Petition — Public Service Co. of Indiana v. United States Environmental Protection Agency

Office - Supreme Court, U.S.

FILED

SEP 23 1982

ALEXAN STEVAS,

Iu the

Supreme Court of the United Puts

OCTOBER TERM, 1982

PUBLIC SERVICE COMPANY OF INDIANA, INC.,

Petitioner,

v.

UNITED STATES ENVIRONMENTAL PROTECTION

AGENCY and ANNE M. GORSUCH,

Respondents.

ON PETITION FOR WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR THE

SEVENTH CIRCUIT

PETITION FOR CERTIORARI

JAMES A. STRAIN

Counsel of Record for Petitioner

BRYAN G. TABLER

STANLEY C. FICKLE

JOHN M. KYLE III

Barnes & Thornburg

1313 Merchants Bank Building

Indianapolis, Indiana 16204

(317) 638-1313

Of Counsel:

GREGORY A. TROXELL

Public Service Company of Indiana, Inc.

1000 E. Main Street

Plainfield, Indiana 16168

(317) 838-1345

eee ___

QUESTION PRESENTED FOR REVIEW

When the United States Environmental Protection Agency

disapproves an integral portion of a regulation submitted by

the State as a revision to its State Implementation Plan under

the Clean Air Act, is the remaining portion of the regulation

enforceable by the Agency if it is neither:

(1) Adopted by the State as a state regulation; nor

(2) Promulgated as a federal regulation pursuant to the

provisions of the Act?

TABLE OF CONTENTS

QUESTION PRESENTED FOR REVIEW ..........

eee. eee eee

I.

II.

III.

The Act Gives The States Discretion To Choose

Any Mix Of Regulations Adequate To Meet

National Air Standards And Expressly Provides

The Procedures EPA Must Follow If The State

r ;LLARAA este

Where A State Submits A Regulation As A

Revision To A Valid Pre-existing State Regula-

tion, Permitting EPA To Disapprove An Integral

Portion While “Approving” And Federally En-

forcing The Remainder Serves No Statutory

Policy And Seriously Erodes The State’s Primary

Authority Under The Act ....................

EPA Has No Statutory Authority In Any Circum-

stance To Create And Enforce New Regulations

Merely By “Partially Disapproving” Those Sub-

erer cccotesdcccscncvess

eee

10

TABLE OF AUTHORITIES

I. Table of Cases

Page

Adamo Wrecking Co. v. United States, 434 U.S. 275

17 ͤͤ A onduess 20, 21

Anaconda Company v. Ruckelshaus, 482 F. 2d 1301

s ö 21

Bethlehem Steel Corp. v. EPA, 638 F.2d 994 (7th Cir.

% 7

Big Rivers Electric Corp. v. EPA, 523 F.2d 16 (6th Cir.

1975), cert. denied, 425 U.S. 934 (1976) .......... 7, 21

Buckeye Power, Inc. v. EPA, 481 F.2d 162 (6th Cir.

— AQ ²A ⁵»Ä 1 19

Bunker Hill Co. v. EPA, 572 F.2d 1286 (9th Cir

„ es 20

EPA v. Brown, 431 U.S. 99 (1977) ............... 11, 19

Kennecott Copper Co. v. Train, 526 F.2d 1149 (9th Cir.

1975), cert. denied, 425 U.S. 935 (19760)))) 20

Maryland v. EPA, 530 F.2d 215 (4th Cir. 1975), vacated

sub. nom EPA v. Brown, 431 U.S. 99 (1977) ........ 19

Natural Resources Defense Council, Inc. v. EPA, 481

e eee 21

Public Service Company of Indiana, Inc. v. EPA, 590

neee eee eee 2, 6

Public Service Company of Indiana, pa v. EPA, 682

F.2d 626 (7th Cir. 1982) .. 2, 5, 6, 7, 12, 15, 16, 18, 20, 21

South Terminal Corp. v. EPA, 504 F.2d 646 (Ist Cir.

. AAA ³˙ ]0ͤ K 20

Train v. National Resources Defense Council, Inc., 421

eee 7, 8, 9, 10, 11, 12, 17, 19

Union Electric Co. v. EPA, 427 U.S. 246

r 7, 12, 15, 19

Utah International, Inc. v. EPA, 478 F.2d 126 (10th

/ e 2¹

iv

Page

II. Other Authority

IND. CODE § 4-22-2-2 and 4-22-2-5 (1982) ............ 14

,, g.. 6

,, „e 19

JJ ecb cecckucinecesedctcevenes 2

28 U.S. C. § 1331(a) (Supp. III 19790 ·ꝛ5 6

eee eee 2

28 U.S.C. § 2201 (Supp. III 1979) 1))h0)0) eee 6

eee eee ee 2

42 U.S.C. 5 1857h-5(b) (1976)))))))))j cece eeee 15, 20

42 U.S.C. § 1857h-5(b\(1) (19760)))))) 20, 21, 22

42 U.S.C. 88 7401-7626 (Supp. IV 1980)............ 2,3

42 U.S.C. § 7401 (Supp. IV 1980)))))))))) 2

42 U.S.C. § 7401(0a)( 3) (Supp. IV 1980) ................ 12

42 U.S.C. § 7407(a) (Supp. IV 1980) ...............46. 12

42 U.S.C. § 7410 (Supp. IV 1980))))))) / 2

42 U.S.C. § 7410(a)(1) (Supp. IV 1980) ................ x

42 U.S.C. § 7410(a)(2) (Supp. IV 1980) 8, 9, 12, 17, 18

42 U.S.C. § 741002 D) and (F) (Supp. IV 1980)...... 8

42 U.S.C. § 7410(a)(2(H) (Supp. IV 1980) 4, 9, 12

42 U.S.C. § 7410) 3) (Supp. IV 1980)))): 18

42 U.S.C. § 7410(a)(3)(A) (Supp. IV 19800) 3, 9

42 U.S. C. § 7410(c)(1) (Supp. IV

Dns 5, 9, 10, 12, 16, 17, 18, 19, 20, 21

42 U.S. C. § 7410(c)1)(C) (Supp. IV 1980) 4, 9, 12

42 U.S.C. § 7410(d) (Supp. IV 1980) 3, 8, 9

42 U.S.C. § 7410(h) (Supp. IV 1980)))⸗) 15

42 U.S.C. § 7413 (Supp. IV 1980) .............. 2, 3, 8, 9

42 U.S.C. § 7413(b) and (c) (Supp. IV 1980) ........... 15

42 U.S.C. § 7602(k) (Supp. IV 1980 )).. 11

42 U.S.C. § 7607(b\(1) (Supp. IV 1980) 22

Page

42 U.S.C. § 7607(d) (Supp. IV 1980) .............. 19, 20

1969 Additions and Revisions to Rules and Regula-

Se GO vc eco eee s ese 2, 3, 4, 11

325 IND. ADMIN. CODE 1-3 (1979) 0 ß 2,3

325 IND. ADMIN. CODE 1-3-1 (1979) ............... 4, 10

325 IND. ADMIN. CODE 1-3.1 (1980 Supp.) ) 5

325 IND. ADMIN. CODE 5 (1982 Cum Supp.) ............ 5

a RE FD er ree 8

ee 8

oe RB FR ee 11

40 C. F. R. 5 52. 7010 (198iliT177)))) eee ees 3

CLI bests ccccdévccstcveccsse 2,4

37 Fed. Reg. 10,863-65 (197/%2)00)0)0)0)0))0)0)0 3

rr 3, 4

CLI 5

40 Fed. Reg. 50,083 (1975) ů ]a—a—ꝛͤü k 4, 11

GS FER He . 5

GB a GP TE endeten 15

CLI. 5

45 Fed. Reg. 20,432, 20, 436-8 (1980) ᷑ ẽ D[ᷣPᷣI⸗ 5

46 Fed. Reg. A, ei h)) 5

ZLI. II. 5

Revisions to State Implementation Plans—Pro-

cedures for Approval-Disapproval Actions, OAQPS

No. 1. 2-005A, EPA, October, 1975 at ............ 19

No.

In the

Supreme Court of the United States

OCTOBER TERM, 1982

PUBLIC SERVICE COMPANY OF

INDIANA, INC.,

Petitioner,

v.

UNITED STATES ENVIRONMENTAL

PROTECTION AGENCY and

ANNE M. GORSUCH,

Respondents.

PETITION FOR WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

The petitioner prays that a writ of certiorari issue to review

the judgment of the United States Court of Appeals for the

Seventh Circuit entered in the case of Public Service

Company of Indiana, Inc., Plaintiff-Appellant, v. United

States Environmental Protection Agency and Douglas M.

Costle, Defendants-Appellees, No. 81-1241.

OPINIONS BELOW

The opinion of the United States Court of Appeals for the

Seventh Circuit is reported at 682 F.2d 626, and is set forth

in the Appendix to this Petition (“Appendix”) at A-3. The

opinion of the District Court is reported at 509 F. Supp. 720,

and is set forth in the Appendix at A-37.

JURISDICTION

The judgment of the United States Court of Appeals for

the Seventh Circuit was entered June 25, 1982. (A-51). The

of this Court is invoked under 28 U.S.C. 88 1254(1)

and 2101(c) (1976).

STATUTES AND REGULATIONS INVOLVED

This case involves the following statutes and regulations,

the pertinent texts of which are set forth in the Appendix:

1. The Clean Air Act, 42 U.S.C. 88 7401-7626 (Supp. IV

1980); pertinent portions set forth in Appendix are 42 U.S.C.

§§ 7401 (A-52), 7410 (A-52), and 7413 (A-68) (Supp. IV 1980)

and 42 U.S.C. § 1857h-5 (1976). (A-90).

2. Indiana air pollution control regulation, APC-3,

“Smoke and Other Visible Emissions,” 1969 Additions and

Revisions to Rules and Regulations (Indiana) (1969 ed.)

4, 11 (referred to herein as “1972 APC-3”). (A-93).

3. Indiana air pollution control regulation, APC-3, “Vis-

ible Emissions and Malfunctions,” 325 IND. ADMIN. CoDE

1-3 (1979\(referred to herein as “1974 APC-3”). (A-94).

4. 40 C. F. R. § 52.776(c) (1981). (A-93).

STATEMENT OF THE CASE

Petitioner Public Service Company of Indiana (“PSI”) is a

regulated public utility engaged in the generation, transmis-

sion, distribution and sale of electric energy. The respondents

are the United States Environmental Protection Agency and

its Administrator Anne M. Gorsuch' (collectively, “EPA”,

“Agency” or Administrator“).

Approval of Indiana’s State Implementation Plan.

In January 1972, Indiana submitted to EPA under the

Clean Air Act (the Act“), 42 U.S.C. 88 7401-7626 (Supp. IV

1980), a State Implementation Plan (“SIP”) to meet national

air quality standards within the borders of Indiana. The SIP

included, inter alia, an Indiana air pollution control regula-

tion called “APC-3” (“1972 APC-3”) which limited to 40%

opacity the “smoke” from “any combustion installation.”

1969 Additions and Revisions to Rules and Regulations

(Indiana) 11 (A-94). 1972 APC-3 was approved by EPA as

part of Indiana’s SIP on May 31, 1972, 37 Fed. Reg. 10,863-65

(1972) (A-116-122), and thereby became federally enforceable

under Sections 110(d) and 113 of the Act. 42 U.S.C. 58 7410/2),

7413 (Supp. IV 1980).

Proposed Revision of Indiana’s SIP.

During 1974, the Indiana Air Pollution Control Board

promulgated a number of regulations, including a new regula-

tion designated APC-3 (“1974 APC-3”). 325 IND. ADMIN.

Cope 1-3 (1979) (A-94). On November 8, 1974, 1974 APC-3 was

submitted to EPA for approval under Section 110(a3)(A) of

the Act, 42 U.S.C. S 7410(a(3)(A) (Supp. IV 1980), as a revision

of Indiana’s SIP. 40 C. F. R. § 52.770(c)(14) (1981); 40 Fed. Reg.

19,210 (1975) (A-153-4). In promulgating 1974 APC-3 and

submitting it for approval as a revision, the State was not

‘Pursuant to Rule 40.3 of this Court, Anne M. Gorsuch is

substituted for Douglas M. Costle, former Administrator of the

United States Environmental Protection Agency, who was a party

in the case before the Court of Appeals.

4

acting in response to any finding and notification by EPA

pursuant to 42 U.S.C. S8 74 100% H), 7410(c1(C) (Supp. IV

1980), that 1972 APC-3 was inadequate to achieve national air

quality standards or was otherwise not in compliance with the

Act.

As stated by EPA in its public notice of receipt of the

proposed revisions, 1974 APC-3 amended 1972 APC-3 in its

entirety.” 40 Fed. Reg. 19,210 (1975) (A-154). In particular,

Section 1 of 1974 APC-3 substantially expanded the coverage

of 1972 APC-3 to “other visible emissions” in addition to

“smoke” and to “any equipment” rather than just “any

combustion installation.” The same sentence of Section 1 of

1974 APC-3 that expanded its coverage also, unlike 1972

APC-3, limited the application of the opacity restrictions to

those emissions occurring “for more than a cumulative total

of fifteen minutes in a 24-hour period.

EPA announced its decision on 1974 APC-3 by order dated

October 21, 1975, and published October 28, 1975:

APC-3 of Indiana’s Air Pollution Control Regulations

(visible emission limitation) is disapproved insofar as the

phrase “for more than a cumulative total of 15 minutes in

a 24-hour period” will interfere with attainment and mainte-

nance of particulate standards.

40 Fed. Reg. 50,033 (1975) (A-165) (subsequently codified at 40

C.F.R. § 52.776(c) (1981) (A-93). As interpreted by EPA and the

Court of Appeals, that order had the effect of approving and

making legally enforceable 1974 APC-3’s expansion of cover-

age to all “visible emissions” rather than just “smoke” and

“any equipment” rather than just “any combustion installa-

tion” while, at the same time, disapproving and deleting that

portion of 1974 APC-3 which permitted such emissions for up

2 “Sec. 1. Limitation. No person shall operate any equipment so

as to produce, cause, suffer, or allow smoke or other visible

emissions in excess of 40 per-cent opacity .. for more than a

cumulative total of fifteen minutes in a 24-hour period . . .-” 325

Inp. ADMIN. Cope § 1-3-1 (1979) (A-95).

5

to 15 minutes per day. Public Service Company of Indiana,

Inc. v. EPA, 682 F. 2d 626, 638 (7th Cir. 1982) (A-26).°

EPA’s resulting more stringent regulation, restricting all

emissions in excess of 40% opacity, was never the subject of

public hearings, either by Indiana or EPA. Before its October

21, 1975 order, EPA published no notice of intent to adopt, by

selectively disapproving the fifteen-minute limitation or oth-

erwise, a more stringent regulation than Indiana had submit-

ted for approval. See 40 Fed. Reg. 19,210-11 (1975) (A-153-159).

EPA never subsequently promulgated the resulting regula-

tion as a federal regulation pursuant to Section 110(c)(1) of

the Act. 42 U.S.C. S 7410(c)(1) (Supp. IV 1980). Indiana never

subsequently adopted EPA’s version of 1974 APC-3 as a state

regulation and has not enforced EPA’s version. See, e. g., 44

Fed. Reg. 2402-03 (1979) (A-166-7); 44 Fed. Reg. 12,461-62

(1979) (A-169-170); and 46 Fed. Reg. 21,790-91 (1981) (A-240-

242). The State has twice sought EPA approval of new

revisions addressed to the concerns reflected by the disap-

proved 15-minute exception in 1974 APC-3, but its efforts have

been unsuccessful to date. (A-98; A-112).“

Enforcement Against PSI.

On January 7, 1980, after having been denied permission to

inspect certain PSI facilities, EPA successfully applied ex

Since EPA’s October 21, 1975 order does not state anywhere

that any portion of 1974 APC-3 was “approved,” the actual intent

of the order is by no means clear and PSI challenged this

interpretation in the courts below. However, PSI is not seeking

review of that question in this Petition.

On June 26, 1979, Indiana submitted a revised version of APC-3

to EPA for approval as a revision to Indiana’s SIP. 325 IND. ADMIN.

Cope 1-3.1 (1980 Supp.) (A-98). On March 27, 1980, EPA published

notice of its intent to disapprove that proposed revision. 45 Fed.

Reg. 20,432, 36-38 (1980) (A-178, 195-200). Thereafter, on October

6, 1980, Indiana submitted another proposed revision to APC-3. 325

IND. ADMIN. CoDE 5 (1982 Cum. Supp.) (A-112). Although EPA has

not taken final action on that submission, it published notice of its

intent to disapprove on March 3, 1982. 47 Fed. Rey. 9020-21 (1982)

(A-244, 251-52).

parte to a United States Magistrate for warrants authorizing

inspection of those facilities. The applications were supported

by affidavits of an EPA inspector stating, inter alia, that he

believed the PSI facilities were being operated in violation of

1974 APC-3, as approved in part by EPA in October, 1975.° The

warrants were executed and the Magistrate denied motions to

quash. On March 21, 1980, EPA notified PSI that it had found

PSI in violation of EPA’s version of 1974 APC-3.

The Action Below.

On April 7, 1980, PSI brought this action against EPA in the

District Court for the Southern District of Indiana, asserting

jurisdiction under 28 U.S.C. §§ 1331(a), 2201 (Supp. III 1979),

and 5 U.S.C. $702 (1976). The suit sought, inter alia, a

declaratory judgment that 1974 APC-3 was not federally

enforceable because it was not approved in its entirety by

EPA, as required by the Act.“ PSI also requested injunctive

relief against further inspections and against use of any

evidence obtained by means of the warrants.

After a hearing on PSI’s motion for preliminary injunction,

which the parties later agreed to treat as a trial on the merits,

the District Court entered final judgment for EPA on PSI’s

claims.’ In particular, the District Court held that EPA had

lawfully approved 1974 APC-3 “with the minute exception of

the 15-minute exemption provision .” Public Service

Company of Indiana, Inc. v. EPA, 590 F Supp 720, 724 (S.D.

Ind. 1981) (A-46).

5 The District Court concluded and the Seventh Circuit affirmed

that probable cause was established on the basis of alleged

violations of “1974 APC-3 . . . with the 15-minute exemption

excised.” 682 F.2d at 638 (A-26).

* PSI also challenged the scope of the warrants, but is not seeking

review of those questions in this Petition.

The Seventh Circuit characterized the ruling as a “summary

judgment for the defendants (EPA).” 682 F.2d at (A-5).

Although EPA moved for summary judgment, the District Court's

memorandum opinion correctly states that it is based on “a hearing

on the merits . 3 590 F.Supp at 721 (A-4 ])).

7

The Court of Appeals for the Seventh Circuit affirmed the

District Court in all respects. With respect to PSI’s claim that

1974 APC-3 was not enforceable because it was not approved

in its entirety by EPA, the appellate court upheld EPA’s

argument that the Act authorizes EPA to approve and

enforce “any portion of a state submitted (SIP) revision” 682

F. 2d at 632 (A-13), and, applying that conclusion to the facts

of this case, held that “EPA partially approved the 1974

APC-3, disapproving only the 15 minute exemption.” Id. at

636 (A-22).

REASONS FOR GRANTING THE WRIT

In upholding EPA’s claim of statutory authority selectively

to approve and enforce the restrictive portions of regulations

submitted by the State while simultaneously disapproving

and deleting the State’s limitations on those same restric-

tions, the Seventh Circuit has destroyed the balance Con-

gress struck between state and federal regulation of the

environment. Since EPA’s claimed authority is not conferred

on the face of the Act, and its exercise alters the balance

struck by the Act’s most central features, the Seventh Circuit

incorrectly decided a question of national significance.*

As this Court has twice determined, Congress intended the

Act to give to each state, and not to EPA, the authority to

choose its own “mix” of limitations, provided only that the mix

chosen is sufficient to achieve minimum national air quality

standards. Train v. Natural Resources Defense Council,

Inc., 421 U.S. 60, 79, 86-87 (1975); Union Electric Co. v. EPA,

427 U.S. 246, 267, 269 (1976). Further, as this Court has also

determined, each state and not EPA is given “continuing

In Bethlehem Steel Corp. vu EPA, 638 F.2d 994, 997-998 (7th

Cir. 1980), the court did not reach appellant’s contention that EPA

“has no statutory authority to issue ‘partial’ approvals of state

revisions of its SIP... .” The validity of the EPA's “partial approval”

technique was probably raised by the facts in Big Rivers Electric

Corp. u EPA, 523 F.2d 16, 18 (6th Cir. 1975), cert. denied, 425 U.S.

934 (1976), but was not argued to or addressed by the court.

8

authority to revise [prior] choices about the mix,” again

provided only that the revised mix is sufficient to achieve

minimum national standards. Train, 421 U.S.at 87, 98. The

mere existence of the authority claimed and upheld by the

Court of Appeals’ decision significantly impairs the states’

“continuing authority” to revise prior policy choices. Further,

where, as here, EPA elects to exercise that authority, it will

to that same extent implement and enforce its policy choice

as to the proper mix rather than the state’s, in defiance of

the Act’s fundamental policy. Finally, in circumstances unlike

those here, where due to state default EPA is authorized to

propose federal regulations as ingredients of the overall mix,

the Seventh Circuit’s decision allows EPA to negate both the

state’s second opportunity to select means of its own, and the

public hearing and rulemaking procedures mandated by the

Act.

I. The Act Gives The States Discretion To Choose Any Mix

Of Regulations Adequate To Meet National Air Stan-

dards And Expressly Provides The Procedures EPA

Must Follow If The State Fails To Comply.

The general design of the Act waz described by this Court

in Train v. National Resources Defense Council, Inc., 421

U.S. 60. Under Section 110(a)(1) of the Act, each state is

directed to submit to EPA for approval a plan designed to

meet national air quality standards within that state’s

boundaries. 42 U.S.C. S 7410(a)(1) (Supp. IV 1980). That plan

must have been “adopted after reasonable notice and hear-

ing” by the state, 42 U.S.C. § 7410(a)(2) (Supp. IV 1980), and

must include rules and regulations enforceable by the

appropriate state agency. 42 U.S.C. § 7410(a)(2(D) and (F)

(Supp. IV 1980); 40 C. F. R. §§ 51.11, 51.22 (1981).

EPA must approve any plan the state submits that is

adequate to achieve and maintain national air standards and

complies with the other general requirements of Section

110(a)(2). 42 U.S.C. § 7410(a) ) (Supp. IV 1980); Train, 421

US. at 79. If EPA approves a plan submitted by a state, that

plan becomes an “applicable implementation plan,” 42 U.S.C.

§ 7410(d) (Supp. IV 1980), and federally enforceable under

Section 113 of the Act. 42 U.S.C. § 7413 (Supp. IV 1980). EPA

9

has no authority to require that a state plan do more than

achieve minimum national standards or to alter any mix of

limitations selected by the state which is sufficient to meet

that goal. Train, 421 U.S. at 79.

If EPA disapproves 2 pian or a portion thereof submitted

by a state, the Administrator has a mandatory duty under

Section 110(c)(1} ef the Act to “promptly prepare and publish

proposed regulations setting forth an implementation plan,

or portion thereo“ for that state. 42 U.S.C. S 7410(c)(1) (Supp.

IV 1980). Even in that event, however, the state is given an

additional six months to submit an acceptable alternative. Id.

If the state fails, EPA must hold public hearings in the

affected state before promulgating the Agency’s proposed

regulations. /d. Upon promulgation, such regulations become

part of the state’s federally enforceable implementation plan,

along with any previously approved state regulations. 42

U.S.C. 88 7410(d), 7413 (Supp. IV 1980).

After a SIP has been approved (or promulgated) by EPA,

a state may propose revisions to its own plan in either of two

situations: (1) where the state voluntarily elects to alter its

previously chosen mix, see Train, 421 U.S. at 80, 87; or (2)

where EPA has found and notified the state that its SIP is

or has become inadequate to meet minimum national stan-

dards or otherwise fails to comply with the Act. 42 U.S.C.

88 7410(a)(2)(H), 7410(c)(1(C) (Supp. IV 1980). Such revisions

must be adopted after notice and hearing in the state, 42

U.S.C. S 7410(a)(3)(A) (Supp. IV 1980), and EPA must approve

any such revisions meeting the requirements of the Act. 42

U.S.C. S 7410(a)(2) (Supp. IV 1980); Train, 421 U.S. at 80. As

this Court emphasized, the Act’s “revision section is . . . the

mechanism by which the States may obtain approval of their

developing policy choices as to the most practicable and

desirable methods of restricting total emissions to a level

which is consistent with the national ambient air standards.”

Id.

In sum, the Act provides only two methods of adopting

federally enforceable emissions limitations: (1) EPA may

approve valid regulations promulgated by the state; and (2)

EPA may promulgate its own regulations by following the

10

procedures in Section 110(c)(1). The first is the preferred

method; the second may be employed only if the state

defaults.

This case presents the question whether the Act was

properly construed to allow a third method—whether EPA

may blue-pencil in ral portions of a state-submitted regula-

tion and enforce the remainder absent either adoption of

EPA’s version by the state or formal promulgation of EPA’s

version as a federal regulation pursuant to Section 110(¢)(1),

and, in particular, whether EPA may do so when the

regulation so edited was submitted by the state to revise a

valid pre-existing state regulation never found by the

Administrator to be inadequate under the Act.

Il. Where A State Submits A Regulation As A Revision To

A Valid Pre-existing State Regulation, Permitting EPA

To Disapprove An Integral Portion While “Approving”

And Federally Enforcing The Remainder Serves No

Statutory Policy And Seriously Erodes The State’s

Primary Authority Under The Act.

Indiana’s 1974 action in seeking revision of APC-3 was a

paradigmatic exercise of the State’s “continuing authority to

revise choices about the mix of emissions limitations.” Train,

421 U.S. at 87. On the one hand, the State’s version of 1974

APC-3 expanded the coverage of its restrictions to include

all visible emissions (having previously been limited to

smoke“) and all equipment (having previously been limited

to “combustion installations”). On the other hand, Indiana

contracted the coverage of its restrictions by granting a

15-minute-per-day exception to both emissions previously

covered and those brought within coverage by the same

revision.“

Section 1 of 1974 APC-3 is denominated as a “Limitation on

emissions”, 325 IND. ADMIN. CODE 1-3-1 (1979), and is referred to

as such throughout this Petition. Technically, however, it and other

opacity limits are properly considered surveillance techniques for

detecting violations of actual “emission limitationſs] as defined by

(Footnote continued on next page)

11

EPA disapproved the 15-minute exception for emissions

previously and newly covered because the State failed to...

demonstratſe] that the exception “would not result in an

interference with attainment and ma‘ntenance of the [perti-

nent] standards.” 40 Fed. Reg. 50,033 (1975). Petitioner does

not contest that determination. What petitioner does contest

is EPA’s exercise of claimed authority simultaneously to

adopt by selective “approval” and to eliminate by selective

“disapproval” portions of the same regulation, thereby

expanding the coverage of the resulting regulation beyond

the scope of both 1972 APC-3 and 1974 APC-3. The result,

of course, is to adopt and enforce EPA’s policy choice of a

proper mix of emissions limitations, not that of the State of

Indiana.

Indiana’s version of 1974 APC-3 demonstrates that the

State considered the 15-minute exception an integral and

substantive part of its decision to revise the “mix” of

emissions limitations it had chosen in 1972. If there could be

any doubt, it is dispelled by Indiana’s subsequent treatment

of EPA’s edited version of 1974 APC-3. The State has never

adopted EPA’s version of what EPA says is (and what the

Act says must be) the State’s regulation; the State has

refused to enforce it; and the State has twice sought to revise

APC-3 since EPA is federally enforcing its version of 1974

APC-3 against Indiana emissions sources. Supra at p.5 and

n. 4. 0

Section 302(k) of the Act, 42 U.S.C. § 7602(k) (Supp. IV 1980). See,

40 C.F.R. § 51.19(c) (1981). Surveillance techniques are required to

achieve an adequate SIP, see id., and are frequently more important

as a practical matter than “emissions limitations” narrowly defined.

They clearly are governed by those provisions of the Act giving

the states continuing authority to revise their SIPs, aud this Court’s

analysis in Train.

‘© EPA cannot contend (and notably has not contended to date)

that the State is required to promulgate and enforce as a State

regulation EPA’s federal version of Indiana 1974 APC-3. Such a

contention would assert that the Agency may via an alternative

route enforce against the states an authority EPA conceded it did

not have in EPA v. Brown, 431 U.S. 99 (1977).

12

In part, the Court of Appeals rejected PSI’s argument that

EPA may not “partially approve” and enforce 1974 APC-3

because, in that court’s view:

To require the Administrator to disapprove an entire

regulation because one provision in it is inconsistent with

the requirements of 42 U.S.C. § 7410(a)(2) would unneces-

sarily curtail the discretion of the states in formulating

their SIPs.

682 F. 2d at 633 (A-15). But that rationale ignores that under

the Act states are always given an opportunity to correct a

deficient SIP before federal regulations may be promulgated

pursuant to Section 110(c)(1). 42 U.S.C. § 7410(c}(1(Supp. IV

1980). And it makes no sense at all when, as here, the State

voluntarily submitted the regulation as a revision of a

pre-existing state regulation previously approved by EPA

and never subsequently found by the Agency to be inade-

quate under the Act pursuant to Sections II0(a AH) and

110(c)(1)(C). 42 U.S.C. 88 7410(a(2)H), 7410(e1(C) (Supp. IV

1980). In that case particularly, the Administrator’s authority

is and must be limited to approving or disapproving the

proposed revision in its entirety if the continuing policy role

Congress gave the states is to be preserved.

Denying EPA authority to approve and enforce a portion

of a regulation submitted by the state as a revision to a valid

pre-existing regulation leaves the states with the primary

policy role with respect to the limitations mix. It leaves the

states, and not EPA, with the choice whether to:

(1) Continue with the pre-existing regulation;

(2) Develop and submit for approval some new alterna-

tive; or

(3) Adopt EPA’s version of a minimally adequate new

one.

That is the result that Congress intended and this Court

affirmed. 42 U.S.C. 88 7401(a)(3), 7407(a) (Supp. IV 1980);

Train, 421 U.S. at 79; Union Electric, 427 U.S. at 266.

On the other hand, no purpose of the Act is served in

allowing the Administrator to exercise the authority claimed

13

here. While the state is considering which option to choose,

the pre-existing SIP, previously approved by the Administra-

tor and never subsequently found to be inadequate, remains

in effect. And, of course, consistent with the policy of the Act,

that pre-existing SIP has the virtue of having been chosen

by the state.

The authority to edit state submitted revisions and to

enforce the remaining portions, claimed by EPA and affirmed

by the Court of Appeals, erodes the state’s primary and

continuing policy role under the Act. Knowledge that EPA

may blue-pencil a revised policy choice in unrestricted and

unpredictable ways, and federally enforce a regulation less

acceptable to the state than the choice sought to be revised,

will render ail states considerably more reluctant to exercise

the continuing responsibility and discretion Congress con-

ferred. And where, as here, EPA elects to exercise that

claimed authority, it implements and enforces its policy

choice as to an appropriate mix of emissions for the state,

ousting the state from the primary policy role Congress

intended it to have.

To countenance that claim of authority, as the decision of

the Court of Appeals does, inevitably countenances precisely

those administrative results which occurred in this case. EPA

“approves” those portions of the revised regulation it likes,

and which substantially expand the scope of the regulation,

while it simultaneously disapproves and deletes concomi-

'! Sanctioning EPA’s claim of authority, as exercised in this case,

will result both in anamolies never intended by Congress and in the

states’ reluctance to submit revisions. For example, if a regulation

submitted by a state provides that the restrictions it contains apply

only to certain industries, EPA could, by employing the blue-pencil

authority challenged here, delete that portion and thereby enact

a regulation applicable to all industries. Similarly, the Agency

could, by using its blue-pencil technique, have deleted the 0“ in

Indiana’s 1974 APC-3 providing a 40% opacity limitation. Plainly

Congress did not intend for the states to be subjected to this kind

of unfettered authority on the part of EPA.

14

tant relaxations of restrictions viewed by the state as an

integral part of its revised choice.“?

This result fundamentally alters the Act and transfers to

EPA powers heretofore both the Congress and this Court

thought were reserved to the states. This Court should

review the Court of Appeals decision in light of EPA’s

unwarranted usurpation of the states’ role in determining the

appropriate emissions mix, and the nationwide effects that

flow from its judicial blessing.

III. EPA Has No Statutory Authority In Any Circum-

stance To Create And Enforce New Regulations

Merely By “Partially Disapproving” Those Submitted

By The State.

The further implications of the authority claimed and

upheld below for the proper operation of the Act also justify

review of the Court of Appeals’ decision by this Court.

Indiana has never adopted EPA’s version of 1974 APC-3 and

that version is quite clearly not operative as a matter of

Indiana law.'* Consequently, two different regulations are in

effect in Indiana, one state and one federal, a result that

Congress neither contemplated nor intended. Further, by

proceeding as it has, EPA has deprived affected industries,

2 If EPA excises portions of a state submitted revision and

“approves” the remainder, it is theoretically true that the state may

subsequently seek EPA approval of the pre-existing regulation as

a“revision” of EPA’s version of the new regulation. But that places

an extensive procedural burden on the state that is both unneces-

sary and unwarranted by the terms of the Act (a burden illustrated

by Indiana’s continuing and thus far unsuccessful efforts to revise

EPA’s version of 1974 APC-3; supra at p.5 and n.4). And even if

eventually successful, in the interim the Agency is substituting and

enforcing its policy choice rather than the state’s, and is doing so

in blatant evasion of the Act’s procedural safeguards discussed in

Section III, infra.

Under Indiana law a regulation not subjected to public notice,

hearing, adoption by the Air Pollution Control Board, and, inter alia,

signature of Governor and publication in Indiana Register is “void”

and of no effect. IND. CODE §§ 4-22-2-2, 4-22-2-5 (1982).

15

including petitioner, the opportunity for judicial review of the

merits of its version of the regulation. Since EPA is enforcing

what it says is a state regulation, there is no general

opportunity for federal judicial review with respect to the

economic and technical feasibility of EPA’s version of 1974

APC-3. Union Electric, 427 U.S. 246 (1976). Yet, because the

State has never adopted EPA’s version as a state regulation,

a state court likely would not have jurisdiction to engage in

such a review. Finally, EPA is enforcing a regulation that

was never the subject of the administrative procedures

expressly mandated by the Act.“

The Court of Appeals seemed to recognize the reality and

gravity of these problems, but refused to consider them

because, in its view, they involved challenges only to a specific

exercise of a general authority of partial approval and

therefore were, in this case, time-barred under Section 307(b)

of the Act, 42 U.S.C. § 1857h-5(b) (1976). 682 F.2d at 634 n.12,

636-38 & n.16 (A-18, 22-26). However, the existence of these

problems is clearly relevant to the general question whether

the Administrator has any authority at all to proceed in this

fashion. Moreover, the appellate court’s interpretation of

Section 307(b) is flawed for the identical reasons that its

conclusion with respect to EPA’s general authority is wrong.

In large part, the Court of Appeals affirmed EPA’s claim

of general authority to proceed in this fashion because: (1)

approval of state-submitted revisions should be governed by

the standards applicable to approvals of original SIPs, 682

F.2d at 632 (A14-15); and (2) the plain language of the Act

“It is worthy of mention that because of exercise of the

authority claimed, the verbatim text of what EPA contends is

Indiana 1974 APC-3 is nowhere set forth in publications of either

Indiana or federal regulations. This results in an independent

violation of 42 U.S.C. § 7410(h), see 44 Fed. Reg. 4948-49(1979), and

is hardly a desirable result since violations are subject to draconian

civil, and criminal, penalties. 42 U.S.C. § 7413(b) and (e) (Supp. IV

1980).

16

allows EPA to approve “any portion of the original SIP”. Id.

at 633 (A -16). But the equally plain language of the Act shows

the Administrator has no authority whatever to proceed as

was done here.

With the sole exception of the situation described in Section

II, supra, where the state voluntarily elects to submit for

approval a revision to an existing ard adequate SIP, the plain

language of the statute requires the Administrator to begin

proceedings to promulgate federal regulations pursuant to

Section 1 100%) whenever he disapproves a state submission

in whole or in part.'® Thus, with that one exception, there is

no situation when Administrator disapproves in which he is

not under a simultaneous duty to proceed under Section

110(c\(1). This duty is flatly inconsistent with the authority

claimed here to arrive at an adequate SIP and finalize the

administrative process solely by exercise of the disapproval

power i e., by deleting portions of the state’s submission.

This conclusion is compelled by the procedural scheme of

the Act as well as by its express language. There are

doubtless innumerable situations where the Administrator

may properly approve a portion of a state’s submission and

disapprove the remainder. EPA may, for example, generally

approve restrictions yet disapprove their application to

particular metropolitan areas of a state; it may approve one

© Section 110(c\1) of the Act provides, inter alia:

“The Administrator shall . . . promptly prepare and publish

proposed regulations setting forth an implementation plan, or

portion thereof, for a State if—. . .

(B) the plan, or any portion thereof, submitted for such

State is determined by the Administrator not to be in

accordance with the requirements of this section, or

(C) the State fails, within 60 days after notification by the

Administrator or such longer period as he may prescribe,

to revise an implementation plan as required pursuant to

a provision of its plan referred to in subsection (a 2H) of

this section.

(Footnote continued on next page)

17

submitted emission limitation and disapprove another; it may

approve such a limitation but disapprove its application to a

particular industry, But the distinguishing feature of each

of these “partial approvals” is that the administrative process

is not finished because the state plan is, to the extent

disapproved, inadequate o achieve national air quality

standards. Hence, in each case, the Administrator has a

mandatory duty pursuant to Section 110(c\(1) to propose

federal regulations.

That there can never be a disapproval without a concomitant

duty to proceed under Section 110(c)(1) is dictated both by the

nature or the Administrator’s authority to disapprove and by

the role given the states by the Act.“ EPA may disapprove a

state submission only if, or to the extent that, it is inadequate

to achieve national standards or otherwise fails to comply with

Section 110(a)(2) of the Act. 42 U.S.C. S 7410(a)(2) (Supp. IV

1980). It has no authority to disapprove for any other reason.

Train, 421 U.S. at 79. Thus, except where a pre-existing SIP

has been approved and not subsequently found inadequate,

every instance where EPA disapproves a state submission will

be an instance where the state’s SIP is inadequate. This

required for submission of such plan (or revision thereof),

promulgate any such regulations unless, prior to such promul-

gation, such State has adopted and submitted a plan (or

revision) which the Administrator determines to be in accor-

dance with the requirements of this section

42 U.S.C. S 7410(c(1) (Supp. IV 1980) (emphasis added). Thus, except

where there has been proposed a voluntary revision of a valid

pre-existing SIP, there is no situation where Section 110(c)(1) does

not mandate further procedures by the Administrator in the event

he disapproves, in whole or in part, a state submission.

0 The logie of the single exception is plainly dietated by the same

considerations. When the state voluntarily elects to revise an

adequate state plan, but the revision is disapproved, an adequate

SIP remains in effect. It is quite understandable, then, why

Congress excepted this one exercise of the disapproval power in

imposing the otherwise general duty to proceed pursuant to Section

110(c1) whenever a state submission is disapproved.

18

explains Section 110(c)(1)’s requirement that the administra-

tive process proceed. The Administrator must proceed to

remedy the inadequacy by means of federal regulations. 42

U.S.C. S 7410(c(1) (Supp. TV 1980).'7

The Court of Appeals stated that to require EPA to proceed

pursuant to Section 110(c)(1), if it wished to enforce its version

of 1974 APC-3 weuld be “unnecessarily duplicitous.” 682 F.2d

at 634 (A -18). That conclusion contains multiple errors. First,

EPA has no authority to proceed under Section 110(c)(1)

where, as here, it disapproves a revision of an existing

adequate SIP (see Section II, supra). Second, even where

Section 110(c\1) is properly invoked, that section of the Act

gives the state a second opportunity to develop a plan before

EPA is authorized to impose the version it wishes, an

opportunity denied under the administrative procedure used

here. 42 U.S.C. S 7410(c\(1) (Supp. IV 1980).

Third, the two methods expressly provided by the Act for

enacting enforceable emissions limitations, state submission

and EPA approval on the one hand, and EPA promulgation

pursuant to Section 1100) on the other, both require public

hearings in the affected state on the proposed regulations.

42 U.S.C. 88 7410(a)(2), 7410da 3), 74 100%) (Supp. IV 1980).

Aside from the fact that the statute requires such hearings,

there is no basis for viewing them as “duplicitous.” In

addition to the information gathering function obviously

served, the Act’s requirement that EPA hold public hearings

on proposed federal regulations in the affected state, 42

U.S.C. S 7410(c)(1) (Supp. IV 1980), indicates Congress’ aware-

ness that substantive changes in EPA’s proposed regulations

may result from the political dynamics of face to face

confrontations with state and local public officials, affected

local industries, and local environmental interests. The

exercise of the authority claimed by the Administrator,

Further, proceeding under Section 11001) gives the state a

second opportunity to correct the problem by means of its own

choosing, 42 U.S.C. §7410(c1) (Supp. IV 1980), an opportunity

wholly abrogated by the authority claimed here to finalize the

process merely by deleting portions of the state’s submission.

19

and sanctioned by the Seventh Circuit, patently permits

evasion of this statutory requirement.

Fourth, even if EPA follows notice and comment proce

dures for rulemaking in making its decision to approve or

disapprove a state submission,“ that decision process is in

no way an adequate substitute for the rulemaking process

required when EPA proposes to promulgate federal regula-

tions pursuant to Section 110(c)(1).'* In the approval/disap-

proval decision, EPA’s authority and responsibility is limited

to determining whether the state’s submission meets the

requirements of the Act. Train, 421 U.S. at 79. Its authority

and responsibility in promulgating federal regulations pursu-

ant to Section 110(c)(1) is much broader since it must then also

make decisions with respect to the appropriate mix of

limitations.“ And because the essential focus and character

It did not in this case. No notice of any intent to disapprove

1974 APC-3’s 15 minute exception while “approving” the remainder

was published prior to EPA’s order. Supra at p. 5. Following the

decision in Buckeye Power, Inc. v. EPA, 481 F.2d 162 (6th Cir. 1973),

EPA indicated that it would follow general Administrative Proce-

dure Act (“APA”) requirements for informal rulemaking prior to

— approval / disapproval actions on SIP actions submitted by

.” Revisions to State Implementation Plans—Proce-

» for Approval- Disapproval Actions, OAQPS No. 1.2-005A,

EPA, October, 1975 at 8.

Prior to the 1977 amendments to the Act, EPA was required

to follow APA Section 553 rulemaking procedures, 5 U.S.C. § 553

(1976), when it promulgated federal regulations to replace or

supplement a deficient SIP. See, eg, Maryland v. EPA, 530 F. 2d

215 (4th Cir. 1975), vacated on other grounds sub nom. EPA v.

Brown, 431 U.S. 99 (1977). Under the Act as now amended, the

Agency must employ rulemaking procedures far more elaborate

than those required for rulemaking under the APA, see Section

307(d), 42 U.S.C. § 7607(d\Supp. IV 1980), all of which may be

evaded by exercise of the authority claimed here and upheld below.

* This Court has left open the question whether EPA must

consider economic and technical feasibility issues when it promul-

gates federal regulations pursuant to Section 110(c\(1). Union

Electric, 427 U.S. at 261 n.7. Several lower federal courts have

(Footnote continued on next page)

of the decision making process is altered, requiring further

rulemaking proceedings under Section 110(c)(1) is far from

“duplicitous” as held by the appellate court Congress

deemed it essential to the end of careful and reasoned

decision making. 42 U.S.C. 88 7410(c)(1), 7607(d) (Supp. IV

1980).

Finally, the Court of Appeals erred in part in its analysis

of EPA’s contention that review of the issues in this case is

time barred by Section 307(b\(1) of the Act, 42 U.S.C.

§ 1857h-5(b)(1) (1976). It correctly held that Section

§ 307(b\(1)’s requirement for expeditious review of EPA

action in approving submissions does not preclude a chal-

lenge questioning EPA’s general “power to partially approve

a revision. 682 F.2d at 636, n.17 (A-23). That issue on

the merits is identical to the issue of Section 307(b)(1)’s

application. Section 307(b)(1) governs judicial review of EPA

approvals. Therefore, the question of the Administrator’s

general authority is the same as the question whether what

he did here is an “approval” within the meaning of Section

307(b). 42 U.S.C. § 1857h-5(b) (1976). However, once the

Court of Appeals determined that EPA had general statutory

authority partially to approve revisions, it viewed many of

indicated that it must. Bunker Hill Co. v. EPA, 572 F.2d 1286, 1294

(9th Cir., 1977); Kennecott Copper Co. v. Train, 526 F.2d 1149 (9th

Cir. 1975) cert. den. 425 U.S. 935 (1976); South Terminal Corp. v.

EPA, 504 F.2d 646 (Ist Cir. 1974). However this Court ultimately

resolves that issue, it is obvious that in a Section 110(c)(1)

proceeding EPA must to some extent step into the shoes of the

defaulting state, and must consider and resolve many issues

irrelevant to its prior decision to disapprove the state’s submission.

Although not cited by the Court of Appeals, its conclusion in

this respect is squarely supported by this Court’s decision in

Adamo Wrecking Co. v. United States, 434 U.S. 275 (1978), holding

Section 307(b)(2), 42 U.S.C. § 1857h-5(b) (1976), did not bar the Court

from deciding the question whether “the regulation which the

defendant is alleged to have violated is on its face an ‘emission

standard’ within the broad limits of the congressional meaning of

(Footnote continued on next page)

21

PSl's arguments as challenging only the propriety of the

exercise of that authority in the circumstances, consideration

of which was time barred by Section 307(b)(1).

Section 307(b)(1) as in effect in 1975 permitted review only

of EPA action “in approving” state submissions. 42 U.S.C.

§ 1857h-5(b)(1)(1976). Courts interpreting that provision at the

time held that EPA action approving in part and disapproving

in part a state submission was not final and hence not

reviewable at that point. Utah International, Inc. v. EPA,

478 F.2d 126 (10th Cir. 1973); Anaconda Company v.

Ruckelshaus, 482 F.2d 1301, 1304-5 (10th Cir. 1973). See also,

Natural Resources Defense Council, Inc. v. EPA, 481 F.2d

116,121 (10th Cir., 1973). The Seventh Circuit purported to

distinguish Utah International’s finality holding on the

grounds that there, but not here, the Administrator had

proposed to promulgate federal regulation: pursuant to

Section 110(c)(1), and hence the administrative process was

not completed.“ In so distinguishing Utah International,

the Court of Appeals simply repeated its error with respect

to the question on the merits. Under the Clean Air Act

properly construed, except where there is an adequate

pre-existing SIP, EPA disapproval of a state submission is

never the end of the administrative process because Section

110(c)(1) always mandates further administrative action.

that term.” Id. at 285. See also, id. at 294 n.1 (Stevens, J.,

dissenting): Section 307(b) “applies only if the Administrator’s

action could have been reviewed in the Court of Appeals for the

District of Columbia Circuit; and review was not available there

unless the Administrator’s ‘action’ was the promulgation of an

‘emission standard’ within the meaning of 307(b).”

22 The Court relied upon Big Rivers Electric Corp. v. EPA, 523

F.2d16, 18 (6th Cir., 1975). However, as noted supra at p.7 n.8, and

by the Court of Appeals, 682 F.2d at 634 n.11, EPA’s authority to

finalize the administrative process by disapproving portions of the

state’s submission was not challenged in that case and was not

addressed by that court.

22

Whether evuluated in terms of its express language, the

logic of the procedural scheme it establishes, or the central

policies it reflects, the Act contemplates no situation where

EPA can establish by disapproval standing alone either an

adequate SIP or, necessarily, the finality required to invoke

timely review under the 1975 version of Section 307(b)(1), 42

U.S.C. § 1857h-5(b)(1) (1976).2*

CONCLUSION

For the foregoing reasons, a Writ of Certiorari to the Court

of Appeals for the Seventh Circuit should be granted, and

the judgment of that Court entered June 25, 1982, should be

reversed.

Dated: September 23, 1982.

Respectfully submitted,

JAMES A. STRAIN

Counsel of Record for Petitioner

BRYAN G. TABLER

STANLEY C. FICKLE

JOHN M. KYLE Ill

Barnes & Thornburg

1313 Merchants Bank Building

Indianapolis, Indiana 46204

(317) 638-1313

Of Counsel:

GREGORY A. TROXELL

Public Service Company of Indiana, Inc.

1000 E. Main Street

Plainfield, Indiana 46168

(317) 838-1345

20 In 1977, Congress revised Section 307(b)(1), inter alia, to

provide for judicial review of EPA actions disapproving state-

submissions as well. Section 307(b)(1), 42 U.S.C. 8 7607(b)\(1)

(Supp. IV 1980). That amendment affects on y the question of when

the administrative process is sufficiently % al for purposes of

judicial review, and in no manner alters the EPA’s general

authority and duties with respect to the issues presented by this

Petition.