,

1978, did not appear in a newspaper of general circulation in

Marion County 21 days prior to January 17, 1978.

11. (a) On January 17, 1978, a public hearing on the

county attainment/nonattainment classifications was held at the

offices of the Indiana State Board of Health, 1330 West Michi-

gan Street, Indianapolis, Indiana, and H. Earl Capehart, Jr.

presided as hearing officer.

(b) At the public hearing Ralph C. Pickard appeared and

read into the record a statement on behalf of the Air Pollution

Control Division of the State Board of Health, the APC Board,

or himself, including the following:

Quality assured sampler data were used to designate

Lake, Marion, and Wayne Counties as “nonattainment”

areas. Preliminary modeling studies were utilized to desig-

nate part of all of Lake, LaPorte, Marion, Porter, and

Vigo Counties as nonattainment regions in accordance

with U.S. EPA guidelines.

or additions to the technical support document previously sub-

mitted to EPA had been developed.

(d) The revisions or additions to the list of county classifi-

cations referred to above in paragraphs 11(c) were conveyed

to Robert L. Duprey or other representatives of EPA the same

day, January 17, 1978. At this time the APC Board had not

approved or disapproved such revisions or additions and had

not authorized such matter to be sent to EPA on behalf of the

State of Indiana.

(e) The record of the public hearing was held open for

additional written submissions until January 20, 1978.

(f) The documents at Exhibits 1 and 2 of the Complaint in

this action ratified by the APC Board on December 14, 1977,

do not contain any reference to, summary of, or detail of, model-

ing studies for the Marion County sulfur dioxide classification.

A43

12. (a) On January 25, 1978, the APC Board held a

meeting and Mr. Pickard reported to the APC Board that EPA

Region V had already drafted for promulgation in the Federal

cations of Indiana counties and had on January 23, 1978, sent

such classifications to EPA’s headquarters in Washington, D. C.

(b) Also at the January 25, 1978, APC Board meeting

Ralph C. Pickard recommended that the APC Board ratify his

January 17, 1978, submission to EPA of the revisions to the

list of country classifications referred to in paragraphs 11(c)-

(d), and the APC Board resolved to accept such revisions.

occurred before the hearing officer conducting the public hearing

on January 17, 1978, had reported on the hearing and before

he had delivered to the APC Board any findings and recom-

mendations.

13. (a) Also at the January 25, 1978, meeting of the

APC Board, H. Earl Capehart, Jr. gave a report and recom-

mendations as the hearing officer conducting the January 17,

1978, public hearing on the attainment/nonattainment classifica-

tions of Indiana counties, but noted that he had not completed

review of all the testimony or comments submitted in written

form.

(b) The minutes of the January 25, 1978, APC Board

meeting, as approved by the APC Board at its March 22,

1978, meeting, show the following:

Mr. Capehart moved that Marion and Vigo Counties

be designated as unclassifiable areas and that Gibson

County be designated as an attainment area with respect

to the sulfur dioxide. Mr. Watson seconded, and the motion

carried.

14. On February 3, 1978, Mr. Pickard received a letter

from EPA in Chicago stating that it had already submitted to

EPA headquarters in Washington, D.C., the list of county

A44

classifications for Indiana and including a copy of such sub-

mittal.

15. (a) The minutes of the February 22, 1978, APC Board

meeting show that at such meeting the APC Board resolved

that Marion County and Vigo County be classified for sulfur

dioxide as “unclassifiable” instead of as “nonattainment, in

part.”

(b) On March 9, 1978, a new “technical support document

(dated February 22, 1978)” was sent to EPA. Such document

and the March 9, 1978, letter transmitting it are attached to the

Complaint in this action as Exhibit 4.

1978)” as Exhibit 4 to the Complaint in this action was not

the subject of any public notice, public comment or pul'ic

- hearing.

(d) The technical support document (dated February 22,

1978) attached to the Complaint in this action as Exhibit 4

and sent to EPA shows that parts of the counties of Porter,

LaPorte, Vigo and Marion are shown as nonattainment areas

for sulfur dioxide, which is exactly contrary to the resolutions

of the APC Board adopted at its February 22, 1978 meeting.

(e) As to the sulfur dioxide classification of Marion County,

the document submitted to EPA on March 9, 1978, and at-

tached to the Complaint in this action as Exhibit 4 reads as

follows: ; |

The entire county with the exception of Washington

Township East of Fall Creek and Franklin Township south

and east of 5 Points Road and Thompson Road, should

be classified as a primary nonattainment area. This is

based on emissions and air quality data as well as pre-

liminary modeling.

16. (a) On March 3, 1978, EPA published at 43 Federal

U.S.C. A § 7407(d). Such new regulations, codified as 40

C.F. R. § 81.315, are attached to the Complaint herein as

—

—_—

A45

Exhibit 5, and contain classifications of Marion County, Indiana,

which are the same as the classifications set forth in the list of

county classifications included as Exhibits 1 and 2 of the Com-

plaint.

(b) So much of 40 C. F. R. § 81.315 as applies to Marion

‘County, Indiana, was based upon documents submitted to

EPA purportedly on behalf of the State of Indiana and the

face of such regulation shows that EPA did not substitute its

own classification of Marion County for any classification sub-

mitted by officials of the State of Indiana, but adopted the

classifications for Marion County set forth in the lists of county

classifications as Exhibits 1 and 2 to the Complaint herein.

17. (a) On August 15, 1974, the Secretary of State promul-

gated an APC Board regulation entitled “Regulation APC-22”

bearing the following preamble:

A REGULATION, pursuant to the authority found in

I. C. 1971, 13-7-7-2, establishing geographical areas and

classifications for different contaminant sources, (i.e.

particulate matter, sulfur dioxide, photochemical oxidants/

hydrocarbons, carbon monoxide and nitrogen dioxide)

from stationary sources.

(b) Although some of the specific county classifications sent

to EPA under Section 107(d) of the Clean Air Act differ from

those in Regulation APC-22, the latter regulation also sets

forth a list of all Indiana counties and classifies each one as to

whether its air quality meets or violates NAAQS for the same

five pollutants as those concerned herein.

documents, classifications, or actions of the APC Board men-

tioned in this action except issuance of APC-22.

19. None of the documents issued by or on behalf of the

APC Board classifying Indiana counties under Section 107(d)

of the Clean Air Act, 42 U.S.C. A. § 7407(d), was ever:

(a) submitted to the Attorney General of the State of Indiana

for his approval as to legality;

A46

(b) filed with the Governor of the State of Indiana;

(d) filed with the legislative council;

(e) filed with the Secretary of State of Indiana.

20. In issuing the lists of county classifications the APC

Board did not take account of, or make any findings or other

record with respect to, the existing physical conditions and the

character of the areas affected; past, present and probable

future uses of the area, including the character of the uses of

surrounding areas; zoning classifications; the nature of the exist-

ing air quality or existing water quality, as the case may be;

technical feasibility, including the quality conditions that could

reasonably be achieved through coordinated control of all factors

affecting the quality; and economic reasonableness of measuring

or reducing any particular type of pollution.

21. (a) The hearing officer presiding at the public hearing

on January 17, 1978, admitted at the January 25, 1978, APC

Board meeting that he had not had opportunity to read, under-

stand, or summarize all the testimony and data presented at

the hearing by the time he reported thereon at the January 25,

1978, APC Board meeting held 5 days after the record of the

public hearing was closed.

(b) EPA had already completed and published its final ac-

tion under Section 107 of the Clean Air Act with respect to

Indiana counties before it was notified by Mr. Pickard’s letter

of March 9, 1978, of the content of the public hearing held

January 17, 1978, and APC Board action thereon, and such

final action by EPA was based upon the lists of county classifica-

tions transmitted to EPA in December, 1977.

22. (a) In point of fact the public hearing and actions

of the APC Board which purported to classify Marion County

and cther Indiana counties under Section 107 of the Clean

Air Act were meaningless formalities because such classifications

were really made by staff of the APC Board and not according

A47

to Indiana law and the classifications were issued to EPA

before the hearing, and the comments delivered by the public

at the hearing were not ever described to the APC Board.

(b) Because of the lack of adequate notice and hearing prior

to sending the lists to EPA and because of the failure to

submit such lists to the proper approving authorities, the Cham-

ber, its members, the public affected by the classifications, and

the duly elected and appointed governmental authorities with

responsibility for safeguarding the interests of the public under

the laws of the State of Indiana were all deprived of any mean-

ingful opportunity to participate in development of, review the

content of, or approve, the classifications as required by the law.

23. IPL and the public in Marion County have been and

will be damaged by the classifications of Marion County as a

nonattainment area for pollutants controlled under the Clean

Air Act if such classifications are allowed to stand because

of the automatic effect of the Clean Air Act upon such non-

attainment areas, in that the following requirements or prohibi-

tions, among others, are applicable to such areas:

(a) The APC Board must revise its regulations to further

restrict emissions from all sources which contribute nonattain-

ment of NAAQS. [Clean Air Act, §§ 129, 172, 173, 42

U.S. C. A. §§ 7502-7503.]

(b) No new major sources may be permitted to be built

or operated, and no existing ones may be modified, in the area

unless an existing source makes more than offsetting emission

reductions of pollutants to which a nonattainment classification

under Clean Air Act Section 107 relates. [Clean Air Acct,

§§ 129, 173, 42 U.S.C. A. §§ 7502-7503.)

or operated except upon condition that they achieve the “lowest

achievable emission rate” contained in any Clean Air Act

implementation plan in the United States. [Clean Air Act,

§ 173, 42 U.S.C. A. § 7503.]

A48

(d) Such effects and the amount of loss or damage thereby

caused IPL and the public of Marion County are not suscep-

tible of exact mathematical computation but are immediate

and constitute irreparable harm to IPL and the public of Marion

County. IPL is without any adequate legal remedy on the facts

here found, and irreparable injury can be avoided only by the

injunctive process of this court.

24. The actions of defendant herein complained of injure

IPL by reducing its revenues in that its customers in Marion

County will be caused to shut down or curtail operations and

reduce their consumption of electric energy, and new customers

will be deterred or prevented from locating within IPL’s service

area so that it will be unable to maintain and increase its

revenues.

CONCLUSIONS OF LAW.

1. The court has jurisdiction of the parties and the subject

matter of this action.

2. The lists of county classifications given to EPA in Decem-

ber, 1977, January, 1978, and March, 1978, constitute ad-

ministrative action with respect to which plaintiff and the rest

of the public affected thereby were entitled to a meaningful

hearing under the Constitution and laws of the State of Indiana

and the Constitution of the United States.

3. (a) The actions of the APC Board and its staff in sub-

mitting lists of county classifications to EPA, and the action of

the APC Board in authorizing or ratifying the transmission of

the classifications to EPA, were actions amounting to the

issuance of rules creating air quality basins and issuance of

classifications designed to have or having the effect of law

and/or implementing statutes, namely Section 107(d) of the

Clean Air Act, 42 U.S.C. A. § 7407(d); IC 13-1-1-5; IC 13-

7-5-1(e); and/or IC 13-7-7-2.

(b) The actions referred to in paragraph 3(a) hereof, if

legally effective, have the effect of law in that the provisions of

ee te

A49

the Clean Air Act relating to “nonattainment area” now apply

to Marion County.

4. All the actions of the APC Board and its staff in sub-

mitting documents to EPA classifying Indiana counties under

Section 107(d) of the Clean Air Act, 42 U.S. C. A. § 7407(d),

are properly and legally actions subject to the laws of the State

of Indiana governing promulgation of rules by agencies of the

State of Indiana.

5. Issuance of the lists of county classifications to EPA

under Section 107 of the Clean Air Act by or on behalf of the

APC Board constitute actions subject to the laws of the State

of Indiana governing promulgation of rules by agencies of the

State of Indiana in that IC 4-22-2-3 provides that:

The word “rule” means any rule, regulation, standard,

classification, procedure, or requirement of any agency, de-

signed to have or having the effect of law or interpreting,

supplementing or implementing any statute... .

6. The lists of county classifications which formed the basis

for so much of the EPA regulations at 40 C. F. R. § 81.315 as

pertains to Marion County were issued and promulgated in

violation of IC 4-22-2-1 to 4-22-2-12, IC 13-7-7-1 to 13-7-7-4,

and IC 13-1-1-4(A) (3) in that such lists were not duly approved

by or filed with the proper agencies and state officials and were

not the subject of public hearing or notice which accorded with

the applicable requirements of the laws of the State of Indiana.

Marion County has, accordingly, not been duly classified, desig-

nated, or identified as a “nonattainment area” according to the

requirements of law for any purpose.

7. Unless prohibited therefrom by the injunctive process of

this Court, the APC Board is required at this time by Section

129 of the Clean Air Act to apply EPA’s ruling of December 21,

1976 (41 Federal Register 555524-30) (the “EPA Offset Regu-

lation”) to applications for permission to construct or operate

any large new industrial facilities which emit pollutants with

respect to which Marion County has been designated a nonat-

ASO

tainment area. With respect to Marion County, the EPA Offset

Regulation essentially requires that no new major source of

sulfur dioxide, particulate matter, or ozone may be permitted to

be constructed or operated unless it demonstrates that after

commencing operation, emissions of such pollutants would be

less than before such source began operating.

8. Unless restrained by the injunctive process of this Court,

the Air Pollution Control Board must under Sections 172 and

173 of the Clean Air Act revise the regulations in the Indiana

Clean Air Act Implementation Plan limiting emissions of pol-

lutants with respect to which a nonattainment classification is

in force and controlling building of new sources of such pol-

lutants so that they require new sources to meet the lowest achiev-

able emission rate in any implementation plan in the United

States and require existing sources including plaintiff's Marion

County generating stations to install, at a minimum, “reasonably

available control technology.”

9. The APC Board is, and must be presumed to be, carry-

ing out the requirements set forth in Conclusions No. 7 and 8,

and imposition of such requirements will adversely affect IPL

and the public of Marion County, and the loss and damage

caused thereby is not susceptible of exact mathematical com-

putation but is immediate, irreparable and continuing injury

and damage. Such irreparable injury and damage can only be

avoided by the injunctive process of this Court, plaintiff having

exhausted its administrative remedies and being without any

adequate legal remedy in the circumstances.

10. There is no genuine issue of material fact and IPL is

entitled to judgment as a matter of law.

Dated this 6th day of May, 1979.

/s/ Ronalé L. Gottschalk «

Ronald L. Gottschalk

Judge, Hancock Circuit Court

ASI

State of Indiana ;

County of Hancock

I, Shirley Riddle, Clerk of Hancock County, do hereby

certify this to be a true and correct copy of Plaintiff Indianapolis

Power & Light Co.’s Proposed Findings of Fact and Conclusions

of Law and Entry on Motion for Summary Judgment as the same

appears on record in this office in Order Book 69 Page 44.

Witness my hand and seal at Greenfield, Indiana this 11th

day of May 1979.

/s/ Shirley Riddle

Shirley Riddle

Clerk of Hancock County

A52

43 F.R. 8962

RULES AND REGULATIONS

[6560-01]

Title 40—Protection of Environment

CHAPTER I—ENVIRONMENTAL PROTECTION AGENCY

SUBCHAPTER C—AIR PROGRAMS

[FRL 856-5]

PART 81—AIR QUALITY CONTROL REGIONS, CRITERIA,

AND CONTROL TECHNIQUES

Section 107—Attainment Status Designations

Agency: Environmental Protection Agency.

Action: Final rule.

Summary: This rulemaking sets forth the attainment status of

all States in relation to the national ambient air quality standards

(NAAQS). The tables following this rulemaking indicate, on a

State-by-State, pollutant-by-pollutant basis, the attainment status

of every area as submitted by the appropriate State agency and

approved, or as designated by the Environmental Protection

Agency (EPA). No distinctions are made as to the severity of

the violations recorded in the areas designated as nonattainment

in these tables. These designations are immediately effective.

EPA is soliciting comments for 60 days and will republish re-

vised designations as appropriate.

Dates: Effective Date: Immediately. Comments Due: May 2,

1978.

Address: General comments on these designations should be

addressed to Norman L. Dunfee, Chief, Control Programs Op-

erations Branch (MD-15), Office of Air Quality Planning and

Standards (OAQPS), Research Trangle Park, N. C. 27711.

Federal Register, Vol. 43, No. 43—-Friday, March 3, 1978

ia i tiles a a Se

AS3

Comments relative to specific State designations should be

directed to the appropriate EPA Regional Office, contact as

listed below:

Tom Devine, Chief, Air Branch, EPA Region I, JFK Fed-

eral Building, Boston, Mass. 02203 (Connecticut, Maine,

Massachusetts, New Hampshire, Rhode Island, Ver-

mont).

William Baker, Chief, Air Branch, EPA Region II, 26

Federal Plaza, New York, N. Y. 10007 (New York,

New Jersey, Puerto Rico, Virgin Islands).

Howard Heim, Chief, Air Branch, EPA Region III, Curtis

Building, Sixth and Walnut Streets, Philadelphia, Pa.

19106 (Delaware, Maryland, Pennsylvania, Virginia,

West Virginia, District of Columbia).

Tom Helms, Chief, Air Branch, EPA Region IV, 345

Courtland Street, NE., Atlanta, Ga. 30308 (Alabama,

Georgia, Florida, Kentucky, Mississippi, North Caro-

lina, Tennessee, South Carolina).

Jack Chicca, Chief, Air Branch, EPA Region V, 230

South Dearborn Street, Chicago, Ill. 60604 (Indiana,

Illinois, Michigan, Minnesota, Ohio, Wisconsin).

Jack Divita, Chief, Air Branch, EPA Region VI, 1201 Elm

Street, Dallas, Tex. 75270 (Arkansas, Louisiana, Okla-

homa, New Mexico, Texas).

Art Spratlin, Chief, Air Branch, EPA Region VII; 1735

Baltimore Streets, Kansas City, Mo. 64108 (Nebraska,

Iowa, Kansas, Missouri).

Robert DeSpain, Chief, Air Branch, EPA Region VIII,

1860 Lincoln Street, Denver, Colo. 80295 (Montana,

Utah, North Dakota, South Dakota, Wyoming, Colo-

rado).

Allyn Davis, Chief, Air Branch, EPA Region IX, 215

Fremont Street, San Francisco, Calif. 94105 (California,

Nevada, Arizona, Hawaii, American Samoa, Northern

Mariana Islands).

Clark Gaulding, Chief, Air Branch, EPA Region X, 1200

Sixth Avenue, Seattle, Wash. 98101 (Alaska, Washing-

ton, Oregon, Idaho).

Federal Register, Vol. 43, No. 43—Friday, March 3, 1978

A54

FOR FURTHER INFORMATION CONTACT:

Norman L. Dunfee, USEPA, Research Triangle Park, N. C.

27711, phone 629-5226 (FTS) or 919-541-5226 (com-

mercial).

SUPPLEMENTARY INFORMATION:

The Clear Air Act (CAA) Amendments of 1977 place addi-

tional requirements on the States and EPA. Among them, the

Amendments added section 107(d), which directed each State,

within 120 days after the Amendments were enacted, to submit

to the Administrator a list of the NAAQS attainment status of

all areas within the State. The Administrator was required under

section 107(d)(2) to promulgate the State lists, with any nec-

essary modifications, within 60 days of their submittal.

The States are now preparing revisions to their State imple-

mentation plans (SIPs) as required by sections 110(a) (2) (1)

and 172 of the Act. This enterprise, which must be completed

by January 1, 1979, requires that the States have immediate

guidance as to the attainment status of the areas designated

under section 107(d). Congress has acknowledged this by im-

posing a tight schedule on the designation process and requiring

EPA to promulgate the list within 180 days of the enactment

of the amendments. Under these circumstances it would be im-

practicable and contrary to the public interest to ignore the

statutory schedule and postpone publishing these regulations

until notice and comment can be effectuated. For this good

cause, the Administrator has made these designations imme-

diately effective.

The Agency recognizes, however, the importance of public

involvement in the designation process. It is therefore, soliciting

public comment on this rule by May 2, 1978.

Comments received will be considered carefully and revisions

to the designations will be made where appropriate. The criteria

used in making these designations include the following.

Federal Register, Vol. 43, No. 43—Friday, March 3, 1978

A5S5

AiR QUALITY DATA

Section 107(d) of the CAA specified that designations should

be based upon air quality levels as of enactment of the Amend-

ments (August 7, 1977). States were required by EPA guidance

to consider the most recent four quarters of monitored ambient

air quality data available. If this data showed no standards vio-

lations, then the previous four quarters of monitoring data were

to be examined to assure that the current indication of attain-

ment was not the result of a single year’s data reflecting unrep-

resentative meteorological conditions. In the absence of sufficient

monitored air quality data, other evaluation methods were used,

including air quality dispersion modeling.

GEOGRAPHIC SIZE

The Act specified that the designation areas could be based

on air quality control regions (AQCRs) or any subportions of

these areas. EPA advised States they could divide AQCRs into

various nonattainment, attainment, or unclassified portions, i.e.,

county. subcounty, or other geographic areas as long as the area

could be clearly defined in a written narrative. Additionally, a

different geographic area could be used in designating the status

for each pollutant.

POLLUTANT SPECIFIC CONSIDERATIONS

Subsections 107(d)(1) (A)-(E) of the CAA Amendments

specified the possible categories for area designatic.is. For both

total suspended particulates (TSP) and sulfur dioxide (SO2), an

area could be designated as: (1) Not meeting the primary

NAAQS, (2) not meeting the secondary NAAQS, (3) unclassi-

fiable, and (4) attainment. For carbon monoxide (CO), photo-

chemical Ox, and nitrogen dioxide (NO:), designations of: (1)

Federal Register, Vol. 43, No. 43—Friday, March 3, 1978

AS56

Not meeting primary NAAQS, and (2) attainment/ unclassified

were possible. The attainment and unclassified designations for

CO/O;/NOz are combined into one column for the tables pre-

sented in this notice because both designations are set forth by

subsection 107(d)(1)(E) of the CAA. No designations regard-

ing the secondary NAAQS for these pollutants were necessary

since the primary standards and secondary standards are iden-

tical.

The criteria used in designation of the status of each pollutant

used in addition to ambient air quality data is discussed below:

PHOTOCHEMICAL OXIDANTS

There are 105 urban areas in the United States with popu-

lations great(43 F.R. 8963]er than 200,000. The major urban

areas (except Honolulu, Hawaii, and Spokane, Wash.) are

where the oxidant problem is most severe. Honolulu has re-

corded eight consecutive quarters of data without a violations

justifying and attainment designation. There is sufficient un-

certaintly regarding conditions in Spokane to warrant an un-

classifiable designation for the present time. The other 103

urban areas, where over 100,000,000 people reside, consistently

experience photochemical oxidant levels above the NAAQS.

Due to these factors, higher priority is being given in the SIP

planning process to these urban areas. Of these, only six urban

areas do not have oxidant ambient air quality monitoring data.

The other 97 urban areas experienced oxidant violations based

on ambient data. Since 97 of the 105 urban areas greater than

200,000 with monitoring data recorded violations, the six cities

without data were presumed to be nonattainment for oxidants.

Additionally, a comprehensive analysis was performed by

OAQPS and other factors considered by EPA for each of the

six urban areas. These analyses substantiated the presumptive

nonattainment designation and these areas will be required to

Federal Register, Vol. 43, No. 43—-Friday, March 3, 1978

aaa aaa es

AS7

monitor during the 1978 oxidant season (summer-fall) to de-

termine the magnitude of their oxidant problem.

TOTAL SUSPENDED PARTICULATES

Given the spatially limited nature of TSP violations, no gen-

eral area size criteria were possible. However, States were ad-

vised that designations along political boundaries such as city

limits or county lines were practical from an air quality manage-

ment standpoint.

The problem of designating for rural fugitive dust areas re-

quired special consideration. EPA’s fugitive dust policy recog-

nizes the generally greater health impact due to fugitive dust in

urban areas in contrast to rural areas. In urban areas, the wind-

blown soil contains various manmade toxic pollutants. But,

rural windblown dust is usually not significantly contaminated

by industrial pollutants. Therefore, for the purpose of these des-

ignations, any rural areas experiencing TSP violations which

could be attributed to fugitive dust could claim attainment of

the TSP NAAQS. Rural areas for this purpose are defined as

those which have: (1) A lack of major industrial development

or the absence of significant industrial particulate emissions, and

(2) low urbanized population densities.

CARBON MONOXIDE

A designation of nonattainment for the entire urban core area

of a city experiencing monitored CO violations was desirable,

but smaller area designations were acceptable since CO viola-

tions are most pervasive in downtown areas of high traffic density.

SULFUR DIOXIDE AND NITROGEN DIOXIDE

Generally where EPA promulgated a designation for SO:

the minimum area was to be the county in which the violating

Federal Register, Vol. 43, No. 43—Friday, March 3, 1978

AS58

monitoring site was located. If States had monitoring data to

substantiate the size areas they designated, they would be ac-

ceptable by EPA regardless of size.

AIR QUALITY CONTROL REGION (AQCR) REDESIGNATIONS

Section 107 of the CAA also provided for redesignation of

the existing AQCR boundaries where a State determined that

the redesignated areas would promote more efficient air quality

management. Several States exercised this option in defining

their designation areas. Part 81 under Title 40 of the Code

of Federal Regulations presently contains descriptions of all

existing AQCRs and these descriptions, where feasible, will be

modified in a future FEDERAL REGISTER notice to reflect the

State revisions. The exact descriptions of all AQCR boundaries

are available from either the appropriate State or EPA Regional

Office.

EFFECT OF THE DESIGNATIONS

Section 107(d)(1)(A)-(E) sets out attainment status cate-

gories to which reference is made in Parts C (Prevention of

Significant Deterioration (PSD) ) and D (Nonattainment) of the

CAA. Section 171(2) in Part D defines “nonattainment area”

to include any area identified under subparagraphs 107(d) (1)

(A)-(C), while giving the Administrator authority to add other

areas based on monitoring or calculations. Similarly, areas des-

ignated under subparagraphs 107(d)(1)(D) or (E) are de-

scribed in section 161, Part C, as PSD areas.

The section 107(d) designations are meant to provide a start-

ing point for States in their efforts to correct existing air quality

problems and to implement programs under the 1977 CAA

Amendments. For example, a designation as a nonattainment

area, in general, means that an applicable SIP must be revised,

pursuant to section 172, to provide for attainment of the NAAQS

Federal Register, Vol. 43, No. 43—Friday, March 3, 1978

aie ah hs ites cea tse

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A59

as expeditiously as practicable, but not later than December 31,

1982 (December 31, 1987, under certain conditions for photo-

chemical oxidants and/or carbon monoxide). Under section 172

(b)(6) the revised SIPs must require permits, in accordance

with the provisions of section 173, for the construction and op-

eration of major new or modified stationary sources. To be ap-

proved by the Administrator under section 110(a)(2)(I), a

SIP must contain a prohibition against major new source con-

struction in nonattainment areas after June 30, 1979, where

emissions from the source would contribute to increases in pol-

lutants for which a NAAQS was being exceeded, unless the SIP

meets the requirements of Part D at the time of the permit

application. Under section 129 of the Amendments, EPA’s emis-

sion offsets policy, as modified, continues to apply to major new

source construction in nonattainment areas prior to July 1, 1979.

But the designation of an area as nonattainment or attainment

rnust be considered only a point of departure and not a final.

inflexible end in itself. The designations will have only limited

significance for new source preconstruction review, for three

reasons. First, new sources, wherever they proposed to locate,

must be reviewed for their impact on all nearby areas as well

as that in which they would locate. If an area on which a new

source would impact is designated differently than the one in

which it is locating, the designation of the latter would not

necessarily determine the rules to which the source would be

subject. Second, PSD rules apply in any area where at least one

NAAQS is attained, and since virtually every area in the country

shows attainment for at least one pollutant, the PSD review will

be a requisite virtually everywhere. Finally, case-by-case new

source review is necessitated to account for the possibility that

an area with a particular designation may encompass “pockets”

which do not fit that designation.

These section 107(d) designations are subject to revision

under Section 107(d)(5) whenever sufficient data is available

Federal Register, Vol. 43, No. 43—Friday, March 3, 1978

A60

to warrant a redesignation. Both the State and EPA can initiate

changes to these designations, but any State redesignation must

be submitted to EPA for concurrence. EPA will promulgate any

revised list in accordance with the requirements for this initial

promulgation.

EPA REVIEW

The State submittals were reviewed by EPA for consistency

with the criteria set forth in this notice. Where EPA differed

with a State designation, section 107 of the CAA provides that

EPA should notify the State and allow the submission of addi-

tional information. If EPA and the state could not reach agree-

ment, an EPA designation would replace the State submitted

designation. Also, in the case where a State failed to designate

for any State or portion thereof the EPA would designate for

the State as needed.

EPA considered all available monitoring data where it was

determined to be valid. Al! EPA designations contained in the

following tables were [43 F.R. 8964] made within the criteria

contained in this notice except in a limited number of cases

where the State designations were replaced by unclassifiable

designations by the appropriate Regional Offices on the basis

that a major source in each county was utilizing a possibly un-

authorized dispersion technique. Since EPA has not finalized its

tall stack policy regulations to implement Section 123, it is

presently unknown whether the sources can claim full credit for

their existing stacks.

EPA designations are indicated in the following tables by the

asterisks accompanying the designations: * means a Federal

EPA designation replaced a State recommendation. This * is

used where either the designation status or the area size was

modified by EPA: ** means solely a Federal designation where

a State failed to submit their own recommendation. In some

instances, the descriptions of the designated areas submitted by

Federal Register, Vol. 43, No. 43—Friday, March 3, 1978

Aél

the States were so lengthy as to prohibit their publication in the

limited space available in the tables presented below. Exact

descriptions of all areas designated are available at the appro-

priate Regional Offices or the State in question. In some of the

following tables, States reference AQCRs by their appropriate

number instead of their title. An Appendix A is included in the

regulatory section of this rulemaking which gives both the

AQCR name and number for ease of reference.

A summary of the approved designations for the 3215

counties or county equivalents covered by these designations is

presented below:

TSP SO: CO Ox NC:

Number of counties either totally or

partially approved or designated

by EPA as nonattainment .... 421 101 190 607 8

Dated: February 23, 1978.

DouG.Las M. COSsTLE,

Administrator.

Part 81 of Chapter I, Title 40 of the Code of Federal Regula-

tions is amended by adding Subpart C and Appendix A as

follows:

Subpart C-—Section 107 Attainment Status Designations

Sec. Sec.

81.300 Scope. 81.309 District of Columbia.

81.301 Alabama 81.310 Florida.

81.302 Alaska. 81.311 Georgia.

81.303 Arizona. 81.312 Hawaii.

81.304 Arkansas, 81.313 Idaho.

81.305 California. 81.314 Illinois.

81.306 Colorado. 81.315 Indiana.

81.307 Connecticut. 81.316 Lowa.

81.308 Delaware 81.317 Kansas.

Federal Register, Vol. 43, No. 43—-Friday, March 3, 1978

Sec.

81.318

81.319

81.320

81.321

81.322

81.323

81.324

81.325

81.326

81.327

81.328

81.329

81.330

81.331

81.332

81.333

81.334

81.335

81.336

81.337

Kentucky.

Louisiana.

Maine.

Maryland.

Massachusetts.

Michigan.

Minnesota.

Mississippi.

Missouri.

Montana.

Nebraska.

Nevada.

New Hampshire.

New Jersey.

New Mexico.

New York.

North Carolina.

North Dakota.

Ohio.

Oklahoma.

A62

Sec.

81.338

81.339

81.340

81.341

81.342

81.343

81.344

81.345

81.346

81.347

81.348

81.349

81.350

81.351

81.352

81.353

81.354

81.355

81.356

Oregon.

Pennslyvania.

Rhode Island.

South Carolina.

South Dakota.

Tennessee.

Texas.

Utah.

Vermont.

Virginia.

Washington.

West Virginia.

Wisconsin.

Wyoming.

American Samoa.

Guam.

Northern Mariana

Islands.

Puerto Rico.

U. S. Virgin Islands.

APPENDIX A—Air Quality Control Regions (AQCRs).

AUTHORITY: Secs. 107, 301 of the Clean Air Act, as amended

(42 U.S. C. 7407, 7601).

Subpart C—Section 107 Attainment Status Designations

§ 81.300 Scope.

Attainment status designations as approved or designated by

the Environmental Protection Agency (EPA) pursuant to

Section 107 of the Act are listed in this subpart. Area designa-

tions are subject to revision whenever sufficient data becomes

available to warrant a redesignation. Both the State and EPA

can initiate changes to these designations, but any State rede-

signation must be submitted to EPA for concurrence.

Federal Register, Vol. 43, No. 43—Friday, March 3, 1978 +

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A63

[43 F.R. 8992]

§ 81.315 Indiana.

INDIANA — SO:

Designated Area

Does Not

Meet

Primary

Standards

Does Not

Meet

Secondary

Standards

Cannot Be

Classified

Better

Than

National

Standards

Dearborn County

Gibson County

Jefferson County

Lake County

An area bounded by

Lake Michigan on the

north, the Indiana-Illinois

State line on the west,

U.S. 30 on the south, and

the Lake-Porter County

line on the east.

The remainder of Lake

Co.

LaPorte County

An area bound in the

north by Lake Michigan

& the Indiana-Michigan

State line, in the west by

the LaPorte Porter

County Line, & in the

south & east by 1-94

The remainder of LaPorte

County

Marion County

> 4

X* EPA designations replace State designations

Federal Register, Vol. 43, No. 43—Friday, March 3, 1978

INDIANA — SO2 Continued

A64

Does Not; Does Not Better

Bead AB ane Cannot Be National

Designated Area Standards| Standards| Classified | Standards

Porter County

An area bound in the xX X

north by Lake Michigan,

in the west by the Lake-

Porter Co. line, in the

south by I-80-90 & in the

east by the LaPorte-

Porter County line

The remainder of Porter X

Co.

Vigo County X

Warrick County X*

Wayne County X

All portions of all other X

Indiana Counties

X* EPA designations replace State designations

Federal Register, Vol. 43, No. 43—Friday, March 3, 1978

A65

[43 F.R. 45993]

[6560-01]

Title 40—Protection of Environment

CHAPTER I—ENVIRONMENTAL PROTECTION AGENCY

Subchapter C—Air Programs

[FRL 972-2]

PART 81—AIR QUALITY CONTROL REGIONS, CRITERIA,

AND CONTROL TECHNIQUES

AGENCY: Environmental Protection Agency.

ACTION: Final rule.

SUMMARY: This rulemaking responds to comments and makes

necessary amendments to the designations of attainment status

relative to the national ambient air quality standards (NAAQS)

for Illinois, Indiana, Michigan, Minnesota, Ohio, and Wisconsin.

This rulemaking supplements the national EPA rulemaking of

September 11, 1978 (43 FR 40412), and incorporates by refer-

ence EPA’s position on certain general issues raised in comments

on the designations found in the supplementary information

section of that rulemaking.

DATE: Effective date—October 5, 1978.

FOR FURTHER INFORMATION CONTACT:

Thomas Mateer, Air Programs Branch, U. S. Environmental

Protection Agency, 230 South Dearborn Street, Chicago, Ill.

60604, 312-353-2334.

SUPPLEMENTARY INFORMATION: The Clean Air Act |

Amendments of 1977 (the 1977 Amendments), Pub. L. 95-95,

added section 107(d) to the Clean Air Act (the Act) which

directed each State to submit to the Administration a list of

the NAAQS attainment status of all areas within the State. The

Federal Register, Vol. 43, No. 194—-Thursday, October 5, 1978

A66

Administrator was required under section 107(d) (2) to promul-

gate the State lists, with any necessary modifications. For each

standard, areas are classified as either not meeting the standard

(nonattainment areas), meeting the standard (attainment

areas), or lacking sufficient data to be classified (unclassifiable

areas). The U.S. Environmental Protection Agency (EPA or

the Agency) published these lists in the FEDERAL REGISTER on

March 3, 1978 (43 FR 8962), and invited the public to sub-

mit comments to the Agency by May 2, 1978.

Certain issues raised in these comments were similar to those

raised by others throughout the nation. These issues are

addressed in the national EPA promulgation. Additional issues

which are specific to the States in EPA region V are addressed

in this action. Several of the comments have caused EPA to

modify earlier designations. In some cases, the designation has

been changed by redefining the boundaries of the area; in others,

the designation itself has been changed but no new nonattain-

ment areas have been designated in counties which were pre-

viously attainment or unclassifiable.

For good cause, the amendments to designations made final

today are being made effective immediately. As discussed in the

national EPA rule-making, the only effect of these designations

is to identify problem areas for which State planning must be

completed by a statutory deadline. These designations impose no

obligation on any source. There would therefore be no point

in deferring the effective date. The issues raised in the comments

are discussed below by State.

* * *

[43 F.R. 45994]

INDIANA

The Agency received a total of 24 comments on designations

in the State of Indiana. Also, the State of Indiana on June

Federal Register, Vol. 43, No. 194—Thursday, October 5, 1978

A67

12, 1978, petitioned the Agency under section 107(d) (5) of the

Clean Air Act to revise the designations for several counties, in

some cases revising its previous recommendations. Normally,

the Agency’s approval or disapprovai of such a petition would

be proposed as rulemaking and subsequently promulgated; how-

ever, since Indiana’s petition was submitted in time to be re-

viewed along with all of the other comments on designations

and since there is no prejudice to sources in areas where the

designation is revised, the State’s recommendations in the peti-

tion were reviewed and are discussed below in conjunction with

all other comments on the same areas.

* ok *

[43 F.R. 45995]

SULFUR DIOXIDE (SOz2)

Ten commenters requested revisions to the size of the sulfur

dioxide (SO) prima

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