Amicus Curiae Brief — Environmental Protection Agency v. National Crushed Stone Ass'n

Supreme Court brief1980

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TABLE OF CONTENTS

INTERESTS OF THE NATURAL RESOURCES DE-

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QUESTION PRESENTED ..............cscsscsssssssssssssessseseveces

STATEMENT OF THE CASE ..............ccccccseeeseeseeeseeeeeees

I. The Limits of the Question Presented ..................

Il. |The Context and Implications of the Case ...........

SUMMARY OF ARGUMENT 0.000... .ccccccecccecceeeeeeteeees

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I. The Act Neither Requires Nor Authorizes the

Administrator to Modify BPT Limitations on the

Economic Capability Grounds Specified in Sec-

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Il. The Scope of the Variance Required Below Is

Precluded By the Act and the Rationale of

Tisai Accivaheandpeenncdeiiacieoussurespetuneesnenvece

Page

CITATIONS

CASES:

American Frozen Food Institute v. Train, 539 F.2d

BOF CED, Gies CG PGP vvvscavessssctessvesiscseséns nese, sonnssessessees

American Iron & Steel Inst. v. EPA, $26 F.2d 1027

CRC. UG TS) cisvicsecsscicsacsssccsesencnesesevesssnsensonsevanssenssee

American Meat Institute v. EPA, 526 &.2d 442 (7th

Ba PN Is ccciancaenescseasesidon tiuxsasnibdbevadsneevenekvceesenbinatssaats

American Paper Institute vy. Train, 543 F.2d 328

CTC, Le. SFPD) sccncsveresssessccevesens nishinsuinanatniinnnn

American Petroleum Institute v. Train, 526 F.2d 1343

(10th Cir. 1975) and $40 F.2d 1023 (10th Cir.

OPTI. ccxssivussnceannvescustecbantanircdanpsannernuapeebensranartnahsnevedts

American Petroleum Institute v. EPA, No. 79-2433

(Sth Cir, tiled Jume 14, 1979). ceeeeeereeerenes

Appalachian Power Co. v. Train, S48 F.2d 1351 (4th

Re: FPN icvscscéckscvesacrrticstrecrensicticoveriestesusesseessopnnnnn

Appalachian Power Co, v. Train, No. 74-2096 (4th

Cir. April 28, 1980) ...........ccsscsescesrerssessersssssesseseeness

BASF Wyandotte Corp. v. Costle, S98 F.2d 637 (Ist

EWE Dis. sassecccuanevsnondincausvdasoneoreenabeaestehtunsmenesupnenen

Consolidation Coal Co. v. Costle, 604 F.2d 239 (4th

ee IE cao seach knee eigubsilinaeianinmenyecbaunabatontitits

CPC International Inc. v. Train, S18 F.2d 1032 (8th

I em cacssvicehisndscbaverbsudedbadsnauacuncnpkinaiomsidanbid

E.1. duPont de Nemours & Co. v. Train, 430 U.S. 112

SY cseicorscenecscudguassnbacvosinuannbeonbens toxiolapneotenrseskiite

E.L. duPont de Nemours & Co. v. Train, 528 F.2d

1136 (4th Cir. 1976) and $41 F.2d 1018 (4th Cir.

PINE acca ckcceccdasweuessusddec pecnuiububintOsp busparecauucaeuevaaereneevess

Hooker Chemicals & Plastics Corp. v. Train, 537 F.2d

GD 6 BOE, CBF ccnsencnriccsvesecencrintssevexorvencnensusevessenss

Page

4,22

National Crushed Stone Ass'n v. EPA, 601 F.2d 111

(4th Cir. 1979) oo. speSig Ide peduaieweteettaetionm ieee

Natural Resources Defense Council v. EPA, 537 F.2d

Re Ce Se eceiineenoaieinses ui ee

Natural Resources Defense Council v. Train, 6 ERC

1033 (D.D.C. 1973), aff'd in part and rev'd in part,

SOE Fee Oe CI. Ge. FIFO D cvcavivccscecssveresecesesescevcs

Natural Resources Defense Council v. Train, 8 ERC

2120 (D.D.C. 1976), revd in part, NRDC v.

Costle, S61 F.2d 904 (D.C. Cir. 1977), modified,

NRDC vy. Costie, 12 ERC 1833 (D.D.C. 1979) .......

Natural Resources Defense Council v. EPA, No. 79-

1618 (D.C. Cir. filed June 14, 1979) ooo.

Neely v. Eby Construction Co., 386 U.S. 317 (1967) ...

Tanner's Council of America v. Train, 541 F.2d 1188

(4th Cir. 1976)

United States v. Chevron Oil Co., §83 F.2d 1357 (Sth

GR Ia aiehiscaucsiotiniketsantinder eaknniatoea cena

United States vy. Ketchikan Pulp Co., 430 F.Supp. 83

CR I: BCE D taicstsasnennsdciccnincanehnataiae

United States Steel Corp. v. Train, §56 F.2d 822 (7th

Be ee Bis ciacetccnccuosaecedsoammasenisceenaaeemae asa

birginia Electric Power Co. v. EPA, No. 79-1347 (4th

a Geer Ns I cat cat

1978)

STATUTES

Clean Water Act of 1977 (formerly Federal Water

Polluuon Control Act Amendments of 1972), 33

ras. Ue Ms Io ccccancaecsastaSepscenenasiencecatanccs

Section 301(a), 33 U.S.C. § 1311(a)

Page

passim

Page

Section 301(b)(1)(A), 33 US.C. § 13110b)

CL CA) .cccccscscsccssessrssesceesesersensescsseesssssasennsensennenss passim

Section 301(b)(1)(B), 33 US.C. § 1311(b)

(1 )CB)......cccecscccesssseeesseceseseesssresassnssesensesessnsees

Section 301(b)(2)(A), 33 U.S.C. § 1311(b)

(2 EM) cacecencosscessovesessesscansenssssensnennevnsesnssnesenseusnti 3,10,16,

Section 301(b)(2)(E), 33 US.C. § 1311(b)

C2 CE ) ccnvsererescessserasessenscsvnsnnsasacssascnnneenssncsensnesees 21

Section 301(c), 33 U.S.C. § IS TECC) cee eeeeeees passim

Section 301(g)(1), 33 U.S.C. § 13110 g)(1) ....-- 11,21

Section 301(h), 33 U.S.C. § ISTI CH)... eee 21

Section 301(i), 33 U.S.C. § TS TI QC) 2... eens 21

Section 301(1), 33 U.S.C. § IS TL CL) onc. eeeeeeeereeee 5,6

Section 302, 33 U.S.C. § 312 ..............ccscccccsrsessees 25,27

Section 303, 33 U.S.C. § 1313 nn. ceeeeeeeeeeeeeeeeeees 7

Section 304(b)(1), 33 U.S.C. § 1314(b)(1)....... passim

Section 304(b)(2), 33 U.S.C. § 1314(b)(2)....... 3,10,28

Section 304(b)(4), 33 U.S.C. § 1314(b)(4)....... 21

Section 306, 33 U.S.C. § 1316 0... eee eeeeteeeees 22

Section 307(a), 33 U.S.C. § 1317( a) ....c eects 27

Section 307(b), 33 U.S.C. § 1317(b) eee 3,21

Section 309(a), 33 U.S.C. § 1319( a)... eee 21

Section 311, 33 U.S.C. § 1321... cece eeeeeeeeeeeeeees 26

Section 402, 33 U.S.C. § 1342 eee eeeteees 4

Section 507(e), 33 U.S.C. § 1367(@ )...... cee 19

Section 509(b), 33 U.S.C. § 13690)... eee 16

Clean Air Act, 42 U.S.C. §§ 7401, ef 8€q. .........:cceeeeees 22

Section 110(a)(2), 42 U.S.C. § 1857¢-5(a)(2) .. 22,23

REGULATIONS, NOTICES, ADMINISTRATIVE

DETERMINATIONS

Federal Regulations

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PS tc A, MO isciicsniatsscsuvinivvinvinareuevaiensenees

ae A Ne ticeicicbrstsikan ti ctenweinueiinuspiaesuphinisnieanaiocce

Federal Register Notices

SS FOG. TG, 27 TFG C GTB ) on asescassescesesvessvcversecscces

43 Fed. Reg. SOOGDE 1978 ) ............ccceccsesccscessecssees

Administrative Determinations

In re Louisiana-Pacific Corp., 10 ERC 1841

( Decision of the Administrator, September 15,

POPE TE wivictheshehinidetAidiaaisisicenshesiahnlaiamiechbinicnalbiesiasian

LEGISLATIVE HISTORY

Congressional Research Service, Library of Congress,

A LEGISLATIVE HISTORY OF THE WATER

POLLUTION CONTROL ACT AMENDMENTS

OF 1972, 93d Cong., Ist Sess., Serial No. 93-1

(Comm. Print 1973) (Two Volumes) (‘*—Leg.

en TT NSIORE KEL TAY T. Mad EMR ae WPAN,

| Leg. Hist. 169-70 (remarks of Sen. Muskie) .....

| Leg. Hist. 232 (remarks of Cong. Jones)...........

| Leg. Hist. 255 (remarks of Cong. Dingell) .......

t Leg. Bist. FOE (COME. Ret. ) ....cesvescesseesveseveceesces

2 Leg. Hist. 1468 (Sen. Rept.) ......cccccccccccseeeceeeeees

Page

15,16

10,11,26

—

IN THE

Supreme Court of the Wnited States

OctTosper Term, 1979

No. 79-770

ENVIRONMENTAL PROTECTION AGENCY,

Petitioner

NATIONAL CRUSHED STONE ASSOCIATION, ef al,

Respondents,

DouGLas M. CostLe.

Administrator

ENVIRONMENTAL PROTECTION AGENCY,

Petitioner

Vv.

CONSOLIDATION Coat COMPANY, ef al.,

Respondents.

On Writ of Certiorari to the United States

Court of Appeals for the Fourth Circuit

BRIEF FOR NATURAL RESOURCES DEFENSE

COUNCIL, INC., AMICUS CURIAE

INTERESTS OF THE NATURAL RESOURCES

DEFENSE COUNCIL

The Natural Resources Defense Council, Inc., (““*NRDC")

is a national environmental organization with more than 44,000

members residing in all states and territories, as well as abroad.

For nearly ten years, one of NRDC’s primary objectives has

been to protect the integrity of our Nation’s waters from

polluting activities. Toward this end, NRDC has worked to

bring about effective implementation of the Clean Water Act

(“the Act”) and its predecessor, the Federal Water Pollution

Control Act Amendments of 1972. 33 U.S.C. §§ 1251, et seq.

At stake here is one of the Act’s most important principles.

In E.1. duPont de Nemours & Co. v. Train, 430 U.S. 112

(1977), this Court confirmed that Congress authorized the

Administrator of the Environmental Protection Agency

(“EPA” or “the Agency”) to regulate industrial pollutant

discharges from existing sources through the issuance of nation-

ally uniform effluent limitations under Sections 301(b)(1)(A)

and 304(b)(1) of the Act, as long as those limitations are

applied with sufficient flexibility. Jd. at 128. The decisions

below represent a major excursion from that principle. The

Fourth Circuit has required the Administrator to re-examine

uniform limitations each time a discharger asserts a claim of

economic hardship, and to consider relaxing the regulations on

a case-by-case basis wherever the Agency is unable to counter

those assertions with its own analyses.

NRDC has a long-standing interest in this issue. Believing

that the first step toward industrial pollution control must be

prompt issuance of effluent limitations, NRDC has participated

extensively in litigation to enforce the Act’s deadlines for

promulgating these regulations. For example, NRDC brought

suit when EPA missed the Act’s deadline for issuing the first set

of effluent limitations. In NRDC v. Train. 6 ERC 1033

(D.D.C. 1973). aff'd in part and rev'd in part, 510 F.2d 692

(D.C. Cir. 1975), the District Court established a schedule for

promulgating limitations reflecting the “best practicable control

technology currently available” (BPT) as required by Sections

301¢b)(1)(A) and 304(b)(1) of the Act. The regu.ations at

issue here descended from that case.' In 1973-75, NRDC

brought a series of lawsuits to remedy the Agency’s failure to

promulgate pretreatment standards and other controls on toxic

pollutants. As a result, EPA is developing limitations reflecting

the “best available technology economically achievable’

(BAT)? and other standards for 21 major industrial categories

under the requirements of the consent decree in NRDC v.

Train, 8 ERC 2120 (D.D.C. 1976), rev'd in part, NRDC v.

Costle, 561 F.2d 904 (D.C. Cir. 1977), modified, NRDC v.

Costle, 12 ERC 1833 (D.D.C. 1979). NRDC believes that the

Court’s decision in this case could affect the integrity and

validity of those regulations as well.3

NRDC has long been interested in the manner in which

effluent limitations are developed and applied to individual

1 See National Crushed Stone Ass’n v. EPA, 601 F.2d 111, 112

n.4 (4th Cir. 1979).

233 U.S.C. §§ 1311(b)(2)(A), 1314(b)(2). The government's

brief explains why there are different compliance deadlines for the

various species of BAT, and refers to these limitations collectively as

the “1987 limitations.” Brief for the Petitioners, note 6. As a result of

the consent decree described in the text, however, nearly all of the

Agency’s BAT limitations will pertain to toxic pollutants, for which

the statutory compliance date is July 1, 1984. Accordingly, NRDC

will use “1984” in referring to BAT limitations.

3 This case involves only the proper scope of EPA’s variance

provision pertaining to BPT. However, EPA also has promulgated

variance provisions—not specifically authorized by Congress

—Pertaining to BAT as well as pretreatment standards required under

Section 307(b) of the Act. 40 C.F.R. § 125, 44 Fed. Reg. 32948 (June

7, 1979). The validity and proper scope of these provisions is the

subject of other, pending litigation. NRDC v. EPA, No. 79-1618

(D.C. Cir. filed June 14, 1979); Virginia Electric Power Co. v. EPA,

No. 79-1347 (4th Cir. filed June 14, 1979); American Petroleum

Institute v. EPA, No. 79-2433 (Sth Cir. filed June 14, 1979). NRDC

believes that the Court’s disposition of this case could shed light on

these ancillary, yet important issues.

dischargers through the Act’s permit system.4 In NRDC v. EPA,

537 F.2d 642 (2d Cir. 1976), NRDC unsuccessfully contended

that, in view of the Act’s demand for uniformity, no variances

should be allowed from BPT limitations. NRDC also filed

amicus curiae briefs in the many other appellate cases which

dealt with the Administrator’s authority to issue uniform

effluent limitations, as well as the related question of EPA’s

duty to provide variances from those limitations.5 And NRDC

participated as amicus curiae in duPont v. Train, wherein we

urged the Court to uphold EPA’s authority to issue uniform

BPT regulations. The Court approved that authority on

condition that EPA exercise some administrative flexibility in

implementing the regulations. 430 US. at 128.

Moreover, in a case recently decided by the Fourth Circuit,

NRDC raised precisely the issue presented by the government's

petition to this Court: whether EPA’s BPT variance provision

must include consideration of a discharger’s “economic capabi-

lity,” ie., its ability to afford the costs of installing and

4 The effluent limitations established pursuant to Section 301 are

applied to individual dischargers by means of the permit system

established under Section 402 of the Act, 33 U.S.C. § 1342, and

designated the National Pollutant Discharge Elimination System

(“NPDES”). Under NPDES, the Administrator, or a State official

pursuant to a federally approved state program, may issue permits for

discharges of pollutants on condition that the discharges will meet all

applicable requirements of the Act, including those under Sections

301, 302, 304, and 307. Id.

5 CPC International Inc. v. Train, 515 F.2d 1032 (8th Cir. 1975);

American Meat Institute v. EPA, 526 F.2d 442 (7th Cir. 1975);

American Iron & Steel Institute v. EPA, 526 F.2d 1027 (3d Cir.

1975): E. 1. duPont de Nemours & Co. v. Train, 528 F.2d 1136 (4th

Cir. 1976) and 541 F.2d 1018 (4th Cir. 1976); Tanner’s Council of

America Inc. v. Train, 541 F.2d 1188 (4th Cir. 1976); Appalachian

Power Co. v. Train, 545 F.2d 1351 (4th Cir. 1976); Hooker Chem-

icals & Plastics Corp. v. Train, 537 F.2d 620 (2d Cir. 1976);

American Frozen Food Institute v. Train, 539 F.2d 107 (D.C. Cir.

1976); American Paper Institute v. Train, 543 F.2d 328 (D.C. Cir.

1976); American Petroleum Institute v. Train 526 F.2d 1343 (10th

Cir. 1975) and 540 F.2d 1023 (10th Cir. 1976).

operating BPT. Appalachian Power Company v. Train, Nos.

74-2096, et al. (4th Cir. April 28, 1980) (“Appalachian Power

| /980|").© The case came before the court on petitions filed by

NRDC and numerous power companies for review of the

Administrator’s actions on remand in Applachian Power Com-

pany v. Train, 545 F.2d 1351 (4th Cir. 1976) (“Appalachian

Power [1976]”). In Appalachian Power { 1976], the court

ordered EPA to expand the BPT variance by adding the factors

specified in Section 301(c) of the Act. 545 F.2d at 1359-60.

NRDC filed its petition in Appalachian Power | 1980] to contest

the Administrator’s failure to consider events arising after the

1976 remand which, in our view, demonstrated the error in the

Fourth Circuit’s rationale. These events included this Court's

decision in duPont and the DC. Circuit’s decision in

Weyerhaeuser Company v. Costle, 590 F.2d 1011 (D.C. Cir.

1978). The Fourth Circuit denied NRDC’s petition on several

grounds.’

® The Fourth Circuit's opinion in Appalachian Power [1980] is

set forth as an Appendix to this brief.

7 NRDC intends to file a petition for Writ of Certiorari to the

Court of Appeals for the Fourth Circuit on the basis of Appalachian

Power | 1980]. If it is granted, we intend to request that the case be

reviewed together with the two cases now before the Court. We will

urge the Court to consolidate these three cases for several reasons.

First, the Fourth Circuit rejected NRDC’s position on the specific

question presented here. We contended that Appalachian Power

[1976] was no longer good law—in light of this Court’s subsequent

decision in duPont and the D.C. Circuit's decision in Weyerhaeu-

ser—to the extent it required EPA to include Section 301(c) in the

BPT variance. The court “declined to change [its] Appalachian

Power variance holding.” (App. at 12a). In so doing, the court

implicitly rejected NRDC’s argrment, set forth at 28-32, infra, that

the Act and duPont preclude consideration of Section 301(c) in BPT

variance decisions. That argument was neither raised nor considered

in the two cases before this Court.

Second, Appalachian Power [1980] presents an important issue

of first impression that has significance for the administration of the

Clean Water Act. NRDC contended that Section 301(1) of the Act.

(footnote continues)

Finally, NRDC and its members have a strong interest in

the outcome of this case because we believe the decision below

would seriously delay the progress toward clean water that

Congress envisioned when it prescribed a uniform, technology

forcing regulatory scheme. Congress has enacted precise,

comprehensive legislation to require expeditious abatement of

industrial pollution. Twice within a span of five years, Congress

has considered amendments to the federal law of water pollu-

tion control, and each time has examined carefully the manner

in which this progress is being achieved. As a result, the Act

explicitly provides avenues for relief from many of its require-

ments and deadlines. But the Act contains no indication of

Congressional intent to deviate from this Court’s holding in

duPont that uniform BPT limitations, with only limited van-

ations, must serve as the foundation for industrial pollution

abatement. The decisions below threaten to undermine that

foundation—in terms of both the degree of pollution control

required and the protracted permit proceedings that will be

necessary—to the detriment of NRDC’s members who enjoy

and depend on the Nation’s aquatic resources.

(footnote continued)

which prohibits any modification of effluent limitations that apply to

toxic pollutants, narrows the circumstances in which EPA may grant

BPT variances. The court held that Section 301( 1) “does not apply to

BPT vanances.” (App. at 14a).

Third, all three decisions affect the scope of EPA’s uniform BPT

variance clause even though each case pertains to only one industrial

category. In the interests of judicial economy and efficient adminis-

trauon of the Clean Water Act, we believe the Court should resolve all

pertinent issues, for all categories, in one decision.

Finally. Appalachian Power [1980] creates clear conflicts, both

within the Fourth Circuit and between that circuit and the D.C. Court

of Appeals. Contrary to Consolidation Coal Co. v. Costle, 604 F 2d

239, 248 (4th Cir. 1979), and Weyerhaeuser Co. v. Costle, $90 F.2d

1OLt, 1041-44 (D.C. Cir. 1978), the court indicated in Appalachian

Power | 1980] that it disapproved of EPA’s position that “[r]jeceiving

water quality simply cannot legally be considered a relevant factor in

evaluating a variance request.” (App. at |la-12a)

This amicus brief ts filed with the consent of the parties to

this case. Copies of the letters of consent are filed herewith.

QUESTION PRESENTED

Whether the Administrator of the Environmental Protec-

tion Agency is required, or even permitted, to consider the

economic factor specified in Section 301(c) of the Clean Water

Act, 33 U.S.C. § 131 1(¢), in deciding applications for variances

from uniform BPT effluent limitations promulgated pursuant to

Sections 301(b)(1)(A) and 304(b)( 1) of the Act, 33 U.S.C.

SS 1311 b)C LCA), 13140b)01).

STATEMENT OF THE CASE

1. The Limits of the Question Presented.

The government's petition asks whether the BPT variance

provision must provide for consideration of a discharger’s

economic capability —under Section 301(c) or otherwise. Am-

icus NRDC poses a question that in one aspect is somewhat

narrower, since it asks only whether the economic factor

specified in Section 30] (c) need be considered in determining

variances from BPT. We believe the broader question raised by

the government ts not properly before this Court because it was

not decided below. See Neely v. Eby Construction Co., 386 US.

317, 330 (1967).

In both decisions below, the court remanded EPA’s vari-

ance provision for compliance with Appalachian Power | 1976}.

See National Crushed Stone Ass'n v. EPA, 601 F.2d 111. 124

(4th Cir. 1979); Consolidation Coal Co. v. Costle, 604 F.2d 239,

244 (4th Cir. 1979). That 1976 decision required EPA to

include in its BPT variance clause the statutory factors set out in

Sections 301(c) and 304(b)(1)(B) of the Act. 545 F.2d at

1359-60

With respect to consideration of a particular discharger’s

economic capability, Appalachian Power | 1976] relied entirely

on the opinion that Section 301(¢) must be applied to BPT as

well as to BAT. After discussing the relevance of Section

301(¢c) to BAT limitations, the court stated: “| 1 ]f such factors

as the economic capacity of the owner or operator of a

particular point source ts relevant in determining whether a

variance from the 1983 standards should be permitted, they

should be equally relevant when applied to the less stringent

1977 standards... .” 545 F.2d at 1359. Nothing in Appala-

chian Power |1976| or the two cases now before this Court

suggests any alternative rationale for including economic hard-

ship among the variance factors. Indeed, the lower court has

recognized, without further comment, that EPA’s variance

clause now complies with Appalachian Power | 1976| insofar as

it requires consideration of the factors set forth in Section

304(b)(1)(B). National Crushed Stone, 601 F.2d at 123.

In contrast. the broad question framed by the government

has been raised in two other cases. The D.C. Circuit has

decided that the BPT variance provision need not include

consideration of economic capability. Weyerhaeuser Co. v.

Costle, $90 F.2d LLL (D.C. Cir. 1978). The court held that

while the Section 304(b)ci)(B) factors include a_ cost-

effectiveness test, they do not require EPA to consider whether

an individual discharger can afford the costs of BPT. /d. at

1035-36.

The second case raising the government's broad question is

Appalachian Power | 1980}, discussed above. There, the parties

briefed and argued this question before the Fourth Circuit for

the first ume. In particular, the briefs raised questions as to

whether the term “practicable” in Section 301(b)(1)(A) and

the concept of “total cost” in Section 304(b)(1)(B) imply a

duty to consider economic hardship quite apart from Section

301(c). In its recent decision, the court did not address these

Issues.

Consequently, no question is properly before this Court

except whether the factors specified in Section 301(c) should

apply to BPT variances.

In another aspect, however, the question NRDC presents is

broader than that raised by the government. The government

asks only whether economic considerations are a mandatory

component of the BPT variance provision. NRDC believes that

a legitimate subsidiary question is whether the Administrator is

even permitted to consider the economic factors, specified in

Section 301(c), in deciding BPT variances. As discussed

below,® we believe the Act and duPont preclude consideration

of affordability in BPT variance decisions.

ll. The Context and Implications of the Case.

This case calls upon the Court to interpret and apply the

Clean Water Act of 1977, 33 U.S.C. §§ 1251, et seg., in light of

its legislative history. The linchpin of this Act is its absolute

prohibition against pollutant discharges that fail to meet certain

minimum standards. 33 US.C. §1311(a). For existing

industrial point sources, those standards require progress to-

ward the elimination of pollutant discharges in two distinct

stages.

At the first stage, point sources were required to reduce

their discharges by 1977 to a level which can be achieved

through application of the “best practicable control technology

currently available” (BPT). Clean Water Act § 301(b)(1)

(A), 33 US.C. §1311(b)C1)(A). BPT limitations are in-

8 See discussion at 28-32, infra.

9 The government’s statement describes adequately the procedur-

al background of this case and the Court of Appeals’ decision under

review here. However, Amicus NRDC believes it is imperative that

the Court appreciate the broader context in which this issue arses, as

well as the differences in the reasoning employed by the courts which

have addressed the issue, and the important practical implications of

the decisions below. NRDC’'s statement summanizes these aspects of

the case

tended to bring all sources in an industrial category to a single

baseline which represents, at a minimum, the “average of the

best performers” in that category. '®

At the second stage, the same sources must upgrade their

pollution controls by 1984 to a level which can be achieved

through application of the “best available technology econom-

ically achievable” (BAT). Clean Water Act, § 301(b)(2)(A),

33 US.C. § 1311¢b)(2)(A). BAT limitations must ensure

“reasonable further progress [beyond the BPT stage ]toward

the national goal of eliminating the discharge of all pollutants.”

Id. In contrast to the BPT stage, BAT limitations must be

pegged, at a minimum, to “the best performer” in any industn-

al category.'' Indeed, BAT regulations “shall require the elimi-

nation of discharges of all pollutants if the Administrator finds

. that such elimination is technologically and economically

achievable... .”’ Jd. (emphasis added ).

The Administrator must consider specihe statutory factors

in developing BPT and BAT regulations. The factors per-

taining to BPT are contained in Section 304(b)(1)(B) of the

Act. The BAT factors are set forth in Section 304(b)(2)(B).

To provide for increased pollution abatement from the first

stage to the second, these sets of factors differ in one important

respect. At the first stage, EPA must perform a cost-

10 Remarks of Sen. Muskie explaining the Conference Report on

the Federal Water Pollution Control Act Amendments of 1972. |

Leg. Hist. 169-70. The Congressional Research Service of the Library

of Congress has published a detailed, two-volume legislative history

of the 1972 Act. titted A LEGISLATIVE HISTORY OF THE

WATER POLLUTION CONTROL ACT AMENDMENTS OF 1972,

93d Cong. Ist Sess., Serial No. 93-1 (Comm. Print 1973). Citations to

this compilation of the legislative history will be: “— Leg. Hist. —.”

1 | Leg. Hist. 169-70 (remarks of Sen. Muskie). Of course, if no

discharger in a given category is utilizing the “best available” or “best

practicable” technology for that category, the Administrator should

establish effluent limitations with reference to technologies used in

different industries or otherwise demonstrated to be reliable and

effective. Jd.

effectiveness analysis by considering the costs of BPT “in

relation to” the effluent reductions that will be achieved. 33

U.S.C. § 1314(b)(1)(B). This is not a true cost-benefit

analysis, since EPA need not consider the effect on the quality

in a particular water body that is produced by any particular

reduction of effluent discharges. Weyerhaeuser, 590 F.2d at

1041-44, 1047. At the second stage, the Act envisions much less

emphasis on costs. EPA need only “take into account” the cost

of achieving BAT. 33 USC. § 1314(b)(2)(B); see

Weyerhaeuser, 590 F.2d at 1045.'2

The Act provides for limited variances from both BPT and

BAT limitations. Section 301(c) permits the Administrator to

modify BAT limitations if the applicant meets two conditions.

He must show that less stringent requirements (1) “will

represent the maximum use of technology within the economic

capability” of that discharger, and (2) “will result in reason-

able further progress toward the elimination of the discharge of

pollutants.” 33 U.S.C. § 1311(c).'3 While the Act is silent

regarding variances from BPT, in duPont the Court held that at

‘2 Senator Muskie explained the consideration of BAT costs as

follows:

As to the cost of “best available” technology, the Conferees

agreed upon the language of the Senate bill in Section

304(b)(2). While cost should be a factor in the Administrator's

judgment, no balancing test will be required. The Administrator

will be bound by a test of reasonableness. In this case, the

reasonableness of what is “economically achievable” should

reflect an evaluation of what needs to be done to move toward the

elimination of the discharge of pollutants and what is achievable

through the application of available technology— without regard

fo cost.

| Leg. Hist. 170 (emphasis added ).

‘3As a result of amendments enacted in 1977, the Act also

contains a second variance from BAT limitations. Section 301(2)(1)

directs the Administrator to modify BAT for certain pollutants if a

discharger satisfies three enumerated requirements relating to the

environmental effects of the discharge. 33 U.S.C. § 1311(g)(1).

least a limited opportunity for variances must be inferred from

the law in order to uphold EPA’s authority to issue uniform

BPT limitations. 430 US. at 128

The “reasonable further progress” condition in Section

WiC) w meant to assure that BAT requires more pollution

control than BPT. This must be true for each source, as well as

for whole industrial categories. Under Section J0i(c), itis not

cnough that a discharger show economic inability to meet BAT;

he must also show that lesser requirements will ensure progr: 4s

toward climinating pollutant discharges. Vhis progress must be

toward “zero discharge,” not toward BAT. The baseline for

progress is the BPT requirements to which that source was

subject: either the uniform BPT limitations or, fa BPT variance

has been obtained, the limitation specified theremin. Thus, under

the statutory scheme, as claborated in duPont, it is impossible

tor any source to be subject to more onerous requirements in

1977 than in L984

The relationship between uniform BPT limitations and the

BPT variance is central to this case. Under duPont, BPT

limitations must be both uniform and capable of flexible

implementation fn determining whether the requirements of

duPont have been met, one must assess the combined impact of

the regulations and the variance provision.

While ethuent limitations are published for entire point-

source categories, each category ts subdivided so that only those

sources Which are similar will be subject to the same limita-

tions. '4 In this manner, some flexibility is built into the regu-

‘4 This Court approved the use of subcategories in duPont. After

discussing portions of the legislative history that called for ranges of

best practicable levels, the Court observed: “if construed to be

consistent with what we have found to be the clear statutory

language. this language can be fairly read to allow the use of

subcategories based on factors such as size, age, and unit processes,

with effluent limitations for each subcategory normally based on the

performance of the best plants in that subcategory.” 430 U.S. at 132

n 21

lations themselves by considering technical and other variations

among the dischargers to the extent possible in a general

rulemaking. The need for case-by-case variations at the permit

stage 1s reduced significantiy by the use of subcategories.

Weyerhaeuser, 590 F.2d at 1040.15

EPA’s limited variance provision affords additional flexi-

bility. Recognizing that some dischargers might not fit the

assumptions upon which EPA based the uniform regulations,

the Agency (and this Court in duPont) thought it necessary to

make some allowance for anomalies at the permit stage. 6

'5In Weyerhaeuser, for example, the court discussed the

relationship between subcategories and variances, noting that both

mechanisms contribute toward the minimum flexibility required by

duPont:

Although the variance must prevent the regulations from

having a greater overall impact on an individual mill than the

Act authorizes the general regulations to have on the industry,

the one designed by EPA... accomplishes this goal. Because

EPA, in devising the limitations, undertook a meticulous effort to

obtain all relevant information from all available sources in-

cluding the tmdustry itself, and attempted to account for that

information in all its diversity, the Agency has built a significant

degree of flexibility into the regulations themselves.

Thus, to a great degree, the Agency has accounted for cross-

industry, and even “cross-subcategory,” differences in estab-

lishing the limits. Allowing for variances based on slight or

moderate differentials at individual plants would accordingly

ignore the liberality that is already built into the system. It

would allow for variances when the impact on an individual did

not exceed the range of impacts considered by the Agency for the

industry generally.

$90 F.2d at 140

‘6 The Agency's variance clause 1s published as a part of each

BPT regulation. £.g., 40 C.F.R. §§ 434.22, 32, .42 (coal mining

category); 40 C.F.R. §§ 436.33, .43 (mineral mining and processing

category). The variance clause provides, in part:

(footnote continues)

There may be anomalous situations in which data about

peculiar conditions at certain plants do not emerge in the

general rulemaking. But even when such data are available at

the rulemaking stage, limited variances may be necessary to

avoid having to establish an inordinate number >f subcate-

gories. Rather than sacrifice the uniform nature of the regu-

iations in the name of flexibility, EPA might establish relatively

fewer subcategories and rely upon the variance to adjust

discharge limits for unusual circumstances.

Nevertheless, the structure of EPA’s variance provision

helps to ensure that the uniformity of the limitations will not fall

victim to wholesale variances. A variance may be grad only

on the basis of a plant’s characteristics which are “fundamen-

tally different” from those EPA considered in the BPT rulemak-

ing. E.g., 40 C.F.R. §§ 436.33, .43 (variance provision for the

mineral mining and processing category); see Weyerhaeuser,

590 F.2d at 1040. The applicant is permitted to demonstrate,

for example, that its cost-effectiveness ratio (not its cost) is

fundamentally different from the ratio EPA calculated for the

industry as a whole. Moreover, each applicant for a variance

must make at least an initial showing that these fundamental

differences exist, and that the cumulative effect of the differ-

ences justifies a variance. These burdens on the applicant make

it somewhat more difficult at the permit stage to persuade EPA

to alter uniform BPT limitations than would be the case at the

rulemaking stage. Consequently, dischargers are encouraged to

come forward with data prior to the final rulemaking that will

facilitate EPA’s development of sound, flexible regulations. Cf.

BASF Wyandotte Corp. v. Costle, 598 F.2d 637 (1st Cir. 1979)

(problems caused by lack of industry data).

(footnote continued)

In establishing the limitation set forth in this section, EPA

took into account all information it was able to collect, develop

and solicit with respect to factors ... which can affect the

industry subcategorization and effluent levels established. It is,

however, possible that data which would affect these limitations

have not been available and, as a result, these limitations should

be adjusted for certain plants in this industry.

Similarly, the scope of the variance —i.e., the factors to be

considered—is relevant to determining whether BPT effluent

limitations are sufficiently flexible without sacrificing unifor-

mity. Under the Administrator's interpretation, the only ano-

malies which may be considered in variance applications are

those which relate to the generic considerations, or factors, that

must be taken into account in the BPT rulemaking. Other kinds

of anomalies are irrelevant because they would introduce

considerations that are foreign to the concept of BPT. In EPA's

parlance, the BPT variance is a “redefinition” of BPT for

individual dischargers. See Withdrawal of Interpretations, 43

Fed. Reg. 50042 (October 26, 1978). Thus, even though

modified BPT requirements may be less stringent than uniform

BPT limitations, conceptually they must represent BPT for that

discharger. Jn re Louisiana-Pacific Corp. 10 ERC 1841, 1851

(Decision of the Administrator, September 15, 1977).17

For this reason, the government’s petition asks the Court to

limit the kinds of anomalies which EPA must consider at the

permit stage to those specified in Section 304(b)(1)(B) of the

Act. Specifically, the Court must decide whether EPA is

required or permitted to consider the factors set forth in Section

301(c) when deciding requests for variances from BPT. In

Weyerhaeuser, the D.C. Circuit ruled that EPA need not do so

with respect to BPT limitations for the paper industry. In the

Appalachian Power decisions (steam-electric power industry ),

National Crushed Stone ( mineral mining industry ) and Consol-

idation Coal (coal mining industry), the Fourth Circuit ruled

that EPA must.

As noted above, EPA’s interpretation of the variance

clause can be traced directly to this Court’s decision in duPont.

There, the Court concluded that the Act authorizes EPA to

promulgate uniform, single-number effluent limitations for en-

'7 Similarly, the D.C. Circuit pointed out that the Section 301(c)

variance permits a case-by-case reassessmeni of the statutory factors

used to establish uniform BAT limitations. See Weyerhaeuser, 590

F.2d at 1034-35.

tire categories of point sources. 430 U.S. at 128. The Court

found that the Act unambiguously provided this authority with

respect to BAT by using the language “for categories and

classes of point sources” to describe those limitations. Jd. at

126-27 (citing 33 U.S.C. § 1311(b)(2)(A)). Congress used

different language to describe BPT effluent limitations: “for

point sources.” 33 U.S.C. § 1311(b)(1)(A). Nevertheless, the

Court drew upon the Act’s purposes and the Administrator’s

interpretation of it to uphold the Agency’s BPT rulemaking

authority “so long as some allowance is made for variations in

individual plants ....” /d. at 128. Thus, rather than requiring

EPA to define BPT in each permit, the Court allowed a uniform

limitation in the regulations, to be followed by an opportunity

for reconsideration of that limitation in those circumstances

which warrant variations. The Court believed that it was

“premature,” however, to consider “whether EPA’s variance

provision has the proper scope.” /d. at 128 n.19.'8

18 After the Court's decision in duPont, the Administrator made

it abundantly clear which kinds of fundamental differences may be

raised in support of applications for BPT variances. See in re

Louisiana-Pacific Corp., 10 ERC 1841 (decision of the Administrator,

Sept. 1S, 1977); Withdrawal of Interpretations, 43 Fed. Reg. 50042

(Oct. 25, 1978).

The government has suggested that this case presents a substan-

ual ripeness question because the variance clause has not been applied

in the context of a specific application. Petition for Writ of Certiorari

at 20-22. Amicus NRDC believes the issue in this case is sufficiently

clear and proper for review. The question arises as a subsidiary issue

within the broader question of whether EPA’s BPT regulations for

these two categories are valid. As this Court noted in duPont, the

Administrator’s authority to promulgate uniform BPT limitations

depends upon a sufficient allowance for flexibility in implementing

those regulations. The validity of uniform limitations can be chal-

lenged only in the Court of Appeals within 90 days following

promulgation (33 U.S.C. § 1369(b)(1)(E)), and if not raised at that

time, cannot be addressed in enforcement proceedings. 33 U.S.C.

§ 1369(b)(2). Thus, as the D.C. Circuit noted in Weyerhaeuser, it is

necessary as a “threshold” matter to determine whether the uniform

BPT limitations are valid under the requirements of duPont. 590 F.2d

at 1032. That determination, in turn, depends on the flexibility of the

variance provision

The D.C. Circuit and the Fourth Circuit have taken

somewhat different approaches toward determining the neces-

sary scope of the variance clause. The D.C. Court confined its

inquiry to whether the variance provision was capable of

satisfying the purpose for which it was required: to afford the

minimum flexibility upon which this Court in duPont condi-

tioned EPA’s authority to promulgate uniform BPT limitations.

Weyerhaeuser, 590 F.2d at 1033. Under that standard, the

court held that the Administrator need only consider the

factors, set forth in Section 304(b)(1)(B) of the Act, which

EPA considered in the rulemaking. /d. at 1036. Accordingly, if

a plant’s costs relative to the degree of its effluent reduction are

not fundamentally different from those which could have been

demanded of the industrial category, a variance need not be

granted. /d.

The Fourth Circuit agreed that the variance factors “ought

ordinarily to be as broad as the factors relied upon in estab-

lishing the limitation if the [variance] provision is to have

meaning.” Appalachian Power [1976], 545 F.2d at 1359.

However, though economic capability is not one of the factors

EPA must consider in setting BPT limitations, the court held

that EPA “may not exclude the [§ 301(c)] factors to be

considered in granting variances under the [BAT] standards

....” National Crushed Stone, 601 F.2d at 124. The court

noted correctly that “the statute contemplates there be more

stringent standards in 1983” than in 1977. Jd. But the court

was of the opinion that the Section 301(c) “economic capabili-

ty” factor must be considered in granting BPT variances, as

well as BAT variances, so as to preserve this pattern of

increasing stringency. Jd.19

The potential administrative burdens of the Fourth Cir-

cuit’s holding are substantial. At present, EPA must process

'§ Consolidation Coal merely adopts this holding and analysis.

604 F.2d at 244. Appalachian Power [ 1980] follows the court’s prior

decisions without comment. (App. at 12a).

iB)

NPDES permit applications trom tens of thousands of dis-

chargers. See duPont, 440 US. at 132.2 Under the Fourth

Cireut’s decision, FPA must respond to a plausible showing by

any appheant that wt cannot absorb BPT compliance costs. The

Agency will be compelled to decide whether the discharger

would be forced to close, reduce production, forego expansion

and modernization, of take other serious measures as a result of

BPT requirements In each case, erther the Administrator will

have to accept the appheant’s representation that such impacts

are inevitable, or he will have to undertake his own analysis of

the discharger’s business judgment to show that they are not?!

These proceedings will be complex, costly and cumber-

some EPA's expenence with a similar kind of inquiry indicates

what can be expected In 1976, EPA investigated, under

Section SO7(e) of the Act, a claim by the Ketchikan Pulp

Company that cconomic constraints would force the company

As noted above, FPA intends to provide similar variances from

pretrearment standards See discussion at 3, supra, note 3 Pre

treatment standards apply to “indirect” dischargers which are not

subject to NPDES permit requirements Nevertheless, EPA will have

ty conduct Variance appheation proceedings for these dischargers. At

least 88.000 such dischargers will be subject to pretreatment standards

by 1983. and a substantial number of these could be added to the

Ageney's existing administrative case load when this variance be

comes available 43 Ked) Reg 27736 (June 26, 1978)

2) This shift of the burden of persuasion to EPA will be

acoompanied by tremendous political pressure on the Agency's permit

writers The DC Crreutt, for example, was concerned that EPA and

state permit writers will be unable to respond effectively to economic

Varlanee requests

A more difficult question surrounds the relevance and impor-

tance of economre hardship The issue ts crucial, of course,

because those mill operators who are most hard pressed econom-

really will be the most likely to pursue vigorous variance

demands Moreover, when faced with the ulumate threat of

economic hardship plant closure, with attendant unemploy

ment and regional economic dislocation — the local permit-grant-

ing ageney will find ut difficult to resist a plea for a variance

Weverhacuser, 890 F 2d at 1036

to close its pulp mill if BPT limitations were required.2? The

Agency hired several economic consulting firms and conducted

extensive discovery of Ketchikan’s financial position. Hundreds

of thousands of dollars were expended, and the Administrator

assigned several enforcement officers, attorneys, engineers and

economists to the task for over a year. Even after this effort, the

issues were not resolved.

The Ketchikan investigation illustrates, on a small scale,

the tremendous administrative difficulues EPA would face

under the ‘ourth Circuit's mandate. Thus, the Court's decision

in this cas. will have a major effect on the efficiency, uniformity

and prompiness with which the Act is to be administered. In

the Argument which follows, we turn to NRDC’s principal

contention: Congress could not have meant for EPA to shoulder

such a burden, or it surely would have stated that intention

clearly in the Act

SUMMARY OF ARGUMENT

The result reached by the D.C. Circuit in Weyerhaeuser v.

Costle ts correct. There, the court upheld a BPT variance clause

which, as interpreted by the Administrator, includes the statu-

tory factors specified in Section 304(b)(1)(B), but excludes

consideration of the “economic capability” factor set forth in

Secuon 301(c) of the Act. 590 F.2d at 1039, n.38. This

conclusion is supported by two alternative lines of analysis.

22 Section S07(e) provides, in part, that “[t}he Administrator

shall investigate] threatened plant closures or reductions in

employment allegedly resulting from [effluent] limitations ... .” 33

USC §1367(e) Such investigations result only in reports to

Congress, not regulatory or enforcement actions. The Ketchikan

investigation was the only such proceeding ever undertaken by EPA

Pursuant to this provision. It produced an extensive record, but was

terminated when EPA settled a related enforcement action against the

company. See United States v Ketchikan Pulp Co., 430 F.Supp. 83

(D. Alas. 1977)

First, both the Act and its legislative history demonstrate

that Congress made a conscious decision to exclude consid-

erations of economic capability from the calculation of BPT

requirements for individual dischargers. At the BPT stage,

Congress prescribed a cost-effectiveness test. The Adminis-

trator need only assess the costs of BPT in relation to the

resulting effluent reductions. He need not consider whether a

discharger will be able to afford those costs. This conclusion ts

underscored by the fact that Congress made the explicit eco-

nomic escape valve in Section 301(c) applicable only to the

more costly BAT limitations, and by Congress’ acceptance of

the likelihood that BPT limitations would force some plants to

close. Moreover, by its terms Section 301(c) requires that a

discharger’s modified limitations result in “reasonable further

progress” beyond BPT, a condition which obviously cannot be

met in applying Section 301(c) to grant a variance from BPT.

Second, as the result in Weyerhaeuser demonstrates, the

scope of EPA’s vanance must be consistent with the Act's

concept of uniform BPT limitations. The Act, as interpreted tn

duPont, authorizes a two-tiered regulatory scheme consisting of

uniform BPT effluent limitations followed by opportunities to

reassess BPT at the permit stage if unusual circumstances are

encountered. Thus, the sole purpose of the BPT variance ts to

reconsider BPT for individual dischargers, and to thereby

calculate case-by-case BPT limitations wherever warranted. By

analogy. Section 301(c) provides for reconsideration of the

BAT factors and, if warranted, modification of the uniform

BAT requirements.

With respect to considerations of cost and economic

capability, Congress has set forth radically different factors to

detine BPT and BAT. Accordingly, concepts peculiar to

BAT —the Section 301(c) factors— must not be engrafted onto

BPT, as the decisions under review require. The Fourth Circuit

would require the Agency to do far more than reassess BPT for

fundamental differences in statutorily relevant factors; it would

require EPA to change the BPT calculus by adding the

statutorily proscribed concept of affordability. Consequently,

dischargers which obtain a variance based in part on consid-

erations of affordability, will be permitted to utilize less than the

best practicable technology, as defined by Congress. This result

is neither required nor permitted by the Act

ARGUMENT

I. The Act Neither Requires Nor Authorizes the Adminis-

trator To Consider Modifying BPT Limitations On the

Economic Capability Grounds Specified In Section

3Ol(c).

In resolving this case, as in duPont, the Court must apply

the language of the Clean Water Act and the intentions of the

Act's authors. The scheme of the Act is detailed and com-

prehensive. It prohibits point-source discharges of all pollu-

tants except in compliance with certain uniform standards. 33

US.C. § 1311(a). It states the criteria for developing and

issuing those standards. It authorizes variances and time

extensions for some standards while providing none for oth-

ers.23 And where the Act affords relief from uniform standards

on the basis of affordability, it states that intention explicitly.24

23 In addition to Sections 301(c) and 301(g)( 1), discussed at 11,

supra, the Act contains a vaniety of provisions for relief from uniform

standards and compliance deadlines. Section 309(a)( 5) authorizes

extensions of time to comply with BPT effluent limitations. 33 U.S.C

§ 1369(4)(5). Section 301(h) allows the Administrator to waive the

requirement of Section 301(b)(1)(B) that: municipalities install

secondary treatment by July 1, 1977 (33 USC. §1311(h)), and

Section 301(1) permits extensions of that deadline for both municipal-

ities and associated indirect dischargers. 33 U.S.C. § 131101). BAT

effluent limitations must be relaxed for certain “conventional” pollu-

tants in accordance with the cost-effectiveness analysis prescribed by

Secuons 301(b)(2)(E) and 304(b)( 4). 33 (USC

§§ 13110b)(2)CE), 13140b)(4). And in certain circumstances, uni-

form pretreatment standards required by Section 307(b) must be

eased to the extent that municipalities receiving pre-treated wastes are

capable of achieving additional pollutant removal. 33 !)S.C.

§ 13170 b)C1)

24 See discussion at 11, supra; note 31, infra.

In view of the thoroughness of the Act’s regulatory scheme

and the attention Conress gave to considerations of affordabth-

ty, special care should be taken to give the Act its literal

meaning. Recognition must be given the Act’s omissions as

well as its commands. As thts Court observed in a similar

context, “| t}he question... is what Congress intended for these

regulations.” duPont, 430 U.S. at 138 (emphasis in the origi

nal).25 If Congress intended that EPA would consider economic

hardship in granting variances from these regulations, it surely

would have provided that authority in the Act

In Union Electric Co. v. EPA, 427 US. 246 (1976), the

Court outhned the proper analysis for this case. There, the

Court considered whether the Administrator, in approving state

implementation plans under the Clean Ai Act, 42 USC.

§§ 7401 et seg. may consider the technological and economic

feasibility of meeting the plans’ requirements. 427 US. at 256

The Court noted the “technology-forcing character” of the

statute's requirements for state plans, and held that the eight

criteria Congress had specifically set forth in Section 1100432)

were the only factors the Administrator could consider in

assessing such plans. /d. at 257. The Court stated: “[I]fa basis

is to be found for allowing the Administrator to consider such

claims [of infeasibility], it must be among the eight criteria

dd.

It was urged that one of these criteria requiring that

various standards be met as expeditiously as “practicable” or

25 The quoted passage comes from that portion of duPont in

which the Court reyected any variance from the uniform “standards of

performance” for new sources that are required by Section 306 of the

Act. The Court of Appeals had ordered EPA to “come forward with

some limited escape mechanism for new sources,” reasoning that

“| p]rovisions for variances, modifications and exceptions are appro-

priate to the regulatory process.” E. I. duPont de Nemours v. Train,

541 F.2d 1018, 1028 (4th Cir. 1976). In rejecting the Fourth Circuit's

rationale, the Court stressed that Congress’ intentions must be the

basis for decision. The Court should be guided by the same principle

here.

within a “reasonable” time — provided the basis for considering

feasibility, /d at 257-58. Carefully analyzing the statute and

its history, the Court disagreed. /d) Most important, the Court

supported its conclusion by observing that “[w|here Congress

intended the Administrator to be concerned about economic

and technological feasibility, it expressly so provided.” /d. at

257, n. 5. Since section 110(a)(2) contained no such language,

the Court held that “claims of economic or technological

infeasibility may not be considered by the Administrator.” /d.

at 265

Simiarly, the Clean Water Act contains no author-

ity either directly or, as in duPont, by implication— for the

Administrator to modify BPT in response to claims of economic

hardship. With respect to technology based controls, the Act’s

only variance for economic hardship 1s Section 301(¢c), which

applies exclusively to BAT limitations. The Administrator has

fashioned the BPT variance provision as a “limited”’?6 variance

which serves only to afford minimum flexibility in implement-

ing the BPT regulations, as required by duPont. As such, the

vanance excludes economic considerations, and should not be

expanded unless the Court finds overwhelming reasons to do

Congress could not have been clearer that Section 301(¢)’s

economic capability test applies only to BAT. Section 301(c)

states: “[t}|he Administrator may modify the requirements of

subsection (b)(2)(A) of this Section ....” 33 USC.

§ 131 1c): see duPont, 430 US. at 121.2? Moreover, Section

26 See duPont. 430 US at 124 Similarly, in Weyerhaeuser the

1>€ Court of Appeals stressed that a narrowly defined vanance

provision “assures that the pin-hole safety valve envisioned in the Act

and duPont does not become a yawning loophole.” $90 F.2d at 1040

27 NRDC contends that this language ts dispositive with respect

to the specific issue raised in this case) Where Congress speaks

explicitly in one context but 1s silent in another where it might have

acted in similar fashion, courts properly give considerable weight to

(footnote continues }

301(c) does not apply av all until after the BPT compliance

deadline of July 1, 1977. /d. Finally, one condition of Section

301(c) is that even the discharger’s modified BAT limitations

will result in “reasonable further progress” toward the elimina-

tion of pollutant discharges. /d. This “further” progress must

go beyond the initial progress required by BPT limitations.?6

Applying Section 301(c) to BPT would require the impossible

result that a variance from a standard must assure progress

beyond the standard itself.

Congress’ statutory plan is sensible and internally con-

sistent. It is not surprising that the Act provides an ¢conomic

capability variance for BAT but authorizes none for BPT.

Congress considered BPT to be within the reach of all but the

marginal plants, and decided that if a source could not afford

even BPT, it should close.29 BAT, however, is expected to be

more onerous than BPT.% Congress therefore afforded case-by-

case relief for those dischargers which had achieved the BPT

(footnote continued)

that silence in ascertaining the legislative intent. Congress should be

deemed to have decided that similar circumstances do not warrant the

same treatment. Union Electric, 427 U.S. at 257. This rule should

apply with special force where, as here, Congress has carefully

developed a comprehensive and detailed statutory scheme.

28 The remarks of Congressman Jones, Chairman of the House

Conferees on the 1972 amendments, leave no doubt that recipients of

Section 301(c) variances must demonstrate progress beyond the BPT

baseline: “This provision in section 301(c) authorizes a case-by-case

evaluation of any modification to the July 1, 1983, requirements . . . .

This provision is not intended to justify modifications which would not

represent an upgrading over the July 1, 1977 requirements of | BPT|.”

1 Leg. Hist. 232 (emphasis added ).

29 See discussion at 26-27, infra.

30 See discu sion at 10, supra.

baseline, but which encountered great economic hardship in

going further.3!

The Act’s legislative history amply supports this view. The

Conference Report left no doubt that EPA may consider

economic hardship under Section 301(c) only at the BAT stage:

The conferees intend that the Administrator ... will

make the determination of the economic impact of an

effluent limitation on the basis of classes and categories of

point sources, as distinguished from a plant by plant

determination. However, after July 1, 1977, the owner or

operator of a plant may seek relief from the requirement to

achieve effluent limitations based on [BAT]. The burden

will be on him to show that modified requirements will

represent the maximum use of technology within his

economic capability and will result in reasonable further

progress toward the elimination of the discharge of pollu-

tants.

i Leg. Hist. 304. Moreover, in addition to limiting Section

301(c) to BAT, this passage demonstrates that Congress re-

fused to give the Administrator any responsibility to assess the

economic impacts of BPT on individual plants. After quoting

this language from the Conference Report, Congressman Din-

gell restated it in even stronger terms: “Thus, a plant-by-plant

determination of the economic impact of an effluent limitation

is neither expected, nor desired, and, in fact, it should be

avoided.” | Leg. Hist. 255. Senator Muskie? agreed, noting

31 Similarly, Congress authorized economic variances from the

“water quality related effluent limitations” called for in Section 302 of

the Act. 33 U.S.C. § 1312. These limitations are intended to be even

more protective than BAT. A person affected by the Section 302

limitations may have these requirements adjusted where it 1s shown

that “there ts no reasonable relationship between the economic and

social costs and the benefits to be obtained.” Ja.

32 As this Court observed in duPont, Senator Muskie was the

primary author of the 1972 amendments to the Federal Water

Pollution Control Act. See duPont, 430 U.S. at 129.

that the Conferees specifically decided “to avoid imposing on

the Administrator any requirement to ... determine the eco-

nomic impact of [BPT] controls on any individual plant in a

single community.” /d. at 170. (emphasis added ).

The Fourth Circuit’s error is not mitigated by the fact that

the holding requires EPA merely to consider an applicant's

economic analysis together with other facts.59 Since Congress

singled out economic hardship as the primary factor to be

excluded from the determination of individual BPT require-

ments, EPA may not consider that factor. See Union Electric,

427 US. at 265. As discussed above,34 the Fourth Circuit’s

position will, as a practical matter, compel EPA to do what

Congress forbade.

The conclusion that BPT has no economic escape valve ts

underscored by Congress’ awareness that the consequences of

BPT might be severe. Congress was determined to establish a

33 The result in United States v. Chevron Oil Co., $83 F.2d 1357

(Sth Cir. 1978), illustrates how EPA will be compelled to do much

more than “consider” an applicant’s analysis. That case involved the

government's attempt to enforce a civil penalty that had been assessed

against Chevron by the U.S. Coast Guard under Section 311 of the

Act in connection with an oil spill. Under Section 311 (as it appeared

at the time of Chevron’s spill), liability for the penalty arises

whenever oil is discharged in excess of the “harmful quantity”

established by the President. 33 U.S.C. §§ 1321(b)(3), (b)(6).

Exercising this authority, the President had established a uniform

harmful quantity as that amount which, “at all times and locations

and under all circumstances and conditions,” will cause “a film or

sheen upon or discoloration of the surface of the water.” See Chevron,

$83 F.2d at 1360.

At an administrative proceeding before the Coast Guard, Chev-

ron introduced evidence that its spill, while violating the government’s

“sheen test,” nevertheless was not harmful under the circumstances of

the incident. The government offered no contradictory evidence. The

Fifth Circuit held that the government cannot rest on its uniform

standard, but “must rebut with evidence that defendant’s spill was of

a harmful quantity under the circumstances.” Jd. at 1364.

34 See discussion at 17-19, supra.

uniform baseline for industrial dischargers that necessarily

would force some marginal plants to cease operations. Such

plant closure was a price that needed to be paid to clean up the

Nation’s waters. See Weyerhaeuser 590 F.2d at 1036-37 (citing

remarks by Rep. Jones and Sen. Bentsen); cf. Union Electric,

427 US. at 270 (concurring opinion of the Chief Justice and

Justice Powell). Plant closings would not be widespread

because BPT was intended to represent only an interim step

toward requiring the very best technology. Consequently, no

further consideration of a discharger’s economic capability was

needed at the BPT stage.

Thus, the Act and its history demonstrate that the Fourth

Circuit’s incorporation of Section 301{c) into the BPT variance

is inconsistent with Congress’ intent. In addition, the lower

court’s rationale is flawed by a fundamental misunderstanding

of the Act.

First, the court based its conclusion on the observation that

“the statute contemplates there may be more stringent stand-

ards for 1983.” National Crushed Stone, 601 F.2d at 124. This

interpretation of the statute is correct as a general proposition.

But the court erred in concluding that the BPT and BAT

variances both must include economic capability in order to

accomplish the Act’s purposes. It is the differences between

BPT and BAT—not an identity of variance factors—that fulfills

Congress’ desire for systematic progress toward elimination of

pollutant discharges.35 Foremost among these differences is the

requirement that BAT represent “reasonable further progress”

35 These statutory distinctions between BPT and BAT are dis-

cussed at 9-11, supra. In addition, the Act includes a variety of other

ways to bring about Congress’ ultimate goal of eliminating the

discharge of pollutants. The Act contemplates that water quality

standards under Section 303 will be strengthened every three years;

authorizes extremely stringent controls under Section 302; and pro-

vides for toxic effluent standards or prohibitions under Section 307( a)

from which no variances are available.

beyond BPT—a requirement found in Section 304(b)(2)(B)

and reinforced by Section 301(c) itself.%

Second, the Court believed that without an economic

capability test in the BPT variance, EPA’s regulations “could

easily close a plant in 1979 which would be allowed to operate

under a variance in 1983.” Jd. This is not true. As explained

above, Section 301(c) does not permit EPA to relax BAT to a

level that is less stringent than BPT.37 Indeed, it provides that

modified BAT requirements must require progress beyond BPT.

Any plant that closes in 1977 because it cannot afford the cost

of BPT must necessarily remain closed after 1984, since BAT,

even as modified under Section 301(c), may not be less

stringent and (barring cost-reducing innovations ) less costly

than BPT.

Il. The Scope of the Variance Required Below Is Precluded

By the Act and The Rationale of duPont.

The foregoing analysis shows that Congress did not require

or even authorize EPA to include the economic capability factor

of Section 301(c) in the BPT variance provision. In addition,

NRDC contends that the Act, as construed in duPont, precludes

such consideration.

In duPont, this Court required a variance provision for only

one reason: to permit the application of BPT to individual

36 For this reason, BPT and BAT limitations for a given

industrial subcategory ordinarily will not be identical—the situation

which primarily concerned the court in National Crushed Stone. 601

F.2d at 124. EPA may occasionally promulgate identical BPT and

BAT, but such situations are not necessarily inconsistent with the Act.

If the Administrator applies the BAT factors and legitimately deter-

mines that “further progress” for an industry would not be “reason-

able,” BAT limitations may be identical to BPT. The Act does not

require, or even suggest, that EPA downgrade BPT in these circum-

stances merely to preserve some room for progress at the next stage.

37 See discussion at 12, supra. As a result, if BPT and BAT are

identical for an industrial category, no modification would be avail-

able under Section 301(c).

dischargers in a manner sufficiently flexible to jusufy the

issuance of uniform regulations. 430 U.S. at 128. In the face of

somewhat ambiguous statutory !anguage,38 the Court’s insist-

ence on a two-tiered regulatory scheme represents a com-

promise of sorts between absolute, uniform limitations and

case-by-case BPT requirements.39 This balance was struck on

the basis of the Act’s purposes, the Administrator’s inter-

pretation of the Act and, in part, on the analogy afforded by the

Section 301(c) variance pertaining to BAT. Jd. at 127-28, 134-

35.

If uniformity is to be maintained as duPont indicates, the

scope of the BPT variance must be no greater than necessary to

achicve its purpose. As discussed above,‘ the provision’s

Purpose is to recalculate BPT for an individual discharger,

taking into account any anomalies which set that discharger

apart from the rest of the industrial category. A discharger’s

permit requirements, derived through the BPT variance pro-

cess, must still represent BPT for that discharger. Accordingly,

the scope of the variance must accomplish that result and no

more. If economic capability is considered for an individual

discharger—while the same consideration is excluded for the

industry as a whole—the BPT variance will become a license

for any marginal plant to avoid BPT.

The D.C. Circuit adopted this reasoning in Weyerhaeuser.

There, the Court stressed that the Act’s emphasis on uniformity,

within the bounds set by duPont, would necessarily force the

38 See discussion at 16, supra.

39 The petitioners in duPont sought a ruling that BPT limitations

must be established at the permit stage. There is no suggestion in

duPont that the Court would have approved the notion of considering

economic hardship in BPT permit proceedings if it had decided

against uniform limitations. Quite the contrary, the Court noted that

the Senate Report contemplated that only the Section 304(b)(1)(B)

factors should be considered at the permit stage. 430 U.S. at 132 n.

21.

40 See discussion at 15, 17, supra.

closure of marginal plants. This result, the court thought, could

not be changed by the BPT variance clause:

590

| T|he Act’s supporters in both Houses acknowledged and

accepted the possibility that its 1977 requirements might

cause individual plants to go out of business. They self-

consciously made the legislative determination that the

health and safety gains that achievement of the Act’s

aspirations would bring to future genc. ations will in some

cases outweigh the economic dislocation it causes to the

present generation. They accordingly authorized EPA to

impose effluent restrictions that they knew might shut

down parts of regulated industries .... The Agency, in

turn, has projected that its limitations for the paper

industry may shut down eight marginal mills ..., and the

variance provision need not protect these or other individ-

uals from impacts authorized for the industry as a whole.

F.2d at 1036-37 (emphasis added ) (citations omitted ).

Accordingly, the court in Weyerhaeuser interpreted du-

Pont’s “flexibility” standard as requiring that the BPT variance

be “

analagous”™ to the statutory variance contained in Section

301(c). $90 F.2d at 1034. Weyerhaeuser holds thai under

duPont the BPT variance factors need only reflect the factors

used to establish BPT limitations. With respect to costs, the

BPT variance is legally sufficient if it provides for the cost-

effectiveness test set forth in Section 304(b)(1)(B), just as

Section 30i(c), by analogy, includes the economic capability

test used to develop BAT. /d. at 1035-36.4' This formulation,

41 The result in Weyerhaeuser is supported by the Senate Report

on the 1972 amendments:

In determining best practicable for any given industrial category,

the Committee expects th: Administrator to take a number of

factors into account. These factors should include [those listed

in Section 304(b)(1)(B)] .... In applying effluent limitations

to any individual plant, the factors cited above should be applied

to that specific plant.

2 Leg. Hist. 1468

together with the requirement that differences regarding the

BPT factors be “fundamental,” ensures that the uniformity of

the regulations will not be undermined. Jd. at 1039-40.

The Seventh Circuit’s holding in United States Steel Corp.

v. Train, 556 F.2d 822 (7th Cir. 1977), also is instructive.

There, U.S. Steel petitioned for review of EPA’s order issuing

an NPDES permit to the Company’s Gary Works. Earlier, in

American Iron & Steel Inst. v. EPA, 526 F.2d 1027 (3d Cir.

1975), the Third Circuit had remanded BPT limitations for the

steel industry because of the Agency’s failure to establish ranges

of effluent reductions. For this reason, the Administrator had

sought additional data in order to develop an individual BPT

permit for the Gary Works. In United States Steel, noting that

this Court in duPont had approved the use of single-number

effluent limitations instead of ranges, the Seventh Circuit said

that EPA should have treated the proceeding as a variance

application. 556 F.2d at 844. Nevertheless, the court held that

EPA’s process was the functional equivalent of applying the

BPT variance clause:

The agency’s reexamination of the BPT issue as if it

were obligated to determine BPT for the Gary Works

individually was the equivalent of detemining whether

there were fundamentally different factors at that plant

which made BPT impracticable there and thus justified a

variance from nationally applicable limitations based on

BPT.

Id. at 845. Thus, while not addressing the “fundamentality”

requirement or the applicant’s burden of proof, the court did

indicate that a BPT variance amounts to recalculating BPT for

an individual discharger using the same factors that are rele-

vant to developing uniform BPT limitations.

Weyerhaeuser goes as far as the Act and duPont permit.

The inclusion of extraneous factors in the variance would

require EPA to consider excusing a discharger from using the

best practicable technology that is available under the circum-

stances. It would result in permit requirements which, both

conceptually and in a very real sense, are less protective than

BPT. As the D.C. Court feared, EPA’s variance would become

‘a license for avoidance of the Act’s strict pollution abatement

requirements.” Weyerhaeuser 590 F.2d at 1035. For this

reason, the Fourth Circuit’s result is contrary to the rationale of

duPont and flagrantly inconsistent with the Act.

CONCLUSION

By requiring EPA to consider the economic capability

factor of Section 301(c) in deciding applications for variances

from BPT effluent limitations, the decisions below are inconsist-

ent with the Clean Water Act and this Court’s holding in

duPont. The Act neither requires nor authorizes such consid-

erations. Indeed, as interpreted in duPont, the Act precludes

consideration of affordability in BPT variance proceedings. If

any remnant of the uniformity of BPT limitations is to remain,

as authorized by duPont, the scope of the Agency’s variance

clause must be confined to those factors used to develop the

BPT regulations. The BPT factors, specified in Section

304(b)(1)(B) of the Act, do not include economic capability.

Accordingly, the Court should uphold the Agency’s BPT

variance clause, and reverse the judgments below on this issue.

Respectfully submitted,

J. TAYLOR BANKS

Davip D. DoniGer

1725 1 Street, N.W., Suite 600

Washington, D.C. 20006

(202) 223-8210

RONALD J. WILSON

810 18th Street, N.W.

Washington, D.C. 20006

(202) 628-3160

Attorneys for Natural Resources

Defense Council, Inc.

May 14, 1980

APPENDIX

UNITED STATES COURT OF APPEALS

For THE FOURTH CIRCUIT

Nos. 74-2096, 74-2188, 74-2196,

74-2236, 74-2263, 74-2264,

74-2265, 74-2268, 74-2269,

74-2270, 74-2286, 74-2298,

74-2312, 74-2313, 74-2315,

74-2339, 74-2340, 74-2341,

74-2343, 74-2365, 74-2366,

74-2396, 75-1014, 75-1020,

75-1021, 75-1022, 75-1047,

75-1074, 75-1078, 75-1091,

75-1094, 75-1095, 75-1198,

75-1199, 75-1200, 75-1201,

75-1202, 75-1203, 75-1223,

75-1255, 75-1345, 75-1346,

7§-1347, 78-1701, 78-1878,

78-1902

APPALACHIAN POWER COMPANY, BALTIMORE GAS

AND ELECTRIC COMPANY, CAROLINA POWER &

LIGHT COMPANY, DUKE POWER COMPANY,

MONONGAHELA POWER COMPANY, OHIO POWER

COMPANY, POTOMAC EDISON COMPANY, POTOMAC

ELECTRIC PoWER COMPANY, SOUTH CAROLINA

Erectric & Gas COMPANY, VIRGINIA ELECTRIC

AND POWER COMPANY, WEST PENN POWER COMPANY

Petitioners

Vv.

Russet E. TrRAtin, as Administrator

ENVIRONMENTAL PROTECTION AGENCY

Respondent

ALABAMA POWER COMPANY, ef al.

JERSEY CENTRAL Power & LIGHT COMPANY,

METROPOLITAN EDISON COMPANY and

PENNSYLVANIA ELECTRIC COMPANY

Intervenors

ON PETITIONS FOR REVIEW OF ACTIONS OF THE

ADMINISTRATOR OF THE ENVIRONMENTAL

PROTECTION AGENCY*

Argued: April 4, 1979 Decided: April 28, 1980

Before BREITENSTEIN,** Senior Circuit Judge,

WIDENER and PHILLIPS, Circuit Judges.

* The following Petitions for Review, all naming Train as

Respondent, were consolidated:

74-2188 — National Rural Electric Cooperative Associ-

ation

74-2196 — Georgia Power Company

74-2236 — Tampa Electric Company

74-2263 — Indiana & Michigan Electric Company

74-2264 — Indiana-Kentucky Electric Corporation

74-2265 — Illinois Power Company

74-2268 — Pacific Gas and Electric Company

74-2269 — San Diego Gas & Electric Company

74-2270 — Southern California Edison Company, a Cali-

fornia corporation

74-2286 — Mississippi Power Company

74-2298 — Arkansas Power & Light Company and

Arkansas-Missouri Power Company

74-2312 ~ Gulf Power Company

74-2313 — Alabama Power Company

74-2315 — Boston Edison Company, Holyoke Water Pow-

er Company, Nontaup Electric Company,

New England Power Company, Public Ser-

vice Company of New Hampshire, Western

Massachusetts Electric Company

74-2339 — Consolidated Edison Company of New York,

Inc.

74-2340

74-2341

74-2343

74-2365

74-2366

74-2396

75-1014

75-1020

75-1021

75-1022

75-1047

75-1074

75-1078

75-109]

75-1094

75-1095

75-1198

75-1199

78-1200

758-1201

7§-1202

75-1203

- Pennsylvania Power & Light Company

Philadelphia Electric Company

Florida Power & Light Company

Dairyland Power Cooperative

Commonwealth Edison Company

Mississippi Power & Light Company, Loui-

siana Power & Light Company, and New

Orleans Public Service, Inc.

- Western Farmers Electric Cooperative, a cor-

poration

Alabama Electric Cooperative, Inc.

- Buckeye Power. Inc., Indiana and Michigan

Power Company, Kentucky Power Com-

pany, Ohio Electric Company, Ohio Power

Company, Ohio Valley Electric Corporation

Brazos Electric Power Cooperative, Inc.

Connecticut Light & Power Company, The

Hartford Electric Light Company, Western

Massachusetts Electric Company, Long Is-

land Lighting Company, New York State

Electric & Gas Corporation ( Intervenors )

- Corn Belt Power Cooperative

Texas Uulities Generating Company, Dallas

Power & Light Company, Texas Electric

Service Company, Texas Power & Light

Company

- Public Service Electric & Gas Company

- Union Electric Company

Central lowa Power Cooperative _

- South Texas Electric Cooperative, Inc

Central Power & Light Company and West

Texas Unlities Company

State of Texas

Houston Lighting & Power Company

Tennessee Valley Authority

Brazos River Authonty

75-1223 Cincinnati Gas & Electric Company, Cleveland

Electric Hluminating Company, Columbus &

Southern Ohio Electric Company, Dayton

Power & Light Company, Ohio Edison

Company, Toledo Edison Company

75-1255 Union Electric Company, a Missouri Corpo

ration

75-1345 Platte River Power Authority

75-1346 City of Lamar, a municipal corporation of the

State of Colorado, and The Lamar Utilities

Board

75-1347 Tri-State Generation and Transmission Associ

ation, Inc.

78-1902 Appalachian Power Company, ct al

78-1878 Natural Resources Defense Council, Inc

78-1902 Natural Resources Defense Council, Inc

** Honorable Jean S. Breitenstein, United States Circuit Judge

for the Tenth Circuit, sitting by designation

WIDENER, Circuit Judge:

These actions arse because of FPA amending tts regu

lations to comply with our mandate in Appalachian Power Co

v. Train, 545 F.2d 8351 (1976). In Appalachian Power,

approximately seventy power companies sought review of the

Environmental Protection Agency's (EPA) regulations promul

gated under authority of the Federal Water Pollution Control

Act (Act).' The power companies now challenge EPA's

amendments to parts of 40 CFR Part 423? on grounds that they

do not fully comply with Appalachian Power. Part 423 sets out

the best practicable technology (BPT) limitation standards for

the steam electric power industry. Natural Resources Defense

133 USC § 1251 et seq

2Specifically amended were 40 CKR 423 12(a), 4242204),

423. 32(a) and 423.42

Council (NRDC ), through its petitions, also seeks a review of

certain EPA BPT regulations, not on the ground that Appala-

chian Power has not been complied with but on the ground that

§ 30101), 33 USC § 131101), a 1977 amendment to the Act,

prohibits EPA from modifying any of § 301, 33 USC § 1311,

including BPT limitations, for toxic poilutants. It also chal-

lenges the EPA variance amendments on the ground that they

did comply with Appalachian Power so far as the factors in

§ 3O1(c) are referred to in the amended regulations.

In 1972, Congress passed the Federal Water Pollution

Control Act (Act) with an ultimate goal of no pollutant

discharges into our nation’s waters. Toward that ultimate goal,

Congress established increasingly stringent standards of poilu-

tion control. Phase I of the Act sets best practicable technology

(BPT) limitations to go into effect in 1977.3 In 1983, best

available technology (BAT) limitation standards are to go into

eHect.4 Several parts of the Act were amended in 1977 but the

basic goals and strategies of the Act remain intact. EPA is

given broad power under the Act so that it may insure that the

phases of improvement can be achieved. In order to carry out

ts obligation, EPA) promulgated regulations setting single

number effluent limitations for various industries in order to

commence the achievement of the goal of the statute. In

duPont, we held that EPA had the authority to promulgate such

effluent limitations which are to be considered presumptively

appheable Eo 1. duPont de Nemours & Co. v. Train, 541 F.2d

LOTS, 1028 (4th Cur, 1976), afd on this point 430 U.S. 112

(1977). Through the regulations, applicable unless rebutted,

EPA hopes to achieve national uniformity as the goal of no

discharge of pollutants is sought. /d at 1028.

Appalachian Power involved a review of many of EPA's

regulations promulgated to aid in the application and enforce-

ment oft the Act. Only our holding dealing with BPT vanance

regulations is pertinent to our decision here. Among other

*S WiC bICLICA)D, 33 USC § LILLE bE LCA)

*§8 WiEbIC2VEA), 33 USC § TATTOO 2 CA)

provisions under attack in Appalachian Power was EPA’s

variance clause providing that a variance from the 1977

standards set out in the regulations would be granted when “the

factors relating to equipment or facilities involved, the process

applied, or other such factors related to such discharger are

fundamentally different from those factors considered in estab-

lishing the guidelines.”> Costs were excluded from consid-

eration by EPA’s interpretation of its own regulation. We

struck down the clause because EPA’s refusal to consider costs

resulted in too restrictive a view of the minimum content of the

variance. Under the 1983 standards set out in the Act, for

example, costs were to be a relevant factor. Following our

decision in duPont, we reasoned that the Act contemplated

progressively more stringent standards as the country moved

closer to the goal of elimination of pollutant discharge. There-

fore, the 1977 standards were not intended to be any less

flexible than the 1983 standards. As a result, we remanded the

regulation to EPA for the agency to come forward with a

meaningful variance clause taking into consideration at least

the statutory factors set out in §§ 301(c), 33 USC § 1311(c);

304(b)(1)(B), 33 USC § — 1314(b)(1)(B); 9 and

306(b)(1)(B), 33 USC § 1316(b) (1)(B).6 Appalachian

Power at 1359-60.

5 § 423.12(a) interpreted at 39 FR 28926-27 (Aug. 2, 1974),

30073 (Aug. 13, 1974).

6 § 301(c), 33 USC § 1311(c), provides:

The Administrator may modify the requirements of subsec-

tion (b)(2)(A) of this section with respect to any point source

for which a permit application is filed after July 1, 1977, upon a

showing by the owner or operator of such point source satisfac-

tory to the Administrator that such modified requirements (1)

‘. will represent the maximum use of technology within the eco-

nomic capability of the owner or operator; and (2) will result in

reasonable further progress toward the elimination of the dis-

charge of pollutants.

§ 304(b)(1)(B), 33 USC § 1314(b)(1)(B), provides that such

regulation shall:

(footnote continues)

After the Supreme Court’s decision in E. I. duPont de

Nemours & Co. v. Train, 430 U.S. 112 (1977), we modified our

decision in Appalachian Power to exclude the requirement of a

variance for new sources, but declined to modify the opinion

further.” In March 1978, EPA proposed its amendment to the

(footnote continued)

specify factors to be taken into account in determining the

control measures and practices to be applicable to point sources

(other than publicly owned treatment works) within such cate-

gories or classes. Factors relating to the assessment of best

practicable control technology currently available to comply with

subsection (b)(1) of section 1311 of this title shall include

consideration of the total cost of application of technology in

relation to the effluent reduction benefits to be achieved from

such application, and shall also take into account the age of

equipment and facilities involved, the process employed, the

engineering aspects of the application of various types of control

techniques, process changes, non-water quality environmental

impact (including energy requirements), and such other factors

as the Administrator deems appropriate;

§ 306(b)(1)(B), 33 USC § 1316(b)(1)(B), provides:

As soon as practicable, but in no case more than one year, after a

category of sources is included in a list under subparagraph (A)

of this paragraph, the Administrator shall propose and publish

regulations establishing Federal standards of performance for

new sources within such category. The Administrator shall

afford interested persons an opportunity for written comment on

such proposed regulations. After considering such comments, he

shall promulgate, within one hundred and twenty days after

publication of such proposed regulations, such standards with

such adjustments as he deems appropriate. The Administrator

shall, from time to time, as technology and alternatives change,

revise such standards following the procedure required by this

subsection for promulgation of such standards. Standards of

performance, or revisions thereof, shall become effective upon

promulgation. In establishing or revising Federal standards of

performance for new sources under this section, the Adminis-

trator shall take into consideration the cost of achieving such

effluent reduction, and any non-water quality environmental

impact and energy requirements.

7 No. 74-2096, Order of September 26, 1977

BPT variance provision. 43 FR 8812-13 (1978). After a

comment period, this rule was made final on September 22,

1978. EPA amended 40 CFR Part 423.12(a), 423.22(a),

423.32(a) and 423.42 by adding the following paragraph:

In accordance with the decision in Appalachian Power,

545 F2d 1351, 1358-60 (4th Cir. 1976), EPA’s legal

interpretation appearing at 30 FR 30073 (1974) shall not

apply to this paragraph. The phrase “other such factors”

appearing above may include significant cost differentials

and the factors listed in section 301(c) of the Act.

43 FR 43025 (Sept. 22, 1978) corrected at 43 FR 44848 (Sept.

29, 1978).

In October 1978, EPA published a notice rescinding its no-

cost interpretation of 1974. 43 FR 50042. In October 1978, the

utilities filed this action.§

The utilities challenge the EPA amendment to the BPT

variance provisions, contending that the mandate of Appala-

chian Power has not been met by the addition of “significant

cost differentials and the factors listed in section 301(c) of the

Act.” Specifically, the utilities argue that Appalachian Power

requires EPA to consider 304(b)(1)(B) factors including

“total cost... in relation to effluent reduction benefit.”

The utilities concede that the addition of “significant cost

differentials and the factors listed in section 301(c) of the Act”

to the existing variance provisions on its face could fulfill the

Appalachian mandate. They argue, however, that EPA has

made it clear that effluent reduction benefits are not a relevant

factor under the regulation. The utilities urge that EPA’s

interpretation of effluent reduction benefit is much too narrow

® NRDC nad filed its original petition on September 28, 1978, in

review in this court. Upon motion, the D.C. Circuit transferred

NRDC’s first petition to this court. NRDC v. EPA, No. 78-1929

(D.C. Cir. Dec. 21, 1978).

in that it considers only costs in relation to the degree of effluent

reduction with no consideration of receiving water quality.

Such an interpretation, they urge, is impermissible in light of

Appalachian.

No variance has been applied for here. Therefore, the

utilities’ only authority offered to show EPA's application of its

newly amended regulations is the February 6, 1979 recommen-

dation of the Assistant Administrator for Water Enforcement of

the EPA tentatively turning down Cincinnati Gas and Electric

Company’s application for a variance for its W. C. Beckjord

Station. as well as the case of Jn re Louisiana-Pavific Corp., \0

ERC 1841 (1977). That document, the utilities contend, shows

EPA’s rejection of water quality as a factor in considering

effluent reduction benefits pursuant to Appalachian. There,

Cincinnati Gas’ application for a variance from ph limitations

was turned down because no fundamental difference was found

to justify a less stringent standard. In commenting on receiving

water quality, the Office of Enforcement of the EPA included in

its recommendation to the Administrator the following:

The Administrator has determined Jn the matters of Loui-

siara Pacific Corporation NPDES No. CA0005894 and

Crown Simpson Pulp Company NPDES No. CA0005882 10

ERC 1841 (September 16, 1977) (“Louisiana Pacific”)

that EPA is not authorized to grant a FDF vanance

providing relief from technology-based limitations guide-

lines due to the characteristics of the recet:ing water. The

type of receiving water or the fact that the receiving water

quality will not be harmed by the discharge or measurably

improved by installing control equipment are not legally

fundamental! differences.

Recommendation on Variance Ruling FDF 78-01 at pp. 7-8.

We think the utilities’ reliance on the recommendation in

the Cincinnati Gas and Electric variance recommendation ts

misplaced. First and principally, the Administrator has not yet

taken any action with respect to the variance. That being so, we

10a

do not believe that, even assuming the utilities’ construction of

the recommendation to be correct, the recommendation of the

Office of Enforcement to the Administrator is legally binding on

the Agency. While it may have considerable significance, legal

as well as practical, to the parties involved, it is little if anything

more than an in-house memorandum from a subordinate in the

Agency recommending to the Administrator the action he

should take in passing on the requested variance. Second, the

language we have above quoted, which is that upon which the

utilities rely, we do not believe, read in context, can be taken to

say that the Administrator in no instance will consider the

quality of the receiving water as a part of the evidence in a case

requesting a variance. Read literally, the language simply

means that the quality of receiving water of itself is not a

fundamental difference upon which a variance can be granted.

This is entirely consistent with that part of our ruling in

Appalachian Power in which we denied the claim of Consoli-

dated Edison that it ought to be allowed to discharge into New

York harbor not subject to effluent limitations because the

harbor was already so dirty the addition of its effluent would

make no difference. From an examination of the papers on

hand in the Cincinnati Gas and Electric Company variance No.

FDF 78-01, we believe, however, that the variance was not

sought solely or even principally because of the water quality of

the Ohio River into which the effluent flowed. Rather, it was

based principally upon cost differentials and a claim that the

addition of sulphuric acid to its settling ponds to reduce their

alkalinity would do more harm to the receiving water than the

effluent in question in that case.

Much the same remarks apply to EPA’s decision in Jn re

Louisiana-Pacific Corp., 10 ERC 1841 (1977). In that case the

claim of the industry was that a discharge of its effluent into the

ocean would do no harm apparently because the ocean waters

were so vast. The Administrator denied that variance, again

entirely consistent with our opinion in Appalachian Power,

concluding that he could provide no “...relief from

lla

technology-based effluent limitations guidelines due solely to

the characteristics of particular receiving waters. ...” He stated

that he could not permit exemption where the type of receiving

water is the fundamental difference between the seekers of the

variance and other pulp and paper mills. In his opinion, the

Administrator time and again made it plain that the only thing

he acted upon was a request for a variance based solely on

water quality. At no place in that decision did the Adminis-

trator indicate that he did or would hold that the quality of the

receiving waters was irrelevant in all instances in variance

proceedings. It is true EPA does take that position in its brief in

this court: ‘‘Receiving water quality simply cannot legally be

considered a relevant factor in evaluating a variance request.”

Brief at p. 13. But as the mere recommendation of a subordi-

nate does not bind the Agency,? neither does the mere assertion

of an attorney in a brief except for the purposes of that case.

9The Deputy Assistant Administrator for Water Enforcement,

who made the recommendation in Cincinnati Gas and Electric Co.,

acts only as the principal adviser to the Administrator of EPA on

matters of enforcement. 40 CFR § 1.31. Thus, his decision is not

binding on the Administrator. In like vein, we held that a decision of

the Provider Reimbursement Review Board, an in-house-board, does

not bind the Secretary of HEW, who can modify or reverse that

decision on his own motion. Fairfax Hospital Ass’n, Inc. v. Califano,

585 F.2d 602 (4th Cir. 1978). See also e.g., Universal Camera Corp.

v. NLRB, 340 U.S. 474 (1951) (NLRB rejected examiner’s findings );

Environmental Defense Fund, Inc. v. EPA. 489 F.2d 1247 (D.C. Cir.

1973) (Administrator decided contrary to the conclusion of the

Hearing Examiner regarding the banning of DDT); Adolph Coors

Co. v. FTC, 497 F.2d 1178 (10th Cir. 1974) (FTC overruled

Administrative Law Judge’s finding that Coors had not violated § 5 o1

the Federal Trade Commission Act); Peterson v Gardner, 391 F.2d

208 (2d Cir. 1968), (Appeals Council can rule contra to decision to

the Hearing Examiner); Alcoa Steamship Co. v. Federal Maritime

Commission, 321 F.2d 756 (D.C. Cir. 1963) (Maritime Commission

rejected recommendation of examiner and approved pooling agree-

ment); Braswell Motor Freight Lines v. USA, 275 F.Supp. 98 (W.D.

Texas 1967), aff'd 389 U.S. 569 (1968) (ICC rejected recommenda-

tion of its examiner).

l2a

Much as we disagree with the statement, there has been no

application of it in the case before us, and no binding statement

has been made to that effect by the Administrator. We will

have to await a proper case to see if the Administrator in actual

practice, or in the administration of the statute, takes the same

extreme position his attorneys do in the brief in this case. No

such extreme position can be read into the Louiiana-Pacific or

Cincinnati Gas variance cases.

Because we believe the amendment of the variance provi-

sion will admit consideration of all of the factors required in our

opinion, and there has been no concrete application denying a

variance request which is under review, we decline to set aside

EPA’s amended regulations as a noncompliance with our

mandate. '0

EPA and NRDC also ask us to reconsider our holding in

Appalachian Power to the effect that § 301(c) factors are

applicable in consideration of variances from BPT limitations.

Id. at 1359-60. This issue was dealt with again by this court in

National Crushed Stone Assoc. Inc. v. EPA, 60' F.2d 111 (4th

Cir. 1979), and in Consolidation Coal Co. v. Costle, 604 F.2d

239 (4th Cir. 1979), cert. granted 48 L.W. 3513 (1980). In

those cases the industries successfully sought application of

Appalachian Power’s BPT variance holding outside the steam

electric industry to which EPA had limited our holding in

Appalachian. We declined to change our Appalachian Power

variance holding in those cases, and we decline to do so here.

We should note at this point that EPA continues to argue

from extreme positions which we do not believe are justified by

the statute, and even are not justified by the actions of the

10 The utilities also rely upon EPA’s comments published with its

amendment of the variance provisions in 40 CFR Part 423. 43 FR

40324 (Sept. 22, 1978), typographically corrected at 43 FR 44847

(Sept. 29, 1978). The comments no more than reflect the ruling in

Louisiana-Pacific, supra, and are not contrary to our mandate in

Appalachian Power.

13a

Administrator as distinguished from the language in his brief.

EPA’s principal argument in this case is shown by an example it

gives that a discharger of a copper compound might be granted

a variance if it were on a clean river but not if it were on a dirty

river. The example misses the point. If the discharger were

economically able [sic.] to correct its condition of violation and

if its efforts resulted in reasonable further progress toward

meeting the standard, then there is no reason to necessarily

exclude the issuance of a variance. But if the continued

discharge, during the time it took the industry to comply, might

kill all aquatic life in the river, it might easily be said that the

progress was not reasonable, while, if the discharge did little or

no actual harm during this period, it might just as easily be said

that reasonable progress was being made. To determine

whether or not progress is reasonable, we repeat, it may be

appropriate to consider water quality as a factor, that is to say

as an item of evidence. Its sought-for arbitrary exclusion by

EPA is simply too rigid a construction of the statute, and we do

not believe it is justified. To hold otherwise ultimately can only

result in regulation for regulation’s sake, at which point, of

course, a serious question of constitutional limitations would

arise. We believe this useful statute deserves better treatment.

NRDC’s petitions request us to hold that variances from

BPT limitations cannot be granted to a discharger of toxic

pollutants because of a 1977 amendment to the Act, which

States:

The Administrator may not modify any requirement of this

section as it applies to any specific pollutant which is on the

toxic pollutant list under section 307(a)(1) [33 USC

§ 1317(a)(1)!

§ 301( 1) of the Act, 33 USC 1311(1).

It is the contention of NRDC that the amendments to the

various regulations should have as required content a prohibi-

tion against issuing a variance from BPT limitations on account

of toxic pollutants.

l4a

33 USC § 131 7/a)(1) (§ 307(a)(1) of the Act) requires

the Administrator te publish a list of toxic pollutants. Upon

designation of a pollutant as toxic, § 307 (a)(2) [33 USC

§ 1317(a)(2)] goes into effect, requiring the EPA to set BAT

standards for those pollutants.

As now interpreted by EPA, the variance clause applies to

all pollutants for which BPT limitations are set by regulations.

The BPT limitations for the steam electric industry include

pollutants which are on the toxic pollutant list in 40 CFR Part

129. As noted, because of § 301( 1), NRDC contends that EPA

in a repromulgation of its variance regulations must in terms

exclude toxics from their coverage. EPA and the utilities

contend that § 301(1) was not intended to apply to BPT, but

only to the specific sections of § 301 which allow an operator to

be relieved of an effluent limitation. They also argue that a

BPT variance is not a true variance so as to bring § 301(1) into

effect. BPT variances, the argument goes, do not excuse anyone

from meeting BPT limitation standards. Instead, they enable

EPA to determine an individual BPT limitation for an industry

procuring a variance. As a result, an operator granted a

variance is still in compliance with its BPT limitation standard.

Its standard is just different from others.

It is apparent that if either argument just above stated is

correct that EPA is not required to exclude toxic pollutants from

BPT variances. We think that § 301(1) does not apply to BPT

variances.

Toxic pollutants prior to the 1977 amendments were not

treated differently from other pollutants in that BAT technology

was not necessarily applied, and dischargers discharging toxic

pollutants were nevertheless included in those required to

comply with BPT effluent limitations. While the 1977 amend-

ments have required BAT limitations for discharges of toxic

substances, they do not indicate that they are to operate

retroactively so as to possibly retract any variance previously

issued to an industry which just happened to be discharging

lSa

toxic substances, or to obliterate the known practice of EPA in

not excluding toxic substances from those pollutants for which a

variance might be granted under BPT effluent limitations.

Neither does the legislative history justify such a construction.

See 3 U.S. Code Congressional and Administrative News, 1977,

p. 4326 et seq. The interpretation of the statute by EPA is

entitled to some deference. E. J. duPont de Nemours v. Train,

430 U.S. 112, 135 n. 25 (1977). It is also true that retroactive

application of a statute is not favored. Union Pacific RR Co. v.

Laramie Stockyards Co., 231 U.S. 190, 199 (1913). In our

case, § 301(1) speaks to preventing the modification of any

requirement of § 301 as it applies to any specific pollutant on

the toxic pollutant list. On its face, it might thus be said to

apply to such parts of the statute as § 301(c) which speaks of

modifying requirements for BAT limitations. Indeed, in

§ 301(g), 33 USC § 1311(g), also a part of the 1977

amendments, it is provided that the Administrator, with the

concurrence of the State, shall modify BAT requirements with

exceptions including toxic pollutants. While this may well be

an indication of Congressional! intent that the statute should be

read as EPA reads it, that § 301(1) applies only to those

sections of § 301 which in terms permit modification, in all

events the best that can be said for § 301(1) is that it is not

clear. That being true, we give weight to the construction the

administering agency has placed upon the statute, and, when

we consider that retroactivity is not favored, we are of opinion

that § 301( 1) does not apply so as to require the exclusion of

toxic substances from BPT variance provisions.

Our ruling today is limited to the holding that BPT

variance regulations need not exempt toxic pollutants. We do

not consider whether or not, or how, EPA will construe

§ 301(c) with relation to § 301( 1). That question is not before

us and its consideration would be premature.

l6a

Accordingly, being of opinion that EPA’s amendments to

40 CFR §§ 423.12(a), 423.22(a), 423.32(a), and 423.42 are

sufficient to permit a compliance by the agency with our

opinion and mandate, the petition of the industry to require

further consideration of this matter by EPA is denied. (This

petition was filed in case No. 74-2096.) The petition of the

industry dealing with the same subject in case No. 78-i701 is

likewise denied for the same reasons.

The petitions of NRDC are also denied for the reasons

stated in this opinion. ( These petitions were fiied in cases Nos.

78-1878 and 78-1902.)

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.