Petitioners Reply Brief — Ruckelshaus v. Natural Resources Defense Council, Inc.

No. 82-1591 MAT 20 |

In the Supreme Court ofthe Hated States

OCTOBER TERM, 1982

ADMINISTRATOR, ENVIRONMENTAL PROTECTION AGENCY,

PETITIONER

Vv.

NATURAL RESOURCES DEFENSE COUNCIL, INC, ET AL.

ON PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS FOR

THE DISTRICT OF COLUMBIA CIRCUIT

REPLY BRIEF FOR THE PETITIONER

Rex E. Lee

Solicitor General

Department of Justice

Washington, D.C. 20530

(202) 633-2217

TABLE OF AUTHORITIES

Page

Cases:

Alabama Power Co. v. Costle,

dE en ere 4,8

ASARCO Inc. v. EPA, 578 F.2d 319 ......00s 2

Statutes and regulations:

Clean Air Act, 42 U.S.C. (Supp. IV)

7401 et seq. :

Section 110(a)(2)(1), 42 U.S.C.

(Supp. IV) 7410(aX(2)(1) oo. eee ee ee eee 9

Section 111,42 U.S.C. (Supp. IV) 7411 ..... 2

Section 111(a)(3), 42 U.S.C. (Supp. IV)

PEPE Vewwe pedbseerecdecizceeyss 2,4

Section 111(a)(4), 42 U.S.C. (Supp. IV)

ll, SEP er ere Peer rrr re 3

Section 171, 42 U.S.C. (Supp. I'V)

eT rer err errr rr er rey 3

Section 171(4), 42 U.S.C. (Supp. IV)

Lo REPT E TOUTE LENT PTT TTT TT TOTTTee 3

Section 172, 42 U.S.C. (Supp. IV) 7502 ..... 6

Section 172(a)(1), 42 U.S.C. (Supp. IV)

TREEE ceheccersvatvevvcdoesinseete 4

Section 172(a)(2), 42 U.S.C. (Supp. IV)

ME 605 kon e6a cave seceapueh canes 9

Section 172(b)(6), 42 U.S.C. (Supp. IV)

TT sivhsnsebavadacnes Caenues eos 2

Section 173, 42 U.S.C. (Supp. IV) 7503 ..... 7

Section 302, 42 U.S.C. (Supp. IV) 7602 ..... 3

Clean Air Act Amendments of 1977, Pub.

L. No, 95-95, 91 Stat. 685 et seq. :

Section 129(a), 91 Stat. 745 .........ce eee 6

Section 129(a)(1), 91 Stat. 745 .........4.0.- 7

(I)

Page

Statutes and regulations—Continued:

SOE b6b00bscdstbebseecdbones evade 2

40 C.F.R. :

Part 51:

IK Perr e err reer ry 4

PN SO PEEED ibd pysecocisvecunes see 4

Section 51.18(jKIN VINA) ...ccecccccecccees 7

Section 51.18(j)(1)(vi)(b) .. cee ee eee ee eee 7

BOOTING FUTUNA) cc cvccccccvescosscens 8

Section 51. 18(jK IM Xili) occ eccccccccvees 8

Se LL PPP rT PeTrrr Trey tr 7

Part 52:

SED occccscevcccecesesecens 4

Section 52.24(f)(2) ........ Qiscxcteveeveues 4

ED Vig bene ccveseusseesenee 7

PE SEL EESD bbiccrsccveveseesvases &

Miscellaneous:

41 Fed. Reg. $5524 (1976) ....vccccccccccccvere 6

45 Fed. Reg. (1980):

DLT Ab co beevcteresenestacteccenreees 7

| eer Srp rererr Terr rrr Tere ry oe 7

i; SEDER. La ceccvicuneccuvospeneses 8

DEE chsshecsebaceetcaachoces Seweeens 8

48 Fed. Reg. (1983):

DME Sesbavavendsekeveneesaneveesadeas 9

ME beckncvsccstuns babeusuhsenveceees 9

Page

Miscellaneous—Continued:

H.R. Rep. No. 95-294, 95th Cong., Ist Sess.

CEPFUD ncdcvccrdsruvncevabechveumeaumeawned 6

H.R. Rep. No. 95-564, 95th Cong., Ist Sess.

(USTED vvctovnercacucetavessselwueesanakwed 7

National Commission on Air Quality, To

Breathe Clean Air (1981) ..... cece cece ee eens 8

S. 252, 95th Cong., Ist Sess. (1977) ........0000s 5

S. Rep. No. 95-127, 95th Cong., Ist Sess.

(IFT T) ccidccccccunvesnadackubestioveee woems 5

Staff of Senate Comm. on Environment and

Public Works, 95th Cong., 2d Sess., A

Legislative History of the Clean Air Act

Amendments of 1977 (Comm. Print 1978):

Iu the Supreme Court of the Mnited States

OCTOBER TERM, 1982

No. 82-1591

ADMINISTRATOR, ENVIRONMENTAL PROTECTION AGENCY,

PETITIONER

V.

NATURAL RESOURCES DEFENSE COUNCIL, INC., ET AL.

ON PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS FOR

THE DISTRICT OF COLUMBIA CIRCUIT

REPLY BRIEF FOR THE PETITIONER

In our petition we explain that the court of appeals’

decision, interpreting the term “stationary source” in the

new source review provisions of the Clean Air Act, repre-

sents a significant breach of established limits on the scope

of judicial review of administrative action. We also show

that the decision is inconsistent with the congressional

design vesting the States with substantial discretion to

determine what mix of nonattainment program strategies

best serves their needs while assuring that the required

degree of pollution abatement will be achieved. The court of

appeals acknowledged (82-1005 Pet. App. A8, A9 n.22, Al7

n.39) its decision was unsupported by pertinent statutory

language or legislative history. The only basis for its deci-

sion thus was its own conclusion that treating each emission-

producing unit as a separate source would be most compat-

ible with the overall air quality improvement objectives of

the nonattainment program (id. at Al7 to A18).

2

Remarkably, respondents make no serious effort to

defend the court of appeals’ analysis in this case. Rather,

they assert the following alternative rationales: (1) the per-

tinent statutory language bars the Administrator from

approving any state implementation plan using a plant-wide

approach to new source review for nonattainment areas

(Br. in Opp. 15-16), and (2) the legislative history of the 1977

Amendments to the Clear Air Act demonstrates that Con-

gress intended that each unit be treated as a stationary

source (Br. in Opp. 16-21).

1. Respondents claim (Br. in Opp. 10, 15-16) that the

1977 Clean Air Act Amendments do “determine” (Br. in

Opp. 10) the meaning of the term “stationary source”

employed in Section 172(b)(6) of the Act, 42 U.S.C. (Supp.

IV) 7502(b)(6), which establishes the new source review

requirement. But the definition respondents point to (Br. in

Opp. 15), Section 111(a)(3) of the Act, 42 U.S.C. (Supp. IV)

7411(a)(3),' explicitly provides that it is effective only “[flor

purposes of this section” (emphasis added). “[T]his Sec-

tion” — Section 111—establishes the new source perfor-

mance standards (“NSPS”) program; it has no application

to the nonattainment program or its component new source

review requirement. The NSPS program is applicable to

new sources without regard to the air quality of the region in

which a source is located, and was enacted in 1970. See 42

U.S.C. 1857c-6. Accordingly, the Section 111 NSPS defini-

tion of “stationary source” simply is not controlling for

purposes of the nonattainment program established in 1977

to cover selected*regions of the nation.?

'Section 111, 42 U.S.C. (Supp. IV) 7411 provides in pertinent part:

(a) For purposes of this section

os e a e

(3) The term “stationary source” means any building, struc-

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

pollution.

2The decisions of the Fourth and Ninth Circuits cited by respondents

(Br. in Opp. 5-6 & n.10) concern the NSPS program rather than the

nonattainment program, and were, as respondents concede, controlled

by the D.C. Circuit's decision in ASARCO Inc. v. EPA, 578 F.2d 319

(1978). They do not address the issue in this case.

3

Significantly, in establishing the nonattainment program

in 1977 Congress did adopt by reference the NSPS program

definition of the terms “modification” and “modified” that

are also used in the new source review program. See Section

171(4), 42 U.S.C. (Supp. IV) 7501(4), incorporating by

reference Section | 11(a)(4),42 U.S.C. (Supp. I'V) 741 1(a)(4).

By contrast, the 1977 Congress did not adopt the NSPS

definition for the term “stationary source”; nor did it pres-

cribe a separate definition (see pages 4-7, infra).3 Nor is the

term “stationary source” to be found among the phrases

defined for purposes of the Clean Air Act as a whole in

Section 302, 42 U.S.C. (Supp. IV) 7602. Respondents’

assertion that Congress has defined the term in a manner

that deprives the Administrator of discretion to promulgate

regulations offering the States the option of employing a

plant-wide approach to new source review is thus simply

incorrect.4 Respondents’ contention that Congress pres-

cribed a definition for the term at issue here is in fact

diametrically opposed to the court of appeals’ conclusion

‘In Section 171, 42 U.S.C. (Supp. IV) 7501, Congress did define

several other terms of art used in the statutory provisions governing the

nonattainment program.

‘Respondents have recast the question presented and framed much of

their discussion as though the Administrator had required the States to

adopt a plant-wide approach to new source review. See e.g. Br. in Opp.

i, 24-26. As explained in the petition (at 17) the use of a plant-wide

approach to new source review instead of the more intrusive equipment

unit-specific approach preferred by respondents is merely an option

made available to the States. Moreover, this option is available only to

those States that can show that their SIPs embracing it provide for the

required amelioration of air quality.

Respondents also err in suggesting (Pet. 9, 15) that the regulations

invalidated by the court of appeals represent a departure from long-

standing practice. As explained in our petition (at 7) the rules that were

replaced by those under review in this case themselves represented a

change of the agency’s original position on this issue. Because there

could have been no occasion for the agency to formulate any position

on the proper interpretation of the 1977 Act before 1977, respondents’

suggestion (Br. in Opp. 9) that the unit-specific definition had been in

place since 1971 is simply inaccurate.

4

that “Congress * * * supplied none” (82-1005 Pet. App. A9

n.22).5

2. Reviving another contention rejected below, respond-

ents argue here (Br. in Opp. 16-21) that the legislative

history of the 1977 Clean Air Act Amendments dictates that

new source review be conducted on a unit-specific (rather

than a plant-wide) basis. As noted, the court of appeals was

persuaded to the contrary that“ ‘the legislative history is at

best contradictory’ "(82-1005 Pet. App. Al7 n.39, quoting

government's brief). In fact, the convoluted legislative his-

tory of the new source review requirement, compiled during

the course of two different Congresses, does not directly

address the question presented here and does not support

the court of appeals’ judgment.

‘The court of appeals did suggest (82-1005 Pet. App. A9 n.22),

following its analysis in Alabama Power Co. v. Costle, 636 F.2d 323,

395-396 (D.C. Cir. 1979), that in the absence of any statutory definition

it was appropriate to look to the NSPS definition, Section 11 1(a)(3).

But, as in Alabama Power itself, the court’s observation was made

subject to the caveat that

EPA® ® * has authority to define the constituent terms of source

enumerated in[Section | 1 1(a)(3)] (“building, structure, facility or

installation”) in a manner that will best effectuate “the expressed

purposes of the Act.”

82-1005 Pet. App. A9 n.22, quoting Alabama Power Co. v. Costle,

supra, 636 F.2d at 396. Indeed, that is precisely what the agency has

done. The term “stationary source” is defined in the new source review

program regulations using the language of Section |11(a)(3), while the

constituent components of that definition are themselves defined so as

to authorize a plant-wide approach to new source review. 40 C.F.R.

51.18(j)(1 (i) and (ii); see also 40 C.F.R. §2.24(f)(1) and (2).

In this case the court of appeals correctly recognized that reference to

Section 11 1(a)(3) cannot obviate or alter the basic inquiry: to determine

the contours of the new source review program established in Section

172(b\6) by Congress. Regrettably, the court of appeals failed to

appreciate that because Congress nowhere expressed any intention to

limit the Administrator's discretion to frame the necessary definition,

its decision necessarily substitutes a judicial conception of what the

public interest requires for the Administrator's judgment.

5

A critical link in respondents’ argument is the 1977

Senate version of a bill to amend the Clean Air Act (see Br.

in Opp. 16-17, 20-21). Respondents assert that the Senate in

1977 contemplated unit-by-unit new source review. Assum-

ing that this is correct,® the strongest evidence for it in any

event is the fact that the Senate bill adopted the NSPs

definition of the term “stationary source” for all purposes

under the Act (see pages 2-4, supra).’ However, as pre-

viously noted, Congress ultimately chose not to make that

definition applicable to the new source review requirement.

Accordingly, any inferences that might be drawn about the

Senate’s intent in 1977 provide no insight into the meaning

of the final legislation.

*Such an assumption is not necessarily warranted. Respondents

description of the 1977 Senate bill and its legislative history is incom-

plete, and therefore misleading. The particular new source review

requirements of the 1977 Senate bill (derived from the 1976 Senate bill)

that are described by respondents were merely an interim measure, to be

applied prior.to July 1, 1979. See S. 252, 95th Cong., Ist Sess. § 13(a)

(1977), adding Section 1 13(g)(1) to the Act, reprinted in Staff of Senate

Comm. on Environment and Public Works, 95th Cong., 2d Sess.,[3] A

Legislative History of the Clean Air Act Amendments of 1977 at

630-634 (Comm. Print 1978) (hereinafter “eg. Hist.”); S. Rep. No.

95-127, 95th Cong., Ist Sess. 54-56 (1977), reprinted in 3 Leg. Hist. at

1428-1430. The Senate adopted a different approach to be applied after

that date, permitting construction of new or modified facilities in nonat-

tainment areas providing that the State had in effect an approved revised

implementation plan formulated in response to the amendments. In

order to secure approval for such a revised SIP, a State would have been

required to demonstrate, inter alia, that it provided for attainment of

the mandated national air quality standards by the end of 1982,

required major new or modified facilities to employ state-of-the-art

emissions control technology, and provided for sufficient emission

reductions from existing sources by 1982 to compensate for added

emissions from new facilities and permit timely attainment of applica-

ble air quality standards. S. 252, supra, § 13(b), amending Section

110(a)(3)( Aili) of the Act, reprinted in3 Leg. Hist. at 635-636; S. Rep.

No. 95-127, supra, reprinted in3 Leg. Hist. at 1428-1430. Accordingly,

the bearing of the legislative history respondents discuss upon the scope

of new source review intended to be required by the Senate after 1979 is

far from clear.

"S. 252, supra, § 39, adding Sections 302(k) and (m) to the Act,

reprinted in3 Leg. Hist. at 684-686.

6

Indeed, the new source review requirements of the Clean

Air Act Amendments of 1977 as they emerged from the

Conference Committee were derived primarily from the

House bill, rather than the Senate bill. The House bill called

for revised SIPs providing for attainment of air quality

standards by 1982 (with extensions of that date to 1987

available for certain pollutants) and reasonable further

progress in the interim; it also required establishment of a

permit program to govern construction and operation of

“new or modified stationary sources” similar to the new

source review requirement ultimately enacted.* The House

bill did not define the term “stationary source”; and we are

unaware of any indication in the bill or its legislative

history—and respondents have cited none—that this new

source review program was to be applied to each unit of

process equipment rather than on a plant-wide basis.

The new source review provisions of the bill that emerged

from the Conference Committee are primarily derived from

the 1977 House bill.? Like the House bill, but unlike the

H.R. 6161, 95th Cong., Ist Sess. § 117 (1977), adding Section

127(c)(2), (3) and (8) and (d), reprinted in 4 Leg. Hist. at 2332, 2333,

2335-2339; H. R. Rep. No. 95-294, 95th Cong., Ist Sess. 13-14 (1977),

reprinted in 4 Leg. Hist. at 2480-2481.

In lieu of the interim new source review provisions adopted by the

Senate (see page 5 note 6, supra) the House bill continued in effect ona

temporary basis EPA's Offset Ruling, 41 Fed. Reg. 55524 (1976). H.R.

6161, supra, § 117, adding Section 127(b)(2) to the Act, reprinted in 4

Leg. Hist. at 2331-2332; H.R. Rep. No. 95-294, supra, at 14, reprinted in

4 Leg. Hist. at 2481. The Offset Ruling was an interpretive rule, pro-

mulgated by the agency when Congress’ efforts to amend the Act in

1976 had failed, that set forth conditions undef which new sources could

be constructed in nonattainment areas, pending further legislation.

*The Conference bill adopted the EPA's Offset Ruling, with certain

modifications, as the basis for governing new source construction in

nonattainme..{ areas prior to July 1, 1979 n Air Act Amendments

of 1977, Pub. L. No. 95-95, Section 12%a), 9! Stat. 745. Both the

general nonattainment area requirements (Section 172 of the Act, 42

U.S.C. (Supp. 1V) 7502) and the specific new source review provision

7

Senate bill, the key term “stationary source” was left unde-

fined. The Conference Committee Report clearly reflects

the origin of the new source review provisions:

All implementation plan revisions must contain a per-

mit program for new or modified major facilities sim-

ilar to the program required in the House bill.

H.R. Rep. No. 95-564, 95th Cong., Ist Sess. 157 (1977),

reprinted in 3 Leg. Hist. at 537. And respondents point to

nothing in the legislative history that supports their claim

that the Conference bill precluded the Administrator from

approving SIPs employing a plant-wide new source review

mechanism. Thus the court of appeals correctly concluded

that the legislative history cited by respondents does not

support their contention that Congress foreclosed this

option.

3. Respondents appear to suggest (Br. in Opp. 4 & n.9)

that plantwide new source review permits repeated substan-

tial net increases in the air pollution emissions of a single

plant. This contention is doubly unfounded. First, the

applicable regulations require aggregation of successive

emissions increases over a reasonable time period for the

purpose of determining whether any given modification of a

major pollution source is subject to new source review. See

40 C.F.R. 51.18(j)(1)(viXa) and (b); see also 40 C.F.R. Part

51 App. S II(A)(6) (aggregation over a five-year period under

Offset Ruling); 40 C.F.R. 52.24(f)(6) (aggregation over a

five-year period under moratorium program).'° Second,

(Section 173 of the Act, 42 U.S.C. (Supp. IV) 7503) generally follow the

provisions of the House bill.

Respondents appear to suggest (Br. in Opp. 16-17, 19) that because

the 1976 Offset Ruling assumed that new source review would occur on

a unit-by-unit basis the 1977 Amendments to the Act should be inter-

preted to require the same. There are two major flaws in this reasoning.

First, Congress adopted the Offset Ruling only for the period prior to

July |, 1979. Second, Congress made clear that the Administrator

remained free to “modif[y] by rule” the requirements of the Offset

ae Clean Air Act Amendments of 1977, Section |12%a)(1) (91 Stat.

45).

See also 45 Fed. Reg. 52698, 52701 (1980).

8

any quarrel that respondents might have with the adminis-

trator’s particular de minimis threshold amounts is out-

side the scope of this proceeding. These significance thres-

holds were established by regulation, 40 C.F.R.

51.18(j)(1)(x), pursuant to the mandate of the court of

appeals in Alabama Power Co. v. Costle, supra, 636 F.2d

at 399-400, 405, see 45 Fed. Reg. 52705-52710 (1980), and

were not challenged by a timely petition for review. Intelli-

gent evaluation of these threshold significance levels requires

understanding of their relative magnitude compared to typ-

ical industria. emissions levels.'' Absent the detailed record

compiled for the administrative decision that is considered

upon a petition for review any effort to second-guess the

agency’s expert judgment is impermissible. '!?

4. Respondents argue (Br. in Opp. 24-26) that the expira-

tion of the 1982 deadline fixed by the 1977 Amendments for

attainment of air quality standards without attainment hav-

ing been achieved in many regions of the nation demon-

strates the invalidity of the regulations authorizing a plant-

wide approach to new source review, and militates against

further review. Respondents’ argument rests upon several

unsupported premises. They seem to assume that use of a

plant-wide approach either caused various regions to fail to

''In fact, the threshold significance levels are extremely modest. For

instance, the de minimis level for sulfur dioxide is 40 tons per year. 40

C.F.R. 51.18) 1)(xiii); 40 C.F.R. 52.24(1)(13). If a thousand plant

modifications resulting in additional pollution of a magnitude just

below this significance threshold occurred in the entire United States in

a year, the aggregate additional emissions could not exceed 40,000 tons

per year. By contrast, in 1978 total sulfu dioxide emissions in the

United States were 29.7 million tons. Nat, nal Commission on Air

Quality, To Breathe Clean Air 288 (Table 47) (1981). The additional

emissions permissible in this hypothetical would represent an increase

of .13% over the preexisting level.

'2The administrative record makes clear that the agency considered

the effect of numerous separate de minimis emissions increases upon air

quality in fixing the significance thresholds. 45 Fed. Reg. 52708 ( 1980).

9

attain the required degree of air quality improvement or

now prevents those regions from achieving that improve-

ment. In fact, there is no reason to believe that there is any

association between the source definition in force for new

source review purposes in a given region and success or

failure in achieving air quality improvement. Only thirty-

nine of the 111 nonattainment areas tentatively identified

by EPA have ever had in force an EPA-approved plant-

wide new source review procedure. The remaining nonat-

tainment areas have remained subject to unit-specific new

source review—yet still failed to meet the Act’s require-

ments. !3

'3Respondents’ argument also proceeds as though the Administra-

tor's regulations would permit construction of new stationary air pollu-

tion sources to proceed as before in areas that did not meet the 1982

deadline. On the contrary, pursuant to Section | 10(a)(2)(1), 42 U.S.C.

(Supp. IV) 7410(a)(2)(1), the Administrator has proposed to activate the

moratorium required by the Act on construction or modification of

major sources of air pollutants in areas with excessive concentrations of

those pollutants: 48 Fed. Reg. 4972 (1983).

Respondents’ quarrel (Br. in Opp. 25 n.55) with EPA's conclusion

that a moratorium is required by law is outside the scope of this

litigation. In any event, whether or not respondents agree with the

agency's position on that score, the Administrator has responded affir-

matively to insure that new facility construction cannot exacerbate air

quality deficiencies in nonattainment areas.

We note that EPA's position that a moratorium is required rests ona

straight-forward reading of the statute. Under the Clean Air Act a

construction moratorium must be imposed on areas whose SIPs do not

“meet [] the requirements of part D” of the statute. Section | 10(aX(2)1),

42 U.S.C. (Supp. IV) 7410(a)(2)(1). One of those requirements is that

the SIP “provide for” attainment by the end of 1982. Section 172(a\ 1),

42 U.S.C. (Supp. IV) 7502(a)(1). See 48 Fed. Reg. 4974 (1983).

The applicability of the moratorium to nonattainment areas does not

moot this case. As explained in the petition (82-1591 Pet. 6) the regula-

tions in dispute govern the scope of the moratorium as well as new

source review. Moreover, for those areas that have secured an extension

of the 1982 deadline for meeting air quality standards for ozone and

carbon monoxide until 1987, pursuant to Section |72(a)(2) of the Act,

42 U.S.C. (Supp IV) 7902(aX2), the question of the scope of new

source review continues to be of substantial importance. Of course, if

respondents’ contention that the statute does not impose a moratorium

in the present circumstances were correct, the scope of new source

review would be of even greater practical importance.

10

5. Respondents’ argue (Br. in Opp. 23-24) that the ques-

tion in this case should be left to Congress. But Congress, in

enacting the 1977 Clean Air Act Amendments, left the task

of defining “stationary source” to the agency—a delegation

the court of appeals failed to respect. In any event, there can

be no confident prediction that Congress will act one way or

another on this point in the near term. Indeed, just like the

94th Congress, which proved unable to produce amend-

ments to the Act in 1976 in the face of a similar nonattain-

ment situation, the 97th Congress proved unable to legislate

on this subject in 1982. The Senate bill respondents cite did

not see floor action; the House Committee did not even

report out a bill. Thus the views expressed in the Senate

Report upon which respondents rely (Br. in Opp. 24) do not

represent the intentions of the 97th Congress, much less

those of the 95th Congress that adopted the provisions in

controversy, and provide no basis for allowing the errone-

ous decision of the court of appeals to stand.

CONCLUSION

For the foregoing reasons and those stated in the petition,

it is respectfully submitted that the petition for a writ of

certiorari should be granted.

Rex E. Lee

Solicitor General

May 1983

DOJ.1983-05