Petitioners Reply Brief — Alabama Power Co. v. Sierra Club

Tree Court, US.

No. 83-1429 JUN T 1804

_ — CLERK

IN THE

Supreme Court of the United States

OCTOBER TERM, 1983

ALABAMA POWER Co., et al.,

Petitioners,

v.

SIERRA CLUB, et al.,

Respondents.

On Petition for a Writ of Certiorari to the

United States Court of Appeals

for the District of Columbia Circuit

REPLY BRIEF FOR PETITIONERS

ALABAMA POWER CO., ET AL.

HENRY V. NICKEL

(Counsel of Record)

F. WILLIAM BROWNELL

MICHELE POLLAK

HUNTON & WILLIAMS

P.O. Box 19280

2000 Pennsylvania Ave., N.W.

Washington, D.C. 20086

202/955-1500

Counsel for Petitioners

Alabama Power Co., et al.

Wis0n - Eres Paiwrine Co.. Inc. - 789-0096 - WasninacTon, D.C. 20001

TABLE OF CONTENTS

TABLE OF AUTHORITIES ......

ARGUMENT

I. CERTIORARI SHOULD BE GRANTED TO

ESTABLISH THE STANDARD OF REVIEW

APPLICABLE TO AGENCY INTERPRETA-

TIONS OF LAW

II. CERTIORARI IS NECESSARY TO ESTAB-

LISH THAT EPA, IN THE FACE OF CON-

GRESSIONAL SILENCE, MAY ADOPT

RULES THAT AVOID ABSURD RESULTS...

III. THE POTENTIAL SOCIAL AND ECONOMIC

IMPACTS OF THE D.C. CIRCUIT’S DECI-

SION CALL FOR REVIEW BY THIS COURT..

CFT tcieicasesnnsinsntetiiereajeiniaiestierenaiitieitnicidiipiesieahiaaiioes

Page

ii

TABLE OF AUTHORITIES

CASES: Page

Adamo Wrecking Co. v. United States, 486 U.S.

EARS Ra oar een eee 2

Andrus v. Sierra Club, 442 U. s. 847 aa 5

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

(6th Cir. 1975), cert. denied, 425 U.S. 934

(1976) 5

Board of Governors of the Federal Reserve Sys-

tem v. Investment Company Institute, 450 U.S.

EET ISS 2 A PAR ee eT ee 5

Chevron U.S.A. Ine. v. NRDC, cert. granted, 108

S.Ct. 2427 (May 81, 1983) (No. 82-1005 and

ES ESET CETTE TSS. passim

FCC v. WNCN Listeners Guild, 450 U.S. 582

EE ETSY Se Ce er 5

FEC v. National Right to Work Committee, 459

MBB SSE Ea eee ae 5

FEC v. Democratic Senatorial Campaign Com-

mittee, 454 U.S. 27 (1981) om 5

Kennecott Copper Corp. v. Train, 526 F.2d 1149

(9th Cir. 1975), cert. denied, 425 U.S. 985

EEE OSI. SI EE oo ea nC ee 5-6

Morrison-Knudsen Construction Co. v. Director,

OWCP, 108 S.Ct. 2045 (1983) 5

Motor Vehicle Manufacturers Asa’n v. Ruckelshaus,

719 F.2d 1159 (D.C. Cir. 1983) 8

NLRB v. Local Union No. 108, Int'l Ass’n of Iron

Workers, 484 U.S. 885 (1978) = 5

NDRC v. EPA, 529 F.2d 755 (5th Cir. 1976) ...... 6

Sierra Club v. EPA, 719 F.2d 486 (D.C. Cir.

RE a passim

Train v. NRDC, 421 U.S. 60 (1975) 5

Union Electric Co., 427 U.S. 246 (1976) ................ 2,5

Vermont Yankee v. NRDC, 485 U.S. 519 (1978) _.. 6

STATUTES:

The Clean Air Act, 42 U.S.C. § 7401, et seg. (Supp.

V 1981)

§ 110, 42 U.S.C. § 7410 2,9

§ 128, 42 U.S.C. § 7423 passim

iii

TABLE OF AUTHORITIES—Continued

Page

§207(b), 42 U.S.C. §7541(b) (Supp. V

1981) 8

§ 807 (b) (1), 42 U.S.C. § 7607(b) (1) .......... 2

§ 807 (b) (2), 42 U.S.C. § 7607 (b) (2) 2

FEDERAL REGISTER:

45 Fed. Reg. 34802 (1980) ........... ; 8

MISCELLANEOUS:

44 U.S.L.W. 8449 (Feb. 2, 1976) 2.20.0... ccceceeeeeeeee 6

44 U.S.L.W. 3374 (Dec. 28, 1975) 6

[Current Developments] ENv’T REP. (BNA) (May

NE cennciiceponedneciidbenbehtabtiadet Uae sist sedate chesetie cdnibsarnalileaas 7

IN THE

Supreme Court of the United States

OCTOBER TERM, 1983

No. 83-1429

ALABAMA POWER Co., et al.,

- Petitioners,

SIERRA CLUB, et al.,

Respondents.

On Petition for a Writ of Certiorari to the

United States Court of Appeals

for the District of Columbia Circuit

REPLY BRIEF FOR PETITIONERS

ALABAMA POWER CO., ET AL.

ARGUMENT

In this case, Federal Respondent agrees with Peti-

tioners that the lower court erred in substituting its

judgment on complex, technical issues for that of the

Environmental Protection Agency (EPA or Agency).’

Nevertheless, both Federal Respondent and Respondents

Sierra Club, et al. (hereinafter Sierra Club) oppose cer-

1 See Brief of Federal Respondent 8. Indeed, there apparently

was serious discussion within the government as to whether to seek

certiorari in this case, leading the government to request an exten-

sion of time “to file certiorari to consider those recommendations

{of interested government agencies concerning certiorari], to deter-

mine whether to seek certiorari, and, if we decide to do so, to

prepare and print a petition.” Application for An Extension of

Time in Which to File a Petition For a Writ of Certiorari on Be

half of EPA 8 (March i984).

2

tiorari. For the reasons discussed below, respondents’

arguments in opposition to certiorari are without merit.

I. CERTIORARI SHOULD BE GRANTED TO ESTAB-

LISH THE STANDARD OF REVIEW APPLICABLE

TO AGENCY INTERPRETATIONS OF LAW

Under the Clean Air Act,? the D.C. Circuit has exclu-

sive jurisdiction to review EPA actions of national scope

and effect. CAA § 307(b) (1). Such actions include EPA

rules, such as those promulgated by EPA under § 123 of

the Act, which govern the requirements states must in-

clude in their implementation plans mandated by § 110

of the Act. Once the D.C. Circuit has spoken, no court,

save thie Court on review of a D.C. Circuit opinion, can

consider the correctness of the D.C. Circuit’s pronounce-

ment on the validity of such rules.’

In this setting, the standard of review that the D.C.

Circuit will apply must be known in order to enable rule-

making participants to identify the issues that can legiti-

mately be presented on appeal. If judicial review rights

of those affected by EPA’s rules are to be forever fore-

closed after expiration of the 60-day review period under

§ 307(b) of the Act, fundamental fairness dictates that

affected parties know the ground rules that will be ap-

plied in determining the validity of EPA’s actions.

Contrary to Sierra Club’s assertions, Sierra Club Brief

9-10, 12, the ground rules governing judicial review of

agency interpretations of law are not fixed in the D.C.

Circuit and were not properiy applied by the court below.

In each case that comes before the court, the D.C. Cir-

2 The Clean Air Act, 42 U.S.C. § 7401, et seg. (Supp. V 1981)

(hereinafter referred to as “CAA” or “the Act”). (For convenience,

all further citations will be to the Act. Parallel citations to the

U.S. Code are given in the Table of Authorities.)

8 Clean Air Act § 8307(b) (1), (2); see Adamo Wrecking Co. v.

United States, 486 U.S. 275, 289 (1978) (Powell, J., concurring) ;

Union Electric Co. v. EPA, 427 U.S. 246, 270-71 (1976) (Powell, J.,

concurring) .

3

cuit chooses between a “deference” standard and a “de

novo review” standard in judging agency interpreta-

tions of statutory terms. Petition for Certiorari of Ala-

bama Power Co., et al. 16-17 (hereinafter “Pet.”). For

example, while the lower court sustained Sierra Club’s

challenge to EPA’s interpretation of the technical statu-

tory term “good engineering practice’ (GEP) in this

case, in another recent case, Motor Vehicle Manufac-

turers Ass’n v. Ruckelshaus, 719 F.2d 1159 (D.C. Cir.

1983), the lower court rejected an industry challenge and

deferred to EPA’s similar interpretation of GEP under

another provision of the Act.

In the instant case, EPA interpreted GEP to refer

to what engineers had done in the past. While this inter-

pretation of GEP found support in the plain meaning of

the statute and its legislative history, it was nevertheless

rejected by the court.‘ By contrast, in the other recent

decision, the D.C. Circuit rejected a challenge by indus-

trial petitioners to EPA’s interpretation of “good engi-

neering practices” under § 207(b) of the Act. In affirm-

ing EPA’s interpretation in that case, the court found

that it was properly based upon “real world” experience

and “the reasonable capability of personnel and equip-

ment”—i.e., actual engineering practice. According to

the lower court, the ‘““Administrator’s resolution of thorny

technical problems [in defining “GEP”] . . . represents

a reasonable accommodation of conflicting interests en-

trusted to his care. In this respect .. . ‘a reviewing

court must be at its most deferential.’”’* In sum, faced

with consistent Agency interpretations of virtually iden-

tical statutory language, the D.C. Circuit applied differ-

* See Pet. 20-22; Sierra Club v. EPA, 719 F.2d 436, 457 (D.C.

Cir. 1983), Appendix to Petition for Certiorari at 42a-43a (herein-

after “App.”).

5 See Motor Vehicle Manufacturers Ass'n, 719 F.2d at 1167; 45

Fed. Reg. 34802, 34812 (1980).

* Motor Vehicle Manufacturers Ase'n, 719 F.2d at 1167 (citation

omitted).

4

ent standards of review to produce dramatically different

results.

While Federal Respondent, like Petitioners, disagrees

with the lower court’s substitution of its interpretation

of technical terms such as “GEP” and “excessive concen-

trations” for that of EPA,’ Federal Respondent nonethe-

less states that the lower court’s “rejection of EPA’s

interpretation stemmed not from its failure to accord the

proper degree of deference, but from its conclusion that

the legislative history and objectives of Section 123 com-

pelled a different outcome.” Brief of Federal Respondent

8. This statement makes little sense, in light of the gov-

ernment’s assertion that “the court of appeals could have

(and should have) accepted EPA’s definition of key tech-

nical terms in Section 123.” Jd. (emphasis added). If

the lower court’s independent consideration of ambiguous

legislative history and statutory objectives, in the face of

admittedly reasonable Agency conclusions, does not con-

stitute a failure to give deference (as the government

suggests), this Court should take this opportunity to clar-

7 Federal Respondent argues that the lower court’s holdings on

“GEP stack height credit” and ‘‘excessive concentrations” are “ques-

tionable, because the statute itself and other legislative history

lend support to EPA’s reliance on traditional engineering practice.”

Furthermore, Federal Respondent argues, as does Petitioner, that

“Section 123 itself arguably adopts the traditional ‘two and a half

times’ formula as a good estimate of the GEP height, and the House

Report ‘affirms’ that formula.” Brief of Federal Respondent 10

& n.10.

Curiously, Sierra Club suggests that Congress rejected earlier

EPA guidelines in the 1977 Amendments to the Clean Air Act.

See Brief of Sierra Club 3. This statement is seriously misleading.

As the lower court recognized, Congress adopted in 1977 the

essence of EPA's earlier definition of “GEP.” See Sierra Club v.

EPA, 719 F.2d at 441, App. 8a. Congress only rejected that portion

of EPA’s earlier guidance that exempted sources from this GEP

rule if they used “best available control technology” or if continu-

ous controls were infeasible. Jd. These aspects of the earlier

guidance were not relied upon by EPA in the § 123 rulemaking and

are not at issue in this case.

_

oO

ify its prior holdings that appellate courts must accept

“reasonable” interpretations of the Clean Air Act.®

Given the confusion demonstrated by Federal Respond-

ent as to the appropriate standard of judicial review and

given the number of recent D.C. Circuit cases involving

EPA and other agency interpretations of law which have

required review by this Court,’ review of this case is

8 See Union Electric Co., 427 U.S. at 256; Train v. NRDC, 421

U.S. 60, 75 (1975).

*The D.C. Circuit’s shifting standard of review has led this

Court to review and to reverse the D.C. Circuit in numerous cases

over the past few years where the degree of deference to an agency’s

interpretation was in dispute. See Morrison-Knudsen Construction

Co. v. Director, OWCP, 103 S.Ct. 2045 (1983) (OWCP interpreta-

tion of the term “wages” under the Longshoreman and Harbor

Workers’ Compensation Act); FEC v. National Right to Work

Committee, 459 U.S. 197 (1982) (FEC interpretation of the term

“member” of a corporation under the Federal Election Campaign

Act (FECA)); FEC v. Democratic Senatorial Campaign Commit-

tee, 454 U.S. 27 (1981) (FEC interpretation of FECA language

concerning agency relationships) ; FCC v. WNCN Listeners Guild,

450 U.S. 582 (1981) (FCC implementation of the term “public in-

terest” under the Communications Act); Board of Governors of

the Federal Reserve System v. Investment Company Institute, 450

U.S. 46 (1981) (Federal Reserve Board definition of “closely re-

lated to banking” under the Bank Holding Company Act); Andrus

v. Sierra Club, 442 U.S. 347 (1979) (CEQ interpretation of NEPA

language); NLRB v. Local Union No. 103, Int’] Ass’n of Iron

Workers, 434 U.S. 335 (1978) (NLRB interpretation of term “un-

fair labor practice’ under the NLRA). See also Chevron U.S.A.

Ine. v. NRDC, cert. granted, 103 S.Ct. 2427 (May 31, 1983) (No.

82-1005 and consolidated cases) (certiorari granted to review D.C.

Circuit’s rejection of EPA interpretation of the term “source”

under the nonattainment provisions of the Clean Air Act.).

Sierra Club argues that this Court’s denial of petitions for

certiorari in the mid-1970s in cases dealing with the use of “dis-

persion techniques” under the 1970 Clean Air Act should lead it to

deny certiorari here. See Brief of Sierra Club 9. To the contrary,

the courts in those cases deferred to EPA's implementation of the

Clean Air Act’s restrictions on the use of dispersion techniques,

rejecting challenges to EPA's interpretation of the Act. See Big

Rivers Electric Corp. v. EPA, 523 F.2d 16 (6th Cir. 1975), cert.

denied, 425 U.S. 934 (1976); Kennecott Copper Corp. v. Train,

6

necessary to give the lower court and those that must

appear before the D.C. Circuit much needed guidance on

the scope of its review powers. As in Vermont Yankee

v. NRDC, 485 U.S. 519 (1978) (where the Department

of Justice also opposed certiorari), this case provides an

appropriate opportunity for this Court to speak out on

an important question of administrative law. Through

this case, the Court can establish a controlling precedent

that will put an end to the D.C. Circuit’s ad hoc ap-

proach to determining what standard it will use to re-

view agency interpretations of law under the Clean Air

Act and similar statutes.

II. CERTIORARI IS NECESSARY TO ESTABLISH

THAT EPA, IN THE FACE OF CONGRESSIONAL

SILENCE, MAY ADOPT RULES THAT AVOID

ABSURD RESULTS

Federal Respondent, like Petitioners, disagrees with

the lower court’s decision on plume impaction and con-

tends that “EPA should have been allowed to fill the gap

created by Congress.” Brief of Federal Respondent 9.

Sierra Club, by contrast, argues that “[t]he absence of a

[specific] plume impaction exemption in § 123 must...

be interpreted as a deliberate congressional choice to deny

such treatment here.” Brief of Sierra Club 13. The lower

court’s decision therefore presents a major issue of ad-

ministrative law, involving the authority of a federal

agency to interpret its enabling statute in a manner

which avoids absurd results that were clearly never con-

526 F.2d 1149 (9th Cir. 1975), cert. denied, 425 U.S. 9385 (1976) ;

see also 44 U.S.L.W. 3449 (Feb. 2, 1976); 44 U.S.L.W. 3874 (Dec.

23, 1975) ;¢f. NRDC v. EPA, 529 F.2d 755, 760 (5th Cir. 1976)

(court of appeals approved EPA's 2.5 times source height GEP

rule in the face of NRDC’s challenge). Those cases therefore pro-

vide no support for denial of certiorari here since, in this case,

the court of appeals refused to defer to EPA's interpretation of

the Act, requiring a redirection of the § 110 state air programs.

Whenever asked to review a case rejecting EPA's construction of

the Act and requiring such redirection, this Court has granted the

petition. See Pet. 2-8.

7

templated by Congress in enacting the provision.” Cer-

tiorari is needed to establish that, contrary to Sierra

Club’s contention, congressional silence on “plume im-

paction” should not be construed “as a deliberate con-

gressional choice to deny such treatment” in these rules.

Brief of Sierra Club 13; see Pet. 22-26.

III. THE POTENTIAL SOCIAL AND ECONOMIC IM-

PACTS OF THE D.C. CIRCUIT’S DECISION CALL

FOR REVIEW BY THIS COURT

Federal Respondent does not dispute the potentially

serious social and economic impacts that could result from

the D.C. Circuit’s decision. To the contrary, the Solicitor

General’s motion for enlargement of time to consider

EPA’s recommendation on certiorari, see supra note 1,

and recent EPA statements concerning interim imple-

mentation of § 123"' reflect the seriousness of the lower

10 Pet. 22-26. As Appendix A to this brief (hereinafter “Br.

App. A”) shows, over 40 states have very high terrain features

within their borders. To suggest, as the lower court did, that Con-

gress was “indifferent” to “harsh” discrimination against economic

development in rugged terrain areas is to impute a fundamentally

irrational intent on the part of the vast majority in Congress.

Such an interpretation would be inconsistent with the law of this

Court. See Pet. 25 & n.55.

11 EPA explains in an interim policy statement issued in May

1984 that, since the lower court has set aside significant portions

of the final § 123 rules,

[the Agency will try) to avoid actions that may need to be

retracted later... [including action on] specific emission limi-

tations ... and requests to redesignate areas to attainment....

{Current Developments! ENv’T Rep. (BNA) 85 (May 18, 1984).

Moreover, EPA states that actions already taken will have to be

reviewed and may require revision as a result of any remand

proceeding. Id.

The need to conduct numerous, time-consuming individual plant

reviews and to reassess area classifications are the types of serious

impacts that led Federal Respondent to seek certiorari in a recent

case involving the nonattainment provisions of the Clean Air Act.

See Petition for Certiorari of EPA at 23-24, EPA v. NRDC (No.82-

1591) (consolidated with Chevron U.S.A. Inc. v. NRDC (No. 82-

1005) ). Moreover, while that case could have required action in

8

court’s decision to the administration of the Act. Sierra

Club, on the other hand, attempts to discount the poten-

tial impacts of the lower court’s decision. Sierra Club

thus observes that “[t]he few facilities with stacks above

65 meters consist almost exclusively of 148 power plants

and four copper smelters.” Brief of Sierra Club 6-7

(emphasis added).

The “minimal impact” assertions of Sierra Club do not

withstand analysis. The 148 power plants referred to

by Sierra Club constitute 28% of the fossil fuel-fired

electric generation capacity in this nation, serving po-

tentially more than 70 million customers. These plants

are located in 41 states, see Br. App. B; many of them

are located in areas of rugged terrain that will be es-

pecially severely affected by the lower court’s decision,

see Br. App. A; and still others are located in industrial

areas where false stack height assumptions will affect

neighboring sources and industrial growth. See Pet. 27.

Finally, the lower court’s mandate will affect future eco-

nomic development in any area where a new power plant

or other major industrial facility attempts to locate.”

The contention of Sierra Club that this case is of little

practical consequence is also belied by their own state-

ments in the administrative proceedings in this case. At

an EPA public hearing held on December 19, 1983 to

discuss the implications of the lower court’s decision, for

example, a representative of respondent NRDC testified

that “[i]n remanding [the GEP rule], the vourt asked

potentially 31 states, this case could require imple'nentation plan

revisions in at least 41 states. See Appendix B to this brief (here

inafter “Br. App. B”). It is thus understandable that Federal Re

spondent has not disputed the practical significance of this case.

'2 Pet. 27 n.59 & accompanying text. The potentially serious,

adverse impacts of the lower court's decision on other industries

are discussed in the briefs that have been filed before this Court by

representatives of the smelter industry, the coal industry, the paper

industry, and others. It should be noted that Sierra Club refused

to consent to the filing of briefs explaining the potential effects

of the lower court's decision on other industries.

9

EPA to consider whether the use of the formula could

ever be justified.” Transcript of Public Hearing Regard-

ing GEP Stack Height Regulations 34 (emphasis added).

Further, NRDC testified that abandonment of the GEP

formula could require case-by-case examination of ‘429

stacks over the de minimis height.” Id. at 34-35.

Finally, Federal Respondent suggests that, with respect

to the GEP formula, the lower court has “left the EPA

considerable discretion in implementing the court’s man-

date” on remand. Brief of Federal Respondent 12. In

light of the errors in the lower court’s decision, the po-

tentially significant impacts that could flow from these

errors, and the position of NRDC before EPA that the

Agency has no flexibility on remand under the lower

court’s decision, this general statement is not reassuring.

At most, it holds open the promise of further litigation

in the D.C. Circuit, creating further uncertainty for the

states and regulated industries.

In sum, review by this Court is justified by the prac-

tical importance of this case and the need to settle the

law governing this important aspect of the § 110 state-

federal air quality programs.

CONCLUSION

For the reasons discussed in the Petition for Certiorari

and those additional reasons presented above, this Court

should grant certiorari and reverse the decision of the

D.C. Circuit. Further, as described in the accompanying

Motion to Defer Decision on this Petition, another

Clean Air Act case that is currently before this Court

for decision raises standard of review issues of a nature

similar to those presented in this case. See Chevron

U.S.A. Ine. v. NRDC (No. 82-1005 and consolidated

cases). Since resolution of that case may have a direct

bearing on the Court’s dezision on this Petition for Cer-

tiorari, Petitioners respectfully request that action on this

10

petition be withheld pending a decision by this Court in

Chevron U.S.A. Inc. v. NRDC, and the filing of a supple-

mental brief by Petitioners on the significance of that

decision.

Respectfully submitted,

HENRY V. NICKEL

(Counsel of Record)

F. WILLIAM BROWNELL

MICHELE POLLAK

HUNTON & WILLIAMS

P.O. Box 19230

2000 Pennsylvania Ave., N.W.

Washington, D.C. 20036

202/955-1500

Counsel for Petitioners

Alabama Power Co., et al.

June 7, 1984

* of am ee.

ore

rn oS

-~

APPENDICES

APPENDIX A

SOUTH cakora |

|

pms cca es amsemesen, f

( PLEEMO'S i yw oramal

OUTLINE MAI’

on THK

UNITED STATES

AREAS OF THE COUNTRY

CONTAINING MAJOR

RUGGED TERRAIN FEATURES

_ r -*

; * aé

| Fagot

| é

.

/ } ee “s

F * No, On rT

— y

j

t ~

> 7 bal ts ; Ny ars 1 P ° - ws . 4 f

| a : . ~ a J . ny

O ~ -~ Pi

te P , z « «

wiNNE A / z *

“ “ P 4 4 o -- :

" ¥ e ‘3:39

P ¢ . d

* a ' a i

/ . ‘ .

a ss a a e z * «*

* 8.

|

| : ” a

i - co wy a © e® er ya® 7 “-

© r a 2 |

Mey, ~ . oSe os

. io A “ . 3

ry 9. wa e @ t

; ® * alien: 4 : oe “8

7 « tal

° @® t e® «6 e dy ait

° , .s * aG ~ 5

} ° @ A [2 v re a ee =

| : . * peace n

e .

; ce . ” gi © Mae,

a” »

o 4 2 4g e ‘ e s s " > |

a

4 AR ? we ¥ A “ = &

> NEW mey ARK ANS! s °. 2 wi

A

é e * o * . ed

i “ gto* + af

| 4 ac agama y

° e -

x A Ss ¢ 2 e } (TLINE MAP

4 f ov Tee

eo” e ‘ @ es se : UNITED STATES

c . 4 ° 4%

* * é va ss } ‘ \ eS. aw

Vv 6 . a - ° \ sae ‘an

= ALASKA e yr" ‘s = ‘ cD mremiaus e

? '

ps if ‘

/ Wa, A

; { @ 22" . Seer

naw a ov ase wr

— 7 . va won,

ee eee ee

eee ee ee toe

(THIS PAGE INTENTIONALLY LEFT BLANK)