# Amicus Curiae Brief — Alexander v. Sandoval

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URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385014_0377%3A18

## Record

- **Collection:** Supreme Court brief
- **Document type:** Amicus Curiae Brief
- **Published:** January 1, 2001
- **Citation:** 532 U.S. 275

## Text

ait ee
Supreme Court of the Anited States

JAMES ALEXANDER, IN HIS OFFICIAL CAPACITY AS THE
DIRECTOR OF THE ALABAMA DEPARTMENT OF PUBLIC
SAFETY, AND THE ALABAMA DEPARTMENT OF PUBLIC
SAFETY,
Petitioners,
v.

MARTHA SANDOVAL, INDIVIDUALLY AND ON BEHALF OF ALL
OTHERS SIMILARLY SITUATED,
Respondents.

On Writ of Certiorari to the
United States Court of Appeals
for the Eleventh Circuit

BRIEF OF AMICUS CURIAE
NATIONAL ASSOCIATION OF MANUFACTURERS
IN SUPPORT OF PETITIONERS

MICHAEL W. STEINBERG*
MICHAEL A. McCorD

MorGaNn, LEwis & Bockius LLP
1800 M Street, N.W.

Washington, D.C. 20036
(202) 467-7141

[Additional Counsel Listed on Inside Cover]

November 13, 2000 ~ *Counsel of Record

Ze"

Of Counsel:

JAN AMUNDSON

NATIONAL ASSOCIATION OF MANUFACTURERS
1331 Pennsylvania Avenue, N.W.
Washington, D.C. 20004

(202) 637-3000

TABLE OF CONTENTS

Page
TABLE OF AUTHORITIES ...................... ii
INTEREST OF THE AMICUS CURIAE ............. 2
STATEMENT OF THECASE .................... 4
SUMMARY OF ARGUMENT .................... 5
CTE Te nn. teceecccceves 7
THE DECISION BELOW SERIOUSLY
INTERFERES WITH STATE ENVIRONMENTAL
PERMITTING PROGRAMS AND UNDERMINES
THE GOALS OF THOSE PROGRAMS ............. 7

A. Current Clean Air Act Permitting Programs
Require Facilities to Meet Stringent Requirements
Designed to Reduce Emissions and Protect Public
ESE SS RS 9

1. The NSR Permitting Program ......... 10
2. The Title V Operating Permit Program .. 13

B. The Decision Below Substantially Increases the
Uncertainty and Complexity of the Clean AirAct
Permitting Programs ...................... 15

C. The Resulting Disruption of Clean Air Act Permitting
Processes Would Lead to Adverse Consequences for
the Environment and Local Communities, as Well as
for Sources Seeking Permits ................ 19

ees ee ti cehceengecdaveseececes 22

P
TABLE OF AUTHORITIES
Page

CASES:
Chester Residents Concerned for Quality Living v.
Seif, 132 F.3d 925 (3d Cir. 1997) ............. 2, 3, 5,9
Latimore v. Citibank Federal Savings Bank,
SS ae PUES CEU é vcucecccecsvesceseces 17
Puerto Rican Cement Co. v. EPA, 889 F.2d 292 (1st Cir.
PE ee ee re nn 20
STATUTES AND REGULATIONS:
Civil Rights Act of 1964, Title VI, 42 U.S.C. § 2000d-

ee re eee a passim
Civil Rights Act of 1964, 42 U.S.C. §2000d-1 ......... 5
Clean Air Act, 42 U.S.C. §§ 7401 ef seg. ......... passim
Clean Air Act, 42 U.S.C. § 7407(d)(1 AV) ......... 11
Clean Air Act, 42 U.S.C. § 7409%(b) \............... 11
Clean Air Act, 42 U.S.C.§ 7410 .................. 11
Clean Air Act, 42 U.S.C. §§ 7470-7515............ 7, 10
Clean Air Act, 42 U.S.C.§ 7471 .................. 11
Clean Air Act, 42 U.S.C. § 7475(a) ............. 11, 12
Clean Air Act, 42 U.S.C. § 7475(aX(1).... 2.200000... 11
Clean Air Act, 42 U.S.C. § 7475(a)(2) .............. 12
Clean Air Act, 42 U.S.C. § 7475(e)(3)(B) ........... 12
Clean Air Act, 42 U.S.C. § 7479(3) ................ 13
Clean Air Act, Title V, 42 U.S.C. §§ 7661-7661f. . . . passim
Clean Air Act, 42 U.S.C. § 766la .................. 13
Clean Air Act, 42 U.S.C. § 766la(b)(5)(B) ........... 14
Clean Air Act, 42 U.S.C. § 7661b .................. 14

Clean Air Act, 42 U.S.C. § 7661b(6) ............... 14

TABLE OF AUTHORITIES — Continued

Page
Clean Air Act, 42 U.S.C. § 7661c .................. 14
Clean Air Act Amendments of 1990, Pub. L. No.

101-549, 104 Stat. 2399 ............ ip Doe 13
Clean Water Act, 33 U.S.C. §§ 125l efseg. ........ 3, 10
Resource Conservation and Recovery Act,

42 U.S.C. §§ 6901 ef seg. ................ 3, 10
EI ET OT eT PET eT 5
GIG DERE occ Se cccccccccccceces 10
ee a concekccdetecessedsoane 11
EE ie de ee ce peaks bunns 14
a ee 5
MISCELLANEOUS:

Marla Cone, Civil Rights Suit Attacks Trade in Pollution
Credits, Los Angeles Times, July 23, 1997, at1 ....... 17
Michael Mattheisen, 7he U.S. Environmental Protection
Agency's New Environmental Civil Rights Policy, 18 Va.
es ele i ce eenebekes 4

U.S. Chemical Industry Handbook, Chemical Manufacturers
i ns ct ths Sucee ene lee ebeteses 15

IN THE

Supreme Court of the United States
OCTOBER TERM, 2000

No. 99-1908

JAMES ALEXANDER, IN HIS OFFICIAL CAPACITY AS THE
DIRECTOR OF THE ALABAMA DEPARTMENT OF PUBLIC
SAFETY, AND THE ALABAMA DEPARTMENT OF PUBLIC
SAFETY,
Petitioners,
v.

MARTHA SANDOVAL, INDIVIDUALLY AND ON BEHALF OF ALL
OTHERS SIMILARLY SITUATED,

Respondents.

On Writ of Certiorari to the
United States Court of Appeals
for the Eleventh Circuit

BRIEF OF AMICUS CURIAE
NATIONAL ASSOCIATION OF MANUFACTURERS
IN SUPPORT OF PETITIONERS

INTEREST OF THE AMICUS CURIAE'

The interest of Amicus Curiae National Association of
Manufacturers arises from the far-reaching consequences of any
decision regarding a private right of action based on Title VI
“disparate impact” regulations issued by federal funding
agencies. Amicus Curiae is particularly concerned about
“disparate impact” claims in the context of environmental
permitting decisions made by state agencies.

Just two years ago, the Court considered the same question
presented in this case, but in the context of a “disparate impact”
challenge to an environmental permit issued by the
Pennsylvania Department of Environmental Protection.
Chester Residents Concerned for Quality Living v. Seif, 132
F.3d 925 (3d Cir. 1997), cert. granted, 118 S. Ct. 2296, vacated
as moot, 524 U.S. 974 (1998). Although the factual context of
the present case is plainly different,” the concerns exemplified
by the Chester Residents case are just as pressing today as they
were two years ago. As set forth below, those concerns warrant
very careful consideration in reaching any conclusion about
private nghts of action under Title VI “disparate impact”
regulations.

The National Association of Manufacturers is the nation’s
oldest and largest broad-based industrial trade association. Its
nearly 14,000 member companies and subsidiaries, including
10,000 small manufacturers, employ approximately 85 percent

' Letters from all parties consenting to the filing of this brief have been filed
with the Clerk of this Court. Counsel for a party did not author this brief in
whole or in part. No person or entity, other than the Amicus Curiae, its

members, or its counsel, made a monetary contribution to the preparation
and submission of this brief.

* Amicus Curiae takes no position on Alabama’s English-only drivers

of all manufacturing workers and produce over 80 percent of
the nation’s manufactured goods. More than 158,000 additional
businesses are aifiliated with the NAM through its Associations
Council and National Industrial Council.

The decision of the court of appeals adversely affects the
ability of members of Amicus Curiae to obtain needed permits
under key federal environmental statutes such as the Clean Air
Act, the Clean Water Act, and the Resource Conservation and
Recovery Act (RCRA). These statutes require most major
manufacturing facilities to obtain one or more environmental
permits, which typically expire unless renewed every few years.
Significant changes to the manufacturing facilities, in turn,
typically require either new permits, or modifications to
existing permits, before the changes may be put into effect.

These federal statutes ultimately delegate to state or local
permitting agencies the authority to issue all or most
environmental permits. However, the Eleventh Circuit's
decision, by concluding that there is a private right of action in
federal court based on “disparate impact” regulations under
section 602 of the Civil Rights Act of 1964, interjects into the
states’ established permitting processes a wholly new set of
issues.

Specifically, the decision below opens environmental
permits to collateral attacks in federal court on the ground that
they may have a “disparate impact” on a racial or ethnic group,
based on criteria that are not clearly delineated, understood, or
agreed upon. In the Chester Residents case, for example, the
claim was that the Pennsylvania Department of Environmental
Protection violated EPA’s Title VI regulations by issuing a
permit for a facility in an area with a higher percentage of
minority residents than the percentage found in the county as a

whole.’ The alleged violation was not the environmental
performance of the facility, but rather its proximity to minority
residents.

The uncertainty and delay in the permitting process caused
by these “disparate impact” challenges will make it extremely
difficult for companies to make essential planning decisions and
will prevent or discourage the companies from obtaining
permits necessary to modernize existing facilities in a timely
manner, to construct new facilities, or even to continue
operation of existing facilities. Local communities, as a result,
may suffer increased pollution, loss of jobs, and a reduced tax
base.

Amicus Curiae National Association of Manufacturers is
committed to federal, state, and local environmental permitting
programs that provide meaningful opportunities for community
involvement and input. It believes that environmental permits
should protect public health and the environment and that
permits not meeting the relevant criteria should not be issued.
However, the decision of the court of appeals will not result in
more protective permits or foster greater compliance. Instead,
it will cause significant uncertainty to be overlaid on the
existing permitting processes, thereby undermining the
environmental protection goals of the programs and making it
more difficult for facilities to make beneficial changes.

STATEMENT OF THE CASE
Amicus Curiae National Association of Manufacturers

adopts the statement of the case contained in the brief of
Petitioners, as supplemented by the following summary.

> Michael Mattheisen, The U.S. Environmental Protection Agency's New
Environmental Civil Rights Policy, 18 Va. Env’t! L.J. 183, 199-206 (1999).

In the decision below, the Eleventh Circuit ruled that
private parties can bring actions in federal court based on
“disparate impact” regulations issued by federal agencies under
Title VI of the Civil Rights Act of 1964, 42 U.S.C. § 2000d -
2000d-7 (1994). Section 602 of Title VI, 42 U.S.C. § 2000d-1,
provides that federal agencies are to promulgate regulations
denying federal financial assistance to recipients who
discriminate against persons on the basis of “race, color, or
national origin.”

The Title VI “disparate impact” regulations issued by many
federal agencies state, in relevant part, that the agencies will
withhold federal financial assistance if they find that the
recipient is using “criteria or methods of administering its
program which have the effect of subjecting individuals to
discrimination” based on race, color, or national origin. In
Chester Residents, supra, the private right of action was based
on the regulations issued by the Environmental Protection
Agency (EPA). 40 C.F.R. § 7.35(b). In this case, the private
right of action was based on the regulations issued by the
Department of Transportation. 49 C.F.R. § 21.5(b)(2). The
relevant language in both sets of regulations is virtually
identical.

SUMMARY OF ARGUMENT

The Eleventh Circuit’s decision, unless reversed, will have
a profoundly adverse impact on permitting programs
established by the federal environmental statutes and
administered primarily by state regulatory agencies. The
conclusion that parties can challenge state permitting decisions
implementing federal environmental programs on “disparate
impact” grounds makes the process of obtaining valid
environmental permits substantially more difficult for reasons

unrelated to protecting human health and the environment. It
will also introduce tremendous amounts of uncertainty and
delay into the overall permitting process. Moreover, it will
likely burden the federal courts with a vast number of
challenges to such state permitting decisions.

To illustrate the potential impact of the Eleventh Circuit’s
reasoning, this brief focuses on two related permitting programs
administered primarily by the states under one of the major
federal environmental statutes — the Clean Air Act. These two
programs govern the activities of a broad range of industrial
facilities throughout the country, and the ability of companies
to obtain permits under the programs in a reasonable manner is
vital to the continued operation of those facilities. Both

programs impose stringent pollution control requirements on

applicants seeking permits and involve detailed permitting
procedures, including extensive opportunities for public

participation. However, the Eleventh Circuit’s decision will
wreak havoc on these Clean Air Act permitting programs by
allowing parties to bring federal court challenges to final state

permitting decisions on ill-defined “disparate impact” grounds.

Although permitting requirements under the various Clean
Air Act programs are by now generally well understood and
predictable, the Eleventh Circuit’s decision would inject a great
deal of uncertainty into these permitting programs. Because of
the nature and variety of the claims that might later be raised,
neither the permit applicant nor the state permitting authority
could anticipate what showing must be made by the applicant
to avoid having the final permit subsequently overturned by a
federal court for causing a “disparate impact” on a particular
group.

Ironically, Title VI “disparate impact” claims such as these

— will frequently harm the minority communities that the

proponents of the claims seek to benefit. Judicial actions based
on such “disparate impact” claims will make it impossible or
extremely difficult for companies to obtain, in a timely fashion,
final environmental perniits that can be relied upon. This will
cripple the ability of a company to make the essential planning
and investment decisions necessary to modernize existing
facilities, or to construct newer and cleaner facilities near
minority communities. As a consequence, such claims — or the
threat of such claims - will eliminate jobs in the local
community, lower the local tax base, and in many instances
actually cause greater pollution in the area in question.

ARGUMENT

THE DECISION BELOW SERIOUSLY INTERFERES
WITH STATE ENVIRONMENTAL PERMITTING
PROGRAMS AND UNDERMINES THE GOALS OF
THOSE PROGRAMS.

The Clean Air Act establishes two principal permitting
programs that are generally applicable to stationary sources of
air emissions: a preconstruction permit program under the New
Source Review (NSR) provisions of the Act (42 U.S.C. §§
7470-7515) and an operating permit program under Title V of
the Act (42 U.S.C. §§ 7661-7661f). Among other things, the
NSR program requires sources planning to undertake significant
physical or operational changes in existing facilities to install
more stringent pollution controls. The Title V program is
primarily intended to incorporate all applicable clean air
requirements governing the operation of a major source in one
permit so that the permittee, the permitting authority, and the
public will have a clearer understanding of the source’s
compliance obligations. Both permitting programs require
sources seeking permits to comply with detailed, demanding
requirements and f0 participate in extensive, time-consuming

permit proceedings. The programs also have an extremely
broad reach — thousands of emissions sources across the nation
must obtain permits under one or both programs, and those

sources obtaining Title V operating permits must renew them
every five years.

As currently constituted, the two permitting programs are
relatively stable programs. They produce reasonably
predictable results that protect human health and the
environment. Permit applicants are ordinarily aware of the
procedural and substantive requirements they must meet to
secure a usable permit and are able to make key business
decisions well in advance.

However, the Eleventh Circuit’s decision, by allowing
parties to raise “disparate impact” issues in federal court after
a state permit has been issued, would severely disrupt the two
permitting programs by causing an intolerable amount of
uncertainty and delay. The vague and fluid nature of “disparate
impact” claims will make it impossible for the permit recipient
or the permitting authority to anticipate what claims could
conceivably be raised. Because a final permit could later be
challenged and overturned at some indefinite time for reasons
unrelated to meeting environmental standards and protecting
public health, the permit recipient cannot reasonably rely on
that final permit.

As discussed below, these elements of uncertainty and
delay will severely interfere with the ability of companies to
obtain environmental permits critical to modernizing aging
facilities and/or making changes necessary to respond to rapidly
changing market demands. A company cannot reasonably make
the investment and planning decisions necessary to proceed
with a project if a final permit can later be collaterally attacked
on “disparate impact” grounds under Title VI regulations — with

no clear indication of what issues might be raised or how long
the litigation might last.

Finally, the fact that the Eleventh Circuit’s decision will
make it much more difficult for companies to obtain Clean Air
Act permits will adversely affect the minority communities
located near the facilities in question. If a plant is unable to
modernize and remain competitive, it will ultimately provide
fewer jobs and perhaps close altogether. The result will be
abandoned industrial sites and economic harm to the minority
community.

A. Current Clean Air Act Permitting Programs Require
Facilities to Meet Stringent Requirements Designed to
Reduce Emissions and Protect Public Health.

Both the NSR and Title V permitting programs reflect a
regulatory approach based on principles of federalism. The
statute provides that EPA is to delegate to state or local
permitting agencies the authority to issue permits under the
programs once the permitting agency has satisfied detailed
requirements for establishing permit programs. Thus, in states
or localities with approved programs, the state or local
permitting authority is responsible for granting or denying
permit applications, and judicial review of such decisions must
be sought in state courts, not federal courts.

These state and local permitting agencies typically receive
federal funds from EPA to assist them in implementing the
Clean Air Act, including the Prevention of Significant
Deterioration (“PSD”) and Title V permitting programs. As a
result, the Eleventh Circuit’s decision would presumably allow
parties to bring federal court “disparate impact” challenges to
state or local permitting decisions made under those programs.
See generally Chester Residents, supra.

10

Amicus Curiae briefly describes the permitting programs
below and then discusses the adverse impacts that the Eleventh
Circuit’s decision would have upon them. It is important to
recognize that the Clean Air Act permitting programs are
discussed as examples of the wide range of federal and state
permitting programs that will be disrupted by the Eleventh
Circuit’s decision. Similar serious problems will arise in
permitting programs under the Clean Water Act, RCRA, and
other environmental programs involving permit requirements.
Furthermore, the Eleventh Circuit’s decision would extend even
beyond these fundamental permitting programs and interfere
with federal, state, and local government efforts to revitalize
urban areas by locating new industrial facilities on previously
contaminated waste sites that have been cleaned up.

1. The NSR Permitting Program

Under the Clean Air Act, companies that seek to make
changes at existing facilities or to construct new facilities may
trigger NSR requirements under Parts C or D of Title I of the
Act. 42 U.S.C. §§ 7470-7515. The question of whether a
particular project will trigger NSR requirements depends on (1)
whether the facility in question constitutes a “major stationary
source”* and (2) whether the project will cause an emissions
increase for a pollutant in excess of specified threshold levels.
If a proposed project is determined to be subject to NSR, the
company must obtain a preconstruction permit before
undertaking the project.

The type of NSR permit required depends on whether or
not the facility is located in an area which meets the national

* The terms “major emitting facility” and “major stationary source” are
generally used interchangeably in the NSR program. The term “major
stationary source” is defined at 40 C.F.R. § 51.166(b)(1)(D.

11

ambient air quality standard (“NAAQS”) for the pollutant in
question. Such standards, which are promulgated by EPA
pursuant to section 109(b) of the Act, 42 U.S.C. § 7409(b), are
designed to protect the public health and welfare in the area in
question. For emissions sources located in “attainment areas,”
the preconstruction permit is referred to as a Prevention of
Significant Deterioration (“PSD”) permit. See sections 161 and
165(a\(1) of the Clean Air Act, 42 U.S.C. §§ 7471, Toran?)
The principal purpose of the PSD permitting program is
ensure that attainment areas remain in compliance with the
relevant NAAQS and that the existing clean air is not gradually
degraded through increased pollution.

The states are primarily responsible for implementing the
PSD permitting program. Sections 161 and 165(a) of the Act
provide that each state 4. > ape ot ptncanay So = a
Implementation Plan (“S ensure
program is carried out. 42 U.S.C. §§ 7471, 7475(a). EPA
administers the PSD program within a state only if that portion
of the state’s SIP is not approvable. 40 C.F.R. § 52.21(a).

To obtain a PSD permit, an applicant must satisfy a number
of demanding, highly technical requirements. Among other
things, the applicant must (1) demonstrate that emissions from
the facility will not cause, or contribute to, pollution in excess
of the NAAQS or any other emissions standard under the Act,
(2) conduct and submit an extensive air quality impact analysis

* An “attainment area” is “any area . . . that meets the primary or secondary
ambient air quality standard fo: the pollutant” in question. Section
107(d)(1)(A)(ii), 42 U.S.C. § 7407(¢)(1 (A)(ii).

. Pursuant to section 110 of the Act, each state is to adopt and submit to
EPA a plan which provides for the ruplementation, maintenance, and
enforcement of the NAAQS for each pollutant in every region in the state.
42 U.S.C. § 7410.

12

for the area in question;’ and (3) conduct monitoring to
determine the effect which emissions from the facility may have
on air quality in any area which may be affected by those
emissions. See generally section 165(a).

Each proposed PSD permit is subject to an array of
procedural requirements, including extensive public
participation and comment requirements, before the state
permitting authority may make a final decision granting or
denying the permit. Among other things, the permitting
authority must hold a “public hearing . . . with [an] opportunity
for interested persons including representatives of the [EPA]
Administrator to appear and submit written or oral presentations
on the air quality impact of such source, alternatives thereto,

control technology requirements, and other appropriate
considerations.” Section 165(a)(2).

Moreover, each final PSD permit must contain stringent
emissions control requirements. For a source subject to PSD

require-meats, the permit must require the use of the Best

” The air quality impact analysis referred to above must include

an analysis of the ambient air quality, climate and
at the site of the proposed major emitting facility and in
the area potentially affected by the emissions from such
facility for each pollutant regulated under this [Act]
which will be emitted from, or which results from the
construction or operation of, such facility, the size and
nature of the proposed facility, the degree of continuous
emission reduction which could be achieved by such
facility, and such other factors as may be relevant in
determining the effect of emissions from a proposed
facility on any air quality control region.

Section 165(e)(3)(B).

13

Achievable Control Technology (“BACT”), which is defined,
in relevant part, as

an emissions limitation based on the maximum
degree of reduction of each pollutant subject to
regulation under this [Act] emitted from or
which results from any major-emitting facility,
which the permitting authority, on a
case-by-case basis, taking into account energy,
environmental, and economic impacts and other
costs, determines is achievable for such facility

Section 169(3), 42 U.S.C. § 7479(3).
2. The Title V Operating Permit Program

In the Clean Air Act Amendments of 1990," Congress
created a comprehensive operating permit program in Title V of
the Clean Air Act, 42 U.S.C. §§ 7661-7661f. The primary
purpose of that program is to require “major sources” for the
first time to obtain federal operating permits that incorporate all
existing Clean Air Act requirements applicable to each source.
The Title V permit program is regarded as one of the most far-
reaching and resource-intensive regulatory programs ever
implemented by EPA under the Clean Air Act. EPA has
estimated that 20,000 facilities throughout the nation will need
to obtain Title V permits —- many of which have not yet been
issued.

In accordance with section 502 of the Act, state or local air
agencies may obtain approval from EPA to administer the Title
V program within their jurisdictions. 42 U.S.C. § 766la. EPA

* Pub. L. No. 101-549, 104 Stat. 2399.

14

has promulgated a detailed set of regulations in 40 C.F.R. Part
70 describing what permitting requirements and procedures
State programs must contain. Upon EPA’s approval of a
proposed state program, the state is authorized to administer the
Title V program in that state. At this point, virtually all states
have had their Title V programs approved by EPA.

A source that is subject to the Title V program must submit
a detailed permit application to the state permitting authority
pursuant to section 503 of the Act. 42 U.S.C. § 7661b. Among
other things, such applications must identify all relevant
emissions units and all applicable requirements. At a large
facility, there may be hundreds of individual emissions units
and scores of requirements applicable to those units. Many
Title V permit applications have been several inches thick.

Final Title V permits must set forth all applicable
requirements as well as an array of inspection, entry,
monitoring, compliance certification, recordkeeping, and
reporting provisions. Section 504, 42 U.S.C. § 766l1c. Title V
permits must also be revised as necessary to reflect changes in
the source’s applicable requirements or other significant
changes in status. For example, relevant applicable
requirements contained in a PSD permit for a new project must
also be incorporated in the source’s Title V operating permit.
In addition, all Title V permits expire after five years and must
be renewed through new permit proceedings. Section
502(b)(5)(B), 42 U.S.C. § 7661a(b)(5)(B).

Each state’s Title V program must provide for extensive
public participation in the development of individual Title V
permits. Section 502(b)(6) requires that state programs contain
procedures for public notice and comment and an opportunity
- for a public hearing. 42 U.S.C. § 7661(b)(6). In addition, the

The Eleventh Circuit’s decision seriously disrupts the

a particular racial or ethnic group. The claims raised in these
judicial challenges would create a new set of issues that have
little or nothing to do with whether the final permits meet all
relevant Clean Air Act and state environmental requirements
and will protect the public health. As discussed below,
overlaying the existing permitting programs with an entirely
separate, ill-defined set of issues would interfere with the
effectiveness of those environmental protection programs and
would likely have adverse consequences for the local
Pe oe, Meer ee

The current PSD and Title V permitting processes already

impose very demanding requirements on applicants, and the
comic themselves are frequently very time-

’ ies from the Bureau of the Census show that the chemical industry
lone spent approximately $45 billion in 1994 in capital expenditures and
control and not the significant additional costs of obtaining permits. U.S.
Chemical Industry Handbook, Chemical Manufscturers Association (1997),

16

generally understand what procedural and substantive steps they
must take to obtain a permit and what criteria will be used to
judge whether a permit should be issued. As a result, the
outcome of the permit proceeding ordinarily is reasonably
predictable, and applicants are able to develop plans and make
investments based on their expectations.

However, the Eleventh Circuit’s decision would create
tremendous uncertainty as to what is required to obtain a permit
that can be relied upon and would make the task of obtaining
such a permit infinitely more difficult. A serious threshold
problem is that the very concept of a “disparate impact” in this
context is vaguely defined and almost completely open-ended.
The Title VI regulations themselves, which would be the basis
for the private mght of action, provide no meaningful
definitions.

The assumption apparently underlying such “disparate
impact” claims is that facilities that give rise to pollution should
be located so that all identifiable racial or ethnic groups are
exposed more or less equally to the pollution. Accordingly,
there are numerous theories and arguments that conceivably
could be advanced as to why a permitting decision for a
particular facility somehow creates a “disparate impact” with
regard to a racial or ethnic group in a particular area."®

p. 136.

'° Claims based on alleged “disparate impacts” have recently been raised in
many different situations. For example, a pollution reduction program
developed by the South Coast Air Quality Management District in California
has been judicially challenged by groups on “disparate impact” grounds.
The goal of the program is to promote early retirement of heavily polluting
automobiles by allowing businesses to pay into a fund that is used to buy old
vehicles. | However, the plaintiffs contend that the program has
discriminatory effects because industrial plants located near minority
communities would allegedly use credits generated from the program to

17

On a practical level, it would be almost impossible to
anticipate what specific showing a permit applicant would be
required to make so that its permit would survive a post-
issuance “disparate impact” challenge. For example, it would
be unclear what ZIP code, census tract, or other geographic area
should be used as the basis for comparison; what constitutes the
target population; what is the “appropriate” reference area; what
are the numerical criteria for establishing a “disparate impact”;
and, finally, whether any disparity reflects impermissible
discrimination, on the one hand, or reflects permissible
socioeconomic and other factors, on the other.'' Rather than
addressing environmental issues, the Title VI court challenge
may focus on such matters as census data, statistical analyses,
historical studies, zoning decisions, and growth and land use
patterns. Even if a source attempted to anticipate the kind of
showing it must make to prove a negative — to prove the
absence of any “disparate impact” — the plaintiffs can simply
adopt a different approach and then demand that the source
refute the different approach. Moreover, given the lack of clear
criteria for determining what constitutes a “disparate impact” in
the context of environmental permitting, federal courts
presented with such “disparate impact” claims will likely
struggle to develop uniform guiding principles for addressing
the claims.

The uncertainty and complexity which will be engendered
by “disparate impact” issues will substantially delay the
issuance of numerous Clean Air Act permits. Even when a

increase their emissions. Marla Cone, Civil Rights Suit Attacks Trade in
Pollution Credits, Los Angeles Times, July 23, 1997, at 1.

'"' See generally Latimore v. Citibank Federal Savings Bank,151 F.3d 712,
713-15 (7* Cir. 1998) (describing origins, purposes, and limitations of

disparate impact analysis).

18

permit has been issued, the filing of a subsequent “disparate
impact” challenge in federal court — or the threat of such a
challenge — would significantly delay the time when a permittee
could actually rely on the permit in order to make necessary
investment, production, and marketing decisions.

The problem of delay is particularly crucial with regard to
many PSD permits and for requested revisions to Title V
permits. Sources frequently need to obtain PSD permits or
Title V permit revisions relatively quickly because they must
make physical or operational changes to respond to rapidly
changing market conditions and remain competitive. For
example, a pharmaceutical company may need to change its
production processes or install new equipment at a facility in
order to rapidly meet the demand for a newly-approved,
important drug. If the company is unable to secure the
necessary permit or permit revision in a reasonably expeditious
way and rely upon it to take action, the company will suffer
economic harm and the benefits of the drug to consumers will
be postponed indefinitely. The interjection of “disparate
impact” issues in federal court litigation after the conclusion of
state permit proceedings would have a crippling effect on the
ability of sources to meet market demands in a timely manuer
or simply to modernize an aging facility.

Moreover, under the Eleventh Circuit’s decision, any
person can challenge, on “disparate impact” grounds, a source’s
Title V permit renewal (required every five years). The source
would then be forced to defend its continuing operation of the
facility even if no significant changes had been proposed and no
environmental standards had ever been violated. Conceivably,
the facility could be forced to cease operating based on
“disparate impact” grounds even though it had operated in
accordance with all environmental laws for years.

19

It is important to recognize that the plaintiffs in a “disparate
impact” challenge would have every incentive to make the
proceedings last as long as possible. The source cannot
commence construction on a new project until it has received
the necessary final permit or permit revision and cannot
reasonably rely on a permit or permit revision if it has been — or
could be — collaterally challenged on grounds that are distinct
from the basis on which the permit was granted. The longer the
entire process takes, the greater the negotiating leverage gained
by the plaintiffs. Bluntly put, a plaintiff may be able to force
the permittee or permitting authority to make “concessions” —
perhaps not related to environmental concerns — even though
the plaintiff's substantive position lacks any merit whatsoever.

C. The Resulting Disruption of Clean Air Act Permitting
Processes Would Lead to Adverse Consequences for the
Environment and Local Communities, as Well as for
Sources Seeking Permits.

The disruptions in the Clean Air Act permitting processes
caused by interjection of entirely separate “disparate impact”
issues after permit issuance will also lead to many other adverse
results. Indeed, “disparate impact” claims will actually be
counterproductive in many instances by causing — greater
pollution and doing economic harm to local communities.

These adverse results follow primarily from the fact that
“disparate impact” claims will make it much more difficult and
time-consuming for sources to obtain PSD permits or Title V
permit revisions in order to modernize their facilities or to
respond quickly to market demands. The filing of a federal
court challenge based on “disparate impact” claims may prevent
a source from receiving a necessary permit or permit revision in
a timely manner — or receiving it at all. Beyond that, the very
real possibility that such a challenge could be brought even

20

though the source satisfies all applicable environmental
requirements may be enough to discourage the source from
making improvements and changes at the facility in question.

If a facility is unable to make changes because of
uncertainty resulting from “disparate impact” claims, it will
operate less efficiently and become less competitive. Indeed, if
a company cannot make needed changes at a particular facility,
e.g., changes enabling the company to produce a new product,
the company will likely make those changes at another facility.
If the company is unable to keep a particular facility operating
efficiently because of the inability to make physical or
operational changes, the company will likely be forced to close
the facility and move its operations elsewhere. As a result, jobs
would be lost in the local community and the industrial site
would be abandoned. The local tax base would also be
reduced, thereby making it more difficult to provide services to
residents in the community.

Moreover, “disparate impact” challenges to PSD permits
would in many instances actually prevent emissions reductions
from being made at a facility. This result may come about for
either or both of two reasons. First, PSD permitting
requirements are frequently triggered under the applicable
regulations even though the proposed change will not, in fact,
cause a significant increase in actual emissions.'* Second,

'2 To determine whether a PSD permit is required for a proposed
modification, EPA believes that the facility’s pre-change actual emissions
should be compared to its post-change potential emissions, regardless of
whether the post-change actual emissions would even approach the
theoretical potential emissions. In calculating potential emissions, EPA
generally assumes that the source will be operating continuously at full
capacity and that it will not be using the stringent control technology it
would have to use if PSD applies. This “actual-to-potential” approach was
addressed in Puerto Rican Cement Co. v. EPA, 889 F.2d 292 (ist Cir.

21

once the Act’s PSD requirements are determined to apply, the
source’s later-issued PSD permit will require the use of BACT.
This very stringent control technology requirement will result
in actual emissions being substantially reduced — many times to
levels lower than the pre-change levels. By making it much
more difficult or even impossible for facilities to obtain PSD
permits, challenges based on “disparate impact” grounds would
destroy the environmental benefits to be gained by such

permits.

In summary, under the approach taken in the Eleventh
Circuit’s decision, environmental permits issued by state
agencies can be collaterally attacked in federal court even
though the facilities satisfy all requirements for obtaining the
permits, would comply with all environmental laws, and would,
in fact, provide net environmental benefits. Because of the
uncertainty and delay engendered by this approach, companies
would be prevented or discouraged from modernizing their
plants, and those plants would be unable to remain competitive
in the marketplace. As a result, jobs would be lost in the
affected communities. At the end of the day, everyone would
lose — the local communities, the companies duly seeking
environmental permits, and the state or local permitting
authorities attempting to administer these programs.

1989). There the court recognized that, under this approach, PSD
requirements could be triggered even though actual emissions at a facility
would be reduced by a new operational process. Jd. at 293-94.

22

CONCLUSION

For the foregoing reasons, the judgment below should be
reversed.

Respectfully submitted,

MICHAEL W. STEINBERG*
MICHAEL A. MCCORD

MORGAN, LEWIs & BOCKIUS LLP
1800 M Street, N.W.
Washington, D.C. 20036

(202) 467-7141

*Counsel of Record
Of Counsel:
JAN AMUNDSON
NATIONAL ASSOCIATION OF
MANUFACTURERS
1331 Pennsylvania Avenue, N.W.
Washington, D.C. 20004
(202) 637-3000

November 13, 2000

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385014_0377%3A18. Public record. Not legal advice.