Opposition — Chevron USA Inc. v. Natural Resources Defense Council, Inc.

Offite-Supreme Court, us. |

FILED

Nos. 82-1005, 82-1247, 82-1591 APR 29 993

ALEXANCTR LC. STEVAS,

CLERK

IN THE

Supreme Court of the United States

OcToBER Term, 1983

CHEVRON U.S.A., INC.,

Petitioner,

Vv.

NATURAL Resources Derense COUNCIL, INC., ef al.,

Respondents;

AMERICAN IRON AND STEEL INSTITUTE, ef ai.,

Petitioners,

v.

NATURAL ResouRCES DEFENSE COUNCIL, INC., ef al.,

Respondents;

ADMINISTRATOR, ENVIRONMENTAL PROTECTION AGENCY

Petitioner,

Vv.

NATURAL ResouRCES DEFENSE COUNCIL, INC., ef al.,

Respondents.

On Petition for a Writ of Certiorari to the United States Court

of Appeals for the District of Columbia

RESPONDENTS’ BRIEF IN OPPOSITION

TO THE PETITIONS

Davip D. DONIGER

Attorney for Respondents

1725 I Street, N.W., Suite 600

Washington, D.C. 20006

(202) 223-8210

April 29, 1983

i

QUESTION PRESENTED

Whether the court of appeals, ruling on provisions of the

Clean Air Act for meeting the health-based National Ambient

Air Quality Standards where they are now violated, correctly

held that the Administrator of the Environmental Protection

Agency exceeded her authority when she redefined the term

“source” to mean whole industrial plants only and thereby

exempted from permit requirements the major industrial in-

stallations (such as boilers and blast furnaces) built within such

plants.

PARTIES TO THE PROCEEDING

The respondents are Natural Resources Defense Council,

Inc., Citizens for a Better Environment, Inc., and American

Lung Association of Northwestern Ohio, Inc. NRDC and CBE

are national non-profit organizations with more than 43,000

and 24,000 members, respectively. The Association (formerly

known as the Northwestern Ohio Lung Association) is a non-

profit organization serving metropolitan Toledo, Ohio, and has

more than 68,000 contributor/members. Other parties are

identified by the petitions for certiorari.

TABLE OF CONTENTS

SET IOUT BIIED ccrrcsssrsnsyceccensinneonescebennsnsennesionne

PARTIES TO THE PROCEEDING. ............cccccscsseseeseseees

ee SEN ON iscccrccinspnainnsveuinnsccoosuintimerernenesenvenneceneves

STATUTES AND REGULATIONS INVOLVED.........

STATEOEEING OF THEE CASES ...ccosccccscscoscsccsvccsecscscveccccees

REASONS FOR DENYING THE PETITIONS ............

I. THE LOWER COURT DECISION CREATES

NO CONFLICT AMONG CASES, RAISES NO

CONSTITUTIONAL ISSUES, AND PRE-

SENTS NO GENERALLY APPLICABLE

UESTIONS OF STATUTORY CONSTRUC-

ON OR ADMINISTRATIVE LAW .................. 5

A. No Conflict Among Cases..............c.ccccccseeeee 5

D. , FAROE CRO CIRCUS cccccecercccccesccccesedhecsees 5

2. With Supreme Court Decisions ............ 6

S. NPRRI GR EA, GI cassereccessecccseccecess 7

BD. HD te Bec caiccseescetsieectcescvessteseces 8

C. No Generally Applicable Questions of

Rules for Statutory Construction or Prin-

ciples of Administrative Law ................0000 8

Il. THE LOWER COURT DECISION WAS COR-

Pei iar Ek seeceidhenionnicctanectidiindbintaieiidiciaieaersiqune 10

A. The 1977 “Nonattainment” Amendments.... 11

B. Analysis of the Statutory Terms..................... 15

C. Analysis of the Legislative: History ................ 16

a FRB Be ie ieieeihtetnenasticcitetetecdestccesese 17

2. The 1976 EPA Interpretive Ruling....... 19

3. The 1977 Amendments....................... 20

D. Analysis of the Statutory Purpose.................. 22

Il. CONGRESS SHOWS EVERY SIGN OF

ENDORSING THE LOWER COURT DECI-

SARILY DELAY PUBLIC PROTECTION

FROM RECOGNIZED HEALTH HAZARDS.... 24

V. THE LOWER COURT DECISION CORRECTS

AN ABUSE OF THE “BUBBLE” CONCEPT...... 26

EARNS canenssisinivsintarinniibiiiinaiinnggitemneaenennannes 28

iv

TABLE OF AUTHORITIES

CASES:

Alabama Power Co. v. Costle, 636 F.2d 323 (D.C.

HOR SEES A a eel

ASARCOv. EPA, 578 F.2d 319 (D.C. Cir. 1978) ......

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

Cir. 1975), cert. denied, 425 U.S. 934 (1975)..........

Kennecott Copper Corp. v. EPA, 526 F.2d 1149 (9th

Cir. 1975), cert. denied, 425 U.S. 935 (1975)..........

Natural Resources Defense Council v. EPA, 489 F.2d

390 (Sth Cir. 1974), rev'd in part on other grounds

sub nom. Train v. NRDC, 421 U.S. 60 (1975).........

National Labor Relations Board v. Brown, 380 US.

oe IE Win Uacelatineatechisndaeh dad siaticceatesetanduencdininnthoseevneees

Natural Resources Defense Council v. Gorsuch, 685

Ee FEE Cts Cis. BED daietciesennssedininecergsishsoenscsveres

Potomac Electric Power Co. v. EPA, 650 F.2d 509

a ei ited ia hectnstesansbimendecantbadisthbnidicnesinne

Securities and Exchange Commission v. Chenery

Cs aree iis OE POE Piksacpbsmsscs Mestcatesiertincscsenens

Sierra Pacific Power Co. v. EPA, 647 F.2d 60 (9th

Eales. UIE Dacccsitkonderehsndincnd bdcnantbeeaphategntchacdimatonasetntonte

Train v. Natural Resources Defense Council, 42\ U.S.

Sy Se Siacechcctshdesnsaicatldinnnhtlchatiddeevensslinibaustuiassess

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

Wisniewski v. United States, 353 U.S. 901 (1957)......

STATUTES:

Clean Air Act (1970 provisions, amended 1977)

Section 110(a)(2)(A), 84 Stat. 1680 (1970)...

Section 110(e), 84 Stat. 1682 (1970)...

Clean Air Act (as amended 1977)

Section 108, 42 U.S.C. § 7496 .....ccoccccccccccccccssccssee

Section 109, 42 U.S.C. § 7409 a

Section 110(a)(2), 42 U.S.C. § 7410(a)(2).......

: Pages

Section 110(a)(2)(D), 42 U.S.C.

Be Fa BE PO EP P acsscsescpeteccceensecesnecvenesenecenneestoes raARS

9,11,12

Section 110(a)(2)(H)(ii), 42 U.S.C.

§ 7410( @)( 2) (HH) (ii) ....cccccessccssccsscseseseseesseeeees 25

Sec’ 1110(a)(2)(1), 42 U.S.C.

D ool TD Licnctcisncieraiseonnceeseuseeesregtincnieceenen 14,25

Section 110(c)(1)(C), 42 U.S.C.

Be PUIEIEAIES BE Wis Bititcicidbtnscantiansenvcsecocssecconsienccecsees 25

Section 111, 42 U.S.C. § 74D D .occcccecccceccceeeseeeeees 7,13

Section 111(a)(3), 42 U.S.C. § 7411(a)(3) ....... 14,15

Section 111(a)(4), 42 U.S.C. § 7411(a)(4) ....... 24

Section 129(a), codified as a note to 42 U.S.C.

8 RR eo 16,21

Sections 160-169A, 42 U.S.C. §§ 7460-91 ............ 7

Sections 171-178, 42 U.S.C. §§ 7501-08 ............... ll

Section 171( 1), 42 U.S.C. § 7S5O1( 1) wn. 13

Section 171(3), 42 U.S.C. § 750103) we 13

Section 171(4), 42 U.S.C. § 750104) wo... 14

Section 172(a), 42 U.S.C. § 7502( a) .........cccccceee ll

Section 172(b)(3), 42 U.S.C. § 7502(b)(3)....... 12

Section 172(b)(5), 42 U.S.C. § 7502(b)(5)....... 13

Section 172(b)(6), 42 U.S.C. § 7502(b)(6)....... : 23,7,

CF le Gs SE FO conatecnieecnsionenneceinnnta 2,3,7,

9,11,12,

14,15,16,

17,20,21,

26

Section 173(1)(A), 42 U.S.C. § 7503(1)(A) ..... 12,13

Section 173( 1)(B), 42 U.S.C. § 7503(1)(B)....... oo

Section 173(2), 42 U.S.C. § 7503(2) .....ccccccecccees 12,13

Section 173(3), 42 U.S.C. § 7503(3) ........ccccce 13

Section 173( 4), 42 U.S.C. § 7503(4) .........ccee 14,24

Section 302(j), 42 U.S.C. § 7602 FT r......ccccccceees 14

Section 307(b)( 1), 42 U.S.C. § 7607(b)(1)....... 6

Boatiat FBS, 42 UBC. 8 FEBS cccecsccoceccsesccrescsesessces ll

Steel Industry Compliance Extension Act of 1981,

_ Pub. L. No. 97-23, 95 Stat. 191 (1981) .....ccccccceeees 9,23

vi

Pages

LEGISLATIVE HIsTorRY:

S. Rep. No. 127, 91st Cong., 2d Sess. (1970) .............. 6

S. Rep. No. 717, 94th Cong., 2d Sess. (1976) ............. 17

H.R. Rep. No. 294, 95th Cong., Ist Sess. (1977) ........ 13,16,22

H.R. Rep. No. 121, 97th Cong., Ist Sess. (1981)........ 23

S. Rep. No. 666. 97th Cong., 2d Sess. (1982) ............. 24

A Legislative History of the Clean Air Act Amend-

ments of 1970 (Sen. Comm. on Public Works, Ser.

I cessmubbatoneons 6

A Legislative History of the Clean Air Act Amend-

ments of 1977 (Sen. Comm. on Environment and

Public Works, Ser. No. 95-16, 1978) ........ccccccccceeeeee 13,16,17,

18,20,21

128 Cong. Rec. $15250 (daily ed. Dec. 16, 1982)....... 26

129 Cong. Rec. $2583 (daily ed. Mar. 10, 1983) ........ 24

ADMINISTRATIVE MATERIALS:

Federal Register Notices

ie Py ee © BP FOP cscecccscccccscsercsccesescsseoses 19

GRIN EP A BOMIED D sesceccarcscvcccoscescensoctoscces 3

46 Fed. Reg. 50,766 ( 1981 )................cccccccccscceseses 3

I TITS. 0 BUTE Pc ccnscscvscscsscessecesccenscecssses 25

REGULATIONS:

I SPIED 0 Piicnsscacoccsniesvensoseoesstosoivonseos 1,3,4

| : 3,4

MISCELLANEOUS:

Congressional Research Service, “The Application of

Nonattainment Area Sanctions Under the Clean

ST I IED ios sccsnicimnisinasactnennesnearsopecee 26

Declaration of Jeff Gabe, Research Director, Citizens

for a Better Environment (San Francisco) (Jan.

1982) (on file with the court of appeals) ................. 4

EPA, “Emissions Offset, Banking, and Trading Up-

I I hoa tetas ct clisiwscnaniitcsactdenscemioreseces 4

New York Times, Aug. 18, 1982 ..0.0........:cccccceceseeceseeeee 24

Report of the National Commission on Air Quality

( Preliminary Staff Draft, Jan. 15, 1981) .................. 11

IN THE

Supreme Court of the Wnited States

OcToBER TERM, 1983

Nos. 82-1005, 82-1247, 82-1591

CHEVRON U.S.A., INC.,

AMERICAN IRON AND STEEL INSTITUTE, ef ai.,

ADMINISTRATOR, ENVIRONMENTAL PROTECTION AGENCY,

Petitioners,

Vv.

NATURAL RESOURCES DEFENSE COUNCIL, INC.

CrT1zENS For A BETTER ENVIRONMENT, INC.

AMERICAN LUNG ASSOCIATION OF NORTHWESTERN OHIO, INC.

Respondents.

OPINION BELOW

The opinion of the court of appeals in Natural Resources

Defense Council, Inc., et al., v. Gorsuch is reported at 685 F.2d

718. It is reproduced in App. A to the petition of Chevron

U.S.A. (No. 82-1005). The orders denying petitions for

rehearing and suggestions for rehearing en banc are reprinted in

App. B to the Chevron petition.

STATUTES AND REGULATIONS INVOLVED

Pertinent provisions of the Clean Air Act, 42 U.S.C.

§§ 7401 et seg. (Supp. IV, 1983) are reproduced in App. la-10a

to the petition of American Iron and Steel Institute, et al. ( No.

82-1247). Pertinent portions of the implementing regulations,

40 C.F.R. § 51.18(j), are reproduced in App. 32a-33a of the

AISI petition.

2

STATEMENT OF THE CASE

The petitions for certiorari give no good reason for this

Court to review the decision of the court of appeals. The lower

court decision creates no conflicts among the circuits, with

decisions of this Court, or even within the D.C. Circuit. The

decision raises no constitutional question, no issue of general

principles for statutory construction, and no generally appli-

cable question of administrative law. The only issue presented

in the petitions is the construction of one provision of a federal

statute, the Clean Air Act as amended in 1977,’ and on this

issue the lower court reached the correct decision. Moreover,

Congress is presently amending the Clean Air Act as a whole

and shows every sign of explicitly endorsing the lower court

decision. In these circumstances, Supreme Court review is

unnecessary and unwarranted.

This case concerns the scope of one provision of the Clean

Air Act. Specifically, the case concerns the statutory obligations

of new and modified “major stationary sources” of pollution

built in the heavily polluted areas of the United States that do

not meet minimum federal health standards (the national

ambient air quality standards).2 Under Sections

110(a)(2)(D), 172(b)(6), and 173 of the Cleaf Air Act,3 new

and modified sources whose emissions exceed specified levels

must undergo careful review and meet three pollution-reducing

requirements in order to obtain a permit for construction and

operation. This permit process is known as “new source

review.”

To obtain a permit, the owner or operator of the prospec-

tive source must: (1) use state-of-the-art pollution controls, (2)

demonstrate compliance with all emission limits that apply to

142 U.S.C. §§ 7401 et seq. (Supp. IV.) All U.S. Code citations are to

Supp. IV.

2 The standards are established under Sections 108 and 109 of the Act,

42 U.S.C. §§ 7408-09.

342 U.S.C. §§ 7410(a)(2)(D), 7502(b)(6), 7503.

—

3

his existing sources, and (3) secure a substantial net reduction

in overall emissions (usually through a greater-than-even emis-

sions “offset”).4 These three conditions assure that new indus-

trial growth reduces pollution rather than increases it, and

contributes to, rather than hinders, rapid attainment of the

health standards.

At issue in this case is the scope of the term “major

stationary source”: Which industrial projects are subject to new

source review and the substantive pollution control require-

ments applied therein? All parties in this case agree that if a

company wishes to build a major new industrial project—e.g., a

large boiler, blast furnace, or petroleum storage tank —at a new

site in an area with unhealthy air, that project is a “major

stationary source” subject to new source review under Sections

110(a)(2)(D), 172(b)(6), and 173. The question in this case

is whether the Clean Air Act treats this industrial project any

differently if it happens to be built not at a new site, but within

a pre-existing plant.

The statute mandates identical treatment for such projects,

regardless whether they happen to be constructed at new sites

or within existing plants. In areas with unhealthy air, both of

these projects are “sources” subject to the Act’s new source

review requirements.

This is what the Environmental Protection Agency's regu-

lations provided through October 1981.5 At that time, however,

former EPA Administrator Anne Gorsuch changed the defini-

tion of the term “source” so that it thenceforth applied only to

entire industrial plants. As redefined, the term no longer

covered major individual units (such as boilers, blast furnaces,

or storage tanks) located within plants. The stated purpose of

this definitional change was to exempt the bulk of such units

from new source review. Indeed, the exemption allowed more

4See pp. 12-14, infra.

5See 40 C.F.R. §§51.18(j)( 1), 54.24(f), at 45 Fed. Reg. 52,743-44,

52,746 (Aug. 7, 1980),

$46 Fed.» Reg. 50,766, 50,771 (1981), amending 40 C.F.R.

$8 S1.18(j)( 1), $4.24(f), (AISI Pet. at 3la-33a.)

4

than 90 percent of the projects Congress intended to be covered

to evade the permit requirements.’

Under these rules, the builder of a major unit at a pre-

existing plant could evade new source review and the pollution-

reducing conditions for permits if he secured an intra-plant

pollution reduction. Contrary to repeated misstatements by one

of the petitioners,® the intra-plant emission reduction did not

have to be as large as the emission increase from the new unit.

Rather, the rules typically allowed plant-wide pollution in-

creases of 25 to 40 tons per year, and in some instances as much

as 100 tons per year, each time a major project was built.®

? The reason is that areas with unhealthy air typically are already heavily

developed, and nearly all major industrial growth takes place at existing plant

sites. For example, between December 1977 and January 1982 there were 46

major additions or modifications to major existing plants in the San Francisco

Bay Area, and only one new major source was constructed at a virgin site.

Declaration of Jeff Gabe, Research Director, Citizens for a Better Environ-

ment (San Francisco), 111 (Jan. 1982) (documents filed with the court of

appeals). Nationwide, EPA recorded more than 590 major additions or

modifications to existing plants in nonattainment areas between 1976 and

1980. In the same period, EPA recorded no more than 14 major projects built

in such areas at wholly new sites. EPA, “Emissions Offsets, Banking, and

Trading Update” (Feb. 1980),

® Petitioners American Iron and Steel Institute, ef a/., (AISI) repeatedly

make the erroneous claim that the intra-plant emission reduction must be as

large as the increase it is “netting out.” AISI mischaracterizes the EPA plant-

wide definition as follows: “If ‘source’ is so defined, the owner or oper-

ator... can make a process or equipment change which results in an increase

in pollutant emissions at one unit within the plant without becoming subject to

the permit process... if he counters that increase with an equal or greater

contemporaneous decrease in emissions elsewhere in the plant.” AISI Pet. at 5

(emphasis added). See also /d. at 7 and n. 17. This, as demonstrated in the

following text and note, is simply not so.

*The rules deemed insignificant and treated as zero net plant-wide

pollution increases up to the following amounts:

Carbon monoxide: 100 tons per year ( tpy)

Nitrogen dioxide: 40 tpy

Sulfur dioxide: 40 tpy

Particulate matter: 25 tpy

One: 40 tpy of volatile organic com-

pounds ( hydrocarbons )

Lead: 0.6 tpy

40 C.F.R. §§ 51.18(j)( 1 )(aili), $2.24(1)(13).

(footnote continues)

5

On August 17, 1982, a panel of the lower court held EPA’s

plant-wide “source” definition contrary to law. (Chev. App.

A.) The full court denied suggestions for rehearing en banc by a

6-1 vote. (Chev. App. B.)

REASONS FOR DENYING THE PETITIONS

None of the factors enumerated in Rule 17 as weighing in

favor of granting petitions for certiorari is present in this case.

As shown in Part I of this argument, the case has created no

conflict among the circuits, with Supreme court decisions, or

even within the D.C. Circuit. The case involves no con-

stitutional questions. It raises no generally applicable issues of

statutory construction or administrative law. The only issue

involved is construction of a single provision of the Clean Air

Act, an issue which—given the demands on the Court's limited

resources—is not sufficiently important for review. Moreover,

as demonstrated in Part II, on this issue the lower court reached

the correct result.

I. THE LOWER COURT DECISION CREATES NO

CONFLICT AMONG CASES, RAISES NO CON-

STITUTIONAL ISSUES, AND PRESENTS NO GEN-

ERALLY APPLICABLE QUESTIONS OF STATU-

TORY CONSTRUCTION OR ADMINISTRATIVE

LAW

A. No Conflict Among Cases

1. Among the Circuits

This case presents no conflict among the circuits. In fact,

both the Fourth and Ninth Circuits have addressed the

(footnote continued)

Consider, for example, a new storage tank being built at a refinery,

which would emit 200 tons per year of hydrocarbons. For hydrocarbons, the

EPA rules treated any plant-wide increase up to 40 tons per year as though it

were zero. To avoid new source review, the owner of the refivery would need

to make an intra-plant reduction of just over 160 tons pe year. Each time

such a project was built, total hydrocarbon pollution in the «ir could increase

by up to 40 tons per year.

6

“source” definition question and come to the same result as the

District of Columbia Circuit.'° Supreme Court review, there-

fore, is unnecessary."'

2. With Supreme Court Decisions

Petitioners EPA and AISI argue that the lower court

decision conflicts with Train v. Natural Resources Defense

Council, 421 U.S, 60 (1975). They contend that Train gives

the states freedom to choose any path to attainment of the

health standards that they wish, regardless of specific minimum

requirements of the Clean Air Act. EPA Pet. at 13; AISI Pet. at

12. Train, however, does not go so far. That decision

recognizes that in addition to demonstrating timely attainment

of the health standards, the states’ programs also must “satis-

f[y] the standards of § 110(a)(2).” 421 U.S. at 79.12 The

© Potomac Electric Power Co. v. EPA, 650 F.2d 509, 516-18 ( 4th Cir.

1981); Sierra Pacific Power Co, v. EPA, 647 F.2d 60, 66-67 (9th Cir. 1981),

In both cases, petitioners sought unsuccessfully to block the application of

new source performance standards (set under Section 111 of the Act, 42

U.S.C. §. 7411) to new boilers being added to existing electric generating

plants, by invoking a plant-wide “source” definition. Both courts rejected

these claims, Although both courts found their decisions controlled by the

D.C. Circuit's decision in ASARCO v. EPA, 578 F.2d 319 (D.C. Cir, 1978)

(See note 14, infra), neither court expressed any reservations with the D.C.

Circuit's reasoning.

') The petitioners complain that conflict among the circuits is impossible

because the Clean Air Act assigns review of nationally applicable clean air

regulations, such as those at issue in this case, exclusively to the District of

Columbia Circuit Court of Appeals. Section 307(b)(1), 42 U.S.C.

§ 7607(b)( 1). Congress did this, however, explicitly to serve the same goal

served by Supreme Court review of conflicts among circuits: national uniform-

ity of law, See S. Rep. No, 127, 91st Cong., 2d Sess. 41 (1970), reprinted in |

Legislative History of the Clean Air Act Amendments of 1970 at 441 (Senate

Comm. on Public Works, Ser. 93-18, 1974):

Because many of these administrative actions are national in

scope and require even and consistent national application, the

provision specifies that any review of such actions shall be in the

United States Court of Appeals for the District of Columbia.

Petitioners assert they are deprived of opportunities for further litigation.

Rather, the issue is now settled and framed for congressional review. As

shown in Part III, Congress appears ready to endorse the lower court decision,

not reject it.

2 See also Union Electric Co. v. EPA, 427 U.S. 246, 250 (1976). ~

5

states’ latitude to choose the “mix of emission limitations,” id.,

does not include authority to waive specific requirements of

Section 110(a)(2)."3

By virtue of subparagraph 110(a)(2)(D), as amended in

1977, the minimum requirements of Section 110(a)(2) include

the new source review provisions of Sections 172(b)(6) and

173. As shown in Part II, these provisions rule out the plant-

wide definition of “source.” While the states retain control over

many particulars of their SIPs under the 1977 nonattainment

amendments, this is one requirement they may not waive.

Because new source review is a requirement of Section

110(a)(2), there is no conflict with Train.

3. Within the D.C. Circuit

Petitioners Chevron and AISI strive to paint a picture of

conflict within the decisions of the D.C. Circuit. Despite the

petitioners’ efforts to confuse, the decisions of the court of

appeals are fully consistent with one another.'4 The petitioners

3A SIP could not be approved if it lacked emission limitations, fur

example. Thus, SIPs which substituted excessively tall smokestacks (to

disperse pollution rather than control it) in place of actual emission limita-

tions could not be approved. See Natural Resources Defense Council v. EPA,

489 F.2d 390, 408-10 ( Sth Cir. 1974), rev'd in part on other grounds sub nom.

Train v. NRDC, 421 U.S. 60 (1975). See also Big Rivers Electric Corp. v.

EPA, 523 F.2d 16 (6th Cir. 1975), cert. denied, 425 U.S. 934 (1975) (same);

Kennecott Copper Corp. v. EPA, 526 F.2d 1149 ( 9th Cir. 1975), cert. denied,

425 U.S. 935 (1975) (same).

In ASARCO v. EPA, 578 F.2d 319 (D.C. Cir. 1978), the court held

that the plant-wide definition was inconsistent with the pollution-reducing

purpose of the Act's program for establishing new source performance

standards ( NSPS), 42 U.S.C. § 7411, because the plant-wide definition would

allow new facilities to escape such standards and maintain the high pollution

rates of old facilities. The court observed: “Treating whole plants as sing):

sources would grant the operators of existing plants permanent easemerts

against federal new source standards—and the worst polluters would get he

largest easements.” Jd. at 329 n.40.

In Alabama Power Co. v. Costle, 636 F.2d 323, 401-02 (D.C. Cir. 1979),

the court found the plant-wide definition acceptable under the Act's program

for protecting areas with air quality better than the minimum nationa’ health

standards ( prevention of significant deterioration or “PSD”). Secticns 160-

169A, 42 U.S.C. §§ 7460-91. The reason for the different result was that the

(footnote continues)

8

pressed identical arguments in petitions for rehearing en banc,

which the court of appeals voted 6-1 against. Intra-circuit

conflicts, if they exist at all, are generally left to the circuit to

settle by sitting en banc.'5

In sum, there is no conflict among the circuits, with

Supreme Court opinions, or within the D.C. Circuit requiring

this Court’s resolution.

B. No Constitutional Issue

The petitioners have tried to create the impression that

important issues of federal-state relations are at stake.'® The

petitioners do not even argue, however, that Congress is in any

way constitutionally barred from defining the scope of the term

“source.” They contend only that Congress did not do so. That

is purely a statutory question. The court of appeals decided

that the statute does determine the meaning of “source,” and as

shown in Part II, that decision was correct.

C. No Generally Applicable Questions of Rules for

Statutory Construction or Principles of Adminis-

trative Law

The petitioners contend the court of appeals failed to defer

to EPA’s construction of the statute. EPA Pet. at 12; AISI Pet.

at 15. This contention raises no significant issue of general

importance. Rather, it asks the Court merely to review one

application of the well-settled law on when deference is appro-

priate.

(footnote continued)

purpose of the PSD program is different from the purpose of the NSPS

program. PSD’s purpose is not to reduce pollution, but to meter limited

increases in pollution allowed by law. The court reached this conclusion

relying on legislative history specific to the PSD program. /d. Because of the

difference between program purposes, the court of appeals both distinguished

and reaffirmed ASARCO. Id. at 402.

The distinction drawn in the prior cases clearly points to the illegality of

the plant-wide “source” definition in the nonattainment program. NRDC v.

Gorsuch, 685 F.2d 718, 725-727 (D.C. Cir. 1982) (Chev. App. A-13 through

A-18).

'S Wisniewski v. United States, 353 U.S. 901, 902 (1957).

6 See ¢.g., EPA Pet. at 14.

9

While deference to an agency’s interpretation of the law is

common, the courts “are not obliged to stand aside and rubber-

stamp their affirmance of administrative decisions that they

deem inconsistent with a statutory mandate or that frustrate the

congressional policy underlying a statute.” NLRB v. Brown, 380

U.S. 278, 291 (1965). Deference to EPA’s construction was not

warranted in this case.

First, the law and legislative intent are definite on this

issue. As shown in Part II, Congress explicitly intended new

source review under Sections 110(a)(2)(D), 172(b)(6), and

173 to cover major industrial units built within existing plants,

as well as such units built on their own. Second, the agency’s

interpretation was by no means long-standing»or consistently

held. The regulation in question dates only from 1981. For ten

prior years, in the context of the program to meet the health

standards where they are now violated, the term “source”

covered the major units built within plants, not just whole

plants.

Third, Congress has never given its blessing to EPA’s 1981

plant-wide interpretation of the term “source.” In fact, as

elaborated in Part III, Congress is currently amending the

Clean Air Act, and the key Senate Committee has explicitly

endorsed the lower court decision.'? Finally, no appeal to

“agency expertise” can mask the obvious conflict between the

pollution-reducing purposes of new source review in areas with

unhealthy air and the pollution-increasing effect of EPA’s plant-

wide “source” definition.

Petitioner AISI also argues that the lower court applied an

improper standard of review when it failed to defer to EPA’s

reversal of position on a factual assertion—a dubious claim that

the congressionally-chosen pollution control requirements for

new sources perversely harm air quality by retarding the

replacement of old sources. AISI Pet. at 18. The issue of the

standard for review of agency reversals, however, is not

17 See p. 23, infra. See also the legislative history of the 1981 Clean Air

Act amendments, the Steel Industry Compliance Extension Act, discussed at

note 48, infra.

10

presented in this case. The reason is that the government twice

explicitly conceded its factual assertion in the court below."®

Since EPA has conceded the factual issue on which AISI’s

deference argument depends, AISI's argument is moot. '®

The only remaining basis for granting certiorari would be

the presence of an important question of federal law warranting

decision by this Court. As demonstrated in Part II of this

argument, however, this case presents only a run-of-the-mill

statutory question of the type usually left to the courts of

appeals. The lower court decision, moreover, was correct on

the merits, and has drawn congressional endorsement. Espe-

cially in the absence of any other consideration favoring

certiorari, this question does not merit review.

Il. THE LOWER COURT DECISION WAS CORRECT

The petitions for certiorari are based fundamentally on the

false premise that the Clean Air Act does not define the

meaning of the term “source” for the purposes of the program

to meet the health standards. The Act, however, does deter-

mine the meaning of the term “source” and the scope of the

permit provisions in the nonattainment areas. The 1977

amendments to the Act and their legislative history show

plainly that major new and modified industrial units are subject

to new source review, regardless whether located on their own

or within plants. This result is compelled as well by the

pollution-reducing purpose of new source review in the

nonattainment areas. As a result, EPA has no discretion to give

“source” a plant-wide definition, or to approve state regulations

with plant-wide definitions. The lower court decision, there-

fore, was correct.

® In its memorandum opposing a stay pending review (at 12) and in its

brief on the merits (at 12), the Agency said: “EPA did not rely on this [the

alleged effect on modernizations] as a basis for its decision.” Rather, EPA

sought to defend its decision on purely legal grounds.

The government's concession may have been motivated by the fact that

the entire record support for this proposition consisted of two two-page,

conclusory letters from industrial commentors. See pp. 65-68 of the Joint

Appendix below.

An agency's decision can be defended only on grounds the agency

asserted. SEC v. Chenery Corp., 332 U.S. 194, 196 (1947).

A. The 1977 “Nonattainment” Amendments

The permit provisions of Sections 110(a)(2)(D),

172(b)(6), and 173 are part of the expanded program enacted

in 1977 for meeting the national health standards (the primary

national ambient air quality standards). Congress adopted this

program in reaction to shortcomings of the Clean Air Act of

1970. Although significant progress was made under the 1970

Act, its requirements proved insufficient to protect public

health. Nearly all the State Implementation Plans (SIPs )—the

state pollution control programs required to be adopted under

the 1970 Act®°—projected that the health standards would be

met by the original statutory deadline—mid-1975.2" When the

deadline passed, however, areas of the country containing more

than two-thirds of the U.S. population still suffered air pol.ution

in violation of one or more of the health standards.?2

In 1977 Congress addressed the problems of these

“nonattainment” areas with amendments to Section 110 and

the addition of Sections 171-178.29 Congress gave the states

more time to meet the health standards, but also demanded

greater efforts from them. The amendments extended the

deadlines for attainment; the standards now must be met by the

end of 1982 or (for some areas with special problems meeting

standards for two of the pollutants) the end of 1987.24 The

amendments also called for each state to revise its SIP and

incorporate into it a set of more specific and stringent measures

2 Pub. L. No. 91-604 § 110, 84 Stat. 1680. (Citations to provisions

subsequently amended are given to Statutes at Large.)

2’ Section 110(a)(2)(A), 84 Stat. 1680. Under certain circumstances, a

two-year extension could be granted. /d. § 110(¢), 84 Stat. 1682.

#2 Report of the National Commission on Air Quality, pp. 3.3-20 through

3.3-33 (Preliminary Staff Draft, Jan. 15, 1981) (The Commission was

established in 1977 under Section 323 of the Clean Air Act, 42 U.S.C. § 7623,

to report on progress under the Act.)

3 Pub. L. No. 95-95, §§ 108, 129, 91 Stat. 693-97, 745-50, codified at 42

U.S.C. §§ 7410, 7501-08.

* Section 172(a), 42 U.S.C. § 7502(a).

12

than those required by the 1970 Act.25 Most important for this

case, the SIP must contain an expanded permit program for

new and modified “major stationary sources.” Sections

110(a)(2)(D), 172(b)(6), 173, 42 U.S.C. §§ 7410(a)(2)

(D), 7502(b)(6), 7503.

Under this permit program, the state may issue a permit

for construction and operation only if the following conditions

are met:

(1) the permitting agency determines that—

(A) by the time the source is to commence

operation, total allowable emissions from exist-

ing sources in the region, from new or modified

sources which are not major emitting facilities,

and from the proposed source will be sufficiently

less than total emissions from existing sources

allowed under the applicable implementation

plan prior to the application for such permit to

construct or modify so as to represent (when

considered together with the plan provisions

required under section 172) reasonable further

progress (as defined in section 171); or

(B) that emissions of such pollutant resul-

ting from the proposed new or modified major

stationary source will not cause or contribute to

emissions levels which exceed the allowance

permitted for such pollutant for such area from

new or modified stationary sources under section

172(b);

(2) the proposed source is required to comply with

the lowest achievable emission rate; and

28 Where a promise to meet the health standards as late as the last day

before the deadline was acceptable under the 1970 Clean Air Act, the SIP

now must also demonstrate incremental improvement in the interim years

(“reasonable further progress”), Section 172(b)(3). The new plan must

incorporate upgraded pollution controls for existing sources (“reasonably

available control technology”). Jd.

13

(3) the owner or operator of the proposed new or

modified source has demonstrated that all major

stationary sources owned or operated by such person

(or by any entity controlling, controlled by, or under

common control with such person) in such State are

subject to emission limitations and are in compliance,

or on a schedule for compliance, with all applicable

emission limitations and standards under this

Act....

Section 173(1)-(3). Paragraph (1)(A) requires the owner of

the major source to secure an emissions “offset.” The “offset”

must exceed the emissions of the new source by an amount

sufficient to constitute reasonable further progress towards

attainment.2® Paragraph (2) requires use of state-of-the-art

emission control techniques.?” Paragraph (3) requires that the

source owner demonstrate that its existing facilities are subject

to and in compliance (or on schedules for compliance) with

pollution limits.

Paragraph (1)(B) allows a waiver of the “offset” require-

ment if the state, pursuant to Section 172(b)(5), has adopted a

SIP containing sufficient extra emission reductions from existing

sources, beyond those needed for marginal attainment and

2*“Reasonable further progress” is defined as annual incremental

progress towards the standards in the years before the deadlines. Section

171( 1), 42 U.S.C. §7501(1). This requirement is intended to keep states

from deferring all pollution control measures until the last moment before the

deadlines.

27 The proposed source must meet the “lowest achievable emission rate”

(LAER). Section 173(2), 42 U.S.C. §7503(2). LAER is defined as equal to

the lowest pollution rate actually being achieved by an existing source of the

same type, or as equal to the lowest rate required of such a source by any

state, whichever is lower. Section 171(3), 42 U.S.C. §7501(3). The

legislative history indicates that the states and EPA may consider the cost of

controls when determining LAER, but in view of the health interests at stake,

must give cost less weight than when setting other standards (¢.g., the new

source performance standards established under Section !i1 of the Act, 42

U.S.C, §7411.) See H.R. Rep. No. 294, 95th Cong., 'st Sess. 215 (1977),

reprinted in 4 Legislative History of the Clean Air Act Amendments of 1977 at

2682 (Senate Committee on Environment and Public Works, Ser. No. 95-16,

1978) (hereinafter cited as Leg. Hist.).

14

reasonable further progress, to provide a “growth allowance.”

Under no circumstances, however, does Section 173 let a state

waive the technology or self-enforcement requirements. These

must be met by major new and modified sources even in a

nonattainment area whose SIP has a growth allowance.

As an incentive for adopting and implementing the up-

graded State Implementation Plans contemplzted by the 1977

amendments, Section 110(a)(2)(1) provides; that no major

stationary source may be constructed or modified in the

nonattainment areas of states which have not revised their

plans in accordance with these provisions by mid-1979. 42

U.S.C. § 7410(a)(2)(1). Once the SIP is approved by EPA,

permits may not be issued for construction of major sources

unless the state is carrying out the plan. Section 173(a)(4), 42

U.S.C. § 7503(a)(4). In this way, Congress gave the states and

private industry a common interest in taking the measures

necessary to protect public health.

A “major stationary source” is “any stationary facility or

source of air pollutants which directly emits, or has the potential

to emit, one hundred tons per year or more of any air

pollutant.” Section 302(j), 42 U.S.C. § 7602(j). A major

modification is any physical or operational change in an

existing source which causes its emissions to increase by

“significant” amounts—typically 25-40 per year—specified by

regulation.2®

The term “stationary source” itself is defined as “any

building, structure, facility, or installation which emits or may

emit any air pollutant.” Section 111(a)(3), 42 U.S.C.

§ 7411(a)(3).

28“ Modification” is defined as “any physical change, or change in the

method of operation of, a stationary source which increases the amount of any

eA gown oyna amen ellggered ar rgpar tna Aare e

previously emitted.” Sections I11(a)(4), 171(4), 42 USC.

$57411(8)4). 7501(4). The “significant emission” levels were promulgated

pursuant to Alabama Power Co. v. Costle, 636 F.2d 323, 399-400 ( D.C. Cir.

1979). They are set out in note 9, supra.

15

The statutory text, the legislative history of the permit

provisions, and the fundamental purpose of the provisions,

definitively show that new source review in “nonattainment”

areas applies equally to major industrial units being built within

existing plants and major units being built on their own.

B. The Statutory Terms

The legislative intent is apparent in the statutory terms

themselves, beginning with the statutory definition of “source.”

Section 111(a)(3) defines a “source” as “any building, struc-

ture, facility, or installation” which emits or may emit air

pollution. A project which is any one of these four terms is a

“source.” These terms are not susceptible of a plant-wide

construction. A “building” cannot be a combination of build-

ings. A “structure” cannot be a collection of structures.

“Facility,” as explained below,2® was the term chosen by the

1976 and 1977 Senate bills, which unmistakeably intended new

source review in nonattainment areas to cover the major

projects within plants. “Installation,” prior to the 1981 rules

change, was defined by EPA itseif as a major piece of process

equipment. EPA’s subsequent attempt to define all four terms

as only entire plants cannot be squared with the statutory

language or intent, and was properly reversed by the court of

appeals.

This conclusion is reinforced by Section 173. As explained

above, Section 173(1)(B) allows a state to waive the greater-

than-even “offset” requirement if it creates a growth allowance

by requiring extra emission reductions from existing sources.

Nothing, however, permits a state to waive the technology or

self-enforcement requirements. There is no logical reason why

Congress would have so sharply delineated the terms for

waiving “offsets,” and would have so clearly barred waiver of

the other two requirements, if Congress had intended to let

EPA eliminate all three conditions by changing the definition of

a “source.” The procedure for waiver of offsets makes sense

29 See pp. 17-18, infra.

3 See note 5, supra.

16

only if Congress understood “source” to include the major

projects built within plants.9'

. C. Analysis of the Legislative History

The same conclusion follows from the legisiative history.

The permit provisions have their origin in 1976 legislation to

amend the Clean Air Act. This bill proceeded as far as

Conference Committee agreement, but failed to become law

because of a post-conference filibuster on an unrelated issue.

To tide over until Congress could complete action the following

year, in December 1976 EPA adopted an interpretive ruling

based on these provisions. In 1977, amalgamating the 1976 bill

and the EPA ruling, Congress enacted Section 173. From

31 The limited opportunity to waive offsets, but not the technology or

self-enforcement conditions, explains the real meaning of the petitioners’

principal legislative history citation. The House Report states that the 1977

nonattainment provisions have two main purposes:

(1) to allow reasonable economic growth to continue in an area

while making reasonable further progress to assure attainment of

the standards by a fixed date; and (2) to allow states greater

flexibility for the former purpose that EPA’s present inter-

pretative regulations afford.

H.R. Rep. 294, 95th Cong., Ist Sess. 211, 4 Leg. Hist. at 2678. From this

passage the petitioners infer that EPA has the freedom to adopt a plant-wide

definition of “source.” (EPA Pet. at 15; AISI Pet. at 13-14; Chev. Pet. at 12.)

Their broad inference is incorrect, however. The pages of the Report

which follow (211-14, 4 Leg. Hist. at 2678-81) plainly show that Congress

had two specifics in mind when referring to “greater flexibility.” First,

Congress adopted the growth allowance alternative to offsets in Section

173(1)(B), an option which was not available under the EPA “offset ruling”

referred to in the quotation. See p. 21, infra. Second, Congress altered the

baseline for calculating emissions offsets under the interpretive ruling. Under

EPA's ruling, a source owner or operator could take credit for an emission

reduction, as an offset against new pollution, only to the extent pollution was

reduced below “reasonably available control technology” levels. In these

amendments, Congress changed the offset baseline for the period until revised

nonattainment SIPs were adopted. Until then, the offset baseline was the

emission level allowed by the SIP presently in effect. Section 129( a), codified

as a note to 42 U.S.C. §7502. This had the effect of allowing more “room” for

growth during the transition period while SIPs were being revised.

The cited passage can hardly be read as a general grant of discretion. It

does not extend to changing the basic “source” definition.

17

beginning to end, the permit provisions applied to major new

and modified units built within plants, and a plant-wide

“source” definition was ruled out.

1. The 1976 Bill

The new source review and permit provisions were first

introduced in the 1976 Senate bill. The 1976 Senate Report

stated the problem which the bill sought to solve. Uder the

1970 Act, in areas where the deadlines for meeting the health

standards had passed unmet, no further additions to polluting

industries were allowed:

The Clean Air Act prohibits the addition of any

emissions of an air pollutant in any air quality control

region or portion thereof where an ambient air

quality standard for that pollutant has not been

attained.9

The Report noted, however, that the nonattainment areas

include many places where economic growth and industrial

development are highly desirable. “The most logical and

economical place for industrial expansion to take place,” the

Report continued, “is often at existing plant sites, in the vicinity

of present industrial development.”

To allow such growth to proceed, the Senate Committee

adopted an exception from the general growth prohibition of

the 1970 law, allowing the addition of new “facilities” at

existing plant sites. The exception was narrow. It did not allow

construction of new facilities at new sites in nonattainment areas

under any circumstances. It did not even allow the addition of a

new facility to an existing plant unless the new facility met

pollution-reducing conditions (conditions which later grew into

the state-of-the-art technology, self-enforcement, and greater-

than-even offset requirements of the present Section 173).

Specifically, ihe Committee adopted Section 11 of S. 3219,

which stated:

No major emitting facility shall be constructed

or modified in any air quality control region or

9S. Rep. No. 717, 94th Cong., 2d Sess. 42 (1976), 6 Leg. Hist., at 4743,

* Id.

portion thereof in which any national ambient air

quality standard is exceeded, if such facility will emit

air pollutants subject to such standard so as to

prevent the attainment or maintenance of such stan-

dard, except that a facility proposed for construction

or modification at an existing site or plant owned or

operated by the owner or operator of such facility

may be constructed or modified if the owner or

operator demonstrates to the satisfaction of the state

that (A) the proposed facility will comply with the

best available technology ... applicable to such

proposed facility before the proposed facility begins

operation, (B) all existing sources owned or con-

trolled by the owner or operator of the proposed

facility are in compliance with an approved schedule

and timetable for compliance ... (C) the total

cumulative emissions from the facility location and

the proposed facilities will at no time increase, [and]

(D) the total allowable emissions from all existing

and proposed sources at the proposed facility location

will be sufficiently less than the total allowable

emissions from the existing sources ... sO as to

represent reasonable further progress toward attain-

ment of the applicable national ambient air quality

standard... .™

Contrary to EPA's plant-wide “source” definition, this bill

distinguished between “sources” and “plants” and permitted

the addition of major new projects at existing plants only if the

three technology, self-enforcement, and offset conditions were

met.

The Senate provision was adopted unchanged by the

Conference Committee. Final enactment in 1976, however,

was prevented by a filibuster un an unrelated issue ( protection

of areas with air quality better than the health standards),

™% Subparagraph (A) later became the “lowest achievable emission rate”

requirement; subparagraph (B) became the compliance requirement; and

subparagraphs (C) and (D) became the “offset” requirement. 6 Leg. Hist. at

4652-53 (emphasis added ).

99S, 3219, $119, 5 Leg. Hist, at 4312.

19

2. The 1976 EPA Interpretive kuling ‘

Congress’ failure to pass amendments in 1976 left EPA

and the states in difficulty, because the statutory deadline for

meeting the health standards had passed unmet in many places.

As the 1976 Senate Report had observed, this meant no further

new source construction was permitted in such areas. To avoid

this result, after Congress adjourned EPA issued an interpretive

ruling which permitted construction to continue in nonattain-

ment areas on terms consistent with the 1976 bill’s exception

from the growth ban. The “Offset Ruling” (as it has come to

be known) permitted construction of a “majors”? new and

modified source in a nonattainment area only if the three

conditions of the 1976 legislation were met: (1) compliance

with the “lowest achievable emission rate,” (2) certification

that commonly owned or operated sources are in compliance

(or on schedules for compliance) with applicable emission

limits, and (3) achievement of a greater than one-for-one

emissions “offset.""9® Under the Offset Ruling, just as under the

1976 bill, “sources” were individual major units, not whole

plants.

% 4| Fed, Reg. 55,524 (Dec. 21, 1976).

37 Defined as emissions of 100 tons per year of any pollutant, except

carbon monoxide for which the threshold was 1000 tons. /d. at 55,528, col. |.

38 Jd. at 55,528-29.

%® This is evident from the preamble to the ruling, which notes that both

“internal” and “external” emission reductions may be used to satisfy the

offset condition. /d. at 55,526, cols. 2-3. (An “internal” offset is one from

another source in the same plant; an “external” offset is one from another

source at another site.) There would have been no need for discussion of

internal offsets—indeed there would have been no such thing as an internal

offset—unless what EPA meant by “source” was major industrial units (such

as boilers and blast furnaces) rather than whole plants.

In addition, immediately after defining the amount of emissions which

make a source “major,” the text of the ruling states that:

A proposed new source with an allowable emission rate ex-

ceeding the [“major"] amounts is considered a major source

under this ruling, even though such a source may replace an

existing source with the result that the net additional emissions

are less than the [“major"] amounts.

Id. at 55,528, col. 1. This statement is not consistent with a plant- aid

conception of “source,” for whole plants are almost never replaced. Rather,

replacements nearly always involve discrete units within plants.

20

3. The 1977 Amendments

In January 1977, Senator Muskie, the chief architect of the

Clean Air Act, introduced S. 252, the new source review

provisions which were identical to those of the Conference

Committee bill of the year before. The Senate Committee did

not make any change in its decision of the year before that

major new units added to existing plants in nonattainment

areas could be built only if they met the above-described

conditions. The Committee did address the question: “Should

the exception be available only for expansion at existing sites,

or also for construction of new facilities at new sites?’’4'

The bill adopted by the Senate Committee extended the

exception to new facilities at new sites, not just to new facilities

at existing sites. To accomplish this, the, Committee used the

term “major emitting facility” alone, dropping the limiting

reference in the prior bill to “a facility proposed for construc-

tion or modification at an existing site or plant.”4? The Com-

mittee also began the transformation of conditions (A) through

(D) of the 1976 bill to their present form in Section 173.

Introducing the bill on the Senate floor, Muskie made clear

the limited nature of this change and the meaning of the term

“major emitting facility.” He said:

This year the issue that drew the greatest atten-

tion during the working sessions of the committee

was the issue of new emissions in areas exceeding

standards. The provision contained in the bill report-

ed by the committee last year dealt only with the the

expansion of existing facilities in such areas.

The committee this year determined that a

broadening of that provision was necessary so that

new sources, without any existing facilities in the

area, could still enter the area and construct new

5 Leg. Hist. at 3605-06,

41 A Section-by-Section Analysis of S. 252 and S. 253 Clean Air Act

Amendments, 5 Leg. Hist. at 3873.

42S. 252, §13 (as reported by the Committee), 3 Leg. Hist. at 632.

21

facilities under carefully limited procedures and

meeting stringent requirements. The committee

adopted a provision which provides protection for air

quality while at the same time allowing new sources

to be constructed.

The Committee provision was adopted by the full Senate.

The House of Representatives began by adopting the EPA

Offset Ruling into law.* The House bill modified the EPA

ruling in only one significant respect, by providing the means

for a state to waive the “offset” requirement if it adopted a SIP

with a growth allowance.*® The bill made no change in the

Offset Ruling’s definition of “source.”

The Conference Committee melded the two bills into the

current statutory language.“* At no point in the legislative

process was any change even suggested in the determination

that the projects subject to new source review and permitting

include the major units added within existing plants.

EPA’s 1981 plant-wide “source” definition directly con-

tradicted this congressional decision. It exempted major units

at existing plants from the three Section 173 conditions upon

compliance with a single, much less restrictive condition: a /ess-

than-even intra-plant offset which allowed total pollution to

increase.

93 Leg. Hist. at 711.

“H.R. 6161, §117 (adding $127(b)(2)), 4 Leg. Hist. at 2331-32.

Citations are to the bill passed by the Committee. The permit provisions were

adopted without change by the full House. 4 Leg. Hist. at 3216.

4 Id, §127(c)(5)(A), (d)(1), 4 Leg. Hist. at 2333, 2336-37. See p. 16,

supra.

“ The similarity of the House and Senate provisions was emphasized by

Rep. Paul Rogers, chairman of the House subcommittee responsible for the

bill, when introducing the Conference agreement to the full House. Under the

subject heading “Nonattainment” Rogers began: “The House and Senate

bills were very close on this issue to begin with.” The ensuing description of

points of difference and compromise did not mention the scope of new source

review, because there were no differences there. 3 Leg. Hist. at 319.

The 1977 amendments also adopted the EPA “offset ruling” described

above (p. 19, supra) for an interim period. Pub.L. 95-95, §129( a), codified

as a note wo 42 U.S.C. $7502.

22

D. Analysis of the Statutory Purpose

The statutory provisions and legislative history just sur-

veyed make plain Congress’ purpose in adopting the new

source review provisions. Congress intended that the construc-

tion or modification of major sources in nonattainment areas

should contribute to, rather than hinder, rapidly meeting the

health standards. Growth in such areas was acceptable only

under the three pollution-reducing conditions of Section 173.

Congress expressly found it unacceptable for such growth to

continue while making pollution worse.47

Relying on the evident purpose of these provisions, and

observing the effects of the plant-wide “source” definition, the

court of appeals found that definition contrary to law. The

court stated:

The nonattainment program’s raison d'etre is to

ameliorate the air’s quality in nonattainment areas

sufficiently to achieve expeditious compliance with

the NAAQSs [national ambient air quality stan-

dards}.

685 F.2d 718, 726-27 (Chev. App. A-19) (footnote omitted ).

Because of this purpose, changing the definition of “source” in

order “to shrink to relatively small size new source review in

47 Contesting the lower court's analysis of the statutory purpose, the

government's petition for certiorari claims the nonattainment program's new

source review requirement “is not a mandate for the maximum feasible

reduction in emissions.” EPA Pet. at 20. To the contrary, the 1977 House

Report stated:

[1 }m light of the adverse air quality and health consequences

of this new pollution | from new sources allowed despite contin-

ued health standard violauons |, the committee concluded that all

feasible efforts w) rec'uce of control this new pollution should be

mandated

Futhermore, maximum polluvon control from new sources is

necessary in order w permit room for maximum potential

economic growth —_ Finally, tne technology-forcing purpose of

the act is best served by requiring masimum feasible poilunon

control from these new sources in dirty air areas.

H.R. Rep. No. 294, 95th Cong. Ist Sess. 215, 4 Leg Mist. at 2682.

23

nonattainment areas[] is impermissible.” Jd. at 720 (Chev.

App. A-4) (footnote omitted ).

This basis of decision was itself correct. Moreover, it

necessarily leads to the same conclusion as direct analysis of the

statute and its legislative history. EPA has no discretion to

adopt a plant-wide “source” definition, or to approve State

Implementation Plans with such a definition. For these rea-

sons, the lower court decision was correct.‘

Ill. CONGRESS SHOWS EVERY SIGN OF ENDORSING

THE LOWER COURT DECISION

An additional reason why Supreme Court review is unwar-

ranted is that Congress is currently considering legislation to

amend the Clean Air Act and can give a timely hearing to the

“® Congress reiterated the meaning its holds for the term “source” in

1981, with the passage of an amendment to the Clean Air Act extending

certain compliance dates for the steel industry. The Steel Industry Com-

pliance Extension Act, Pub. L. No. 97-23, 95 Stat. 139 (1981), allows steel

companies more time for compliance with emission limits applicable to their

existing facilities, provided the companies meet carefully drawn conditions

relating to modernizing these facilities and protecting air quality in the

interim. The House Report on the bill emphasized that in “nonattainment”

areas: ‘

[T]he program to modernize facilities will also continue to

include the application of lowest achievable emission rate tech-

nology (LAER) on the modernized facilities.

H.R. Rep. No.121, 97th Cong., Ist Sess. 12 (1981), reprinted in [1981] U.S.

Code Cong. & Admin. News 63. The Report then listed examples of the type

of projects that would be subject to LAER

z

z

z

:

Id. (emphasis added). Each of the types of projects mentioned is a unit

within a plant, not a “ant itself Modermzatvion of such an installation is the

construction of modification of a “major stationary source” and 1s subject to

the permit provisions. Twice in the proceedings below, EPA admitted that

these passages “do indicate that thought new source review would

apply to facilities within a plant.” Memorandum in Opposition to a Stay

at 16; BPA brief at 19.

24

petitioners’ objections to the scope of new source review. The

question in this case is purely a matter of what Congress deems

proper. EPA, in fact, has asked Congress for an amendment to

adopt the plant-wide “source” definition.*®

Congress, however, shows every sign of rejecting the EPA

request. In May 1982, before the lower court decision, the

Senate Committee on Environment and Public Works adopted

an amendment which reversed the EPA plant-wide “source”

definition. The Senate Report, written after the lower court

decision, explicitly endorses it: “The court’s decision ... cor-

rectly interprets congressional intent... .”5'

The identical bill, containing the same “source” amend-

ment, has been reintroduced in this session by the Chairman of

the Senate Committee, Senator Stafford.52 Congress probably

will complete action on Clean Air Act amendments before the

Court could decide this case. This schedule, coupled with the

fact that Congress appears well satisfied with the lower court

decision, makes Supreme Court review unnecessary.

IV. FURTHER REVIEW WOULD UNNECESSARILY

DELAY PUBLIC PROTECTION FROM RECOG-

NIZED HEALTH HAZARDS

The Clean Air Act, as noted above, sets an urgent schedule

for meeting the health standards, the primary national ambient

air quality standards. Most areas were to have met these

standards by December 31, 1982, deadline. Although many

areas succeeded, more than 100 areas of the country appear not

“Statement of EPA Assistant Administrator Kathleen M. Bennett,

quoted in the New York Times, Aug. 18, 1982, p. |.

The amendment adds a new paragraph to Section 17! defining a

“majo: “tationary source™ to include “each discrete operation, unit, or other

activity which produces of may produce emissions of one hundred tons or

a pollutant for which the area does not meet the health

standard. §. 3041, § 114 ( adding § 171 5)), reprinted in S. Rep. No. 666,

ry] ’ ;

8 §. 768, 129 Cong. Rec. $2583 ( daily ed. Mar. 10, 1983). Of course, if

the lower court decision is allowed to stand, the “source” amendment will not

25

to have met the deadline.59 For these areas, far from being able

to relax, EPA and the states are now under special obligations

to take action to protect public health.

EPA’s change of the “source” definition to let most major

new and modified projects escape new source review was

completely inconsistent with these obligations. In response to

the redefinition, 31 states (or parts of states) have already

adopted, or are in the process of adopting, the plant-wide

definition. Many of the areas which failed to meet the

standards by the 1982 deadline are in these states. These areas

must be made to adopt the correct “source” definition, so that

industrial growth in these areas will play its congressionally

designated part in protecting public health from dangerous air

pollution.55

Because of the petitions for certiorari, issuance of the lower

court’s mandate has been stayed. EPA has taken the position

that until the mandate is issued, it will not take any step to

correct its own regulations or the State Implementation Plans

53 Even those areas which have extensions for meeting the carbon

monoxide and ozone standards until the end of 1987 have their work cut out

for them. A substantial number of such areas will fail to meet the standards

by the 1987 deadline unless they promptly adopt the proper “source”

definition.

54 When the Administrator determines that a State Implementation Plan

“is substantially inadequate to achieve [any] national ambient air quality

primary or secondary standard,” he must notify the state. The state then must

revise the plan to cure the inadequacy. Section 110(a)(2)(H)(ii), 42 U.S.C.

§ 7410(a)(2)(H)(ii). If the state does not do so within 60 days, EPA must

promulgate, and if necessary implement, an adequate SIP. Section

11O(eM TMC), 42 US.C. §7410(c)(1)(C). The failure to meet the

standards by the 1982 deadline triggered these obligations of the states and

EPA.

88 Instead of carrying out the process described in the preceding note,

former EPA Adminstrator Gorsuch threatened these areas with a morato-

num on the issuance of permits for mayor new and modified sources. See 48

Fed. Reg. 4972 ( Feb. 3, 1983). This threat is based on a misconstruction of

Sections | 10(a)(2)(1) and 173( 4), 42 U.S.C. §§ 7410( a){ 2)(1), 79031 4).

These provisions prevent issuance of permits to major new or modified

sources of pollutants for which an area has unhealthy air if the area (a) does

not have or (b) is not carrying out an EPA-approved SIP. See p. 14, supra.

(footnote continues )

26

with plant-wide “source” definitions.5® Review by this Court

would probably take another year. In this period, dozens of

major sources will be built or modified without securing the

permit required by Section 173. The Court’s review would lead

it to the same result as the lower court. In these circumstances,

review is unwarranted.

Vv. THE LOWER COURT DECISION CORRECTS AN

ABUSE OF THE “BUBBLE” CONCEPT

One final matter requires discussion. Running throughout

the Chevron petition is an implication that the lower court

decision bars any use of the “bubble” concept under the Clean

Air Act. This implication is wrong. The case below did no

more than reverse one misapplication of the “bubble” concept

which, as we have shown, permitted air pollution sources to

avoid the emission control responsibilities Congress has as-

signed them.

Discussion of the “bubble” concept is often muddied by a

misconception that the “bubble” is only one thing. In fact,

there are many different applications of the concept. Some

(footnote continued)

The moratorium does not apply, however, in areas which have approved SIPs,

and which have been carrying them out in good faith. See Statement of Sen.

Stafford, Chairman of the Environment and Public Works Committee (and

attached letter and memorandum of law from Sens. Stafford and Randolph to

the EPA Administrator), 128 Cong. Rec. $15250-53 (daily ed. Dec. 16,

1982). See also Congressional Research Service, “The Application of

Nonattainment Area Sanctions Under the Clean Air Act” (Feb. 17, 1983).

The proposed application of the moratorium is of very doubtful legality.

Even if it is promulgated by the new EPA Administrator, it will not likely be

sustained by the courts of appeals. This Court does not review one action just

because of the speculated consequences of a possible future action that may

not even be taken, and that will be subject to judicial review if it is.

% This policy is set forth in a memorandum entitled “D.C. Circuit Ruling

on Natural Resources Defense Council v. Gorsuch, No. 81-2208—Reinstate-

nonattainment areas,” from Robert Perry (Associate Administrator and

General Counsel) and Kathleen Bennett (Assistant Administrator for Air,

Noise, and Radiation), to Regional Administrators, ef a/. (Aug. 27, 1982),

Appended to Respondent's Motion to Stay Issuance of the Mandate ( Nov. 2,

of appeals).

27

applications are consistent with the Clean Air Act’s require-

ments and purposes. Others, however, undermine those

requirements and purposes.

The “offset” requirement of Section 173(1)(A) falls in the

former category. It is specifically authorized by law. It is a

fundamental part of the program for achieving the Act’s

primary goal: healthful air quality. The “offset” requirement

assures that each time a major new source is built, existing

pollution is reduced by more than the new source adds.

The plant-wide “source” definition, by contrast, operates

to exempt new sources from the “offset” requirement and the

other statutory conditions on permits. It actually lets total

plant-wide pollution increase each time such a project is built,

because the intra-plant reduction in emissions does not have to

be as great as the emissions increase from the new project. This

use of the “bubble” concept contravenes both the letter and

spirit of the Clean Air Act.

The lower court ruled the plant-wide “bubble” illegal for

the nonattainment program. The court did not rule on any

other application of the “bubble” concept.5? Other types of

“bubbles” will have to be evaluated individually, on their own

merits. Some types undoubtedly will pass muster; others will

not. These, however, are cases for the future.

5? The ARMCO “bubble” discussed by Amicus Mid-America Legal

Foundation is another type of “bubbie” which simply was not at issue in this

case and is not affected in any way by the lower court’s decision. The

ARMCO “bubble” has no bearing on the plant-wide “bubble” involved in

this case.

28

CONCLUSION

For the foregoing reasons, the petitions for certiorari

should be denied.

Respectfully submitted,

Davip D. DONIGER

Counsel for

Natural Resources Defense

Council, Inc.

Citizens for a Better

Environment, Inc.

American Lung Association of

Northwestern Ohio, Inc.

April 29, 1983