Record and brief — City of Painesville v. United States
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81 — 1 6 4 Office-Supreme Court, U.S.
F! I. E
No. JUL 27 1981
ALCXANDER L. STEVAS,
EK
Supreme Court of the United States
October Term, 1981
CITY OF PAINESVILLE, OHIO,
Petitioner,
vs.
UNITED STATES OF AMERICA,
Respondent.
PETITION FOR A-WRIT OF CERTIORARI
To the United States Court of Appeals
For the Sixth Circuit
Lee E. LARSON
Counsel of Record
JAMES Van CARSON
1900 Union Commerce Bldg.
Cleveland, Ohio 44115
(216) 696-9200
Attorneys for Petitioner City of
Painesville, Ohio
Of Counsel:
Squire SANDERS & DEMPSEY
1800 Union Commerce Bldg.
Cleveland, Ohio 44115
CHARLES E. CANON
CANNON, STERN & AVENI
Milburn Building
41 East Erie Street
Painesville, Ohio 44077
— —-—
———
THE GATES LEGAL PUBLISHING CO., CLEVELAND, OHIO- TEL. (216) 621-5647
QUESTIONS PRESENTED
1. Upon determining that a municipal utility boiler
is not in compliance with New Source Performance Stan-
dards, promulgated pursuant to Section 111 of the Clean
Air Act, should the district court, under this Court’s de-
cision in Hecht Co. v. Bowles, 321 U.S. 321 (1944), first
conduct an evidentiary hearing and determine the potential
legal and equitable remedies available and the propriety
and efficacy of each before permanently enjoining opera-
tion of the boiler in violation of such standards?
2. When a proposed New Source Performance Stan-
dard promulgated under Section 111 of the Clean Air Act
is subsequently held to have been defective at the time of
its proposal, does the date of publication nevertheless con-
stitute the date for determining which sources are subject
to such standard, even though the standard can subse-
quently be justified only on the basis of technology de-
veloped after the date of publication?
TABLE OF CONTENTS
Questions Presented ................
Statucory and Regulatory Provisions Involved
Statement of the Case
A. ee
tion in the courts below ..
B. Factual background ...
C. Background on the ——— of pertinent
air pollution regulations
D. The decision of the court of appeals ................
Reasons for Granting the Writ:
I. The Court Of Appeals’ Decision Is In Direct
Conflict With Decisions Of This Court
II. This Case Involves Important Questions Of
Federal Law Which Should Be Decided Py
This Court
A. The decision below misconstrues an im-
portant statutory element of the Clean
Air Act and establishes erroneous prece-
dent that transcends this case and factu-
ally similar cases
B. The immediate consequences of the deci-
sion below will adversely affect many
persons directly and indirectly involved
C. The decision below, if let stand, will re-
sult in the unequal application of the
Clean Air Act in different jurisdictions ....
Conclusion ..
eonwe 1
10
16
16
21
Appendix:
A. Decision and opinion of the court of appeals,
B.
8
filed on March 26, 1981 Al
Order of the court of appeals denying petition
for rehearing, filed on April 29, 1981 Als
Order of the court of appeals staying mandate,
filed June 11, 1981 Al
Memorandum and Order of the district court,
filed January 19, 1977 (431 F. Supp. 496) A20
Order of the district court granting perma-
nent injunction, filed June 18, 1978 A30
Section 111, Clean Air Act, 42 U.S.C. §1857c-6
[later amended and recodified at 42 U.S.C.
87411] .. A32
40 C.F.R. Part 60 (January 1, 1972) ................ A34
United States v. Public Service Co. of Indi-
ana, 12 ERC 1495 (S.D. Ind. 1977) ...................... A36
City of Hamilton v. Gardebring, Civil No. 1-
79-552 (S.D. Ohio, Decision filed May 26,
1981) A56
INDEX OF AUTHORITIES
Cases
Brown v. Hecht Co., 49 F. Supp. 528 (D.D.C. 1943),
. rev'd, 137 F.2d 689 (D.C. Cir. 1943), rev’d sub nom.,
Hecht Co. v. Bowles, 321 U.S. 321 (1944) 11
*City of Hamilton v. Gardebring, Civil No. 1-79-552
r oP ee eee 22
Essex Chemical Corp. v. Ruckelshaus, 486 F.2d 427
(D,C. Cir. 1973) 6, 7, 9, 15, 17-19
Hecht Co. v. Bowles, 321 U.S. 321 (1944) 8, 10-15
Vv
Hill v. TVA, 419 F. Supp. 753 (E.D. Tenn. 1976), rev’d,
549 F.2d 1064 (6th Cir. 1977), aff'd, 437 US. 153
AAS te PT aA a NN A I 12, 13
Portland Cement Assn. v. Ruckelshaus, 486 F.2d 375
(D.C. Cir. 1973) * 6
Rondeau v. Mosinee Paper Corp., 422 U.S. 49 (1975) * 8 10
TVA v. Hill, 437 U.S. 153 (1978) ——— 8, 12, 13, 14, 15
United States v. Constantine, 296 U.S. 287 (1935) ........ 24
*United States v. Public Service Co. of Indiana, 12 ERC
re. 23, 24
Statutes
II —— serene 2
34 T0 ]ܹ à21—ꝛ2 3
Section 111, Clean Air Act, 42 U.S.C. §1857c-6 [later
amended and recodified at 42 U.S.C. §7411] ............ 2, 3, 5,
6, 10, 16, 19, 21, 22
Section 113, Clean Air Act, 42 U.S.C. §1857c-8 [later
amended and recodified at 42 U.S.C. §7413] ....2, 3, 10, 15
Code of Federal Regulations (C. F. R.)
40 C. F. R. Part 60 (January 1, 1972) 2, 3
40 C. F. R. 560.43 (January 1, 1972 6
Federal Register
36 Fed. Reg. 15704 (August 17, 1971) 6
36 Fed. Reg. 24877 (December 23, 1971) 2, 6
40 Fed. Reg. 42045 (September 10, 1975) 7
42 Fed. Reg. 61541 (December 5, 1977) 7
“Reproduced in the Appendix.
No.
Supreme Court of the United States
October Term, 1981
CITY OF PAINESVILLE, OHIO,
Petitioner,
vs.
UNITED STATES OF AMERICA,
Respondent.
PETITION FOR A WRIT OF CERTIORARI
To the United States Court of Appeals
For the Sixth Circuit
The City of Painesville, Ohio, petitions for a writ of
certiorari to review the judgment of the United States
Court of Appeals for the Sixth Circuit, entered on March
26, 1981, in Case No. 78-3551, affirming a decision and orders
of the United States District Cou rt for the Northern District
of Ohio.
OPINIONS BELOW
The decision and opinion of the court of appeals,
entered on March 26, 1981, and not yet officially reported,
appears in the appendix to this petition, as does the court’s
April 29, 1981, order denying rehearing. The January 9,
1977, Memorandum and Order of the district court is re-
ported at 431 F. Supp. 496. The June 18, 1978, Order is
unreported. Both district court decisions appear in the
appendix.
JURISDICTION
The jurisdiction of this Court is invoked pursuant to
28 U.S.C. §1254(1). The opinion below was entered on
March 26, 1981, and an order denying a petition for re-
hearing was filed on April 29, 1981.
STATUTORY AND REGULATORY
PROVISIONS INVOLVED
A. Section 111 of the Clean Air Act, as added by
§4(a) of the Clean Air Amendments of 1970, Pub. L. No.
91-604, 84 Stat. 1676, and originally codified at 42 U.S.C.
§1857c-6 (later amended and recodified at 42 U.S.C.
§7411) is reproduced in pertinent part in the appendix.
B. Section 113(b) of the Clean Air Act, as added
by §4(a) of the Clean Air Amendments of 1970, Pub. L.
No. 91-604, 84 Stat. 1676, and originally codified at 42
U.S.C. §1857c-8(b) (later amended and recodified at 42
U.S.C. §7413(b)) provides, in pertinent part:
“The Administrator may commence a civil action
for appropriate relief, including a permanent or tem-
porary injunction, whenever any person. . violates
section 111 (e)
C. 40 C. F. R. Part 60, as added by 36 Fed. Reg. 24877
(December 23, 1971), is reproduced in pertinent part in
the appendix.
STATEMENT OF THE CASE
A. The course of proceedings and their
disposition in the courts below
On April 2, 1976, the United States of America, at the
request of the United States Environmental Protection
Agency (“EPA”), filed a complaint, along with a motion
for preliminary injunction, with the United States District
Court for the Northern District of Ohio, requesting that
the City of Painesville (the “City” or “Painesville”), a
municipal corporation, be enjoined from operating Unit 5
of the Painesville Municipal Light Plant in violation of
Section 111 (e) of the Clean Air Act (the Act“), and
the Standards of Performance for New Stationary Sources
(commonly called “New Source Performance Standards”
or “NSPS”) for sulfur dioxide, promulgated thereunder
and codified at 40 CF. R. Part 60. The jurisdiction of the
district court was invoked under 28 U.S.C. §1345 and 42
U.S.C. §1857c-8(b) (3) (later amended and recodified at
42 U.S.C. §7413(b) (3)).
On April 23, 1976, the City responded by filing a mo-
tion for summary judgment for the reason that Unit 5
was not, under the statute and regulations, a “new source”
subject to the NSPS for sulfur dioxide. On July 30, 1976,
the government filed its own “Motion for Summary Judg-
ment as to Liability,” contending that Unit 5 is a “new
source” as defined in Section 111(a)(2) of the Act. The
government sought only to determine the issue of liability
and advised the court that facts relating to remedy were
1. References herein are to Section 111 of the Clean Air
Amendments of 1970, Pub. L. No. 91-604, 84 Stat. 1676. Section
111 was originally codified at 42 U.S.C. §1857c-6 (cited in the
district court opinion) but later 2 and recodified at 42
U.S.C. §7411 (as cited by the court of appeals).
4
in dispute and that further evidence might have to be taken
on that issue.
On January 19, 1977, the district court issued a Memo-
randum and Order grantiig the government’s motion for
summary judgment as to liability and concluding that
Unit 5 is a “new source.” On June 18, 1978, without
hearing any evidence as to the propriety or nature of the
injunctive remedy, the district court granted final judg-
ment to the government and permanently enjoined the
City from operating Unit 5 in violation of the NSPS sul-
fur dioxide limitation.
A timely appeal was taken to the Court of Appeals
for the Sixth Circuit. On March 26, 1981, the court issued
and filed its decision and opinion affirming the district
court. On April 29, 1981, the court denied the City’s peti-
tion for rehearing.
B. Factual background
The City of Painesville owns and operates a municipal
electric utility which includes its own power generating
facility. Prior to the construction of Unit 5, power was
generated by four older coal-fired boilers with supporting
equipment.
In 1966 the City recognized that it would need addi-
tional, modern power generating capacity. Thereafter,
the City purchased a turbogenerator, hired design engi-
neers, prepared detailed plans and specifications, passed
ordinances to increase electric rates and finance construc-
tion, and evea signed a letter of intent to purchase the
boiler. However, because of disagreements which de-
veloped between the City and its original consultant, the
actual execution of a contract for construction of the boiler
did not occur until Jul; 28, 1972.
On-site construction for the plant expansion was com-
menced on January 22, 1973. Boiler erection was begun
about July, 1973, and essentially completed in April, 1975.
The Unit 5 boiler was started in December, 1975, and is
presently the only boiler in normal operation at the Paines-
ville light plant. :
Nearly a year after learning that construction of Unit
5 was in progress, the EPA sent a letter on September 18,
1975, to the City asking for more information on Unit
5, stating that it was “concerned” about the applicability
of the NSPS to Unit 5. At this point, the boiler was com-
pleted and the unit nearly ready for start-up.
In accordance with this request, further information
was submitted to the EPA. Finally, on November 24, 1975,
the EPA issued a Notice of Violation stating that, if started
up, Unit 5 would violate the NSPS for sulfur dioxide.
The parties were unable to reach agreement subsequent to
the issuance of the Notice of Violation and, at the EPA’s
request, the government filed its complaint in this case.
C. Background on the development of pertinent
air pollution regulations
Section 111(b) of the Clean Air Act sets forth a strict
timetable by which the EPA was to develop and publish
emissions standards for certain categories of stationary
sources of air pollutants. Applicability of these standards
was to be limited to those sources which fell under the
definition of “new source”; that is, those which com-
menced construction or modification after the date upon
which the EPA published regulations pertaining to those
sources. For each of the listed source categories a stan-
dard of performance had to be developed which
“. . . reflects the degree of emission limitation achiev-
able through the application of the best system of
emission reduction which (taking into account the cost
of achieving such reduction) the Administrator deter-
mines has been adequately demonstrated.” Clean Air
Act, §111(a) (1).
As the EPA was soon to find out, a determination of
the “best system” of emission reduction included more
than simply a technical evaluation and an economic im-
*pact analysis; rather, it included an investigation of the
adverse environmental impact of the selected system, and
the Clean Air Act required publication of the results of this
analysis along with the standard. Portland Cement Assn.
v. Ruckelshaus, 486 F.2d 375, 385 (D.C. Cir. 1973).
The EPA published proposed standards for fossil fuel
fired steam generators (boilers) on August 17, 1971. 36
Fed. Reg. 15704. These proposed standards set forth, inter
alia, a sulfur dioxide emissions standard of 1.2 Ib.“ After
the notice and comment period the EPA published this
standard as a final rule (36 Fed. Reg. 24877; December 23,
1971) and subsequently codified it as 40 CFR §60.43(a) (2).
Judicial review of these standards was initiated in the
Court of Appeals for the District of Columbia Circuit.
Essex Chemical Corp. v. Ruckelshaus, 486 F.2d 427 (D.C.
Cir. 1973). The Essex petitioners argued that the EPA
acted unlawfully and/or arbitrarily in adopting the par-
ticulate, sulfur dioxide and nitrogen oxide standards for
coal-fired boilers. While the Essex court upheld the
particulate and nitrogen oxide standards, it remanded the
sulfur dioxide standard to the agency for further develop-
ment of the record. 486 F.2d at 441. The Essex court
2. Refers to pounds of sulfur dioxide per million British
thermal units a€tual heat input to the boiler.
7
found that the 1.2 lb. standard was “achievable”, using
lime slurry scrubbers, but that the EPA had failed suf-
ficiently to evaluate the “counter productive environmental
effects” of these scrubbers. 486 F.2d at 440, 441. There
was therefore, in the view of the court , appeals, insuffi-
cient basis in the record to conlude that scrubbers were
the best, adequately demonstrated system for reducing
sulfur dioxide emissions.
Pursuant to the Essex court’s order, the EPA under-
took extensive evaluation of the environmental impact of
scrubbers. It published the proposed results of this study,
along with a solicitation of comments, on September 10,
1975. 40 Fed. Reg. 42045.
This published response by the EPA to the Essex
remand revealed that the technology (scrubbers) had not
been adequately demonstrated at the time of the proposed
standards, but that the adverse environmental consequences
(sludge disposal) had then (in 1975) only recently been
solved. However, the EPA concluded there was no basis
on which to revise the 1.2 lb. standard in light of the
1975 technology demonstration. After waiting another two
years, the EPA published a terse final response to the
Essex remand without change to the sulfur dioxide stan-
dard. 42 Fed. Reg. 61541 (December 5, 1977).
D. The decision of the court of appeals
On June 18, 1978, the district court entered a judg-
ment finding the City’s Unit 5 boiler subject to New Source
Performance Standards and further ordering “that the
defendant, its officers and employees be permanently en-
joined and restrained from emitting sulfur dioxide into
the atmosphere from the Painesville Municipal Light Plant,
Unit No. 5, in excess cf [the NSPS limit]. The district
court thereupon stayed the injunction pending appeal.
Even though the record demonstrates.’ and the govern-
ment agreed,‘ that there was insufficient evidence before
the court to fashion an equitable remedv, the district court
issued the permanent injunction without a hearing or the
taking of additional evidence relating to the injunctive
remedy.
The City has argued that the failure of the district
court to hold an evidentiary hearing to determine the pres-
ence of the traditional factual predicates essential to the
issuance of equitable remedies, and thus to assess the
propriety and the nature of an injunctive mandate, violated
principles well established by decisions of this Court, in-
cluding Rondeau v. “Mosinee Paper Corp., 422 US. 49
(1975) and Hecht Co. v. Bowles, 321 U.S. 321 (1944).
While the court of appeals recognized the general
applicability of the principles set forth in Hecht Co., it
cited this Court’s opinion in TVA v. Hill, 437 US. 153
(1978), as supporting the proposition that, when there is a
clear congressional mandate, the district court is required
to order injunctive relief upon its finding of liability,”
(emphasis added) and that “[a] hearing to determine the
presence of irreparable injury and inadequacy of legal
The City also argued in the court of appeals that Unit 5
is not a “new source” within the meaning of the NSPS
for sulfur dioxide and thus is not properly subject to the
sulfur dioxide standard prescribed therein. The basis for
this assertion is that the date of »ublication of a proposed
NSPS for sulfur dioxide (August 17, 1971, was not the
proper date for determining which sources are subject to
such standard because:
(a) a necessary prerequisite to proposal of such a
standard is a determination by the EPA that the
standard-defining technology has been “adequately
d nonstrated”;
(b) the Essex court held (and the EPA’s response to
the remand confirmed) that, in failing to address
the adverse environmental consequences of such
technology, the EPA had not adequately demon-
strated the requisite technology (scrubbers), at
least as of the time of the 1971 publication; and
(e) if the date of publication becomes the effective
date of the standard, under these circumstances
the result would be to require a newly constructed
source to install unproven technology, which is
both unreasonable and beyond the intent of Con-
gress.
The court of appeals rejected this argument, holding
it irrelevant whether or not the Essex remand invalidated
the sulfur dioxide standard. Instead, the court held that
the mere publication of a proposed standard, even a defec-
tive standard, “determines what sources are new; a source
whose construction commenced after such publication is
subject to [the standard] whatever [it] might be or be-
come.” App. A, p. A7 (emphasis added).
10
REASONS FOR GRANTING THE WRIT
I. THE COURT OF APPEALS’ DECISION IS IN
DIRECT CONFLICT WITH DECISIONS OF THIS
COURT
In upholding the district court’s issuance of an in-
junction without a hearing, the court of appeals held that
the district court was required to order injunctive relief
upon its finding of liability, and that a hearing to determine
whether, on the facts of this case, such injunctive relief
could be justified under traditional equitable principles was
unnecessary. Such a nolding is in direct conflict with this
Court’s decision in Hecht Co. v. Bowles, 321 U.S. 321
(1944), which the Court recently reaffirmed in Rondeau v.
Mosinee Paper Corp., 422 U.S. 49 (1975).
This case and Hecht Co. rest on parallel facts and
similar statutory provisions. In both instances enforce-
ment proceedings were brought on behalf of federal
agencies to enjoin violations of (or to mandate compliance
with) federal statutes and regulations. In both cases, there
was a judicial finding of liability. In Hecht Co., the statute
provided that, upon a finding of a violation or impending
violation, “a permanent or temporary injunction, restrain-
ing order, or other order shall be granted without bond.”
321 U.S. at 322. In the instant case the statute provided
that “[t]he Administrator may commence a civil action
for appropriate relief, including a permanent or temporary
injunction” for a violation of Section 111. Clean Air Act,
Section 113(b), 42 U.S.C. §1857c-8(b) [later amended and
recodified at 42 U.S.C. 87413 (b)] (emphasis added).
In Hecht Co., the district court held an evidentiary
hearing from which it concluded, inter alia; that an in-
11
junction “would not be in the public interest.” Brown v.
Hecht Co., 49 F. Supp. 528, 532 (D.D.C. 1943). Accord-
ingly, after such a balancing of the equities, the court
held that injunctive relief was not warranted under the
circumstances and on that basis refused to issue an injunc-
tion. The court of appeals reversed, holding that the stat-
ute required the issuance of an injunction (or other order)
as a matter of course once violations were found. Brown
v. Hecht Co., 137 F.2d 689 (D.C. Cir. 1943). This Court
reversed the court of appeals’ decision. In so doing, the
Court emphasized the principles that should guide the fed-
eral courts in the exercise of their equity jurisdiction:
“The essence of equity jurisdiction has been the power
of the Chancellor to do equity and to mould each de-
cree to the necessities of the particular case. Flex-
ibility rather than rigidity has distinguished it. The
qualities of mercy and practicality have made equity
the instrument for nice adjustment and reconciliation
between the public interest and private needs as well
as between competing private claims.” 321 U.S. at
329-330.
The Court brushed aside the government’s assertion that
the statute at issue implicitly overrode such equitable con-
siderations by noting that “if Congress desired to make
such an abrupt departure from traditional equity practice as
is suggested, it would have made its desire plain.” 321 U.S.
at 330. Accordingly, the Court held that the remedial pro-
visions of the statute must be read “in favor of that inter-
pretation which affords a full opportunity for equity courts
to treat enforcement proceedings. . in accordance with
their traditional practices, as conditioned by the necessities
of the public interest which Congress has sought to pro-
tect.” Ibid.
12
The court of appeals in this case acknowledged the
general applicability of the Hecht Co. rule. However, the
court read this Court’s opinion in TVA v. Hill, 437 U.S.
153 (1978), as dispensing with the traditional equitable
fact-finding and balancing requirements when there is a
“clear congressional mandate.” App. A, p. Al7. As a
threshold matter, it should be noted that the remedial stat-
ute at issue in this case does not, any more than that con-
sidered by the Court in Hecht Co., evidence any congres-
sional desire “to make such an abrupt departure from tradi-
tional equity practice as is suggested.” Indeed, the lan-
guage of the statute, which authorizes “a civil action for
appropriate relief, including a permanent or temporary
injunction” (emphasis added) reinforces, in the words of
this Court’s opinion in Hecht Co., “the power of the Chan-
cellor to do equity and to mould each decree to the neces-
sities of the particular case” and thereby to be “the in-
strument for nice adjustment and reconciliation between
the public interest and private needs as well as between
competing private claims.” Simply put, the statutory lan-
guage at issue affords no support to any suggestion that
Congress intended to supplant the traditional equitable
principles prescribed in the decision of this Court.
Moreover, upon a careful reading of this Court’s opin-
ion in Hill, as well as that of the court of appeals to which
this Court referred approvingly, it is clear that a departure
from such traditional equity practice was not sanctioned
in that case. In Hill, a fact-finding hearing was held by
the district court, which thereafter declined to issue an in-
junction. 419 F. Supp. 753 (E.D. Tenn. 1976). A thorough
review of the equities appearing from the record was con-
ducted by the court of appeals, Hill v. TVA, 549 F.2d 1064
(6th Cir. 1977), which reversed the district court’s denial of
injunctive relief, and by this Court, which affirmed the
13
court of appeals. Neither the court of appeals nor this
Court, however, held that an injunction must automatically
issue in all cases upon a finding of liability. Rather, the
court of appeals concluded from its extensive review of
the record made before the district court that, in the
absence of injunctive relief, “the national policy objec-
tives of a statute [would be] frustrated,” and, in that light,
it held that t jhe district court abused its discretion
when it refused to enjoin” the completion of the Tellico
Dam. 549 F.2d at 1074-75. Likewise, this Court deter-
mined that, in denying the injunction in that case, the dis-
trict court had abused its discretion by substituting its
opinion as to the “wisdom or unwisdom” of the statute for
that of Congress. In so doing, however, the Court did
not hold that the federal court lacked discretion in all cases
in fashioning remedies for violations of federal statutory
requirements. Indeed, it expressly reaffirmed the Hecht
Co. rule that a federal judge “is not mechanically obligated
to grant an injunction for every violation of law.” 437 U.S.
at 193. In this light, the petitioner respectfully submits
that the court of appeals in this case misread Hill when it
concluded that that decision had completely obviated the
necessity for a federal district court, sitting as a court of
equity, to conduct a | aring for the purposes of assessing
the efficacy of alternative remedies and determining the
presence or absence of the traditional prerequisites to ex-
traordinary equitable relief.
The petitioner has no quarrel with the court of appeals’
statement that the “[district court’s] reliance upon the tra-
ditional ‘practices of equity must be ‘conditioned by the
necessities of the public interest which Congress has sought
to protect.“ App. A, p. Al6. However, in this case there
was neither an examination into, much less reliance upon,
the traditional practices of equity to be so conditioned nor
14
a comparative analysis of the various alternative remedies
available and, perhaps most importaritly, the relative effect
of each upon the necessities of the public interest.
Neither Hecht Co. nor Hill can properly be read, as
the court of appeals apparently did in this case, either
to foreclose altogether, or to relieve the district court of
the duty to conduct, such an inquiry prior to issuing
extraordinary equitable relief. In Hill, the federal courts
determined, upon review of the record developed from a
hearing in the district court, that in the absence of in-
junctive relief the public policy would be frustrated and
that, on that account, the relevant equitable considerations
balanced in favor of extraordinary injunctive relief. No
such conclusion, however, can be gleaned from the meager
record in this case and, the petitioner submits, if a hearing
had been conducted in the district court, the record would
point to the opposite conclusion. Unfortunately, neither
the court of appeals nor this Court can now apply in this
case the doctrine of Hill and Hecht Co. on the balancing
of equities, because no hearing was held on the issue of
injunctive remedy and there is thus no record to examine.
The petitioner submits, however, that a number of factors,
unexamined by the district court, weigh heavily in a de-
termination as to whether an injunction should issue and,
if so, what the specific terms of such injunction should be.
The following is but a partial listing of some of the issues
that the petitioner believes should have been fully con-
sidered by the district court prior to the issuance of an
injunction:
1. The manner in which compliance with the New
Source Performance Standard could be achieved, and the
time required for such compliance.
2. The cost of compliance and the problems associated
with the financing of a compliance program, especially in
15
light of the legal constraints placed upon a municipality
in funding the cost of compliance, by the issuance of bonds
or otherwise.
3. The effect of possible adverse environmental conse-
quences of the district court’s injunction. As discussed
at page 22, infra, the injunction, as presently framed,
will likely increase, rather than decrease, pollutant emis-
sions, thus defeating “the necessities of the public interest
which Congress has sought to protect” in the Clean Air
Act. Certainly this overriding public concern should be
considered by the district court in fashioning an appropriate
judicial remedy.
4. Whether the conduct of the EPA during the con-
struction of Unit 5 or in its response to the Essex remand
constitutes laches or an estoppel to the granting of equi-
table relief or should mitigate the nature of such relief.
5. The adverse consequences of the district court’s in-
junction upon City residents, taxpayers, bondholders, and
utility customers.
In short, neither the Congress—as evidenced by the
language, previously noted, of Section 113(b) of the Clean
Air Act—nor this Court—as evidenced by the language of
its opinions in Hecht Co. and Hill—has shackled the courts
to predetermined mandates in administering equitable jus-
tice under the Clean Air Act. The blind and mechanical
issuance of a prohibitory injunction under the Clean Air
Act, as in any case, disserves not only the affected parties
and the public, but justice as well. For this reason, the
petitioner submits that the Court should grant the writ of
certiorari in this case to correct the deviation by the court
of appeals and the district court from the elemental prin-
ciples of equity jurisprudence clearly delineated in previ-
ous decisions of this Court.
16
u. THIS CASE INVOLVES IMPORTANT QUES-
TIONS OF FEDERAL LAW WHICH SHOULD BE
DECIDED BY THIS COURT
A. The decision below misconstrues an important
statutory element of the Clean Air Act and
establishes erroneous precedent that tran-
scends this case and factually similar cases
Section 111 of the Clean Air Act imposes environ-
mental constraints upon many of the newly constructed
major emissions sources throughout the United States.
New standards are continually being imposed, and the
question as to whether the standard applies to a particular
source arises in each instance.
The purpose of Section 111,of the Clean Air Act is to
require newly constructed emissions sources to adhere to
rigid environmental standards which can be achieved by
the installation of “state-of-the-art” pollution control
equipment at the time of construction. To accomplish this
goal, Congress set out a specific procedure by which emis-
sions standards for new sources would be determined and
implemented.
First, the EPA had to determine and define the best
system for reducing sulfur dioxide emissions. In this case,
the selected system was the lime slurry scrubber. Second,
the EPA had to demonstrate that the system was cost ef-
fective and without adverse environmental consequences.
Third, the EPA had to determine the emissions level which
can be achieved by implementation of the selected system;
that is, the performance standard. Only then is the result-
ing performance standard proposed and published in the
Federal Register. In short, it is the demonstrated tech-
nology that determines the emissions standard.
17
The EPA’s economic and environmental demonstration
is most crucial to the prospective new source owner be-
cause it determines whether the inclusion of the selected
emissions control system in the design of the source is
economically and environmentally justified. It was the
EPA’s environmental demonstration which was found to
be lacking by the Court of Appeals for the District of
Columbia Circuit in Essex Chemical Corp. v. Ruckelshaus,
486 F.2d 427 (1973). The court upheld the EPA’s deter-
mination that scrubbers were the best emissions reduction
system, that the system was economically acceptable, and
that the 1.2 lb emissions standard could be achieved by
the use of scrubbers. However, the court held that the
EPA had not demonstrated the use of scrubbers to be
environmentally sound, in light of serious waste disposal
problems associated with the spent lime slurry. As the
EPA’s later response to the Essex court’s remand proved,
the court’s concern was well founded. While the EPA
asserted that the disposal problem had subsequently been
solved, it had not been solved at the time the proposed
standard was published or, for that matter, at the time
of either the Essex court’s decision or the City’s contract
to construct Unit 5, and there was, of course, no assurance
at that time that it would ever be solved.
In finding the effective date of the sulfur dioxide
standard to be August 17, 1971, the court of appeals in
this case stated that the publication of an emission stan-
dard constitutes the effective date for determining com-
pliance with such standard, “whatever [such standard]
might be or become.” App. A, p. A7. The court further
held that even if the sulfur dioxide standard was inval-
idated in the Essex case, the 1971 date would remain the
effective date for determining the applicability of any sub-
sequently established sulfur dioxide NSPS. The petitioner
- submits that the Essex court’s determination with respect
18
to the technology underlying the sulfur dioxide standard
mandates a contrary result if the evident policy of the
Clean Air Act, to give new source owners reasonable
notice of what is required of them, is to be honored. In
essence, since the Essex decision determined that the tech-
nology (lime slurry scrubbers) underlying the published
emissions standard had not been adequately demonstrated,
the court of appeals’ decision in this case undermines a
major policy underlying the Act by requiring a prospective
new source owner either to install then-unproven tech-
nology, to halt construction altogether until and unless
the technology is subsequently developed and proved to
satisfy the published standard, or to take the economically
perilous course of proceeding with construction subject
to an open-ended obligation to retrofit the new source
at some uncertain point in the future with subsequently
demonstrated technology. It seems clear that, in requiring
a proposed NSPS to be accompanied by a statement of the
demonstrated technology that could be employed to satisfy
it, Congress intended to prevent just this sort of economic
stalemate. Moreover, if the court of appeals in this case
is correct in holding that the sulfur dioxide NSPS was
retroactive to the date of publication of the proposed stan-
dard, the prospective new source owner would in effect
be called upon to install technology that had not been
demonstrated to be environmentally sound, a result that
seems irreconcilable with the basic purpose of the Clean
Air Act.
The Essex petitioners challenged the sulfur dioxide
standard on two grounds; (1) that the emission standard
was not achievable by use of the demonstrated technology
and (2) that the identified control technology had not
been adequately demonstrated (taking into consideration
cost and adverse environmental impact). Had the Essex
19
court upheld the EPA’s determination at the control
technology had been adequately demonstrated, a concur-
rent finding that the emission standard was erroneous
(that is, not achievable by the demonstrated technology)
would not necessarily have invalidated the publication date
for the proposed standard as a determinant for identifying
new sources. In such a case the emission standard, what-
ever it eventually “might be or become,” would still repre-
sent that standard which is achievable using the demon-
strated technology. There would be no significant danger
of the retroactive application of a subsequently defined
(or redefined) standard, since the source owner would
still be required to install the identified control technology,
which itself serves to define the standard that must be
satisfied.
However, the Essex court found the emission standard
achievable by use of the identified control technology
(scrubbers), but found the control technology not to have
been adequately demonstrated. The effect of that holding
must be to void the proposed rule publication date as
determining whether a source built thereafter is subject
to the emission standard. A contrary conclusion would
create a significant potential for arbitrary and economically
wasteful results wholly unintended under the Act.
It is clear from Section 111 of the Act that a source
owner cannot be required to install pollution control tech-
nology until it has been adequately demonstrated. It is
likewise clear that Section 111 contemplates the installa-
tion of such controls at the time of the initial design and
construction of the source. It logically follows, therefore,
that if the control technology is not feasible (that is, has
not been adequately demonstrated) at the time of con-
struction, its inclusion should not be mandated in the
design of the source.
20
Although the regulatory procedure prescribed under
the Act implicitly sanctions some degree of retroactivity
for the standards as ultimately promulgated, the impact
of such retroactivity is tempered by the fact that prospec-
tive new source owners will be put on notice by the pro-
posed standard as to the technology that they are expected
to incorporate. In this fashion, the purposes of the Act will
be served without engendering either economic chaos or
economic stalemate during the period between the publica-
tion of proposed regulations and their ultimate promulga-
tion. The decision of the court of appeals, however, would
open the door to the sort of uncertainty that Congress tried
to avoid regarding what is expected of a prospective new
source owner. For while the new source owner would be
on notice as to the standard, he would not be apprised of
what feasible technology, if any, he could employ to satisfy
the standard. He would thus be faced with the Hobson's
choice of suspending all construction until and unless the
uncertainty clears, taking the economic risk of installing
undemonstrated technology, unilaterally undertaking at his
own expense to discover feasible technology that will satisfy
the published standard, or proceeding with construction
but with the knowledge that he may subsequently be re-
quired to incur a retrofit expense of unpredictable dimen-
sion. It is precisely because the court cf appeals’ retro-
active application of the standard creates such an economic
dilemma that the petitioner believes it cannot be reconciled
with the evident intent of Congress under the Act to fur-
nish reasonable notice to prospective new source owners
of the technology they should plan to incorporate into their
facilities.
In the same vein, the degree of retroactivity sanctioned
by the court of appeals creates an unacceptable potential
for administrative abuse. Carried to extremes, such inter-
pretation means that the EPA could propose any arbitrary
21
new source standard, without any demonstrated technical
basis for such a standard, so as to “catch” as many sources
as possible. As previously discussed, these sources would
as a consequence be faced with the unenviable choice of
designing to meet an irrational and infeasible standard,
not building at all, or subsequently retrofitting to meet a
standard which may not become finalized for many years
hence. The purpose of Section 111 was not intended to
promote irrational standards, to halt the construction of
new sources, or to require retrofit; on the contrary, the
statute can only be justified on the basis that the time
to undertake the installation of the latest and best control
technology is before construction of the source has been
commenced.
B. The immediate consequences of the decision
below will adversely affect many persons di-
rectly and indirectly involved
The adverse consequences which would result from the
issuance of the district court’s injunction are both real and
substantial. If the court of appeals’ judgment is let stand,
and its mandate is issued to the district court, the injunc-
tion will become immediately effective, and the City will
be enjoined from operating Unit 5 in excess of the NSPS
sulfur dioxide limit. The City would be forced to shut
down Unit 5, since this boiler cannot be operated in com-
pliance with the NSPS sulfur dioxide emissions limitation
pricr to the installation of additional pollution control
equipment.
5
i
8
f
5
.
:
3
Because the City’s other coal-fired boilers cannot
presently be used to meet demand, the practical effect of
the injunction would be to completely shut down the light
plant and force the City to purchase power from other
sources in order to meet customer demand. Moreover,
such purchased power would very likely be supplied in
large part from coal-fired boilers which may well emit
more sulfur dioxide (per kilowatt-hour of electricity pro-
duced) than would Unit 5 but would escape classification
as new sources within the reach of NSPS.* The judgment
could thus lead to the anomalous result that the geographic
region served by Unit 5 would experience more, rather
than less, air pollution. Indeed, should operation of Unit
5 in compliance with the sulfur dioxide NSPS prove eco-
nomically infeasible, this increase in sulfur dioxide emis-
sions could become permanent. Thus, although the intent
of Section 111 is to promote the implementation of the
best emissions control technology for new sources, the pri-
mary purpose of the Clean Air Act, to reduce air pollution,
would be frustrated in this case.
Such adverse consequences would befall not only the
C. The decision below, if let stand, will result in
the unequal application of the Clean Air Act
in different jurisdictions
In 1976 the government, at the EPA’s request, brought
an enforcement action in the District Court for the South-
ern District of Indiana against the Public Service Company
of Indiana (“PSI”), alleging that two of PSI’s boilers
were subject to NSPS for sulfur dioxide and seeking the
same relief as it sought in this case. United States v.
Public Service of Indiana, 12 ERC 1495 (1977) (App. H).
Attorneys for the government and the EPA in that case
also participated in the instant case.
The facts in Public Service Co. and this case are in-
distinguishable. Both the City and PSI had begun the
planning for new generating units well before 1971, hav-
ing, inter alia, purchased turbogenerators before 1971.
However, neither the City nor PSI executed formal con-
tracts for the boilers until after 1971. In its post-trial
brief, the government cited the 1977 decision by the district
court in this case as authority for its position in Public
Service Co.
The district court in Public Service Co. held, how-
ever, that PSI was not subject to NSPS for sulfur dioxide
because (1) PSI had commenced construction of the
“source”, which the court defined as the entire power gen-
erating unit, prior to the date of publication of the pro-
posed standards (August 17, 1971), and (2) in any case, the
Essex remand had invalidated the publication date as the
effective date for determining applicability of the sulfur
dioxide NSPS.
The government did not pursue an appeal of the dis-
trict court’s decision in Public Service Co. While the pe-
tioner cannot speculate as to the government's reasons not
to pursue such an appeal, it should be noted that the
24
Public Service Co. decision was never reviewed by the
Court of Appeals for the Seventh Circuit by choice of the
government.
The Public Service Co. case, of course, does not rep-
resent the conflict between circuits contemplated by Rule
17(a) of this Court. The petitioner urges the Court, how-
ever, to give consideration vo the conflicting Public Service
Co. decision in its determination of the importance of the
questions presented, in light of the inconsistent application
of the Clean Air Act that will result between the citizens
and utility customers in Ohio and Indiana, and in light
of the different burden carried by each in fulfilling the
objectives of the Act. In this regard, the petitioner would
call the court’s attention to the fact that it has previously
recognized the relevance of conflicting district court deci-
sions in determining the importance of the questions pre-
sented for review, especially when the conflict leads to a
disparate application of federal law between jurisdictions.
United States v. Constantine, 296 U.S. 287 (1935).
CONCLUSION
For the foregoing reasons, this petition for a writ
of certiorari should be granted.
Respectfully submitted,
Lee E. LARSON
JAMES VAN CARSON
Squire, SANDERS & DEMPSEY
1800 Union Commerce Building
Cleveland, Ohio 44115
(216) 696-9200
Attorneys for Petitioner
City of Painesville, Ohio
July 23, 1981
Al
APPENDIX A
Decision and Opinion of the Court of Appeals
(Filed March 26, 1981)
No. 78-3551
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v.
CITY OF PAINESVILLE,OHIO,
Defendant-Appellant.
On Aral, from the United States District Court for
The Northern District of Ohio.
Before: KEITH and — Circuit Judges; WISEMAN,
District Judge“.
WisEeMaANn, District Judge. The first of two questions
before the Court is whether the district court erred in hold-
ing that a boiler operated by the Painesville Municipal
Electric Utility is a “new source” under section 111(a) (2)
of the Clean Air Act [the Act], 42 U.S.C. § 7411(a) (2)
“Honorable Thomas A. Wiseman, Jr., District Judge, United
States District Court for the Middle District of Tennessee, sitting
by designation.
A2
(Supp. III 1979). The second issue is whether the district
court was required to hold an evidentiary hearing before
permanently enjoining the City of Painesville from emitting
sulfur dioxide from its boiler in excess of the Environ-
mental Protection Agency’s [EPA’s] “new source” stan-
dards for sulfur dioxide [SO.]. The Court answers both
questions negatively, and accordingly the actions of the dis-
trict court are affirmed.
Section 111 and the New Source Performance
Standards
In ASARCO, Inc. v. EPA, 578 F.2d 319, 321-22 (D.C.
Cir. 1978), Judge Skelly Wright provided a succinct over-
view of the 1970 amendments to the Clean Air Act, and it
serves equally well as an introduction to the instant case.
According to Judge Wright (now Chief Judge of the D.C.
Circuit), the 1970 amendments to the Clean Air Act were
passed in recognition of the failure of state governments to
cooperate with the federal government in effectuating the
Act’s commitment “to protect and enhance the quality of
the Nation’s air resources so as to promote the public health
and welfare and the productive capacity of its popula-
tion.” Clean Air Act § 101(b) (1), 42 U.S.C. § 7401(b) (1).
See generally W. Rodgers, Environmental Law § 3.1 (1977).
The 1970 changes were designed to increase the federal gov-
ernment’s role in the battle against air pollution. See
Train v. Natural Resources Defense Council, Inc., 421 U.S.
1. The Clean Air Act was first enacted in 1955 and there
have been frequent amendments, most notably in 1970 and 1977.
See Clean Air Amendments of 1970, Pub. L. No. 91-604, 84 Stat.
1676; Clean Air Amendments of 1977, Pub. L. No. 95-95, 91
Stat. 685. At the time this litigation began, the Act was codified
at 42 U.S.C. § = et seq. The 1977 amendments rearranged
many provisions o f the Act and recodified it at 42 U.S.C. § 7401,
et seq. 42 U.S.C. “5 7411(a)(2) was formerly codified at 42 U.S.C.
§ 1857c-6(a) (2) (1976).
A3
60, 64 (1975). The amendments require the states to de-
velop pollution control programs (State Implementation
Plans) that will keep levels of certain air pollutants below
the National Ambient Air Quality Standards sei by EPA.
Clean Air Act §§ 109, 110, 42 U.S.C. §§ 7409, 7410.
The 1970 amendments also added section 111, which
is at issue on this appeal. Section 111 directs EPA to set
specific, rigorous limits on the amounts of pollutants that
may be emitted from “new sources” of air pollution. The
New Source Performance Standards established under this
section are designed to force new sources of targeted air
pollutants to employ the best demonstrated systems of emis-
sion reduction. 42 U.S.C. § 7411 (a) (1). Because these
New Source Performance Standards are likely to be stricter
than emission standards under State Implementation Plans,
plant operators have an incentive to avoid application of
the new source standards. Such a situation is presented by
the instant case; EPA’s new source standard for coal-fired
steam generators allows 1.2 lbs. SO:/mBtu, while the Ohio
plan would impose a limit of 2.1 lbs./mBtu on Painesville’s
boiler.
The Facts
The government, at the request of EPA, filed a com-
plaint in the Northern District of Ohio against the City
of Painesville on April 4, 1976. The complaint alleged
that the coal-fired boiler in Unit No. 5 of the electrical
generating plant operated by the Painesville Municipal
Electric Utility [Boiler No. 5] was emitting sulfur diox-
ide in excess of the permissible standards established by
EPA pursuant to section 111(b) of the Act. EPA’s SO,
standard for new sources, which is published at 40 C.F.R.
§ 60.43 (1980), allows 1.2 Ibs. SO. /m Btu derived from solid
fossil fuel. The complaint alleged that Boiler No. 5 emits
4.8 lbs. SO:/mBtu heat input, thereby constituting a vio-
A4
lation of section 111 (e) of the Act,“ which makes it unlaw-
ful to violate the standards of performance established by
EPA.
The City has never denied that Boiler 5 exceeds the
SO; new source standard, but it has consistently maintained
that Boiler No. 5 is not a new source at all. Ultimately,
the issue of whether Boiler No. 5 is a new source was the
sole issue presented to the district court on cross-motions
for summary judgment, and the district court’s holding
that Boiler No. 5 is a new source under section 111(a) (2)
established the City’s liability for violating the Act. See
United States v. City of Painesville, 431 F. Supp. 496, 501
(N.D. Ohio 1977).
In his January 19, 1977, Memorandum awarding sum-
mary judgment to the government, District Judge Manos
ordered the parties to prepare plans for the operation of
Boiler No. 5 so that it would comply with the 1.2 lbs./
mBtu standard. The parties entered “lengthy and thor-
ough discussions“ under the court’s supervision, but they
failed to reach agreement on a plan. Consequently, on
June 18, 1978, the district court issued an injunction order-
ing the City to comply with the SO, Standard, Judge
Manos having concluded that further negotiations would be
fruitless. There was no hearing on this injunction, but
the judge stayed the effect of his order pending this ap-
peal.
2. Section 111(e) provides as follows:
(e) Prohibited Acts. After the effective date of standards of
promulgated under this section, it shall be un-
lawful for any owner or operator of any new source to
operate such source in violation of any standard of per-
formance applicable to such source.
42 U.S.C. § 7411(e).
3. United States v. City of Painesville, No. C76324 (Order
of June 18, 1978).
A5
Discussion
On this appeal, the City challenges both the district
court’s finding of liability in its award of summary judg-
ment and its issuance of an injunction without a prior
evidentiary hearing. The City raises three arguments
in opposition to the finding of its liability. First, the City
maintains that the D.C. Circuit’s remand in Essex Chem-
ical Corp. v. Ruckelshaus, 486 F.2d 427, 441 (D.C. Cir.
1973), cert. denied sub nom. Appalachian Power Co. v.
EPA, 416 U.S. 969 (1974), operated to remove the boiler’s
status as a new source. Second, the City asserts that EPA
erroneously applied its own regulations in determining that
Boiler No. 5 was a new source or, third, that EPA, in its
regulations, misinterpreted the statutory definition of
“new source” found at section 111(a)(2). In challenging
the district court’s granting of injunctive relief, the City
maintains that equitable principles required the court to
hold an evidentiary hearing before issuing the permanent
injunction. These arguments will be discussed in order.
A. The District Court’s Summary Judgment
1. The Effect of Essex Chemical Corp.
v. Ruckelshaus
In Essex Chemical Corp. v. Ruckelshaus, supra, the
D.C. Circuit reviewed EPA’s sulfur dioxide, particulate
matter, and nitrogen oxide standards for coal-fired steam
generators. The court approved the particulate matter and
nitrogen oxide standards, but it remanded the record for
further consideration by EPA of the adverse environ-
mental effects that might result from requiring a 1.2 Ibs./
mBtu standard for coal-fired steam generator plants that
must use a “lime slurry scrubbing system” in order to
achieve the SO. standard. Such systems produce a great
deal of solid waste in the form of sludge, and the circuit
A6
court concluded that EPA had not given adequate con-
ideration to the environmental problems posed by this
form of solid waste.“ Essex was decided on September
10, 1973, approximately two years after the proposed 1.2
Ibs. / mtu standard had been published on August 17, 1971.
36 Fed. Reg. 15,704 (1971).
The City argues that the Essex remand retroactively
voided the proposed SO, standard published on August 17,
1971, so that there was no new source standard for SO; in
effect when the City entered its contract to purchase
Boiler No. 5 on July 25, 1972.“ This proposition is taken
one step further, however, by the City’s argument that
the remand of the SO, standard lifted Boiler No. 5 out of
the class of new sources altogether, with the result that
the new source standard for SO, ultimately adopted by
the EPA after the Essex remand (1.2 lbs. SO./mBtu, the
same standard) was inapplicable to Boiler No. 5.“ In other
words, the City maintains that if the D.C. Circuit remands
a record for a new source standard so that the EPA can
reconsider the substantive standard, that action effectively
obliterates not only the standard, but the class of new
sources to wich the standard was applicable. Moreover,
the former new sources are forever relieved of complying
4. A lime slurry 1 system was the anticipated best
system” for achieving the SO, standard of performance. See
486 F.2d at 440.
58. Under the EPA’s regulations as applied to the instant
„ eee
date which construction “commenced” under section 111 (a)
2) the Act, which defines new sources. 40 C.F.R. § 60.2
1980). The statute des that if the construction of a new
source is commenced M — „ ——
tions prescribing a standard of performance for the particu
source, that source will not be included in the class of new sources.
> By Bh Boe 14 28 30,
sponse no
standard was warranted 40 Fed. Ree 42,085 (1975). EPA stocd
this conclusion in its final response to Essex on November
1977. 42 Fed. Reg. 61,541 (1977).
A/
with any future new source standards. Another class
of new sources would come into existence only when
EPA publishes a response to the remand, and that class
becomes fixed only when the D.C. Circuit approves the
reconsidered standard.
The City’s argument is completely at odds with the
plain meaning of the statute. Section 111(a)(2) provides
as follows:
The term “new source” means any stationary source,
the construction or modification of which is com-
menced after the publication of regulations (or, if
earlier, proposed regulations) prescribing a standard
of performance under this section which will be appli-
cable to such source.
42 U.S.C. § 7411(a) (2).
The statute unambiguously establishes the benchmark
for determining which sources of a particular pollutant
are new sources. “[T]he publication of regulations (or,
if earlier, proposed regulations) prescribing a standard
of performance. . which will be applicable to such
source” determines what sources are new; a source whose
construction commenced after such publication is subject
to the new source standards, whatever they might be or
become. The City argues, in effect, that new sources of
SO: remain unknown until the D.C. Circuit approves an
“ultimate” SO, standard. This argument must fail, how-
ever, because Congress provided that even the publication
of proposed regulations establishes the cut-off date for
identifying new sources of a particular pollutant. A pro-
posed regulation is, of course, subject to both administra-
tive and judicial review and, consequently, modification.
By identifying new sources with reference to the publica-
tion date of a proposed standard, Congress eschewed the
City’s position that new sources of SO: remain unknown
A8
until the substantive standard becomes unreviewable.
The City’s argument confuses the criteria for identifying
new sources with the validity of substantive new source
standards.
If the Essex remand invalidated the 1.2 lbs./mBtu
standard (an extensively disputed but ultimately irrel-
evant point), the City could not have violated the SO;
new source standard until EPA responded to the remand
on September 10, 1975. See 40 Fed. Reg. 42,045 (1975).
But given the plain meaning of the statute, the Essex
remand had no effect on Boiler No. 5’s status as a new
source within the meaning of section 111(a)(2). That
status was conferred on August 17, 1971, the day EPA
published proposed SO, standards for coal-fired boilers.
See 36 Fed. Reg. 15,704 (1971). Once Boiler No. 5 be-
came a new source, it remained a new source regardless
of what happened to the 1.2 lbs./mBtu standard. The
Court therefore rejects the City’s argument that the Essex
remand somehow nullified Boiler No. 5’s obligation to
comply with the 1.2 lbs./mBtu new source performance
standard for SO: that was in effect when the government
brought this action in April 1976.
2. EPA's Interpretation of Its Own Regulations
In pursuing its legislative mandate under section 111
(b) of the Act to create performance standards for new
sources of air pollution, EPA adopted regulations to con-
strue the statutory definition of “new source” set forth
in section 111 (a) (2) of the Act:
(2) The term “new source” means any station-
ary source, the construction or modification of which
is commenced after the publication of regulations (or,
if earlier, proposed regulations) prescribing a stan-
dard of performance under this section which will
be applicable to such source (emphasis added).
A9
EPA adopted this definition of “construction”: Con-
struction” means fabrication, erection, or installation of
an affected facility.” 40 C.F.R. § 60.2 (1980) (emphasis
added). With reference to a stationary source, an “af-
fected facility” is “any apparatus to which a standard
[of performance] is applicable.” 40 C. F. R. § 60.2 (1980).
In regard to the City’s electrical generating plant, EPA
concluded that the boiler “apparatus” was the “affected
facility,” and thus the commencement date of its con-
struction determined whether the City would have to
comply with the new source standards.
EPA interpreted the statute’s use of the word “com-
menced” in this fashion:
(i) “Commenced” means, with respect to the
definition of “new source” in section 111(a)(2) of
the Act, that an owner or operator has undertaken
a continuous program of construction or modification
or that an owner or operator has entered into a con-
tractual obligation to undertake and complete, within
a reasonable time, a continuous program of construc-
tion or modification.
40 C.F.R. § 60.2 (1980).
The City did not contract for the purchase of Boiler
No. 5 until July 28, 1972, almost a full year after the
cut-off date for new sources of SO: (August 17, 1971).
Consequently, EPA concluded that because the construc-
tion of Boiler No. 5, the “affected facility,” commenced
after August 17, 1971, it was a new source.
The City argues that EPA misinterpreted its own reg-
ulations in concluding that the boiler is a new source. An
agency’s interpretation of its own regulations is controlling
unless plainly erroneous. See, e.g., Udall v. Tallman, 380
US. 1, 17 (1965); Compton v. Tennessee Dept. of Public.
Alo
Welfare, 532 F.2d 561, 565 (6th Cir. 1976). Having re-
viewed EPA’s regulations set forth above and the agency’s
application of them to the instant case, the Court cannot
find that EPA’s interpretation is plainly erroneous.
3. EPA’s Interpretation of Section 111(a)(2)
of the Clean Air Act
Apart from its argument that EPA misapplied its own
regulations, the City also argues that EPA’s regulations
misinterpret the statutory definition of “new source” found
in section 111 (a) (2). Section 10(e) of the Administrative
Procedure Act defines the scope of judicial review of EPA's
regulations interpreting the Clean Air Act. A reviewing
court is required to determine whether the agency’s action
was “in excess of statutory jurisdiction, authority, or lim-
itations, or short of statutory right.” 5 U.S.C. §706(2)
(C) (1976). See ASARCO, Inc. v. EPA, 578 F.2d 319,
325 (D.C. Cir. 1978). EPA's interpretation of the Clean
Air Act is to be given considerable deference, however.
Id.
The City’s argument is essentially economic; the City
maintains that because it will be very expensive to comply
with the SO: new source standards,’ Congress could not
have meant to inflict such expense on an operator in the
City’s position. The City emphasizes that it began plan-
ning for the construction of a new Unit No. 5 (consisting
of the boiler, a turbogenerator set, and auxiliary equip-
ment) in 1966 after determining that it would need addi-
tional power generating capacity if it wished to remain
in the business of generating electricity. Thereafter, the
City purchased a 25,000 kW turbogenerator, hired con-
sulting engineers to begin design work on the plant ex-
7. The record does not show how expensive compliance will
however.
be,
All
pansion, and passed ordinances to finance the construction.
In April 1970 the City even signed a letter of intent to
enter a contract to purchase a certain boiler, but that
contract was never executed.
The City maintains that it is “harsh and unreasonable”
to require compliance with the SO, new source standards,
because if it had known in 1966 that its utility would
have to bear the expense of complying with such stan-
dards, the City might well have decided to close its gen-
erating facility instead of initiating the construction pro-
gram. Moreover, if the SO, standards are now applied
to Boiler No. 5, the Painesville utility might before, [sic]
non-competitive with the adjacent large utility that could
supply Painesville’s customers. The City acknowledges
that it did not contract for its boiler until after the SO,
standard was published, but it also maintains that this cir-
cumstance is relatively insignificant in light of the major
efforts that had been undertaken in contemplation of con-
structing Unit No. 5.
The Court is sympathetic to the City’s potential eco-
nomic burden, but the unambiguous language of section
111(a)(2) easily bears EPA’s interpretation of it. The
statute plainly provides that new sources are those whose
construction is commenced after the publication of the
particular standards of performance in question. Given
this statutory language, EPA would not have exceeded
its authority even if its regulations had defined the com-
mencement of construction as the time of groundbreaking.
EPA was more lenient, however, and defined commence-
ment of construction as, in essence, the time when a pur-
chase contract for a polluting apparatus is executed. See
40 C.F.R. § 60.2 (1980). The statutory language compels
the conclusion that EPA’s regulations identifying Boiler
No. 5 as a new source of SO: do not exceed EPA’s con-
gressionally mandated authority.
Al2
Because the statute alone unambiguously allows EPA’s
interpretation, there is no need to consider the legislative
history of the 1970 Clean Air Amendments. See United
States v. Sutton, F. 2d — (6th Cir. 1980). The
Court will briefly observe, however, that the legislative
history weighs heavily against the City’s position. The
City’s basic complaint is that compliance with the SO,
new source standard will be expensive, and from that
premise it attacks EPA’s statutory authority to impose
such costs on the City, in its particular circumstances.
However, the legislative record demonstrates a congres-
sional awareness that compliance with new source stan-
dards would be costly. Nonetheless, the choice was made
to impose those costs. As stated in the Senate Report,
“maximum feasible control of new sources at the time of
their construction is seen by the committee as the most
effective, and in the long run, the least expensive ap-
proach.” S. Rep. No. 1196, 91st Cong., 2d Sess. 16 (1970),
reprinted in Legislative History of the Clean Air Amend-
ments of 1970, at 416 (Comm. Print 1974) [hereinafter
cited as Legislative History]. This passage reflects a con-
gressional decision that the short-term costs of “maximum
feasible control” are ultimately less expensive than the
long-term costs of increasing air pollution. As Senator
Cooper stated during the Senate debate on the new source
standards, “[t]he concept is that whenever we can afford
or require new construction we should expect to pay the
cost of using the best available technology to prevent
pollution.” Referring to the Clean Air Amendments in
general, Senator Cooper went on to observe that the 1970
Act “assumes a readiness by industry and the people or
[sic] the country to pay the costs of pollution control.”
116 Cong. Rec. 32918, 32919 (1970), reprinted in Legislative
History 260, 262. Even more illuminating is an exchange
between Senator Muskie and Senator Randolph during
Al3
Senate consideration of the Conference Repor! on Decem-
ber 18, 1970. In response to an inquiry from Senator
Randolph, Senator Muskie stated that the new source per-
formance standards “undoubtedly will have an economic
impact all across this country.” Senator Randolph then
stated: “Yes, it will, and it will be costly. And yet the
ugly face of pollution must be erased.” 116 Cong. Rec.
42392 (1970), reprinted in Legislative History 145. A
clearer recognition of the economic impact of new source
standards could hardly be imagined. Cf. Cleveland Elec-
tric Illuminating Co. v. EPA, 572 F.2d 1150, 1164 (6th
Cir.), cert. denied sub nom. Timken Co. v. EPA, 439 US.
910 (1978) (upholding EPA’s SO, control plan for Ohio).“
The Court’s only reservation about the applicability
of new source standard to Boiler No. 5 is based on what
appears to have been one of the primary aims of the new
source standards. As stated in the House Report:
The promulgation of Federal emission standards
for new sources in the aforementioned categories will
preclude efforts on the part of States to compete with
each other in trying to attract new plants and facilities
without assuring adequate control of extra-hazardous
or large-scale emissions therefrom.
H. R. Rep. 91-1146, 91st Cong., 2d Sess. 3, reprinted in
Legislative History 893; [1970] U.S. Code Cong. & Ad.
News 5356, 5358. The new source standards prevent in-
dustries from “shopping around” for “pollution havens”
that might otherwise exist if the states were allowed any
8. For all of the reasons discussed in text, the Court dis-
agrees with the decision of the district court in United States v.
Public Service Commission, 12 Envir. A.B, J (BNA) 1495, 1502
(S.D. Ind. 1977). That court concluded that EPA’s regulations
638 es ES Se ~—~ a source,” “affected fa-
cility” “construction” — t te
Air Act's N “new source” in section 111(a) (2).
Al4
flexibility in setting standards for new sources. See 116
Cong. Rec. 32902 (1970) (remarks of Senator Muskie),
reprinted in Legislative History 227; Environmental Law
Institute, Federal Environmental Law 1104 (1974). Such
shopping around is foreclosed by the new source standards,
because they set a nationwide “floor” on permissible levels
of pollution from new sources. See Clean Air Act § 116,
42 U.S.C. § 7416; W. Rodgers, Environmental Law § 3.2,
at 217 (1977). Because the new source standards must
reflect “the application of the best technological system
of . . . emission reduction,” 42 U.S.C. § 7411(a)(1), this
federal standard will invariably equal or exceed the stan-
dard imposed by State Implementation Plans for existing
sources adopted pursuant to section 110 of the Act, 42
U.S.C. § 7410.“ See ASARCO, Inc. v. EPA, supra, 578
F.2d at 322. Consequently, there is no incentive for in-
dustries to move to relatively pollution-free states whose
implementation plans for achieving the National Ambient
Air Quality Standards might be more accommodating to
new industry.
Painesville’s municipal electrical utility is obviously
not in a position to “shop around” for another location, and
thus the “pollution haven” rationale for the new source
str dards does not apply. If the sole purpose for section
were to prevent states from adopting different new
source standards in order to compete with each other for
new industry, the Court would be inclined to read a
“municipal utility exception” into the statute, because such
utilities are simply not in a position to seek “pollution
havens.” It is apparent, however, that the overriding pur-
pose of section 111 is to prevent significant new pollution
9. For the Ohio plan for existing sources of SO,
would allow Boiler No. 5 to omit 2.1 lbs. SO,/mBtu, while the
„ ee ee 6 ae ee ee
Al5
problems, without regard to existing ambient air quality
conditions. See H.R. Rep. 91-1146, supra, at 3, 5, reprinted
in Legislative History 893, 895; [1970] U.S. Code Cong. &
Ad. News, supra, at 5358, 5360-61; 116 Cong. Rec. 33075
(1970) (remarks of Sen. Randolph), reprinted in Legis-
lative History 289. The Senate Report specifically found
that electric generating plants must be controlled to the
“maximum possible degree,” and it directed EPA to estab-
lish new source standards for power plants. S. Rep. No.
91-1196, supra, at 16; Legislative History 416. No excep-
tion was made for municipalities."° The Conference Com-
mittee agreed that power plants should be subject to new
source standard, and the Committee did not suggest any
exception for municipalities. See 116 Cong. Rec. 42384
(1970), reprinted in Legislative History 130. The new
source standards were drafted to “insure that major new
stationary sources, wherever they are located, are designed
and equipped to reduce emissions to minimize feasible
levels.” New source standards also tend to minimize the
competitive advantage of locating new facilities in areas
where emission standards might otherwise be less rigorous,
but this was not the primary purpose of section 111. See
Hearings on Air Pollution Control Before the Subcomm. on
Public Health and Welfare of the House Comm. on Inter-
state and Foreign Commerce, Legislative History 1369
(statement of Robert Finch, Secretary of Health, Educa-
tion, and Welfare). Accordingly, the Court will not infer
an exception to the statute that would relieve municipali-
ties from complying with new source standards.
10. The Senate specifically included municipal incinerators
not intend to create any pality exceptions” to the new
source standards, even the “pollution haven” rationale
— not apply to — — meinerators, just as it is inapplicable
to municipal electrical generators.
Al6
In summary, the Court holds that the EPA regulations
defining affected facility,” “commenced,” and construc-
tion,” 40 C.F.R. § 60.2, as applied to the instant case, do
not exceed EPA’s statutory authority.
B. The Lack of an Evidentiary Hearing
on the Injunction
The City argues that Judge Manos should have held
a formal evidentiary hearing before issuing his June 18,
1978, injunction that requires Boiler No. 5’s compliance
with the SO, new source standard. The argument is based
on the premise that “the appropriate principles of inade-
quate remedy at law and irreparable harm must be estab-
lished” before a court orders injunctive relief. The City
argues from this premise that the district court violated
these traditional equitable principles by not holding a
hearing to establish inadequacy of a legal remedy and
irreparable harm, and the City asks this Court to remand
for such a hearing.
Section 113(b) of the Act, 42 U.S.C. § 7413(b), em-
powers district courts to provide injunctive relief for vio-
lations of section 111(e), which prohibits violation of
EPA new source standards. In Hecht Co. v. Bowles, 321
U.S. 321, 330 (1944), the Supreme Court emphasized that
when a court is called upon to enforce a federal statutory
injunction, its reliance upon the traditional practices of
equity must be “conditioned by the necessities of the
public interest which Congress has sought to protect.”
In enacting the Clean Air Act, Congress made a determi-
nation that the public interest required that substantial
r asures be taken to combat the deleterious effects of air
pollution. See 42 U.S.C. § 7401. The district court’s dis-
cretionary injunctive powers were therefore tempered by
its obligation to carry out the congressional mandate con-
tained in the Clean Air Act.
Al7
In a recent case, TVA v. Hill, 437 U.S. 153 (1978)
(the “snaildarter” case), the Court held that the Endan-
gered Species Act required the district court to enjoin
the completion of the Tellico Dam in East Tennessee, de-
spite the lower court’s doubts about the “wisdom .. . of
a particular course consciously selected by the Congress.”
Id. at 194. The Court einphasized that it is the exclusive
province of Corigress to formulate legislative policies and
establish their relative priority. Moreover, “[o]nce Con-
gress, exercising its delegated powers, has decided the
order of priorities in a given area, it is for the Executive
to administer the laws and for the courts to enforce them
when enforcement is sought.” Id. Although the Court
recognized that a federal court is not “mechanically obli-
gated” to grant injunctive relief for every violation of the
law, the Court concluded that the clear congressional
mandate of the Endangered Species Act provided no al-
ternative but to enjoin the completion of the Tellico Dam,
regardless of the expenses that had already been incurred
in its near-complete construction.
By enacting the Clean Air Act, Congress established a
high priority for the control of air pollution. The legis-
lature recognized that compliance would be expensive in
some cases, but the choice was made to require compliance
with the standards promulgated by EPA. Having made
that choice, Congress did not contemplate that its decision
would be thwarted by judicial reluctance to require com-
pliance when enforcement proceedings are brought and
liability is proven. Accordingly, this Court holds that the
district court was required to order injunctive relief upon
its finding of liability, once negotiations for a compliance
plan broke down. A hearing to determine the presence
of irreparable injury and inadequacy of legal remedy was
therefore unnecessary.
Affirmed.
Al8
APPENDIX B
Order of the Court of Appeals Denying Petition
for Rehearing
(Filed April 29, 1981)
No. 78-3551
UNITED STATES COURT OF APPEALS
For THE SIXTH CIRCUIT
THE UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v.
THE CITY OF PAINESVILLE, OHIO,
Defendant-Appellant.
On APPEAL FROM THE UntTep States District Court
For THE NORTHERN District or OHIO
Before: Kerrn and Brown, Circuit Judges; WISEMAN,
District Judge*
Upon consideration of the petition for rehearing filed
herein by defendant-appellant, the Court concludes that
the issues raised therein were fully cor dered upon the
original submission and decision of this case.
IT IS THEREFORE ORDERED that the petition for
rehearing be and it hereby is denied.
ENTERED BY ORDER OF THE COURT
/s/ Joun P. HeEHMAN
Deputy Clerk
*Honorable Thomas A. Wisem Jr., District Judge, United
States District Court for the Middle District of Tennessee, sitting
by designation.
Al9
APPENDIX C
Order of the Court of Appeals Staying Mandate
(Filed June 11, 1981)
No. 78-3551
UNITED STATES COURT OF APPEALS
For THE Stern CIRCUIT
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
vs.
CITY OF PAINESVILLE,
Defendant-Appellant.
ORDER
IT IS ORDERED that the motion to stay mandate
herein pending application to the Supreme Court for writ
of certiorari is hereby granted and the mandate is stayed
for sixty days from this date; provided that, if within such
sixty days, the applicant shall file with the Clerk of this
Court the certificate of the Clerk of the Supreme Court
that the certiorari petition, record, and brief have been
filed, the stay shall continue until the final disposition of
the case by the Supreme Court. Unless this condition is
complied with within such sixty days of any extension
thereof made by the Court or any judge thereof, or if the
condition is complied with, then upon the filing of a copy
of an order denying the writ applied for, the mandate shall
issue.
ENTERED BY ORDER OF THE COURT
/s/ Joun P. HEHMAN
Clerk
A20
APPENDIX D
Memorandum and Order of the District Court
(Filed January 19, 1977)
No. C76-324
THE UNITED STATES DISTRICT COURT
Tue NorrHern District or OmoO
EASTERN DIVISION
UNITED STATES OF AMERICA,
Plaintiff,
V.
CITY OF PAINESVILLE,
Defendant.
MEMORANDUM AND ORDER
Manos, District Judge
On April 2, 1976 the plaintiff, the United States of
America, filed a complaint requesting that the defendant,
the City of Painesville, a municipal corporation, be en-
joined from operating a steam generating coal fired power
unit in violation of the Clean Air Act, 42 U.S.C. § 1857c-
6(e) and the Standards of Performance For New Stationary
Sources, promulgated thereunder. See, 40 C.F.R. Part 60.
The defendant filed a motion for summary judgment on
April 23, 1976, and the plaintiff filed a motion for sum-
mary judgment, as to the defendant’s liability, on July 30,
1976.
This Court has jurisdiction over this action pursuant to
28 U.S.C. § 1345 and 42 U.S.C. § 1857c-8(b) (3).
A21
FINDINGS OF FACT
The facts of this case are undisputed: In 1966 the
City of Painesville hired the engineering consultant firm
of Glaus, Pyle & Schormer (Glaus) for advice on the possi-
bility of expanding the electrical generating capacity of
the Painesville Municipal Electric Utility (Municipal Elec-
tric). See, Painesville Ordinance No. 27-66, plaintiff's
Appendix A. In 1967 Painesville city council decided that
expansion of Municipal Electric was both feasible and
necessary and started a construction program to build an
additional coal fed electrical generating unit. The com-
pletion of Municipal Electric’s expansion project was tenta-
tively expected to be in early or mid 1972. See, Document
11, Appendix B.
On December 21, 1967 Painesville made its first pur-
chase of equipment for the new generating unit; a used
25,000 kw turbo-generator at a cost of $118,000. See, Ordi-
nance No. 46-67, Appendix A; Document No. 6, Appendix
B. In November of 1969 Glaus submitted “specifications
and proposals for pulverized coal fired steam generating
unit no. 5.“ See, Document 12, Appendix B. On Decem-
ber 1, 1969 Painesville city council authorized the city man-
ager to advertise for bids for the new generating unit (Unit
No. 5) based on Glaus’ specifications. See, Resolution No.
60-69, Appendix A. On April 20, 1970, after receiving bids
on Unit 5, a letter of intent to enter into a contract for the
construction of a boiler was sent to Combustion Engineer-
ing Inc. See, Document 18, Appendix B. At this point
the start of construction appeared imminent. However
financing difficulties caused delays and with each delay
the cost of Unit 5 increased. See, Document 22, Appendix
B. In August of 1971 Painesville discussed with Glaus
ways to decrease the cost of Unit 5. See, Document 27,
Appendix B.
A22
On August 17, 1971 the Administrator of the United
States Environmental Protection Agency (EPA) published
in the Federal Register proposed standards for performance
for new stationary sources. See, 36 Fed.Reg. 15704.
On September 20, 1971 Painesville informed Glaus that
their services would no longer be needed. See, Document
11, Appendix C. On November 29, 1971 the engineering
firm of Campbell, Deboe, Giese & Weber (Campbell) was
hired. See, Resolution No. 52-71, Appendix A.
On December 23, 1971, the Standards of Performance
for new source fossil-fuel fired steam generators became
final. See, 36 F.R. 24877. Approximately one month later
Campbell submitted a report on the proposed construction
of Unit 5. In this report Campbell stated:
xisting new federal air pollution regulations and
proposed State of Ohio air pollution regulations which
are scheduled to go into effect in February of this year
are such that it is questionable if the boiler equipment
is appropriate in all respects if furnished as originally
contemplated. The new regulations cover emissions
of particular matter, sulphur dioxide and nitrous
oxides.” See, Document 13, p. 6, Appendix C.
The report recommended a change in size of the boiler from
240,000 Ibs. steam/hour (continuous rating) to 215,000 lbs.
steam/hour (continuous rating). Painesville accepted the
change in the boiler specifications, and on February 22, 1972
advertised for bids. See, Resolution 7-72, Appendix A.
Bids were received and evaluated. One of the factors in
the evaluation was whether the bids met the United States
Environmental Protection Agency (EPA) and Ohio EPA
regulations. Campbell noted that the bidders could only
meet sulfur dioxide requirements by “fuel selection.” See,
Document 4, Exhibit C.
A23
On July 28, 1972 Painesville executed a contract with
Babcock & Wilcox Company for the construction of the
steam generating unit of Unit 5. See, Appendix D, Docu-
ment 5.
On May 17, 173 the Ohio EPA found the City of
Painesville was not required to meet Ohio’s air quality
standards contained in R.C. §§ 3704 et seq. because Unit 5
was not a new air contaminate source. The basis for this
decision was that the contracts for purchase of the equip-
ment for Unit 5 were made before the effective date of the
Ohio Air Pollution Control Regulations, February 15, 1972.
See, Defendant’s Exhibit D. A consent and abatement order
was later entered into by Painesville and Ohio EPA in
which Painesville agreed to comply with Ohio particulate
regulations and to burn coal containing less than 3.2%
sulfur. See, Defendant’s Exhibit B. On March 31, 1975,
the EPA informed Painesville that it would not pursue
enforcement of federal particulate emission standards be-
cause of the consent and abatement order, but the letter did
not preclude EPA from enforcing sulfur dioxide emission
standards. See, Document 3, Appendix D. On November 24,
1975 EPA issued notice that Painesville was in violation of
40 C.F.R. §§ 60.40 and 60.43 because it intended to burn
coal with a 3% sulfur content which would cause in excess
of 4.8 Ibs. sulfur dioxide/million btu heat input to be
emitted from Unit 5, a fossil-fuel fired steam generating
unit with more than 250 million btu/hour heat input. See,
Document 8, Appendix D. Under § 60.43 a new stationary
source may emit no more than 1.2 Ibs. sulfur dioxide/million
btu heat input. Painesville does not contest that Unit 5’s
emissions violate the standards set by 40 C.F.R. § 60.43 if
they apply. However, Painesville claims that 40 C. F. R.
1. Painesville admitted. we do not believe that com-
pliance with the SO, emissions regulations is possible at this time.
(Continued on following page)
A24
Part 60, Standards Of Performance For New Stationary
Sources, does not apply because Unit 5 is not a new source
as that term is used in 42 U.S.C. § 1857c-6(a)(2) and the
regulations promulgated thereunder.
CONCLUSIONS OF LAW
The sole issue* for determination is whether Paines-
ville’s Unit 5 is a new source that is required to meet the
regulations contained in 40 C.F.R. Part 60.2 42 U.S.C.
§ 1857c-6(a) (2) reads,
“The term ‘new source’ means any stationary
source, the construction or modification of which is
commenced after the publication of regulations (or,
if earlier, proposed regulations) prescribing a stan-
dard of performance under this section which will be
applicable to such source.”
to David Kee, Chief Air on A Region V. — Ap-
pendix D; see also, Affidavit of Thomas Voltaggio, attached to
motion for preliminary injunction.
2. Painesville claims that the doctrine of laches is applicable
and that EPA is barred from bringing this action because EPA
knew about the consent and abatement between Ohio EPA and
the defendant, but raised no objection until November of 1975.
The Court rejects this argument. EPA’s March 31, 1975 letter
for particulate emissions, at that time. No mention was made of
sulfur dioxide standards. Painesville, from the record before this
Court, had no reason to believe the decision not to eriforce par-
ticulate emission standards meant that all other federal emission
standards would also not be enforced.
3. The standards set by 40 C.F.R. § 60.43 have not been
attacked by the defendant. 40 C.F.R. § 60.43 had been found to
„ ecto. in terms of cost and available technology.
See, Essex Corporation v. Ruckelshaus, 158 U.S. App. D. C.
360, 486 F.2d 427, 440 (1973).
A25
Proposed regulations for new source emissions were issued
August 17, 1971, see, 36 Fed.Reg. 15704, so that if, as of
August 17, 1971, “construction” or “modification”* of Mu-
nicipal Electric had been “commenced,” Unit 5 would not
be a new source and therefore sulphur dioxide emission
standards promulgated under 42 U.S.C. § 1857c-6 do not
apply. The words “construction,” “modified,” and “com-
menced” are not defined in § 1857c-6 but have been defined
in 40 C. F. R. § 60.2 (g) (h) and (i) respectively. While an
interpretation of an act by the enforcing agency is not
conclusive, it is entitled to “great deference,” Udall v.
Tallman, 380 U.S. 1, 16, 85 S.Ct. 792, 13 L.Ed.2d 616 (1965);
see, e. g., Youakim v. Miller, 425 U.S. 231, 235-236, 96 S.Ct.
1399, 1402, 47 L.Ed.2d 701 (1976); Satty v. Nashville Gas
Company, 522 F.2d 850, 854 (6th Cir. 1975). Further the
interpretation by an administrative agency of its own reg-
ulations is controlling unless plainly erroneous. See, e. g.,
Udall v. Tallman, 380 U.S. 1, 17, 85 S.Ct. 792, 13 L.Ed.2d
616 (1965); Compton v. Tennessee Dept .of Public Welfare,
532 F.2d 561, 565 (6th Cir. 1976).
In 40 C.F.R. § 60.2(g) “construction” is defined as
the “. fabrication, erection or installation of an affected
facility.” An “affected facility” is defined in § 60.2(e)
as meaning “. with reference to a stationary source, any
apparatus to which a standard is applicable.” (emphasis
added). Standards are made applicable to fossil-fuel fired
steam generators, like Unit 5, by § 60.40. A fossil-fuel
fired steam generator is a boiler, see, 40 C.F.R. § 60.41(a).
It follows, in this case, that the “affected facility” of Unit
5 is the boiler, because it is the apparatus to which the
emission standards are applicable. Therefore it is the
4. The defendant does not argue that the construction of
Unit 5 was a “modification” or was the reconstruction of an
existing facility. See, 40 C.F.R. § 60.2(h) and § 60.15.
A26
date of the “commencement” of “construction” of the
boiler which determines whether Unit 5 is or is not a new
source.
In 40 C.F.R. § 60.2(i) “commenced” is defined as
meaning,
. . . with respect to the definition of ‘new source’
in Section 111(a)(2) of the Act, that an owner or
operator has undertaken a continuous program of
construction or modification or that an owner or
operator has entered into a contractual obligation to
undertake and complete, within a reasonable time, a
continuous program of construction or modification.”
Using this definition EPA argues that the construction of
the “affected facility,” the boiler, commenced at one of two
times: First, when actual construction at the building
site was started for a particular type of boiler, so that
modification of existing physical construction would be
required if the boiler specifications were changed to ac-
commodate anti-pollution control devices; or, second, that
construction commenced at the time a contract for the pur-
chase of a new boiler was signed, with the proviso that
delivery be required within a reasonable time. The Court
finds that EPA’s interpretation of 40 C.F.R. § 60.2 (i)“
is fully supported by the language of that regulation.
argues that it was engaged in a continuous
program of construction, in 1967 with the of
the used „and that it therefore “commenced”
erroneous,
40 C.F.R. §§ 60 et seq.
6. The definition by the EPA of the term new stationary
source annunciated in 40 C.F.R. § 60.2(d), (e), (g), (h) and (i)
(Continued on following page)
A27
Applying the above definition to the facts of this case
the Court finds that of August 17, 1971 “construction” of
Unit 5 had not “commenced.” No contract for the produc-
tion of a boiler for Unit 5 had been entered into. Con-
struction of Unit 5 had not progressed to the point that a
change in its design would have required the facility already
Footnote continued—
is consistent with what appears to have been Congress’ intent in
enacting 42 U.S.C. § 1857c-6. The rationale behind § 1857c-6 was
Congress’ desire that the best available emission control tech-
no be incorporated into the construction of a facility which
a threat of being a new air pollution source. This would
prevent further environmental decay over the short run, while
decreasing air pollution from current levels over the long run.
Further, the economic impact would be spread over many years,
and would not be as drastic as req existing facilities to
immediately incorporate the best available anti-pollution tech-
nology. As the Senate Conference Report stated:
“The provisions for new source performance standards are
cleaning up existing sources.
“As used in this section, the term ‘available control tech-
is intended to mean that the Secretary should examine
the of emission control that has been or can be achieved
the application of technology which is available or nor-
mally can be made available. This does not mean that the tech-
nology must be in actual, routine use somewhere. It does mean
their
is seen by the committee as the most effective in the
the least expensive approach.” See, Senate on 8.
In testimony before a house subcommittee on the administra-
tion’s clean ai bill, which had a section similar to 1857c-6, H.E.W.
Secretary, Rol ert H. Finch, stated,
(Continued on following page)
A28
erected to be modified in order to insure that it could com-
ply with the sulfur dioxide emission standards of 40 C. F. R.
§ 60.43. In fact the Court finds in the record no evidence
that any purchase of equipment made prior to August, 1971
would have been incompatible with a complying operation
of Unit 5.“ As is evidenced by the change in the specifica-
tions of the boiler in January of 1972, Painesville could have
modified its plans for Unit 5 at a time well after the pro-
posed regulations for new stationary sources became final,
Footnote continued
“In general, existing stationary sources of air pollution are so
numerous and diverse that the problems they pose can most ef-
ficiently be attacked by State and local agencies. Even with air
quality standards being set nationally, as p in the Adminis-
tration bill, the steps need to deal with ng stationary sources
would necessarily vary from one State to another and, within
States, from one area to another.
“In the years ahead, however, many potentially significant
new stationary sources of air pollution will come into being as
a result of the Nation’s demands for electric power,
manufactured goods, and necessities and amenities of modern
life. Large stationary sources, such as electric generating plants,
iron and steel mills, and petroleum refineries frequently have
adverse effects not only on public health and welfare in their
own communities but also on air quality over broad geographic
areas. This problem is one that 23 national attention. If
we are ever to begin preventing air 111— instead of just at-
tacking it after the fact, then we must at least insure that major
new stationary sources, wherever they are located are designed
and eq ye at A my wg bh me
with a ble — 12 = af before the Subcommittee on
Public Health and Welfare of 2 on Interstate and
Foreign Commerce 91-44, p. 288.
eee ee e ee
sta
available to prevent tion.“ See, Legislative His-
fice, Jan. 1974.) The Court concludes that the EPA’s definition
that a new stationary source is one in which the boiler has neither
been made nor contracted for, balances the interests in pollution
Li e SPARED cag CONS ATG
The defendants were on notice of the requirements of 40
CFE § 60.43. See, Document 4, Exhibit C.
A29
without loss of the money previously spent on capital
purchases.*
The Court finds that Municipal Electric’s Unit 5 is a
new stationary source“ subject to the emission standards
established by 40 C.F.R. § 60.43. Further the Court finds
that the burning of coal with the sulfur content of ap-
proximately 3.0% will cause the emissions of sulfur dioxide
in excess of 1.2 lbs./million btu input heat. Summary
judgment on liability is granted to the plaintiff, the United
States of America. The parties are ordered to prepare
plans with documentation, which would allow the opera-
tion of Unit 5 in compliance with 40 C.F.R. § 60.43 and at
an economically acceptable level.
ITIS SO ORDERED.
8. EPA’s interpretation of 42 U.S.C. § 1857c-6(a) (2) limits
the application of new stationary source emission standards to
those projects in which the — — has not progressed te
the point that modifications of already completed physical struc-
tures would be necessary to meet those standar But if the
only work made fruitless by the need to meet anti-pollution stan-
dards is in the design or planning of a new source, then operators
are required to modify those designs or operating plans to meet
new stationary source emission standards. This interpretation is
given credence by Congress’ use of the word “construction” in
§ 1857-6 (a) (2) Las rather than the words “planning” or de-
signing.“
9. Ohio EPA found that Unit 5 was not a new stationary
source under Ohio law. See, Appendix E, Document 1. Paines-
„„ decison. „
argument ignores act t 0 was interpreting a dif-
ferent statute than EPA. Further, it is clear that Congress in-
tended that federal 1122 of federal air pollution standards
not be controlled by the states. See, Train v. Natural Resources
Defense Council Inc., 421 U.S. 60, 63-64, 95 S.Ct. 1470, 1474, 43
L.Ea.2d 731 (1975).
In introducing the Conferences Report to the House of
Representatives Congressman Staggers stated,
“The enforcement of air pollution regulations is partly the
responsibility of the States and partly that of the Federal Govern-
ment. The legislation provides that the Federal Government
shall have primary —y— for the enforcement of per-
formance standards for new stationary sources and hazardous
emissions stationary sources.” See, Legislative History of the 1970
Clean Air Act, p. 112 (Government Printing Office, Jan. 1974).
APPENDIX E
Order of the District Court Granting
Permanent Injunction
(Filed June 18, 1978)
Case No. C76-324
IN THE UNITED STATES DISTRICT COURT
For THE NORTHERN DISTRICT OF OHIO
EASTERN DIVISION
UNITED STATES OF AMERICA,
Plaintiff,
V.
CITY OF PAINESVILLE,
Defendant.
ORDER
On January 19, 1977 this court granted the plaintiff,
the United States of America, summary judgment on the
defendant City of Painesville’s liability. In its order the
court stated:
The Court finds that Municipal Electric’s Unit 5
is a new stationary source subject to the emission
standards established by 40 C.F.R. § 60.43. Further the
A31.
Court finds that the burning of coal with the sulfur
content of approximately 3.0% will cause the emissions
of sulfur dioxide in excess of 1.2 lbs./million btu input
heat. Summary judgment on liability is granted to
the plaintiff, the United States of America. The par-
ties are ordered to prepare plans with documentation,
which would allow the operation of Unit 5 in com-
pliance with 40 C.F.R. § 60.43 and at an economically
acceptable level.
Since the entering of the court’s order of January 19,
1977 lengthy and thorough discussions have been held
between the parties, under the court’s supervision, in an
attempt to devise an acceptable plan by which Unit 5
could operate at an acceptable cost and comply with the
emission standards established by 40 C.F.R. § 60.43. At
this time the court concludes that further negotiations are
fruitless. Accordingly the court enters judgment of the
United States of America and orders that the defendant, its
officers and employees be permanently enjoined and re-
strained from emitting sulfur dioxide into the atmosphere
from the Painesville Municipal Light Plant, Unit No. 5, in
excess of 2.2 g per million cal heat input (1.2 lb. per million
BTU).
The effect of this order is stayed pending appeal. See
Fed. R. Civ. P. 62.“
IT IS SO ORDERED.
/s/ JohN M. Manos
United States District Judge
1. The court has not given the defendant a grace period in
which to comply with its order because he has simultaneously
entered a stay of its order.
2. The necessity of the defendant posting a bond was waived
by the plaintiff.
A32
APPENDIX F
Section 111, Clean Air Act, 42 U.S.C. § 1857c-6
[later amended and recodified at 42 U.S.C. § 7411]
STANDARDS OF PERFORMANCE FOR N.
STATIONARY SOURCES
Sec.111. (a) For purposes of this section:
(1) The term ‘standard of performance’ means a stan-
dard for emissions of air pollutants which reflects the de-
gree of emission limitation achievable through the applica-
tion of the best system of emission reduction which (taking
into account the cost of achieving such reduction) the Ad-
ministrator determines has been adequately demonstrated.
(2) The term ‘new source’ means any stationary
source, the construction or modification of which is com-
menced after the publication of regulations (or, if earlier,
proposed regulations) prescribing a standard of perfor-
mance under this section which will be applicable to such
source.
(3) The term ‘stationary source’ means any building,
structure, facility, or installation which emits or may emit
any air pollutant.
(b) (1) (A) The Administrator shall, within 90 days
after the date of enactment of the Clean Air Amendments
of 1970, publish (and from time to time thereafter shall
revise) a list of categories of stationary sources. He shall
include a category of sources in such list if he determines
it may contribute significantly to air pollution which causes
or contributes to the endangerment of public health or
welfare.
A33
(B) Within 120 days after the inclusion of a category
of stationary sources in a list under subparagraph (A), the
Administrator shall propose regulations, establishing Fed-
eral standards of performance for new sources within such
category. The Administrator shall afford interested per-
sons an opportunity for written comment on such proposed
regulations. After considering such comments, he shall
promulgate, within 90 days after such publication, such
standards with such modifications as he deems appropriate.
The Administrator may, from time to time, revise such
standards following the procedure required by this sub-
section for promulgation of such standards. Standards of
performance or revisions thereof shall become effective
upon promulgation.
(e) After the effective date of standards of perform-
ance promulgated under this section, it shall be unlawful
for any owner or operator of any new source to operate
such source in violation of any standard of performance
applicable to such source.
A34
APPENDIX G
40 C.F.R. Part 60 (January 1, 1972)
Subpart A—General Provisions
§ 60.1 Applicability.
The provisions of this part apply to the owner or
operator of any stationary source, which contains an af-
fected facility the construction or modification of which
is commenced after the date of publication in this part
of any proposed standard applicable to such facility.
§ 60.2 Definitions.
As used in this part, all terms not defined herein
shall have the meaning given them in the Act:
(a) “Act” means the Clean Air Act (42 U.S.C. 1857
et seq., as amended by Public Law 91-604, 84 Stat. 1676).
(b) “Administrator” means the Administrator of the
Environmental Protection Agency or his authorized repre-
sentative.
(c) “Standard” means a standard of performance pro-
posed or promulgated under this part.
(d) “Stationary source” means any building, struc-
ture, facility, or installation which emits or may emit any
air pollutant.
(e) “Affected facility” means, with reference to a
stationary source, any apparatus to which a standard is
applicable.
(f) “Owner or operator” means any person who owns,
leases, operates, controls, or supervises an affected facility
or a stationary source of which an affected facility is a
part.
A35
(g) “Construction” means fabrication, erection, or in-
stallation of an affected facility.
> =. &. 2 Ss
(i) “Commenced” means that an owner or operator
has undertaken a continuous program of construction or
modification or that an owner or operator has entered into
a binding agreement or contractual obligation to under-
take and complete, within a reasonable time, a continuous
program of construction or modification.
Subpart D—Standards of Performance for
Fossil-Fuel Fired Steam Generators
§ 60.40 Applicability and designation of affected fa-
cility.
The provisions of this subpart are applicable to each
fossil fuel-fired steam generating unit of more than 250
million B.t.u. per hour heat input, which is the affected
facility.
§ 60.43 Standard for sulfur dioxide.
On and after the date on which the performance test
required to be conducted by § 60.8 is initiated no owner
or operator subject to the provisions of this part shall dis-
charge or cause the discharge into the atmosphere of sulfur
dioxide in excess of:
(b) 1.2 lbs. per million B.t.u. heat input (2.2 g. per
million cal.), maximum 2-hour average, when solid fossil
fuel is burned.
A36
APPENDIX H
Opinion of the District Court in United States v.
Public Service Co. of Indiana
(Filed September 30, 1977)
No. IP 76-657-C
THE UNITED STATES DISTRICT COURT
SouTHERN DisTRICT or INDIANA
UNITED STATES OF AMERICA,
Plaintiff,
VS.
PUBLIC SERVICE COMPANY OF INDIANA, INC.,
Defendants.
Horn, D. J.:
FINDINGS OF FACT
CONCLUSIONS OF LAW
AND JUDGMENT
The action was commenced by the plaintiff, United
States of America, with the filing of a one count complaint
on November 12, 1976 against the defendant. Public Ser-
vice Company of Indiana, Inc., and the action or November
12, 1976 was scheduled for trial for May 9, 1977. The
trial date was vacated on the Court’s own motion on May
2, 1977 because of the trial date conflicting with the Judicial
Conference and reassigned for July 20, 1977 and later re-
assigned for July 25, 1977. The complaint was amended
on February 17, 1977 and defendant filed its answer there-
to on February 25, 1977 consisting of one defense of ad-
missions and denials.
A37
The plaintiff filed a motion for a preliminary injunction
on December 14, 1976 and on December 14, 1976 the mo-
tion was scheduled for evidentiary hearing on December 21,
1976. The parties’ stipulation for a continuance of the hear-
ing was filed on December 15, 1976 and approved. The
motion was amended on February 17, 1977. Plaintiff with-
drew the motion on February 22, 1977 and amended the
first amended complaint by deletion of the complaint’s re-
quest for preliminary injunction.
Plaintiff filed a motion for partial summary judgment
on June 22, 1977 and withdrew the motion on July 12,
1977.
The bench trial of the issues of the second amended
complaint in one count and the answer of one defense com-
menced on July 25, 1977 and was concluded on July 26,
1977. The parties waived final argument and a post trial
briefing schedule was ordered. The briefing schedule hav-
ing been concluded and the Court being advised in the
matter does now record its findings of fact, conclusions of
law and judgment «ntry.
The United States of America through the Attorney
General of the United States of America and at the request
of the Administrator of the Environmental Protection
Agency commenced this civil action to enjoin the defen-
dant, Public Service Company of Indiana, Inc., a corpora-
tion, from emitting and threatening to emit sulfur dioxide
from steam generating coal fired power units in alleged
violation of Section 111(e) of the Clean Air Act, 42 U.S.C.
§ 1857c-6(e), and the Environmental Protection Agency’s
Standards of Performance for New Stationary Sources
promulgated thereunder and relating to emissions of sulfur
dioxide. Notice of the commencement of this action has
been given to the Air Pollution Control Board of the State
of Indiana.
A38
The defendant is a corporation organized and existing
under the laws of the State of Indiana within the Southern
District of Indiana. The defendant is engaged in the busi-
ness of generating, transmitting and distributing, directly or
indir 2ctly, electric energy to over 500,000 customers located
in 69 of the 92 counties in the State of Indiana. The defen-
dant owns and operates seven generating stations in the
State of Indiana with a combined present generating ca-
pacity of approximately 4,300 megawatts (MW). Of de-
fendant’s total present capacity, 1,300 MW are produced
by Units #1 and #2 located at the Gibson County Generat-
ing Station in Gibson County, Indiana.
Planning for the Gibson Station with a capacity for
five generating units, four of which were to come on line
in 1975, 1976, 1978 and 1979, commenced during the mid
to late 1960’s. It was determined in 1966 that additional
generating capacity would be needed by defendant in 1975.
Preliminary plans were begun at that time and expendi-
tures and planning commenced in terms of engineering and
financing this additional capacity. The Gibson Station was
planned to operate and is operated as a base load electric
generating station to serve the customers dependent on
defendant for electric utility service. Preliminary reports
were refined throughout the periods 1966 through 1969 and
the first definitive report was submitted by consulting en-
gineers to the Company on May 20, 1969, wherein the site
of the new station was determined. By September of 1969,
defendant had selected the Gibson County location for the
new generating station and begun acquisition of more
than 5,000 acres of land for the project located on the In-
diana banks of the Wabash River approximately three
miles south of Mt. Carmel, Illinois, in Gibson County, In-
diana. The turbo-generator contract for two 650 MW gen-
erating units with General Electric is dated September 3,
A39
1969. First option for purchase of over 4,500 acres of land
was taken September 23, 1969. A majority of deeds for the
plant site were consummated in 1970. A condemnation
hearing requested by the Company was held on August
17, 1970, and public announcement of the plant project was
made on August 18, 1970. At all times since its announce-
ment in August, 1979, defendant has planned its Gibson
Generating Station to contain at least four generating
units and its construction of the station from its com-
mencement by June, 1971, has been made to house and
accommodate four such units. By August 11, 1971, con-
struction work necessary to ultimate operations of Units
#3 and #4 (and on a scale unnecessary to operation of
Units #1 and #2 alone) was underway on the 2,950 acre
cooling lake, coal handling facilities, ash handling and
storage facilities, cooling water intake structure, electrical
switchyard and railroad facilities. In addition, the order
of construction of Units #1 and #2 was reversed to facili-
tate construction. The contract for two super critical
Foster-Wheel boilers of 4.7 million pounds of steam per
hour for the first two 650 MW units was signed November
30, 1970. The contract for sale of timber from the plant
site was signed on January 21, 1971. By June, 1971, the
planning of defendant’s Gibson generating station was em-
bodied in defendant’s Five Year Construction Program
Budget as embracing a 650,000 kw Unit #2 to be placed in
service on January 1, 1975; a 650,000 kw Unit #1 to be
placed in service on January 1, 1976; and an 800,000 kw
Unit #3 to be placed in service on January 1, 1978; and
involving a continuous program of construction and con-
struction expenditure over the quintennial. Defendant’s
Five Year Construction Program Budget was updated in
June, 1972, to include Gibson generating Unit +4 to go in
service on January 1, 1979, and to specify Units #3 and
#4 as being 650,000 kw units. The construction program
A40
budgets for defendant’s Gibson generating station have
been revised from year to year thereafter. Construction
on defendant’s Gibson generating station has proceeded
continuously since June, 1971, and construction of the four
units included within it has proceeded in regular progres-
sion as a continuous program of construction and comple-
tion of the station. Construction on Units #3 and #4,
considered as individual turbo-generator units separate and
apart from the station, commenced on or about July 1, 1974.
Contracts for site preparation were signed with Green Con-
struction Company on July 9, 1971; actual earth moving
for the plants site commenced on July 19, 1971; and Green
received its first payment for site preparation on Sep-
tember 13, 1971. On August 17, 1971, the Administrator
of the United States Environmetnal Protection Agency,
published in the Federal Register proposed Standards of
Performance for Fossil-Fuel Fired Steam Generators with
limitations on the emission of particulate matter, sulfur
dioxide and nitrogen oxides. Such Standards of Per-
formance were not developed based on health related stan-
dards. Environmental Protection Agency’s Office of Air
Programs Technical Report No. APTD-0711 entitled “Back-
ground Information for Proposed New-Source Performance
Standards” was part of the data supporting such proposed
regulations. It stated in part:
“The standards for sulfur dioxide are based on
limited demonstrations of stack-gas desulfurization
processes and on the availability of low-sulfur fuels.
At this time only the lime-slurry demonstrated [sic]
on large steam generators. Three other processes have
been shown capable of continuous operation at smaller
installations. * * *
“Coal and fuel oil of low sulfur content and
natural gas can be used to satisfy the standards at
A41
many new system generators. It is not expected, how-
ever, that there will be enough low-sulfur fuel to
supply all new steam generators as well as existing
sources requiring SO, control under state implementa-
tion plans. In addition, transportation costs in many
areas may make these fuels more expensive than stack-
gas desulfurization.
“* * * The reimbursements for salable by-products,
such as elemental sulfur and sulfuric acid, were not
included as credits in the cost estimates because of the
market variabilities involved, in addition, the cost for
disposal of spent reagents incurred by some processes
was not considered in any depth.
“The standards of performance are insensitive to
cost/benefit analysis when stack-gas cleaning is em-
ployed in that it is the only control system available.
Since the availability of low-sulfur fuel varies with
the location of the plant, it is not possible to analyze
the cost of this control strategy.”
All generating units at defendant’s Gibson Station are large
steam generators. Environmental Protection Agency has
never made a determination as to the cost of complying
with the new source performance standard for sulfur
dioxide by burning low sulfur coal. On December 23, 1971,
the Standards of Performance for Fossil-Fuel Fired Steam
Generators became final regulations. 36 F.R. 23877. On
July 18, 1972, Green Construction Company commenced
construction on the dike for the 2,950 acre cooling lake for
approximately 3,000 megawatts of new capacity and a pro-
posed but as yet unfinalized Unit +5. On December 14,
1973, defendant and Foster-Wheeler Corporation signed a
contract for two steam generating units of 4.6 million
pounds of steam per hour for use in connection with Units
A42
#3 and #4. Each unit is a 5,884.11 million BTU per hour
generating unit.
Defendant’s Gibson Station Units #3 and #4 were
designed to meet Environmental Protection Agency’s New-
Source Performance Standards for particulates and sulfur
dioxide. Defendant has in good faith endeavored to com-
ply with such standards. Thereafter defendant developed
general specifications for the sulfur dioxide removal equip-
ment to be used in the Gibson Units #3 and #4 installa-
tion. The specifications were designed to insure full and
continuous compliance with Environmental Protection
Agency’s new source standards for sulfur dioxide emis-
sions and sought performance guarantees on the equipment.
The contract for delivery of coal for Gibson Units +3 and
#4 with the Carter Oil Company is dated April 24, 1974.
The coal to be delivered will contain 3.3% sulfur by weight.
No adequate supplies of sufficiently low sulfur coal to
meet the New-Source Performance Standards were found
to be available with adequate facilities to transport it to
the site of the Gibson Station, so defendant in accordance
with the custom in the utility industry entered into à iong-
term contract with Carter Oil Company to supply approxi-
mately 3.3% sulfur content coal for Gibson Units +3 and
#4 so as to insure a supply of coal during the expected life
of the units of 35 years. On June 4, 1974, Sargent and
Lundy, consultants ana design engineers for the Gibson
County Generating Station, submitted a “Scope of Work”
for Units #3 and #4 to defendant for comment. During
early 1974 Sargent and Lundy advised defendant that SO,
control equipment costs would be approximately $74/Kw or
$99,000,000 for both units. Construction on Units +3 and
#4, considered as individual turbo-generator units separate
and apart from the station facilities required for them,
commenced on or about July 1, 1974. On July 8, 1974, the
A43
Air Pollution Control Board for the State of Indiana issued
a Construction Permit for Units #3 and #4 at the Gibson
Station. On July 26, 1974, defendant sent to Sargent and
Lundy its comments on the June 4, 1974, “Scope of Work”
for the Gibson Units +3 and +4. On September 4, 1974,
Ralph C. Pickard, Technical Secretary, Indiana Air Pollu-
tion Control Board, stated in a letter to Mr. Carroll H.
Blanchar, Chairman and Chief Executive Officer of defen-
dant, that “the construction permit PC (32) 712 issued on
July 8, 1974, for the new generating Units #3 and #4 at
your Gibson Station was based on the source meeting the
New-Source Performance Standards. This requires that
sulfur dioxide emissions from a source exceeding 250 mil-
lion BTU per hour will not be more than 12 pounds per
million BTU heat input.” Such construction permit was
issued under Indiana Air Pollution Regulation APC-19. At
that time defendant and other Indiana electric utilities were
parties to an action attacking the validity of that Indiana
regulation and on November 10, 1975, the Circuit Court of
Marion County, Indiana, entered a judgment declaring
that regulation APC-19 and others are invalid for pro-
cedural deficiencies and enjoining their enforcement. The
injunction has been stayed pending an appeal and an appeal
is presently pending from such judgment. On November
1, 1974, Sargent and Lundy submitted to defendant con-
densed and detailed construction schedules for Gibson
Units #3 and #4. By letter through Sargent and Lundy,
defendant invited bids for equipment to control emissions
of sulfur dioxide from Gibson Units #3 and +4. The re-
quested bids were due on or before July 11, 1975. Plaintiff
challenges the guarantee specifications as being unrea-
sonably strict and more than is required of any other major
piece of equipment, but the fact remains that other equip-
ment does not have to meet a strict law-imposed standard
for equipment performance, whereas the emission control
A44
equipment has as its sole function the responsibility of
causing the unit to operate without violating applicable
limitations imposed by law, and, since defendant’s Gibson
Station is a base load generating station, the equipment
must operate substantially continuously in compliance with
such legal requirements. During July of 1975 bids were
received from eight of the eleven vendors to whom re-
quests for bids for SO. equipment were addressed. Of
those eight who submitted bids, one bidder—Foster-Wheeler
—submitted a bid for a regenerable system which was
deemed unresponsive by defendant. Thus seven companies
out of eleven receiving invitations submitted bids and all
proposed a lime or limestone scrubbing system which is a
throwaway system, rather than a system which produces
a salable by-product. None of the suppliers of regenerative
systems invited to bid were willing to propose a full scale
unit. The quoted base material and erected prices received
by defendant from six of the seven bidders for one unit
ranged from $19,900,000 to $25,800,000 and for two units
ranged from $36,800,000 to $51,500,000. The seventh
bidder—M. W. Kellogg—quoted base material and erected
prices at $60,168,000 for one unit and $120,336,000 for
two units. The M. W. Kellogg bid included sludge prep-
aration costs and unlike all other bidders did not quote
escalatable prices but quoted firm prices. An analysis
of four bids deemed best by defendant showed aggregate
capital costs (present worth at January 1, 1978) for Gibson
Units #3 and #4 over an assumed thirty year life of the
scrubber equipment ranging from $108,967,000 to $111,006,-
000, and aggregate operating costs (present worth at Janu-
ary 1, 1978) ranging from $205,500,000 to $253,240,000. An-
nualized costs (both capital and operating would range
from $34,183,000 per year to $39,243,000 per year. These
capital and operating costs would result in increasing de-
fendant’s electric utility rates to its customers by 8% to
A45
10%. Mr. W. O. Montgomery, Vice President-Engineering
for defendant, wrote to James McDonald, Director, Enforce
ment Division, United States Environmental Protection
Agency, Region V, on August 19, 1975, requesting a meet-
ing to discuss alternatives to scrubbers for Unit #3. The
letter stated that by September 1, 1975, defendant “must
place an order for scrubber hardware in order to start
Unit No. 3 operation with constant emission control.” Both
Unit +3 and Unit #4 at the Gibson Station were designed
for and will have a maximum rated capacity of 5,884.11
million BTU per hour (BTU/hr). Unit #3 and Unit #4
have been designed and are being equipped with the best
available equipment to control emissions of particulate mat-
ter. No control equipment is planned for the control of
emissions of sulfur dioxide from Unit #3. Unit #3 and
#4 will each have a pulverized coal dry bottom boiler.
Unless operated with sufficiently low sulfur content coal
or with appropriate control equipment, the operation of
the units will emit into the atmosphere gases containing
sulfur dioxide in amounts approximately 5.80 Ib. per million
BTU heat input. Pulverized coal is a solid fossil fuel. Units
#3 and #4 were designed for and space was allocated in
the plant layout for control equipment to remove SO: from
the flue gas to meet an emission limit of 1.2 lb. SO: per
million BTU heat input. When burned in Units #3 and
#4 at the Gibson Generating Station, 3.3% sulfur coal will
result in emissions of about 5.8 Ib. of SO: per million BTU
heat input. By letter of January 21, 1976, to defendant
Sargent and Lundy recommended that Research Cottrell
be awarded the contract to furnish and erect the Gibson
Generating Station sulfur removal system for Units +3
and #4 and that a testing program be made to determine
how to dispose in an environmentally acceptable manner
of the waste produced by such sulfur removal system.
The Gibson Generating Station site is constructed in a flood
A46
plain. A lined pond, assuming one were constructed in the
vicinity of the Gibson Generating Station, would have to
be constructed in a flood plain; the soil and hydrology of
the area adjacent to the Gibson Generating Station would
prevent the use of an unlined pond to dispose of sludge.
No liner for a sludge pond has been demonstrated effective
as a permanent solution of the sludge containment problem.
The cost of obtaining lime for one unit at the Gibson
Generating Station over the life of the plan would be $80,-
468,000 and the cost of obtaining limestone for one unit
over the life of the unit would be $31,115,000. Disposal of
lime sludge (dry) over the life of one unit comparable to
Gibson Unit #3 would require 3,800 acre feet and for lime-
stone sludge (dry) would require 3,200 acre feet. The
annual tonnage of sludge from one unit comparable to Gib-
son Unit #3, assuming a 55% capacity factor and the use
of a lime scrubber, would be 330,000 tons (assuming 60%
solids-40% moisture) and the annual tonnage, assuming
limestone, would be 430,000 tons (assuming 60% solids-
40% moisture). Defendant does not have sufficient land
at its Gibson Generating Station site to store untreated
sludge disposal from lime or limestone scrubbers, and it
could not store chemically treated sludge at the site without
absolute assurance that it will not leach into ground water.
Untreated sludge could not be stored at the Gibson Generat-
ing Station site or on land immediately adjacent thereto
without a lined pond and adequate diking. The cost of a
lined pond, assuming one were constructed, would be ap-
proximately $10,000,000. All present systems for treat-
ment of sludge are either experimentu: or demonstrate in-
stallations so new that their efficiency has not been fully
tested. Defendant could operate all four units at its Gib-
son Generating Station so as to meet the primary national
ambient air quality standards promulgated under the Clean
Air Act without making any change or additions to Units
A47
3 and #4 as the same are now being constructed and
installed and without any change in present coal supply
arrangements for those units other than to have a supply
of lower sulfur coal available to burn when atmospheric
conditions so require. By letter of February 10, 1976,
Russell W. Rink, Vice President, Purchasing for defendant,
notified remaining bidders that def ndant was unable to
decide on the purchase of SO, rm noval equipment for
Units #3 and #4 and not to hold production space open.
In late 1975 and early 1976, there was no commercially
established flue gas scrubber equipment for an installation
comparable to Gibson Units #3 and #4. While reserves
of coal with sulfur content low enough to be usable in com-
pliance with the new source standards without the necessity
of scrubbers do exist, a supply adequate for defendant’s
Gibson Units 23 and #4 would require combining the
holdings of a number of suppliers and the transportation
problems and logistics of moving such coal to defendant's
Gibson Station makes use of such coal, even on an interim
basis, impractical and an unreasonable economic burden
on the defendant customers. Coal costs would be increased
by $60,000,000 to $83,000,000 per year and a new investment
of $133,000,000 would be required in transportation facil-
ities. Although increased coal costs would terminate if low
sulfur coal were used as an interim compliance measure,
capital investment in railroad rolling stock and trackage,
barges, barge transfer facilities and trucks would be neces-
sary even over the short term and would thereafter be of
no use and constitute waste. The additional coal costs
alone would increase customer rates by 10% to 11% if low
sulfur coal were used as an interim compliance measure
during construction of FGD equipment and by 13-16% if
low sulfur coal were adopted as a long-term compliance
method. Although compliance with the standards by use
A48
of low sulfur coal may be a feasible option for many
western and some eastern utilities located near low sulfur
coal fields or on adequate railroad water routes, compliance
with the new source performance standards by burning low
sulfur coal at Gibson Units #3 and #4 would be sub-
stantially more expensive than compliance by means of
FGD systems; because of the lack of reliable sources and
transportation problems compliance with the new source
performance standards by burning low sulfur coal at Gibson
Station is not feasible. There is no commercially estab-
lished regenerative system for use with flue gas scrubber
equipment on generating units the size of Gibson Units
#3 and #4. While some of the now installed flue gas
scrubber equipment are being used, there is none working
satisfactorily in any installation involving the site prob-
lems and limitations imposed by conditions at defendant's
Gibson Station. Of the scrubber installations claimed by
plaintiff to be working satisfactorily and to be workable
models for defendant’s Gibson Units #3 and #4, Kansas
City Power & Light Company’s LaCygne installation in-
volves nighttime cutbacks for maintenance and operates
open loop by discharging sludge liquid overflow into an
outside pond. The next unit at that station will use low
sulfur coal for compliance. Northern States Power's
Sherburn County station uses low sulfur coal, is not a
base load operation and operates open loop. Pennsylvania
Power Company’s Mansfield station has a nighttime cut-
back and operates open loop by discharging sludge liquid
overflow into a river. It also showers a discolored mist all
over a nearby city. Defendant’s Gibson Station cannot be
operated open loop because it cannot be allowed to dis-
charge sludge liquid into the Wabash River or into the
flood plain; and it is to be a base load operation. No
specific scrubber system is known to be practical for use
A49
to bring defendant’s Gibson Units +3 and #4 into com-
pliance and effectively produce power. If Gibson Station
Units #3 and #4 are not put in service serving defendant’s
customers dependent on it for electric utility service rea-
sonably near their scheduled in-service dates in early
1978 and 1979, respectively, the consequence will be to re-
duce the generating capacity of defendant to a dangerously
low point where its reserves would be inadaquate to meet
any substantial emergency or to carry out proper main-
tenanee necessary to keep the equipment in an economic
and reliable operating condition and will likewise have a
similar effect on the KIL. P. pool (consisting of Kentucky
Utilities, Inc., East Kentucky Power Co-operative, Inc.,
Indianapolis Power & Light Company and defendant). De-
fendant would be deprived of some $150,000,000 power
sales to pool members and would have to purchase ap-
proximately $40,000,000 of replacement energy from
neighboring utilities. The financial losses occasioned by
such a deferral of in-service dates would have a substantial
adverse effect on defendant’s customers and there is no
public benefit to be realized from such a shutdown. De-
fendant proposed that, in view of the uncertainties as to
the workability of existing sludge disposal or treatment
systems, its Gibson Station Units #3 and #4 be used as
test facilities to develop a commercially workable and ac-
ceptable technology to produce a commercially salable end-
product instead of sludge and one which could be safely
stored or disposed of in case the market for the end-product
should become glutted or otherwise unable to handle addi-
tional supply. If such system can be developed, the public
interest will be advanced by having a useful end-product
instead of another dump and the system can serve as a
prototype for future coal-fired generating stations. A rea-
sonable timetable for compliance on this basis is as follows:
Event Months
After
Order
Test Module
Start Specification
Specification for bids 4
Bidders response 7
Award of contract 10
Procure and install equipment 34
Test and evaluation complete 48
Full Scale
Specification for bids 47
Bidders response 48
Contract award 50
Construction, installati and
start up of full scale scrubbers for
Gibson Units #3 and #4 83
This timetable contemplates that Gibson Station Units
#3 and #4 will be in operation during the above periods
and that the sulfur dioxide removal system will be phased
in at the dates shown. Pending final operation of the com-
plete sulfur dioxide removal systems, defendant will be
required to monitor continuously ground level concentra-
tions and to take all steps necessary to keep the operation
in compliance with the primary nationa! ambient air quality
standards promulgated under the Clean Air Act. A com-
plete shutdown of Gibson Station Units #3 and #4 until
defendant can make them comply with Environmental
Protection Agency's New-Source Performance Standards
is not in the interest of the public in the State of Indiana
dependent on defendant for electric utility service. Unit
#2 at the Gibson Station commenced commercial opera-
tion on April 15, 1975, and Unit #1 commenced commer-
cial operation on May 3, 1976.
A51
The Court has jurisdiction of the parties and subject
matter of the action, 28 U.S.C. § 1345 and § 113(b) of the
Clean Air Act (42 U.S.C. § 1857c-8(b)).
The plaintiff has failed to prove all of the alleged
facts of each of the essential legal elements of the second
amended complaint by a preponderance of all of the evi-
dence.
Environmental Protection Agency’s New-Source Per-
formance Standards which are sought to be enforced in
this action are the standards applicable to sulfur dioxide
emissions from coal-fired steam generators. Such regula-
tions were the subject of judicial review pursuant to the
terms of the Clean Air Act and on that review were de-
termined to be defective for failure to consider the counter-
environmental effects of the process relied upon to sup-
port the prescribed standards; they were, therefore, re-
manded to Environmental Protection Agency for further
proceedings. No final Agency action has been taken to
comply with the remand order and there is no valid reg-
ulation in effect to be enforced. Essex Chemical Corpora-
tion vs. Ruckelshaus [5 ERC 1820] (D.C. Cir. 1973), Cause
No. 72-1079, 486 F.2d 427, cert. den. subnom. Appalachian
Power Co. v. Environmental Protection Agency (1974), 416
U.S. 969 [6 ERC 1512].
Since Environmental Protection Agency has never
taken into account, or made any determination as to, the
costs of compliance with its sulfur dioxide new source
performance standards by use of low sulfur coal, burning
such coal does not constitute a “system of emission reduc-
tion which (taking into account the cost of achieving such
reduction) the Administrator [has] determine[d] [to be]
adequately demonstrated,” as required by § 111(a)(1) of
the Clean Air Act.
A52
Although burning low sulfur coal may be regarded
as a method of compliance to be used at the option of the
owner or operator of a new source, it is not a method of
compliance which may be lawfully required in any case
in which the costs of compliance by its use substantially
exceed the cost of lime or limestone scrubbing, because the
latter system of emission control is the only one Environ-
mental Protection Agency has determined to be adequately
demonstrated, taking into account the cost, as required by
§.111(a) (1) of the Clean Air Act.
Gibson Units #3 and #4 are, therefore, among the
sources referred to by the Essex court as “those coal-fired
steam generator plants which must use a lime slurry scrub-
bing system as the only means of achieving the standards”
(486 F.2d 441.) Accordingly, Gibson Units #3 and #4
may not be subjected to enforcement of any remnant of
the new source performance standard for sulfur dioxide
which survived Essex.
If and when Environmental Protection Agency does
take final action to respond to the reviewing court’s re-
mand order, the date of publication of the proposed regu-
lation within the meaning of § 111 (a) (2) of the Clean
Air Act will be no earlier than September 10, 1975, the date
of Environmental Protection Agency’s proposed response
to the reviewing court’s remand order, and the final sulfur
dioxide New-Source Performance Standard will be ap-
plicable to stationary sources, the construction or modifi-
cation of which was started after that date. 40 F.R. 42045.
No final response has been published or submitted to that
court and Environmental Protection Agency has taken no
final position on what, if any, methods are available to
dispose of the sludge resulting from lime or limestone
slurry scrubbing systems without being exorbitantly costly
in a economic or environmental way so as to meet the re-
A53
quirements of § 111 (a) (1) of the Clean Air Act (42 U.S.C.
§ 1857c).
Under § 111 of the Clean Air Act (42 U.S.C. § 1857c)
the “new source” controlled by the New-Source Perform-
ance Standards is for purposes here pertincnt the entire
steam electric power plant rather than the individual steam
boilers or turbo-generator units in such plant. Environ-
mental Protection Agency’s regulations at 40 C.F.R.
§ 60.2(d), (e), (g) and (i) in defining the “new source”
to be the specific piece of apparatus are invalid as con-
trary to the Clean Air Act.
Defendant’s Gibson Generating Station, including gen-
erating Units #1, #2, #3 and #4, does not constitute
a “new source” subject to § 111 of the Clean Air Act (42
U.S.C. § 1857c) or the Environmental Protection Agency
regulations sought to be enforced in this action.
Should there be some post trial action of the Environ-
mental Protection Agency that is legally accepted that
would warrant the Appellate Court’s finding that defen-
dant would be in violation of § 111(e) of the Clean Air
Act (42 U.S.C. § 1857c) and/or should an Appellate Court
otherwise conclude that defendant is in violation of § 111(e)
of the Clean Air Act (42 U.S.C. § 1857c) then this Court
further concludes as follows:
A) In light of Environmental Protection Agency’s
failure to take any final administrative action on the ques-
tion of how to solve the counterenvironmental effects of
the sludge produced by scrubbers used as flue gas desulfur-
ization (“F.G.D.”) equipment and of the fact that such
scrubbers were the only F.G.D. equipment quoted in re-
sponse to defendant’s invitation for bids on compliance
apparatus, and wf the great expense of such equipment
which would be wasted if it could not be used because of
25⁴
such counter - environmental effects, defendant’s failure to
commit such expenditures for equipment not shown to be
environmentally acceptable constituted g tion in good
faith.
B) Environmental Protection Agency’s delay in tak-
ing final administrative action on the response to the re-
mand order of the reviewing court in Cause No. 72-1079
in the United States Court of Appeals for the District of
Columbia is unreasonable and has left in doubt just what
will be the final New-Source Performance Standards ap-
plicable to sulfur dioxide emissions from coal-fired steam
generators.
C) Any order against defendant requiring compliance
with Environmental Protection Agency’s New-Source Per-
formance Standards applicable to sulfur dioxide emissions
from coal-fired steam generators should be conditioned to
provide defendant a reasonable period for compliance after
Environmental Protection Agency takes final administra-
tive action on the question of how to solve the counteren-
vironmental effects of the sludge produced by F. C. D. equip-
ment.
D) Operation of defendant’s Gibson Station in com-
pliance with the national ambient air quality primary
standards will protect the public health from the adverse
effects of sulfur dioxide with an adequate margin of safety.
E) Defendant’s proposed compliance schedule as de-
scribed in the findings is reasonable and should be em-
bodied in a compliance order which shall permit defen-
dant to operate Gibson Station Units #3 and #4 so long
as defendant is proceeding in good faith to meet such com-
pliance schedule and so long as such operations are con-
ducted in compliance with the national ambient air quality
standards under the Clean Air Act.
A55
The action is being prosecuted upon a precise theory
and the Court does not conclude upon whether or not de-
fendant is about to violate some other State or Federal
statute or regulation, or the common law of the State of
Indiana. The statute in question was conceived in the era
of the use of natural gas and oil for fuel, which fuels are
now and for the foreseeable future are and will be in short
supply. Industry consequently is requiring more coal and
the demand reduces the supply of low sulfur coal. Plain-
tiff has in effect left it up to the ingenuity of the industry
to develop a practical way to use high sulfur coal. It
appears that industry has and defendant is illing to and
ready to experiment for improvement in the use of high
sulfur coal and defendant should not be confined to the
unproven expensive experiments of others in the industry.
The law is with the defendant and against the plain-
tiff.
The defendant is entitled to a judgment of dismissal
of the action with prejudice.
JUDGMENT
It is therefore ADJUDGED and DECREED that the
plaintiff take nothing by this action and the action be and
is hereby DISMISSED with prejudice.
A56
APPENDIX I
Opinion of the District Court in City of Hamilton
v. Gardebring
(Filed May 26, 1981)
Civil No. C-1-79-552
IN THE UNITED STATES DISTRICT COURT
For THE SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
CITY OF HAMILTON,
Plaintiff,
V.
SANDRA S. GARDEBRING, et al.,
Defendants.
FINDINGS OF FACT,
OPINION AND
CONCLUSIONS OF LAW
This matter is before the Court following presentation
of testimony and evidence on one issue in the above en-
titled case. Pursuant to Rule 42(b) of the Federal Rules
of Cvil Procedure the Court severed the question of
when construction commenced on an installation of plain-
tiff known as Boiler No. 9. This case involves a question
of compliance by plaintiff with the Clean Air Act, 42
U.S.C. 87401-7642.
In accordance with Rule 52 of the Federal Rules of
Civil Procedure, the Court does submit herewith its Find-
ings of Fact, Opinion and Conclusions of Law on this issue
alone. Determination of all other issues herein will await
the presentation of evidence thereon.
A57
I
FINDINGS OF FACT
1. Plaintiff the City of Hamilton (Hamilton) is a mu-
nicipal corporation located in Butler County, Ohio. It op-
erates a municipal electric plant that generates electricity
for distribution and sale. Defendant, the United States En-
vironmental Protection Agency (EPA) is the agency that
administers the Clean Act.
2. In 1967 Hamilton foresaw a need for additional
electric generating capacity. It employed engineers to
make study of the necessary improvements. In 1969 a
report of such engineers was submitted recommending
that the city go forward with an expansion program. The
report recommended a two phase expansion. Phase One
involved the removal of four old boilers and a smoke-
stack, installation of a gas turbine, and the conversion
of a coal boiler. Phase One was undertaken and com-
pleted. It added generating capacity of sixteen megowatts
[sic] to the plant. It is undisputed that Phase One was
completed prior to August 17, 1971. The gas turbine was
designed for use either in contributing to the base load
or for use at times of peak capacity. When used in the
latter mode it could be brought on line faster but less
efficiently.
3. In January of 1971 Hamilton authorized the prepa-
ration of plans and specifications for Phase Two. This
improvement inciuded the design and installation of Boiler
No. 9, the subject of the dispute before the Court.
In May of 1971 a rate study authorized in November
of 1970 for purposes of paying for the improvement was
completed and an ordinance was passed in June of 1971
to adopt new rates. On June 16, 1971, Hamilton solicited
bids for the construction and installation of Boiler No. 9.
On July 22, 1971 such bids were opened.
A58
In July of 1971 the engineers were paid $80,000.00
and the City Manager was authorized to enter into an
agreement with such engineer to perform engineering
services for the implementation of Phase Two. At the
same time counsel were retained to oversee the issuance of
revenue bonds for the funding of Phase Two.
On September 17, 1971, a Letter of Intent was sent by
Hamilton to Combustion Engineering, Inc. indicating an in-
tent to enter into a contract for the construction of Boiler
No. 9. A contract was entered into on November 3, 1971.
The Charter of the City of Hamilton requires that there
be funds on hand before the city may obligate itself on
a contract and until November 17, 1971, when revenue
bonds were sold, such funds were not on hand.
4. On August 17, 1971, the Administrator of the EPA
published in the Federal Register proposed standards for
the performance of new stationary sources. 36 Fed. Reg.
15704. On December 23, 1971, the standards of performance
for new source fossil fuel fired steam generators became
final. 36 Fed. Reg. 24877. Both the boilers in Phase
One and Boiler No. 9 are fossil fuel fired steam generators.
5. While plaintiff at all times contemplated the ulti-
mate improvement of its electric generating facility to re-
quire both Phase One and Phase Two, the installation of
improvements under Ph se One were self-contained in
that they did not depend upon the installation of Boiler No.
9 to operate. For the period beginning August, 1971, when
Phase One was completed, and June, 1975, when Boiler No.
9 was completed, the units of Phase One did in fact operate
separate and apart frera Boiler No. 9.
6. On August 17, 1971, Boiler No. 9 was neither under
construction nor the subject of a binding contract for
construction.
A59
II.
OPINION
The question presented to the Court in this matter is
identical to the question decided by The Honorable John
Manos, Judge of the United States District Court for the
Northern District of Ohio, in the case of United States of
America v. City of Painesville, 431 F. Supp. 496 (N.D.Ohio
1977). In the Painesville case Judge Manos found that a
contract for the boiler involved in the suit was entered
into on July 28, 1972. He held that since the construction
had not been commenced on August 17, 1971, the boiler was
a “new source” as defined in 42 U.S. Code § 7411(a) (2).
The United States Court of Appeals for the Sixth
Circuit has recently considered the Painesville case and af-
firmed Judge Manos’s decision, United States of America
v. City of Painesville, ........ 8 (6th Cir. March 26,
1981). At page six of the Slip Opinion the United States
Court of Appeals for the Sixth Circuit made the following
statement:
The statute [42 U.S.C. 7411 (a) (2)] unambiguously
establishes the benchmark for determining which
sources of a particular pollutant are new sources.... A
source whose construction commenced after such pub-
lication [August 17, 1971] is subject to the new source
standards whatever they might be or become
Based upon this holding and Finding of Fact 6, this
Court must now find that Boiler No. 9 was a “new source”
and subject to the new source standards of the EPA.
A60
III.
CONCLUSIONS OF LAW
A. This Court has jurisdiction in accordance with
28 U.S.C. §1331.
B. A boiler, the construction or modification of which
has been commenced after August 17, 1971, is a “new
source” and subject to the performance standards proposed
by the Environmental Protection Agency on that date.
United States of America v. City of Painesville, , F. 2d
— (8th Cir. 1981).
C. The activities of Hamilton prior to August 17, 1971
did not constitute construction or modification of Boiler
No. 9.
D. Plaintiff's prayer for an injunction prohibiting any
enforcement action against the City of Hamilton for failure
to operate Boiler No. 9 in compliance with new source
performance standards for sulfur dioxide should be and is
hereby DENIED.
IT IS SO ORDERED.
uon
No, 81-164
7
Cite. Supreme ©
tire.
SEP LE 981
OcrToBER TERM, 1980
Crry oF PAINESVILLE, OHIO, PETITIONER
v. | os
UNITED STATES OF AMERICA
ON PETITION FOR A WRIT OF CERTIORARI TO THE
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIROUIT
BRIEF FOR THE UNITED STATES IN OPPOSITION
Rex E. LEE
Solicitor General
CaROL E. DINKINS
Assistant Attorney General
ROBERT L. KLARQUIST
LAURA FROSSARD
Attorneys
Department of Justice
Washington, D.C. 20530
(202) 683-2217
Ron M. PERRY
General Counsel
Topp M. JosEPH
EARL SALo N
Attorney
QUESTIONS PRESENTED
1. Whether a district court must hold an eviden-
tiary hearing before enjoining a municipal electrical
generation plant to operate its boiler in conformity
with new sources performance standards promulgated
pursuant to Section 111 of the Clean Air Act, 42
U.S.C. (Supp. III) 7411, when the court has found
the boiler subject to and in violation of the standards,
has allowed the parties an extended opportunity to
negotiate a compliance schedule, which did not lead to
an agreement, and where neither party requested an
evidentiary hearing.
2. Whether Section 111 of the Clean Air Act,
which provides that any stationary source of air pol-
lution built after the publication of an applicable pro-
posed or final new source performance standard must
be operated in conformity with the standard, should
be denied effect as to a particular standard in an
enforcement action, where a court reviewing the
standard in separate proceedings had remanded the
record to the EPA Administrator for further con-
sideration of an issue, witnout vacating or staying
the standard, and the standard was ultimately re-
affirmed by the Administrator and further judicial
review proceedings abandoned.
(1)
TABLE OF CONTENTS
Page
Opinions below 1
Jurisdiction 1
Statement 2
Argument 5
Conclusion ..... 14
TABLE OF AUTHORITIES
Cases:
Appalachian Power Co. v. Costle, No. 78-1092
(D.C. Cir. Sept. 5, 1978) * 13
Asarco Inc. v. EPA, 578 F.2d 319 7
EPA v. National Crushed Stone Association. 449
/ er eae were 9
Ernst & Ernst v. Hochfelder, 425 U.S. 185 ............ 11
Essex Chemical Corp. v. Ruckelshaus, 486 F.2d 427,
cert. denied, 416 U.S. 9699 2, 3, 5, 11, 12, 13, 14
Harrison v. PPG Industries, Inc., 446 U.S. 578 2, 14
Hecht Co. v. Bowles, 321 U.S. 32112 — 6, 7, 8, 9
Hormel v. Helvering, 312 U.S. 552 5
International Harvester Co. v. Ruckelshaus, 478
a CII Se ER ae ne 13
Kennecott Copper Corp. v. ‘EPA, 462 F.2d 846...... 13
National Asphalt Pavement Association v. Train,
+ ASRS EE Sa Se 7
Oljato Chapter of the Navajo Tribe v. Train, 515
/ ( es VO 13
Romero-Barcelo v. Brown, 643 F.2d 835, petition
for cert. pending, No. 80-1990 “‘ed May 26,
171717C7CCCCCCCCCCCG c — 10, 11
TVA V. Hill, 437 US. 168 ee 6, 7, 10
United States v. Great Northern Ry., 343 U.S.
„ 12
United States v. San Francisco, 310 U.S. 16 .......... 7
(in)
Statutes and regulations: Page
Clean Air Act, 42 U.S.C. (Supp. III) 7401 et seq.:
Section 111, 42 U.S.C. (Supp. III) 7411....2, 3, 7, 11
Section 111(a)(1), 42 U.S.C. (Supp. III)
7411(a) (1) 3
Section 111 (a) (2), 42 U.S.C. (Supp. III)
, SIT EN tee See 2, 11, 12
Section 111 (b) (1) (B), 42 U.S.C. (Supp. III)
7411 (b) () (3) 2
Section 307 (b), 42 USC. (Supp. III) 7607
%ͤñĩ 2 ̃ ͤÄT——ͤ %¼QP—nͤx . .Tͤ—Ä—2 9
Section 307 (b) (1), 42 U.S.C. (Supp. III) 7607
Far 14
Section 307 (b) (2), 42 U.S.C. (Supp. III)
rr 9
Clean Air Amendments of 1970, pub. L. No. 91
84888. 11„1!ł⸗łç„„% 2
Section 111, 42 U.S.C. 1857 e- 2
Clean Air Act Amendments of 1977, Pub. L. No.
e 2
r 14
40 C. F. R. 60.43 (1976) / 4
Miscellaneous:
116 Cong. Rec. 32918-32919 (1970) ** 7
36 Fed. Reg. (1971):
p. 15704 2
3 2
p. 24876 . 2
p. 24878 2
40 Fed. Reg. 42045 (1975) 3
42 Fed. Reg. (1977) :
Leventhal, Environmental Decisionmaking and the
Role of the Courts, 122 U. Pa. L. Rev. 509
c ——TPPTT—TVVPV—— 13
S. Rep. No. 1196, 91st Cong. 2d Sess. (1970) 8
Ju the Supreme Court of the United States
OCTOBER TERM, 1980
No. 81-164
CITY OF PAINESVILLE, OHIO, PETITIONER
V.
UNITED STATES OF AMERICA
ON PETITION FOR A WRIT OF CERTIORARI TO THE
UNITED STATES COURT OF APPEALS
° FOR THE SIXTH CIRCUIT
BRIEF FOR THE UNITED STATES IN OPPOSITION
OPINIONS BELOW
The opinion of the court of appeals (Pet. App.
Al-A17) is reported at 644 F.2d 1186. The opinion
of the district court (Pet. App. A20-A29) is reported
at 431 F. Supp. 496. The June 18, 1978, order of
the district court (Pet. App. A30-A31) is unreported.
JURISDICTION
The judgment of the court of appeals was entered
on March 26, 1981. A petition for rehearing was
denied on April 29, 1981 (Pet. App. A18). The peti-
tion for a writ of certiorari was filed on July 27,
1981. The jurisdiction of this Court is invoked under
28 U.S.C. 1254(1).
(1)
2
STATEMENT
A. The sulfur dioxide standard of perſormance.—
Section 111(b)(1)(B) of the Clean Air Act, 42
U.S.C. (Supp. III) 7411 b) (1) (B), requires the
Administrator of the Environmental Protection
Agency (EPA) to establish maximum allowable
emission standards, called “standards of perfor-
mance,” for specific air pollutants emitted by new
sources. A new source is defined as a stationary
source constructed or modified after the standard of
performance for the pollutant the source emits has
been published in final or proposed form, whichever
comes sooner. Section 111(a)(2), 42 U.S.C. (Sup».
III) 7411 (a) (2); Harrison v. PPG Industries, Inc.,
446 U.S. 578 (1980).
On August 17, 1971, the standard of performance
for new fossil fuel-fired steam generators (i. e.,
boilers) was proposed by EPA at 36 Fed. Reg. 15704,
15705 (1971). It was promulgated on December 23,
1971, at 36 Fed. Reg. 24876, 24878, and codified
at 40 C.F.R. 60.40 et seg. The standard in-
cludes emission limits for the pollutants sulfur
dioxide, particulate matter and nitrogen oxides. The
standard was challenged by utility companies in
Essex Chemical Corp. v. Ruckelshaus, 486 F.2d 427
(D.C. Cir. 1973), cert. denied, 416 U.S. 969 (1974).
In Essex (486 F.2d at 440), the court of ap-
peals held that the standard was achievable and
based on adequately demonstrated control systems,
References here are to the Act as amended by the Clean
Air Amendments of 1970, Pub. L. No. 91-604, 84 Stat. 1676 et
seq. Section 111 of the Clean Air Act was codified at 42 U.S.C.
1857c-6 until the enactment of Clean Air Act Amendments of
1977, Pub. L. No. 95-95, 91 Stat. 685 et seq., which amended
Section 111 in respects not material here and recodified Sec-
tion 111 at 42 U.S.C. (Supp. III) 7411.
as required by Section 111(a)(1) of the Clean Air
Act, 42 U.S.C. (Supp. III) 7411(a)(1). However,
the court remanded that record to the Administrator
for further consideration of only adverse environ-
mental effects of applying the standard to generating
plants that must use lime slurry scrubving systems to
achieve the emission limit for sulfur dioxide. These
scrubbing systems, though effective in lowering sulfur
dioxide emissions, produce a solid waste sludge, the
effects of which EPA had not sufficiently considered,
the court concluded. 486 F.2d at 441. The court ex-
plained that [wle only want to be sure in view of
the significant problem posed in the record that the
Administrator has acted reasonably in promulgating
the standard.” Ibid. n.51. The court did not vacate,
or invalidate any part of the standard. EPA recon-
sidered the adverse effects of scrubber sludge, and in
1975 published notice that it had determined that no
change in the emission limit for sulfur dioxide was
warranted. 40 Fed. Reg. 42045 (1975). After public
comment, the Agency confirmed that view. 42 Fed.
Reg. 61541 (1977).
B. Factual background.—On April 2, 1976, the
United States filed a complaint alleging that the City
of Painesville, Ohio, was operating a coal-fired, steam
generating boiler in Unit No. 5 of its electrical gen-
eration plant, in violation of Section 111 of the Clean
Air Act and the regulations promulgated thereunder
by emitting sulfur dioxide in excess of the 1.2 Ibs. per
million B.T.U. allowed by the standard for new coal-
fired steam generators (Pet. App. A3). The United
States sought to enjoin the petitioner to burn coal
with a sulfur content low enough to comply with the
standard, and to require the petitioner to submit a
plan to the court for achieving compliance with the
emission standard. Petitioner moved for summary
judgment, alleging that the only issue to be decided
4
by the court was whether construction of the boiler
began before August 17, 1971 (J.A. 31, 33). Peti-
tioner did not deny that if construction of the boiler
had begun after that date, the boiler was a new
source subject to the standard of performance, or
that the boiler would violate the standard (see J.A.
31-34; Pet. App. A4). The government filed a cross-
motion for summary judgment.
On January 19, 1977, the district court granted
the government’s motion for summary judg: ient
(Pet. App. A20-A29), finding that the boiier was a
new source subject to the emission standards of 40
C.F.R. 60.43 (1976), and that the operation of the
boiler violated the emission standard for sulfur
dioxide. The court ordered the parties to prepare a
plan for compliance “at an economically acceptable
level” (Pet. App 29).
One and one-half years later, on June 18, 1978, the
court issued an order permanently enjoining the City
from emitting sulfur dioxide from the boiler in excess
of the new source standard. The court statea that it
had ordered this injvnction only after “lengthy and
thorough discussions * * * between the parties, under
the court’s supervision” had failed to produce “an ac-
ceptable plan by which Unit 5 could operate at an
acceptable cost and comply with the emission stand-
ards established by 40 C.F.R. § 60.43” (Pet. App.
A381). The court concluded that “further negotia-
tions are fruitless” (ibid.). Neither party requested
an evidentiary hearing or objected to the entry of
+he injunction without such a hearing.’ The district
2“J.A.” refers to the Joint Appendix filed in the court of
appeals.
Indeed, petitioner’s motion for summary judgment was
the only pleading ever filed by petitioner in the district
court prior to filing of its notice of appeal from the entry of
the! junction (see J. A. 1).
court, apparently acting sua sponte, stayed its order
pending appeal, and expiained that “[t]he court has
not given defendant a grace period in which to com-
ply with its order because he has simultaneously en-
tered a stay of its order” (Pet. App. A31 & n.).
On March 26, 1981, the court of appeais affirmed
(Pet. App. Al-A17), holding that the boiler was a
new source subject to the performance standard and
that the district court had not erred in issuirg the
injunction without an evidentiary hearing. It was on
this appeal that the City raised, for the first time, the
argument that the Esser litigation had invalidated
the standard of performance.
ARGUMENT
The decision below is correct and does not present
any issue warranting review by this Court.
1. Petitioner contends (Pet. 10-15) that the court
of appeals erred in holding that no evidentiary hear-
ing was required. Although the petitioner argued
in the court of appeals that the district court was
required to hold an evidentiary hearing prior to issu-
ing the injunction, petitioner never requested such a
hearing. Petitioner has not suggested that it was un-
fairly surprised by the district court’s action and the
district court’s order precludes any such assertion
(see Pet. App. A31). Having failed to raise the
issue in the district court, the City should be pre-
cluded from asserting it here as error. Hormel v.
Helvering, 312 U.S. 5&2, 556-557 (1941).
In any event, in the circumstances of this case, the
court of appeals correctly held that an evidentiary
hearing was not required prior to issuance of an in-
junction. The court of appeals properly recognized
that “the district court’s discretionary injunctive
6
powers were * * * tempered by its obligation to carry
out the congressional mandate contained in the Clean
Air Act” (Pet. App. Al16).
The principles underlying the decision below are
well established. As petitioner observes (Pet. 10-11),
in Hecht Co. v. Bowles, 321 U.S. 321, 329-330
(1944), this Court held that Congress’ enactment of
a statutory prohibition does not impose “an absolute
duty“ upon a court hearing an enforcement action to
issue an immediate injunction barring violation of
the statute “under any and all circumstances.” How-
ever, in Hecht Co., the Court merely reversed a court
of appeals’ decision holding that the district court
had erred by exercising any measure of discretion
whatsoever when it refused to enjoin a violation of
the Emergency Price Control Act of 1942, upon find-
ing that the issuance of an injunction would be both
superfluous and an an empty formality. See TVA v.
Hill, 437 U.S. 153, 193-194 (1978). As the court of
appeals properly noticed, the Hecht Co. Court em-
phasized that “when a court is called upon to enforce
a federal statutory injunction, its reliance upon
the traditional practices of equity m
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