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

Table of Contents.

Motion of New England Legal Foundation for Leave

to File Brief as Amicus Curiae

Brief of Amicus Curiae New England Lega! Foundation

in Support of Appellees

Questions Presented

Statement of Facts

Summary of Argument

Argument

I.

II.

Il.

In Cases of Complex Administrative Regulation,

the Enforcement of Uniform Standards Re-

quires a Formal Procedure for Considering

Waivers in Special Circumstances

In the Instant Case, Substantially Divergent

Costs of Compliance and Extraordinary Eco-

nomic Hardship Arising from Enforcement .of

Uniform Effluent Standards Are Both Special

Circumstances Worthy of Consideration in a

Variance Application

When an Individual Discharger Cites an Extra-

ordinary Economic Burden of Compliance in Its

Application for a Waiver from 1977 or 1987 Ef-

fluent Standards, EPA’s Narrow Obligation of

Fair Consideration Does Not Render the Act

Unenforceable

Conclusion

Table of Authorities Cited.

CASES.

American Airlines, Inc. v. Civil Aeronautics Board,

359 F. 2d 624 (D.C. Cir.) (en banc), cert. denied,

385 U.S. 843 (1966)

oar » >

10

15

16

ii TABLE OF AUTHORITIES CITED.

American Importers Association v. CAB, 473 F. 2d

168 (D.C. Cir. 1972) 9

American Meat Institute v. Environ. Protect. Agcy.,

526 F. 2d 442 (7th Cir. 1975) 11

Appalachian Power Co. v. Train, 545 F. 2d 1351 (4th

Cir. 1976) 15

Bowles v. Willingham, 321 U.S. 503 (1944) 14

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

(1977) 10, 13

EPA v. State Water Resources Control Board, 426

U.S. 200 (1976) 6

Federal Power Comm’n v. Texaco, Inc., 377 U.S. 33

(1964) 9

First National Bank of Boston v. Bellotti, 435 U.S. 765

(1978) 2

Gulf Oil Corporation v. Hickel, 435 F. 2d 440 (D.C.

Cir. 1970) 10

International Harvester Company v. Ruckelshaus,

478 F. 2d 615 (D.C. Cir. 1973) 9

National Broadcasting Company v. United States,

319 U.S. 190 (1943) 9

National Petroleum Refiners Association v. Federal

Trade Commission, 482 F. 2d 672 (D.C. Cir. 1973),

cert. denied, 415 U.S. 951 (1974) 10

Natural Resources Defense Council, Inc. v. EPA, 537

F. 2d 642 (2d Cir. 1976) 11

Natural Resources Defense Council, Inc. v. Train,

510 F. 2d 692 (D.C. Cir. 1975) 11

Permian Basin Area Rate Cases, 390 U.S. 747

(1968) 9,14

TABLE OF AUTHORITIES CITED. ili

Portland Cement Association v. Ruvckelshaus, 486 F. 2d

375 (D.C. Cir. 1973), cert. denied, 417 U.S. 921

(1974) 10, 11n.

Stone v. Farmers’ Loan & Trust Co., 116 U.S. 307

(1886) 9

United States v. Allegheny-Ludlum Steel Corp., 406

U.S. 742 (1972) 10

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

192 (1956) 9

WAIT Radio v. FCC, 418 F. 2d 1153 (D.C. Cir. 1969) 8,9, 10

WBEN, Inc. v. United States, 396 F. 2d 601 (2d Cir.

1968), cert. denied, 393 U.S. 914 (1968) 9

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

1978) 10, 15

STATUTES AND RULES.

Clean Water Act of 1977 (formerly Federal Water

Poliution Control Act Amendments of 1972), 33

U.S.C. §§ 1251, et seq. 5, 10

Section 301, 33 U.S.C. § 1311 11

Section 301(a), 33 U.S.C. § 1311(a) 5

Section 301(b), 33 U.S.C. § 1311(b) 5, 6,7

Section 301(bX 1A), 33 U.S.C. § 1311(bX1)(A) 5

Section 301(c), 33 U.S.C. § 1311(c) 7,14

Section 304, 33 U.S.C. § 1314 11

Section 304(b\1\B), 33 U.S.C. § 1314(bX1)B) 6, 14

Section 304(b\2\B), 33 U.S.C. § 1314(bX2\B) 6

Section 402, 33 U.S.C. § 1342 6

Section 402(a)-(d), 33 U.S.C. § 1342(a)-(d) 6

iv TABLE OF AUTHORITIES CITED.

Rule 42, United States Supreme Court Rules 1

REGULATIONS AND NOTICES.

40 C.F.R. 423.12(a) 7

3 Envir. Rep. 706 (1972) 11n.

39 Fed. Reg. 30073 7,14

42 Fed. Reg. 21380 7,13

43 Fed. Reg. 50042 7,8, 14

44 Fed. Reg. 32894 14

LEGISLATIVE CITATIONS.

Legislative History: Congressional Research Service,

Library of Congress, A Legislative History of the

Water Pollution Control Act Amendments of 1972,

93d Cong., 1st Sess., Serial No. 93-1 (Comm.

Print. 1973) (two volumes), ‘‘__ Leg. His. _”’ 5n.

1 Leg. His. 169. Senate Consideration of the Report of

the Conference Committee (October 4, 1972) 5n., 12

1 Leg. His. 170. Senate Consideration of the Report of

the Conference Committee (October 4, 1972) 6

Testimony of Thomas C. Jorling, EPA Assistant Ad-

ministrator for Water and Hazardous Materials

before the Senate Committee on Environmental

and Public Works as reported by Senator Muskie,

123 Cong. Rec. S.13,535 (daily ed., Aug. 4, 1977) 13n.

123 Cong. Rec., $.13,539 (daily ed., Aug. 4, 1977)

remarks of Senator Muskie 13n.

OTHER AUTHORITIES.

Brief for Petitioners, EPA v. National Crushed Stone

Association, et al., Castle v. Consolidation Coal Co.,

et al. (79-770) 14

TABLE OF AUTHORITIES CITED. V

Brief for Petitioners, Appalachian Power Co., et al. v.

Train, 545 F. 2d 1351 (4th Cir. 1976) 12n.

Council on Environmental Quality, 8th Annual Report

(1977) lin.

Kneese and Kneese, The Economics of Water Utiliza-

tion in the Sugar Beet Industry, 1968 12n.

Koch and Leone, The Clean Water Act: Unexpected

Impacts on Industry, 3 Harv. Env. L.R. 84

(1979) lin., 12n., 13n.

Leone (ed.), Environmental Controls (1976) 12n.

Leone and Jackson, ‘‘The Political Economy of Federal

Regulatory Activity,” in Fromm (ed.), Public Regu-

lation of Economic Activity (1979) 12n.

National Commission on Water Quality, Report to

Congress (1976) 12n.

Rauch, Note, The Federal Water Pollution Control

Act Amendments of 1972: Ambiguity as a Control

Device, 10 Harv. J. Leg. 565 (1973) 12n.

Regulatory Policy Committee, U.S. Department of

Congress, Toward Regulatory Reasonableness,

1977 13n.

Voytko, The Clean Water Act and Related Develop-

ments in the Federal Water Pollution Control

Program Durirg 1977. 2 Harv. Env. L.R. 103

(1977) or 13n.

IN THE

Supreme Court of the United States.

OcTOBER TERM, 1979.

No. 79-770.

ENVIRONMENTAL PROTECTION AGENCY,

APPELLANT,

v.

NATIONAL CRUSHED STONE ASSOCIATION, eT AL.,

APPELLEES.

DOUGLAS M. COSTLE, ADMINISTRATOR,

ENVIRONMENTAL PROTECTION AGENCY,

APPELLANT,

v.

CONSOLIDATION COAL COMPANY, ETAL.,

APPELLEES.

ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT.

Motion of New England Legal Foundation for Leave

to Pile Brief as Amicus Curiae.

Pursuant to Rule 42 of the Rules of the Supreme Court,

New England Legal Foundation moves the Court for leave to

file its brief as amicus curiae bound with this motion in sup-

port of appellees.

Z

New England Legal Foundation has the consent of counsel

for appellant and counsel for appellees to the filing of this

brief. Copies of appellees’ and appellant's consent letters are

filed with the Clerk of the Court.

New England Legal Foundation (NELF) is a non-profit,

tax-exempt corporation, organized and existing under the

laws of the Commonwealth of Massachusetts for the purpose

of engaging in litigation on matters affecting the broad public

interest. Policy for NELF is set by a board of directors com-

posed of New England citizens, the majority of whom are at-

torneys. The board evaluates the merits of any contemplated

legal action and authorizes such legal action only where the

Foundation’s position has broad support within the general

community.

New England Legal Foundation’s attorneys participated

as amicus curiae in First National Bank of Boston v. Bellotti,

435 U.S. 765 (1978) (see 435 U.S. at 785, footnote 22); Carey

v. Brown, 79-703 (1979) and Consolidated Edison Company of

New York, Inc. v. Public Service Commission of the State of

New York, 79-134 (1979).

The Foundation, due to its unique public interest perspec-

tive and extensive work on environmental and economic

issues, can provide the Court with additional arguments in

this case.

The statutory background of the instant case is complex.

Its legislative history is filled with controversy. The Founda-

tion argues that basic principles of administrative regulation,

as applied to an agency's actual record of enforcement of

pollution controls, should guide this Court's decision. The

Foundation is concerned that the enforcement of the En-

vironmental Protection Agency’s inflexible variance provi-

sion will unnecessarily jeopardize the economic health of the

New England community. It is NELF’s position that the

Court of Appeals decision, rejecting the Environmental Pro-

tection Agency's variance provision, should be affirmed.

For the foregoing reasons New England Legal Foundation

respectfully requests permission to participate as amicus

curiae and to file the attached brief in support of appellees.

By its Attorneys,

WILLIAM W. BECKER,

LANDFIELD, BECKER & GREEN,

Suite 1050,

1819 H Street, N.W.,

Washington, D.C. 20006.

(202) 293-1919

JOHANNA HARRIS,

HARRISON A. FITCH,

NEW ENGLAND LEGAL FOUNDATION,

110 Tremont Street,

Boston, Massachusetts 02108.

(617) 482-1410

4

IN THE

Supreme Court of the United States.

OcTOoBER TERM, 1979.

No. 79-770.

ENVIRONMENTAL PROTECTION AGENCY,

APPELLANT,

Vv.

NATIONAL CRUSHED STONE ASSOCIATION, ev AL.,

APPELLEES.

DOUGLAS M. COSTLE, ADMINISTRATOR,

ENVIRONMENTAL PROTECTION AGENCY,

APPELLANT,

v.

CONSOLIDATION COAL COMPANY, ET AL.,

APPELLEES.

ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT.

Brief of Amicus Curiae New England Legal Foundation

in Support of Appellees.

Questions Presented.

1. In cases of complex administrative regulation, does the

enforcement of uniform standards require a formal pro-

5

cedure for considering waivers in special circumstances?

2. In the instant case, do substantially divergent costs of

compliance or extraordinary economic hardship arising from

enforcement of uniform effluent standards constitute special

circumstances worthy of consideration in a variance applica-

tion?

3. If an individual discharger cites an extraordinary

economic burden of compliance in an application for a waiver,

does the Environmental Protection Agency’s narrow obliga-

tion of fair consideration render the Federal Water Pollution

Control Act unenforceable?

Statement of Facts.

The Federal Water Pollution Control Act (‘‘the Act’’)' pro-

hibits discharge of any pollutant into navigable waters,

unless the pollutant discharger complies with effluent stand-

ards that are promulgated under the Act. 33 U.S.C. §

1311(a). These effluent standards are based upon the

technology of pollution control. Section 301(b) of the Act

directs that effluent limits for existing point sources be

established in two successive stages. 33 U.S.C. § 1311(b).

First, by 1977, industrial dischargers must comply with ef-

fluent limits based upon the level of clean-up achieved by ‘‘the

best practicable control technology currently available’

(BPT). Section 301(bX1XA). BPT is based upon ‘‘the average

of the best existing performance of plants of various sizes,

ages, and unit processes within each industria! category.’’?

1The Federal Water Pollution Control Act (P.L. 92-500) as

amended by the Clean Water Act of 1977 (P.L. 95-217).

2 Senate Conference Committee Report on S.2770, October 4,

1972, in 1 Legislative History of the Water Pollution Control

Amendments of 1972, Ser. No. 93-1, at page 169 (Comm. Print

1973). (Hereafter ‘‘Leg. His.’’)

6

Subsequently, by 1987, more stringent effluent limits are

to be established. These standards will be based upon the

degree of clean-up achieved by the ‘‘best available technology

economically achievable’ (BAT). BAT will be based upon

“the best performer in any industrial category.”’ 1 Leg. His.

at 170.

Section 304(bX1\B) of the Act requires the Administrator

of the Environmental Protection Agency (EPA or

‘“‘Agency’’), in his determination of BPT, to consider the

following factors: ‘‘the total cost of application of technology

in relation to the effluent reduction benefits to be achieved

from such application, ... the age of the equipment and

facilities involved, the process employed, the engineering

aspects of the application of various types of control tech-

niques, process changes, non-water quality environmental

impact (including energy requirements), and such other fac-

tors as the Administrator deems appropriate.”’ 33 U.S.C. §

1314(bX1\B).

Section 304(bX2\B) of the Act requires that the Ad-

ministrator, in his determination of BAT, consider the same

factors, but with one exception. Rather than balancing the

total cost of application of the technology against the effluent

reduction benefits, the Administrator must take into account

“the cost of achieving such effluent reduction.’’ 33 U.S.C. §

1314(bX2XB).

The Act further establishes a system of permits that trans-

forms these generally applicable effluent limitations into

specific compliance obligations of individual dischargers.

EPA v. State Water Resources Control Board, 426 U.S. 200,

205 (1976). No one can dischargepollutants into waters with-

out such a permit. Permits incorporate the effluent limita-

tions promulgated by EPA under § 301(b). 33 U.S.C. §

1342(aX1). They are issued by EPA or an authorized state

agency. 33 U.S.C. § 1342(a-d). A discharger, at the time of

7

application for a permit, may also request a variance from the

applicable 1977 or 1987 effluent limitations set pursuant to §

301(b).

Section 301(c) of the Act states those criteria that EPA

shall rely upon in evaluating applications for a variance from

the later 1987 standards. 33 U.S.C. § 1311(c). The Act does

not, however, state what EPA must consider in granting a

variance from the initial 1977 limits.

According to § 301(c) of the Act, EPA may modify the 1987

standards as they apply to a particular point source

discharger. These modified requirements must correspond to

the maximum use of technology ‘‘within the economic

capability of the [discharger].’’ They must result in

“reasonable further progress toward the elimination of the

discharge of pollutants.’’ Based upon these statutory provi-

sions, EPA will consider the ‘‘economic capability or afford-

ability” of specific dischargers in g@anting waivers to the

1987 limits. 43 Fed. Reg. 50042 (1

In the absence of statutory criteria for granting a variance

to the 1977 standards, EPA promulgated a regulation pur-

suant to its rule-making authority. 40 C.F.R. 423.12(a).

Under this regulation, a discharger may obtain a variance

from the 1977 limits only if ‘factors relating to the equip-

ment or facilities involved, the process applied or other such

factors related to such discharger are fundamentally dif-

ferent from the factors considered in [setting the 1977 limita-

tions].’’ See, e.g., 42 Fed. Reg. 21380. In 1974, EPA limited

this provision’s application to cases involving ‘‘factors of a

technical and engineering nature.’’ The Agency specifically

excluded “economic factors’’ from consideration. 39 Fed.

Reg. 30073. EPA subsequently modified its position. ‘‘[A]

plant may be able to secure a [1977 limitations] variance by

showing that the plant’s own compliance costs with the

national guideline limitation would be z times greater than

8

*

the compliance costs of the plants EPA considered in setting

the [1977 limitations]. A plant may not, however, secure a

variance by alleging that the plant’s own financial status is

such that it cannot afford to comply with the [1977 limita-

tions].”’ 43 Fed. Reg. 50042 (1978).

New England Legal Foundation adopts appellees’ descrip-

tion of the opinions below.

Summary of Argument.

New England Legal Foundation argues as follows. In cases

of complex administrative regulation, the enforcement of

uniform standards requires a formal procedure for consider-

ing waivers in special circumstances. In the instant case,

substantially divergent costs of compliance and extraor-

dinary economic hardship arising from enforcement of

uniform effluent standards are both special circumstances

worthy of consideration in a variance application. When an

individual discharger cites an extraordinary economic burden

of compliance in its application for a waiver from 1977 or

1987 effluent standards, the EPA’s narrow obligation of fair

consideration does not render the Act unenforceable.

Argument.

I. In CASEs OF COMPLEX ADMINISTRATIVE REGULATION, THE EN.

FORCEMENT OF UNIFORM STANDARDS REQUIRES A FORMAL PRo-

CEDURE FOR CONSIDERING WAIVERS IN SPECIAL CIRCUM-

STANCES.

An administrative agency may implement laws within its

jurisdiction by promulgating generally applicable rules.

WAIT Radio v. FCC, 418 F. 2d 1158, 1157 (D.C. Cir. 1969).

“The conditions of compliance with these rules may vary

somewhat from one regulated entity to another, so long as

these differences result in ‘‘strains rather than injustice.”

9

American Importers Association v. CAB, 473 F. 2d 168, 174

(D.C. Cir. 1972). “[The] power to regulate is not a power to

destroy.’’ Stone v. Farmers’ Loan & Trust Co., 116 U.S. 307,

331 (1886).

An agency’s discretion to proceed in difficult areas through

general rules is ‘‘intimately linked to the existence of a safety

valve procedure for consideration of an application for ex-

emption based on special circumstances.’’ WAIT Radio v.

FCC, supra at 1157; accord, Federal Power Comm'n v. Tex-

aco, Inc., 377 U.S. 38, 40 (1964); United States v. Storer

Broadcasting Co., 351 U.S. 192, 204-205 (1956); National

Broadcasting Company v. United States, 319 U.S. 190, 219-

220 (1943); International Harvester Company v. Ruckels-

haus, 478 F. 2d 615, 641 (D.C. Cir. 1973); WBEN, Ine. v.

United States, 396 F. 2d 601, 618 (2d Cir. 1968), cert. denied,

393 U.S. 914 (1968); American Airlines, Inc. v. Civil

Aeronautics Board, 359 F. 2d 624, 628-629 (D.C. Cir.) (en

banc), cert. denied, 385 U.S. 843 (1966). The administration

of a uniform licensing rule did not excuse the Federal Com-

munications Commission from fairly considering an applica-

tion for a variance that was consistent with the agency’s

“public interest’’ mandate. WAIT Radio v. FCC, supra at

1158. The existence of uniform emissions standards did not

excuse the EPA from fairly considering an application for ex-

tension when timely enforcement might have extraordinary,

industry-wide economic consequences. International Harves-

ter Company v. Ruckelshaus, supra at 632-639. The adminis-

tration of uniform pricing formulas was constitutionally per-

missible so long as the Federal Power Commission provided

consideration of special relief for hardship cases. Permian

Basin Area Rate Cases, 390 U.S. 747, 784-787 (1968).

As these cases demonstrate, “special circumstances’”’ arise

when mechanical application of the general rule runs counter

to the rationale of the rule or the mission of the agency, when

10

the overall benefits of enforcement are substantially

outweighed by its costs, or when the rule’s application to an

individual regulated entity would cause extraordinary

economic hardship. See also WAIT Radio v. FCC, supra at

1159; National Petroleum Refiners Association v. Federal

Trade Commission, 482 F. 2d 672, 680-681 (D.C. Cir. 1973),

cert. denied, 415 U.S. 951 (1974); United States v. Allegheny-

Ludlum Steel Corp., 406 U.S. 742, 755 (1972); Portland

Cement Association v. Ruckelshaus, 486 F. 2d 375, 399 (D.C.

Cir.), cert. denied, 417 U.S. 921 (1974); Gulf Oil Corporation

v. Hickel, 435 F. 2d 440, 447 (D.C. Cir. 1970). Such ‘‘special

circumstances”’ are an inevitable consequence of an agency's

limited resources to fashion exact rules for a large number of

regulated entities, even when statutory provisions for rule

making apparently provide sufficient flexibility. Portland

Cement Association v. Ruckelshaus, supra at 399.

II. IN THE INSTANT CASE, SUBSTANTIALLY DIVERGENT COSTS OF

COMPLIANCE AND EXTRAORDINARY ECONOMIC HARDSHIP ARIS.

ING FROM ENFORCEMENT OF UNIFORM EFFLUENT STANDARDS

ARE Boru SPECIAL CIRCUMSTANCES WORTHY OF CONSIDERA-

TION IN A VARIANCE APPLICATION.

The requirement of a formal variance mechanism for

special circumstances applies equally well to EPA’s pro-

mulgation of effluent limits under both the 1977 and the 1987

provisions of the Federa] Water Pollution Control Act. EJ.

duPont de Nemours & Co. v. Train, 430 U.S. 112, 128 (1977).

The formal waiver procedure must be sufficiently flexible to

accommodate these special circumstances. Weyerhaeuser Co.

v. Costle, 590 F. 2d 1011, 1032 (D.C. Cir. 1978).

To characterize these special circumstances precisely, we

must examine EPA’s actual record of enforcement of the

Act. The sheer number of different point sources potentially

11

subject to regulation made it impossible for EPA, with its

limited resources, to formulate exact fitting effluent limita-

tions.’ Hence, EPA resorted to sampling. Nutural Resources

Defense Council, Inc. v. EPA, 5387 F. 2d 642, 647 (2d Cir.

1976). Pursuant to §§ 301 and 304 of the Act, the Agency con-

tracted different private consultants to analyze the technical

conditions of effluent reduction in sample firms in a given in-

dustrial category, and then partitioned each category into

subcategories according to the production process applied.‘

When EPA became aware of other production processes in

an industry for which it had no sample observations, the

Agency created the requisite additional subcategory and ex-

trapolated BPT-based effluent standards from other in-

dustries. American Meat Institute v. Environ. Protect. Agcy.,

526 F. 2d 442, 453 (7th Cir. 1975). As a result of court order,

EPA was compelled to set some effluent limits in extreme

haste. Natural Resources Defense Council, Inc. v. Train, 510

F. 2d 692, 704 (D.C. Cir. 1975). Commenting on EPA’s pro-

gress toward implementation of the Act, the National Com-

mission on Water Quality noted that many effluent limits

* The EPA Administrator himself noted that there is no way that

anyone sitting in Washington can properly prepare a document

which specifies the effluent limitations for all of the tens of

thousands of plants around the country because every plant in-

volves factors which differentiate it from others and directly affect

what will be the BPT for that plant. 3 Fnvir. Rep. 706 (1972). See

also Portland Cement Association v. Ruckelshaus, 486 F. 2d at 399.

* By 1977, EPA had divided some industries into as many as 51

subcategories based upon the production process applied. Council

on Environmental Quality, Eighth Annual Report (1977) at 38. For

example, tissue paper mills using the bleached kraft process are

subject to different effluent limitations than those using the de-

inking process. Koch and Leone, The Clean Water Act: Unex-

pected Impacts on Industry, 3 Harv. Env. L.R. 84, 107 (1979).

12

were too simplistic and often required a “force-fit’”’ for in-

dividual plants.§

As a result, extremely wide variations in both the costs of

compliance and the severity of the economic burden of com-

pliance have been the rule and not the exception.® In the

tissue industry, costs of compliance with BPT limits ranged

from $1.85 per ton to $82.82 per ton in 1974, with an average

of $9.40 per ton.” In the electric power industry, capital costs

of compliance with thermal pollution controls varied from

$9.00 per kilowatt to $81.00 per kilowatt. A number of

studies have shown that the incremental cost of discharge

treatment rises extremely rapidly as the 90-95 percent clean-

up level is approached.® If the best practicable control

technology, i.e., ‘the average of the best existing perform-

ance,”’!° achieves treatment levels far beyond what other

dischargers in the subcategory can achieve, the resulting

divergence in costs could be substantial. This appears to be

the case in the pulp and pape: industry."!

5 National Commission on Water Quality, Report to Congress,

1976, p. 8. As a remedy, the Commission recommended greater

flexibility and discretion by the Administrator.

6 See the studies of the petroleum refining, pulp and paper, tex-

tile, aluminum and metal finishing industries in Leone (ed.), En-

vironmental Controls, 1976, at 25, 45, 89, 100, 101, 103 and 110.

7Leone and Jackson, ‘The Political Economy of Federal

Regulatory Activity.” in Fromm (ed.), Public Regulation of

Economic Activity, 1979; also, Koch and Leone, supra, note 2 at

91.

8 Brief for Petitioners, Appalachian Power Co., et al. v. Train, at

31-33 and 2 App. 648.

* For example, Kneese and Kneese, The Economics of Water

Utilization in the Sugar Beet Industry, 1968. The cost of treating

the last five percent of pollutants may equal or exceed the total cost

of treating the first 95 percent.

10 Leg. His. at 169.

11 Rauch, Note, The Federal Water Pollution Control Act

Amendments of 1972: Ambiguity as a Control Device, 10 Harv. J.

Leg. 565, 579 (1973).

13

Abatement costs, it has been shown, are strengly related to

plant age and size.'? Although these classifying factors were

explicitly authorized in 1977 by this Court in EJ. duPont de

Nemours & Co. v. Train, 430 U.S. at 130-132, they had not

been fully considered by EPA. Of the approximately 4000

major industrial dischargers nationwide, more than 600

failed to meet the July 1977 deadline for compliance with

BPT-based limits.'® Those who failed were mostly older

plants with large local payrolls, often clustered in specific

geographic areas or industries.’ Nearly 50 percent of the

nation’s iron and steel plants failed to meet the deadline.'* To

avoid plant closings and unemployment among steel pro-

ducers in Mahoning Valley, near Youngstown, Ohio, EPA

was compelled to subcategorize iron and steel plants in that

area. The Agency then promulgated less stringent standards

for this subcategory than those applicable to the rest of the

industry.'¢

These facts demonstrate that extremely wide variations in

the economic burden of compliance have not necessarily

arisen from identifiable engineering features that are ‘‘fun-

damentally different than the factors considered [in setting

the 1977 limitations]."" 42 Fed. Reg. 21380. In many cases,

they have arisen from EPA's inability, in the face of limited

'2 Koch and Leone, supra at 107.

8 See Testimony of Thomas C. Jorling, EPA Assistant Ad-

ministrator for Water and Hazardous Materials before the Senate

Committee on Environmental and Public Works as reported by

Senator Muskie, 123 Cong. Rec. S.13,535 (daily ed., Aug. 4, 1977).

'* Voytko, The Clean Water Act and Related Developments in

the Federal Water Pollution Control Program During 1977. 2

Harv. Env. L.R. 108, 104-105 (1977).

'S See 123 Cong. Rec., S.13,539 (daily ed., Aug. 4, 1977) remarks

of Senator Muskie.

'® Regulatory Policy Committee, U.S. Department of Congress,

Toward Regulatory Reasonableness, 1977. at 45, 59.

14

resources, to consider fully those factcrs already enumerated

in § 304(bX 1B) of the Act.

The granting of waivers is not dictated merely because

“high cost operators may be more seriously affected . . . than

others.”’ Permian Basin Area Rate Cases, 390 U.S. at 769,

citing Bowles v. Willingham, 321 U.S. 508, 518 (1944). But

the extremely wide variations in the economic burden of com-

pliance in this case clearly establish the presumption that

mechanical application of uniform standards is likely to im-

pose an inequitable and confiscatory burden on a significant

number of plants. In light of this presumption, EPA is

obligated to consider the economic burden of compliance as

evidence of ‘‘special circumstances” warranting the granting

of a variance.

Contrary to its original exclusion of ‘‘economic factors’’

from consideration in a variance application (39 Fed. Reg.

30073), EPA will now consider a showing that ‘‘adherence to

the 1977 limitations would be substantially more expensive

than compliance by other members of the same industry.”’

Petitioner’s Brief at 10-11. See also 44 Fed. Reg. 32894

(1979); 43 Fed. Reg. 50042 (1978). The Agency draws a

distinction between this type of evidence and the allegation

that a discharger-applicant simply cannot afford to comply

with the limitations. Petitioner’s Brief at 11; 43 Fed. Reg.

50042 (1978). EPA bases this distinction on its statutory in-

terpretation that § 301(c), allowing waivers according to “‘the

economic capability of the [discharger],’”’ applies only to the

1987 limitations.

Since EPA has already agreed to consider substantial dif-

ferences in the cost of compliance, the only case at issue is

where a business potentially hard hit by the BPT-based limits

cannot demonstrate a substantial cost difference or other

special circumstance. Yet the economic consequence of

business shutdown would alone establish a significant cost

15

differential. To enforce this distinction, EPA must therefore

rule out the possibility that the compliance will lead to an ap-

plicant’s business failure. But this cannot be accomplished by

exclusion of ‘‘affordability’”’ or ‘financial status’’ from con-

sideration in a waiver application. Both extraordinary com-

pliance costs and extraordinary hardships are potentially

special circumstances that require a flexible rather than a

categorical approach to enforcement. The distinction be-

tween them is arbitrary.

II]. WHEN AN INDIVIDUAL DISCHARGER CITES AN EXTRAORDI-

NARY ECONOMIC BURDEN OF COMPLIANCE IN ITS APPLICATION

FOR A WAIVER FROM 1977 oR 1987 EFFLUENT STANDARDS,

EPA’s NARROW OBLIGATION OF FAIR CONSIDERATION DOES

Not RENDER THE ACT UNENFORCEABLE.

EPA’s consideration of the economic burden of compliance

is not a license to avoid the Act’s strict effluent standards.

Weyerhaeuser Co. v. Costle, 590 F. 2d at 1035. It merely

allows the petitioning firm to present to the Agency its

economic concerns. The discharger-applicant, and not the

EPA, has the burden to determine the economic impact of

the effluent standards and to present the information con-

vincingly in a variance application. EPA is not compelled to

undertake cost/benefit analysis. A discharger’s demonstra-

tion that compliance with BPT-based limits imposes extra-

ordinary costs does not automatically yield him a variance.

The narrow obligation of the Agency is to consider the costs

of compliance as one of many factors. Appalachian Power Co.

v. Train, 545 F. 2d 1351, 1359-1360 (4th Cir. 1976).

A variance procedure that is sensitive to the economic

burden of compliance will not degenerate into unworkable,

case-by-case regulation. The record of enforcement of the

Act demonstrates the importance of flexibility in the admin-

16

istration of general rules. EPA is obligated to balance the

goal of uniformity against this flexibility requirement.

Because such desired flexibility will require consideration of

special circumstances, some degree of case-by-case enforce-

ment is likely. But the fair consideration of economic hard-

ship cases is only one element in the achievement of ad-

ministrative flexibility. There is no showing in this case that

fair consideration of economic impact will by itself over-

burden the enforcement of the Act. Congress’s belief that

consideration of a discharger’s ‘‘cost of achieving effluent

reduction” would not disarm the Act is demonstrated by its

explicit imposition of such a requirement in the Act’s 1987

variance procedure.

Conclusion.

The statutory background of this case is complex. Its

legislative history is filled with controversy. New England

Legal Foundation argues that basic principles of ad-

ministrative regulation, as applied to an agency’s actual

record of enforcement of pollution controls, should govern

this Court’s decision.

The Court below should be affirmed.

17

Respectfully submitted,

By its Attorneys,

WILLIAM W. BECKER,

LANDFIELD, BECKER & GREEN,

Suite 1050,

1819 H Street, N.W.,

Washington, D.C. 20006.

(202) 293-1919

JOHANNA HARRIS,

HARRISON A. FITCH, ;

NEW ENGLAND LEGAL FOUNDATION,

110 Tremont Street,

Boston, Massachusetts 02108.

(617) 482-1410

Dated June 12, 1980.