Petitioners Reply Brief — Edison Electric Institute v. Costle

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No. 80-619

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IN THE

Supreme Court of the Wuited States

OCTOBER TERM, 1980

EDISON ELECTRIC INSTITUTE, ef al.,

- Petitioners,

DOUGLAS M. COSTLE,

Respondent.

On Petition for a Writ of Certiorari to the United States

Court of Appeals for the District of Columbia Circuit

REPLY BRIEF OF PETITIONERS

GEORGE C. FREEMAN, JR.

HUNTON & WILLIAMS

707 East Main Street

P.O. Box 1535

Richmond, Virginia 23212

(804/788-8365)

HENRY V. NICKEL

(Attorney of Record)

F. WILLIAM BROWNELL

MARK G. WEISSHAAR

HUNTON & WILLIAMS

P.O. Box 19230

1919 Pennsylvania Ave., N.W.

Washington, D.C. 20036

(202 /223-8650)

Counsel for Petitioners

JANUARY 19, 1981 Edison Electric Institute, et al.

WILSON - EPES PRINTING Co.. INC. - 789-0096 - WASHINGTON. D.C. 20001

ed

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INDEX

Page

I. EPA Failed to Give the Public Adequate Notice

of the Intended Effect of the Part 58 Rule-

EE SOG ES SRO ED 2

II. Substantial Due Process Concerns Are Pre-

CE 6

REESE ER 10

TABLE OF AUTHORITIES

CASES:

National Tour Brokers Ass’n. v. United States,

591 F.2d 896 (D.C. Cir. 1978) .............................

Union Electric Co. v. EPA, 429 U.S. 246 (1976)..

a >

STATUTES:

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

SEE SIIESEY SADE 2 EN 5

Clean Air Act, 42 U.S.C. § 7401 et seq. (Supp.

II 1978)

S200, 48 USC. $7409 .................................... 4

§ 109(d), 42 U.S.C. § 7409(d) 0. 4

§ 807(b), 42 U.S.C. § 7607(b) 0. 2,7

§ 807(d), 42 U.S.C. § 7607(d) 0. 4

Se MM I ccc cece eee 4

REGULATIONS:

ee ee ee OD

GO CPR. $504 (1G9G0) nnn. ccccccececeece ee

40 C.F.R. § 50, Appendix A, 7.1.2 (1980) ..............

40 C.F.R. § 58.82(f) (1980) 2... ccecececeeeee

—— me CO

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REPLY BRIEF OF PETITIONERS

This Petition for a Writ of Certiorari arises out of

Electric Utilities’ attempt to obtain review of the 24-

hour national ambient air quality standard for sulfur

dioxide (SO,), as interpreted by EPA some nine years

after the standard’s promulgation.

The 24-hour national ambient SO, standard was pro-

mulgated by EPA in 1971 under § 109 of the Clean Air

Act. This standard, in 40 C.F.R. Part 50, determines

the emission control requirements that apply to every

coal- and oil-fired industrial facility in the nation. The

cost of those controls—indeed, the very ability of such

facilities to continue to operate lawfully or to be con-

structed—is directly related to the stringency of the 24-

hour standard. See Edison Electric Institute, Petition for

Writ of Certiorari at 5-6 (Oct. 20, 1980) (hereinafter

“Petition for Certiorari”).

Part 50 specifies that compliance with the 24-hour

standard is to be evaluated using “calendar day” aver-

ages.' As now interpreted by EPA, however, the Part

1EPA has asserted that Part 58 does not change the ambient

standard because the standard permits the Agency to determine

compliance by using any averaging technique that yields a 24-

hour value so long as the statistical method “detects more viola-

tions.” See Respondent’s Brief in Opposition at 3 n.2 (December

1980) (hereinafter “Respondent’s Br.”). EPA’s assertion is not

supported by the language of Part 50 which provides that “viola-

tions” of the 24-hour standard can only be determined in accord-

ance with “the reference method described in Appendix A to this

part, or by an equivalent method.” 40 C.F.R. § 50.4 (1980), App.

99 (emphasis added). The reference method referred to in § 50.4

requires that one compliance determination be taken each day “from

midnight to midnight.” 40 C.F.R. § 50, Appendix A, 7.1.2 (1980),

App. 109. Similarly, the equivalent method mandates that “[f]or

sulfur dioxide, no more than... one (1) 24-hour measurement shall

be made per day.” 40 C.F.R. § 53.82(f) (1980), App. 129. Thus,

calendar day averages are the compliance method specified by the

terms of Parts 50 and 58 and, therefore, Part 50 neither au-

thorizes nor contemplates the use of “running” 24-hour averages

in determining whether the 24-hour standard has been violated.

’%

A

2

58 ambient air quality reporting requirements promul-

gated in May 1979 supercede the calendar day com-

pliance method and require enforcement of the 24-hour

standard using “running averages.”*® This change in

the method for evaluating compliance—which enlarges

the compliance periods from 365 such periods to 8,737—

increases the stringency of the 1971 standard by 30 to

40 percent. Petition for Certiorari at 11; App. 159.

The court below dismissed Electric Utilities’ petition

to review EPA’s attempt to shift enforcement of the

standard from calendar day averages to running aver-

ages. If this dismissal is allowed to stand, Electric Utili-

ties will, by virtue of § 307(b) of the Clean Air Act,

be forever barred from challenging the validity of this

more stringent 24-hour SO, standard. Respondent op-

poses review by this Court. For the reasons stated below,

the grounds urged by Respondent for denial of Electric

Utilities’ Petition for Certiorari are without merit.

I. EPA Failed to Give the Public Adequate Notice of the

Intended Effect of the Part 58 Rulemaking

Respondent admits that if the effect of the Pari 58

reporting requirements on the Part 50 SO, ambient

standard had been ambiguous at the time the Part 58

rules were promulgated, a petition for judicial review

would, as Electric Utilities contend, have been appropri-

ate at a later date.* According to Respondent, however,

2 With the calendar day method, a violation occurs upon finding

a second exceedance out of 365 values, whereas, under the running

averages method, a violation occurs upon finding a second ex-

ceedance out of 8,737 possible values. Petition for Certiorari at

11.

3 See Respondent’s Br. at 6 n.3, 7. The Respondent’s alleged

distinction of the line of District of Columbia Circuit authority

cited by Electric Utilities (Respondent’s Br. at 6) relies entirely

upon the Respondent’s ex cathedra pronouncement that the Part

58 regulations unambiguously communicated a change in the

ci ai

3

the effect of the Part 58 reporting requirements on the

Part 50 SO, ambient standard was made clear and un-

ambiguous when the Part 58 rules were promulgated.

This notice, Respondent asserts, was given by the terms

of a footnote in one of the six appendices to the Part 58

regulations and by an unpublished guideline document

referred to in that footnote.* Respondent’s Br. at 2.

The very obscurity of the reference relied upon by

Respondent belies the accuracy of EPA’s assertion of

clarity. Had EPA intended to impose a new, more

rigorous compliance method for a standard that applies

throughout the nation and affects all of industry, the

Agency was required to announce such a profound

change prominently and directly. It cannot satisfy its

notice obligation by relying upon a footnote that is buried

in the midst of 45 Federal Register pages of highly tech-

nical regulatory provisions—a footnote that itself can-

not be understood without reading a guideline document

that was not made available to the general public.

EPA also seems to rely upon the preamble to the pro-

posed rules as providing the necessary notice. Respond-

ent’s Br. at 2. The inadequacy of this “notice” is per-

haps best demonstrated by the content of the rulemaking

comments received by EPA. Not one comment was re-

ceived from any member of industry on the Agency’s

“proposal” te change the compliance method and in-

method for determining compliance with the Part 50 standard.

Respondent appear to imply that, if the regulations were indeed

ambiguous on this point, as Petitioners contend, the District of

Columbia Circuit cases require the course of prior administrative

resolution which Electric Utilities attempted. Respondent’s Br. at

5, 6 & n.3.

* App. 157-59. The guideline document referred to in Appendix

F was never incorporated by reference in accordance with 1 C.F.R.

Part 51 (1980). Indeed, the document was not even made avail-

able to the public by filing a copy at the Office of the Federal

Register.

4

crease the stringency of the 24-hour standard by as much

as 40 percent. Not one comment on this issue was re-

ceived, of course, because no one in industry knew that

this was the Agency’s intent. Indeed, Electric Utilities

have, for the past three years, been participating in

EPA’s ongoing pre-rulemaking activities to evaluate

whether revisions of the Part 50 SO, ambient standard

are required. See Clean Air Act §109(d). The Part 58

rulemaking was never discussed during this evaluation,

nor was a change to a running averages compliance

method ever even mentioned.

The terms of the preambles to both the proposed and

final rules further show why Respondent’s characteriza-

tion of Part 58’s “clarity” is without support. First,

while Respondent admits that the Part 58 rules as in-

terpreted by EPA significantly increase the stringency

of the Part 50 standard, the Part 50 regulations were

never discussed or even mentioned in the preambles to

the Part 58 rulemaking. Second, Respondent in its brief

correctly observes that the Part 58 regulations were

promulgated in accordance with § 319 of the Act—a pro-

vision dealing with standardization of ambient monitor-

ing networks, not national ambient air quality stand-

ards. Section 109, the statutory provision authorizing

the Agency to promulgate and revise national ambient

air quality standards, was never even mentioned in the

Part 58 rulemaking.’ It was similarly ignored in Re-

spondent’s brief. See Respondent’s Br. at 1. Finally, in

the Part 58 rulemaking, EPA did not make any of the

numerous findings required by § 109 of the Clean Air

Act, nor did EPA follow the procedures required by

§ 307(d) of the Act for revising the Part 50 ambient

standards.®

5 Cf. National Tour Brokers Ass’n. v. United States, 591 F.2d

896 (D.C. Cir. 1978).

* Petition for Certiorari at 11 n.16.

5

These considerations lead to one inescapable conclusion

—the purported effect of the Part 58 rules on the Part

50 SO, ambient standard was totally unclear until EPA

responded in March 1980 to Electric Utilities’ request for

a definitive interpretation of these rules.? Since Electric

Utilities filed their petition to review within 60 days of

this final Agency action,* the petition was timely, and it

was improper for the court below to dismiss it.

7 Respondent implies that Electric Utilities “sought to avoid”

such available courses as petitioning for review or intervening in

PPG v. Costle and chose instead to seek clarification from the

Administrator of an ambiguity which was Electric Utilities’ own

creation. Respondent’s Br. at 5. Respondent does not hazard to

suggest what possible motivation could induce Electric Utilities to

embark voluntarily on such a circuitous course. The facts are that

the PPG petitioners filed their petition to review the Part 58

rules as a “protective” matter after learning that an EPA Region

may have used running averages in finding a violation of the

24-hour standard in Summit County, Ohio. Petition for Cer-

tiorari at 9 n.14. Electric Utilities did not learn until the fall of

1979 that this EPA Regional Office viewed Part 58 as changing

the compliance method for the Part 50 SO, ambient standard.

This was after the expiration of the 60-day period for seeking

review of the Part 58 rule and after the time for intervention

of right in PPG v. Costle. Electric Utilities, inasmuch as they

had no knowledge of the purported change in the regulations un-

til well after the period for judicial review and for intervention

as of right had expired, cannot be charged with knowledge of

that local interpretation as grounds for depriving them of judicial

review. Rather, it was proper, and in accordance with the law of

the District of Columbia Circuit, for Electric Utilities to ask that

the Administrator of EPA issue a definitive interpretation of his

rules before filing any petition to review. See Petition for Cer-

tiorari at 9-10 n.14, 15 n.22.

® Respondent does not find PPG v. Harrison to be applicable

to this case. Respondent correctly observes that the parties in

PPG v. Harrison stipulated that the action of the Regional Ad-

ministrator was “final action” under 5 U.S.C. § 551 et seq. (1976)

but then concludes that no similar concession is appropriate here be-

cause EPA’s letter responding to Electric Utilities’ request for in-

terpretation merely reaffirmed what had previously been determined

*

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6

II. Substantial Due Process Concerns Are Presented by

this Case

Electric Utilities petitioned to review EPA’s Part 50

ambient standard after being notified of a definitive ad-

ministrative interpretation of that standard which, by

EPA’s own admission, will substantially increase its

stringency. Since the national primary ambient stand-

ards are the mainspring of EPA’s health-based regula-

tion, the change signalled by this interpretation will work

a profound alteration of Electrie Utilities’ legal obliga-

tions under the Clean Air Act.°

The decision of the District of Columbia Circuit in

this case operates to deny Electric Utilities the oppor-

tunity ever to be heard on this significant national issue.

As described above,’ neither the proposed regulations

nor the final regulations provided adequate notice of this

change in the standard. As a result, Electric Utilities

were never provided an opportunity to submit comments

in the rulemaking proceeding or to file a timely petition

in the regulations. Respondent’s Br. at 7. In attempting to make

this distinction, Respondent ignores the fact that, in PPG Vv.

Horrison, this Court found jurisdiction even though the Agency’s

response to a request for interpretation merely reaffirmed a pre-

vious EPA determination. An even more fundamental flaw in

Respondent’s argument is the suggestion that the concessions of

the parties in Harrison could be dispositive on the question of

jurisdiction. It is axiomatic that the parties, by their agreement,

cannot create jurisdiction where none exists. Thus, it is ap-

propriate to conclude that this Court determined in Harrison that

a Regional Administrator’s reaffirmation of an agency determina-

tion in response to a request for interpretation was indeed final

agency action.

® Among other things, emission limitations implementing pri-

mary national ambient air quality standards must be attained

without regard to the technological or economic feasibility of

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

10 See pp. 2-5 supra.

T

for judicial review.'' Rather, it was not until the Ad-

ministrator’s response to Petitioners’ request for inter-

pretation that notice of this change was first officially

communicated. Should the Court uphold the District of

Columbia Circuit’s denial of jurisdiction to review this

administrative interpretation, Electric Utilities will be

forever denied appellate review of this significant change

in the standard and will be barred by § 307(b) from liti-

gating the validity of this change in subsequent proceed-

ings. In its brief in opposition, Respondent, making the

assumption that the Part 58 regulations were ambiguous

on their face,’* offers two arguments which it believes

should lead this Court to let the lower court’s order of

dismissal stand.

First, Respondent contends that the issue of inadequate

notice “is not of sufficient importance to merit review

. since no member of the affected industry could

plausibly maintain in the future that it was unaware of

what the Administrator meant by the language in ques-

tion.” Respondent’s Br. at 7. Respondent’s position in

this first argument seems to be that, as long as a regu-

lated company is afforded notice of its legal obligations,

it does not matter whether the company is denied ju-

dicial review to challenge the validity of those obligations.

This argument seems to forget the fundamental prin-

ciple that due process requires notice and an opportunity

to be heard. Providing companies with notice is an empty

gesture if it comes at a time or in a manner which

prevents those companies from being heard.”

11 See note 7 supra.

12 Respondent’s Br. at 7.

18 Respondent has also attempted to belittle the importance of

this case by claiming that it “raises only a narrow issue tied to the

particular language involved.” Respondent’s Br. at 7. It is hard to

understand from what legal tradition Respondent has learned

that the denial of an opportunity to be heard raises issues of little

significance. Even if Respondent can find a tribunal which would

countenance such an idea, its assertion {3 nonetheless factually

8

Second, Respondent argues that Electric Utilities

are not prejudiced by the inadequacy of notice in this

case because all of Electric Utilities’ arguments have

been presented to the District of Columbia Circuit in

PPG v. Costle. To date, the only filing from Petitioners

in the PPG case is Electric Utilities’ amici brief. This

brief, however, only described the administrative action

taken by Electric Utilities, and explained how that ac-

tion might resolve the issues before the court in the

PPG litigation. Electric Utilities did not present their

arguments on the merits, as Respondent implies.* In-

unsupportable. The change in the ambient standard effected by

Part 58 is not particularized or parochial but rather national

in scope. The ambient standard has a direct and tangible effect

on the industrial growth of communities throughout the United

States and on the nation’s future energy options. Petition for

Certiorari at 5-6. Moreover, it leaves a further misimpression to

maintain that the issue presented “is tied to the language in-

volved.” As EPA’s response in opposition makes clear, a major

change in the 24-hour standard was made on the basis of an

oblique reference in a footnote in one of numerous appendices

to highly technical regulations. See pp. 2-8, supra. The permis-

sibility of making such profound changes in such an obscure

manner is a question which transcends the specific “language in-

volved” in this case.

14 Respondent implies that Electric Utilities’ amici brief was

filed at a time when Electric Utilities were aware of the Ad-

ministrator’s interpretation of Part 58 and could therefore present

all their arguments on the merits of this interpretation. This is

simply not true. Throughout its statement of the case, Re-

spondent depicts the course of regulatory activity and court filings

in sequence. Inexplicably, Respondent departs from this faithful-

ness to the sequence of events when describing the filing of

Electric Utilities’ amici brief in the PPG case. Although the amici

brief was filed on December 8, 1979, more than four months be-

fore the issuance of the Administrator’s interpretation, Respond-

ent mentions the filing of the amici brief after a court filing which

occurred on April 25, 1980. Respondent’s Br. at 4. Thus, in Re-

spondent’s brief, it appears as though the framing of the amici

brief could benefit from and challenge the Administrator’s inter-

pretation. As the contents of this brief reveal, this solitary filing

9

deed, Electric Utilities’ brief on the merits, filed in June

1980, was not considered by the court in dismissing Elec-

tric Utilities’ petition to review and is not before the

Court of Appeals in the PPG case.”

Finally, while the PPG petitioners have made certain

arguments in the PPG case that are similar to argu-

ments that would be made by Electric Utilities, the only

certain way in which Electric Utilities’ interests would

be protected by the outcome of the PPG case is if the

District of Columbia Circuit accepts PPG’s arguments

and sets aside the Part 58 regulations. That result, how-

ever, is only a possibility, and this possibility is no sub-

stitute for an opportunity to be heard and to have Electric

Utilities’ arguments on the validity of both the Parts 50

and 58 regulations considered by the Court before de-

cision.*%* Equally important, the District of Columbia

Circuit could affirm EPA in PPG v. Costle and the

petitioners in PPG could decide not to seek review of

that decision. If this occurred, Electric Utilities would

have no opportunity to ask this Court to review this

significant change in the 24-hour SO, standard and would

be forever bound by the result in the PPG case.

by Electric Utilities in the PPG case does not present Electric

Utilities’ arguments on the merits of EPA’s significant change in

the SO, ambient standard.

15 Given Respondent’s implication in its brief to this Court that

Electric Utilities had had an opportunity to submit their views on

the merits to the court below in the PPG case, Electric Utilities

filed on January 7, 1981, a motion for leave to file their brief on the

merits as a supplemental amici brief. The District of Columbia

Circuit denied that motion on January 14, 1981, thereby foreclos-

ing Petitioners from ever presenting their views on the merits

in that case.

16 The petition to review filed in PPG v. Costle cites Parts 51,

52, 58 and 58 of EPA’s regulations. Electric Utilities’ petition,

which was dismissed by the court below, specifically requested

that the court review both the Part 58 regulations and the Part

50 ambient standard. See Petition for Certiorari at 9, 12.

_

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CONCLUSION

In view of the pendency of the PPG case in the Dis-

trict of Columbia Circuit and the desirability of resolv-

ing as soon as possible all challenges to the validity of

the Part 50 standard as construed by EPA, Electric

Utilities urge the Court to grant the petition for the

writ of certiorari and summarily remand this case to

the Court of Appeals for the District of Columbia Cir-

cuit for consolidation with PPG Industries v. Costle.

JANUARY 19, 1981

Respectfully submitted,

GEORGE C. FREEMAN, JR.

HUNTON & WILLIAMS

707 East Main Street

P.O. Box 1535

Richmond, Virginia 23212

(804/788-8365 )

HENRY V. NICKEL

(Attorney of Record)

F. WILLIAM BROWNELL

MARK G. WEISSHAAR

HUNTON & WILLIAMS

P.O. Box 19230

1919 Pennsylvania Ave., N.W.

Washington, D.C. 20036

(202/223-8650)

Counsel for Petitioners

Edison Electric Institute, et al.