Memorandum — Crown Simpson Pulp Co. v. Costle

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JAN 21 1980

No. 79-797

emeeesbdichenbgnt ay a

Iu the Supreme Court of the United States

OcTOBER TERM, 1979

CROWN SIMPSON PuLP COMPANY AND LOUISIANA-

PACIFIC CORPORATION, PETITIONERS

ve

DouGLas M. CostLE, ADMINISTRATOR.

ENVIRONMENTAL PROTECTION AGENCY

ON PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS FOR

THE NINTH CIRCUIT

MEMORANDUM FOR THE RESPONDENT

WADE H. McCreer, Jr.

Solicitor General

SANFORD SAGALKIN

Deputy Assistant Attorney

General

Jacques B. GELIN

DEAN K. DUuNSMORE

Davip C. SHILTON

Attorneys

Department of Justice

Washington, D.C. 20530

~~

———

INDEX

Page

I a ea I

CEES ERME EC a PTR NUPDUIR I 125 SOS PACs ee EES !

BE EE REIS NET ERED POE 2

TEE SEO NASP en en. LR RN ae eine en ee ee 2

RI ite as ee Bt a 5

CITATIONS

Cases:

Central Hudson Gas & Electric Corp. v.

eg I i I de 6

E.l. du Pont de Nemours & Co. v. Train.

326 F.2d 1136, aff'd, 430. U.S, 112 .......... i. 8

Ford Motor Co. v. EPA, 567 F. 2d

4, BRIE LOR TEI A re UPON ne PO Fe Te ee RED 6

Granville-Smith v. Granville-Smith, 348 ;

ane I, SO I te )

Menominee Tribe v. United States, 390

a ee I, a as 9

Mianus River Preservation Committee v.

eg, ee a PI phic hn aka sda cas sscoacencce: 5, 6

Republic Steel Corp. v. Costle,

BO A ae 6

Save the Bay, Inc. v. EPA,

- ie 5 f° BR RE EER erence nen 5

Shell Oil Co. v. Train,

Sr a a a a ok i a 8 6

State of Washington v. EPA (Scott Paper).

Lip 2 ae 5 | BSC FAS ROR ERE 4.5

Weverhaeuser Corp. v. Costle, ‘

UE a hr i ieee Fie S)

i

il

Page

P:

- ” i a Statutes and regulation—(Continued):

-Statutes and regulation:

: Clean Warter Act of 1977, Pub. L. No. 95-

Clean Water Act, as amended, 33 U.S.C. I ke seneneies 2

(and Supp. 1) 1251, er seg. :

: I ear ai ti natsnsonaneintonnicbabe r)

Section 301, 33 U.S.C. (and Supp. 1)

RNS CERES Sy 2 Miscellaneous:

Section 301(b)(1)(A), 33 U.S.C. 42 Fed. Reg. 28167-28172 (1977) ................cceeeeee 3

Oe co gan, phe hE OCT ORE IT 3 oe Seat ee x

Section 301(c), 33 U.S.C. 131 Me) .......... 8. 9 H.R. Conf. Rep. No. 95-830, 95th Cong..

Section 402, 33 U.S.C. (and Supp. 1) I IPI sisadincahicivsantipoasinahidinieigitwinsnnaevenpaonsewe 8

“te hE EMSRS OT OPS AE BEL ek RE 7 'S. Rep. No. 95-370, 95th Cong.,

Section 402(b), 33 U.S.C. (and Supp. 1) NE, GRRESI LESH CUPRA a anne Seo eae WE &

2. I a Reh, SRE eR aA 2

Section 402(c), 33 U.S.C. (and Supp. 1)

ge REIL Sy oi ee eS ER 2

Section 402(d)(2), 33 U.S.C. (and Supp. 1)

sR hb. sn 0am wae cadetiann seer sac cscs 2

Section 402(d)(4), 33 U.S.C. (Supp. 1)

A 8 | StS! SeReee SOR tener neem y

Section 509, 33 U.S.C. 136@ ........................ 5

Section 50%(b), 33 U.S.C. 136%b) ............... 2

Section 509(b)(1), 33 U.S.C. d

INS I ae Dae a

Section 509(b)(1)(E), 33 U.S.C.

1369(b)(1)(E) aseonsesnasssegguenesesdcoeteses oe 4, 8 D

Section 509(b)(1)(F), 33 U.S.C. - |

fj |) SER ae oy ae

Jn the Supreme Court of the Hnited States

OCTOBER TERM, 1979

No. 79-797

CROWN SIMPSON PuLP COMPANY AND LOUISIANA-

PACIFIC CORPORATION, PETITIONERS

Vv.

DouGLas M. CostLe, ADMINISTRATOR,

ENVIRONMENTAL PROTECTION AGENCY

ON PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS FOR

THE NINTH CIRCUIT

MEMORANDUM FOR THE RESPONDENT

OPINIONS BELOW

The opinion of the court of appeals (Pet. App. 1-21) is

reported at 599 F. 2d 897. The decision of the

Administrator of the Environmental Protection Agency

(Pet. App. 24-53) is reported at 10 E.R.C. 1841.

JURISDICTION

The judgment of the court of appeals was entered on

June 29, 1979. A petition for rehearing was denied on

October 15, 1979 (Pet. App. 22). The petition for a writ

of certiorari was filed on November 21, 1979. The

jurisdiction of this Court is invoked under 28 U.S.C.

1254(1).

(1)

QUESTION PRESENTED

Whether a final action of the Environmental Protec-

tion Agency denying a variance and vetoing a National

Pollutant Discharge Elimination System permit issued by

an authorized state agency is directly reviewable in .the

court of appeais under Section 509(b) of the Clean

Water Act, 33 U.S.C. 1369(b).

STATEMENT

Pursuant to Section 301 of the Clean Water Act! (the

Act), 33 U.S.C. (and Supp. 1) 1311, the United States

Environmental Protection Agency (EPA) has

promulgated regulations limiting the amount of effluent

that can be discharged into navigable waters. Re-

quirements for particular discharges are implemented

through National Pollutant Discharge Elimination

System (NPDES) permits. Under the Act, EPA issues

NPDES permits directly, except in those states where

EPA has approved state administration of the NPDES

program. 33 U.S.C. (and Supp. 1) 1342(b) and (c).

California’s program has received EPA approval, and the

California State Water Resources Control Board (the

State Board) is therefore authorized to grant NPDES

permits. However, EPA must be notified of all actions

taken regarding permit applications and, if it acts within

ninety days, EPA may veto the issuance of any permit.

33 U.S.C. (and Supp. 1) 1342(d)(2).

Petitioners, who operate bleached kraft pulp mills

located near Eureka, California, initially sought NPDES

permits from the California Regional Water Resources

Board, North Coast Region (the Regional Board). The

Regional Board proposed to issue permits to petitioners

'This Act was generally known as the “Federal Water Pollution

Control Act” until it was amended by the Clean Water Act of 1977.

Pub. L. No. 95-217, 91 Stat. 1566.

on August 26, 1976. On September 3, 1976, the Director

of EPA’s Region IX Enforcement Division objected to

the proposed permits because they did not require

petitioners to achieve effluent limitations based upon the

best practicable control technology then available, as

required by 33 U.S.C. I311(b)(I)(A). Petitioners each

sought direct review of EPA’s action in the court of

appeals in Nos. 76-3161 and 76-3287 (Pet. App. 2-4).

Petitioners thereupon asked the State Board for

variances from EPA effluent guidelines. On March 17,

1977, the State Board granted variances, which were

explicitly subject to EPA approval, and proposed to

issue permits based on those variances. On May 26,

1977, the EPA General Counsel issued a Recommended

Decision of the Administrator recommending denial of

the variances. 42 Fed. Reg. 28167-28172 (1977). On

September 15, 1977, the EPA Administrator issued a

final decision denying petitioners’ variance requests and

disapproving the State’s proposed permits (Pet. App. 24-

53). The decision was based upon a review of the

extensive record compiled during the state proceedings,

briefs submitted by petitioners and written comments on

the recommended decision (Pet. App. 24-26).

Petitioners sought review in No. 77-3322 of the

Administrator’s refusal to approve the state-proposed

variances. They claimed jurisdiction under the direct

review provisions set forth in Section 509(b)(1)(E) and

(F) of the Act, 33 U.S.C. 1369(b)(1)(E) and (F).2 The

court of appeals held that it did not have jurisdiction to

consider the claim. The court concluded that Subsection

2EPA originally contended that jurisdiction existed under

Subsection (E) and later, in the joint petition for rehearing, it agreed

that jurisdiction would also lie under Subsection (F).

(E), which governs review of an action “in approving or

promulgating any effluent limitation or other limitation

under section 1311, 1312, or 1316,” did not apply here,

since the Administrator did not approve or promulgate

anything, but instead rejected a proposed permit (Pet.

App. 4, 5, 8). The court also found that Subsection (E)

applied to generalized effluent limitations affecting whole

categories of plants, rather than to adjudications

affecting single plants (Pet. App. 9-10).

Subsection (F) provides direct review of an EPA

Administrator’s action “in issuing or denying any permit

under section 1342 of this title.” The court followed its

previous decision in State of Washington v. EPA (Scott

Paper), 573 F. 2d 583 (9th Cir. 1978), which held that

Subsection (F) applied to the Administrator's own action

in issuing or denying a permit, but not to his veto of a

state’s issuance of a permit (Pet. App. 10-14). According-

ly, the court dismissed the petitions for review without

reaching the merits.

Judge Renfrew concurred (Pet. App. 15-21) on the

ground that Scott Paper was controlling. However, he

went on to urge the court to convene en banc to

reconsider Scott Paper, which he felt to be wrongly

decided. Judge Renfrew concluded that the policies of

the Act were best effectuated by reading “denying [a]

permit” to include objecting in writing to a permit and

thus that Subsection (F) conferred jurisdiction on the

court of appeals.

Petitioners and the United States filed a joint petition

for rehearing and suggestion for rehearing en banc on

the jurisdictional question, which was denied on October

15, 1979 (Pet. App. 22).

DISCUSSION

The petition in this case raises the question of the

appropriate forum for reviewing final EPA actions in

states that administer approved NPDES permit systems.°*

We believe that the decision below is erroneous on two

counts, one of which creates a conflict in the courts of

appeals. We note, however, that the continuing impor-

tance of the issue may be affected by the intervening

passage of amendments to the Clean Water Act in 1977.

|. The decision below and the Ninth Circuit’s earlier

decision in State of Washington v. EPA (Scott Paper),

573 F. 2d 583 (9th Cir. 1978), both relied upon decisions

of the Second and Fifth Circuits holding that direct

court of appeals review of EPA’s failure to object to a

permit granted by a state agency was not available under

Section 509, 33 U.S.C. 1369. Save the Bay, Inc. v. EPA,

556 F. 2d 1282 (Sth Cir. 1977); Mianus River Preserva-

tion Committee v. EPA, 541 F. 2d 899 (2d Cir. 1976). As

Judge Renfrew points out (Pet. App. 17-19), these

decisions do not support the decision of the court of

appeals. EPA’s failure to object to state issuance of a

permit requires no more than silent acquiescence for the

90-day statutory period. Accordingly, failure to object

would not necessarily be “Administrator's action” within

the meaning of Section 509(b)(1). Moreover, because no

action is taken, it is likely that no administrative record

amenable to review would result from a decision not to

object to a state-issued permit. See Save the Bay, Inc. v.

EPA, supra, 556 F. 2d at 1291-1292. In contrast, when

the Administrator vetoes a state permit that is based

‘The Court is presently considering an analogous jurisdictional

issue under the Clean Air Act in Harrison v. PPG Industries, Inc..

cert. granted, No. 78-1918 (Oct. 1, 1979). Because of differences in

the two statutes, the decision in Harrison’ will not resolve the

question presented in this case.

6

upon a variance, he has clearly taken an action. and an

administrative record will have been prepared the same

as if EPA were denying a permit directly as it does in

States that do not administer their own program. Indeed,

the Second Circuit stated in dictum in Mianus that an

EPA veto clearly would be reviewable under Section

509(b)(1). 541 F. 2d at 909.

Apart from the dictum in Mianus, the decision of the

court of appeals squarely conflicts with the Sixth

Circuit’s decision in Ford Motor Co. v. EPA, 567 F. 2d

661, 668 (1977), which held that an EPA veto of a state-

granted NPDES permit was directly reviewable under

Section 509(b)(1)(F). This holding was reaffirmed

subsequent to the decision in Scott Paper in Republic

Steel Corp. v. Costle, 581 F. 2d 1228, 1230 n.1 (6th Cir.

1978). Thus, it appears that the conflict between these

two circuits will not be resolved without action by this

Court. Finally, in Shell Oil Co. v. Train, 585 F. 2d 408

(1978), a different panel of the Ninth Circuit stated in

dictum that an EPA veto of a State-issued variance

would be “reviewable in this court under 33 U.S.C.

§ 1369(b)(1).” 585 F. 2d at 412.

2. The decision of the court of appeals established a

two-tiered system of review that must result in delays in

resolving disputes under the Act, frustrating the purpose

of Section 509(b)(1). See Central Hudson Gas & Electric

Corp. v. EPA, 587 F. 2d 549, 557 (2d Cir. 1978).

Moreover, there is no practical difference between a

direct EPA denial of a permit or the veto of a state-

issued permit considered here. The effect of both actions

is to deny the permit within the meaning of 33 U.S.C.

1369(b)(1)(F). The bizarre result of the decision of the

court of appeals is that some permit denials will be

challenged in district court and others directly in the

court of appeals, depending on whether the state where

the plant is located administers an approved permit

system. The court of appeals does not suggest any policy

reason for this distinction other than that Congress may

have intended to divide the burden of “this potentially

staggering new caseload between the district courts and

the courts of appeals” (Pet. App. 14). Nothing in the

legislative history or the Act itself suggests that Congress

intended such a division of review: rather, Congress’

desire was for a unified review system at a single level to

prevent delay in the achievement of the Act’s goals. See

E.l. du Pont de Nemours & Co. v. Train, 528 F. 2d

1136, 1141-1142 (4th Cir. 1975), affd, 430 U.S. 112

(1977). As this Court found in a slightly different

context, it is “unlikely that Congress intended such

bifurcated review” under the Act. 430 U.S. at 128 n.18.

3. Section 402 of the Clean Water Act was amended

in 1977, after the permit in this case was denied. to

provide that:

(d)(4) In any case where, after December 27.

1977, the Administrator, pursuant to paragraph (2)

of this subsection, objects to the issuance of a

permit, on request of the State, a public hearing

shall be held by the Administrator on such

objection. If the State does not resubmit such permit

revised to meet such objection within 30 days after

completion of the hearing, or, if no hearing is

requested within 90 days after the date of such

objection, the Administrator may issue the permit

pursuant to subsection (a) of this section for such

source in accordance with the guidelines and

requirements of this chapter.

33 U.S.C. (Supp. 1) 1342(d)(4). This power was granted

to EPA “in order to avoid the impasse” that existed

when EPA vetoed a state-issued permit and the state did

not then issue a new permit consistent with EPA

guidelines. S. Rep. No. 95-370, 95th Cong., Ist Sess. 73

(1977). The Conference Report makes clear that “the

Administrator is expected to use the authority given by

this amendment to issue a permit after objecting to a

State-issued permit.” H.R. Conf. Rep. No. 95-830, 95th

Cong., Ist Sess. 97 (1977). Under the law, as amended,

an EPA veto of a state permit is therefore essentially a

preliminary action to issuance of a “inal permit under 33

U.S.C. (Supp. I) 1342(d)(4) and thus should not be

reviewable until the permit issues. See 44 Fed. Reg.

32877-32878 (1979). The Conference Report explicitly

States that “any litigation over the degree of effluent

reduction required for a source should take place in the

context of judicial review of the permit, rather than in

the context of an enforcement action.” H.R. Conf. Rep.

No. 95-830, supra, at 97. Thus, the question of the

proper forum for review of a veto of a state permit may

not be of much future importance.

If the veto is still reviewable after the 1977

amendments, however, the Conference Report makes it

clear that review is to be directly in the court of appeals.

“Judicial review arising out of this provision would be in

the same manner as judicial review of any EPA issued

402 permit” (ibid.) which is in the court of appeals under

33 U.S.C. 1369(b)(1)(F).

4. The court of appeals also held that Section

509(b)(1)(E) did not authorize direct review in the court

of appeals of an EPA denial of a variance, and no court

of appeals has specifically held to the contrary. The

court held that an EPA denial of an individual variance

was not covered by Subsection (E) because that refers

only to general effluent guidelines. This theory is at odds

with this Court’s suggestion in E./. du Pont de Nemours

& Co. v. Train, 430 U.S. 112, 136 (1977), that a variance

granted under Section 30l(c) of the Act is directly

reviewable in the court of appeals under Subsection (E).

See also Weyerhaeuser Corp. v. Costle, 590 F. 2d 1011,

1033 n.29 (D.C. Cir. 1978). The court distinguished these

cases on the ground that an EPA objection to a state-

proposed variance is to be treated differently from an

EPA denial of a variance (Pet. App. 10-11 n4).4

First, the court suggests no justification for this

distinction. More importantly, the court erred in failing

to recognize that, unlike permits, variances “must be

approved” by EPA-—states have no authority to issue

variances. See 40 C.F.R. 430.72. Thus, EPA’s action was

an EPA denial! of a variance and must be reviewable

directly in the court of appeals under Subsection (E). In

light of the absence of a conflict, however, we do not

urge that the Court grant plenary review at this time in

respect of this question.

5. In the circumstances, we do not oppose the

granting of the petition for certiorari. The Court may

wish to consider, however, whether summary reversal

would be appropriate.5

+The court also relied on the fact that Section 301(c) applies only

to permit applications filed after July 1, 1977, but the variance in

this case is not sought under Section 301(c) but under the variances

established by regulation for the 1977 limitations.

‘We note that, if certiorari is granted, all parties will be urging

reversal. If the Court deems plenary consideration appropriate. it

may wish to consider the appointment of counsel to appear as

amicus curiae in support of the judgment below. See Granville-

Smith v. Granville-Smith, 348 U.S. 885 (1954), 349 U.S. 1. 4 (1955):

cf. Menominee Tribe v. United States, 390 U.S. 916, 391 U.S. 404.

407 (1968).

10

Respectfully submitted.

WapE H. McCree, Jr.

Solicitor General

SANFORD SAGALKIN

Deputy Assistant Attorney

General

JACQUES B. GELIN

DEAN K. DUNSMORE

Davip C. SHILTON

Attorneys

JANUARY 1980

DOJ-1980-01