Petition — Crown Simpson Pulp Co. v. Costle

In the ih wei iH

Supreme Court of tire"2%-82m]

United States aia ~<a

OcTOBER TERM, 1979

STi EN ” 9-797

CROWN SIMPSON PULP CoMPANY, and

LOUISIANA-PACIFIC CORPORATION,

Petitioners,

No.

v.

DoucLas M, Coste, Administrator,

Environmental Protection Agency,

Respondent.

Petition for a Writ of Certiorari to the

United States Court of Appeals

for the Ninth Circuit

W. Reece BADER

JACK B, OWENS

ALAN C, WALTNER

OrRICK, HERRINGTON, ROWLEY &

SUTCLIFFE

600 Montgomery Street

San Francisco, California 94111

Telephone: (415) 392-1122

Attorneys for Petitioner

Crown Simpson Pulp Company

PAUL R. HAERLE

Joseru A. DARRELL

THELEN, MARRIN, JOHNSON & BRIDGES

Two Embarcadero Center

San Francisco, California 94111

Telephone; (415) 392-6320

Attorneys for Petitioner

Louisiana-Pacific Corporation

November 21, 1979

=

BORG PRINTING COMPANY OF CALIFORNIA, 346 FIRST STREET, GAN FRANCISCO 94108

Opinions below

Jurisdiction

Question presented

Statutory and regulatory provisions involved

Statement of the case

Reasons for granting the writ

INDEX

11

1. The Ninth Circuit Ruling Creates a Bifurcated

Review System in Direct Contravention of Express

Congressional Objectives for Uniform, National Re-

view of EPA Actions in the Courts of Appeals .......... 13

2. The Opinion Below Creates a Conflict Between

Circuits and Within the Ninth Circuit on an Issue of

National Significance Which Requires Resolution ...... 18

3. The Ruling Below Contravenes the Policies and

Rationale Underlying This Court’s Decision in du

Pont 21

4. The Decision Below Will Result in Delays in Effec-

tuating the Overall Objectives of the Federal Water

Pollution Control Act, Constitutes an Unnecessary

Waste of Judicial Resources, and Creates the Risk of

Developing Conflicting Legal Review Standards ........ 22

Conclusion 24

Appendix

(Opinion and Judgment of Court of Appeals)... Appendix A

(Order denying rehearing) -.......-..-2--0-cccne00s seeeeee Appendix B

(Order granting stay of mandate) 0... e.-o------ Appendix C

(Decision of the Administrator) ..Appendix D

(State Board Order granting permit) Appendix E

CITATIONS ii

CASES Pages

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

RI a Sidscedainle hia crant on onoicesacincednchsi 7

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

uc? SESS Hy SEERA ee PT OOS EES 6, 9, 21

E.I. duPont de Nemours & Co. v. Train, 528 F.2d 1136

(4th Cir. 1975) aff'd, 430 U.S. 112 (1977) --neeeecceneseeeen 13, 14

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

4. 1. See ke BS 6

Ford Motor Co. v. EPA, 57 F.2d 661 (6th Cir. 1977) ........ 2, 18

Mianus River Preservation Comm. v. EPA, 541 F.2d 899

(2d Cir. oc, MER AERENE SENOS RRS Pre ORO IE a a 2,19

Pacific Legal Foundation v. Costle, 586 F.2d 650 (9th Cir.

1978), cert. granted, 99 S.Ct. 2857 8. | ee eo 2,21

PPG Industries, Inc. v. Harrison, 587 F.2d 237 (Sth Cir.

1979), cert. granted, No. 78-1918, 48 U.S.L.W. 3186

CIP) Sek. -- 3, 13, 23

Republic Steel Corp. v. Costle, 581 F.2d 1228 (6th Cir.

1978), cert. denied, 440 U.S. 909 (1979) iiseedienenpins 2,18, 19

Shell Oil Co. v. Train, 585 F.2d 408 (9th Cir. 1978) .......... 2, 20

State of Washington v. EPA, 573 F.2d 583 (9th Cir. 1978).. 3, 10

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

Cir. 1978) 19, 20

STATUTES, ‘CULES AND REGULATIONS

33 U.S.C. § 1251 et seq. [Federal Water Pollution Control

Act] passim

Clean Water Act of 1977, PL 95-217 (Dec. 27, 1977), 91

Stat. 1599 (amending 33 U.S.C. § 1342(d) (4)) -neosooo-on 16

CITATIONS iii

Pages

40 C.F.R. § 430.72 ... weeeere-eee passim

42 US.C. § 7607(b) (1)..... ins Dae

28 U.S.C. § 1254(1) 2

LEGISLATIVE HISTORY

123 Cong.Rec. $19646 (daily ed. Dec. 15, 1977) -.-.--.-+-:00-+ 10, 14

In the

Supreme Court of the

United States

OcTOBER TERM, 1979

CROWN SIMPSON PULP CoMPANY, and

LOUISIANA-PACIFIC CORPORATION,

Petitioners,

v.

DoucLas M. Cost Le, Administrator,

Environmental Protection Agency,

Respondent,

Petition for a Writ of Certiorari to the

United States Court of Appeals

for the Ninth Circuit

Crown Simpson Pulp Company and Louisiana-Pacific Corpora-

tion (“petitioners”) petition for a writ of certiorari to review the

judgment and opinion of the United States Court of Appeals for

the Ninth Circuit in this case.

OPINIONS BELOW

The opinion of the court of appeals (Appendix A, infra) is

reported at 599 F.2d 897, 13 ERC 1602 (1979). The order deny-

2

ing petitioners’ petition for rehearing and/or rehearing en banc

(Appendix B, infra) is not reported. The decision of the Admin-

istrator of the Environmental Protection Agency (“EPA”) (Ap-

pendix D, infra) is reported at 10 ERC 1841 (1977). Since this

case was brought on a direct review petition to the court of appeals,

there is no district court opinion.

JURISDICTION

The judgment of the court of appeals was entered on June

29, 1979. On October 15, 1979 the court denied a timely petition

for rehearing and/or rehearing en banc which was sought jointly

by petitioners and by the United States on the jurisdictional

question raised by this petition. The jurisdiction of this Court is

invoked under 28 U.S.C. § 1254(1).

QUESTION PRESENTED

This petition presents the question of the appropriate forum

for review of the EPA’s veto of a permit and variance issued by

an authorized state agency under the National Pollutant Discharge

Elimination System (‘‘NPDES’’) established by the Federal Water

Pollution Control Act, 33 U.S.C. § 1251 ef seq. (“the Act’’).

Pursuant to the congressional mandate for immediate, original

court of appeals review of EPA decisions on NPDES permit mat-

ters, 33 U.S.C. § 1369(b) (1), a number of circuits have ruled

that EPA vetoes of state-issued NPDES permits must be reviewed

in the courts of appeals, rather than in the district courts, Republic

Steel Corp, v. Costle, 581 F.2d 1228 (6th Cir. 1978), cert. denied,

440 U.S, 909 (1979); Ford Motor Co, v. EPA, 567 F.2d 661 (6th

Cir. 1977); Mianus River Pres. Comm. v. EPA, 541 F.2d 899

(2d Cir. 1976) (dictum). At least one panel of the Ninth Circuit

has come to the same conclusion. Shel] Oil Co. v. Train, 585 F.2d

408 (9th Cir. 1978); see also, Pacific Legal Foundation v. Costle,

3

586 F.2d 650 (9th Cir. 1978), cert. granted, 99 S.Ct. 2857 (1979).

Despite these rulings, Ninth Circuit panels in the instant case

and in State of Washington v. EPA, 573 F.2d 583 (9th Cir. 1978),

have rejected direct court of appeals review.

The opinion below exacerbates intercircuit and intracircuit

conflicts on an important question of federal law with nationwide

implications. A similar conflict exists under the direct appellate

jurisdictional provisions of the Clean Air Act, 42 U.S.C. § 7607

(b) (1), which will be reviewed by this Court in the current

term. PPG Industries, Inc. v. Harrison, 587 F.2d 237 (Sth Cir.

1979), cert. granted, No. 78-1918, 48 U.S.L.W. 3186 (1979).

The question presented in this case is analogous to the question

presented in Harrison, to wit: whether the court of appeals has

original jurisdiction under Section 509 of the Act, 33 U.S.C.

§ 1369, to review a final action of the EPA Administrator denying

a variance and vetoing an NPDES permit issued by a properly

authorized state agency.

STATUTORY AND REGULATORY PROVISIONS INVOLVED

33 U.S.C. § 1369(b) (1) provides in pertinent part:

Review of the Administrator's action . . . (E) in approving

or promulgating any effluent limitation or other limitation

under section 1311, 1312, or 1316 of this title, and (F) in

issuing or denying any permit under section 1342 of this

title, may be had by any interested person in the Circuit Court

of Appeals of the United States for the Federal judicial dis-

trict in which such person resides or transacts such business

upon application by such person. Ary such application shall

be made within ninety days from the date of such determina-

tion, approval, promulgation, issuance or denial, or after

such date only if such application is based solely on grounds

which arose after such ninetieth day.

4

33 U.S.C. § 1369(b) (2) provides:

Action of the Administrator with respect to which review

could have been obtained under paragraph (1) of this sub-

section shall not be subject to judicial review in any civil or

criminal proceeding for enforcement.

33 U.S.C. § 1362 provides in part:

(11) The term “effluent limitation” means any restriction

established by a State or the Administrator on quantities,

rates, and concentrations of chemical, physical, biological,

and other constituents which are discharged from point

sources into navigable waters, the waters of the contiguous

zone, or the ocean, including schedules of compliance.

40 C.F.R. § 430.72 provides in pertinent part:

In establishing the limitations set forth in this section, EPA

took into account all information it was able to collect, de-

velop and solicit with respect to factors (such as age and

size of plant, raw materials, manufacturing processes, prod-

ucts produced, treatment technology available, energy re-

quirements and costs) which can affect the industry sub-

categorization 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. An individual

discharger or other interested’ person may submit evidence

to the Regional Administrator (or to the State, if the State

has the authority to issue NPDES permits) that factors re-

lating to the equipment or facilities involved, the process

applied, or other such factors related to such discharger are

fundamentally different from the factors considered in the

establishment of the guidelines. On the basis of such evi-

dence or other available information, the Regional Admin-

istrator (or the State) will make a written finding that such

factors are or are not fundamentally different for that fa-

cility compared to those specified in the Development Docu-

ment. If such fundamentally different factors are found to

5

exist, the Regional Administrator or the State shall establish

for the discharger effluent limitations in the NPDES permit

either more or less stringent than the limitations established

herein, to the extent dictated by such fundamentally different

factors, Such limitations must be approved by the Adminis-

trator of the Environmental Protection Agency. The Admin-

istrator may approve or disapprove such limitations, specify

other limitations, or initiate proceedings to revise these reg-

ulations. (emphasis added).

STATEMENT OF THE CASE

Petitioners operate the only two market bleached kraft pulp

mills in the United States which discharge directly into offshore

ocean waters. The mills are located on the remote Northern

California coast and discharge through deepwater outfall diffuser

systems into the Pacific Ocean. The design of the discharge systems

was chosen in cooperation with the California State Water Re-

sources Control Board (the “State Board’), and its subordinate

Regional Board. The plant and diffuser sites were selected in part

(and despite additional costs) because the currents, turbulence

and other characteristics of the Pacific Ocean in the area eliminate

environmental concerns that may arise from the location of

such plants in other areas. The effect of the currents, turbulence

and other ocean characteristics also demonstrate the absence of

any impact on receiving water quality.

In 1972 Congress extensively revised federal water pollution

control requirements in order ‘to restore and maintain the

chemical, physical, and biological integrity of the Nation’s waters.”

33 U.S.C. § 1251(a). Through extensive amendments to the Act,

Congress required industrial dischargers to achieve the best prac-

ticable control technology currently available (“BPT’’) by July 1,

1977. 33 U.S.C. § 1311(b) (1) (A). BPT requirements for par-

ticular dischargers are implemented through NPDES permits. 33

US.C. § 1342.

6

Under the Act, EPA issues NPDES permits directly, except in

those states where, consistent with congressional policy to pre-

serve the primary responsibilities of states to control water pol-

lution, EPA has approved state administration of the NPDES

program. 33 U.S.C. § 1342(b) & (c). As this Court noted in

EPA v, State Water Resources Control Board, 426 U.S. 200, 209

(1976), California's program was the first to receive EPA ap-

proval, and the State Board is the legally authorized entity to

issue NPDES permits in California. Pursuant to the statutory

scheme, EPA’s authority to issue NPDES permits in California

has been suspended. 33 U.S.C. § 1342(c). EPA, however, retains

authority to review state permits. 33 U.S.C. § 1342(d) (2).

The Act also directed EPA to promulgate nationwide ‘‘effluent

limitations” for “point sources,” 33 U.S.C. § 1311, and to publish

“guidelines” for effluent limitations defining BPT for categories of

point sources. 33 U.S.C. § 1314(b) (1). Recognizing that imple-

mentation of the entire program would be a major undertaking,

involving the potential for a case-by-case evaluation, EPA issued

generic guideline limitations on an industry-by-industry basis. EPA’s

methodology was challenged in E.I. duPont de Nemours & Co.

v. Train, 430 US. 112 (1977). This Court upheld EPA’s authority

to establish generalized BPT effluent guidelines, but only “so long

as some allowance is made for variations in individual plants... .”

Id. at 128.*

EPA belatedly published final effluent limitations guidelines

for the pulp and paper industry in January, 1977, only six months

before the July 1, 1977 BPT deadline. E.g., 40 C.F.R. § 430.72

(1977). These guidelines considered pulp and paper facilities

by general classification, without regard to environmental design

or location.

*This Court did not rule on the validity of EPA’s variance clause, 430

U.S. at 128, n. 19.

7

EPA’s 1977 guidelines for the pulp and paper industry, how-

ever, did contain a generalized variance clause allowing an

evaluation, on a case-by-case basis, of the application of the 1977

BPT guidelines for facilities found to be “fundamentally differ-

ent” from those considered by EPA in the development of the

guidelines. E.g., 40 C.F.R. § 430.72 (1977). The authorization to

issue variances was specifically granted in the EPA regulation to

those states, such as California, which EPA had previously ap-

proved to issue NPDES permits directly.

Although granting variance authority to the states, EPA’s

variance clause failed to articulate satisfactorily the standards to

be applied by state permit-issuing authorities in refusing or grant-

ing variances. E.g., Appalachian Power Co. v. Train, 545 F.2d

1351 (4th Cir. 1976). EPA purported to define variance standards

applicable to petitioners (albeit denying them a hearing) in the

very opinion of the Administrator denying petitioners’ variances

in this case. (Appendix D.) Subsequentl:, EPA finally issued addi-

tional variance regulations which have never been applied to

petitioners’ applications. 40 C.F.R. § 125.31 (1979).

The State Board granted NPDES permits to petitioners in

March 1977. In addition, at the culmination of extensive eviden-

tiary and administrative proceedings before state agencies,* the

State Board unanimously granted variances to petitioners for two -

effluent parameters - - BOD and pH. BOD is a measure of oxygen

depletion from effluent discharges; pH is a measure of acidity

and alkalinity. Both parameters are meaningless in the circum-

stances c° petitioners’ discharges, as the State Board found.

(Apnrendix E, pp. 59-61). The State Board concluded that few, if

any, environmental benefits associated with secondary treatment

*The arduous course of the proceedings before the state agencies and

EPA’s lack of diligence therein are described in detail in Appendix D,

pp. 27-30 and Appendix E, pp. 55-56.

8

for BOD and pH would occur if the variances were denied; tiat

substantial environmental and energy costs would unnecessarily

and inescapably be imposed by a requirement of full BOD and pH

controls; and that it was environmentally counterproductive to im-

pose EPA’s BOD and pH guideline limitations.*

At the same time the State Board imposed other stringent and

costly limitations. Although it determined that the BOD and pH

content of petitioners’ discharges did not threaten water quality

or the marine environment, the State Board expressly declined to

base its decision on that finding. Rather, the State Board weighed

all pertinent environmental factors for the mills and concluded

that BOD and pH variances were appropriate. (Appendix E

pp. 68-69).

The EPA then took over. It denied petitioners’ requests for

hearings. On September 15, 1977, the EPA Administrator issued

a lengthy opinion, rejecting the variances and permits granted by

the State Board. (Appendix D). The Administrator declared, for

the first time, that only EPA has final authority to issue variances.

In effect, the role of states administering NPDES programs was

reduced to a ministerial function, notwithstanding the explicit

language of the variance regulation and the expressly-declared

congressional policy to preserve the primary responsibility of states

in controlling water pollution.

EPA’s denial of the variances was predicated on the theory that

the State Board granted them solely because petitioners’ discharges

do not harm water quality (Appendix D, p. 31), even though the

>

*The undisputed evidence before the state agencies demonstrated, for

example, that more pollution effects would be generated from installation

of secondary treatment facilities required to meet BOD and pH limitations

than without such treatment facilities. For example, installation of sec-

ondary treatment facilities would, wholly apart from capital costs of

millions of dollars, consume 5,200 tons of chemicals per year per plant,

involve a total power use of 148,232,000 KWH annually, and produce

substantial quantities of biological sludge and air pollutants, Similarly, the

evidence was uncontradicted that no expected environmental benefit would

be gained by installation of secondary treatment facilities. (Appendix E,

pp. 59-61, 67).

9

State Board’s opinion expressly rejected that approach. (Appendix

E, pp. 58-59).

The decision of the Administrator emasculates the concept of a

variance and eviscerates the variance clause promfulgated for

1977 BPT limitations. More importantly, the decision is environ-

mentally unsound, contravenes the intent of Congress to avoid

debiting one environmental account in order to credit another, and

subverts the congressional objective of preserving a significant

state role in the permit-issuing process. The issues posed on the

merits in this case are important. They concern basic legal issues

as to whether the role of the states is to be reduced wholly to

clerical functions, in contravention of congressional will, and the

appropriate scope that must be given to a variance clause in order

to preserve the entire statutory scheme. See 33 U.S.C. § 1251(b) &

(f) ; 33 U.S.C. § 1342; and du Pont, supra.

Petitioners then sought direct review of the Administrator's

veto of the variances before the Court of Appeals for the Ninth

Circuit on October 5, 1977, relying upon the review provisions

set forth in 33 U.S.C. § 1369(b) (1). The EPA also relied upon

the same direct review provisions in the jurisdictional section of

its brief. That section provides original court of appeals juris-

diction to review a broad range of EPA actions, including action

“in approving or promulgating any effluent limitation or other

limitation” or “in issuing or denying any permit.” 33 U.S.C.

§ 1369(b)(1)(E) & (F). Although the jurisdictional section,

drafted in 1972 before this Court’s decision in duPont, supra and

before the EPA’s promulgation of the variance clause, does not

expressly refer to variances, there can be little doubt that inclusion

of variance denials by EPA is the only correct reading of the

statute. The legislative history of the 1977 Amendments makes

clear that such coverage was so intended. Senator Muskie, recog-

nized by this Court as “perhaps the Act’s primary author,” duPont,

10

supra, 430 U.S. at 129, has expressly stated that EPA actions on

variances are to be reviewed directly in the courts of appeals:

Whenever judicial review is sought of the Administrator's

action with regard to any modification to or waiver or vari-

ance from an effluent limitation, it is expected that such

Paipat will be in the courts of appeals pursuant to [33 U.S.C.

1369}.

123 Cong. Rec. $19646 (daily ed. Dec. 15, 1977). The petitioners

and the United States have all taken this position in briefs filed

in the Ninth Circuit and in oral argument in this case.

5, a vote of two to one, the Ninth Circuit panel that heard the

case rejected jurisdiction.* The majority rejected the two subsec-

tions of 33 U.S.C. § 1369(b) (1), the jurisdictional statute, which

had been argued to them. The majority concluded that the effluent

limitations contained in petitioners’ permits were not “uniform

effluent limitations for categories of plants” and as such were not

subject to review under subsection (E), although subsection (E)

does not by its terms require such a focus. (Appendix A, p. 9).

The panel also rejected jurisdiction under subsection (F) on the

ground that the EPA permit vetoes fell outside the coverage of

the “issuing or denying” clause (Appendix A, p. 13), despite the

explicit language of the EPA decision under review:

I have been asked to consider the granting of variances

from effluent limitations guidelines for two pulp, paper, and

paperboard mills located on the Pacific Coast of California.

The requests for variances are denied.

*District Judge Renfrew, sitting by designation, nominally voted with

the majority. In his separate, concurring opinion, however, he spelled out

in detail the jurisdictional error and the exacerbation of circuit court con-

flicts being created by the majority, as well as the jurisdictional confusion

certain to arise. As his opinion indicates, however, Judge Renfrew believed

his vote to be mandated by an earlier Ninth Circuit opinion in State of

Washington v. EPA, 573 F.2d 583 (9th Cir. 1978), which he also

concluded was an erroneous decision, in conflict with the body of federal

law on the jurisdictional issue.

11

In re Louisiana Pacific Corp., 10 ERC 1841 (1977) (Decision

of the Administrator) (Appendix D, p. 24).

After brushing off the conflicts in other circuits on the juris-

dictional issue, and refusing to address the merits before it, the

panel suggested that jurisdiction resided in the district court under

the Administrative Procedure Act and the general federal ques-

tion jurisdictional statute. (Appendix A at 13, n. 5).

In response to the court's obviously strained and erroneous

opinion, and Judge Renfrew’s suggestion, petitioners and the

United States filed a joint petition for rehearing and/or rehear-

ing en banc. In the joint petition for rehearing and/or rehearing

en banc, petitioners and the United States described the delay,

inconsistencies and confusion created by the opinion below, as

well as the frustration of congressional purpose for prompt reso-

lution of issues of substantial environmental importance: “Gov-

ernment and industry alike have a strong interest in clarifying

this jurisdictional issue so that interpretation of pollution control

requirements can proceed in a timely fashion.” Joint Petition for

Rehearing and Suggestion for Rehearing Ex Banc, p. 3. Notwith-

standing the fact that all parties, including the United States,

sought to have the Ninth Circuit accept jurisdiction, the petition

for rehearing was denied on October 15, 1979. Petitioners then

obtained a stay of mandate from the court of appeals pending

petition for certiorari by order dated October 24, 1979. The order

further provides that if a petition for a writ of certiorari is filed

by November 21, 1979, the stay is to remain in effect pending

‘disposition of the case in this Court.

REASONS FOR GRANTING THE WRIT

The opinion below contravenes the congressional mandate in

the Federal Water Pollution Control Act for prompt centralized

review in the courts of appeals of those administrative actions

12

taken by EPA described in 33 U.S.C. § 1369(b) (1) (E) and (F).

In refusing to accept jurisdiction below, the Ninth Circuit opinion

creates a bifurcated review system which is neither centralized

nor prompt. As such, it frustrates the statutory objective of

national, uniform review of EPA permit actions. The decision

exacerbates the inter-circuit conflicts presently existing on this

jurisdiction question, preserves the confusion created by incon-

sistent rulings within the Ninth Circuit, and represents a retreat

from the policies and rationale underlying this Court's decision

in duPont, supra.

Another major reason for granting the writ is that the question

at issue on the merits - — the role of states and the proper scope

of the variance clause — - is precisely the type of issue that Con-

gress wanted resolved with quick finality. This case does not

involve simply whether two mills get a variance. Rather, the

issues are largely policy and legal questions concerning the opera-

tion of the variance system. EPA itself recognizes this in its

decision, stating that legal, not factual issues, are the only rel-

evant issues. (Appendix D, pp. 26-27). Indeed, given the existence

of a voluminous and adequate record before the state agencies, it

makes little sense to put the matters before the district court.

In fact, no special expertise of the district court is required in

this case. Rather it poses important national legal issues clearly

designed for court of appeals review.

Lastly, the decision imposes a severe burden on the administra-

tion of the Act. With all due respect, it is a step backward in

the efficient administration of justice on a uniform national level,

and will cause substantial delays and waste of administrative and

judicial resources in the implementation of the Federal Water

Pollution Control Act. Under these circumstances this Court

should exercise its supervisory powers by granting the writ of

certiorari as it recently did in a similar jurisdictional context under

13

the Clean Air Act. PPG Industries, Inc, v. Harrison, 587 F.2d

237 (Sth Cir. 1979), cert. granted, No. 78-1918, 48 U.S.L.W.

3186 (1979).

1. The Ninth Circuit Ruling Creates a Bifurcated Review System

in Direct Contravention of Express Congressional Objectives

for Uniform, National Review of EPA Actions in the Courts

of Appeals.

The review provisions of the Federal Water Pollution Control

Act, 33 U.S.C. § 1369(b)(1), emphasize direct review in the

courts of appeals of actions by the Administrator in administer-

ing the Act and in approving or setting effluent limitations. Sub-

section (b)(1) provides, in pertinent part:

Review of the Administrator’s action ... (E) in approving

or promulgating any effluent limitation or other limitation

under section 1311... , and (F) in issuing or denying any

permit under section 1342 . . . may be had by any interested

person in the Circuit Court of Appeals of the United States

for the Federal judicial district in which such person resides

or transacts such business upon application by such person.

The congressional preference for direct review in the circuits

of EPA actions in administering the NPDES system derived from

Congress’ concern that judicial review be centralized and expe-

dited and not an impediment to the effective administration of

the Act:

Congress did not intend for the actions of the Administrator

to be subjected to the complexities inherent in a system of

review divided between different courts. Rather, it appears

to have been its desire that administrative actions be review-

able, but in a manner not likely to impede enforcement

unduly.

E.I. duPont de Nemours & Co. v Train, 528 F.2d 1136, 1141-42

(4th Cir. 1975), aff'd, 430 U.S. 112 (1977).

As the Fourth Circuit also pointed out in duPont:

14

While there is little legislative history relating to [33 U.S.C.

§ 1369], it is highly significant that the committee reports

make no mention of any division of judicial review. It is

clear that the House and Senate conferees disagreed over

whether there should be judicial review in the district courts

or the courts of appeals. Yet, there is no indication of any

compromise agreement providing for divided review of the

EPA standards. To the contrary, the Senate appears to have

prevailed on this point [in insisting on review in the courts

of appeals}.

528 F.2d at 1141.

The legislative history of the 1977 Act makes plain Congress’

view that the Administrator’s actions on variance matters are to

be reviewed directly in the courts of appeals. In explaining the

actions of the conference on the new variance system for munic-

ipal ocean dischargers provided for in the 1977 Act, Senator

Muskie stated:

Whenever judicial review is sought of the Administrator's

action with regard to any modification to or waiver or vari-

ance from an effluent limitation, it is expected that such

“pon will be in the courts of appeals pursuant to [33 U.S.C.

1369}.

123 Cong.Rec. $19646 (daily ed. Dec. 15, 1977). Since 33 U.S.C.

§ 1369(b) (1) was not modified by the 1977 Act, Senator Mus-

kie’s statements reflect congressional awareness that EPA actions

on variances fall under those existing review provisions.

Regardless of whether review in this case falls under subsec-

tion (E) or subsection (F), the opinion below rejects jurisdiction

under both subsections, and effectively creates a review system

bifurcated between federai district courts and courts of appeals.

Review of EPA permit actions is bifurcated by the decision in

three ways.

15

1. First, in its discussion of jurisdiction under subsection

(E), the majority suggested that if the EPA had approved

the variances granted by the State Board, that approval would

have been directly reviewable in the court of appeals. (Appendix

A, p. 5). The EPA’s veto of the variance, on the other hand,

would only be reviewable in the district court according to the

decision. Thus, a distinction based upon characterizing the type

of EPA action sought to be reviewed results in a dual review

system. Yet the substantive basis of that action is virtually iden-

tical.

2. Secondly, the opinion also draws an unsound jurisdictional

distinction between EPA’s review of state-granted permits, and

EPA's direct action on permits in states without approved NPDES

programs: “In states where the EPA itself grants all permits,

subsection (F) unquestionably provides for direct review.”

(Appendix A, pp. 10-11). Thus, notwithstanding Congress’ inten-

tion to create a uniform review system, within the Ninth Circuit

and presumably elsewhere, EPA denial of a permit in Alaska,

which has no approved state permit-issuing program, would be

reviewed by the court of appeals, while EPA veto of a state-

gtanted permit in California under an approved program would

be reviewable in the district court.

Yet, the action by EPA under either situation is functionally

identical. That Congress established a system whereby either

EPA or a state could issue permits reflects a policy decision to

preserve a major role for the states in the overall administration

of the Act, but by no means does it support a bifurcated review

system. Indeed, it is in direct contrast to Congress’ overall desire

for a unified review system at a single level, regardless of whether

the permit-issuing authority was federal or local. Given the role

which state agencies have been granted under the Act, it demeans

that role to compel review of state permit-issuing actions in fed- .

16

eral district court, while maintaining review of EPA permit-issu-

ing actions in the courts of appeals.

3. Lastly, as petitioners and the United States pointed out in

their joint rehearing petition, the Ninth Circuit's opinion creates

an even greater threat of bifurcated review in light of the 1977

Amendments to the Federal Water Pollution Control Act. Under

the 1977 Amendments, where the Administrator has vetoed a

permit and the State does not revise the permit to meet the

Administrator's objections, the Administrator may then issue a

revised permit. 33 U.S.C. § 1342(d) (4), as amended by 91 Stat.

1599. The decision below would make the Administrator's veto

of the state-granted permit reviewable only in the district court.

If, however, EPA vetoed a state-issued permit and later issued a

revised permit, that “EPA action” is only reviewable in the court

of appeals. Similarly, where a variance is vetoed, the regulations

provide that the Administrator may “specify other limitations.”

40 C.F.R. § 430.72. If EPA specified other limitations they, too,

as “EPA action,” would clearly be directly reviewable in the

courts of appeals under subsection (E). Thus, as the United

States pointed out, review of a single permit or variance request

involving identical parties and an identical record would be

bifurcated, and reviewed in two different forums, even though

the substantive actions of the respective agencies, and the sub-

stantive law to be applied, are identical. The potential for con-

flicting results upon review, and the confusion created by such a

review system, are not only contrary to the desirability of efficient

uniformity in reviewing actions taken under the Act, but also

clearly reflect a step backward from the legislative goals.

The net result of the court of appeals decision can only be

described as a jurisdictional patchwork. Where EPA vetoes a

variance in a state with an approved NPDES program and does

not issue its own variance, the decision would place jurisdiction

17

in the district court. However, ‘EPA actions” in approving vari-

ances, in issuing permits in states without approved NPDES

programs, and in granting or denying variances on its own after a

veto of a state-granted variance, would all be directly reviewable

in the courts of appeals. Petitioners submit that the distinctions

drawn by the court of appeals, based upon characterization of the

action taken or the identity of the permit-issuing authority, are

meaningless and irrelevant. These distinctions are without founda-

tion in the statute, make little sense from the standpoint of

judicial efficiency, and frustrate the congressional goal of quick,

uniform review of EPA actions on NPDES permits.

Petitioners respectfully submit that the jurisdictional confusion

existing in the Ninth Circuit's opinion stems in part from the

history of the variance clause. To be sure, 33 U.S.C. § 1369(b) (1)

does not use the term “variance.” This is scarcely surprising. The

1977 BPT variance mechanism was established by the Administra-

tor long after 33 U.S.C. § 1369(b) (1) was enacted, in order to

save a shaky statutory scheme by promulgating generalized effluent

guidelines, e.g., 40 C.F.R. § 430.72 — — an approach approved by

this Court in duPont. The inescapable point is that important

actions taken by EPA in setting variance policies - — which is

precisely what this case concerns — — are exactly the kinds of issues

Congress designed the review provision to cover. No valid reason

exists for district court review and no special expertise of the

district court is required here. An adequate administrative record

was fully developed before the state agencies. EPA reviewed that

record and issued a decision based solely on its interpretation of

legal issues having critical national importance. The ultimate

action to be reviewed is that of the EPA Administrator, which

clearly falls within 33 U.S.C. § 1369(b)(1), and the ultimate

legal issues are clearly designed by Congress for original court of

appeals jurisdiction. Since Congress intended original court of

18

appeals review of EPA actions, the opinion below is erroneous and

should be corrected.

2. The Opinion Below Creates a Conflict Between Circuits and

Within the Ninth Circuit on an Issue of National Significance

Which Requires Resolution.

The problems created by the Ninth Circuit’s jurisdictional

patchwork are compounded by the inconsistencies of the opinion

with the decisions of other circuits. The opinion diverges radically

from other decisions in two important respects. First, it adopts a

narrow construction of the categories of reviewable EPA actions

contained in 33 U.S.C. § 1369(b) (1), stating that “the courts of

appeals have ‘strictly construed’ these direct review provisions.”

(Appendix A, p. 5, citing Pacific Legal Foundation v. Costle,

supra, 586 F.2d at 654.) No other circuit has taken such a narrow

view. The decision also conflicts squarely with the opinions of

other circuits in terms of the jurisdictional distinctions that it

draws.

Two decisions of the Court of Appeals for the Sixth Circuit

have found EPA vetoes of state-granted NPDES permits to be

directly reviewable under Section 509(b) (1) (F). Republic Steel

Corp. v. Costle, 581 F.2d 1228 (6th Cir. 1978), cert. denied 440

U.S. 909 (1979); Ford Motor Co. v. EPA, 567 F.2d 661 (6th

Cir. 1977). In Ford Motor, the State of Michigan proposed to

modify an NPDES permit. The EPA rejected the proposed modi-

fications. Id. at 667. The Sixth Circuit held EPA’s rejection to be

directly reviewable under 33 U.S.C. § 1369(b)(1)(F), as EPA

action in issuing or denying a permit. Id. at 668. By finding juris-

diction in a situation involving permit modification, as opposed to

initial issuance of a permit, the Sixth Circuit in Ford Motor evi-

denced a willingness to broadly construe the categories in 33

U.S.C. § 1369(b) (1). By finding jurisdiction to review an EPA

veto of a permit proposed by a state with an approved program,

the Sixth Circuit’s decision directly conflicts with the decision in

19

this case. Republic Steel followed Ford Motor in a similar veto

situation, expressly recognizing the conflict with the prior Ninth

Circuit cases. 581 F.2d at 1230, n. 1. Although dismissed with a

passing reference in the Ninth Circuit’s opinion, (Appendix A,

p. 12), these Sixth Circuit cases create a conflict between circuits

on the issue of jurisdiction for review purposes. Because that issue

has national importance in light of the congressional purpose for

uniform review, this Court should resolve this question by grant-

ing certiorari to review the decision below.

The Second Circuit has also stated that EPA permit vetoes

would be reviewable in the courts of appeals. In Méanus River

Preservation Committee v. EPA, 541 F.2d 899 (2d Cir. 1976), the

EPA had refrained from vetoing a state-issued permit, thereby

making the permit issued by the State of Connecticut effective.

Thus, the only action on the permit had been that of the state. The

court held that EPA’s failure to veto was not “action” subject to

court of appeals review under 33 U.S.C. § 1369(b) (1) (F). The

court stated, however, that had the EPA vetoed the permit, that

action would have been reviewable:

Admittedly, had the Administrator exercised his right of

review and rejected the Water Company's permit application,

that rejection would clearly be subject to review as ‘‘Ad-

ministrator’s action.”

541 F.2d at 909 (footnote omitted). This statement of the posi-

tion of the Second Circuit on the issue also conflicts with the

Ninth Circuit decision in this case.

The Court of Appeals for the District of Columbia Circuit

has also addressed the question of jurisdiction to review EPA

actions on variances. Weyerhaeuser Co., et al. v. Costle, 590 F.2d

1011 (D. C. Cir. 1978).That case dealt with variance procedures

established by 33 U.S.C. § 1311(c), under which EPA could relax

the requirement that sources apply the “best available technology

economically achievable” (“BAT”) by 1984. See 33 U.S.C. § 1311

20

(b) (2) (A). The court stated that “[t}hese permit related pro-

ceedings are also judicially reviewable [in the courts of appeals}

under the Act.” Id. at 1020, citing 33 U.S.C. § 1369(b) (1) (F).

Thus, the D.C. Circuit in Weyerhaeuser also refused to construe

the categories contained in 33 U.S.C. § 1369(b) (1) in an overly

literal fashion and further recognized that variances are reviewable

under subsection (F).

Petitioner Crown Simpson was a party to that action, and the

jurisdictional issue involved here was discussed at oral argument

before the District of Columbia Circuit. Judge McGowan’s opin-

ion carefully avoided any expression of opinion on the merits of

the specific variance involved herein, but recognized that both

petitioner and the United States conceded that the Ninth Circuit

had jurisdiction to decide the merits of Crown Simpson’s variance

request. 590 F.2d at 1033, n. 29.

In addition to the conflicts between circuits, the decision in this

case conflicts with other decisions of the Ninth Circuit, thereby

creating a confusing situation for appellate review.

In Shell Oil Co. v. Train, 585 F.2d 408 (9th Cir. 1978), the

Ninth Circuit stated that EPA vetoes of state-issued variances are

reviewable under 33 U.S.C. § 1369(b) (1). In Shell, a jurisdic-

tional distinction was drawn by the Court between two EPA ac-

tions. The EPA had first passively allowed a state to reject a vari-

ance request; the court accordingly found that there was no EPA

action to review. Id. at 411. In the meantime, however, the

applicant succeeded in persuading the state to change its mind

and obtained a variance, which EPA then vetoed. The panel in

Shell found the EPA veto “reviewable in this court under 33

U.S.C. § 1369(b) (1).” 585 F.2d at 412. Since Shell upheld orig-

inal court of appeals jurisdiction in circumstances identical to

that involved in the instant case, the opinion below creates a

square conflict within the Ninth Circuit.

21

In Pacific Legal Foundation v. Costle, 586 F.2d 650 (9th Cir.

1978), cert. granted, 99 S.Ct. 2857 (1979) (on other issues),

the Ninth Circuit broadly construed the categories in 33 U.S.C.

§ 1369(b) (1) in upholding original court of appeals jurisdiction

to review a novel situation not specifically enumerated in the

(b) (1) subsections, In Pacific Legal Foundation, the EPA had

granted an extension of time to a publicly owned treatment work

to meet the secondary treatment requirements contained in 33

US.C. § 1311(b) (1) (B). The acceptance of original jurisdiction

by the Ninth Circuit in Pacific Legal Foundation underlines the

error and confusion inherent in the Ninth Circuit ruling in the

instant case and the disharmony on the point at issue within the

Ninth Circuit.

Because the Ninth Circuit encompasses a large geographical

area, including states with EPA approved permit-issuing programs

and those without, and because the Ninth Circuit is apparently

unable or unwilling to resolve its own internal inconsistencies,

this Court should use its supervisory powers to do so.

3. The Ruling Below Contravenes the Policies and Rationale

Underlying This Court's Decision in duPor.t.

In E. I, duPont de Nemours & Co. v. Train, 430 U.S. 112, 136

(1977), this Court determined that EPA actions on individual

1984 BAT variances are directly reviewable in the courts of

appeals under 33 U.S.C. § 1311(c). This Court rejected a dis-

parate administration of the BAT and BPT requirements, stating

that, ‘Nothing . . . suggests any radical difference in the mechan-

ism used to impose limitations for the 1977 and [1984] dead-

lines,” 430 U.S. at 127. Thus, the Ninth Circuit's opinion, insofar as

it compels district court review of 1977 BPT variances, conflicts

with the principles of duPont.*

*This Court in duPont also recognized that it was “unlikely that Con-

gress intended . . . bifurcated review... .” 430 U.S. at 128, n. 18.

22

4. The Decision Below Will Result in Delays in Effectuating the

Overall Objectives of the Federal Water Pollution Control

Act, Constitutes an Unnecessary Waste of Judicial Resources,

and Creates the Risk of Developing Conflicting Legal Review

Standards.

One of the principal goals of the Act was prompt implementa-

tion of national efforts directed at improving water quality and

preventing water pollution through nationally-imposed standards.

Uniformity of application, with appropriate variances, can only

be achieved by a centralized review system designed to foster

such results, which Congress intended and created. The opinion

below does nothing to advance those goals and objectives; rather

it will result in inordinate delays and an inefficient utilization of

judicial resources, to say nothing of the potential conflict and

confusion in the application of legal standards which it generates.

For example, it is clearly apparent ‘that delay and waste of

judicial resources will result from inter- and intra-circuit con-

flicts concerning jurisdiction to review EPA permit or variance

vetoes. Given the jursidictional uncertainty now present, future

petitioners will be clearly compelled to file precautionary, con-

current petitions in both the district courts and the courts of

appeals, rather than risk losing the right to review through an

improvident choice of forum. Jurisdiction will be contested in

each case regardless of where it is filed. Moreover, the choice to

petition for review in district court may well preclude a later

petition to the court of appeals, since 33 U.S.C. § 1369(b) (1)

requires that all appeals to the courts of appeals be filed within

90 days of the Administrator’s action. Conversely, EPA actions

reviewable under 33 U.S.C. § 1369(b) (1) cannot be challenged

in an enforcement proceeding in the district courts. 33 U.S.C.

§ 1369(b) (2). Thus, an unsuccessful choice of forum may be

fatal to a petition for review. The lesson to counsel will be clear

~~ file early, file often, and contest jurisdiction at all stages - -

scarcely conducive to the goals intended by Congress.

23

The delay created by the opinion below, and its potential for

delay in other circuits, is best evidenced by this case. Having spent

over three years in developing an administrative record which

supports the unanimous state decision to issue permits to petition-

ers with variances and two years in the court of appeals awaiting

a decision on the merits, after full briefing and argument, peti-

tioners are now relegated back to the district court for initial

review. They are faced with the further prospect of a subsequent

review petition being filed in the Ninth Circuit with respect to a

future district court opinion on the same issues which could

be decided now by the Ninth Circuit. Sound judicial utilization

of resources requires the restoration of the efficiencies discarded

in the decision below.

The decision in this case also reflects a disturbing trend on the

part of some courts of appeals to strain to find some theory,

without basis in statute, which will avoid congressionally-man-

dated direct review of environmental cases. For example, the Fifth

Circuit in PPG Industries, Inc. v. Harrison, 587 F.2d 237 (Sth

Cir. 1979), cert. granted 48 U.S.L.W. 3186 (1979),, refused to

accept direct jurisdiction of a petition to review final EPA action

under the Clean Air Act. By its grant of certiorari in the Harrison

case on October 1, 1979, this Court recognized the importance of

the jurisdictional issue in environmental cases. Original court of

appeals review of EPA permit actions is provided in both the

Clean Air Act and the Federal Water Pollution Control Act.

Compare 42 U.S.C. § 7607(b) (1) with 33 U.S.C. § 1369(b) (1).

The goals of such direct review, which include prompt and uniform

resolution of environmental requirements, are identical under

both Acts. Thus, the same interests that argued for Supreme

Court review in the Harrison case apply equally in this case. Con-

gress established a clear review scheme under which pre-enforce-

ment actions are reviewed in the courts of appeals and enforce-

24

ment actions brought in the district courts. The opinion below

destroys that scheme. Accordingly, a clear set of jurisdictional

rules is imperative if review of environmental decisions is to pro-

ceed in a prompt and consistent manner.

CONCLUSION

The petition for a writ of certiorari should be granted.

Respectfully submitted,

W. REECE BADER

JACK B. OWENS

ALAN C. WALTNER

OrRICK, HERRINGTON, ROWLEY &

SUTCLIFFE

Attorneys for Petitioner

Crown Simpson Pulp Company

PAUL R. HAERLE

JosEPH A. DARRELL

THELEN, MARRIN, JOHNSON & BRIDGES

Attorneys for Petitioner

Louisiana-Pacific Corporation

November 21, 1979

Appendix A

In the

United States Court of Appeals

For the Ninth Circuit

CROWN SIMPSON PULP COMPANY,

Petitioner,

vs.

Douctas M. CostLe (formerly Russell E. No. 76-3161

Train), As Administrator, Environmental

Protection Agency,

| Respondent.

LOUISIANA-PACIFIC CORPORATION,

Petitioner,

vs.

Douc as M. Coste (formerly Russell E. No. 76-3287

Train), As Administrator, Environmental

Protection Agency,

Respondent.

CROWN SIMPSON PULP COMPANY and

LOUISIANA-PACIFIC CORPORATION,

Petitioners,

vs. No. 77-3322

Doucras M. Costie, As Administrator, OPINICN

Environmental Protection Agency,

Respondent.

Petitions to Review Decisions of the

Environmental Protection Agency

Before: DUNIWAY and CHOY, Circuit Judges,

and RENFREW,* District Judge

*The Honorable Charles B. Renfrew, United States District Judge for the

Northern District of California, sitting by designation.

2 Appendix

DUNIWAY, Circuit Judge:

Petitioners Crown Simpson Pulp Company and Louisiana-

Pacific Corporation petition for review of respondent Administra-

tor's action in vetoing pollutant discharge permits that the Cali-

fornia State Water Resources Control Board proposed to issue

to petitioners pursuant to § 402(b) of the Federal Water Pollu-

tion Control Act Amendments of 1972 (“the Act’), 33 U.S.C.

§ 1342(b). (Unless otherwise indicated, all citations to statutory

sections are to sections of the Act as they appear in 33 U.S.C.)

We dismiss the petitions for lack of jurisdiction.

I. BACKGROUND

Petitioners operate two bleached kraft pulp mills located on

the Pacific coast near Eureka, California, and those mills dis-

charge pollutants into the Pacific Ocean.

Acting pursuant to § 1311, the Administrator of the United

States Environmental Protection Agency (‘the EPA”) has promul-

gated revised nationally applicable regulations limiting the

amounts of pollutants that different types of bleached kraft pulp,

paper, and paperboard mills may discharge into navigable waters.

See 40 C.F.R. part 430, subparts F-I. His authority to issue such

regulations was upheld by the Supreme Court in E. I. Du Pont de

Nemours & Co. v. Train, 1977, 430 U.S. 112, 136, 97 S. Ct. 965,

51 L.Ed. 2d 204. See also Weyerhaeuser Co. v. Costle, D.C. 1978,

191 U.S. App. 309, 590 F.2d 1011. The regulations provide that

a discharger may obtain a variance from these effluent limitations

if it can show that

factors relating to the equipment or facilities involved, the

process applied or other such factors related to such dis-

charger are fundamentally different from the factors con-

sidered in the establishment of the guidelines.

See, e.g., 40 C.F.R. § § 430.62, 430.72, 430.82, 430.92.

The EPA uses a permit system to enforce the effluent limitations.

An industrial discharger must obtain a National Pollutant Dis-

Ap pendix 3

charge Elimination System permit if it wishes to continue releasing

pollutants into navigable waters. See § 1342; Shell Oil Co. v.

Train, 9 Cir., 1978, 585 F.2d 408, 410. It can obtain a permit only

if it either can comply with the national effluent limitations or get

a variance,

In some states, the EPA itself approves all permit applications.

See § 1342(a). In other states, such as California, the EPA shares

its permit granting authority with state officials pursuant to

§ 1342(b). In such states, state officials initially review a discharg-

er's permit application. If they believe that an applicant qualifies,

they notify the Administrator of the EPA that they propose to

issue a permit. See § 1342(d)(1). The state officials may then

issue the permit unless the Administrator objects in writing within

ninety days on the ground that the permit falls “outside the

guidelines and requirements of . . . Chapter [26],” the “Water

Pollution Prevention and Control” portion of the Act. See

§ 1342(d) (2). This power to object in writing gives the EPA

Administrator a power to veto permits that state officials propose

to issue. See E. I. Du Pont de Nemours & Co. v. Train, supra,

430 US. at 119, n. 7; State of Washington v. United States Envi-

ronmental Protection Agency, (Scott Paper), 9 Cir., 1978, 573

F.2d 583, 586; Shel] Oil Co. v. Train, supra, 585 F.2d at 410. If

a state does not resubmit an objected to permit, “revised to meet

such objection,” within certain time limits, the Administrator may

himself issue a permit under § 1342(a), as if the applicant oper-

ated in a state which had not been authorized to issue permits.

See § 1342(d) (4).

In these cases, the California Regional Water Resources Board,

North Coast Region, first proposed to issue permits to petitioners

on August 26, 1976. The permit did not follow the EPA’s national

effluent limitations. On September 3, 1976, the Director of EPA’s

4 Appendix

Region IX Enforcement Division’ vetoed the permits because they

did not require petitioners to achieve “effluent limitations based

upon {the} best practicable control technology currently avail-

able” as required by § 1311(b)(1)(A). Petitioners then sought

direct review of the Director's veto in this court in Nos. 76-3161

and 76-3287.

On March 17, 1977, the California State Water Resources Con-

trol Board (‘the Board”) granted the requested variances sub-

ject to the approval of the Administrator, and proposed to issue

permits based upon those variances. The proposed permits would

have allowed the companies to discharge wastes far in excess of

the national effluent limitations. On September 15, 1977, the EPA

Administrator vetoed the permits because they excused the com-

panies from using the ‘best practicable control technology cur-

rently available” as required by the Act. In the EPA’s view, this

deficiency placed the permits “outside the guidelines and require-

ments of [the Act}” within the meaning of § 1342(d) (2). The

Administrator's decision is reported as In re Louisiana-Pacific,

1977, 10 E.R.C. 1841. Crown Simpson and Louisiana-Pacific then

petitioned this court in No. 77-3322 to overturn the Administra-

tor’s refusal to approve the state proposed variances.

II. JURISDICTION

Petitioners argue that we have jurisdiction under either sub-

section (E) or subsection (F) of § 1369(b) (1). The EPA does

not argue for jurisdiction under subsection (F), but joins Peti-

tioners in urging us to find jurisdiction under subsection (E).

We conclude that we cannot exercise jurisdiction under either sub-

section (E) or subsection (F), and we dismiss the petitions for

lack of jurisdiction.

1. The Administrator delegated his veto power to his regional adminis-

trators and directors of enforcement pursuant to 40 C.F.R. §§ 125.5 (a)

(4) and 125.5(c). See Scott Paper, supra, 573 F.2d at 585, n.3. In this

opinion, we treat their actions as the Administrator’s.

Appendix 5

Section 1369(b) (1) specifies the six circumstances under which

“Review of the Administrator’s action .. . may be had . . . in the

Circuit Court of Appeals... .” Two of them are

action...

(E) in approving or promulgating any effluent limitation or

other limitation under section 1311, 1312, or 1316 of this

title, and (F) in issuing or denying any permit under section

1342 of this title... .

As we noted in Pacific Legal Foundation v. Costle, 9 Cir., 1978,

586 F.2d 650, 654, the courts of appeals have “strictly construed”

these direct review provisions.

A. Subsection (E)

Subsection (E) applies to an “[action] in approving or promul-

gating any effluent limitation or other limitation under section

1311, 1312, or 1316,” These requirements are not satisfied here.

The Administrator did not “approve” or “promulgate” any-

thing. Instead, he rejected a permit proposed by the California

Board. And his action was with respect to a permit based upon a

questionable variance, not an approval or promulgation of an

effluent limitation or other limitation.

Petitioners advance two basic arguments. First, they say that

the two vetoes are the functional equivalent of a newly promul-

gated, generalized regulation governing the granting of variances,

and that if the Administrator had formally promulgated such a

generalized variance regulation, it would have been directly re-

viewable by the court of appeals as an “effluent limitation or other

limitation” under subsection (E). We can agree that a generalized

variance regulation would be an “effluent limitation or other

limitation” within the meaning of subsection (E) and thus be

directly reviewable in the court of appeals.? See Natural Resources

2. The variance clause set forth in the regulations is a reviewable

effluent limitation. In fact, petitioner Crown Simpson filed a timely appli-

cation with this court pursuant to subsection (E), to set aside the pulp

6 Appendix

Defense Council, Inc. v. E.P.A., 2 Cit., 1976, 537 F.2d 642, 644-45.

We cannot, however, accept the premise that the Administrator's

vetoing of the two permits was tantamount to the promulgation

of a new variance regulation.

We have before us not the establishment of new regulations

through an irregular procedure, but simply two individualized

adjudications to determine the proper application of already

promulgated effluent limitation regulations covering the entire

industry. As such, the individualized adjudications are directly

reviewable, if at all, only under subsection (F) which provides

for direct review of Administrator action granting or denying

individual permits.

Recent cases involving EPA Water Pollution Control Act regu-

lations illustrate this dichotomy. Where polluters have challenged

the validity of regulations, the Supreme Court and the courts of

appeals have based jurisdiction upon subsection (E). See, e.g.,

E. I. Du Pont de Nemours v. Train, supra, 430 US. at 115, 124-

25, 136, 97 S. Ct. 956; Virginia Electric & Power Co. v. Costle, 4

Cir., 1977, 566 F.2d 446, 447, 449-50; American Paper Ins. v.

Train, 1976, 177 U.S. App. D.C. 181, 189-90; 543 F.2d 328,

336-37; American Petroleum Inst. v. E.P.A., 10 Cir., 1976, 540

F.2d 1023, 1026; Natural Resources Defense Council, Inc. v.

E.P.A., supra, 537 F.2d at 645; Hoker Chemicals & Plastics

industry effluent limitation regulations including the variance clause whose

application is at issue here. That generalized challenge to the regulations

was eventually transferred to the District of Columbia Circuit which upheld

the regulations, including the variance clause. See Weyerhaeuser Co. v.

Costle, supra, 191 U.S. App. D.C. at 320, 329-339, 590 F.2d at 1022,

1031-1041.

Weyerhaeuser left open the possibility of a subsequent challenge to the

variance clause as applied. 590 F.2d at 1033, n.29. We agree that an

applicant may raise a challenge to a variance regulation as applied as part

of a petition to review an Administrator's veto of a permit based upon a

proposed but rejected variance. However, we hold, infra, that veto of a

state permit is not directly reviewable in this court, but rather is reviewable

in the district court. Thus a challenge to a variance regulation as applied

in such a case must await a properly brought action in the district court

challenging the veto of the permit which contained the variance.

Appendix 7

Corp. v. Train, 2 Cir., 1976, 537 F.2d 620, 622, 624, 628;

American Meat Institute v. E.P.A., 7 Cir., 1975, 526 F.2d

442, 444, 452; American Petroleum Inst. v. Train, 10 Cir.,

1975, 526 F.2d 1343, 1345. In contrast, where permit applicants

have challenged individual applications of EPA regulations, the

courts of appeals have looked to subsection (F) as the possible

jurisdictional basis for direct review. See, e.g., Republic Steel

Corp. v. Costle, 6 Cir., 1978, 581 F.2d 1228, 1230, n.1; Ford

Motor Co. v. E.P.A., 6 Cir., 1977, 567 F.2d 661, 668; Bethlehem

Steel Corp. v. Train, 3 Cir., 1976, 544 F.2d 657, 660; Sun Enter-

prises, Ltd. v. Train, 2 Cir., 1976, 532 F.2d 280, 284, 287. See

also Diamond Shamrock Corp. v. Costle, 1978, 188 U.S. App. D.C.

407, 410, 580 F.2d 670, 673; American Petroleum Inst. v. E.P.A.,

supra, 540 F.2d at 1026, 1030, 1033. It is true that the vetoes pro-

vide a basis for predicting whether the Administrator will veto

similar permits in future cases, but almost all administrative

decisions have a generalized prospective effect to this extent.

Petitioners also argue that when the Administrator exercised his

veto power he did not merely reject a permit because of a dubious

variance, but rejected an “effluent limitation” within the meaning

of subsection (E). Petitioners rely upon the variance clause in

the regulation to convince us that we should equate state granted

permits based upon variances with subsection (E) effluent limita-

tions. The clause states:

On the basis of such evidence or other available information,

the Regional Administrator (or the State) will make a

written finding that such factors are or are not fundamentally

different for that facility compared to those specified in the

Development Document. If such factors are found to exist,

the Regional Administrator or the State shall establish for

the discharger effluent limitations in the NPDES permit

either more or less stringent than the limitations established

8 Appendix

herein to the extent dictated by such fundamentally different

factors. 40 C.F.R. § 430.72 (emphasis added) .*

While the regulation does appear to support petitioners’ argu-

ment, we cannot accept their analysis for two reasons. First, even

if a permit based upon a variance amounted to a subsection (E)

“effluent limitation,’’ subsection (E) requires ‘administrator's ac-

tion . . . approving or promulgating” an effluent limitation. Here

the Administrator rejected the alleged effluent limitation. .

Second, despite the isolated language of the regulation, a permit

based upon a variance is simply not an “effluent limitation or

other limitation under sections 1311, 1312, or 1316” within the

meaning of subsection (E). A variance does serve to limit the

discharge of effluents. However, the phrase “effluent limitation . . .

under section 1311, 1312 or 1316” is a term of art in the context

of the Federal Water Pollution Control Act Amendments, Such

an effluent limitation is a set of standards restricting the quan-

tities of pollutants that enterprises in a given industry may dis-

charge. See, e.g., E. I. Du Pont de Nemours & Co. v. Train, supra,

430 US. 112, 126-137, 97 S. Ct. 965, 51 L.Ed. 2d 204; Scott

Paper, supra, 573 F.2d at 591-92; Natural Resources Defense

Council, Inc. v. E.P.A., supra, 537 F.2d at 645; S. Rep. No. 92-

414, 92nd Cong., 1st Sess. 50-51 (1971) U.S. Code Cong. &

Admin. News 1972, p. 3668 reprinted in Senate Committee on

Public Works, A Legislative History of the Water Pollution

3. The variance clause also provides that

Such limitations must be approved by the Administrator of the Envi-

ronmental Protection Agency. The Administrator may approve or

disapprove such limitations, specify other limitations or initiate pro-

ceedings to revise these regulations.

(emphasis added)

Here, the Administrator has not taken the initiative to “specify other limi-

tations” by himself granting a less lenient variance. We thus need not

decide whether the direct granting of such an alternative variance would

be directly reviewable under subsection (E) as a limitation pursuant to

§ 1311(c).

Appendix 9

Control Act Amendments of 1972, 93d Cong., 1st Sess. 1468-1469

(1973) (hereafter “Leg. Hist.”). Most factories and other point

sources within a sub-category of an industry employ similar

industrial processes, and so are generally able to limit their dis-

charges to amounts which fall within those effluent limitations

by adopting the best practically available pollution control tech-

nology. As the Supreme Court phrased it in E. I. Du Pont de

Nemours & Co. v. Train, supra, effluent limitations are sets

of “regulations setting forth uniform effluent limitations for

categories of plants.” 430 U.S. at 136, 97 S. Ct. at 979.

Because such generalized effluent limitations may affect dozens

or even hundreds of plants, it is understandable that Congress

made the approval or promulgation of such effluent limitations

directly reviewable in the courts of appeals. See Virginia Electric

& Power Co. v. Costle, supra, 566 F.2d at 451. The two permits

and variances at issue here have no similarly far reaching impli-

cations. Petitioners themselves assert that their two mills are the

only bleached kraft pulp mills in the United States which dis-

charge into open ocean waters, and argue that the proposed vari-

ances are valid for that reason. Petitioners’ brief at 9.

In arguing that the rejections of the proposed variances did

establish effluent limitations, petitioners correctly point out that

the Administrator in part derives his power to approve and reject

state proposed variances from his own implied authority to issue

variances from the 1977 as well as the 1983 effluent limitations.

His authority to issue variances from the 1977 limitations in turn

is based in part upon his authority to promulgate effluent guide-

lines and limitations pursuant to sections 1311 and 1314, See du

Pont, supra, 430 U.S. at 128, 97 S. Ct. 965; Weyerhaeuser, supra,

590 F.2d at 1031-1032.

Nevertheless, the fact that the Administrator's power to reject

state proposed variances ultimately derives in part from his power

to promulgate effluent limitations does not transform his rejection

10 Ap pendix

of state proposed variances for particular plants into the promul-

gation of effluent limitations. Subsection (E) provides for direct

review of the promulgation of effluent limitations, not for direct

review of all of the Administrator’s actions that may in any way

be dependent upon the Administrator’s power to promulgate such

limitations.

The very idea of a variance also cuts against treating a permit

based on a variance as establishing a new effluent limitation rather

than simply an exception to an existing limitation. In another

context, the District of Columbia Circuit broadly analogized one

of the Act’s variance provisions to the variance clauses typically

contained in local zoning ordinances. See Weyerhaeuser, supra,

590 F.2d at 1034, n.31. When a town board grants an individual

zoning variance, that does not mean that it establishes a new

zoning ordinance. When an effluent permit issuing authority grants

a variance, it does no more than vary the application of an other-

wise uniform effluent limitation.

Because the Administrator has not here promulgated or

approved any effluent limitation or other limitation under § 1311,

§ 1312, or § 1316, direct review is not available in this court pur-

suant to subsection (E) of § 1369(b)(1).4 But cf. Weyerhaeuser

v. Costle, supra, 590 F.2d at 1033, n.29.

B. Subsection (F).

Subsection (F) of § 1369(b) (1) provides for direct review in

the courts of appeals of an EPA Administrator’s action “in issuing

or denying any permit under Section 1342 of this title... .” In

4. We are aware that the language of the second paragraph of Part II

of the Supreme Court’s opinion in du Pont, supra, may suggest that if the

Administrator grants or denies a variance under § 1311(c), his action is

reviewable in the court of appeals under subsection (E), as the “approving

or promulgating [of an} . . . other limitation under section 301... .” See

430 U.S. at 136, 97 S. Ct. at 979. In part II (B) of this opinion infra,

we explain why we do not equate an Administrator's action in vetoing or

failing to object to a state proposed permit with the Administrator’s grant

Ap pendix 11

states where the EPA itself grants all permits, subsection (F)

unquestionably provides for direct review. However, petitioners

operate their mills in California, and as we have seen, California

has received the Administrator's approval to administer its own

permit issuance program pursuant to § 1342 (b). That provision

thus limited the Administrator's role in this case to vetoing the

permit by objecting to it in writing within the ninety days, or

doing nothing for ninety days, in which case the state could pro-

ceed to issue the permit, or waiving the ninety-day objection period,

thus enabling the state to issue the permit immediately. See § 1342

(4) (3).

In the cases at bar, the Administrator took the position that all

vatiances required his express approval. He then refused to

approve the state proposed variances on their merits, and conse-

quently objected to the permits. Petitioners argue that the Admin-

istrator’s course of conduct thus constituted “action . . . denying

{a} permit” within the meaning of subsection (F), because his

actions prevented the state from issuing the permits. In Sco#t

Paper, supra, we rejected precisely this argument. There, the

Administrator vetoed a discharge permit issued to another pulp

and paper company by a Washington state agency because the -

permit did not require the “best practicable control technology

currently available,” 573 F.2d at 587. Like the California Board,

the Washington state agency had been authorized to administer

the permit granting program for the state of Washington pur-

or denial of a permit within the meaning of § 1369(b)(1)(F). For the

same reasons, we would not equate an Administrator's action in approv-

ing, rejecting, or failing to object to a state proposed variance with grant-

ing or denying a variance within the meaning of §1311(c). In the

absence of any direct granting or denying under § 1311(c), the possible

reviewability of the Administrator’s action under that section cannot: pro-

vide us with subsection (E) jurisdiction to reach the merits. But see Shell

Oil Co. v. Train, supra, 585 F.2d at 412 (dictum). In any event,

§ 1311(c) only applies to permit applications ‘filed after July 1, 1977.”

Petitioners’ applications were filed with the California Water Resources

Control Board in 1976.

12 Appendix

suant to § 1342(b). On the basis of the “clear and unmistakable”

language of the statute, 573 F.2d at 587, we held that subsection

(F) “is limited to the Administrator and to his own action in

issuing or denying a permit, not to his objection to a state’s action

in doing so.” 573 F.2d at 586. We held that the Administrator’s

limited involvement did not give rise to an agency relationship

sufficient to bring the Administrator's actions within the “issuing

or denying” clause of subsection (F). Ibid; Accord, Shell Oil Co.

v. Train, supra, 583 F.2d at 412. Our Scott Paper decision is

directly in point, and controls our decision here, and we hold that

we do not have jurisdiction to review the Administrator's action

purszant to § 1369(b) (1). Cf. also Save the Bay, Inc. v. Adminis-

trator of the Environmental Protection Agency, 5 Cit., 1977, 556

F.2d 1282, 1290-1292. But see Shell Oil Co. v. Train, supra, 585

F.2d at 412 (dicta).

We decline to ask the court to take this case in banc to consider

overruling Scott Paper. The Sixth Circuit’s recent opinion in

Republic Steel Corp. v. Costle, supra, 581 F.2d at 1230, n.1, has

not persuaded us that Scott Paper was wrongly decided. The case

simply included a footnote which acknowledged the holding of

Scott Paper, and announced that the Sixth Circuit would continue

to follow its earlier decision in Ford Motor Co. v. E.P.A., supra,

567 F.2d at 668.

Decided before Scott Paper, Ford Motor Company explained

that the factual record in that case “‘ha[d]} been sufficiently devel-

oped” to enable the circuit court to “review adequately the action

of [the} E.P.A.” in objecting to a state issued permit modification.

567 F.2d at 661, 668. The Fifth Circuit had earlier relied upon

the inadequacy of an administrative record in refusing to hear

direct petitions under subsection (F) in cases where the record

contained no more than the absence of any objection on the part

of the Administrator, and thus did not ‘“‘reveal what factors were

considered by E.P.A. in determining not to object... .” Save the

Bay, Inc. v. Administrator of E.P.A., supra, 556 F.2d at 1292.

RC

Appendix 13

We need not, and do not, evaluate the adequacy of the admin-

istrative record in the cases before us, because Scott Paper did not

hold that this court lacked jurisdiction because of the absence of

a record. Rather, it relied upon the language of subsection (F)

which it read as requiring the Administrator himself to have issued

or denied the permit. While the impossibility of meaningful direct

review does weigh decisively against construing a statute as dis-

pensing with initial district court consideration, the mere feasi-

bility of direct review by itself provides little warrant for disre-

garding the otherwise plain language of the jurisdictional statute.

In Mianus River Preservation Commission v, EPA, 2 Cir., 1976,

541 F.2d 899, 909, the Second Circuit held itself without jurisdic-

tion under subsection (F) to review the Administrator's failure

to object to a state proposed permit. It based that decision on its

view that a failure to object does not constitute an “‘Administrator’s

action” within the meaning of the direct review provision. In

dicta, it did go on to state that a § 1342(d)(2)(B) objection

“would clearly be subject to review as ‘Administrator’s action.’ ”

541 F.2d at 909. We fully agree that the Administrator's vetoes

in the cases before us amount to ‘““Administrator’s action” within

the meaning of the opening phrase of § 1369(b) (1). However,

as discussed above, only six categories of ‘‘Administrator’s action”’

are subject to direct review. We simply do not believe that the

Administrator's objections equal “denying [a} permit’ within the

meaning of subsection (F). Because the Méanus dicta did not

address this second question, it cannot persuade us that Scott Paper

was wrongly decided.

Our decision does not leave petitioners without a federal forum

in which to challenge the Administrator’s veto. Under Scott Paper,

supra, the district court would have jurisdiction to hear such a

challenge. See 573 F.2d at 587-88.

5. Scott Paper appears to have held district court jurisdiction available

under Section 10 of the Administrative Procedure Act, 5 U.S.C. §§ 701-

706. See 573 F.2d at 588, 590. While Califano v, Sanders, 1977, 430 US.

14 Appendix

We recognize that under our decisions, whether a disappointed

permit applicant must seek judicial review in the district court or

in the court of appeals will depend upon whether the applicant

operates in a state which has taken on primary permit issuing

responsibility under § 1342(b). It does not strike us as at all incon-

gruous that Congress would limit our direct review to states in

which the EPA alone handles the permit process.

The administration of the Act has already required the process-

ing of over 42,000 permit applications. See du Pont, supra, 430

U.S. at 132, 97 S. Ct. 965. Because each application raises the

possibility of a separate lawsuit, it seems quite reasonable that

Congress may have intended to divide the burden of this potentially

staggering new caseload between the district courts and the courts

of appeals. Compare du Pont, supra, 430 US. at 127-28, n. 18,

97 S. Ct. 965.

Nor will our decision undercut Congress’ intention “. . . that

the discharge of pollutants into the navigable waters be elim-

inated . . .” as quickly as possible. See § 1251(a). We do antic-

ipate that some district court decisions upholding vetoes of state

proposed permits will be appealed to this court pursuant to 28

USS.C. § 1291. It is thus fair to say that our decision will create

a second level of review. Nevertheless, this second level of review

will not automatically lead to further delays in the implementation

of effluent limitations, if we give careful attention to Congress’

sense of urgency when passing upon applications for stays pending

appeal.

99, 97 S. Ct. 980, 51 L.Ed. 2d 192, held that the APA is not an implied

grant of federal subject matter jurisdiction, the Scott Paper rationale just

as strongly supports holding jurisdiction available under 28 U.S.C.

§ 1331(a). See Andrus v. Charlestone Stone Products Co., 1978, 436

U.S. 604, 607-608 n. 6, 98 S.Ct. 2002, 56 L.Ed. 2d 570; Laden v. Andrus,

9 Cir., 1978, 595 F.2d 482, 484 (1979). See also Shell Oil Co. v. Train,

Supra, 585 F.2d at 419-20 (dissenting opinion).

Appendix 15

Because we lack subject matter jurisdiction, we dismiss the peti-

tions for review.

Crown Simpson Pulp Company v. Costle—Nos. 76-3161,

76-3287 and 77-3322 RENFREW, District Judge (Con-

curring)

I concur. I am in total agreement that subsection (E) of 33

USS.C. § 1369(b) (1) does not give this Court jurisdiction. Judge

Duniway’s thoughtful analysis makes this result abundantly clear.

In addition, I agree that the question of our jurisdiction under

subsection (F) is controlled by Scott Paper. However, I believe

that that case was wrongly decided, and I therefore urge the Court

to take the present case en banc to consider overruling Scott Paper.

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

the courts of appeals with jurisdiction to review the action of the

Administrator “in issuing or denying any [NPDES] permit’’. In

those states that do not administer their own NPDES permit sys-

tem pursuant to 33 U.S.C. § 1342(b) this provision is easily ap-

plied. Since the Administrator is directly responsible for issuing

or denying the requested permits, his action, whether affirmative

or negative, is immediately subject to review by the courts of

appeals. However, in states such as California and Washington

that have received EPA approval to administer their own NPDES

programs, application of subsection (F) is not as clear. In those

states the Administrator does not issue or deny permits directly.

Rather, he either “objects in writing to the issuance of such

permit,” or, by his inaction for a period of 90 days, approves

the state’s issuance. 33 U.S.C. § 1342(d) (2) (B).

The issue in Scott Paper, as in the case before us, was whether

the EPA Administrator’s written objection to a state-issued permit

constituted “action * * * denying any permit” under subsection

(F). The Court in Scott Paper held that it did not. I do not be-

lieve this was the proper result.

16 Appendix

One of Congress’ stated goals in enacting the Federal Water

Pollution Control Act was to eliminate the discharge of pol-

lutants into this country’s navigable waters by 1985. See 33 U.S.C.

§ 1251(a) (1). Recognizing that a two-tiered level of judicial

review might threaten realization of this goal, Congress vested

the courts of appeals with jurisdiction to review many of the

actions of the Administrator directly. As the Court of Appeals

for the Second Circuit has noted:

“The fact that judicial review of the actions covered by

§ 1369(b) (1) is in the Court of Appeals in the first instance

evidences a purpose, inter alia, to save procedural steps and

time. After the EPA has completed its administrative pro-

ceeding and either denied or issued a permit, to allow chal-

lenges to its jurisdiction then to be heard first in the district

court would merely cause duplication and delay.” Central

Hudson Gas, Etc. v. United States E.P.A., 587 F.2d 549, 557

(2d Cir. 1978) (footnote omitted).

See also DuPont v. Train, 528 F.2d 1136, 1141-1142 (4th Cir.

1975) aff'd, 430 U.S. 112, 97 S. Ct. 965, 51 L.Ed. 2d 204 (1977).

Congress’ goal of ensuring prompt resolution of challenges

to the Administrator's actions can best be realized by interpreting

“denying [a] permit” to include “object{ing} in writing.” This

result would be consistent with Congressional goals. It would

vest the courts of appeals with jurisdiction over the Adminis-

trator’s ‘‘vetoes’’ in states that administer their own NPDES per-

mit programs as well as in states that do not. Moreover, it would

recognize that the functional effect of an administrative veto is

that the requested NPDES permit is denied. See 33 U.S.C. § 1342

(d) (2) (B) (“No permit shall issue * * * if the Administrator

objects in writing * * *.”) (emphasis added).

Of course, it would not be appropriate to vest jurisdiction in the

courts of appeals if the administrative record resulting from the

Administrator’s action were insufficient or inadequate for review.

Appendix 17

However, while the incompleteness of the record might be a

reason for withholding jurisdiction from the courts of appeals

over cases in which the Administrator approved a state-issued

permit—a process that requires no more than silent acquiescence

for the 90-day statutory period—it is not a reason for withholding

jurisdiction over cases in which the Administrator filed a written

objection to a state-issued permit. The administrative record is

more complete, and therefore more susceptible to appellate re-

view, in the latter group of cases."

1. Once the Administrator files his written objection, the administra-

tive record is certainly sufficient for the courts of appeals to review. At a

minimum, it contains a copy of the proposed permit, a

“statement of the reasons for the objection (including the section of

the Act or regulations that support the objection) , and

“A statement of the} actions that must be taken by the Director

in order to eliminate the objection (including the effluent limitations

and conditions which the permit would include if it were issued by

the Regional Administrator).” 40 C.F.R. §§ 124.47(a), 124.48(a)

(2).

Also, unless the Regional Administrator of the EPA expressly waives his

right to receive the following information pursuant to 40 C.F.R. § 124.47

(e), the administrative record will contain

“all terms, conditions, requirements or documents that are a part of

any proposed permit or that affect the authorization by the proposed

permit of the discharge of pollutants [as well as} a copy of any sig-

nificant comments presented in writing pursuant to the public notice

and a summary of any significant comments presented at any hearing,

for any NPDES application if:

“(1) The Regional Administrator requests this information; or

(2) The proposed permit contains requirements different from

or less stringent than those contained in the tentative determination

and draft permit; or

(3) Significant comments adverse to the tentative determination

and draft permit have been preseated at the hearing or in writing

pursuant to the public notice.” 40 C.F.R. § 124.47(b), (c).

Moreover,

“Tf }or every discharge which has a total volume of more than 500,000

gallons on any day of the year, [the administrative record will con-

tain a fact sheet}. The contents of such fact sheets shall include at

least the following information * * *:

“(1) A sketch or detailed description of the location of the dis-

charge described in the NPDES application;

18 Appendix

The two cases relied upon by this Court in Scott Paper support

this position.? In Save the Bay, Inc. v. Administrator of E.P.A.,

556 F.2d 1282 (Sth Cir.) , rehearing denied, 560 F.2d 1023 (1977),

the Fifth Circuit held that it had no jurisdiction under subsection

(F) to review the Administrator's failure to object to a state-

issued permit. In reaching this conclusion, the Court was influ-

enced by the inadequacy of the administrative record.

“The administrative record here is wholly inadequate to

reveal what factors were considered by EPA in determining

not to object * * *, * * * When Congress has vested this

court with original review, it generally has done so in rela-

“(2) A a aa description of the discharge described in the

NPDES application which includes at least the following:

“(i) The rate or frequency of the om ete discharge; if the dis-

charge is continuous, the average daily flow in gallons per day or

million gallons per day;

“(ii) For thermal discharges subject to limitation under the Act,

the average summer and winter temperatures in degrees Fahrenheit;

and

“(iii) The average daily discharge in pounds per day of any pol-

lutants which are present in significant quantities or which are subject

to limitations cr prohibition under sections 301, 302, 306, or 307 of

the Act and cegulalibns published thereunder;

(3) The tentative determinations required under § 124.31;

“(4) A brief citation, including a brief identification of the uses

for which the receiving waters have been classified, of the water

uality standards and effluent standards and limitations applied to

e proposed discharge; and

“(5) A fuller description of the procedures for the formulation

of final determinations than that given in the public notice including:

“(i) The 30-day comment period seated by § 124.32(b);

“(ii) Procedures for requesting a public hearing and the nature

thereof; and

“(iii) Any other | erie se by which the public may participate

in the formulation of the final determinations.” 40 C.F.R. § 124.33;

see 40 C.F.R. § 124.48(c) (1).

Finally, if the Regional Administrator had been unable to decide whether

to object because the information before him was inadequate, he could have

supplemented the administrative record with “the complete record of the

permit proceedings before the State.” 40 C.F.R. § 124.48(c) (2).

2. See State of Washington v. United States Environmental Protection

Agency, 573 F.2d 583, 587 (9th Cir. 1978) (Scott Paper)

Appendix 19

tion to an administrative process that more easily lends

itself to production of a reviewable record.” 556 F.2d at

1292.

When the Administrator vetoes a state-issued permit, as in

Scott Paper and the case before us, however, he creates an admin-

istrative record. Therefore, the reasoning behind the Fifth Cir-

cuit’s opinion is not applicable. It is perhaps in recognition of

this distinction that the Court stated:

“We note that by our decision we suggest no answer to

the question whether a veto by EPA would be reviewable

directly in this Court.” 556 F.2d at 1292 n.13.

The Court of Appeals for the Second Circuit employed a simi-

lar analysis in Mianus River Pres. Comm. v. Administrator, 541

F.2d 899 (2nd Cir. 1976). Like the Court of Appeals for the

Fifth Circuit, it declined to assert subsection (F) jurisdiction over

the Administrator's failure to veto a state-issued permit. However,

it made even more explicit the distinction between inaction and

veto:

“Admittedly, had the Administrator exercised his right of

review and rejected the Water Company’s permit applica-

tion, that rejection would clearly be subject to review as

‘Administrator's action.”” 541 F.2d at 909 (footnote

omitted).

In addition to the cases cited in Scott Paper, I obtain support

for my position in two cases arising in the Sixth Circuit, Republic

Steel Corp. v. Costle, 581 F.2d 1228 (6th Cir. 1978), and Ford

Motor Co. v. E.P.A., 567 F.2d 661 (6th Cir. 1977). Both of these

cases specifically held that subsection (F) does vest the courts of

appeals with jurisdiction to review the Administratot’s written

objection to state-issued permits. In Ford Motor Cc., the court

indicated that one of its bases for decision was that “[t}he factual

record in this case has been sufficiently developed that this Court

20 Appendix

can review adequately the action of EPA.” 567 F.2d at 668. More-

over, in Republic Steel the court not cnly rejected the analysis in

Scott Paper, but also cited in support of its contrary result the

Mianus River decision discussed above. 581 F.2d at 1230 n.1.

Somewhat ironically, the Scott Paper decision itself underscores

the need for immediate appellate review of the Administrator's

vetoes of state-issued NPDES permits. In Scott Paper, after the

panel concluded that it lacked subject matter jurisdiction under

subsection (F) to review Scott Paper’s petition, 573 F.2d at 587,

it made the remarkable statement:

“Although we hold that the district court has jurisdiction

to entertain Scott’s challenge to the Administrator's objection

to the Anacortes permit, we need not, in light of the record

before us, remand the case for additional proceedings. That

course is made unnecessary by the presence of a dispositive

legal issue which we resolve in the interests of judicial econ-

omy. Cf. Save the Bay, Inc. v. Administrator of E.P.A., supra,

556 F.2d at 1292.” Id. at 588.

Considerations of ‘judicial economy” notwithstanding, it has long

been a fundamental principle of our federal system that a court

has no power to entertain a case where subject matter jurisdiction

is lacking. See e.g., Ex parte McCardle, 74 U.S. (7 Wall.) 506,

514, 19 L.Ed. 264 (1868) ; Sheldon v. Sill, 49 U.S. (8 How.) 441,

448, 450, 12 L.Ed. 1147 (1850); Turner v. President, Directors

and Co. of the Bank of North America, 4 Dallas 8, 11 (1799).

The willingness of the Court of Appeals to violate this principle

in Scott Paper not only lends’ credence to my conclusion that

appellate courts should dispose of petitions challenging the

Adminstrator’s vetoes, but it also demonstrates that the record

before them is sufficiently developed that they can do so.

Finally, I note that Shell Oil Co. v. Train, 585 F.2d 408 (9th

Cir. 1978), cited by Judge Duniway with a “But see” signal, is in

part contrary to the result reached by my colleagues. It therefore

Appendix 21

furnishes another ground for en banc review. The issue in Shell

Oil was whether the Court of Appeals had jurisdiction under sub-

section (F) to review the state regional board’s denial of an

NPDES permit. Shell had alleged that even though the denial was

by a state agency, that agency had been “caused” to deny the per-

mit by the EPA. However, the Court of Appeals held that Scott

Paper was not controlling because “Shell [had} not alleged an

actual veto by the EPA of the regional board’s decision.” 585 F.2d

at 413.

In the part of the opinion that supports the position I take here,

however, the Court focused on a second action brought by Shell to

challenge the regional board’s denial of its requested permit. In

addition to the federal suit then before the Court, Shell had

sought review of the regional board’s action by petitioning the

California State Water Resources Control Board. While the

federal action was pending in district court, the state board re-

versed the regional board and granted Shell a variance on its

Class E permit. The proposed variance was then transmitted to

the EPA Administrator pursuant to 33 U.S.C. § 1342(d), and

he vetoed it by filing a written objection. ‘That decision,”

the majority of the panel, “is reviewable in this court under 33

US.C. § 1369(b) (1).” 585 F.2d at 412. The only subsection of

§ 1369(b) (1) the Court could have been referring to was sub-

section (F). Thus, the dicta in Shel] Oil directly contradicts Scott

Paper and supports the position I have taken.

In conclusion, I urge the Court to reconsider Scott Paper by

taking the present case en banc. Because of the congressional de-

sire for speedy resolution of disputes under the Act, the need for

a consistent system of judicial review, the functional effect of the

Administrator's written objections, and the sufficiency of the ad-

ministrative record, I would find that the courts of appeals, rather

than the district courts, have initial jurisdiction to review the

Administrator's vetoes of state-issued NPDES permits.

wrote

22 Appendix

Appendix B

FILED

OCT 15 1979

RICHARD H. DEANE

Clerk, U.S. Court of Appeals

United States Court of Appeals

for the Ninth Circuit

CROWN SIMPSON PULP COMPANY;

LOUISIANA-PACIFIC CORPORATION,

Petitioners, {| Nos, 77-3322

vs. 76-3161

Douc.as M. Coste, as Administrator, 76-3287

Environmental Protection Agency,

Respondent. aiisipationds

Before: DUNIWAY and CHOY, Circuit Judges,

and RENFREW, District Judge

Judges Duniway and Choy vote to deny the petition for a

rehearing in these cases. Judge Renfrew votes to grant the

petition for a rehearing. The petition for a rehearing is denied.

The suggestion that a rehearing in banc be granted has been

submitted to all active members of the court and no judge has

asked that a vote be taken on the suggestion. The suggestion

of a rehearing in banc is rejected.

Appendix 23

Appendix C

FILED

OCT 24 1979

RICHARD H. DEANE

Clerk, U.S. Court of Appeals

United States Court of Appeals

for the Ninth Circuit

CROWN SIMPSON PULP COMPANY,

LOUISIANA-PACIFIC CORPORATION,

CROWN SIMPSON PULP CoMPANY and

LOUISIANA-PACIFIC CORPORATION,

Petitioners, Nos. 76-3161

vs. 76-3287

Douc tas M. CostTLe (formerly Russell E. 77-3322

Train) As Administrator, Environmental

Protection Agency, EPA REGION

Respondent. #9

ORDER STAYING ISSUANCE OF MANDATE

Upon application of W. Reece Bader, Esq., counsel for the peti-

tioners, and good cause appearing, IT IS ORDERED that the

issuance, under Rule 41(a) of the Federal Rules of Appellate

Procedure, of the certified copy of the judgment of this Court

in the above cause be and hereby is stayed pending the filing,

consideration and disposition by the Supreme Court of the United

States of a petition for writ of certiorari to be made by the peti-

tioners herein, provided such petition is filed in the Clerk’s Office

of the Supreme Court of the United States on or before Novem-

ber 21, 1979.

In the event the petition for writ of certiorari is granted, then

this stay is to continue pending the final disposition of the case

by the Supreme Court of the United States.

BEN. C. DUNTIWAY

United States Circuit Judge.

Judge Duniway

DATED: SAN FRANCISCO, CALIF.

October 24, 1979 |

24 Appendix

Appendix D

IN RE LOUISIANA-PACIFIC CORPORATION

Environmental Protection Agency

IN THE MATTERS OF LOUISIANA-PACIFIC CORPORA-

TION, NPDES NO. CA0005894 and CROWN SIMPSON

PULP COMPANY, NPDES NO. CA0005882, September 15,

1977

Two companies request variances from best practicable tech-

nology effluent limitations.

Requests denied.

Full Text of Opinion

Decision of the Administrator

I have been asked to consider the granting of variances from

effluent limitations guidelines for two pulp, paper, and paper-

board mills located on the Pacific Coast of California. The re-

quesis for variances are denied.

I. Procedural Background

On March 29, 1977, Mr. Bill B. Dendy, Executive Officer of

the State Water Resources Control Board for the State of Cali-

fornia, submitted extensive materials concerning the actions taken

before the California Regional Water Quality Control Board,

North Coast Region, and before the State Board itself, with

respect to these two mills. A list of the enclosures to that March

.

Appendix 25

29 letter appears in the margin.’ Mr. Dendy noted in his March

29 letter that the “‘state board finds that a variance is warranted

for the two dischargers . . . on the grounds that the environmental

benefits (if any) to be derived from the application of the treat-

ment required to meet the guideline limitations for BOD and

pH would be far outweighed by the non-water quality environ-

mental costs including use of energy.” Mr. Dendy went on to say

that he believes “that variance based on these grounds is in

accordance with the precedents established in the decisions of

several U.S. Court of Appeals, particularly the Fourth Circuit’s

decision of the case of Appalachian Power v. Train [545 F.2d

1351 [9 ERC 1033} (1973) }.”

On May 26, 1977 Mr. G. William Frick, EPA General Counsel,

issued a Recommended Decision of the Administrator which

recommended denial of the variance requests of the two com-

1. A. State Board Order No. WQ 77-6 (with exhibits thereto).

B. Transcript of hearing before the State Board, December 22, 1976.

C. Transcript of hearing before the Regional Board, July 29, 1976.

D. Transcript of hearing before the Regional Board, August 26, 1976.

E. “Written Comments on Tentative Orders” presented to the Regional

Board July 21, 1976.

F. “Request for Variance in EPA Limitations on the Basis of Funda-

mentally Different Factors” dated June 21, 1976.

G. Written Statement of Dr. Herman R. Amberg before the California

Regional Water Quality Control Board, North Coast Region, July 19, 1976.

H. “Written Comments on Tentative Wastes Discharge Orders” dated

December 1976.

I. Interoffice Memorandum from John R. Hannum to D.C. Joseph

and Gary Grimm dated December 13, 1976.

J. “Non-water Quality Environmental Impacts” calculation by Dr.

Amberg; presented at State Board Hearing, December 22, 1976.

K Letter from Dr. C. Edward ‘taylor to Mr. W. Don Maughan

dated January 13, 1977. :

The two companies have commented that this list does not include

certain documents which were before the State during its proceedings.

However, they do not argue that the documents are vital to this decision

nor have they taken the opportunity afforded by the notice and comment

procedure to make any such materials available to me. Under the circum.

stances, and given the purely legal nature of my decision, I see no need

to amplify the record.

26 Appendix

panies. 42 Fed. Reg. 28167-72 (June 2, 1977). The preamble to

the recommended decision advised that written comments on the

decision could be submitted and that all such comments received

by July 5, 1977 would be considered prior to issuance of a final

decision of the Administrator. Comments were timely filed by

Crown Simpson Pulp Company and Louisiana-Pacific Corporation

(joint submission), the law firm of Hunton & Williams (on

behalf of the Utilities Water Act Group and other petitioners in

Appalachian Power Co. v. Train), Southern California Edison

Company, East Bay Municipal Utility District and the National

Wildlife Federation.

In reviewing the submissions by the State of California and the

extensive materials, including legal briefs, submitted by the

Louisiana-Pacific Corporation and the Crown Simpson Pulp Com-

pany to the State as well as the comments on the recommended

decision, I have assumed for the purpose of the opinion as factu-

ally accurate the statements by the State and the industry as to

the essential nature of operations at these facilities, the water

quslity effects of the discharges, the energy impact, the cost of

application of the technology which would be required to meet

EPA’s national limitations, and other major relevant facts. The

Environmental Protection Agency has conducted no independent

review of the facts following the submission of the requests for

variances. In other words, the record of the State Board hearing

as submitted by Mr. Dendy with the addition of the Development

Document for the effluent limitations guidelines applicable to

these mills, constitutes the record which I have reviewed. While

the Development Document was not formally forwarded to me

as part of the record, I note that it is referred to repeatedly in

the various materials which are part of the record, including the

opinion and order of the State Board, and it is therefore properly

before me.

As I discuss in more detail below, the issues which are to be

resolved in these variance requests are solely legal, and do not

a eee

Appendix 27

require an independent analysis or weighing of facts. This is not

to say, however, that in other variance requests it would not be

appropriate to conduct factual reviews.”

The Crown Simpson Pulp Company and the Louisiana-Pacific

Corporation each operate bleached kraft pulp mills on the Samoa

Penninsula, on the west side of Humboldt Bay, near Eureka,

California. Louisiana-Pacific also operates a plywood mill at this

location. Each mill produces about 600 air dry tons per day of

bleached kraft pulp; the Louisiana-Pacific saw mill also produces

about 500,000 board feet per day of lumber. Each mill principally

discharges through separate ocean outfalls about 2500 feet from

shore and at a depth of approximately 30 to 40 feet. The outfalls

are about one mile apart, and each has a diffuser at the end.

On December 4, 1974 the Regional Board of the California

Water Resources Control Board adopted waste discharge re-

quirements for these dischargers; at that time national effluent

limitations guidelines for these sources were not available. EPA

Region IX objected to the Regional Board orders on the grounds _

that the Regional Board failed to implement the provisions of

Sections 301 and 304 of the Federal Water Pollution Control

Act by not imposing effluent limitations in those orders which

would require achievement of best practicable control technology

currently available by July 1, 1977. The State Board reviewed

2. Crown Simpson and Louisiana-Pacific complain of the lack of

an opportunity for a hearing before me, arguing that such a hearing is

required by law. But the companies were given extensive opportunity for

hearings by the State and an opportunity to comment upon the General

Counsel’s recommended decision. I have not augmented the record compiled

by the State nor have I independently evaluated the factual conclusions

reached below. A hearing, particularly of the nature apparently envisioned

by the two companies in which they would Speed to [my] questions

concerning the voluminous record in the . . . proceedings before the

State . . .”” would be a useless exercise. I have carefully considered the

arguments made by the companies concerning the legal issues involved in

this proceeding. I am convinced that the procedures I have used have been

fair and entirely adequate and that all process ‘‘due’’ has been provided.

28 Appendix

the regional orders and, after a hearing on March 7, 1975, re-

manded the orders to the Regional Board with directions that

effluent limitations based on best practicable control technology,

or “BPT’’, be included. These BPT limitations were to be based

on promulgated national regulations if available, otherwise the

Regional Board was directed to establish the numbers based on

its best judgment as to what constituted BPT.

On February 19, 1976, EPA promulgated interim final effluent

limitations guidelines for the bleached kraft sector of the pulp,

paper and paperboard point source category. 40 CFR Part 430

Subparts F-I. EPA issued final amendments to these regulations

on January 6, 1977. The validity of the national regulations is

not at issue in this variance proceeding.® Each national limitation

contains a variance clause* which in essence provides that a dis-

charger may submit evidence that factors such as the age or size

of plants, raw materials, manufacturing processes, treatment tech-

nology available, energy requirements or other such factors, are

3. The regulations are being challenged in Weyerhaeuser Company,

et al. v. Train, No. 76-1674, et al. before the United States Court of

Appeals for the District of Columbia Circuit. See footnote 5, infra.

4. For example, Section 430.72 reads in part as follows:

In establishing the limitations set forth in this section, EPA took

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

solicit with respect to factors (such as age and size of plant, raw

materials, manufacturing processes, products produced, treatment

technology available, energy requirements and costs) which can

affect the industry sub-categorization 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. An individual dis-

charger or other interested person may submit evidence to the

Regional Administrator (or to the State, if the State has the authority

to issue NPDES permits) that factors relating to the equipment or

facilities involved, the process applied, or other such factors related

to such discharger are fundamentally different from the factors con-

sidered in the establishment of the guidelines. C . the basis of such

Appendix 29

fundamentally different from the factors considered during the

establishment of the national effluent limitations guidelines.®

In accordance with the instructions from the State Board, the

Regional Board conducted hearings with respect to these two

mills, on June 24, July 29, and August 26, 1976. The discharge

restrictions for Crown Simpson and Louisiana-Pacific established

by the Regional Board did not follow the EPA national effluent

limitations guidelines. On September 3, 1976, EPA Region IX

issued a letter of objection to the Regional Board orders, noting

that the Regional Board had in effect granted variances from the

national limitations without submitting the matter to the Admin-

istrator of EPA for approval. This action by EPA prompted the

two mills to seek review in the United States Court of Appeals

for the Ninth Circuit (Nos. 76-3161 and 76-3287). Those actions

have been stayed pending decision on this matter.

On October 21, 1976 the State Water Resources Control Board

adopted resolution 76-108 to review the action of the Regional

Board with respect to these two mills. On December 22, 1976, the

State Board held a hearing, and on March 17, 1977, the Board

issued its opinion.

The Board ordered that the Regional Board Orders No. 76-133

and 76-134 be set aside and replaced by the permits established

by the State Board. It granted the requested variances from the

effluent limitations guidelines for BOD and pH, subject to ap-

evidence or other available information, the Regional Adminis-

trator (or the State) will make a written finding that such factors

are or are not fundamentally different for that facility compared

to those specified in the Development Document. If such factors

are found to exist, the Regional Administrator or the State shall

establish for the discharger effluent limitations in the NPDES

rmit either more or less stringent than the limitations estab-

ished herein, to the extent dictated by such fundamentally different

factors. Such limitations must be approved by the Administrator of

the Environmental Protection Agency. The Administrator may

approve or disapprove such limitations, specify other limitations or

initiate proceedings to revise these regulations.

5. Crown Simpson and Louisiana-Pacific note in their comments that

should I deny their variance request they may seek judicial review of my

decision and raise the question of whether the variance provision is valid.

30 Appendix

proval by the EPA Administrator, and ordered the Executive

Officer of the State Board to forward to EPA all necessary in-

formation, data and documents for a prompt decision on this

matter. Alternative effluent limitations for BOD and pH, to apply

in the event the variances were approved or denied by the Admin-

istrator, were established in the permits. The dischargers also were

granted an extension of time until July 1, 1983, to meet the

effluent quality requirements for chromium contained in the Cali-

fornia Ocean Plan.® |

The differences between the permit conditions based on the

national effluent limitations guidelines, on the one hand, and those

which will result from the granting of the variances from those

guidelines, on the other hand, are substantial. In NPDES Permit

No. CA0005882 the limitation on BODS (daily maximum) is

18,450 pounds, and the limit on total solids is 36,480 pounds.

The pH must be maintained within the range of 5.0 - 9.0. Accord-

ing to the terms of the permit, “Upon approval by the Adminis-

trator of EPA of the finding of ‘fundamental difference’ . . . the

following limitations shall apply in lieu of the limitations [set

forth above}’”’. These are 96,000 pounds per day of BODs (daily

maximum) and pH within the range of 3.0 to 10.0.

For the Louisiana-Pacific Mill (NPDES permit No. CA0005894)

the differences are similar. In all cases the BOD figures cited per-

tain to the pulp operations, which are by far the major sources

of BOD at these facilities.

6. The National Wildlife Federation filed comments which fully

support my denial of the BPT variances but which urge that I also dis-

approve the extension of time given the two companies by the State for

meeting chromium effluent quality requirements derived from the Cali-

fornia Ocean Plan. This proceeding, however, is not a general review of

the State-issued permits. It concerns only the appropriateness of granting

variances from EPA Effluent limitations guidelines, and my decision is

limited to this question. I express no opinion whatever on any other aspect

of the State proceedings.

Appendix 31

II. The Legal Issue

The California State Water Resources Control Board found

that because there would be “no expected or predictable water

quality improvement as the result of imposition of the EPA

guidelines [and iJ}n light of . . . the magnitude of the chemical

and energy requirements, and the potential air and land manage-

ment problems associated with sludge disposal . . . the evidence

justifies the variance requested.” (Board Opinion p. 17). It is

clear that the Board did not find a “fundamental difference” in

terms of non-water quality impact itself but instead found non-

water quality impact to be significant because of lack of improve-

ment of local receiving water quality. In effect, the State granted

an exemption from minimum national technology-based standards

because of local water quality considerations. This was contrary

to the letter and intent of the FWPCA and I have no choice but

to disapprove the state action.

The heart of the Louisiana-Pacific and Crown Simpson presen-

tations to the State Boards was the absence of a need to control

BOD and pH. In essence, what the companies argue is that be-

cause they are located on the Pacific Ocean, with its vast dilution

and regenerative powers, one need not be concerned with pollu-

tion requirements which assertedly are designed solely to protect

the oxygen levels or pH of receiving streams. They argue that

the oxygen level even in the immediate area of their discharge

Pipes is not a matter of concern.

BOD is not a metal or a chemical compound or a specific sub-

stance that pollutes the environment. It is a measure of the quantity

of oxygen required for the biological and chemical oxidation of

water-borne substances under ambient or test conditions. The

BODS test is a procedure which provides an estimate of the oxy-

gen consumed by micro-organisms utilizing the degradable matter

present in a waste under conditions that are representative of

those that are likely to occur in nature. Standard conditions of

: | |

|

32 Appendix

time (5 days), temperature, suggested microbial seed, and dilu-

tion water for the wastes have been defined and are incorporated

in standard analytical procedures. As noted in the Development

Document for the Effluent Limitation Guidelines (BPT) for the

Bleached Kraft, Groundwood, Sulfite, Soda Deink, and Non-in-

tegrated Paper Mills Segment of the Pulp, and Paperboard Point

Source Category, at pages 267 and 268:

The BOD of a waste exerts an adverse effect upon the dis-

solved oxygen resources of a body of water by reducing the

oxygen available to fish, plant life, and other aquatic species.

Conditions can be reached where all of the dissolved oxygen

in the water is used resulting in anaerobic conditions and

the production of undesirable gases such as hydrogen sulfide

and methane. The reduction of dissolved oxygen can be

detrimental to fish populations, fish growth rate, and organ-

isms used as fish food. A total lack of oxygen due to the

exertion of an excessive BOD can result in the death of all

aerobic aquatic inhabitants in the affected area.

* ok x

The BODS test is also an indicator of the total organic load

that is being discharged to a receiving stream. Compounds

contributing to this total organic waste load found in pulp

and paper mill wastes include terpenes, resin acids, fatty

acids, phenols, formic acid, saccharinic acids and other small

organic acids. These compounds also contribute to the

toxicity of a pulp and paper mill waste.

There are substantial testimony and a number of documentary

materials referred to in the record indicating that the waste ma-

terials discharged by Crown Simpson and Louisiana-Pacific

through their ocean outfalls are not causing a significant environ-

mental problem with respect to oxygen reduction or pH levels in

the receiving waters. I do not believe that it is necessary to con-

sider the extent of that problem or debate such issues as the limits

Appendix 33

of the mixing zone for the dischargers.’ For the purposes of re-

viewing these applications for variances, I will assume that the

arguments of Crown Simpson and Louisiana-Pacific are correct in

that there is not a need, based purely on water quality considera-

tions, to control the BOD emanating from these mills beyond

those levels contained in the variance-based permits. While the

facts and arguments are less clear with respect to the pH require-

ments contained in the national effluent limitations guidelines, I

will also assume for the purposes of this proceeding that there is

no water quality need to limit the pH discharge other than as

contained in the California permits based on the variances.®

In its March 17, 1977, opinion the State Board noted that the

dischargers had submitted evidence regarding the chemicals

required should they be forced to treat their wastes to meet EPA

national guidelines, the direct and indirect power requirements

associated with such treatment and the potential biological sludge

disposal problems which would result from the use of EPA

recommended technology (Opinion pages 15-18). Again, for the

7. I note that the State Board observed that “some of the organic

compounds which contribute to the BOD may cause problems in the re-

ceiving water .. . ."” Opinion p. 7. Crown Simpson and Louisiana-Pacific

argue in their comments that it is improper to state that there is any rela-

tionship between effluent toxicity and BOD and pH. The quotation, how-

ever, accurately reflects the finding of the State Board and I see nothing

improper in its inclusion in this opinion.

8. Crown Simpson and Louisiana-Pacific criticize the recommended

decision for being too equivocal on the question of the water quality im-

pact of their discharges. However, as noted previously, no independent

review of the evidence has been undertaken, and it would disthen not

be appropriate for me to endorse or concur in any conclusions reached on

this subject by the State. Instead, it is accurate to say only that for the

limited purpose of deciding the legal issue presented in this proceeding

I assume that limitations on BOD and pH more stringent than those

imposed in the variance-based permits would not improve receiving water

quality. I find the attack upon the propriety of this procedure curious,

since assumption of the existence of facts for limited legal purposes is a

judicial technique of long standing.

34 Appendix

purposes of this variance proceeding I consider as true the Board

findings in these respects.®

The issue to be resolved is straightforward: does the Federal

Water Pollution Control Act, as amended (“FWPCA”’) allow

EPA to vary technology-based water pollution regulations simply

because the receiving water quality at particular sites will not be

measurably improved by compliance with those regulations?

Counsel for the companies stated the matter this way in a brief

before the State Board: .

“{Crown Simpson} and [Louisiana-Pacifi-~ are not asking

this Board to countenance a wholesale »ccurn to an ineffec-

tual water quality approach. Rather, they submit that they

have affirmatively demonstrated that there is a fundamental

difference between the marine environment into which they

discharge and all other receiving waters. None of the dila-

tory or obscurantic tactics sometimes encountered under the

old system are possible when the applicant bears the burden

of proving its entitlement to a variance. And while most dif-

ferences in receiving waters are ones of degree, which may

be burdensome administratively ,to distinguish, the difference

between the ocean and inland waters is categorical, so that

the differentness of the ocean need only be decided once.”

(p. 24)

9. The Board did not make independent findings of fact with respect

to several of these factors; it merely stated, “the dischargers submitted

evidence regarding [these factors.}” In effect, I am accepting as true the

assertions of the companies before the State Boards, for the purposes of

this proceeding. There was also testimony to the effect that redwood pulp

produces more BOD than any other wood species, and that these two

mills may be the only mills using that wood (Tr. 47), but there is no

explanation in the record as to the contribution this factor would have to

the much higher BOD allowed under the variance-based permits. More-

over, I note that this issue was not pressed as an important fact by the

companies or relied upon by the State Board, and no mention of this

factor was made in comments submitted by the companies on the recom-

mended decision.

Appendix 35

Counsel for Crown Simpson reiterated this point during the

December hearing (Tr. 101):

What the companies are saying is that essentially all of the

requirements can be met with the exception, perhaps, of the

chromium heavy metal requirement through the use of

internal procedures. It can be met at a certain cost. To im-

pose the BOD limitation is to impose on them an enormous

additional cost with no environmental benefit.

When Congress enacted the Federal Water Pollution Control

Act Amendments of 1972, it brought about a major change in the

approach to water pollution control. Congress declared in unmis-

takable statutory language that certain key regulations were to be

based on pollution control technology, not water quality. Localized

improvement in water quality as the result of compliance with

technology-based regulations was desired, but the existence of the

nexus was not to be dispositive as to the application of those

regulations. The Senate Committee on Public Works explained

the reasons for the change in approach:

The water quality standards program is limited in its

success. After five years, many States do not have approved

standards. Officials are still working to establish relationships

between pollutants and water uses. Time schedules for abate-

ment are slipping awey because of failure to enforce, lack

of effluent controls, and disputes over Federal-State standards.

The Committee adopted this substantial change because

of the great difficulty associated with establishing reliable

and enforceable precise effluent limitations on the basis of

given stream quality. Water quality standards, in addition

to their deficiencies in relying on the assimilative capacity of

receiving waters, often cannot be translated into effluent

limitations—defendable in court tests, because of the im-

precision of models for water quality and the effects of

effluents in most waters.

Under this Act the basis of pollution prevention and

elimination will be the application of effluent limitations.

ed ge Bae

36 Appendix

Water quality will be a measure of program effectiveness and

performance, not a means of elimination and enforcement.

The Committee recommends the change to effluent limita-

tions as the best available mechanism to control water pollu-

tion. With effluent limits, the Administrator can require the

best control technology; he need not search for a precise link

between pollution and water quality.”

S. Rept. No. 92-414, 92nd Cong. 1st Sess. at 8 (1971), Committee

Print, A Legislative History of the Water Pollution Control Act

Amendments of 1972, 93d Cong. ist Sess. (1973) (2 vols.)

(hereafter cited as Leg. Hist.) at 1426.

Both the Act and its legislative history clearly indicate that

Section 301(b) (1) (A) effluent limitations are not to be based on

the nature, quality or location of receiving waters. This is demon-

strated by Section 301(b) itself. Section 301(b) (1) provides that

point sources other than publicly owned treatment works must

meet, “(A) not later than July 1, 1977 effluent limitations .. .

which shall require the application of the best practicable control

technology currently available... and... (C) ... any more

stringent limitation, including those necessary to meet water

quality standards .. . .” (emphasis added). The basic structure

of the Act is therefore clear. Technology-based limitation imposed

pursuant to Section 301(b) (1) (A) are independent of local water

quality considerations, but where local water quality-based require-

ments are more stringent than 301(b)(1)(A) requirements they

may be imposed pursuant to Section 301(b) (1) (C). This statu-

tory structure would be rendered meaningless if 301(b) (1) (A)

limitations can be downgraded due to water quality considerations.

Section 304(b) of the Act, which lists the factors which must be

taken into account in developing Section 301(b) (1) (A) indus-

11. From 1965 until the enactment of the FWPCA, the quality of

interstate waters had been regulated primarily by State water quality

standards, which States were required to promulgate and have approved

by the Federal Government under the Water Quality Act of 1965.

Ap pendix 37

trial effluent limitations—from which Crown Simpson and Louisi-

ana-Pacific seek relief—conspicuously omits any reference to water

quality." Similarly, Section 304(d) (1), which requires the Ad-

ministrator to publish information on “the degree of effluent

-eduction attainable through the application of secondary treat-

me.” for the purpose of developing Section 301(b) effluent

limitat..ns for municipal treatment works, contains no reference

to the nat.-e or quality of the receiving waters. Clearly, Section

301(b) (1) (A, effluent limitations are not to be based on ambient

water quality considerations. The Committee hearings and Con-

gressional debates show tiiat there was no misunderstanding of

this vital point by the Congressmen voting for this major bill.*%

12. Crown Simpson and Louisana-Pacific argue that the statutory phrase

“effluent reduction benefits” means water quality impact. As will be shown

below, this argument is entirely unfounded. See infra at pp. 31-32.

13. See e.g.:

From the Senate Report:

The application of Phrase I technology to industrial point sources is

based upon the control technologies for those sources and to publicly

owned sewage treatment works is based on secondary treatment. It is

not based on ambient water quality considerations. [Leg. Hist. at 1461

(emphasis added.) } The use of any river, lake, stream or ocean as a

waste treatment system is unacceptable. [Leg. Hist, at 1425 (emphasis

added).}

From the House Report:

The determination of the best practicable control technology currently

available under Section 301(b) (1) is not to be governed by the existing

quality of the receiving waters. {Leg. Hist. at 788.}

From the Conference Report:

.. . [T}he intent of the Conferees is that effluent limitations applicable

to individual point sources within a given category or class be as uniform

as possible. The Administrator is expected to be precise in his guidelines

under [Section 304(b)}, so as to assure that similar point sources with

similar characteristics, regardless of their location or the nature of the

water into which the discharge is made, will meet similar effluent limita-

tions. [ Leg. Hist. at 309.}

From Congressional Debates:

Remarks of Senator Muskie, Chairman, Senate Subcommittee on Air and

Water Pollution, Leg. Hist. at 170.

Remarks of Representative Jones (Alabama), House Conferee, Leg.

Hist. at 231.

Remarks of Senator Tunney, Leg. Hist. at 209.

:

38 Appendix

It perhaps is best summed up in the remarks of Representative

Clausen, a House conferee:

Now, and I emphasize this, such “best practicable control

technology” will be required even if the quality of the receiv-

ing waters do [sic} not require the imposition of effluent

limitations consistent with best practicable control technology.

This is a technological standard [Leg. Hist. at 378}.

Water quality standards remain a vital part of the amended

law, but they are not to be used as a means to avoid compliance

with effluent limitations guidelines and new source standards; the

discharger must comply with all applicable regulations. The fol-

lowing appears in the Senate Public Works Committee Report:

Section 301(b) (1) (C) provides adequate authority to apply

new information to existing water quality requirements and

upgrade effluent limits accordingly.

In other words, wherever the Administrator determines that

application of the best practicable treatment requirements

of Phase I will not provide for implementation of existing

water quality standards for interstate or intrastate streams,

he must tighten the requirements against a source of dis-

charge or group of sources. Leg. Hist. at 1462.

The same is true of water quality related effluent limitations

under Section 302:

Where application of the best available control technology

. . will not attain . . . [the prescribed} standard of water

quality, more stringent effluent limitations or alternative

control strategies can be imposed [under Section 302}.

* * *

Section 302 is intended to furnish a supplemental basis for

improving water quality, and not be a cause for delay in

executing the requirements of Section 301, or for ‘reouiring

Appendix 39

any less stringent effluent limitations. [Leg. Hist. at 1464,

1466 (emphasis added) }."*

Congressman Wright, a House conferee, expressed his belief that

EPA and the States would approach their regulatory duties as

the Senate had outlined. He stated that the combination of tech-

nology-based and water-quality based restrictions on discharges

was “a new system of cleaning up streams by a limitation upon

point discharges, a dual approach [which] provides that which-

ever is the stronger shall apply.” Leg. Hist. at 488.

The Supreme Court recently ackrowledged the roles water

quality and technology feasibility play under the FWPCA.

The reasons for the statutory scheme have been described

as follows: “Such direct restrictions on discharges facilitate

enforcement by makinug it unnecessary to work backward

from an overpolluted body of water to determine which point

sources are responsible and which must be abated. In addi-

tion, a discharger’s performance is now measured against

14. See also Leg. Hist. at 791 (House Report characterizes Section

302 as providing authority to “supplement any effluent limitations set pur-

suant to [Section 301(b)(2)]}” and notes that proposed effluent limitations

under Section 302 “shall in no case operate to delay the application of any

effluent limitation established under Section 301”); 209 (Senator Tunney

observes that effluent limitations are only “a minimum measure of com-

pliance’’) ; 246 (Representative Harsha, a House conferee, notes that ‘’The

water quality requirements are not intended to be in lieu of the technolog-

ical requirements for 1977 but are required to be the basis for water quality

oe if they are more stringent than the effluent limitations determined

by ‘best practicable control technology currently available’, and that “'sec-

tion 303 . . . is intended to be a supplement to the 1977 and 1983 require-

ments.””), 1281, 1283, 1285 (Senator Bentsen, a Senate Committee mem-

ber, notes that “[w]here a State or the Administrator finds [Section 301

(b)(2) limitations] are insufficient under the criteria of section 302,

tougher effluent limitations and alternative control strategies must be

established.” ).

40 Appendix

strict technology-based effluent limitations—specified levels

of treatment—to which it must conform, rather than against

limitations derived from water quality standards to which it

and other polluters must collectively conform.” EPA 1.

State Water Resources Control Board, 426 U.S. 200, 204-

205, 96 S. Ct. 202, 204, 48 L. Ed.2d 578 (footnotes

omitted).

E. I. duPont de Nemours and Co. v. Train, 430 US. 112, 97 S.

Ct. 965, 972, n. 3 [9 ERC 1753} (1977).

When Congress intended there to be deviation from technology

standards due to water quality considerations, it provided definite

indication of that intent. Thus, Section 316(a) provides for re-

laxation of technology-based limitations for thermal discharges,

when the discharger can demonstrate that the environment will

be protected adequately.’°

It is in light of this strong Congressional sentiment against

water-quality based exceptions from national technology standards

that the Crown Simpson and Louisiana-Pacific appeals must be

considered, and against which the decisions of the California

15. Similarly, the U.S. District Court for the Central District of Cali-

fornia recently observed that “Section 301 deals with the technological

control of pollutants at their source, without regard to their effect on the

immediate environment . . . .” Pacific Legal Foundation v. Quarles, Civil

No. 77-521-HP [10 ERC 1369] (July 20, 1977), slip op. at 8 (emphasis

added).

16. That section states:

With respect to any point source otherwise subject to the provisions of

section 301 or section 306 of this Act, whenever the owner or operator of

any such source, after opportunity for public hearing, can demonstrate to

the satisfaction of the Administrator (or, if appropriate, the State) that any

effluent limitation proposed for the control of the thermal component of

any discharge from such source will require effluent limitations more string-

ent than necessary to assure the projection [sic] and propagation of a

balanced, indigenous population of shellfish, fish, and wildlife in and on

the body of water into which the discharge is to be made, the Administrator

(or, if ey Oy the State) may impose an effluent limitation under such

sections for such plant, with respect to the thermal component of such

discharge (taking into account the interaction of such thermal component

of such discharge with other pollutants) that will assure the protection and

propagation of a balanced indi S population of shellfish, fish, and

wildlife in and on that body of water.

a

Ap pendix 41

Water Resources Control Board must be viewed. To the extent

that the Board Opinion assumes regulatory authority to relax

implementation of technology-based standards for reasons related

to water quality, that Opinion is wrong. Efforts by commenters

(particularly Hunton & Williams) to argue otherwise are unper-

suasive. There is nothing inconsistent between the ultimate con-

gressional goal of cleaner water and the technology-based approach

required by Section 301(b) (1) (A) of the Act. As explained by

Senator Cooper, a Senate Conferee,

This is a very direct approach. It is a pragmatic approach.

I think we all acknowledge that, in the short run, it may

often require larger expenditures then permitting discharges

to the point where the water can be shown to be degraded

for some use. But I think it is fair to say that after the most

thorough examination, the committee concluded that the

approach adopted in the bill promised to be a far more

effective means of attacking the problems of water pollution

control than the 1965 act. Leg. Hist. at 1304. While Hunton

& Williams quote Representative Jones’ statement that Con-

gress did not wish “to credit one environmental account

and debit another” so as to “negate the overall benefit of the

achievement of higher water quality”, Leg. Hist. at 232, they

ignore the same congressman's statement that “With the

exception of modifications of section 301 requirements for

the discharges of heat which may be made pursuant to

section 316(a), the determination of the ‘best practicable

control technology currently available’ is not to be based

upon the existing quality of the receiving waters.” Leg. Hist.

at 231. (emphasis added). Congress consciously adopted

the Section 301 approach of uniform minimum levels of

controls based on technological achievability rather than

receiving water quality as its chosen means to attain the

42 —— Appenaix

goals set out in Section 101 of the Act.!" I have no authority

to defy that statutory mandate.”

Crown Simpson and Louisiana-Pacific argue that this proceed-

ing presents a situation in which the practical problems normally

associated with a water quality related approach to pollution

control do not apply, and that therefore an exception to the

technology-based approach of Section 301(b)(1)(A) is war-

ranted. They contend that Congress adopted the technology-based

approach largely out of concern with the difficulty of calculating

and defending water-quality based requirements, but that this

concern does not apply here because the burden of proof in a

17. Moreover, I think that it should be remembered that the first

enumerated goal set out in Section 101(a) is “that the discharge of pollu-

tants into navigable waters be eliminated by 1985.” As thoughtful y ex-

plained by Senator Buckley this goal indicates a congiielianar belief that

ultimately xo Jevel of discharge of pollutants should be tolerable.

Of course, the bill itself has abandoned the attempt, as an ultimate

goal, of drawing a causal connection between the discharge of pollut-

ants and the degradation of our streanis. In effect, we are saying we

know so little about the ultimate consequences of injecting new

matter into water that it involves a presumption of pollution, and the

way to insure ourselves against soliahion is through the control and

ultimate elimination of pollutants.

Leg. Hist, 1332.

19. {sic} Hunton & Williams also argue that my decision in In Re Public

Service Company of New Hampshire [10 ERC 1257} (No. 76-7, June 17,

1977) (“Seabrook”) is inconsistent with the legal analysis in this decision.

In Seabrook at page 13 I found that Section 316(b), which concerns cool-

ing water intake structures, does not require use of technology whose cost

is wholly disproportionate to the environmental benefit to be gained. I see

no inconsistency. Sections 301(b) (1) (A) and 316(b) are quite different.

Section 316(b) is explicitly site-specific while Section 301 (b)(1)(A), as

discussed above, concerns uniform national standards. Moreover, Section

316(b) concerns the environmental impact of entrapment and entrainment

while Section 301(b)(1) (A) concerns reduction in the amount of pollu-

tants discharged by industrial point sources. In establishing effluent limita-

tions guidelines for the ig a industry the Agency considered cost in rela-

tion to effluent reduction benefits. But the fact that this analysis did not

involve consideration of local receiving water quality is inconsistent with

neither my decision in Seabrook or the language and history of Section

301(b) (1) (A).

i i i

Appendix 43

variance proceeding is on the discharger rather than EPA and

because the discharger must show a “fundamental” difference in

water quality impact. Similarly, the fact that this is a variance

proceeding is said to mean that the congressional desire for

uniformity of requirements will not be compromised and that

the administrative burden upon EPA will not be exessive.

I do not share the companies’ confidence that merely by casting

matters in the form of a variance that all problems associated

with a water-quality based approach evaporate. At best, prob-

lems of correlating effluent discharge levels to water quality and

of maintaining a measure of national uniformity may be reduced.

But these problems will certainly remain severe. More important,

regardless of whether or not a water-quality based variance would

be meritorious, it would not be consistent with the statute. Con-

gtess was well aware of the possibility of such a variance and

adopted just such a provision for thermal discharges in Section

316(a). The limitation of Section 316(a) to heat was, in effect, a

deliberate rejection by Congress of the kind of scheme proposed

by the two companies here.?°

The question presented is one of fundamental importance under

the Act. Congress deliberately chose a technology-based approach

and fully appreciated the fact that under certain circumstances it

would result in treatment beyond that needed to attain or main-

tain water quality. To retreat from this basic congressional scheme

in this proceeding would, despite Crown Simpson’s and Louisiana-

Pacific's bland assurances to the contrary, set a precedent which

would threaten the integrity of the Act.2!

20. Congress is now considering amendments to the Act which would

provide relief to publicly owned treatment works discharging to marine

waters. See H.R. 3199, S. 1952. These amendments would not apply to

industrial dischargers.

21. While the companies assured the State that their arguments

applied only to marine discharges, see supra at p. 14, the fact is that

their arguments logically apply to discharges into any body of water with

high dispersion characteristics, and therefore these arguments represent

an assault upon one of the basic elements of the 1972 amendments.

44 Appendix

The March 17, 1977, Order and Opinion of the California

Water Resources Control Board does not directly dispute the

interpretation of the FWPCA which I have presented. Instead,

the Board appears to rely heavily on recent judicial discussion of

EPA’s variance clause to support its approval of variances for

Crown Simpson and Louisiana-Pacific. However, I cannot agree

with the Board’s determination. One reason is that I do not

believe the cases support the legal position adopted by the Board.

Second, I believe the Board's action in effect is the granting of

water quality-based variances, which is prohibited.

Essential to a careful review of the Board’s determination are

the following findings by the Board:

1. “There do not appear to be any environmental benefits

which will be derived by requiring these discharges to meet either

the [California State} Ocean Plan or Guideline limitations for

BOD or pH.” (Board Opinion p. 9)

2. “In appraising the evidence related to non-water quality

environmental effects and energy requirements the Board must

at least in part appraise the significance in terms of the potential

environmental benefits to be gained as a result of the imposition

of the EPA Guidelines. In this case we have unrefuted evidence

presented by the dischargers and concurred with by the Regional

Board Executive Officer that the existing discharges result in no

water quality problems. Secondly, there is no expected or predict-

able water quality improvement to be achieved as the result of

imposition of the EPA Guidelines. In light of these facts (the

magnitude of the chemical and energy requirements, and the

potential air and land management problems associated with

sludge disposal) we can only conclude the evidence justifies the

variance requested.” (Board Opinion pp. 16-17).

The variances were granted not because the non-water quality

environmental impacts of BPT were of themselves fundamentally

different from the impacts considered in the development of the

Appendix 45

effluent limitations guidelines, but instead because this factor in

relation to the absence of water quality problems was deemed to

be fundamentally different. I cannot find any statement by the

State Board that the non-water quality environmental impacts (i.e.

sludge, energy etc.) of BPT for the two mills are fundamentally

different in and of themselves.”

The only aspect of the Crown Simpson and Louisiana-Pacific

situation which was ‘ound different from most other mills is, in

effect, that they discharge directly into the ocean. The companies

candidly admitted that this is the “fundamental” difference in

the State proceedings.”®

The issue resolves into asking whether water quality considera-

tions are valid grounds for variances from effluent limitations

based upon best practicable technology. The answer to this, as

the California Board itself stated, is that it is not a valid basis:

The argument advanced by the dischargers (variance based

on type of the receiving water) is, in our opinion, the essence

of what Congress intended to avoid with the Federal Water

Pollution Control Act Amendments of 1972. The legislative

history of the Amendments reflects a conclusion that regula-

tion of pollution based on a plant by plant basis was unwork-

22. The problems associated with sludge disposal on the Samoa pen-

insula was mentioned by the Board as if t! . were possibly a fundamen-

tally different factor. But the record is ambiguous on the point. The

companies did not rely on this difference in their requests for variances to

the State. And the State never explicitly found sludge disposal problems

at the two mills to be fundamentally different from those problems con-

sidered by EPA in developing the regulations.

23. See supra at p. 14. Witnesses for the companies, and counsel in

their behalf, have stated that these mills were never considered by EPA

in drafting national regulations. The State Board opinion also states this

(p. 5). According to a key to the identification of plants used in the

preparation of the Development Document, which key has been made

available to all who have requested access—including Crown Simpson

and Louisiana-Pacific, both mills were evaluated by EPA. For example,

on page 186 of the Development Document, plant 185 (Crown Simpson )

and plant 186 (Louisiana-Pacific) are listed. Data for production, flow,

BODS, and TSS for the Crown Simpson mill were used in calculating

national limitations. There were insufficient data for Louisiana-Pacific’s

mill to be used this way.

46 Appendix

able from a practical regulatory standpoint. Congress based

the Amendments on predefined minimum levels of treatment

technology which were to be applied regardless of the type

of receiving water. (Opinion, p. 6).

My authority to provide for variances from BPT flows from, and

is inherent in, my authority to promulgate effluent limitations

guidelines under Sections 301(b) (1) (A) and 304(b) (1).24 Thus,

in considering variances from effiuent limitations I am as con-

strained by the language and legislative history of the Act with

regard to this issue as I am in promulgating the national limita-

tions. Variances can only be based on fundamental differences in

factors which are appropriate to technology-based regulations and

limitations derived through the variance process must still meet

the congressional difinition of best practicable control technology

currently available.

I therefore reject as unsound the argument by Crown Simpson

and Louisiana-Pacific that because variances from BPT are not

explicitly mentioned in the Act or its legislative history that I

may completely ignore the statute and the intentions of its drafters

in administering the variance provision. But in so doing I do not

agree that I have rendered the variance provision meaningless. I

find only that the variance provision cannot be used to do what

Congress clearly forbade. This does not mean that where a

fundamental difference can be shown with respect to a factor

other than water quality that a variance may not be appropriate.”®

24. For this reason it is entirely appropriate that variances from

BPT be subject to my approval.

25. The two companies charge that by rejecting their requests I have

established that “it is never appropriate to grant a variance from the

requirement of installing a secondary treatment facility.” If a fundamental

difference can be shown in a factor (other than water quality) and a

degree of treatment less than “secondary” would be appropriate under

the Act, then such a reduced requirement may be established. But what-

ever requirement is established for a discharger, whether or not by vari-

ance and whether or not it ni 9a “secondary” treatment, it must,

for the July 1, 1977 phase of the statutory program, represent “best

practicable control technology currently available”,

ne ne Relat btm thie Am een es me

Appendix 47

The State Board also recognized that water quality considera-

tions cannot be utilized to grant a variance through a weighing of

costs and benefits with regard to an individual mill. The Board

properly rejected the companies’ contention that while their costs

of compliance are not substantially different?* from the costs EPA

found would be sustained on an industry-wide basis, their costs

weighed against the local water quality benefits justify a variance.

The legislative History of the Act firmly rejects any individualized

cost/benefit analysis, and no court has ever required it.2*

- Crown Simpson and Louisiana-Pacific also contend that the

phrase “effluent reduction benefits” in Section 304(b) (1) (B)

means “receiving water quality improvement” and, further, that

EPA conceded as much in its brief filed in Weyerhaeuser Co. v.

Costle (No. 76-1674) now pending in the U.S. Court of Appeals

for the D.C. Circuit. But, as explained by Senator Muskie:

The modification of subsection 304(b) (1) is intended to

clarify what is meant by the term “practicable”. The balancing

test between total cost and effluent reduction benefits is in-

tended to limit the application of technology only where the

additional degree of effluent reduction is wholly out of pro-

26. Opinion p. 14.

27. See Leg. Hist. at 170 (statement of Senator Muskie). See also

Leg. Hist. at 304, 309 (Conf. Rept.). The Fourth Circuit in Appalachian

Power Co, v. Train, 545 F.2d 1351 [9 ERC 1033] (4th Cir. 1976),

although it found the variance clause too narrow, noted that:

In requiring that EPA give weight to the relevant statutory factors

in developing a subsequent variance provision, we in no way intend

to imply that EPA’s regulations must provide for a detailed cost-

benefit analysis at the permit granting stage. As we indicated in

{duPont v. Train, 541 F.2d 1018 (4th Cir., 1976)}, an overall

cost-benefit analysis for each category or subcategory satisfies the

mandate of § 304 in this regard. The variance provision should,

however, allow the permit issuer to consider significant cost dif-

ferentials of the particular point source involved. 545 F.2d at

1360, n. 23.

In arguing that Appalachian Power stands for the proposition that water

quality benefits must be considered in variance decisions Crown Simpson

and Louisiana-Pacific ignore this (and other) pertinent language of that

case.

BSG oer’

48 Ap pendix

portion to the costs of achieving such marginal level of

reduction for any class or category of sources.

The Conferees agreed upon this limited cost-benefit

analysis in order to maintain uniformity within a class and

category of point sources subject to effluent limitations, and

to avoid imposing on the Administrator any requirement to

consider the location of sources within a category or to asser-

tain water quality impact of effluent controls, or to determine

the economic impact of controls on any individual plant in a

single community.

Leg. Hist. at 170 (emphasis added). See also Leg. Hist. at 304,

309 (Conf. Rept.).

Thus, it is clear that consideration of effluent reduction benefits

does not entail consideration of local receiving water quality im-

provement. Nothing in EPA’s brief in Weyerhaeuser is to the

contrary.** Moreover, the Development Document, at page 566,

28. On pages 50-51 of that brief any notion to the contrary was

explicitly repudiated:

Petitioner's suggestion that the method by which the pollutant

parameters for the pulp and paper industry were selected is inconsist-

ent with EPA’s argument that it may not base effluent limitations

on receiving water quality is also without merit. As discussed at

length in SectioneVI of the Final Development Document, EPA

based its selectiog of pollutant parameters on its consideration of a

number of fagt6rs. Petitioners correctly note that one of those

factors was tHe environmental harm caused by the particular pol-

lutant. But it must be emphasized that the Agency’s evaluation of

that factor was limited to a consideration of harmfulness in a

generic sense. That analysis is far different from the site-specific

water quality assessment which petitioners would require of the

Agency. EPA has never required, nor has any Court, that the pollu-

tants it regulates have an equally harmful effect in all water bodies.

That BOD and pH are generally harmful is not disputed by peti-

tioners and is documented in the record,

Moreover, harmfulness was only one element in EPA’s selection

of BOD and pH for the paper industry. At least as important a

factor was the historic measurement of those two parameters by the

industry itself—including mills with marine discharges. BOD was

selected for the additional reasons that the BODS test provides an

indirect measure of other pollutants in mill waste streams and

that systems for the removal of BOD also remove these other,

ow

Ap pendix 49

shows that EPA analyzed “Costs of BPCTCA vs. Effluent Reduc-

tion Benefits” not in terms of receiving water quality improvement

but in terms of the amount of pollution removed from discharges.

Where the State Board erred was in finding grounds for vari-

ances on the basis of non-water quality environmental impacts.

As I have already observed, the Board did not find these impacts,

of themselves, to be fundamentally different from the impacts

considered on a national basis. Instead, the Board found these

impacts to be the basis for variances when weighed against, or

considered in light of, the lack of environmental improvement.

Crown Simpson and Louisiana-Pacific argue in their comments

that the State did not rely upon local water quality considerations

in its decision and that it did in fact find a fundamental difference

in terms of non-water quality impact alone. But the companies

cite only to State observations that there would be non-water

quality environmental impacts as a result of compliance with

EPA effluent limitations guidelines, not to any finding of funda-

mental difference on this point.”

indirectly measured pollutants, including long term BOD, oil and

grease, foam, and a number of compounds which contribute to

toxicity. There is nothing inconsistent between this analysis and the

general legislative history forbidding the establishment of effluent

limitations based on the assimilative capacities of receiving waters.

(footnotes and citations omitted.)

29. Extensive analyses of the non-water quality environmental im-

pacts of the effluent limitations guidelines for the pulp and paper indus-

try, including sludge landfilling and incineration, air pollution, noise

effects, and energy impacts, were performed by EPA and are reflected in

the Development Document. See, e.g., pages 349-354, 433-440, 480-483,

490-494, 504-506, 512, 524-538.

Perhaps one reason why no finding of fundamental difference in non-

water quality environmental impact alone was found by the State was

the testimony of Dr. Herman R. Amberg, Director of Environmental

Sciences for Crown Zellerbach Corporation (part owner of the Crown

Simpson Company), a witness on behalf of Louisiana-Pacific and Crown

Simpson. In response to questions posed by Mr. Sam Johnson, a staff

engineer for the State, at the December 22, 1976, hearing he said: (Tr.

79, 80, 82):

50 Ap pendix

I find the State’s conclusion as to the propriety of granting the

variances to be based on non-water quality environmental impacts

only in light of water quality considerations, and not indepen-

dently.*°

Mr. JOHNSON: Q. With regard to the issue of variance funda-

mental differences, is there any difference in your plant and the

plants that were examined by EPA with regard to age of the facili-

ties that would support a variance?

A. No, sir.

Q. The process employed?

A. It’s essentially the same process.

Q. The engineering aspects of the control technology ?

A. I don’t think so. I’m not that familiar with the 25 mills

that they used.

Q. The process changes required by the guidelines?

A. I’m not sure.

Q. Is the installation of the technology specified by EPA in

the development document as BPCTCA within the economic capac-

ity of your company?

Yes.

Q. How does your plant compare in the area of non-water

yard environmental impacts with the plants that EPA utilized in

eveloping the guidelines?

A. I don’t think there’s that much difference. However, I should

point out, too, that those plants that EPA considered, there was a

need for secondary treatment in that they did improve water qual-

ity. There was a bona fide need for improvement of the water

quality while here there will be no benefit as far as water quality

is concerned.

Dr. Amberg’s comments apply equally to the two mills. His counsel

asked him: “And just to clarify bor the entire part of your testimony,

are the Louisiana-Pacific and Crown Simpson Mills sufficiently similar so

that what you have testified to with respect to Crown Simpson would

equally apply to Louisiana-Pacific?” His response was “Yes.” (Tr. 67, 68.)

30. However, I do find well taken the companies’ admonition that

I should not make a finding that the State could not had it properly

interpreted the Act, have found fundamental difference with regard to

non-water quality environmental impact. I have not independently te-

viewed the factual record. I therefore express no opinion as to whether

the two mills could be found fundamentally different in terms solely of

non-water quality environmental impact. This is a matter properly ad-

dressed in the first instance by the State. Further, this decision does not

stand for the proposition that fundamental difference in this factor cannot

justify a variance. Concerns along this line expressed by Southern Cali-

fornia Edison Company and others are based on a misunderstanding of the

See

OF i A ne He a eS a

ee det Biter

Appendix 51

First of all, the Act does not require that non-water quality

environmental impact (or energy requirements) be weighed

against environmental benefit. This factor is only to be given

“consideration”. Section 304(b) (1) (B).*! Moreover, it should

be obvious that where this factor is deemed fundamentally differ-

ent, not in its own right but only because water quality effects

ate different, then the distinction between a variance granted on

this basis and one granted directly for water quality reasons is

only a form of words. A water quality based variance cannot be

granted merely because it is in the guise of a non-water quality

environmental impact based variance. Appalachian Power Co. v.

Train, supra, does not support the State’s Opinion on this point.

Nothing in that court’s opinion authorizes any balancing of non-

water quality benefits with water quality benefits, or any localized

consideration of water quality improvement. In fact, the court

rejected a request by Consolidated Edison Company that it be

relieved from meeting the effluent limitations for its plant because

of the high cost of non-water quality environmental impacts of

the regulations as applied to it as weighed against an asserted

lack of water quality improvement in New York Harbor. The

court responded:

“so far as [Con Ed’s} petition may be read as a request for

leniency because of the already polluted condition of the

harbor, it must be rejected. The 1972 amendments to the

legal analysis which is the basis for my denial of the variance requests

at issue here. There is no reason why, in a proper case, a fundamental

difference in non-water quality environmental impact could not justify

a variance,

31. Crown Simpson and Louisiana-Pacific argue that non-water quality

environmental impact can only be considered by means of a balancing

with water quality improvement and that my interpretation of Section

304(b) (1) (B) is strained. On the contrary, I read Section 304(b) (1) (B)

quite faithfully. Where Congress intended one factor to be considered in

relation to another, such as cost and effluent reduction benefits, it so

specified. Where it did not do so I take the omission to be deliberate.

52 Appendix

statute changed the system from that of control of the

quality of the body of water to effluent limitations as we

have before noted. 545 F.2d at 1378.

Moreover, as noted previously, the Fourth Circuit specifically

noted that “we in no way intend to imply that EPA’s regulations

must provide for a detailed cost-benefit analysis at the permit

granting stage.” See note 27 supra. I do not understand how the

Opinion in the Appalachian Power case can be held to stand for

a principle specifically disavowed by the Court. In fact, the

Second Circuit squarely faced this issue and held that:

The EPA .. . need not document specifically the benefits to

society from the curtailment of pollutants from a particular

point source. Congress has established as a national goal the

complete elimination of pollutant discharges by 1985... .

The EPA must lead industry toward that goal through the

1977 and 1983 standards, and the agency's discretion is

necessarily broad. California & Hawaiian Sugar Company v.

Environmental Protection Agency, 553 F.2d 280, 289 [9

ERC 2129] (C.A. 2, April 14, 1977) 58

32. In any event, the continuing vitality of the criticism of the

variance clause in Appalachian Power is now in doubt in light of the

recent decision of the Supreme Court in E. I, duPont de Nemours and

Co. v. Train, 430 U.S. 112, 97 S. Ct. 965 (1977). In that case the

Supreme Court reviewed an earlier decision of the Fourth Circuit con-

cerning EPA effluent limitations and noted t

This text is long and has been trimmed here. Open the source document for the complete record.