Petitioners Reply Brief — Public Service Co. of Indiana v. United States Environmental Protection Agency

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PUBLIC SERVICE COMPANY OF INDIANA, INC.,

Petitioner,

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

REPLY BRIEF FOR PETITIONER IN SUPPORT OF

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 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

TABLE OF CONTENTS

EPA’s Claimed Authority Selectively To Ap-

prove And Disapprove Portions Of A Volun-

tary SIP Revision Plainly Impairs The States’

Continuing Authority To Revise Their Mix Of

Emission Limitations And Permits Patent

Evasion Of The Act’s Procedural Safe-

The State And Not EPA Is The Proper Judge

Of Whether A Particular Portion Of A Volun-

tary SIP Revision Is An Integral And Substan-

tive Part Of The State’s Decision To Revise Its

Mix Of Emission Limitations ..............

EPA’s Factual Misrepresentations And Legal

Non-Sequiturs Should Not Adversely Intiu-

ence This Court’s Decision Whether To Accept

This Case For Revier

TABLE OF AUTHORITIES

I. Table of Cases

Page

Mountain States Legal Foundation v. Costle, 630 F. 2d

PG CP eee eee 00 9

Pacific Legal Foundation v. Gorsuch, 690 F. 2d 725

r Re eee 9

Train v. Natural Resources Defense Council, 421 U.S.

SP Casebcndondccdceseseneseeaséuedesecs 2,3,7,9

Union Electric Co. v. EPA, 427 U.S. 246 (1976) .... 3,7,8

II. Other Authority

42 U.S.C. S 7410 %) (Supp. IV 1980) (Appendix at

K . 4

42 U.S. C. S 74100 NA) (Supp. IV 1980) (Appendix at

K 2.4

42 U.S. C. § 74 10% -) (Supp. IV 1980) (Appendix at

K5—ͤ— 4.5

42 U.S. C. § 7607 d) (Supp. IV 1980) (Appendix at

e eee 4

47 Fed. Reg. 43, 378 (Oct. 1, 1982ù/·ũ ũ ii 8

Brief For The United States, Train v. Natural

Resources Defense Council, 421 U.S. 60 (1975) ... 9,10

Reply Memorandum for Petitioners, Train v. Natural

Resources Defense Council, 421 U.S. 60 (1975) ...... 9

Brief For Respondent, Indiana & Michigan Electric

Co. v. United States Environmental Protection

Agency, Seventh Circuit Court of Appeals No. 82-1733,

and Indianapolis Power & Light Company v. United

States Environmental Protection Agency, Seventh

Circuit Court of Appeals No. 82-1738 ............... 6

No. 82-512

In the

Supreme Court of the United States

OCTOBER TERM, 1982

PUBLIC SERVICE COMPANY OF INDIANA, INC.,

Petitioner,

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

REPLY BRIEF FOR PETITIONER IN SUPPORT

OF PETITION FOR CERTIORARI

EPA’s Brief in Opposition to the petition for certiorari

dramatically illustrates why the decision of the Court of

Appeals is both erroneous and deserving of review by this

Court. Although EPA pays lip service to the principle that

the States have “primary authority to choose their own ‘mix

of [emission] limitations’ under the Clean Air Act (Opp. Br.

at 8), the Agency does not so much as mention the principle

actually involved in this case—that the States also retain

“continuing authority to revise” their choices as to the mix.

Train v. Natural Resources Defense Council, 421 U.S. 60,

87 (1975) (emphasis supplied). Nor does EPA discuss at all

the effect of its claimed “partial approval” power upon the

Act’s “mechanism” for effectuating those “developing policy

choices State submission of voluntary SIP revisions pursu-

ant to 42 U.S.C. S 7410(aX3,(A). Train, 421 U.S. at 80.

EPA’s Brief makes crystal clear that the Agency recog-

nizes no limitations upon its power to alter a State’s

voluntary SIP revision other than those that pertain to the

Agency’s approval of original SIPs. (Opp. Br. at 5, 8, 11.) That

interpretation of the Agency’s authority, upheld by the Court

of Appeals, transforms the Act’s “mechanism” for exercise

of the State’s authority into a decidedly risky adventure at

best and at worst, as starkly illustrated by this case, a cruel

joke.

I. EPA’s Claimed Authority Selectively To Approve And

Disapprove Portions Of A Voluntary SIP Revision

Plainly Impairs The States’ Continuing Authority To

Revise Their Mix Of Emission Limitations And Permits

Patent Evasion Of The Act’s Procedural Safeguards.

Elementary logic as well as this Court’s analysis in Train

dictate that the State’s “continuing authority” to revise its

previously chosen means of achieving national air quality

standards is not limited to the authority to erpand the scope

of existing state restrictions. If the State truly may choose

to “develop [new] policy choices,” that must mean that the

State is free to relax or abolish existing restrictions while

simultaneously adopting or expanding others, provided only

that the revised mix as a whole remains adequate to achieve

minimum national standards. So long as the decision below

stands in affirmation of EPA’s claimed “partial approval”

authority, however, States may attempt voluntary revision

only if they are willing to risk unknown and unpredictable

EPA modifications of State submissions and immediate EPA

enforcement of the remainder. In the process, the State is

denied any opportunity to choose to continue under its

existing SIP rather than to accept EPA’s version of its

revision.

That is the result in this case. Indiana voluntarily proposed

expanding the scope of 1972 APC-3 beyond “combustion

installations” to all equipment“ and beyond “smoke” to all

“visible emissions” on the one hand, while granting a

15-minute per day exemption to previously and newly covered

sources on the other. (Pet. at 3-4.) EPA then “disapproved”

the 15-minute exemption, but “approved” and immediately

federally enforced the expansion to all equipment and all

visible emissions. (/d. at 4-5.)

EPA portrays petitioner’s argument that the decision

below permits EPA to adopt “any bits and pieces of revisions

which it likes and [to drop] those which it does not like” is

a “gross mischaracterization.” (Opp. Br. at 11.) But EPA

plainly recognizes no limitation whatever upon its power to

do exactly what petitioner argued (Pet. at 13-14.) Indeed, EPA

urges that the decision of the Court of Appeals “holds that

the Administrator’s authority to approve revised SIPs” —

making no distinction between voluntary revisions and those

required to meet the standards of the Act—“coincides with

his [sic] authority to approve initia! SIPs. The Administrator

must approve both if they meet the attainment and mainte-

nance requirements of Section 110 .... The decision below

does not alter this objective test.” (Opp. BR. at 11)

“This objective test” is a polite way of saying that EPA

may, at its option, sandbag any State that seeks voluntarily

to revise its existing mix. Since the Act permits state rules

more restrictive than required to meet minimum national

standards, Train, 421 U.S. at 79, 98; Union Electric Co. v.

EPA, 427 U.S. 246, 265 (1916), those portions of a voluntary

SIP revision that expand the scope of existing restrictions

will always be approved and enforced by EPA under its

“objective test,” whether or not the State would have chosen

those increased restrictions had it known that its concomitant

relaxation of other restrictions would be disapproved.

As petitioner originally argued, no statutory language

authorizes and no statutory policy is served by permitting

EPA to “partially approve” voluntary SIP revisions. (Pet. at

12-14.) By contrast, national air quality standards are pre-

served if EPA’s authority is limited to the Act’s express

terms—to approve or disapprove “any revision,” 42 U.S.C.

§ 7410(a3A)—because disapproval of a voluntary revision

leaves in effect an existing adequate SIP previously chosen

by the State.

Equally important, limiting EPA to approval or disapproval

of a voluntary revision in its entirety leaves the State with

the primary policy role that Congress conferred. If the State

wishes to adopt EPA’s version of a minimally adequate

revision, the State is free to submit that version to EPA for

the then-ministerial act of approval. If, on the other hand, the

State would rather continue with the existing SIP instead of

adopting the “approved” increased restrictions absent the

“disapproved” relaxation of restrictions, the State may

choose that option as well. That choice is plainly denied under

the “partial approval” authority exercised here and upheld

by the Court of Appeals. EPA neither rebuts petitioner’s

argument nor offers any justification for that unfettered

authority.

Nor does EPA address petitioner’s argumert that exercise

of this “partial approval” authority rips a gaping hole in the

Act’s stringent procedural requirements governing the prom-

ulgation of Federal regulations. (See Pet. at 18-20.)

The decision of the Court of Appeals upholds EPA’s

statutory exegesis which injects the words “or any portion

thereof” into the section of the Act governing EPA approval

of revisions, 42 U.S.C. S 7410(a)(3)(A), words that on the face

of the Act apply only to EPA approval of original SIPs. 42

U.S.C. § 7410(a)(2). At the same time, that decision permits

EPA wholly to evade the procedural safeguards the Agency

must follow, 42 U.S.C. 88 7410(c)(1), 7607(d), when it approves

only a “portion” of a state submission under the section of

the Act that actually contains thcse words. Of particular

relevance to the circumstances preseuted here, those proce-

dures require, inter alia, public hearings in the affected State

on EPA’s proposed regulations and allowing the State a

second opportunity to choose means of its own. (See Brief

in Support of Petition For Certiorari of the Indiana Air

Pollution Control Board as Amicus Curiae, at 7-9.)

Petitioner does not concede that EPA has any authority

to promulgate federal regulations pursuant to 42 U.S.C.

§ 7410(c)(1) when it disapproves a voluntary revision. In that

circumstance the State is still in compliance with the Act

because the pre-existing and federally adequate SIP remains

in effect. (Pet. at 12-13, 18.) But if petitioner is wrong and EPA

can create new federal regulations by “approving” in part

and “disapproving” in part a voluntarily-submitted revision—

regulations of a form never, as here, submitted by the State

nor subsequently adopted or enforced by the State—then

surely the Agency cannot do so without following those

procedures required in circumstances where the Act er-

pressly authorizes creation of federal regulations.

Understandably, the Agency would like to have it both

ways. EPA wants its administrative powers over voluntary

SIP revisions construed expansively and as co-extensive with

its powers over original SIPs. (Opp. Br. at 5, 8, 11.) But EPA

does not want any concomitant expansion of the correlative

procedural duties that arise when it exercises the identical

power with respect to original SIPs. The perverse result,

affirmed by the Court of Appeals, is that EPA is permitted

to evade in the voluntary revision situation, where the State

has done nothing wrong, those procedural safeguards in-

tended by Congress to protect the State in circumstances

where the State has defaulted its obligations under the Act.

‘Notably, EPA’s version of the “Question Presented” states only

one-half of the question. The question is not only whether EPA has

statutory authority to “partially approve” a voluntary SIP revision,

but also, if it does, whether such authority may be exercised

without further administrative proceedings pursuant to the Act’s

procedural requirements. Having deleted this half of the Question

Presented, EPA’s Brief does not discuss it at all.

That is not only anomalous, but also cannot be countenanced

under the principles of federalism Congress embodied in the

Act.

II. The State And Not EPA Is The Proper Judge Of

Whether A Particular Portion Of A Voluntary SIP

Revision Is An Integral And Substantive Part Of The

State’s Decision To Revise Its Mix Of Emission

Limitations.

Perhaps as camouflage for the issues it fails to address,

EPA contends that the disapproved 15-minute exemption

contained in Indiana’s 1974 revision of APC-3 did not alter

the State’s pre-existing mix of emission limitations. (Opp. Br.

at 9 n. 13, 11.) On its face, that contention is incredible—the

same sentence of Indiana’s proposed revision that so ex-

panded the regulation’s coverage also contained the exemp-

tion. (A-95.) Moreover, that contention ignores and denigrates

the representations made to this Court by the Indiana Air

Pollution Control Board. (Amicus Brief in Support, at 3-4.)

Furthermore, EPA’s verbal puffery cannot obscure what the

State has made clear by deed as well as by word. Indiana has

never adopted EPA’s version of 1974 APC-3, has refused to

enforce it, and has repeatedly sought to revise it by means

more cooperative than the lawsuit EPA now faults the State

for not bringing. (Opp. Br. at 11-12.)

Moreover, EPA’s contention is contradicted by its own represen-

tation to the Seventh Circuit less than a week after filing its Brief

in this Court:

EPA’s action [on 1974 APC-3] clearly made the SIP more

stringent than it would have been had EPA approved the revision

in its entirety.

Brief For Respondent at 21, Indiana & Michigan Electric Co. v

United States Environmental Protection Agency, No. 82-1733,

and Indianapolis Power & Light Company v. United States

Environmental Protection Agency, No. 82-1738, currently pend-

ing before the Seventh Circuit.

Congress gave the States, not EPA, the “continuing

authority” to make new policy choices with respect to the

emission limitations mix. Train, 421 U.S. at 80, 87. Congress

gave the States, not EPA, the authority to make the political

and economic tradeoffs that are integral to any decision

voluntarily to revise a SIP. Union Electric, 427 U.S. at 269.°

Accordingly, only the State, and not EPA, can judge whether

any particular provision of a voluntary revision is an

indispensible part of the revised choice. There is neither

statutory nor policy justification for allowing EPA to render

ad hoc judgments with respect to that issue. When EPA

disapproves any aspect of a voluntary revision, the State can

and must be permitted to make that judgment for itself.

III. EPA’s Factual Misrepresentations And Legal Non-

Sequiturs Should Not Adversely Influence This

Court’s Decision Whether To Accept This Case For

Review.

Petitioner recognizes that the Court’s decision whether to

accept a case for review is not likely to be influenced by

counsels’ quibbling over minor legal points or factual infer-

ences with respect to the record. However, three assertions

made by the Agency in its Brief in Opposition are both

inaccurate and central to the issue presented for review.

First, contrary to EPA’s representation (Opp. Br. at 9 n. 12),

there is no evidence in this record that any public hearing was

held on EPA's federal version of 1974 APC-3. In fact, no such

hearing was ever held. The only hearings held with respect

The Act does not:

permit the Administrator or a federal court to reject a State’s

legislative choices in regulating air pollution.... Congress

plainly left with the States, so long as the national standards

[are] met, the power to determine which sources [are to] be

burdened by regulation and to what extent.

Union Electric, 427 U.S. at 269.

to 1974 APC-3 were on Indiana fundamentally different

regulation.“ EPA’s factual misstatement should not be

permitted to obscure the significant point that the claimed

administrative authority to edit a voluntary SIP revision,

upheld by the Court of Appeals, permits evasion of the public

hearing requirement every time EPA elects to exercise it.

Second, the implication that EPA is now surprised by

Indiana’s opposition to EPA’s version of 1974 APC-3 (Opp.

Br. at 11-12) is simply disingenuous. EPA has repeatedly

observed that Indiana has not adopted or enforced EPA’s

version of 1974 APC-3. (See Pet. at 5.) Indeed, after the instant

petition was filed, EPA again disapproved a Delayed Compli-

ance Order issued by the State to Bethlehem Steel Corpora-

tion because that State Order “requires compliance with

Indiana APC-3 as promulgated by Indiana” rather than “the

APC-3 approved by EPA.” 47 Fed. Reg. 43,378 (October 1,

1982). Furthermore, EPA’s representation “that the State of

Indiana did not object in 1975 to the Administrator’s partial

approval of the 1974 APC-3” is not only unaccompanied by

any citation to the record (Opp. Br. at 11), it is wholly

unsupported in this record and is flatly untrue. As EPA well

knows, evidence EPA has agreed to place in the administra-

tive record to be reviewed in Bethlehem Steel Corp. v.

Gorsuch, No. 82-2884, currently pending before the Seventh

The State Agency which promulgated Indiana's version of 1974

APC-3 considered the 15-minute exemption crucial to its technical

and economic feasibility and therefore necessary to its validity as

a matter of State law. (Amicus Br. in Support, at 4.)

In Union Electric, 427 U.S. at 266-267, this Court stressed that

the “most important forum for consideration of claims of economic

and technical feasibility” is the public hearing before the state

agency, and that state courts are the only forums for judicial review

of such claims. By proceeding as it did, EPA deprived petitioner

and other affected persons of both forums. No public hearing on

the technical and economic feasibility of EPA’s edited version of

1974 APC-3 was ever held. Moveover, it is at best doubtful that a

state court would have jurisdiction to review these issues because

the State has never adopted EPA’s version of the regulation. (Pet.

at 15.)

Circuit, demonstrates that Indiana objected from the begin-

ning to EPA’s “partial approval” of 1974 APC-3.

Third, EPA’s contention that petitioner has no “standing

to argue that the rights of the State of Indiana have been

violated” (Opp. Br. at 12) partakes more of farce than legal

argument. EPA cites as authority cases denying standing to

a public interest organization which shows no injury in fact

to itself or its members.“ How those cases are authority for

denying standing to petitioner which is subject to the

contested regulation and has been subjected to search

warrants issued on the basis thereof (Pet. at 5-6) is not and

cannot be explained. EPA has not and cannot articulate why

petitioner is barred from arguing those policy reasons that

lead Congress to withhold from EPA the federal administra-

tive authority to which petitioner now finds itself illegally

subjected. And if EPA knows, it does not tell this Court why

the United States may argue the rights of the States, see

Brief for the United States at 45, and Reply Memorandum

for Petitioners at 3, Train v. Natural Resources Defense

Council, 421 U.S. 60, but a citizen of a State and a beneficiary

of those statutory restrictions upon federal administrative

authority may not.

This petition presents an opportunity to decide whether the

Government’s previous arguments to this Court regarding

the revision section of, and State autonomy under, the Clean

Air Act are promises to be fulfilled or empty litigation

rhetoric to be invoked on EPA’s expedient whim:

The holding below ... would result in unwarranted

constriction of state autonomy to determine how the

national standards should be attained and implemented

In Mountain States Legal Foundation v. Costle, 630 F.2d 754

(10th Cir. 1980), the public interest organization not only failed to

$i. injury in fact, its arguments with respect to the rights of the

St te were contrary to the arguments made by the State itself. In

¥ acific Legal Foundation v. Gorsuch, 690 F.2d 725 (9th Cir. 1982),

‘h- rganization failed to show injury in fact in a case raising only

the constitutional rights of the State.

within each state. In providing for national air quality

standards, Congress plainly meant to establish national

ends to be achieved. But it did not intend comparably to

nationalize decision-making about the means for achieving

those ends—decisions whose economic, social and political

dimensions are of particular concern to the states and

localities most immediately affected by them.

Brief for the Unites States at 45, Train v. Natural Resources

Defense Council, 421 US. 60.

CONCLUSION

For the reasons set forth, the Petition for Certiorari should

be granted and the decision of the Court of Appeals for the

Seventh Circuit should be reversed.

Respectfully submitted,