Petition for Writ of Certiorari — General Motors Corp. v. United States

(i) ~ Supreme Court, U.S. |

- ) FILED

~O-3869 SEP 5 1989

No. 89- JOSEPH F. SPANIOL, JR.

ES

IN THE

Supreme Court of the Gnited States

OCTOBER TERM, 1989

GENERAL Motors CORPORATION,

Petitioner,

v.

UNITED STATES OF AMERICA,

Respondent.

PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS

~ FOR THE FIRST CIRCUIT

- THEODORE L. GARRETT

(Attorney of Record)

COVINGTON & BURLING

1201 Pennsylvania Avenue, N.W.

P.O. Box 7566

Washington, D.C. 20044

Of Counsel: (202) 662-5398

PATRICK J. MCCARROLL

General Motors Corporation

New Center One Building

3031 West Grand Boulevard

Detroit, Michigan 48232

September 1989

AD

WW \\

QUESTIONS PRESENTED

In 1985 the Commonwealth of Massachusetts re-

vised its Clean Air Act implementation plan to pro-

vide an extension of time to 1987 for General Motors

to comply with certain air regulations. Pursuant to a

published EPA policy, the extension allowed GM time

to build a new $200 million facility that achieved lower

emissions than were otherwise required. EPA failed

to approve or disapprove the Commonvvealth’s revi-

sion, and instead filed suit against GM seeking pen-

alties for failure to meet the original deadline. The

questions presented are:

1. Where EPA has failed to act on a revision to

a state plan within four months, as required by the

Clean Air Act, may the government bring an action

for civil penalties against a company that is in com-

pliance with the revised plan?

2. Whether the decision below undermines the abil-

ity of states to make ongoing policy choices as to air

pollution control measures, and creates disincentives

for even-handed administration of the Act?

3. Whether the decision below is contrary to the

language and intent of Congress and decisions of this

Court and other circuit courts?

TABLE OF CONTENTS

QUESTIONS PRESENTED ................0c.00seeessseceseeees

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

STATEMENT OF THE CASE. ...............cccccscccocecsscees

A. Statutory Background ................ccccccce-

C. The Proceedings Below ..............cccccc000--

I. THE DECISION BELOW CREATES A CON-

FLICT IN THE CIRCUITS. ............0ccccccccccseeee

Il. THIS CASE PRESENTS MAJOR ISSUES OF

FEDERALISM, COMITY AND THE IMPLE-

MENTATION OF THE CLEAN AIR ACT ......

Ill. THE ISSUE PRESENTED INVOLVES IMPOR-

TANT, RECURRING QUESTIONS CONCERN-

oa a UNDER THE CLEAN

BESS ..c01ec1ecsssseseeseesmmannnennaniennnaetias

CONCLUSION

APPENDIX

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18

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TABLE OF AUTHORITIES

Cases Page

American Cyanamid Co. v. EPA, 810 F.2d 493 (5th

A passim

Bethlehem Steel Corp. v. EPA,782 F.2d 645 (7th

Ti cecal ccdretnensnscatncopnesoncesoccorecse 3,14

Connecticut v. EPA, 696 F.2d 147 (2d Cir.

ESL ST EPCRA TT EEE 3

Council of Commuter Orgs. v. Thomas 799 F.2d 879

TT tii cincicnsceasatnteenmecnsenencenccs 13

Duquesne Light Co. v. EPA, 698 F.2d 456 (D.C.

as os dercensceturesincidcenseccoeosses 10,13

Indiana & Michigan Elec. Co. v. EPA 733 F.2d 489

TE cre 14

Sierra Club v. Indiana-Kentucky Elec. Corp., 716

Pe BRED CEU COP. BOGB) 220200000000....cccccccccecceee 16-17

Train v. Natural Resources Defense Council, 421

ila iccntddccsncsestoorecorscscessoee 4,13,14

United States v. General Motors Corp., No. 87-2068

(D. Mass. May 16, 1988) ...........cccccccccsesseeeees 6,7,14,15

United States v. General Motors Corp., 876 F.2d -

TT 1,7-9

Statutes

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ID cnsccccccccccccescssoscscsccccscceseeee 4

Se Be cnc scccccseccscccssssscesssssssssoscoccccee 3

a ccccccesscessescccocssssosscccees 3

42 U.S.C. § 741O(aN 2K 1982) ...............csseesesssererreeees 2,4,13

42 U.S.C. § T41O(aNSK1982) ..............cccccesesssssesseees 2,4,13

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iv

Table of Authorities Continued

Administrative Actions

46 Fed. Reg. 51,386 (1981)

53 Fed. Reg. 36,011 (1988)

310 CMR 7.18(7)

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IN THE

Supreme Court of the Gnited States

OCTOBER TERM, 1989

No. 89-

GENERAL Motors CORPORATION,

Petitioner,

Vv.

UNITED STATES OF AMERICA,

Respondent.

PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS

FOR THE FIRST CIRCUIT

Petitioner General Motors Corporation! prays that

a writ of certiorari issued to review the opinion and

judgment of the United States Court of Appeals for

the First Circuit in this case.

Opinion Below

The opinion of the Court of Appeals is reported at

876 F.2d 1060, and is reprinted in the Appendix to

this petition at la.

' Subsidiaries and affiliates of General Motors are set forth in

the Appendix at 19a pursuant to Rule 28.1.

Jurisdiction

The decision below was rendered on June 7, 1989.

The jurisdiction of this Court is invoked pursuant to

28 U.S.C. § 1254(1) (1982).

Statutes And Regulations Involved

This case involves a Clean Air Act enforcement

action by the Environmental Protection Agency (EPA)

against General Motors. Under the Act, EPA is re-

quired within four months to approve or disapprove

revisions to State Implementation Plans (SIPs). 42

U.S.C. § 7410(aX2), (3) (1982). The principal issue in

this case is whether EPA’s failure to do so prevents

it from enforcing the prior state plan.

STATEMENT OF THE CASE

The questions presented in this case raise funda-

mental issues concerning the appropriate division of

authority between the federal government and the

states in the establishment and implementation of

State Implementation Plans under the Clean Air Act.

The Clean Air Act requires EPA to act promptly,

within four months, either to approve or disapprove

a revised SIP. EPA’s refusal to take timely action

on a SIP revision by a state, and EPA’s decision

instead to enforce the old SIP, unlawfully interferes

with the state’s right to select the regulatory alter-

native it will use to attain federal standards. Because

of this fundamental infringement of state preroga-

tives, the Fifth Circuit held in a similar case that

EPA may not collect penalties under the old SIP.

American Cyanamid Co. v. EPA, 810 F.2d 493 (5th

Cir. 1987).

Expressly disagreeing with the Fifth Circuit’s ap-

proach in the Cyanamid case, the court below held

that EPA may bring an enforcement action against

General Motors despite EPA’s failure to-act on a SIP

revision in a timely manner. The First Circuit ac-

knowledged that Congress did not intend the states’

legitimate policy choices to be held hostage to EPA’s

schedule. Without citing any concrete factual or legal

basis for its conclusion, the First Circuit held that an

enforcement bar is too drastic a remedy. GM’s po-

sition would in fact not bar federal enforcement, but

would simply require EPA to take prompt action on

SIP revisions as required by law—a matter wholly

within EPA’s ability to control. The decision below

creates a conflict in the circuits and raises important

and recurring issues concerning the enforcement of

the Clean Air Act.

A. Statutory Background

The Clean Air Act was designed to create a part-

nership between the federal government and the

states in the regulation of air pollution.? Under the

statute, the basic division of authority is straight for-

ward: the federal government, through EPA, estab-

lishes national air quality goals, called the National

Ambient Air Quality Standards. 42 U.S.C. § 7409

(1982). Each state then has the responsibility for es-

tablishing and administering a State Implementation

Plan that will achieve those standards within its

boundaries. 42 U.S.C. § 7410 (1982).

The statute emphasizes that ‘‘[eJach state shall have

the primary responsibility for assuring air quality

2 Bethlehem Steel Corp. v. EPA, 782 F.2d 645, 647 (7th Cir.

1986); Connecticut v. EPA, 696 F.2d 147, 151 (2d Cir. 1982).

within the entire geographic area comprising such

[s]tate... .” 42 U.S.C. § 7407(a) (1982). The Act

gives each state the freedom to design its SIP as it

chooses, selecting whatever mix of regulatory require-

ments it believes will best attain the national stand-

ards in a manner consistent with the state’s political,

economic and social policy concerns. The statute re-

quires EPA review and approval of a SIP before it

comes into force. However, so long as a SIP meets

the basic statutory requirements, EPA must approve

it. Train v. Natural Resources Defense Council, 421

U.S. 60, 79 (1975).

Congress anticipated that the design and adminis-

tration of appropriate SIPs would be an ongoing proc-

ess for the states. The statute therefore permits the

states to amend their SIPs from time to time as they

deem appropriate and requires EPA to approve and

enforce the amended SIPs so long as they meet the

minimum statutory requirements. When a SIP is pro-

mulgated or revised, EPA is required to approve or

disapprove it within four months. 42 U.S.C.

§ 7410(aX2), (3). This four-month deadline requires

EPA to render a final decision in a timely fashion,

so that the state may proceed to administer and en-

force its plan with minimal disruption and confusion.

In this case, EPA left the Commonwealth of Mas-

sachusetts, General Motors, and the public in a state

of uncertainty over the validity of a proposed revision

for nearly three years.*

* Long after the deadline expired, EPA in September 1988

published its final action on the day its brief was filed in the

First Circuit. See note 11 below. GM has challenged EPA's ac-

tion in a separate suit in the First Circuit.

B. The Massachusetts SIP Revision

General Motors owns and operates an automobile

assembly plant in Framingham, Massachusetts. The

plant has associated with it a paint shop that is the

source of volatile organic compounds (VOCs). In 1979,

the Commonwealth promulgated SIP regulations es-

tablishing limits on VOC emissions from automobile

surface coating or painting operations. As originally

promulgated, the regulation required full compliance

by December 31, 1985.‘ This date in une SIP was two

years earlier than the Clean Air Act’s final 1987 com-

pliance deadline. 42 U.S.C. § 7502(aX2) (1982).

On October 20, 1981, EPA published a policy state-

ment advocating deferral of the compliance dates in

SIPs for automobile paint operations. 46 Fed. Reg.

51,386 (1981). The policy statement noted that the

industry was developing new lower-emission tech-

niques, such as basecoat/clearcoat technology, and that

allowing a deferral of compliance to 1986 or 1987

would give the industry needed time to develop-more

cost-effective technology. Jd. at 51,387. Pursuant to

this policy, General Motors submitted a timely request

for an extension of the deadline to the Common-

wealth.* Following a public hearing, the Common-

wealth revised the SIP regulation for automobile

painting to extend the applicable deadline to August

31, 1987, a 20-month extension but still several

‘In particular, 310 CMR 7.18(7) limits emissions from auto-

mobile surface coating, which includes “‘top coat’’ and “final

repair” painting operations, the final steps in painting a new

automobile.

5 At the public hearing, an EPA representative expressed re-

servations but did not oppose the proposed revision.

6

months short of the final Clean Air Act deadline. The

revised SIP was submitted by the Commonwealth to

EPA for approval on December 30, 1985.

In reliance on the Commonwealth’s action, General

Motors continued to operate its then-existing paint

facility during the 20-month extension. General Mo-

tors proceeded with its state-approved compliance

strategy, spending over $200 million to construct a

new lower-emitting paint facility using the basecoat/

clearcoat system. The old Framingham paint facility

was permanently shut down on July 7, 1987, more

than a month before the Commonwealth's revised

deadline.

During the entire period of the extension provided

by the Commonwealth’s revised SIP regulations, EPA

failed to take final action to approve or disapprove

the proposed revision. The initial deadline and the

revised deadline both came and went. Instead of tak-

ing action on the SIP revision, the government pro-

ceeded to enforce the December 1985 deadline in the

original SIP. On August 17, 1987, the United States

filed a complaint in federal district court in Massa-

chusetts seeking civil penalties for the violation of the

1985 deadline. The complaint made no mention of the

company’s compliance plan, of which EPA was fully

aware, or of the state’s revision of the SIP regulation

to defer compliance to August 31, 1987. It also failed

to mention that, despite the passage of nearly two

years, EPA had still not taken final action on the

SIP revision.

C. The Proceedings Below

On May 16, 1988, the District Court (McNaught,

J.) granted summary judgment to General Motors.

United States v. General Motors Corp., No. 87-2068

(D. Mass. 1982). The court held that the Clean Air

Act required EPA to act on the Commonwealth’s pro-

posed SIP revision within four months, and that, hav-

ing failed to do so, EPA was barred from enforcing

the old SIP. Because in this case EPA had not made

a final decision on the Commonwealth’s SIP revision,

the court held that fines could not be assessed and

consequently that the Agency’s enforcement action

should be dismissed.

The District Court believed this rule was necessary

to ensure that EPA did not simply pocket veto SIP

revisions and thereby paralyze state regulatory proc-

esses once the initial SIPs were in place. Barring the

Agency from enforcing an existing SIP until] it ruled

on proposed revisions ws necessary, in the District

Court’s view, to provide EPA with sufficient incentive

to conclude its review within the statutory four-month

period. Noting that “EPA always holds the ultimate

trump card’’ because it may at any time take final

action on a SIP revision and begin enforcement pro-

ceedings, the District Court believed that barring en-

forcement struck the appropriate balance under the

Act. Slip Op. at 7. The District Court expressly fol-

lowed the decision of the Court of Appeals in Amer-

ican Cyanamid Co. v. EPA, 810 F.2d 493 (5th Cir.

1987).

The United States appealed the dismissal of its en-

forcement action. On June 7, 1989, the First Circuit

entered its opinion (Coffin, J.) and judgment reversing

the District Court’s decision. United States v. General

Motors, 876 F.2d 1060 (1st Cir. 1989). The Court of

Appeals agreed with the District Court that EPA

must complete its evaluation of SIP revisions within

8

four months. The First Circuit expressly declined,

however, to follow the Fifth Circuit’s rule in Amer-

wan Cyanamid Co., supra. Without citing any factual

support, the First Circuit assumed that EPA would

need longer than four months to act on SIPs even

with the incentive of an enforcement bar, even though

that assumption is contrary to the statute. The Court

concluded that the additional incentive provided by

the Fifth Circuit’s rule is not outweighed by the harm

done to the general public by prohibiting enforcement

actions in cases where EPA fails to meet its deadline.

876 F.2d at 1067. The Court did not elaborate on the

nature of this “harm” or explain why this “‘balanc-

ing’’ of policies should overcome the specific direction

of Congress that EPA act promptly on SIP revisions.

The First Circuit acknowledged that GM had raised

a number of issues concerning the equities of this

case. In particular, the court noted that GM had relied

on EPA’s 1981 policy statement in deciding to con-

vert its plant to BC/CC technology, and that the pub-

lic was not harmed because the present system was

environmentally superior. The First Circuit declined

to comment on these issues, stating instead that GM

is free to raise them before the District Court. The

decision below states that the District Court has the

responsibility for determining the amount of penalties

to assess, and that the trial court may consider the

reasonableness of the Agency’s delay and the preju-

_ suffered by the company as a result. Jd. at 1067-

REASONS FOR GRANTING THE WRIT

: The Court should grant the petition for certiorari

in this case for three reasons that the Court has

9

traditionally deemed to warrant plenary review. First,

this case presents major issues of federalism, comity,

and the implementation of the Clean Air Act. Second,

the decision below creates a conflict in the circuits

and is contrary to the language and policies of the

Clean Air Act. Third, the decision below involves re-

curring questions of nationwide importance concern-

ing the enforcement of state plans under the Clean

Air Act.

I. THE DECISION BELOW CREATES A CONFLICT

IN THE CIRCUITS

The primary issue addressed by the First Circuit

was whether, having failed to complete its review of

a state’s SIP revision within four months, EPA is

barred from enforcing the old SIP. The First Circuit

expressly declined to follow the decision in American

Cyanamid, holding instead that EPA may bring an

enforcement action, but that the District Court couid

take into account the Agency’s delay in deciding the

amount of penalties to assess. 876 F.2d at 1067-68.

In American Cyanamid, the State of Louisiana had

submitted a revision to its SIP concerning the manner

in which a company could demonstrate compliance

with certain emission limitations. EPA did not act to

approve or disapprove the revision. Long after the

SIP revision was proposed, however, EPA initiated

an enforcement action against American Cyanamid,

charging it with violations of the old SIP require-

ments. The Fifth Circuit held that EPA was barred

from enforcement under these circumstances, empha-

sizing the need to give EPA an incentive to respect

the four-month rule.* The court held that permitting

*In reaching this result, American Cyanamid discussed at

10

EPA to benefit from its own inaction was impermis-

sible in light of the resulting infringement of the

state’s right to timely consideration of its SIP revi-

sion. 810 F.2d at 500. EPA’s distortion of the federal-

state partnership created under the Act was of par-

ticular concern to the court:

Where, as here, the state has proposed a

revision to its SIP which clearly authorizes

local businesses to act in accordance with it

without running afoul of the Clean Air Act,

the interest of the state itself is deeply in-

volved in the required four month approval

or disapproval of the proposed revision. It

distorts the statutory scheme to place vir-

tually full emphasis upon the business entity

involved as a charged ‘polluter.’ The empha-

sis of the statute, rather, is upon the im-

portant role which the state plays in defining

authorized emissions . . .. The issue then is

not so much pollution by American Cyanamid

but the default of the EPA in carrying out

the congressional intent to work in close co-

length the contrary approach adopted by the D.C. Circuit in

Duquesne Light Co. v. EPA, 698 F.2d 456 (D.C. Cir. 1983). In

that case, the D.C. Circuit also held that EPA could not assess

penalties for violation of an old SIP where it had failed to act

within four months on a SIP revision. Jd. at 471. The court

found that assessment in such circumstances constituted an

“inequitable use of the penalty powers."’ Jd. at 472. The court

suggested, however, that it might be permissible for the Agency

to assess such penalties retroactively after it finally completed

its review of the revision if it ultimately decided to disapprove

it. To the extent that the Duquesne approach differs from both

the Cyanamid and General Motors decisions, there is a ‘‘three-

way” conflict in the circuits.

1}

operation with the states in implementing

standards and enforcing the Clean Air Act.

We emphasize the importance of the EPA act-

ing, not for the benefit of American Cy-

anamid, but for the benefit of the State of

Louisiana ....

Id. (Emphasis added).

Moreover, the court expressed concern that failure

to bar enforcement “‘may encourage the EPA to re-

ject [SIP] revisions that it should accept.” Jd. at 499.

As a practical matter, after such a long delay, and

after initiating an enforcement proceeding, “EPA

might be reluctant to approve Louisiana’s revision

and admit that American Cyanamid is not liable for

noncompliance after all.’ Jd. The court found that

the disincentives raised by such a situation could en-

danger “EPA’s even-handed administration of the

Act.” Id. This concern is starkly raised in the present

case.’

The decision below thus creates an intolerable con-

flict among the circuits on an issue of fundamental

importance. Moreover, it is contrary to the Clean Air

Act because it gives the Agency little or no incentive

to conclude its review of SIP revisions within the

statutory time limit because, no matter how long the

"In this case, EPA's final disapproval was not issued until

after the old paint shop was closed and a new $200 million paint

shop had been built to comply with the revised SIP. The revision

had then become irrelevant to anything other than the dismissed

enforcement action. EPA had every incentive to disapprove the

revision and no reason, from a regulatory standpoint, to deter-

mine properly whether that decision was correct on the merits.

In this context, EPA's even-handed evaluation of the revision

is particularly open to question.

12

Agency procrastinates, it knows that it may collect

full penalties if the revision is ultimately rejected.

American Cyanamid, 810 F.2d at 499.

The correct view, adopted by the Fifth Circuit in

the American Cyanamid case, supra, is that enforce-

ment under such circumstances is indeed barred. Con-

trary to the suggestion by the First Circuit, a bar of

enforcement is not a drastic restriction of EPA’s en-

forcement authority. Instead, it is a limited, carefully

tailored rule providing simply that EPA, which bas-

ically has the power to act on a SIP revision at any

time it chooses, may not bring an enforcement action

under an old SIP until it has acted to approve or

disapprove a SIP revision. Under this rule, the re-

sulting bar on enforcement is one that EPA has cre-

ated for itself.

Il. THIS CASE PRESENTS MAJOR ISSUES OF FED-

ERALISM, COMITY AND THE IMPLEMENTA-

TION OF THE CLEAN AIR ACT.

The Clean Air Act is a federal-state partnership in

which the states have the primary role in establishing

emission limitations. In order to assure that state

prerogatives are given full effect, Congress has care-

fully circumscribed EPA’s ability to interfere with a

state’s SIP by limiting the grounds on which EPA

may decline to approve a SIP. This division of re-

sponsibility under the Act was highlighted by this

Court in Train v. NRDC, supra:

The Agency is plainly charged by the Act

with the responsibility for setting the na-

tional ambient air standards. Just as plainly,

however, it is relegated by the Act to a sec-

ondary role in the process of determining and

13

enforcing the specific, source-by-source emis-

sion limitations which are necessary if the

national standards it has set are to be

met ... The Act gives the Agency no au-

thority to question the wisdom of a State’s

choices of emission limitations if they are part

of a plan which satisfies the standards of

Section 110(aX2)....”

421 U.S. at 79.

Congress did not want or intend SIPs to be carved

into stone. It therefore empowered the states to pro-

mulgate SIP revisions, under § 110(aX3) of the Clean

Air Act, 42 U.S.C. § 7410(aX3), with the same general

oversight by EPA that existed for the original SIPs.

Congress intended the expeditious approval of SIP

revisions to be as important as the approval of orig-

inal SIPs. The states’ role in the administration of

the Clean Air Act is a continuing one, and that role

would be substantially jeopardized if EPA were per-

mitted to ignore proposed SIP revisions for an ex-

tended period of time. For that reason, EPA is

required to approve or disapprove original SIPs and

SIP revisions within four months. 42 U.S.C.

§ 7410(aX(2), (3).*

To allow EPA to ignore proposed SIP revisions for

an extended period of time would frustrate the pur-

poses of the statute. As this Court stated in discuss-

ing § 110(aX3) in Train v. NRDC, supra:

* See Duquesne Light Co. v. EPA, 698 F.2d 456, 471 (D.C.

Cir. 1983); American Cyanamid Co., supra, 810 F.2d at 495;

Council of Commuter Orgs. v. Thomas, 799 F.2d 879, 888 (2d

Cir. 1986).

14

Far from evincing congressional intent that

the Agency assume control of a [s]tate’s

emission limitations mix once its initial plan

is approved, the revision section is to all ap-

pearances the mechanism by which the states

may obtain approval of their developing pol-

icy choices as to the most practicable and

desirable methods of restricting total emis-

sions to a level which is consistent with the

national ambient air standards.

421 U.S. at 80.

Without a requirement of timely consideration of

SIP revisions, EPA would, in essence, be permitted

to appropriate to itself a state’s right to choose among

regulatory alternatives: if EPA prefers the revised

SIP, it can approve it; where if it prefers the SIP in

its original form, it can simply ignore the proposed

revision or delay final action on the revision indefi-

nitely while it enforces the old SIP.°

Important state interests are affected by EPA’s

failure to complete its review of a SIP revision in a

timely manner. As the District Court noted:

For an indefinite period, the state would be

unable to act to balance the dictated national

priorities with the interest ofits citizens and

industries as the Clean Air Act intended. And

the industries themselves, though fully in

compliance with state law, would in some in-

* Bethlehem Steel Corp. v. EPA, 782 F.2d 645, 650 (7th Cir.

1986). The courts have uniformly invalidated EPA attempts to

interfere with a state’s regulatory decision under the Act in this

fashion. See also Indiana & Michigan Elec. Co. v. EPA, 733

F.2d 489, 492 (7th Cir. 1984).

15

stances face the Scylla and Charybdis choice

between ceasing operations now, or possibly

being forced out of business by heavy fines

later.

United States v. General Motors Corp., No. 87-2068

(D. Mass. May 16, 1988) Slip Op. at 7-8.

The decision of the First Circuit provides EPA with

little incentive to take timely action on SIP revisions.

The approach adopted by the First Circuit results in

precisely the type of unilateral federal regulation that

the statute was designed to avoid. In effect, the Court

of Appeals has given EPA a right—previously re-

jected by the court in American Cyanamid—to ac-

complish a ‘‘pocket veto’’ of a SIP revision by failing

to take final action.

III. THE ISSUE PRESENTED INVOLVES IMPOR-

TANT, RECURRING QUESTIONS CONCERNING

ENFORCEMENT UNDER THE CLEAN AIR ACT.

In a program as important and complex as the

Clean Air Act, it is vital that all parties involved

understand the means by which SIP plans and plan

revisions may be subject to enforcement. The decision

below raises a host of problems concerning the proper

balance between State and federal prerogatives under

the statute. As a result of the conflict in the circuits

on this important issue, the thousands of industrial

facilities throughout the country that are subject to

SIP requirements can have no certainty as to the

enforceability of SIP provisions which have been

superseded by state revisions to the plans.’

In 1987, EPA processed 56 SIP revisions in Region I, one

of 10 EPA Regions, according to EPA data presented to the

16

=

As discussed above, states must continually revise

their SIP regulations in order to insure attainment

of the national standards. Prompt action by EPA on

SIP revisions is essential to allow the states to con-

tinue with their regulatory planning and implemen-

tation, and to enable industry to plan and construct

necessary control equipment. EPA’s failure to act

promptly places the states and industry in limbo, with

no guidance as to how to proceed. The decision of

the First Circuit encourages EPA to be dilatory in

reviewing revised state plans, and frustrates state and

industry efforts to take appropriate and cost-effective

steps toward attainment of the nation’s air quality

goals.

EPA’s failure to take timely action on a revised

SIP creates an anomaly in enforcement. A revised

SIP is a revision in state regulations which amends

state law; once adopted the state may enforce only

the revised SIP. Under the First Circuit’s approach,

EPA may enforce the old SIP, regardless of whether

a violation exists under the revised SIP. We submit

that it is absurd to suggest that Congress intended

that a Clean Air Act SIP, the product of a joint

federal and state effort under the Clean Air Act,

would be enforceable in federal courts but not state

courts. See Sierra Club v. Indiana-Kentucky Elec.

Corp., 716 F.2d 1145, 1151 (7th Cir. 1983). The four-

month deadline for the review of SIP revisions was

plainly designed to eliminate this anomaly. Because

the decision below does not give due regard to the

District Court. One-fourth of the EPA Region I enforcement

actions from 1985-88 involved cases where a revised SIP was

being developed or had been submitted.

17

appropriate role of the states under the Clean Air

Act, the mandate of Congress has been thwarted.

Moreover, allowing enforcement to proceed in the

absence of final action on a SIP calls into severe

question the even-handedness of the SIP review proc-

ess itself. As the American Cyanamid court pointed

out, it will be difficult, if not impossible, for EPA to

review a SIP revision objectively when it has already

initiated an enforcement proceeding. Failure to bar

enforcement ‘“‘may encourage the EPA to reject [SIP]

revisions that it should accept.’’ 810 F.2d at 499.

The disincentives created by such a situation are

certain to endanger EPA’s even-handed administra-

tion of the Act. This concern is particularly strong

in the present General Motors case. On the very same

day that its opening brief was served in the First

Circuit, and more than two years after the Common-

wealth of Massachusetts had submitted its SIP revi-

sion, EPA published a determination disapproving the

SIP revision." The only possible purpose of the be-

lated EPA action was to serve as a last-minute at-

tempt to bolster the government’s position on appeal.

It is clear that EPA viewed its regulatory and en-

forcement decisions as part of a single, combined

strategy in which enforcement would be given prior-

ity. Under those circumstances, objective review of

the SIP revision became a practical impossibility.

It is also significant to note that EPA’s delay in

this case, and in the American Cyanamid case, in-

volves situations where the companies were attempt-

ing to implement programs that benefit the

53 Fed. Reg. 36,011 (1988).

18

environment. In the present case, for example, the

long-term emissions from General Motor’s Fra-

mingham plant were reduced through the construction

of a new paint facility that has substantially lower

emissions than the old one was required to attain

under the Commonwealth’s rules. In reliance on

EPA’s 1981 policy, and with the Commonwealth’s

concurrence, General Motors, spent $200 million to

build the new, lower emitting basecoat/clearcoat paint

shop. General Motors continued to operate its old lac-

quer paint shop until July 1987, when the old facilities

were permanently shut down. General Motors was

highly prejudiced by EPA’s actions in this case, and

similar cases are certain to arise repeatedly in the

future.

CONCLUSION

For the reasons stated above, the petition for a

writ of certiorari should be granted.

Respectfully submitted,

THEODORE L. GARRETT

(Attorney of Record)

COVINGTON & BURLING

1201 Pennsylvania Ave., NW

P.O. Box 7566

Washington, D.C. 20044

(202) 662-5398

Attorney for General Motors

Corporation

do

19

Of Counsel:

PATRICK J. MCCARROLL

Legal Staff

General Motors Corporation

New Center One Building

3031 West Grand Boulevard

Detroit, Michigan 48232

September 1989

APPENDIX

a.

APPENDIX A

United States v. General rn eee

tion, No. 88-1799 (1st Cir. June 7, 1 et

APPENDIX B

List of Subsidiaries and Affiliates of General

la

UNITED STATES COURT OF APPEALS

FOR THE FIRST CIRCUIT

No. 88-1799.

UNITED STATES OF AMERICA

Plaintiff, Appellant,

v.

GENERAL MOTORS CORPORATION

Defendant, Appellee.

JUDGMENT

Entered: June 7, 1989

This cause came on to be heard on appeal from the

United States District Court for the District of Massachu-

setts, and was argued by counsel.

Upon consideration whereof, It is now here ordered,

adjudged and decreed as follows: The judgment of the

District Court is reversed and the cause is remanded to

the District Court for further proceedings not inconsistent

with the opinion filed this date.

By the Court:

Clerk.

[ec: Messrs. Shilton, Garrett and Ms. McCabe]

2a

UNITED STATES COURT OF APPEALS

FOR THE FIRST CIRCUIT

No. 88-1799

UNITED STATES OF AMERICA,

Plaintiff, Appellant,

v.

GENERAL MOTORS CORPORATION,

Defendant, Appellee.

APPEAL FROM THE UNITED STATES DISTRICT

COURT FOR THE DISTRICT OF MASSACHUSETTS

(Hon. John J. McNaught, U.S. District Judge}

Before

Campbell, Chief Judge.

Coffin and Torruella, Circuit Judges.

David C. Shilton, Land and Natural Resources Division,

Department of Justice, with whom Roger J. Marzulla,

sistant Attorney General, Richard J. Leon, Deputy Assistant

Attorney General, Jaques B. Gelin and William D. Brighton,

Land and Natura] Resources Division, Department of Justice,

were on brief for the United States.

Theodore L. Garrett with whom Sonya D. Winner, Cov-

ington & Burling. Kenneth A. Reich, Widett, Slater & Gold-

man, and Patrick J. McCarroll were on brief for appellee.

Janet G. McCabe, Environmental Protection Division, De-

partment of the Attorney General, and Lee P. Breckenridge,

ef

3a

Chief, Fnvironmental Protection Division, on brief for the

Commonwealth of Massachusetts, Amicus Curiae.

JUNE 7, 1989

COFFIN, Circuit Judge. This is an appeal by the Envi-

ronmental Protection Agency (EPA) from the

dismissal of its enforcement action under the Clean Air Act,

42 U.S.C. § 7401 et. seg., against appellee General Motors.

The case requires us to answer two statutory questions.

First, does the four-month time limit for EPA action on

original state implementation plans (SIPs) also apply to the

Agency's review of proposed revisions to existing state plans.

Second, assuming the EPA must complete its review of SIP

revisions within four months, does its failure to do so prevent

it from enforcing an existing state implementation plan dur-

ing the interval between the end of the four-month period

and the time the agency finally rules on the revision.

The Clean Air Act

During the 1950s and 1960s, the responsibility for improv-

ing the nation’s air quality fel] to the states, with the federal

government playing only a minor role. Over the years, how-

ever, there was growing dissatisfaction with the states’ effort

to combat air pollution. Congress responded with the 1970

Amendments to the Clean Air Act (the Act). Although the

Amendments greatly increased the federal government’s role,

they by no means eliminated the states’ responsibility for

improving air quality. To the contrary, the Act expressly

preserved the principle “that the prevention and control of

air pollution at its source is the primary responsibility of

States and loca] governments. .. .” § 101(aX3) 42 U.S.C.

§ 7401(a) (3) See Train v. Natural Resources Defense Council,

421 U.S. 60, 64 (1975). Thus, the states and the federal

government were now to be partners in the continuing fight

against air pollution.

4a

The division of responsibility is straightforward and logical.

The EPA, the federal agency charged with administering the

Act, has the task of establishing National Ambient Air Qual

ity Standards (NAAQS). The states then have the respon-

sibility of submitting for EPA approval state implementation

plans (SIPs) designed to achieve and maintain these uniform

standards. § 110(aX1). By giving the EPA authority to set

threshold standards and to reject implementation plans that

are ill-designed to achieve and maintain such standards, Con-

gress ensured that states could not compete unfairly for

industry by offering lenient air requirements. See Duquesne

Light v. EPA, 698 F.2d 456, 471 (D.C. Cir. 1983); United

States v. Ford Motor Co., 814 F.2d 1099, 1102 (6th Cir.

1987). At the same time, however, Congress believed it im-

portant that the states retain wide latitude in choosing how

best to achieve national standards, given local needs and

conditions. The EPA, therefore, may not reject a SIP unless

it finds that the plan fails to satisfy the substantive require-

ments set out in the Act, the principal one of which is that

the plan be designed to attain national standards as quickly

as practicable. § 110 (aX2XA}K). “{S]o long as the ultimate

effect of a State’s choice of emission limitations is compliance

with the national standards for ambient air, the State is at

liberty to adopt whatever mix of emission limitations it deems

best suited to its particular situation.”’ Train, 421 U.S. at

79.

Congress also recognized that, because of advances in tech-

nology and changing local conditions, states would occasion-

ally wish to revise their original implementation plans. The

EPA may reject these SIP revisions, but its authority to do

so is no greater than its authority to reject an original SIP.

A state’s proposed revision must be approved, therefore,

unless it fails to satisfy one of the requirements set out in

§ 11a) (2) governing the evaluation of original SIPs. § 110(a)

(3) (A).

Once an original or revised SIP is approved by the EPA,

it becomes federal law and is enforceable in one of two ways.

A Sy A MD a

5a

Under either method, the first step is for the EPA to issue

a Notice of Noncompliance. If the violation continues and

the EPA cannot through negotiations reach some agreement

with the polluting source, the Agency may enforce the SIP

either by issuing an administrative order under § 120 or by

instituting an enforcement action under § 113, which pro-

vides for injunctive relief as well as for civil penalties of up

to $25,000 per day. Criminal penalties for knowing violations

are also authorized. § 113(c).

Under § 120, the administrative mechanism, fines begin to

accrue upon the issuance of a Notice of Noncompliance and

are intended to offset the economic benefit to the company

of delaying compliance. See Duquesne Light, 698 F.2d at 464.

Under § 113, the mechanism employed in this case, the EPA

must bring an enforcement action in the district court to

collect penalties. The court is given the responsibility of de-

termining the amount of penalties to assess, taking into con-

sideration such factors as the seriousness of the violation

and the economic impact of the penalty on the business.

§ 113(b).

Given the sense of urgency with which the 1970 Amend-

ments were passed, it is not surprising that Congress did

not leave the states and EPA free to work at their own

pace in accomplishing these tasks. The Act is laced with

deadlines applicable to both the states and the Agency. Of

concern to us here are the deadlines for EPA review of

state implementation plans. It is undisputed that the EPA

must complete its review of original SIPs within four months.

§110(a) (2) (“The Administrator shall, within four

months . . ., approve or disapprove [original SIPs]’’). Unlike

§ 110(a) (2) however, § 11a) (3) (A) which governs EPA

review of SIP revisions, does not contain language explicitly

imposing a four-month deadline on the Agency. Whether

Congress nevertheless intended for the Agency to complete

its review of SIP revisions within four months is the question

giving rise to the instant dispute.

The Massachusetts SIPs

General Motors owns and operates an automobile assembly

plant in Framingham, Massachusetts. The plant’s painting

operation is the source of volatile organic compounds (VOCs)

which contribute to ozone. In 1980, the EPA approved a

Massachusetts SIP governing VOC emissions from automo-

bile painting operations. The plan permitted GM, which op-

erates the only automobile assembly plant in the state, to

meet emission limits in stages, but required full compliance

by December 31, 1985.

In 1981, the EPA published a policy statement in which

it noted that advancing technology now made it practicable

for automobile painting operations to switch from lacquer

paints to lower-emitting basecoat/clearcoat enamel systems

(BC/CC). In light of these developments, the Agency stated

that it would be willing to approve SIP revisions deferring

compliance with emissions limits until 1986 or 1987 for com-

panies wishing to switch to the BC/CC system. Although

GM's Framingham plant used lacquer paints, the company

took no immediate action in response“®to the EPA's offer.

GM did request revisions, however, for three of its assembly

plants in other states within ten days of the EPA’s state-

ment.

Three years later, in November of 1984, GM decided that

it now wished to defer the December 3], 1985, compliance

date imposed by the existing Massachusetts SIP. The pro-

posed revision it submitted to the Commonwealth did not

call, however, for a conversion to BC/CC technology, but

rather requested a deferral to give the company additional

time to instal] emission controls on its existing lacquer coat-

ing lines. In June of 1985, GM changed course and finally

proposed converting the Framingham plant to BC/CC by the

summer of 1987, which would give it an additional 20 months

to meet the final emission limits. The Commonwealth ap-

proved the revision and submitted the proposal to the EPA

o— . mee Meee 4S eS eS eT

7a

on December 30, 1985—one day before the existing SIP’s

The Enforcement Proceedings

Rather than wait for EPA approval of its proposed re-

vision, GM began construction on a new BC/CC painting

facility while at the same time Png one to i

lacquer plant. EPA Region I, the branch of the Agency

responsible for evaluating SIP revisions from New England

states, began reviewing the proposal while also entering into

negotiations with the Commonwealth and GM in the hope

of resolving GM's noncompliance with the existing SIP’s

deadline by means of a delayed compliance schedule.’

On July 2, 1986, with negotiations apparently having failed,

Region I sent to EPA headquarters a proposal to disapprove

the revision. On August 14, 1986, EPA issued a Notice of

Violation to GM concerning violations of the existing SIP by

the company’s lacquer plant— a prerequisite to the bringing

of an enforcement action. Later that year, on December 2,

EPA published a proposed disapproval of the Common-

wealth’s SIP revision based on Region I's July 2 evaluation.

The proposed disapproval explained in detail why the Agency

was considering rejecting the revision and invited public com-

ment.

The feedback EPA received apparently did not convince

Region | that its initial view had been misguided and on

June 30, 1987, it recommended to EPA Headquarters that

the proposed revision be rejected. Roughly two months later,

on August 17, the EPA brought this enforcement action

against GM under § 113 of the Act for alleged violations of

‘GM contends that to this date there has been no finding that its lacquer

plant failed to comply with the existing SIP’s December 31, 1985, deadline.

The EPA finds this statement “incredible,” pointing to the district court's

opinion below as well as to an affidavit by one of the company’s own

engineers. If GM's continuing operation of its lacquer plant did not in fact

violate the existing SIP. we are curious as to why the company is so

concerned with the EPA's attempts to enforce the regulation.

cutis sak Ulee te tae deadline

rejected SIP revision. The Agency’s decision was published

on September 16, 1988, the day briefs were filed in this

court.

The District Court’s Decisi

The district court began by construing § 110(a) (3) (A) of

the Act to impose a four-month time limit on EPA review

of SIP revisions. Noting that the Agency still had not made

a final decision on the Commonwealth’s SIP revision, the

court went on to address the consequences of EPA’s failure

to meet the four-month deadline. After examining the Act’s

structure and purposes, the court concluded that if the

Agency failed to complete its review within four months, it

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view, provide the EPA with sufficient incentive to conclude

its review within the four-month period. The court recognized

that the Act’s primary purpose was to improve the nation’s

air quality. | concluded, however, that

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The threshold question is whether the Act imposes a four-

month deadline on EPA review of SIP revisions. It is un-

disputed that the Agency must complete its evaluation of

original SIPs within four months. Section 110(a) (2) which

applies to original SIPs, states:

The Administrator shall, within four months after the

notice and hearing and that [it satisfies the substantive

requirements specified in subparagraphs (A) {K)).

Section 110(a) (3) (A), which governs EPA review of SIP

revisions, does not contain this four-month language:

The Administrator shal] approve any revision of an

implementation plan . . . if he determines that it meets

the requirements of paragraph (2) (§ 110(a(2)} and has

been adopted by the State after reasonable notice and

GM contends, however, that the reference to § 11((a) (2) was

intended to incorporate both the substantive and procedural

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12a

unlikely, however, that Congress also intended for the states’

legitimate policy choices to be held hostage to the

schedule. We conclude, therefore, that the four-month dead-

line was meant to to EPA review of SIP revisions as

well as to EPA review of original SIPs. This conclusion is

in line with the views of all but one of i

See Duquesne Light, 698 F.2d 456, 471 (D.C. Cir. 1983) (four-

month deadline); American Cyanamid Co. v

(same); but see United States v. National Steel Corp., 767

F.2d 1176, 1182 n.1 (6th Cir. 1985) (no four-month rule, but

arguably dicta). We add that by imposing a four-month dead-

line on the EPA, we avoid the possibility that the Agency

would have assigned a lower priority to SIP revisions from

The question that remains is what consequences should

13a

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28

There is no question that the Fifth Circuit’s rule provides

the Agency with the greatest incentive to complete its review

within four months. Were we certain that with the incentive

of an enforcement bar, the Agency not only would review

every SIP revision within four months, but could do so in

a thorough and complete manner without sacrificing equally

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18a 19a

declined to adopt an inflexible rule precisely so that the APPENDIX B

equities of each case may be considered.*

Reversed and remanded for further proceedings not incon- General Motors Corporation is not a subsidiary of a

sistent with this opinion. publicly owned corporation. All subsidiaries and affiliates

of General Motors Corporation are wholly owned except

the following:

‘We add that by not precluding enforcement where the Agency fails

to meet its deadline, we avoid possibly rendering superfluous the actions

of a later Congress. In the 1977 Amendments to the Clean Air Act,

Congress added § 110(g), which gives governors the power in emergency

situations to suspend an existing SIP for a short period. The Governor

imposed a four-month deadline on the Agency's review of SIP revisions.

It also shows that this later Congress did not assume that i

ACE Limited (Bermuda)

Aero Vironment Inc. (USA)

Alambrados Automotrices, S.A. de C.V. (Mexico)

Alambrados y Circuitos Electricos, S.A. de C.V.

(Mexico)

AMBRAKE Corporation (USA)

Applied Intelligence Systems, Inc. (USA)

Aralmex, S.A. de C.V. (Mexico)

Asset Leasing GmbH (West Germany)

Automotive Polymer Based Composites Joint Venture

and Development Partnership (Co-Partnership

among GM, Ford and Chrysler to coordinate

basic research on plastic component materials)

Automotive Satellite Television (USA)

Autos y Maquinas del Ecuador S.A. (AYMESA)

(Ecuador)

Avis, Inc. (USA)

Beijing International Information Processing

Company, Limited (China)

British Caledonian Flight Training, Limited (England)

Bujias Mexicanas, S.A. de C.V. (Mexico)

Calsonic Harrison Co., Ltd. (Japan)

Comau Productivity Systems, Inc. (USA)

Compagnie de Faisceaux Tunisian International S.A.

(Tunisia)

Compania Nacional de Direcciones Automotrices, S.A.

de C.V. (Mexico)

Componentes Delfa, C.A. (Venezuela)

Convesco Vehicles Sales GmbH (West Germany)

Daewoo Automotive Components, Ltd. (Korea)

Daewoo Motor Co., Ltd. (Korea)

20a

Delkor Battery Company, Ltd. (Korea)

Detroit Diesel Corporation (USA)

DHB—Componentes Automotivos S.A. (Brazil)

DHMS Industries, Ltd. (Korea)

Diffracto Limited (Canada)

Fabrica Colombiana de Automotores S.A.

(‘“‘Colomotores’’) (Colombia)

Gemeinnutzige Opel-Wohnbau-Gesellschaft mbH

(West Germany)

General Motors Bankgesellschaft mbH (Austria)

General Motors del Ecuador S.A. (Ecuador)

General Motors Kenya Limited (Kenya)

Genie Mecanique Zairose, S.A.R.L. (Zaire)

GM Allison Japan Limited (Japan)

GM Fanuc Robotics Corporation (USA)

Group Lotos, ple (England)

Hitachi Data Systems Corporation (USA)

Iimor Engineering, Ltd. (England)

Industries Mecaniques Maghrebines, S.A. (Tunisia)

Industrija Delova Automobila, Kikinda (Yugoslavia)

Interactive Entertainment, Inc. (Canada)

Isuzu-General Motors Australia Limited (Japan)

Isuzu Motors Limited (Japan)

Isuzu Motors Overseas Distribution Corp. (Japan)

Japan Satellite Communications Network Corporation

(Japan)

Kabelwerke Reinshagen GmbH (West Germany)

Kabelwerke Reinshagen Werk Berlin GmbH

(West Germany)

Kabelwerke Reinshagen Werk Neumarkt GmbH

(West Germany)

Koram Plastics Company, Ltd. (Korea)

Metal Casting Technology, Inc. (USA)

Motor Enterprises, Inc. (USA)

National Advanced Systems Corporation (USA)

New United Motor Manufacturing, Inc. (USA)

NHK Inland Corporation (Japan)

2la

Omnibus BB Transportes, S.A. (Ecuador)

Promotora de Partes Electronics Automotrices

(Mexico)

P.T. Mesin Isuzu Indonesia (Indonesia)

Senalizacion y Accesorios del Automovil Yorka, S.A.

(Spain)

Shinsung Packard Company, Ltd. (Korea)

Sung San Company, Ltd. (Korea)

Suzuki Motor Co., Ltd. (Japan)

Tactical Truck Corporation (USA)

View Engineering (USA)

Volvo GM Heavy Truck Corporation (USA)